State Probes Redondo’s Use of King Harbor Profits

The State Lands Commission is investigating complaints that Redondo Beach officials have inappropriately spent profits from King Harbor and have operated the area more for the benefit of private companies than the public, a commission spokesman said this week.

“We’ll try to find out what the hell’s going on there, and it should be interesting,” said Jack Rump, assistant chief counsel for the commission. “These seem to be significant charges that they’re making.”

City Manager Tim Casey said he did not know the city was under investigation, but said he is unconcerned because the city has done nothing improper.

“These things pop up from time to time,” he said, “and it’s been my experience that the city generally--if not always--comes out with a clean bill of health.”

Last month, Michael Ford, who lives on his 40-foot boat in King Harbor, sent a complaint--also signed by 33 other residents--to Atty. Gen. John Van de Kamp, asking that his office investigate alleged violations by the city of the Tidelands Grant Act of 1915, which gave the site of King Harbor to the city.

The residents said the city and some of the businesses at the harbor, which were not identified in the letter, charge discriminatory fees for harbor facilities.

“The harbor was established primarily for the use by and promotion of marine-oriented activities, such as boating, boating services, fishing and nautical museums,” the letter said. “These activities have been replaced or diminished by the promotion of bars and modern dance halls which our city finds to be more profitable.”

The land and pier at King Harbor is owned by the city but is leased to 18 master lessees who sublease the property or operate businesses there.

This week the attorney general’s office forwarded the letter to the State Lands Commission, which is the watchdog agency of King Harbor.

The Tidelands Grant Act gave the state tidelands--the area west of the median high tide line--to the city to use for commerce, recreation and navigation purposes. The state reserved the right to take the tidelands back and said the area must be used for the benefit of all California residents.

Rump said the state gave about 70 tidelands grants to local agencies and he has not reviewed Redondo’s since receiving the letter. However, he said a 1971 amendment to the grant made “an awful lot of generalized activities” permissible at the harbor, such as more commercial activities.

He said the commission’s staff told him that Redondo Beach is “one of the better grantees in terms of checking with us and getting approvals.”

In another letter to the attorney general sent this week, Ford said, “I implore you to investigate the . . . city’s administration of the tidelands. If (the residents’) claims are supported in law, as I believe them to be, I request that you initiate proceedings to have the administration of the tidelands removed from the City of Redondo Beach and to have all master leases thoroughly reviewed to determine whether they are in fact valid or voidable.”

The residents not only complain that the city is spending too much on businesses in the harbor, but also that it is improperly promoting nearby businesses with harbor profits. Under the law, profits from the tidelands portion of King Harbor are supposed to be spent on that area.

“We have sought voluntary cooperation from the city in certain areas, but have come to the conclusion that our City Council is either unable or unwilling to honestly and fairly honor their obligations in conjunction with lands held for the public trust,” the residents wrote.

In response, Councilwoman Kay Horrell, whose district includes King Harbor, said: “I don’t understand what their complaints are in that so many have been addressed and resolved,” For example, she said when the boat hoist was broken earlier this year the city compelled the master lessee to fix and operate it.

“Look at all the myriads of need we meet within the harbor,” she said, citing the restaurants, hotels, boating facilities, piers, fishing, Seaside Lagoon and Veterans Park.

When told that the city was under investigation, she laughed and asked: “Is this a joke?”

Later, she said: “If there’s something wrong there, then we need to know about it. I can’t imagine that anything was done wrong deliberately. . . .”

Rump said the State Lands Commission would contact city officials and Ford and the other residents who signed the letter to get specific complaints or evidence about the problems they believe exist at King Harbor.

The commission may audit the city’s books, he said, to make sure that money generated from the tidelands is spent there as required by law.

Casey said $3.5 million in tidelands money was used to acquire the properties where the recently opened Sheraton hotel stands. Although the hotel property is not in the tidelands, the city received permission from the State Lands Commission several years ago to use the money to acquire the property, Casey said.

About $2.2 million of the money was used to help pay a $5.1-million, court-ordered judgment against the city, which had applied eminent domain procedures to acquire the properties. Most of the property owners sued, saying that the $5.4 million the city and the developers initially paid for the land was not enough.

Ford said in an interview he believes that money was allowed to be used for the initial property acquisition, but not to pay the judgment. He said he is upset by the many lease amendments that master leaseholders have been given because they often take away money that could be used for capital improvements.

Casey said some capital improvements were delayed when the court ordered the city to pay the additional money for the Sheraton properties. “That was a wrench thrown into our plans,” he said.

He said that when leaseholders ask the city for concessions in their leases, officials negotiate more benefits for the city, such as more responsibility (by leaseholders) for maintenance.

The city spends $300,000 to $500,000 each year for structural improvements to the pier, he said, and recently spent $1 million for beautification in the harbor.