Harbor Debate: How Much Public Money Should Businesses Get?

How much is enough when government is involved in promoting private businesses?

That question came before Orange County supervisors recently when Dana Point Harbor officials asked for another two years of county funding – totaling $153,000 – for promoting businesses at the county-owned harbor. Supervisors approved $90,000 for one year.

The total included an extra $13,000 requested by Supervisor Lisa Bartlett to pay for  outreach aimed at minimizing the impacts of construction during an upcoming harbor revitalization project.

That didn’t sit well with Supervisor Michelle Steel, who noted during last week’s Board of Supervisors meeting that the businesses’ leases already call for a reduction in rent costs if their revenues drop.

Can those merchants “put their own money in to reach out?” asked Steel, who has sometimes voted against the rest of her colleagues on fiscal matters.

“It’s a little odd to see,” she said.

Bartlett, whose district includes the harbor, defended her proposal.

“It’s money well-invested,” considering that the county has some significant merchants in the harbor, Bartlett said in response. The businesses would be putting in $6,000 for the extra outreach, in addition to the county’s $13,000, she added.

The harbor’s director, Brad Gross, emphasized that the current leases don’t call for an automatic rent reduction. It’s based on gross sales, and if they drop over their previous year then there’s a rent reduction, he said.

“As all ships float, they’re all going to decline at the same time,” Gross told supervisors.

Steel still had qualms.

It’s “just certain businesses [we’re] trying to promote and…more than they really request for. That’s really bothersome here,” said Steel. “I can go both ways to help promote businesses, but at the same time it’s taxpayers’ money going into certain businesses. That really – is really bothering for me.”

Gross noted that the contractor for the marketing efforts – the Dana Point Harbor Association – promotes not just businesses but also events like the Festival of the Whales.

With the upcoming construction, the association will have to “go over and above what they normally do” to make sure people know they should still come to the harbor.

Without this, “the businesses would suffer and not have the continual revenue stream” to be sustainable, Bartlett said.

She motioned for the $13,455 county increase, plus shortening the contract to just one year, with plans to bid it out next year. That boosted the county’s contribution from $76,545 to $90,000 this coming fiscal year.

The revised contract was approved 3-1, with Steel opposing and Chairman Todd Spitzer absent.

Many of the harbor’s facilities are in need of renovation, and progress on that front has come slowly.

The effort to upgrade the harbor dates back almost 20 years to a county task force set up in 1997 that focused on the need to replace old structures, update designs and fix major parking and traffic flow problems.

After years of delays, harbor officials said in November that construction was slated to start in June on the project’s first phase, which focuses on intersection improvements.

The start date is now slated for sometime in the fall, according to Bartlett.

Clarification: Update clarifies financing for the Dana Point business promotions.

You can contact Nick Gerda at ngerda@gmail.com, and follow him on Twitter: @nicholasgerda.

  • Larry Leaman

    Dana Point Harbor is a unique public-private partnership between facility operators and merchants and the county taxpayers. The land and water area is owned by the county, and as the landlord the county shares in the revenue generated by the merchants and facility operators. Much different then when a local chamber of commerce asks its city or county for a subsidy, this is a business partnership with the county taxpayers benefiting from the revenues generated by the public that purchases goods and services in the harbor. I was involved in helping launch this harbor business model in the early 1970’s and the result is a marine center of commerce, education and recreation second to none. Revenues generated in the harbor fund its operation and will help finance the planned harbor refurbishment, so it is in the best interests of the county taxpayers that business is generated there. This business model works and the Supervisors need to continue this partnership so it will continue to be an outstanding regional recreation asset for boaters and non-boaters alike..