Orange County Supervisors hit the pause button again on a new lease deal with the developer of Dana Point Harbor on Tuesday, saying the deal didn’t do enough to protect existing workers or benefit the county.
The delay leaves large parts of a project that’s expected to net the developers $25 billion in gross profit over the next 60 years in limbo as several county supervisors acknowledged it’s unclear if this deal actually does much to benefit the county.
“This deal is far from perfect,” said Supervisor Katrina Foley on Tuesday, failing to get her colleagues to support her motion to approve the development deal after announcing she was willing to back up on her previous demands about key labor protections in writing for displaced hotel workers.
Foley, who represents the area, went from one of the project’s loudest critics to its loudest supporter on the board on Tuesday, dropping previous concerns she’d raised over worker protections and the county’s returns and encouraging colleagues to immediately sign the deal.
“If we could start this process over, I would’ve probably done things differently,” Foley said. “The responsible path now is to move the hotels forward.”
Supervisors also went silent on the concerns voiced by local boaters mooring at the harbor, who have complained about skyrocketing rental rates for slips where they can park their boat.
“Dana Point Marina is supposed to be a public marina not a private, for-profit entity,” said Anne Eubanks, president of the Dana Point Boaters Association, in a letter to the board in June. “It is supposed to pay for itself, but it was never intended that the majority of the revenue to support the commercial core and hotels should come from slip fee revenue.”
Rates have jumped significantly for many of the boaters in the harbor according to past rates provided by the Dana Point Boaters Association.
In June 2021, a boat slip for a 30 foot long boat cost around $546 per month.
Now, that same slip costs around $936 per month, a $58% increase in just over five years.
Larger boats faced an even steeper hike, with a slip for a 60 foot boat that once cost $1,374 a month now costing around $3,500 a month.
Bob Olson, president of the Dana Point Harbor Partners that are developing the harbor, said the county got a great deal in a Tuesday interview, questioning the claim developers were set to make $25 billion off the deal but he wouldn’t say how much they expected to make.
“I hope we make money,” Olson said. “There’s no guarantee here, we’re a private enterprise.”
Olson also disputed the claim that boaters were getting a bad deal, saying they conducted a study showing the slip rates were well below the market average.
“Every year they’ve done a market study,” Olson said. “We’re still significantly below the market.”
Supervisors Question Future of Hotel Workers
The biggest dispute over the project centers on workers at the existing Dana Point Marina Inn who will lose their jobs under a plan that would build two new hotels at the harbor in their place, including one that has rate restrictions to keep it more affordable.
Read: OC Supervisors and Developer at Odds over Dana Point Harbor Remodel
Olson said they need the new leases approved by county supervisors to get financing for the hotels – otherwise, they’ll have to just remodel the existing Inn, which they claim could pull over $80 million in annual revenue out of Dana Point.
“We’re pursuing the new hotel deal but we need to have the leases approved to do that,” Olson said in an interview. “The current structure won’t allow us to get financing.”
But multiple county supervisors brought up concerns that the developer hadn’t explicitly promised in writing to guarantee new jobs for the roughly 20 workers at the Marina Inn at other hotels, saying they needed more commitments from a partner who’s set to make billions.
“Given the numbers we’re talking about, this seems like such a small piece that our partners would say ‘sure, let us absorb that,’” Sarmiento said. “I don’t think the language provided by the partners is strong enough.”
Supervisor Doug Chaffee echoed similar concerns.
“If that could be handled I would be all for this project,” Chaffee said. “I think that’s not a hard thing to do…I’m there except for the labor component.”
While Foley was the one who initially raised concerns about the protection for hotel workers, she said she was now happy with the developer’s verbal assurance that there would be a program for displaced workers.
“I’m also assured if they cannot be transitioned for whatever reason, they will have compliance with the California Warn Act,” Foley said. “I’ve been assured.”
Olson said all the employees would be moved to new jobs, and would have the opportunity to return to the remodeled hotels in an interview.
“We have 19 employees, one who’s part time and we want to make sure they’re taken care of,” Olson said in an interview. “When the hotel reopens we’ll also offer them jobs to come back.”
But that wasn’t enough for other board members, who said they wanted to see the promise in writing.
That effort triggered praise from the region’s hotel workers union for the county supervisors that voted against Foley’s effort to move the deal forward without written protections for harbor hotel employees.
Maria Hernandez, a spokesperson for the Unite Here Local 11 union that represents many hotel employees throughout Orange County, praised the board’s decision to ask for more details in writing.
“We thank the Orange County Board of Supervisors for standing with Dana Point Marina Inn workers and recognizing that workers deserve more than hollow promises from the developer—they deserve written protections that provide a real pathway to retain their jobs,” Hernandez wrote.
Final Details Elusive Amid County Leaders Shifting Priorities
Supervisor Don Wagner also flagged a series of concerns with the new proposed leases on Tuesday morning, saying that Foley’s push to get the developer to offer out meeting rooms from the hotels to the county half a dozen times a year for free was “extortion.”
“Nice little project you’ve got there, would be a shame if something happened to it. By the way, give us space.” Wagner said, all but calling the requirement of meeting rooms as a shake down of sorts. “We should not be in a position of extorting folks who do business with us.”
Foley and Sarmiento both disputed that claim, with Sarmiento saying it wasn’t extortion but good negotiation.
“This is a public asset that we should negotiate,” Sarmiento said. “It’s not extorting anything from anybody.”
Olson said it was Foley’s request to get that meeting space for county staff and that it was a “hard” deal point.
“I don’t know what to say other than it imposes more on the hotels,” Olson said in an interview. “While we had agreed to it, it definitely has been an issue for us for some time…I was pleased to hear that Supervisor Foley was willing to let go of that requirement.”
Despite being the sole vote against continuing negotiations on the deal, Foley also questioned whether there was much room for the county to make money on the deal, saying her priority was to “get the most value” out of the harbor.
“It all depends on how successful it is. How many people shop there, dine, visit the hotels,” Foley said. “There are a lot of improvements to the harbor that make it a benefit to the taxpayer.”
Olson said the overall project is about 70% complete and that they will continue moving forward on the portions of the deal separate from the hotels.
“This is a good deal. The county would never have been able to do what we’re doing, it was too political, which is why they had to take it out to a public private partnership,” Olson said. “They’re in the landlord position, that’s the best position of all.”
Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.
