Legal Battle Begins Between Boaters and Harbor Partners

By Lillian Boyd

A class-action lawsuit has been filed against the Dana Point Harbor Partners and the County of Orange on behalf of boaters, after an increase in slip fees was announced in June—a lawsuit that allegedly was never served to any of the named defendants.

The complaint, which was filed on behalf of former and current slip renters who had slips as of June 21, seeks a temporary restraining order (TRO) against the Harbor Partners from imposing the original increases. It also alleges that the increases are a violation of the lease agreement the Harbor Partners have with the County of Orange, the Dana Point Tidelands Grant, and state law.

Dana Point Harbor was established under the Dana Point Tidelands Act of 1961. What the county is able to do with its waterfront is determined by the California Coastal Commission and laid out through a Local Coastal Plan (LCP).

On June 21, tenants of the Dana Point Harbor Marina received notice that there would be slip rate increases—news that many boaters had anticipated but still dreaded.

When Dana Point Harbor Partners took over as lessees for the county-owned land in October 2018, it was understood that changes would come to both the marina and landside. The push for a revitalization had begun decades ago and an agreement finally came to fruition: The Partners would invest $330 million into the harbor.

On Oct. 1, boaters with 55- and 60-foot vessels saw the biggest price increase of 96% (or a little more than $1,000 above their current fees). For slip sizes less than 30 feet, tenants have seen an increase of about 26%. For the 25-foot vessel, there is to be about an additional $90.

“This shocked everybody in the harbor,” Anne Eubanks previously said to Dana Point Times. “I don’t think the average boater here thought there would be slip increases until construction began and you were in your new slip.”

Eubanks, DPBA President, acknowledges that conversations were held with the Harbor Partners prior to the increase notice, but there was an expectation that additional information would be provided “well in advance.”

“Dana Point Boaters Association (DPBA), and most boaters in Dana Point, strongly disagree with the very large slip rate increase announced effective October 1, 2021, the rationale used to justify the increase, and the methodology cited for the increase,” Eubanks wrote in a letter to Orange County Board Supervisor Lisa Bartlett.

Bartlett, whose district represents Dana Point, played a prominent role in finalizing the lease agreement with the Harbor Partners in 2018.

In a letter dated Sept. 21, Bartlett states that while the county is cognizant that Eubanks may not support the slip increases, the fee hike is consistent with the terms of the Tidelands Grant.

“(The slip rate increases) are necessary to support the forthcoming revitalization of Dana Point Harbor…” Bartlett wrote. She added, “Please know that County staff have worked closely with DPHP throughout this process and verified that the proposed rate increase is within the market rates, not only in Orange County, but also for Southern California.”

Bartlett’s letter goes on to state that county staff and counsel have reviewed both the lease with DPHP and the Tidelands Grant and confirmed there is no conflict.

In addition to the lawsuit, boaters have organized two demonstrations, fundraised and spoken at meetings since learning about the increases. Most recently, about a dozen demonstrators gathered near the Ocean Institute on Sept. 29 in light of Dana Point’s State of the City 2021 event—where Bryon Ward, one of the Dana Point Harbor Partners, was a panelist.

Attorneys representing the defendants—the Harbor Partners and the County of Orange—filed a responding memorandum on Wednesday, Oct. 6, stating that the plaintiffs never actually served the summons or complaint to the defendants, nor had they demonstrated the harm plaintiffs would experience as a result of the increased fees.

A plaintiff pursuing a TRO in civil cases is tasked with detailing either how they will prevail or how they will be irreparably harmed without injunctive relief. The memo also argues that the plaintiffs did not meet the burden of proof pertaining to the TRO.

The lawsuit seeks restitution for all “benefits” the Harbor Partners received from boaters by their “excessive increases in proposed slip rental, and damages for the costs imposed on Boaters who have left the Marina because of the proposed increase.”

For the larger boat slip categories, both Joe Ueberroth and Ralph Grippo of Dana Point Harbor Partners have previously acknowledged the “tremendous increase.”

“But it also needs to be acknowledged that most of our vessels are receiving free utilities ranging from a couple hundred dollars a month to over $1,000 a month for some of the large multimillion-dollar yachts,” the notice to boaters stated.

Ueberroth, a marina developer, founded Bellwether Financial Group, which now guides the marina operations, including the boat slips, boater facilities, dry boat storage, day-boat parking and launch ramp areas. Grippo is a principal with Bellwether, which makes up a component of the Dana Point Harbor Partners and the public-private partnership held with the County of Orange.

The lawsuit argues that the new slip fees are not reasonable, nor do they represent market-rate pricing. Leadership with two boater groups, the Dana Point Boaters Association (DPBA), as well as Save Our Slips (SOS), asserts that the methodology is not compliant with the Dana Point Tidelands Trust. Both the DPBA and SOS have funded legal representation for the lawsuit, retaining Dennis Winters with Winters Law Firm. Dennis Winters’ spouse, Victoria Winters, sits on the DPBA Board of Directors.

“Our contention is that the Harbor Partners used a formula of their own to determine market rates,” said Wayne Addison, of SOS.

According to marina management, approximately 90% of the tenants come from Orange County, with the majority of the rest coming from Riverside County.

“We provided the County with a rate comparison that included marinas from San Diego through Los Angeles (the Southern California market to which opponents of the slip increase have referred),” Grippo said.

The defendants’ memorandum states that of the 2,409 boaters in the harbor, seven have indicated they would terminate their lease agreement. It also counterargues that the Tidelands Grant contains no language regarding fees and methodology.

More than 2,000 people currently sit on the waiting list for a slip. Grippo previously told Dana Point Times that the list has grown since the announced fee increase.

“It is hard to imagine that the marina would continue to be 100% full with growing wait lists if the rates were unreasonable. … Some of our wait lists have Orange County residents who have been waiting over 20 years,” said Grippo.

The Harbor Partners’ attorneys argue that if the TRO is not granted, the plaintiffs will not be irreparably harmed—and, contrarily, if it is granted, the Harbor’s revitalization project will be adversely impacted and “could bring the entire project to a halt.”

“(The Plaintiffs’) request for a TRO/preliminary injunction is procedurally improper, unwarranted and unsupported by the facts and evidence, and therefore, DPHP requests that it be denied,” the memorandum states.

While the plaintiffs hope to halt the increases as a result of the TRO, DPBA and SOS leadership still encourage the boater community to pay their fee increases. Through newsletters, slip holders have been asked to write “payment in protest” on their check memo.

According to the defendants’ attorneys, only 65 slip holders have written that memo—or 2.7% of slip holders. A judge’s decision on a TRO will determine whether payments in protest will continue.