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Previously:

• Crescent City Harbor, Developer Reach Settlement Agreement; Port to Regain Control Over RV Parks

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Though he acknowledged that he and his colleagues took a risk, Commissioner Wes White insisted that the Crescent City Harbor District wasn’t worse off after trying to work with Alex Lemus.

Lemus, CEO of Renewable Energy Capital and former lease-holder of Bayside and Redwood Harbor Village RV parks, is expected to pay the Harbor District $100,000. The Harbor District’s profit margin at the RV parks before Lemus took on the leases was about $100,000, Harbormaster and CEO Tim Petrick said.

Petrick told commissioners and the public on Tuesday that he expects that $100,000 from Lemus by Thursday.

This announcement came about a month after Lemus agreed to relinquish possession of Bayside and Redwood Harbor RV parks. He still holds the lease for Redwood Harbor Village’s overflow lot, which he turned into South Beach RV Resorts, according to Petrick.

The Harbor District will be pursuing legal actions for breaches of that lease as well, Petrick told the Wild Rivers Outpost on Wednesday.

“(Lemus) is three months behind on the lease payments, has not provided insurance, has not addressed replacing the public restroom as per the lease agreement and has not acquired any operating permits,” Petrick told the Outpost. “I don’t believe that is the entire list, but it’s a start.”

The Crescent City Harbor District had reached a settlement agreement with Lemus over the two RV parks in October.

On Tuesday, the Harbor District’s account manager, Thomas Zickgraf, said the port’s finances were down for the year by about $315,000 due in large part to the district’s legal expenses from disputes with Lemus as well as with Fashion Blacksmith. However, he said he expects those legal expenses to diminish as the Crescent City Harbor District enters 2024.

The Crescent City Harbor District is also still paying legal expenses related to ongoing litigation against the Dutra Group over construction of the inner boat basin following the 2011 tsunami, Petrick said.

Petrick said he anticipated the Harbor District’s $315,000 in legal expenses to be one-time expenses.

“Outside of legal expenses at the moment, we’re basically at break-even,” he said last week.

Lemus’s history with the Crescent City Harbor District dates back to 2016, when the Board of Commissioners was trying to get a solar project underway to save on energy costs.

In early 2020, Lemus was the only developer who answered a request for proposals to redevelop the harbor’s on-land properties — a fact Commissioner Rick Shepherd pointed out on Tuesday.
According to Shepherd, because the Crescent City Harbor District is a public agency, they couldn’t just “hire somebody to run these trailer parks.”

“That RFP was put out, (Lemus) responded, he gave the best deal,” Shepherd said. “We had some comment that maybe it wasn’t a good business deal, but at the same time that’s the decision we made based on an RFP and nobody else responding to it. And I think we did the best we possibly could. I’m sorry it didn’t work out any better.”

In August 2021, Lemus unveiled a plan to redevelop Bayside RV Park, which included upgrading the landscaping and infrastructure, purchasing Airstream travel trailers and cabins and making it attractive for short-term overnight stays.

The developer entered into ground leases with the Harbor District to operate Bayside and Redwood Harbor Village in April 2022. He promised not to evict or raise rents on tenants who were in good standing for 12 months after they went into effect, and was given the green light to proceed with renovations in December.

Communications between Lemus and the Harbor District broke down around June 2023, with Lemus saying his company had uncovered issues at both RV parks and was uncomfortable taking on the liability.

Speaking with the Outpost last week, Petrick said the Harbor District had been in a bad spot when Lemus proposed redeveloping the RV parks. The tenants should never have been allowed to stay for more than 30 days, he said. But if the Harbor District had told them to leave, the Harbor District would have been responsible for relocating them, Petrick said.

COVID made evicting tenants for cause, either because they were dealing drugs or weren't keeping up their RVs or paying their rent, even more difficult, Petrick said.

Though Lemus's project didn't work out, there were some positives for the Crescent City Harbor District, the harbormaster said.

"Alex spent probably a fairly significant amount of money getting people moved to Bayside," Petrick said. "We have most of the tenants or almost all of the tenants in a single park."

Some residents moved on their own, Petrick said. Some were evicted for cause. There were also a lot of deaths because many tenants were elderly and sickly, Petrick said.

"This has been about a year-long process since the leases were signed," he said. "And what we would have made operating it over that year — that 100-grand — is what the settlement is for, basically. So, we're really not losing on it, although we would have liked to settle for more."

Now that Redwood Harbor Village at Starfish Way and Anchor Way had been “emptied out," Petrick said he envisioned putting shops and restaurants, possibly food trucks and a beer garden, into that space.

“That whole lot could be split into three sections,” he said. “Basically the middle section would be shops, restaurants (and) food trucks. The water side, the south side of it could be a seating area or a picnic area that’s landscaped and then that back section could be parking.”

In his harbormaster report on Tuesday, Petrick said the Harbor District has offered to renew rental agreements to all current Bayside RV Park residents.

“This will ensure continuity in their residency at Bayside following the withdrawal of the firm Renewable Energy Capital from its involvement in the park,” Petrick wrote. “We will continue to share updates as we make a seamless transition for our valued residents.”

Making a final statement as Harbor District Board President on Tuesday, White said he and his colleagues support Petrick as harbormaster.

“We as a board are 110 percent behind our harbormaster,” White said. “We believe he is doing a very good job. He’s gotten us $15 million in grants this year so the harbor can start moving forward.”

Commissioners voted 4-0-1 for Harry Adams to succeed White as Board president. Commissioner Brian Stone abstained. Shepherd was appointed to be Harbor District Board secretary.

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