Marinapark lease terms shelve vote

Deirdre Newman

Uncertainty about proposed lease terms for the Marinapark hotel

project overshadowed the City Council’s consideration of the

agreement Tuesday.

As of press time, no vote had been taken at Tuesday’s council

meeting, but members were leaning toward postponing action on terms

between the city and the developer until those terms had been

tweaked.

The terms would guide negotiations for a ground lease of the

luxury hotel resort, planned for the Balboa Peninsula, if voters

approve Measure L in November. Measure L will ask voters if they want

to change the city’s general plan to allow a hotel on the harbor-side

property, at the site of a mobile-home park and Las Arenas Park.

A majority of City Council members said they did not feel

comfortable with the terms.

“To create a document, which binds the city, when we don’t have

all the terms, and it doesn’t look like we will be able to negotiate

the terms before the election, is not doing voters any service,” said

Councilman John Heffernan, who worked on a committee to help hash out

the agreement. “I’m opposed to going forward on this basis

[tonight].”

Stephen Sutherland has designed a 110-room hotel -- 98 rooms for

nightly rental and 12 for sale -- for the site where mobile homes now

sit. He also offered a host of amenities for neighboring properties,

including renovating the Girl Scout house and a community center.

The agreement, known as a “memorandum of understanding,” was

supposed to allow voters to have concrete information about some of

the financial terms of the project. But that was not the case.

“[Former City Atty.] Bob Burnham said the purpose of the

memorandum of understanding was to give a sense of confidence to

voters, but anyone watching these proceedings has the most total

sense of unconfidence you’ve ever seen in your life,” said Allan

Beek, whose group, Stop Polluting Our Newport, has filed suit against

the city and Marinapark LLC, Sutherland Talla Hospitality over the

project.

The main points of the understanding are offering Sutherland a

five-year option to build his project if he gets all approvals,

funding and a contract with a hotel operator; a ground lease of 50

years; and a base rent payment to the city of $1.1 million per year

when construction is complete or two years after Sutherland exercises

his option to build the project -- whichever comes first.

Some in favor of the luxury hotel encouraged the council and city

staff members to bring back pertinent information about the project.

“I would encourage the City Council to go back and meet with staff

and discuss all of the critical elements that Joe Q. Public can use

to determine if this project is good for Newport Beach,” said Laura

Dietz, a Corona del Mar resident.

The council was leaning toward bringing the matter back at its

next meeting, on Oct. 12.

* DEIRDRE NEWMAN covers government. She may be reached at (949)

574-4221 or by e-mail at deirdre.newman@latimes.com.