A lawsuit challenging recent increases for renting boat slips at the soon-to-be remodeled Dana Point Harbor can proceed, a judge has decided.

Dana Point Harbor Partners, which won a 66-year lease of the harbor from the Orange County Board of Supervisors in 2018 and is embarking on a $400 million overhaul to its marina and commercial core, petitioned to have the lawsuit brought by a group of boaters thrown out, but Orange County Superior Court Judge Glenda Sanders rejected the developers’ efforts in a ruling finalized March 23.

With the remodel, which includes a new marina, two new hotels and renovated restaurant and shopping areas, came a hike in slip prices in September that local boaters say is going to force people to sell their boats or move to other marinas.

The boaters say about 300 vessel owners have left the Dana Point Harbor because of the increase in the last few months.

But, Joe Ueberroth, founder and president of Bellwether Financial Group, who is the partner developing the 2,400-slip marina, said the rent increases are fair and mesh with what is charged at other local harbors, adding that a wait list has more than 2,000 boat owners eager for a new slip once renovations are complete.

“The partners were trying to short-circuit the lawsuit by getting a judge to say there was no basis,” Dennis Winters, the boaters’ attorney, said of the recent court maneuverings. “But, the judge overruled that and it gives us ground to go ahead.”

The boaters, in their lawsuit filed in October, are asking the court to “enjoin the imposition of a massive slip rate increase,” a proposed increase they say will result in a 26% to 96% increase (based on slip size) in boaters’ rates.

In their lawsuit, the boaters argue that when the country made its deal with Dana Point Harbor Partners, the contract stipulated rents for the slips must comply with market rates found at similar public harbors between San Diego and Santa Barbara, but the increases announced last year are more expensive.

“There’s a formula that the county came up with 20 years ago,” Winters said. “But, the partners took a survey of Newport Harbor and included a few smaller moorings in Huntington Beach.

“Newport Beach is completely different than Dana Point Harbor,” he said. “Dana Point is a public-owned marina with 2,400 slip holders. None of the harbors the partners compared are anywhere close to the size of Dana Point and none are publicly owned.”

The boat owners are arguing “the comparison was not fair and reasonable,” Winters said.

They are also arguing that Dana Point Marina holds a monopoly as the only large, publicly owned marina in Orange County and that it has breached its obligation to treat slip holders “fairly and reasonably.” The slip rate increase violates the California Tidelands Grant, the boaters argue, and its requirement for providing public access to amenities such as the county-owned harbor.

The boaters are asking the court to intervene and require Ueberroth to do another survey of other harbors, following the county’s formula.

The boaters’ class-action lawsuit also named the County of Orange, but for now it appears the judge’s decision has removed it from the challenge. County officials said because of the possible pending litigation, they would not comment on the lawsuit.

Ueberroth, who has now moved a construction barge into Dana Point Harbor and will start work on some of the docks shortly, said he couldn’t comment on pending litigation.

In a September letter to 5th District Supervisor Lisa Bartlett, Ueberroth said the new rates are at the “low-end of our market” and “is within the Orange County coastal marinas.”

He also disagreed, in that letter, that the rate increase violates the Tidelands Grant, writing its purpose “is to facilitate commerce and ensure revenues are reinvested into the harbor. There is no restriction in the Tideland Grant that restricts the ability to charge market rates.”

But, Anne Eubanks, who heads up the Dana Point Boaters Association, said she has heard from many unhappy boaters.

“The boaters are angry,” she said. “A lot of people have had to sell boats or move their boats, and that’s not always easy. There’s a lot of anger against Dana Point Harbor Partners for doing this, but also a lot of anger against the Board of Supervisors, and we still contend this is against the Tidelands Act.”

Recently, Dana Point Harbor Partners went before the Board of Supervisors and got approval for a new financing plan for the harbor renovation, which splits the marine and the commercial core from the plan for the two hotels, letting them proceed now. Financing for the the hotels will be sought after they get the necessary approvals from the California Coastal Commission.

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