Port of LA

5. RESOLUTION NO. - RESETTING OF COMPENSATION UNDER\nPERMIT NO. 718 WITH CROWLEY MARINE SERVICES, INC.\nSummary: Staff requests approval of an Order resetting compensation under Permit No. 718\nwith Crowley Marine Services, Inc. P718 grants Crowley approximately 2.79 acres of land, wharf\nand water space at Berth 86 for an office building, shop facility, warehouse and parking lot to be\nused in connection with tugboat and barge services. P718 has been on holdover since\nNovember 24, 2016, and the proposed compensation reset would cover two successive five-\nyear periods; the first from November 24, 2016 through November 23, 2021 and the second\nfrom November 24, 2021 through November 23, 2026 while negotiations for a successor permit\nto P718 continue. As of November 23, 2016, Crowley paid compensation of $6,590 per month.\nPursuant to Section 3(b) of P718, once the Permit was placed on holdover, rent was increased\nto 150% of the compensation for the immediately preceding compensation period. Therefore,\nas of November 24, 2016, monthly rent was increased to $9,885 and has remained at that level.\nDue to the delays in executing a successor permit to P718, staff recommend executing the\nproposed Order resetting compensation under P718 while negotiations on a successor permit\ncontinue. Under the proposed Order, (i) monthly compensation for the first five-year period from\nNovember 24, 2016 through November 23, 2021 would remain at the holdover rate of $9,885\nper month; and (ii) monthly compensation for the second five-year period from November 24,\n2021 through November 23, 2026 would increase by $6,479.64, or 66%, from $9,885 currently\nto $16,364.64 as proposed. Given the retroactive nature of the proposed increase, Crowley\nwould be required to make a one-time payment of $168,470.64 to cover the rent differential\nobserved over 26 months from November 24, 2021 through January 23, 2024 as well as any\nadditional amounts which may accrue beyond January 23, 2024 until the proposed Order is\nexecuted.\nRecommendation: Board resolve to (1) find that the Director of Environmental Management has\ndetermined that the proposed action is administratively exempt from the requirements of the\nCalifornia Environmental Quality Act (CEQA) under Article II, Section 2(f) of the Los Angeles\nCity CEQA Guidelines; (2) approve the Order resetting compensation under Permit No. 718 with\nCrowley Marine Services, Inc. for the five-year period of (i) November 24, 2016, through\nNovember 23, 2021, and (ii) November 24, 2021, through November 23, 2026; (3) authorize the\nBoard Secretary to attest to the Order resetting compensation under Permit No. 718 with\nCrowley Marine Services, Inc.; and (4) adopt Resolution No. and Order\nNo. .\nCommission Office