HOW WE GOT HERE & OUR PLAN GOING-FORWARD
The city council of Newport Beach has done a wonderful job of convincing the public that the Bay Front owners have not paid our fair share of harbor costs. Consider the taxes we already pay that should be credited to the Tidelands Fund:
- Property tax on the increased value the Dock creates [Dock’s increase value up to $1 million]. The city receives 17% of this increase in property tax payments because a Dock exists.
- Boat taxes. There are 9,000 registered pleasure boats in Newport Harbor, including the boat(s) tied up to your Dock. Each is assessed an unsecured property tax bill. The City receives a 17% of the unsecured property tax.
- Possessory Interest Tax. Some are on long-term leases that trigger “Possessory Interest Tax” – a tax similar to property tax. The City receives a percentage of this tax.
- Annual permit fee. We’re not sure what we received for paying this fee, but we paid it for decades.
The City’s budget does not reflect any of these revenues in the Tidelands Fund.
To claim we don’t pay our fair share is absurd. This is an outrageously false statement due to the City’s lack of homework on the issue.
If they done their homework prior to assessing the Dock Tax, they would have realized that in that the County Assessor’s data contains a line item that shows the value of the dock, and what the Assessor is charging dock owners. This information has been available for decades – and the city has been aware of it.
For decades they have received 17% of this amount – without ever properly crediting it to the Tidelands Fund. Instead millions have been inaccurately (possibly illegally) applied to the General Fund for salaries, benefits, pensions, and city operations. This is likely violation of the of the State of California law.
Therefore, Bay Front owners have paid their fair share plus via multiple taxes and additional yearly permit fee. The outrage of this approach is that the Bay Front homeowners have been blamed for the wrong reasons have paid more than their share and additionally, the money has gone to the wrong fund. All these years the city has complained that the general fund has had to bail out the Tidelands while keeping these funds.
STEALING OUR EQUITY
In their haste to levy the Dock Tax, the politicians stripped us of our “property right” to our docks. The second issue is that the City and the general public do not understand the financial effect on the bay front property owners. In forcing us to accept the new annual permit triggering the Dock Tax, there is language allowing the city to confiscate your dock for a “cause.” Translation: Your property right to your dock is removed. Future city councils can take this further and by legislative fiat deem your dock a public asset and confiscate it.
Let me explain. If own a vacant lot without a dock on the bay front it could maybe worth x, if your neighbor had basically the same lot, with a dock, lot b could easily be worth $500,000 to $1,000,000 or more. By establishing a yearly permit, the city at any time, can cancel your permit, or charge huge yearly funds, and who knows what future councils may demand?
The owner no longer has any rights to the dock that they paid for and the equity they paid for, at purchase. The city has taken a valuable asset, the owner paid for, and the owner is expecting to recoup that equity at sale time. So in essence, the home owner has been stripped of the equity value of the dock and what does he do when he wants to sell?
The seller cannot guarantee a secured dock future. What will that do to property owners? What will lenders do if the future of the dock is unknown? How does that affect loan amounts to the future buyer? Valuations will go down and if values go down, taxes go down and that is not good for the city. And what will the buyer now offer?
ONE BBI HOMEOWNER LOSES $800,000 DUE TO DOCK TAX
We have already seen a case of a bay front in escrow to close for almost $5,000,000, until the buyer reviewed the Dock Tax Permit and subsequently reduced the offer to $4,200,000. The buyer quickly surmised that the dock is no longer the property of the upland owner and counter-offered accordingly.
Basically what the city has done is to take away property rights by legislative fiat. It’s a clever way of “taking” your property without triggering an adverse possession, which they would lose in court. This will certainly affect the thinking of potential buyers think considering buying a Bay Front Home in Newport Beach.
My personal opinion as a Bay Front owner, is that the city did not realize the Bay Front owners were already paying way more, and for years, more than the city knew about and did not give any consideration as to the stripping of the owners dock equity, and therefore the value of the Bay front itself.
It’s been eight months since the City crammed down the Dock Tax. Now they have agreed to take a look back at this situation in two public meetings. There are two basic issues, between the dock owners and the City that I feel can be resolved by coming back to the negotiating table, and addressing these two issues in a professional, non-contentious atmosphere on both sides.
We want our equity back, and we understand the need to financial support the Bay.
ATTEND THE CITY SPONSORED DOCK OWNERS COMMUNITY MEETINGS
It’s been eight months since the City crammed down the Dock Tax. Now they have agreed to take a look back at this situation at two public meetings. There are two basic issues, between the dock owners and the City that I feel can be resolved by coming back to the negotiating table, and addressing these two issues in a professional, non-contentious atmosphere on both sides. We want the our equity in our docks back, to understand that we pay our fair share, and we understand the need to financially support the Bay.
Thursday, August 15, 2013
3:00 – 5:00 p.m.
OASIS Senior Center
Corona Del Mar
Wednesday, August 21, 2013
6:00 – 8:00 p.m.
OASIS Senior Center
Corona Del Mar