Back in the mid 1980s Antioch obtained $6.3 million in loans from the California Department of Boating and Waterways to develop and construct a 285-berth marina. The Marina, with an accompanying privately owned restaurant and public fishing pier (half of which was paid for by a state grant of $54,000) was to be a catalyst in the revitalization of the waterfront and expected to reach a break even cash flow within 5 years.

Unfortunately, the council at that time decided to defer state loan payments for the Marina, both during construction and during the first few years of operation. When they finally decided to start repaying the state loans around 1990, it was discovered that payment was $234,000 more annually than had been budgeted, and capitalized interest had brought the loan balance to approximately $7.3 million.

In 2002 the City negotiated new loan terms with the state and committed to providing $2.5 million in redevelopment subsidies (from Project Redevelopment Area #1) to the Marina over 10 years ($250,000 per year beginning in FY02) with $1.7 million of it earmarked for a capital outlay reserve. However, from FY02 through FY11, only $2,481,710 was transferred to the Marina as part of the loan condition – $18,290 short of the $2.5 million.

Also in 2002 the City Manager asked staff to develop a proposal for increasing occupancy and eliminating the deficit. Although two private Marina management firms were consulted in regard to the possibility of a public/private partnership, both expressed disinterest due to the debt service requirements. That put an insurmountable financial burden upon the marina, the low berth occupancy rates which were expected to remain low due to a competitive market, and land leases with private business which were bringing in revenues far below original estimations.

The situation hasn’t improved since. Now, 13 years later, the City still owes the state approximately $6.3 million and remains unable to obtain an 100 percent occupancy rate for both open and covered berths. (Currently the marina has a combined occupancy rate of 73 percent). Probably, because in addition to screwing up financial projections, no one realized that the non-optimal wind alignment of the marina limits rental of approximately 20 percent of the open space double occupancy berths.

Nor has the assumed revenue goal from the four commercial lease enterprises on the site met expectations. Currently there are only two at the marina: Humphrey’s Restaurant and Twin Rivers Marine Insurance Agency.

The city contributed more than $1 million in shared parking and decking, piling along the waterfront to support the restaurant whose owner signed a 35-year lease requiring that he pay the city $2,500 a month or 2 percent of gross and receive a rent increase every 5 years based on the rate of inflation in the proceeding four years. Currently Humphrey’s rent is $4,089.03, with the last adjustment occurring in January 2011. (They owe March and April rent. )

Apparently, it was Gov. Jerry Brown’s decision to possibly abolish redevelopment agencies that prompted staff to review all agreements in place with the Antioch Development Agency. (ADA is Antioch’s Redevelopment Agency). Staff has recommended that additional monies be transferred from Project Area #1 to the Marina Fund in 2011 in order to comply with loan conditions.

Sounds like heavy seas and rough sailing still ahead for the Antioch Marina.

This entry was posted on Monday, April 11th, 2011 at 8:07 pm and is filed under Opinion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.