SANTA BARBARA — A marine infantryman who charged guests to use his vessel as a boatel in Santa Barbara Harbor and private charter to nearby islands ultimately resulted in his partner losing his slip permit.
The Santa Barbara Harbor Commission formally revoked a slip permit from Richard Smith last month, ruling he allowed someone to use the berth space as an illegal business and residence.
According to City Attorney Ariel Pierre Calonne and Harbor Manager Mick Kronman, a person who identified himself as “Randy” advertised his vessel as a private charter and vacation rental.
“Randy” was an alias for Mario Geary, who partnered with Smith to use a slip in Santa Barbara Harbor. Geary allegedly charged customers $85 per night, $800 per week or $3,000 per month to use the boat as a boatel or private charter. However, Smith was the sole slip user for the 35-foot berth in question.
Smith was granted a slip permit in 1999. In 2011, he reportedly switched boats and eventually added Geary as a co-owner of the new vessel occupying the berth. However, only Smith was permitted to use the slip. He never applied for a liveaboard or business activity permit, according to Kronman.
Kronman told commissioners that harbor staff became aware of slip users renting the berth and attached vessel for short-term vacation rentals, or “boatels,” and ocean charters through AirBnB.com. The activity violated the harbor’s rules and regulations against renting slips and the city’s prohibitions against non-permitted business activity or residential use.
“We began seeing a trend in these and recognized the fact that there were both a violation of the slip permit rules and regulations that prohibit renting and the Santa Barbara Municipal Code prohibitions against living aboard or conducting business without permit,” Kronman said. “We’re committed to … having the slips used for their intention and … not having them used for what they are not intended.
“This individual had gone to great lengths to not advertise exactly where the boat was located and what exactly was being undertaken on that boat,” Kronman continued, adding the boat was used as a rental and private charter.
In his defense, Smith argued the city issued a lease — not a license — to use the boat slip in Santa Barbara Harbor. A lease would grant Smith a real property interest in the slip. If city and harbor staffs seek to terminate the lease, they would have to file eviction proceedings against Smith in Santa Barbara Superior Court.
“It is our understanding that any termination of [Smith’s] slip rights is subject to California’s unlawful detainer procedures as the slip is considered to be real property. Similar to a tenant who leases an apartment, if there is a breach of a term of the lease, the tenant has the ability to cure the breach and avoid eviction,” David J. Tappeiner, Smith’s attorney, wrote to Kronman and Santa Barbara Waterfront Director Scott Reidman.
Tappeiner added the Harbor Department cannot re-take possession of the slip without pursuing an eviction under statutory unlawful detainer procedures.
“While the slip permit may be designated by the city of Santa Barbara as a license, the city’s classification of it as a license does not necessarily make it so. Our client has a significant property interest in the slip. We do not believe that [Smith’s] interest in the slip can be terminated absent a formal unlawful detainer proceeding,” Tappeiner wrote in a second letter to the city. “He should have the right to defend against the termination in the same manner that a tenant of other real property has.”
The attorney relied on a 1988 California appellate court ruling where a rented boat slip was determined to be real property and subject to unlawful detainer statutes.
“Water in its natural state is part of the land. Therefore a rented boat slip for birth in a marina is ‘real property’ subject to the unlawful detainer statutes,” the appellate court ruled in Smith v. Municipal Court in 1988.
However, city staff disagreed with Smith’s attorney and maintained the slip permit is not real property.
“The critical factor in determining whether a contract is a license or a lease is whether, and what type of, possession is granted by the parties of the contract. If the contract gives the tenant exclusive possession of the property … then it’s a lease,” said Sarah J. Knecht, Santa Barbara assistant city attorney.
She added any contract granting someone a privilege to occupy property under the permission of the owner qualifies as a license.
“In Santa Barbara, slip permits, by their terms, are licenses [and] do not convey an interest in real property. Exclusive possession is not given,” Knecht said. “It’s only a limited right to occupy the slip, which is always given subject to permission of the waterfront.”
A remorseful Geary pleaded with commissioners to not punish Smith for his (Geary’s) actions.
“This whole case is based upon my error,” Geary told commissioners. “2014 is when I started engaging in this activity. I received a call to stop the activity. I told [Richard Smith], yes, I would stop the activity. I definitely actively and proactively told him that I wasn’t doing it, [but] I did continue the activity.”
Still, Harbor Commissioners unanimously voted to terminate Smith’s slip permit.
However, a court hearing is not yet out of the question, as the legal debate of whether the boat slip is governed by a lease or license was not resolved by the Harbor Commission. Instead, Smith’s slip use was terminated based upon the advisory board’s interpretation of city law and harbor rules.
Kronman said slips in Santa Barbara Harbor are issued as month-to-month licenses. Slip permits are assigned to boaters who berth in Santa Barbara Harbor and issued to recreational boaters or commercial anglers. No business or liveaboards are allowed on a vessel berthed in Santa Barbara Harbor without a permit.
Under Santa Barbara’s marina rules and regulations, slip permits “may not be loaned or subleased.” The rules and regulations also limit how long a boat owner can stay aboard their vessels. Specifically, a boat owner is allowed to stay aboard his or her vessel for no more than three nights within a seven-day period. A boat owner who wishes to remain onboard longer must obtain a liveaboard permit from the city’s Harbor Department.
Further, the Santa Barbara Municipal Code prohibits any business or commercial activity taking place in the harbor without a proper lease, license or permit.
Calonne likened the use of a slip in Santa Barbara Harbor to a sports fan’s use of a ticket to attend a live sporting event at a stadium. The ticket serves as a license to enter the stadium and use a seat. The user is not entitled to a property right of the seat or stadium. According to Calonne, boat owners are granted a license to use a slip in Santa Barbara Harbor; no property rights are transferred.
Riedman notified Smith in December 2014 his slip permit was terminated. Later that month, Smith’s legal representative requested Reidman waive the termination. The waiver request was denied in January; Smith appealed the waiver request denial to the Harbor Commission.
In January, Smith’s attorney proposed a settlement. Specifically, Tappeiner requested Smith’s slip be reinstated on the condition he would no longer use it and be given 120 days to transfer the berth space to a third party.
“This proposal will allow Mr. Smith to find a suitable transferee for the slip and to hopefully … recoup at least some of the significant premium that he paid in order to obtain the slip,” Tappeiner wrote to harbor staff.
The Harbor Commission instead voted March 13 to terminate Smith’s slip.
“Mr. Smith was aware of illegal activities engaged in by Mr. Geary aboard the boat they co-owned,” harbor staff stated.