The contract for an oil company to use the Pier boat launch and 10th Street parking lot has been extended to 2030.
The Seal Beach City Council on Monday, Sept. 23, voted unanimously to approve the extension of the pier and parking license agreement with DCOR, LLC. Technically, the vote was 4-0. District Five Councilman Nathan Steele was absent.
The increased monthly fee will be $13,500 with annual adjustments, according to the staff report. The new rent would officially go into effect Sept. 1, 2024. The agreement includes a potential extension for another five years after 2030.
The annual revenue from the agreement will increase by $162,000 in the first year, according to the staff report.
The council authorized the city manager to execute the agreement.
This was a Consent Calendar item. Consent items are voted on collectively unless a council member pulls one for further discussion. Nothing was removed from the Consent Calendar on Monday night.
Background
According to Barbara Arenado’s staff report, Seal Beach and DCOR have agreements for DCOR to have landing rights on the Seal Beach Pier, use the boat launch, and use parking spaces in the 10th Street parking lot.
“DCOR uses the pier to transport personnel and supplies to DCOR’s offshore oil platform. DCOR has been a positive partner with the City throughout the time it has used the pier and the parking spaces,” Arenado wrote.
“The term of the most recent agreement would have expired in October of 2023 but, due to the storm damage to the Pier, the time necessary for repairs, and the need to negotiate new terms of the agreement, the City and DCOR have kept the agreement in effect on a month-to-month basis,” Arenado wrote.
“DCOR has continued to make monthly payments and is in good standing with its obligations. The City Attorney’s office and DCOR’s counsel have negotiated a six-year extension of the lease, with an additional mutual five-year extension available, at a significantly higher rental rate. As of September 1, 2024, DCOR will pay monthly rent payments of $13,500.00. This is an increase of approximately 20% over the existing rent of $11,251.03,” Arenado wrote.
“Thereafter, the rent will continue to increase by an indexed inflation amount annually. This new rent amount will provide approximately $27,000 of additional revenue to the City in the first year. This amendment would allow DCOR to terminate the agreement on six (6) months’ notice but requires DCOR to pay all the rent for the calendar year in which the lease terminates,” Arenado wrote.
The rest of the agreement remains unchanged, according to Arenado.
“As consideration for an approved amendment and the long positive relationship between DCOR and the City, DCOR has agreed to contribute $90,000 toward pier repair costs. In past cases of damage from storms, the pier fire, and operational damage, DCOR has contributed to a share of pier repair costs,” Arenado wrote.
“DCOR has signed the lease amendment and delivered the contribution check, which the City has agreed to hold until the City Council considers and approves this item,” Arenado wrote.
