DATE: December 28, 2020
SUBJECT:
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PRESENTATION ON THE SAN DIEGO PORT TENANTS ASSOCIATION REQUEST FOR ADDITIONAL RENT RELIEF AND DIRECTION TO STAFF, AS NECESSARY
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EXECUTIVE SUMMARY:
District tenant businesses in the hospitality, tourism and convention center dependent sector have been significantly impacted by the COVID-19 pandemic and associated State and County orders and restrictions including the most recent regional stay-at-home order issued by the California Department of Public Health. The District has worked constructively with its tenants to assist with their economic recovery as the region has transitioned through various business restrictions and closure orders. At the December 8, 2020 Board of Port Commissioners (Board) meeting, the San Diego Port Tenants Association (PTA) requested that the Board take immediate action to provide rent relief to hospitality, tourism and convention dependent tenants impacted by the most recent regional order (Attachment A - PTA Letter). The PTA requested that the District waive Minimum Annual Rent (MAR) and require tenants to pay only applicable percentage rent for the duration of the stay-at-home order, plus an additional 60 days to provide time for business reopening and stabilization. The estimated fiscal year (FY) 2021 financial impact to the District of the PTA request is approximately $10 million based on five months of percentage rent only payments to the District. This is in addition to the financial losses the District has already sustained.
The Board previously authorized a two-pronged approach to rent relief which included a rent deferral program giving the majority of the District's tenant portfolio, including both fixed and percentage rent-paying tenants, access to six months of rent deferral with repayment commencing in Fall 2021, and individual lease restructures for tenants with the most need on a case by case basis (Attachment B - Combined Rent Deferral Program Agenda). In response ...
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