Hard times have hit the Pittsburg Yacht Club, which is struggling financially and unable to keep current with a redevelopment loan it took in 2008 to make improvements to its clubhouse.
In earlier times, the club would have been able to ask the city's now-disbanded Redevelopment Agency to consider modifying the loan to lower the $2,696 monthly payments. Club revenues took a hit from rising gas prices that are reducing the number of Delta boaters stopping by the club, and membership is down to about 200, a steep decline from the 350 members before the economy tanked a few years ago.
The option for a loan modification no longer exists as a result of a sweeping state law passed in June 2011 that did away with the nearly 400 local redevelopment agencies in California. The idea behind the law pushed by Gov. Jerry Brown was to shift property taxes that once went to help fund redevelopment projects to cash-strapped schools and other local services.
The club approached city officials about seven months ago in hopes of obtaining a loan modification, said George Iaconis, a current member and former yacht club commodore.
"We were told nothing could be done," he said at a recent meeting of the oversight board for the successor agency that replaced the Redevelopment Agency. "In this economy, our membership is down, and clubs don't cruise into our club and spend money like they used to because of gasoline expenses. They just don't have expandable
"Our biggest hit was the Seafood Festival being taken off the water. That was our biggest fundraiser of the year. That gave us a shot in September to go the rest of the year."
The Seafood Festival was moved to Railroad Avenue in 2010 to get more people to visit the Old Town area after several new restaurants opened as part of redevelopment efforts.
The Pittsburg Yacht Club has now missed 11 monthly payments -- a total of $25,172 -- on its $256,694 loan balance, although it is keeping current with interest payments. The $101,500 loan amount the club received in 2008 for work that included kitchen and dining improvements, new carpeting, outside painting and decking was tacked on to the original $154,567 loan amount taken out in 1990 to build the clubhouse, city records show.
Under the law passed last year, successor agencies created to wind down previously approved redevelopment projects could not enter into new agreements or make changes to existing agreements after Jan. 1, 2011. Most successor agencies, including Pittsburg's, consist of city councils that had previously acted as redevelopment agencies.
After the meeting, Iaconis said he was optimistic that some kind of compromise can be worked out with the city so that the yacht club can continue to operate. The club is located on city-owned land and pays a percentage of its gross revenues in lease payments to the city.
"We are current on the land rent and all other things with the city. The only thing we are behind with are the payments on the loan," he said.
City Manager Joe Sbranti said the city will be sending a letter to the Pittsburg Yacht Club in the next few days outlining financial options to resolve the situation.
"We're doing our best to treat them fairly. They've been such a good tenant for us for a long time," he said. "Ultimately, the oversight board and successor agency have to make the decision that best represents the interests of the public, and we will take the action that is appropriate to ensure that the public interest is represented."
State legislators did not think things through when they dissolved redevelopment agencies, said Nancy Parent, a member of the City Council and the successor agency's oversight board.
"I think the real issue is the Legislature, as usual, did not weigh the consequences of what they were doing. All they wanted to do is take the money," she said.
Under the old rules, there is no guarantee that the yacht club would have had its loan modified, but the option could have been considered. Now it cannot.
"I personally would have considered it," she said. "They sent two representatives to the meeting and explained what the situation was."
Contact Eve Mitchell at 925-779-7189.