City seeks ways to keep marina afloat
By Armon Owlia and Meruyert Shalbayeva
Staff Writers
BERKELEY >> City officials are attempting to craft a remedial plan to keep the Berkeley Marina afloat beyond next year, when its reserve funds could dry up because of a pandemic-induced business slump and crime surge, according to budget analysts.
To replenish the marina’s funding, the City Council this summer approved Berkeley Mayor Jesse Arreguín’s proposal to tap more than $2.5 million in federal COVID-19 relief money from the American Rescue Plan Act.
“I can confirm that the ARPA funds will be used to keep the fund balanced over the next two years,” said Arrequin’s legislative aide, Stefan Elgstrand.
The Marina Fund, which relies on fees and other revenues such as lease payments from businesses, is projected to come up $1.5 million short in 2022 and $1.15 million short in 2023. Most of that gap could be offset through ARPA payments of $1.4 million and $1.15 million in those respective years.
To tackle the marina’s longer term financial problems, the city’s Parks and Waterfront Commission has recommended that the City Council authorize funneling $2.2 million a year of bed tax revenue from the marina’s sole hotel, the DoubleTree, into the Marina Fund. That revenue currently goes into the city’s general fund for operational spending.
But Arreguín and the three-
The Berkeley Marina is in disrepair, according to city reports. Though the city has proposed some short-term solutions, a long-term solution has yet to be established.
DOUG DURAN STAFF PHOTOGRAPHER
member Policy Committee he chairs oppose such a move, which the council is scheduled to consider on Tuesday. It would be inappropriate “to carve out a special exception for the Marina” when there aren’t any “special exceptions in other areas of the city,” Elgstrand said in an email.
Instead of raiding bed tax revenue, known as the Transient Occupancy Tax, the Policy Committee has been searching for a more permanent funding solution to launch the Berkeley Marina Area Specific Plan — a three-year planning project — onto a sustainable fiscal path.
“In general, the infrastructure investments we are making will help bring people back to the marina, while we are exploring the creation of a new ferry terminal and a second hotel that will provide significant revenue to the marina,” Elgstrand said.
In 2019, the city expected the Marina Fund to remain solvent until 2025. However, the pandemic accelerated the fund’s depletion by curtailing travel and dining revenue stream when businesses temporarily shut down.
“Since COVID-19, lease revenues from the (DoubleTree) hotel, restaurants, and commercial tenants have plummeted and safety related issues that were already significant, have become more prevalent, forcing many berthers and their associated revenue to leave,” says the city’s budget report, released in May. Berthers pay rent to keep their vessels in the 1,000slip marina.
Revenue brought in by the marina’s restaurants and the DoubleTree fell by more than 55% over the last two years, from nearly $2.5 million in 2019 to barely $1.1 million projected for 2021.
Although crime decreased overall during that period, city analysts blamed “a surge in crime” in summer 2020 for contributing to the financial shortfalls that sped up the overall decline in the Marina Fund.
“The issue happened in July and August 2020 when there was a surge in crime in the marina, with 114 incidents happening in those two months. In August and September 2020, in direct response to the crime surge, there were multiple slip cancellations which are estimated to cause a reduction in revenue of $350K a year,” Elgstrand said.
Armon Owlia and Meruyert Shalbayeva are students at UC Berkeley’s Graduate School of Journalism covering economic development.
