|A bay in the hand is worth
a bunch to Busch, or
Givin' away the bay
by Carolyn Chase
ission Bay Park and environs is a key city resource contributing to our reputation as a world class tourist destination. Its beautiful setting is a beacon for tourism comparable to any national park in the United States. It attracts about 12 million users, annually, and its immediate coastal zone attracts an additional 8-13 million visits to local beaches and attractions.
But this publicly developed and maintained urban aquatic park and beach system has serious problems. Mismanagement and questionable leasing practices are both reducing public access and increasing overall usage demands. The impact of over-commercialization is significant. Local infrastructure is overwhelmed and yet the demands continue to increase. The City Council will soon make choices on seven proposed commercial expansion projects : Princess Resort, De Anza, Dana Inn, Hilton, Bahia, Marina Village and Sea World.
Sea World is even contemplating putting an initiative on the ballot to request an exemption from the coastal zone 30-foot height limit to allow construction as high as 160 feet. Perhaps it's coincidence that this is the height for a 10-story hotel. Perhaps not. But the city's record of dealmaking around Mission Bay does not exactly inspire confidence in the council's resolve to act in the best interest of both Mission Bay Park and the public.
The first Sea World lease, approved in October of 1961 for a term of fifty years, consisted of only 20 acres of public park land with the rent coming out to about three cents per square foot per year. Over the next decade or so, the lease was extended and expanded a dozen times, growing to include a hydrofoil ride, water skiing, dancing fountains, sky ride, restaurants, tidal pool, exhibits for dolphins, penguins, sharks, sky tower, fireworks, 75 acres of asphalted parking and at least one public street, Perez Cove Way. The leasehold now covers 150 acres of prime real estate in a public park.
Sea World admissions have increased as well. The first annual family pass was $12.75. A single adult admission today is $34.95 plus $5 to park. What has happened to the lease rates? The consolidated rate is up to an average of 55 cents/square foot. But on June 25, 1996, Anheuser-Busch, the corporate owners of Sea World, submitted a letter of intent, on an uncontested council consent agenda, requesting an additional 16.5 prime acres for more parking for fifty years. What was the rate? The brewmasters deposited a one-time "consideration" of $1.2 million into the city's general fund and agreed to study the suitability of the site for the expansion. The council unanimously, without debate, agreed to let the brewer to proceed. This breaks down to the 1961 rate of three cents per square foot per year! Can't we do better than this?
The state of California allows no lease extensions and demands open bidding to maximize return on public resources. We should do no less here. The going rate to open a commercial venture inside a major public park in California is from 13 to 20% of gross in a contract limited to 15-20 years - that is, if you can get permission at all.
State law also requires that "current market conditions" be applied when lease contracts are reviewed. The municipal code requires city land leased over 3 months to be appraised. This appraisal can determine the true current value of the Sea World leasehold. Let's stop charging pennies a square foot for some of the most prime real estate in the country!
The Chargers pay 10% rent at Qualcomm Stadium. The new Yosemite concessionaire paid a $76 million buy-in for a 15 year contract competitively bid up to 20% of a yearly gross of $90 million (4.5% of this is solely to fund capital improvement in the park). The rate at Raging Waters in Los Angeles County's Bonelli Regional lakeside park is 13% of the gross for 20 years. A forced rate adjustment on similar "sweetheart deals" in Old Town is bringing rates up to ten percent of gross.
When Yosemite lessees pay taxpayers $18 million on a $90 million gross, why would Sea World be allowed to pay San Diegans taxpayers just $5 million a year on a $100 million gross? Sea World's 5% is evidently nowhere near market rates.
Funding is needed just to keep up with growth. Mission Bay Park's current 12 million visitors are projected to increase to 18 million.
Most bayside frontage is already occupied by commercial leaseholds, condominiums, single family and apartment residences, and in the south bay, extensive rock rip-rap that prevents tidal erosion. Park access is also restricted by beach closings due to polluted runoff from failing sewer and storm drains. Concreting of wetland filtering zones at Rose Canyon and Tecolote Creek has added to this problem.
During peak tourist season, public lots are full. The park frequently suffers traffic gridlock as its 80,000 peak daily visitors compete for parking. Perimeter access for emergency vehicles [fire, police, lifeguards, and paramedics] is rated F, the lowest level of service.
In light of the Park's popularity, city council should assure funds for projects already identified but "wait-listed" indefinitely.
In 1990 Sea World promised that they wouldn't be back for more sprawl into the park, but here they are and wanting it for cheap to boot! Grabbing another 16.5 acres of public bay side property for parking at fire sale rates will again reduce access to San Diego's shoreline and increase polluted runoff. Why are they not offering to build a parking structure as the zoo is in Balboa Park? When will the city and leaseholders face up to the fact that if they want to support more growth, they have find ways to move people in and out without misappropriating public access and park land?
The city of San Diego has responsibility for the state tidelands of Mission Bay. Sea World's viability over time is proven secure due to its choice location in a public park. The city must negotiate a competitive contract that adequately compensates the public for the appropriation of coastal park land. The matter will next be before the Natural Resources and Culture Committee of the city council on March 25th.