Politics of Pilings
Monterey pledges to examine leasing losses on Fisherman’s Wharf.
Thursday, February 24, 2011
The city of Monterey will hold public hearings this spring on concerns it loses millions of dollars a year by leasing Fisherman’s Wharf property at far below market rates.
Last December, City Planning Commissioner Bill McCrone examined dozens of leases between the city and businesses on Fisherman’s Wharf I and concluded that they amount to a $3 million annual giveaway of public funds.
Now, lease documents show additional tenants have also scored lucrative deals:
The private, members-only Monterey Peninsula Yacht Club on Wharf II pays $600 a month for its 2,500-square-foot headquarters. The lease expires at the end of February.
Surfside Enterprises, run by developer Ted Balestreri, pays among the highest rates on the wharf – 4 percent of gross sales – for the building that houses Sapporo Grill and London Bridge Pub. But Balestreri, who subleases to the eateries, charges them 6 percent of gross sales plus a combined total of at least $170,000 in yearly rent, and shares none with the city.
“You have to understand the history,” Balestreri says, adding that he and others have taken business risks.
Wharf I tenants argue the rates are below market because they maintain the pilings under their buildings at considerable expense.
“If I could void these leases tomorrow, I would,” Meurer says, adding the leases aren’t illegal.