About the Contract:

This page contains two articles:

1. Important Contract Facts by Jeannette Merrilees, co-chair of Save Crystal Cove.

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2.  Crystal Cove Concession Contract by Sandra Genis, land planner and businesswoman.

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Important Contract Facts

by Jeannette Merrilees, co-chair of Save Crystal Cove

Discriminatory pricing effectively bars access to average citizens:

State law prohibits certain types of improvements within State parks.  The proposed resort clearly violates these prohibitions:

Public access restrictions and resignation of state stewardship over natural resources would render Crystal Cove a park "in name only":

The publicly-approved 1982 General Plan, which called for modest improvements "for the safety and convenience of the public", is being amended after-the-fact (and with no public input) to permit the luxury resort:

**  California Public Resources Code Section 5080.03 (c)

Crystal Cove Concession Contract

by Sandra Genis, land planner and businesswoman

The following summarizes major points of the Crystal Cove State Park Concession Contract, with some editorial comment:

The contract is for 60 years, including  a 5 year development period and 55 year operating period.

Its stated purpose is to "promote the safety and convenience of the general public in the use and enjoyment of, and the enhancement of recreational and educational experiences at Crystal Cove."

The contract covers Parcel A, consisting of 12.3 acres (or 13 acres per Exhibit A to the contract) with 46 cottages on the ocean side of the highway and parcel B, consisting of 16.2 acres with paved parking for 425 cars, restroom building, entrance station, landscaping, and paved pathway leading to Parcel A. (p. 8)  The map in Exhibit A appears to extend the leasehold to mean high tide line, i.e., NO PUBLIC BEACH!

p. 11.  Fee during the development period is $50, 000 per year, with rents from residents credited to the fee.  Extra fees during development period roll over to next year.  (Thus, as long as residents remain, the developer nets $450,000 per year, plus parking revenues. The contract indicates that it will take about nine months to get the General Plan amendment.  Working drawings would not be approved until some time after that.  Tenants stay until 120 days after all specifications, financing, etc. are in order, per p. 33.  Thus, without making any improvements at all, the concessionaire gets income of around half a million a year for at least a year.)

p. 14.  Revenues from the interpretive center don't count toward gross receipts, but will run the center (No contract specifics as to making up shortfalls).

p. 16.  "Use of resort facilities described under (1) below shall be reserved for overnight guests of the Resort, with public access to such facilities to be restricted as Concessionaire deems reasonable appropriate to its operations" (!!!)  "Resort guests shall receive priority in the hotel facilities that are open to the general public, such as, but not limited to, the restaurant.

"(1) below" on page 17 lists:

p. 18.  Parking for the general public will be reduced to 225 spaces (or, per page 2 of Exhibit A, 210 spaces), a loss of 200 to 215 spaces for general public parking.  The State will then get 5 % of revenues for 200 to 215 cars, versus 100 % of revenues for 425 cars, at $6 per car, an approximate 98 percent decrease.

New items for the general public will be one bathroom, an interpretive center, and a dive shop (which will be profit making).

p. 21-22.  The concessionaire will rehab 39 cottages, demolish 7, build 14 new, demolish garages, install utilities, remodel one cottage into a fitness center, build a restaurant, build up to three swimming pools, construct parking for up to 150 cars (150 parking spaces plus the 200-215 lost to the public at the Los Trancos lot means there will be 300 to 350 concession guest spots---what for?!?!)

p 22.  Restaurant will have conference capability (Will the conferences use all the parking?)

p. 22. Interpretive center "may" be in Los Trancos area, with "additional" center on Cove side.

p. 23.  Seawalls "as needed".

p. 24.  "Final approval" of general plan amendment "shall be scheduled by the Department".  [Does this mean they can't schedule a denial? How about just scheduling a hearing? (anticipate 9 months from now)] .

p. 33.  Alterations not in conformance with the General Plan "will require the Department's prior written approval".  [Does this mean they get to ignore the Commission approved General Plan as long as they get Department approval?]

p. 19.  Concessionaire also has the option to establish a snack bar.

p. 37.  "Concessionaire shall provide services 24 hours a day, 365 day a year (except 14 days for maintenance, etc.) [Does this mean we get to use the beach 24 hours a day?  Hot dog!  If not, do resort guests get to use it at night and in the evening when the rest of us are kicked out?]

p. 38.  No habitat to be disturbed "without permission of the District Superintendent".  [No public hearing or notices?  He/she just signs off and that's all?  No Fish and Game Department approval?]

p. 41.  Concessionaire not responsible for clean up of contaminants "which were not directly caused by Concessionaire".  [So they have no responsibility if it's done by a guest or subcontractor?  And will they then get rebate of concession fees?]

p. 42.  Pest control activities [??? How do they keep that out of the ocean?]

p. 43.  May also include employee housing on-site.

p. 44.  Signs to be approved administratively--no particular restrictions as to size, location or lighting are specified.

p. 45.  Concessionaire can rent out the place for filming (as has been done in the past).  Money will be "gross receipts". [So they get 95 percent and the State gets 5 percent, versus the 100 percent now going into public coffers].

p. 50.  Concessionaire waives right to make State pay for improvements.

p. 53.  Concessionaire will pay for a professional to design and provide "administration" of interpretive center programs.  [Who pays for those who actually implement?]

p. 56.  Ten percent of rooms to be "affordable"--not to exceed 50 % of "Average Daily Rate" which is not defined, though higher rates may be approved by the State, "to reflect costs".  State gets to review all prices--including those for restaurant food.

p. 57.  Faithful performance guaranty to be $100, 000 letter of credit!  [Just $100, 000 and not even a bond!  Just a letter of credit-- with no requirement that it be irrevocable by the bank (which no bank would give anyway!)].

p. 59.  If the State is name as co-defendants, the Concessionaire pays only if they control the defense.  If the State gets its own attorneys, which they always do, then the State pays.

p. 61.  Insurance policy for $2,000,000 combined single occurrence.

p. 65.  Rent rebated if revenue down due to uninsured damages.

p. 69.  Concessionaire has nonexclusive use, but "use by the general public will be limited by the terms and conditions of ... contract".  "Any uses, events, or activities (excepting emergency services or responses), which the State takes under consideration to authorize for the premises, shall be submitted for Concessionaire's approval." [!!!!]

p. 81.  State may only buyout the contract after ten years and after a twelve month notice.  If the buyout is not completed in 2 years, then stuck for another ten.

p. 82-83.  If buyout, State pays unamortized balance of improvements, plus 2 %, plus Net Present Value (at the time) of interest in the concession for remaining term of contract, calculated as average annual net operating income, for past 5 years multiplied by years remaining.

p. 90.  Failure to perform may end the contract only if written notice is given not only to the contractor but to each secured lender and they have not cured failure, either.

p. 93.  If Concessionaire defaults, State may assume obligations and right.

p. 96.  Concessionaire may assign contract if have general partners in common or 50 % interest in assignee without State permission.

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