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State Could Shut Down Pete's Harbor Development

At a meeting of the State Lands Commission, it was revealed that the Uccellis owe the state over $400,000 in back rent on the outer harbor, and that the state may have the right to deny the proposed development.

In a meeting of the California State Lands Commission last week, several new developments surfaced regarding the Uccellis' rights to the outer harbor of Pete's Harbor, and the type of use of the land that is mandated by state law.

Namely, it was revealed during the meeting that the Uccellis owe more than $400,000 in rent on the outer harbor, dating back nearly 30 years, as the SLC owns that part of the harbor and it was only leased to the Uccellis to rent out commercially.

Furthermore, according to the language of the lease between the SLC and the Uccellis, which was drawn up back in the 1980s, it appears that the Uccellis may not have the right to change the use of the outer harbor from a commercial marina to private boat slips usable only by residents of such a housing development, without permission from the state - which the state has not yet agreed to.

During the meeting, which took place in Sacramento last week on Dec. 5, Ted Hannig, the attorney for current Pete's Harbor owner Paula Uccelli, addressed the SLC board and said that the Uccellis have tried countless times over the past 28 years or so to pay their rent on the outer harbor to the state, but that the state has repeatedly refused to tell them how to do so.

Hannig explained that, back in 1956, Pete Uccelli originally requested to develop both the inner and outer harbor areas of what later became Pete's Harbor into the commercial marina it is today - a small community made up of tenants on boats and in RVs and motorhomes, and small businesses such as storage sheds and the Waterfront Restaurant.

Hannig said the SLC originally objected to Pete's request, but that eventually, a compromise was reached.

Later, in the 1980s, that feeling of compromise changed, and Hannig said Pete was the subject of some "political acrimony" with the state, which resulted in new agreements including legislation, a court judgment, and a lease between the SLC and him that stated that Pete was allowed to "maintain the land as a commercial marina or berthing facility."

It is that very phrase that appears to have surviving owner Paula Uccelli, a group of tenants and local activists, attorney Ted Hannig, and several members of the SLC all locked in debate.

 

$406,000 in back rent owed

Based on that agreement of 1984, Hannig said that, repeatedly over the past 28 years, the Uccellis have tried to pay their rent to the SLC for the outer harbor.

Hannig said that Pete Uccelli, Paula Uccelli and himself have all tried contacting the SLC on numerous occassions to find out "where to send the checks," but that they have either been ignored or given the run-around every time.

Due to the alleged lack of response on the part of the state, Hannig said Paula Uccelli eventually began depositing rent checks from tenants of the outer harbor into a separate bank account for safekeeping until they were told by the state where to send their agreed-upon rent.

At one point, Hannig said he even sent a good-faith check of $20,000 to the state - but that the check has gone uncashed for quite some time.

"It's now sitting in some fire safe at the State Lands Commission somewhere, untendered," Hannig said during the Dec. 5 meeting.

Hannig also said that Paula Uccelli met a member or staffer of the SLC in person one time and whipped out her checkbook, asking if she could write a check then and there, but that the person said he or she didn't know exactly how much she owed, so he or she would get back to her with the amount and where to send it. Hannig said that call never came.

Hannig furthermore said he and Paula Uccelli contacted a friend of theirs in Congress and asked for his help. Hannig said that Congress member contacted the SLC on their behalf, but also said he never received a reply.

Most recently, Hannig said he contacted the office of California Lieutenant Governor Gavin Newsom - as Newsom is the current chairman of the SLC - within the past two to three weeks to ask where they could send the money. Hannig said he received a call back from "a very pleasant and professional" female staff member in Newsom's office, and that she didn't know the answer to his question but would pass on the message to members of Newsom's staff.

Since then, Hannig said he has still never heard back.

Members of the SLC board appeared cynical of Hannig's description of the Uccellis' numerous attempts to find out where to mail their rent checks. One member asked Hannig to disclose specifically the date of his call and the name of the female staffer in Newsom's office he spoke to. Hannig said he didn't have that information on him and that it was "in his notes and call logs" back at his office, and that he could give them that information later. The SLC member said he found it "very convenient" that Hannig could not provide the information then and there.

He also stated that the right office to call would have been the State Controller's office, not Gavin Newsom's office.

The chairman of the meeting, Alan Gordon, who is the Deputy State Controller and alternate chair in Controller John Chiang's absence, then asked SLC Chief Counsel Jennifer Lucchesi exactly how much back rent the Uccellis had racked up over the past 28 years or so.

The answer was "$406,000, give or take."

SLC Executive Officer Curtis Fossum indicated that the SLC had recently sent a demand letter for the back rent to Paula Uccelli on Nov. 9.

Futhermore, Fossum said they sent a request for documentation of all the Uccellis' recent attempts to try and send money, and when and where Hannig's $20,000 check had been sent.

Fossum said no reply from the Uccellis or Hannig had been received to the Nov. 9 demands.

To that, Hannig replied that they had not yet responded because the $20,000 check he had sent was not credited or factored in to the amount the SLC indicated they owed in the demand letter.

Gordon seemed to have at least a small amount of sympathy for Hannig's description of the Uccellis' run-around regarding where to send the funds, so he asked SLC staff to provide him with a new number that did not include any penalty fees. Lucchesi said it would take a little time to calculate that number.

 

What uses of the outer harbor are allowed by state law?

The next issue of debate was regarding exactly what uses of the outer harbor are permitted by law, according to the 1984 lease agreement between the SLC and the Uccellis.

One of the main issues of debate appears to be over the "public trust doctrine," which all parties appear to agree indicated the Uccellis only had permission to operate the outer harbor as a commercial marina or berthing facility - which appears to include, in essence, renting slips to the public.

Hannig argued that, in his interpretation, the doctrine does not imply that "floating residents" are required in order for the outer harbor to be in compliance.

"Residence is not a public trust issue - the only public trust issues are navigation, fishery, commerce and recreation," Hannig said.

"There's been some suggestion, apparently, somehow, that with the marina area - because of the public trust doctrine - that there needs to be floating residents there, and that's completely inconsistent with the public trust doctrine, the history, the leases that were signed, and so forth," he continued.

At that point, Chairman Gordon asked Chief Counsel Lucchesi to clarify whether transferring the lease from the Uccellis to the Pauls Corporation - which Uccelli wants to sell to and who wants to build the 411-unit housing development - is allowed, or whether it's something that needs to be approved by the Commission in order to be legal.

Lucchesi replied that "SLC staff is continuing to look into the judgments and lease language," but that she tentatively believes that, because the lease language said the marina must be maintained with both commercial and ancillary uses, that to transfer it to someone else such as the Pauls Corporation that intends to make it only available to private residents would require an amendment to the lease, which the SLC must approve.

Looking at maps of the inner and outer harbor areas of Pete's Harbor - included in the photos section of this article - Chairman Gordon said, "There's obviously a number of issues here that need to be resolved - legal issues, boundary issues, and interpretations - that are going to take some time to iron out, I believe."

The local group Save Pete's Harbor 2012 - which includes both live-aboard and RV/motorhome tenants, as well as non-tenant supporters - has already filed an appeal of the Redwood City Planning Commission's unanimous approval of the Pauls Corporation's proposed luxury housing development on Pete's Harbor. As of now, the City Council is scheduled to hold a hearing on that appeal on Jan. 28.

Pete's Harbor residents have already received eviction notices from Paula Uccelli asking them to vacate by Jan. 15.

 

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Alan December 12, 2012 at 05:08 PM
I'd like to point out one last thing...in the video and this article it's mentioned that the Uccelli's knew they owed the rent...they aren't disputing this. They then mention that they put that money in a separate account for the eventual day they'd have to pay it. There must then be a bank record of such an account existing and all that money should be there. However, the Uccelli's shouldn't get the added interest...and I'm sure if that account exists and kept growing, it was considerable. They got to skate on 28 years of collected money.
Brenda & David December 12, 2012 at 10:06 PM
In defense of SLC tracking, they do have thousands of leases and it seems that the Uccelli leases didn't begin in the "normal" way of such things--with normal processes in place for state action to be taken in default and so forth--but rather these leases were legislated in an Act sponsored by Uccelli's assembly friend Dominic Cortese (http://en.wikipedia.org/wiki/Dominic_L._Cortese). This is far from an ordinary and normal way for one to obtain a state lease. It will be good for the state to be able to collect the full amount owed from Uccelli.
James Lee Han December 15, 2012 at 10:13 AM
"Well it certainly is interesting how this went from a clear cut story of 'rotten no good tenants,' to a story where nothing was quite as it seemed. I find it hard to believe that for 28 years you can't find anyone in the state to take your money." Excellent comments, I totally agree.
Alison Madden December 28, 2012 at 07:42 PM
Jim, what is your connection to the Uccellis or are you a reporter? That you would call the SLC to find out is interesting, but the other half (not penalties and rent) is market rate for one of the leases that has a higher rent price that is not reflected in the statute, it's a market rate lease that readjusts every five years. Pete was a smart man and we all are, we can read a lease and know the terms. Although I very much respect his memory, Pete didn't seem to much care what the state thought at any turn, and the address for sending $ is in the lease and public record. There would be no penalties and fees if there were no nonpayment and no proof of efforts to pay. The reason why the tenant has to show that (vs state efforts to collect) is that it is the tenant's legal obligation to do so, and Hannig raised that they had in fact tried to do so.
Alison Madden December 31, 2012 at 06:18 AM
Are you saying that the leases you signed were for something other than a month to month basis? Are you saying that you moved into Pete's Harbor with the intention of moving a boat there without actually looking into the possibility that a live-aboard situation might be tenuous? AM: with no "for sale" sign, express statements that I wanted me and my kids to be here for 20 years, the knowledge that the place has been here for 50 years, nothing on the approved website, nothing in the hallway, NO how could I think liveaboard status was "tenuous"? What indications? It's not listed with MLS, it's not shown by realtors. All anyone ever knew is that Pete wanted to be part of the 2003 little city, and it didn't pass. Nothing else was ever apparent to "the City".

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