District waives rent for the next few months but commission expresses concern over maritime nonprofit’s future.
LOS ANGELES — The Port of Los Angeles’s Board of Harbor Commissioners unanimously agreed to forgive AltaSea’s rent obligations through August 2019, on Oct. 18. AltaSea, a nonprofit maritime organization operating at the Port of L.A., has run into problems with utility services on the land it rents from the port district.
Mike Galvin, director of real estate for the Port of L.A., said AltaSea met some of its obligations on Aug. 23 but discovered some power issues with the L.A. Department of Water and Power (LADWP). Port of L.A. staff, accordingly, recommended the district wave AltaSea’s rent obligations until August of 2019, in order to allow the nonprofit to work out its issues with LADWP.
The Port of L.A. and AltaSea initially agreed to pay $136,222 in rent in exchange for 34.75 acres of land for “water-dependent, academic and governmental uses, and a non-profit and for-profit marine research facility.”
“They identified an issue with the LADWP with regards to power sufficiency for the site, to actually allow them to bring tenants into site in the interim,” Galvin told commissioners.
AltaSea expected to have power at its Port of L.A. site by June of this year.
“That has been delayed until June of 2019, approximately,” Galvin said. “They’re still working through that, they believe they’ve gotten through the issue regarding design and an interim power solution that will allow them to bring in tenants.”
A sinkhole was also discovered on AltaSea’s leased parcel, complicating matters further.
Galvin added AltaSea has experienced significant opportunity cost, possibly in the $500,000 to $700,000 range, as a result of the current standoff with LADWP and the inability to rent out portions of the leased parcel to other tenants.
“According to AltaSea, the loss of approximately $500,000 to $700,000 annually in potential revenue from rental income significantly constrains their annual budget,” port district staff stated in a report to commissioners. “Rental costs to the Harbor Department of $14,262 per month would further burden this situation until potential tenants can be accommodated.”
Commissioner Ed Renwick was supportive of the plan to forgive AltaSea’s rent through next summer but expressed concern about the nonprofit’s future.
“What I feel sad about for AltaSea is this is only part of their loss,” Renwick said. “They are a nonprofit doing their best to survive, and because the DWP apparently is a year late in making a solution, I would ask that staff help do everything they can, and to help with the coordination with DWP.
“We’re happy to do our part but we can’t turn on the power,” Renwick continued. “This is terrible for AltaSea. It sounds like … even after we forgive rent, they’re going to be out something like half a million dollars, which is, for a nonprofit who’s doing their best to change the world, is absolutely tragic.”
The port district specifically waived AltaSea’s rent obligations between Sept. 11 and Aug. 22, 2019.
AltaSea is a nonprofit focusing on ocean education and scientific collaboration. The nonprofit organization and marine research center also incubates and sustains ocean-related businesses.