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Port approves first across-the-board tariff increase since 2004

A general rate increase is on its way for those involved in maritime-related commercial activity in the Port of San Diego’s jurisdiction.

At a special meeting held Tuesday, the Unified Port of San Diego’s Board of Port Commissioners adopted increases in the costs associated with numerous activities ranging from wharf storage to space occupancy and wharfage on commodities.

Governed by the port’s Tariff No. 1-G, the rates haven’t been raised across-the-board at the port since 2004, according to Port of San Diego spokeswoman Tanya Castaneda.

“We did a really thorough market study and benchmarked our rates with other ports,” she said.

The benchmark was relative to at least the last six months, she added.

Despite selective rate increases for certain commodities in five of the seven years from 2006 to 2012, the general disparity between Port of San Diego’s rates and those of other ports has grown since 2005, a study presented to the board on Tuesday noted.

All rates charged by the port, regardless of the commodity for which they were enforced, were left unchanged in 2009 and 2010 from the previous year’s levels.

The report received by the board before its unanimous vote, based on numbers from the U.S. Bureau of Labor Statistics, said the recommended increases — ranging from 2-3 percent for various commercial activities — were partially based on the Producer Price Index for Port and Harbor Operations and the Consumer Price Index West Region for All Urban Consumers.

According to that data, the PPI for Port and Harbor Operations indicated an annual increase of 3.9 percent in 2012, while the CPI West Region indicated an annual increase of 1.7 percent during the year.

Castaneda said the comparative market analysis, as well as the recent decision of the California Association of Port Authorities to establish an annual rate increase based on the CPI measure, justified the recommendation.

Among others, she said, the comparative market analysis included the ports of Long Beach, Los Angeles and Hueneme.

“We actually found that our rates are very low,” Castaneda said.

The Port of San Diego does not expect the new rates, due to take effect July 11, to change the behavior of those doing business with the port, she added. They are, however, expected to increased revenues to the port district by approximately $350,000 in fiscal year 2013/2014, according to the staff report.

Scheduled to increase by 2 percent is the wharfage rate for lumber and forest products and certain commercial vehicles, while the dockage item rate for transient and impounded vessels is due to increase by 3 percent.

Wharfage rates for all other commodities will go up by 3 percent, as will the rates for wharf demurrage, wharf storage and space occupancy.

Bay Club

In addition to the general rate increase, the board accepted changes to the lease conditions for two of the port’s long-term tenants, Sunroad Marina Partners LP and the Bay Club Hotel and Marina.

The board approved Sunroad’s agreement with Compass Bank to loan Sunroad, which operates Sunroad Resort Marina, $20 million to refinance its current loan at a lower interest rate. Now able to move forward with port approval, the loan refinancing would replace Sunroad’s existing $18.5 million loan with Prime Finance.

Meanwhile, the Bay Club Hotel secured its spot on Shelter Island Drive for an additional seven years as the board agreed to extend its lease, which previously ran through 2035, through the year 2042.

The operator of the 150-slip marina and 105-room hotel invested $1.85 million in capital improvements, including the complete replacement of its wooden deck system with an environmentally friendly alternative, to secure the lease extension.

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Sunroad Resort Marina

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955 Harbor Island Dr.
San Diego, CA 92101

Sunroad Resort Marina Executive(s):

Jim Behun

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