Yacht Club, Sapporo tussle with Monterey over leases; planning commish cries foul.

Magic Numbers: Planning Commissioner Bill McCrone hasn’t made friends in his campaign to get the city to hike up waterfront rents. “When I brought this up, I may as well have been attacking Santa Claus,” he says.

It’s easy to pass the Monterey Peninsula Yacht Club on Wharf 2 without noticing the boxy structure, which looks more fitting for a utility building than a private club. But it’s rustic and cozy inside, where sailing trophies and ship steering wheels adorn the walls of the restaurant and bar. 


Yacht Club Commodore Ron Blue and outgoing Commodore Joe Headley are trying to portray the 300-member club as a community service while negotiating its lease from the city of Monterey. 


“We’re not selling a timeshare here,” Headley says. “We want people to participate in a life experience.” 


But after the most recent 10-year extension to the yacht club’s 1966 lease expired in 2011, the nonprofit and the city have grappled over the club’s rent.


The club pays $840 a month now, which Planning Commissioner Bill McCrone estimates is about a tenth of its value. But Headley says a fair-market rent would run the yacht club out of business within five years. 


McCrone has become a watchdog for Monterey’s waterfront leases, which he calls “sweetheart deals” priced far lower than they should be. “All I’ve ever said is, [the yacht club] ought to pay a fair rent,” he says. “Those people think they’re entitled, and therefore the City Council should cut them a deal.” 


The city received an appraisal of the yacht club in July; officials won’t release the numbers pending City Council approval. But Headley and Blue rejected the appraisal, saying it’s unfair to evaluate the nonprofit club as if it were a commercial business. 


Rick Marvin, city housing and property manager, disagrees. “The appraisal is a very good document,” he says. 


The City Council is expected to consider the appraisal, and the yacht club’s complaints, in February. 


Headley says the club is a blue-collar organization where about 200 kids learn to sail at summer camps, and 200 high schoolers sail year-round. But it’s incorrectly perceived because its name evokes highfalutin aristocracy, he adds, and there’s no advertising budget to improve public perception.


“Bill McCrone is an advocate for the city getting the best bang for their buck,” Headley says. “It’s a given that government doesn’t spend that dollar as wisely as a nonprofit. Every dollar the government takes away from us, they’re taking away from the community.” 


But Nelson Vega, a Monterey Commercial Property Owners Association board member, says the city shouldn’t subsidize the rent. “At what point does the yacht club become a private club for private people on the taxpayers’ back?” he asks.


A requested extension on the lease next door is also before the council. Ted Balestreri has been asking for a 10-year extension on his lease from Monterey for the building that’s home to Sapporo restaurant and London Bridge Pub. 


Last month, the City Council approved closed-session negotiations with Balestreri, the Cannery Row Company developer, who argues in letters to city officials that he’s being treated unfairly. 


Most Wharf 1 restaurants pay 3 percent of their sales in rent. But for the Wharf 2 building, Balestreri pays 4 percent or $45,000 a year, whichever is higher. In 2010, he paid $105,000 – a rent McCrone says is below fair-market value. 


But Balestreri says he needs another 20 years or more to make the building’s upkeep worth it: “Nothing’s cheap anymore.”

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