A December 10, 2008 letter to the port from Palermo indicates that the partnership began leasing to Ellison last September and is charging him $97,000 a month, “less nominal credits if applicable.” The current term of the lease lasts through May 30.
Though the terms of the state grant are supposed to limit the marina to transient boating uses, Oracle has set up a sizable semipermanent base of operations for its large crew, including large trailers and a big white plastic tent set up in the Fifth Avenue Landing parking lot.
“Oracle intends to remove the boat from the water and relocate it in a temporary tent structure in order to modify the boat,” wrote Palermo. “The primary work to be done on the boat will be the removal of the two outer hulls (floats) and installation of new floats and other elements that are being fabricated off site. This will involve cutting and grinding to fit the new floats and then bonding and painting.
“The tent will be completely closed when any of the above described work is being done with fans used to create negative pressure inside the containment tent to eliminate the possibility of any grinding residue or fugitive dust escaping from the tent.
“Filters will be placed over the exhaust ports from the tent to trap any dust or airborne epoxy or paint operations that would require a San Diego County Air Pollution Control District permit, and the work will be done under their permit.”
According to a September 29, 2008 letter from Chris Hargett, the port’s senior asset manager, to Carpenter, the Fifth Avenue Landing partnership currently pays a minimum annual rent of $469,400.
But the docks may not be around for long.
In addition to the monthly payments from Ellison, the Fifth Avenue partnership is also receiving a $1 million option payment from the San Diego Convention Center Corporation, a subsidiary of the City of San Diego, while the City studies whether it wants to expand the convention center on the land. Currently, Fifth Avenue Landing has the right to build a hotel on the site, but it hasn’t been able to put a deal together.
The convention center option expires in a year, after which the City could pay the partners $13.5 million to buy out the Fifth Avenue Landing lease or walk away from the deal. Palermo says that should the City take over the property for the convention center, Fifth Avenue Landing would continue to operate the docks as an independent operation.