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Newport Bay Boat Slips Give Berth to Lucrative Side Income for Residents

Boating: Homeowners get slips for $80 a year, then rent them out for thousands. Officials say they're profiting from public waters.


Even people along Newport Beach's Gold Coast can use a little extra income. Owners of million-dollar homes overlooking Newport Bay are pocketing as much as $9,000 a year renting out boat slips that the city allows them to own for a yearly fee of $80.

The practice has been going on for years but appears to have become more common recently because of a shortage of berths for large yachts. Some owners of 50-foot yachts must wait as long as three years to find a slip in the harbor.

Such rentals are permitted by ordinance. But Newport Beach's Harbor Commission has launched a study to determine how pervasive the practice is, with some officials expressing concern about homeowners making profits from public waterways. The city is also considering raising the annual fee for residents who rent out their berths, and using the money to maintain the harbor.

"Is it right for people to make money on [public waters]?" asked Tony Mellum, director of harbor resources. "That's what we are looking at."

One company formed last year to address the berth shortage acts as a broker between homeowners and boat owners, posting fliers around coastal neighborhoods that state, "Turn your empty slip, end tie or dock space, no matter what size, into monthly income."

The company expects to rent out 200 of the harbor's 1,200 residential slips this year, said Sean Acosta, owner of Newport Slip Rental.

Finding homeowners interested in renting out their slips--even in a wealthy place like Newport Beach--hasn't been difficult.

"People will, especially in the midst of uncertain economic times, do whatever they can to maximize their income," said Acosta. Acosta has turned the slip next to his home into a berth that accommodates three 40-foot yachts and one small boat. He won't say how much he makes from the rentals but said it goes a long way toward paying his home mortgage.

"I don't think there's anything wrong with people picking up extra income, especially if [the dock] is not being used," he said. "We get calls every day. I wish I had more slips."

The slips are owned and maintained by residents, but they sit on water owned by the state and controlled by the city.

"The only private property is the structure itself," said Dave Kiff, Newport Beach's deputy city manager.

Officials said an increase in the $80 fee could go toward maintenance of the aging harbor and for water-quality improvements required by environmental laws. Some money could also go toward dredging the bay.

"We have more and more responsibility to improve water quality in the bay, and that's a very expensive proposition," Mellum said. "And that's going to have to be funded from some source."

The rental issue is a sensitive one to many residents, and few of those renting the docks are willing to talk about it.

One homeowner recently rented his slip to the owner of a 42-foot powerboat for $900 a month.

Because it reduces the couple's privacy, "my wife would rather not have it there," said the homeowner, who asked not to be identified. "For me, if I'm not using it, it's a few extra bucks a month. Every little bit helps."

Ray Vincenti, 72, started renting out the slip in front of his $2-million, 4,200-square-foot home a few years ago when he sold his boats. Two boats--a 36-footer and 38-footer--occupy the space. Like other homeowners, he opposes city action to take some of his rental money.

"I get really appalled at the fact that the city can't live within their own budgets," he said. Speedboat owner Bill Williams recently moved from Huntington Harbour to Newport Beach but could not find a house with a slip. Private yacht clubs in the harbor didn't have slips available, so Williams contacted Acosta's company.

Acosta had several--at $18 per boat-foot. Williams said the slip he chose wasn't as close to his house as he would have liked, "but you have to weigh the pros and the cons."

The slips along Newport Harbor are assigned to properties that ring the bay. Some are in front of homes; others are within a few yards. Having one can add $500,000 to $750,000 to the value of a home. There are no regulations about leasing them.

Some yacht brokers fear that if the city raises the annual fee on the slips, it could leave even fewer berths available to their customers. Dennis Riehl of Crow's Nest Yacht and Ship Brokerage said fewer people will buy his yachts if they must wait years to berth them in Newport Bay. "The residents have taken up the slack for the guy who wants a boat in the harbor," he said.

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