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File #: 2021-0386    Version: 1 Name:
Type: Action Item Status: Passed
File created: 10/25/2021 In control: Board of Port Commissioners
On agenda: 11/9/2021 Final action: 11/9/2021
Title: MARINE GROUP BOAT WORKS, LLC LOCATED AT 1313 BAY MARINA DRIVE, NATIONAL CITY: A. RESOLUTION CONSENTING TO THE ASSIGNMENT AND ASSUMPTION OF THE LEASEHOLD INTEREST FROM MARINE GROUP BOAT WORKS, LLC TO AUSTAL USA, LLC; AND, B. ORDINANCE GRANTING AN AMENDED, RESTATED AND COMBINED LEASE TO AUSTAL USA, LLC TO UPDATE LEASE TO CURRENT TERMS
Attachments: 1. 15. 2021-0386 Attachment A, 2. 15. 2021-0386 Attachment B, 3. 15. 2021-0386 Draft Resolution, 4. 15. 2021-0386 Draft Ordinance
DATE: November 9, 2021

SUBJECT:

Title

MARINE GROUP BOAT WORKS, LLC LOCATED AT 1313 BAY MARINA DRIVE, NATIONAL CITY:

A. RESOLUTION CONSENTING TO THE ASSIGNMENT AND ASSUMPTION OF THE LEASEHOLD INTEREST FROM MARINE GROUP BOAT WORKS, LLC TO AUSTAL USA, LLC; AND,

B. ORDINANCE GRANTING AN AMENDED, RESTATED AND COMBINED LEASE TO AUSTAL USA, LLC TO UPDATE LEASE TO CURRENT TERMS
Body

EXECUTIVE SUMMARY:

Marine Group Boat Works, LLC, a California limited liability corporation (MGBW), is an existing District tenant which operates two full-service boat and super-yacht facilities that specialize in the repair and fabrication of personal, commercial and government vessels located in the City of Chula Vista and National City. MGBW purchased the National City leasehold from the original tenant, Knight & Carver, in bankruptcy proceedings and assumed the National City leasehold with the District in March 2013. The lease for the National City facility (Lease)1 expires on March 31, 2027 and consists of approximately 7.4 acres of land and building area and approximately 2.26 acres of water area and is further delineated on Attachment A - National City Location Map (Premises). MGBW is proposing to transfer its National City assets, including its leasehold interest under the Lease, to Austal USA, LLC, an Alabama limited liability company (Austal).

Austal has extensive experience operating shipyards and is an advanced ship manufacturer, servicer and sustainment provider to the United States Navy (Navy). Austal commenced operations in Perth, Australia in 1988, and in 1999 they opened their United States shipyard headquarters in Mobile, Alabama. Staff believes that Austal has the financial and operational wherewithal to operate a world-class ship repair facility on District tidelands.

During discussions with MGBW and Austal regarding the assignment of the Lease, Austal indicated that due to the Lease expiring on March 31, 2027, an assignment of the Lease with the remaining leas...

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