Port of San Diego to Provide Temporary Financial Relief to Qualifying Tenants

Wednesday, 08 April 2009
Contact: Marguerite Elicone (619) 686-6222

Port tenants that are suffering from the nationwide financial crisis may soon get a break. The Board of Port Commissioners unanimously approved a resolution on Tuesday, April 7, that would establish a temporary financial relief program. 

In the program, the most severely impacted tenants would be able to defer portions of their lease required rental payments.

The Port collects rent from commercial tenants, such as hotels and restaurants based on a percentage of sales, rather than on a fixed or flat rent basis. When sales-based percentages fall below a certain level, the Port requires a minimum annual rent payment.

Some of the Port's tenants have been experiencing such low sales that they are finding it hard to meet the minimum level and are paying the difference out of pocket. By doing this, the businesses are potentially impacting their operating capital. The newly approved program will focus on deferring minimum rent obligations for 2009 so that the tenants will have enough cash flow to stay in business. The deferred amounts will be paid back during calendar year 2010. Simple interest will be charged on the deferred amount, based on the Port's actual rate of return on its own investment portfolio.

The Port's small, independent, industrial tenants who pay flat rents and are having a difficult time meeting rent payments also have an option with the program. The tenants may defer up to 25 percent of the monthly flat rent required in the terms of the lease for each month during 2009. The tenants will have to pay back the deferred amount in 2010. They will have up to 12 months to pay it back, with simple interest.

The rent relief program is just one way the Port of San Diego is reaching out to assist its tenant businesses. The Port is moving forward with a vigorous marketing and public relations campaign to draw business to its tenants. Working with the San Diego Port Tenants Association, the Port will be developing promotional campaigns with special offers at restaurants, hotels, shops and attractions.

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