The stock market is crashing. The city budget is crumbling. The state unemployment rate has hit 10 percent. Maybe it’s not the best time to be spending $1.27 million to subsidize a marina for superyachts.
On the other hand, having lived through all manner of government giveaways, subsidized sports teams, and a broken pension fund, many San Diegans probably won’t be surprised by the latest taxpayer-financed undertaking: the docks of Fifth Avenue Landing, located on San Diego’s bay front, across Harbor Drive from Petco Park, just north of the new Hilton Hotel.
Off-limits to the general public, the gated marina is described on Fifth Avenue Landing’s website as a “secluded, twelve-slip super-yacht dockage” that can “accommodate superyachts up to 300 feet.” The $3 million complex features “complimentary concierge service for owners and crew,” free wireless internet, and “secured, controlled access.”
Though it hasn’t been publicized locally, the world’s toniest yacht magazines and websites are buzzing with the news. “We promise megayacht owners, captains and crew the finest berthing experience they’ve ever had,” dockmaster Fred Larsson told synfo.com in February.
Gushed Maritime Reporter: “San Diego is the site of the new Fifth Avenue Landing, an elite, stylish superyacht facility that now welcomes the world’s largest and [most] luxurious megayachts.… One notable guest at Fifth Avenue Landing was the famed 225 ft Feadship megayacht Attessa, which spent several weeks at the facility in early 2009.”
Brokered by the California Department of Boating and Waterways, the $1.27 million in public funding for the venture was provided by the U.S. Fish and Wildlife Service’s Boating Infrastructure Grant Program. The money comes from a 10 percent federal sales tax on fishing equipment, boat fuel taxes, and import duties related to tackle and small boating.
According to its grant application, the Fifth Avenue Landing partnership, owned by Raymond Carpenter and members of Coronado’s Engel family, both longtime port lessees, put up $1,757,203, for a total dock complex cost of $3,035,000.
Port records show that the partnership also spent another $2.9 million on “landside” improvements.
During fiscal year 2008, the period in which Fifth Avenue Landing received its grant, the government paid out a total of $6.1 million in boating infrastructure grants for projects across the country. There were only two other California recipients, the cities of Santa Barbara and Redondo Beach, each getting $50,000 for small guest docks.
The rules of the program allow funds to be used “to construct, renovate, and maintain tie-up facilities with features for transient boaters in vessels 26 feet or more in length, and to produce and distribute information and educational materials about the program.” Each state designates an agency to process the grant applications and allows funding to go to either public or private marinas.
Unlike the Fifth Avenue Landing website, nothing in the partnership’s grant application refers to superyachts. Nor does the application disclose that the docks would be limited to only 12 globe-circling megacruisers. Instead, it strongly suggests that San Diego’s legion of small boaters would be primary users.
“These slips will be available to local boaters, some 7,000 in numbers ranging from 26 ft length to 180 ft in length. These transient docks will be available to them and will create a home away from home for 2 and 3 day trips within the Bay.
“The site creates much needed access for visiting boaters to Downtown San Diego, which is not currently available. In addition to dockage for guest vessels, the shore-side restrooms offer needed comfort to those vessels.”
As it turns out, according to Kevin Atkinson of the Department of Boating and Waterways, there is no requirement for public access to the docks. Average citizens are forced to admire the big boats from afar while walking along a concrete promenade on the water’s edge. A 300-foot stretch of lawn, featuring several dispensers with free plastic bags for the use of dog walkers, as well as restrooms and a ticket booth for a harbor excursion company run by the Engels, is also open to the public.
George Palermo, Fifth Avenue Landing’s general manager, says that despite the hype on the partnership’s website about luxury-boat accommodations, it is not the partnership’s intent to bar smaller craft from tying up at the new docks, if they can pay the fee. “It’s not necessarily about just megayachts. It’s just for boats,” he says.
Dockmaster Larsson said the berthing rate for boaters who want to tie up at the landing overnight is currently $2.50 per foot per day, which he characterized as an “introductory rate” that has been set “while we can judge what the demand will be.” He said that is roughly comparable to other marinas around the bay.
Palermo notes, “The length of our fingers is not common for marinas. Most marinas have fingers that are shorter and don’t have a lot of fingers to accommodate large vessels. So in this case, because our fingers are so long, we thought that would be attractive to larger boats. But all boats are welcome; it’s not restricted.”
Palermo adds that Fifth Avenue Landing is participating in the port’s Dock and Dine program, through which small-boat owners who want to tie up at the docks and spend time at a downtown restaurant or bar for a few hours can call the partnership’s dockmaster in advance of their arrival to request a temporary access key.
Unified Port of San Diego lease records indicate that a small portion of the dock complex is supposed to be available to weekend mariners, but only in a limited way. “One berth shall be made available free to a sailing club or other means to make boating as a recreational use affordable to those members of the public not able to own personal watercraft.” So far, though, no such arrangement has been established, according to the records.
Palermo says that’s because local boating and sailing clubs have expressed no interest in the idea. “No one has ever come forward,” he says.
In fact, as of late, Fifth Avenue Landing’s biggest customer has been Larry Ellison, the San Jose–based billionaire founder of Oracle Corporation, the computer software giant. Ellison’s private syndicate, BMW Oracle Racing, has sublet the northern third of the dock complex near Joe’s Crab Shack to house the 90-foot trimaran he hopes to use in his next challenge for the America’s Cup.
A December 10, 2008 letter to the port from Palermo indicates that the partnership began leasing to Ellison last September and is charging him $97,000 a month, “less nominal credits if applicable.” The current term of the lease lasts through May 30.
Though the terms of the state grant are supposed to limit the marina to transient boating uses, Oracle has set up a sizable semipermanent base of operations for its large crew, including large trailers and a big white plastic tent set up in the Fifth Avenue Landing parking lot.
“Oracle intends to remove the boat from the water and relocate it in a temporary tent structure in order to modify the boat,” wrote Palermo. “The primary work to be done on the boat will be the removal of the two outer hulls (floats) and installation of new floats and other elements that are being fabricated off site. This will involve cutting and grinding to fit the new floats and then bonding and painting.
“The tent will be completely closed when any of the above described work is being done with fans used to create negative pressure inside the containment tent to eliminate the possibility of any grinding residue or fugitive dust escaping from the tent.
“Filters will be placed over the exhaust ports from the tent to trap any dust or airborne epoxy or paint operations that would require a San Diego County Air Pollution Control District permit, and the work will be done under their permit.”
According to a September 29, 2008 letter from Chris Hargett, the port’s senior asset manager, to Carpenter, the Fifth Avenue Landing partnership currently pays a minimum annual rent of $469,400.
But the docks may not be around for long.
In addition to the monthly payments from Ellison, the Fifth Avenue partnership is also receiving a $1 million option payment from the San Diego Convention Center Corporation, a subsidiary of the City of San Diego, while the City studies whether it wants to expand the convention center on the land. Currently, Fifth Avenue Landing has the right to build a hotel on the site, but it hasn’t been able to put a deal together.
The convention center option expires in a year, after which the City could pay the partners $13.5 million to buy out the Fifth Avenue Landing lease or walk away from the deal. Palermo says that should the City take over the property for the convention center, Fifth Avenue Landing would continue to operate the docks as an independent operation.