The cash-strapped Recreation and Park Department is relying on a $23.4 million state loan to pay for the renovation of the West Marina Yacht Harbor.
On Tuesday, the Board of Supervisors is expected to authorize spending $6.9 million of the remaining loan amount. The loan debt however will stick with The City for years to come, according to a report from budget analyst Harvey Rose.
The City has the state loan at 4.5 percent annual interest. In the end, Rec and Park will pay the state a total of $46 million for the $23.4 million loan.
The Marina Yacht Harbor has two harbors, about a half mile east of the Golden Gate Bridge. The West Harbor has 327 berths and the east harbor has 342. The loan will pay for the work on the West Harbor.
The project includes dredging, bathroom renovations and construction of new docks and boat slips.
The department’s plan is to rely on revenue from the West Yacht Harbor facilities to pay back the loan, such as from berth rental fees and concessions.
And thanks to previously approved berth rental rate hikes of 37 percent, which go into effect in Fiscal year 2012-13, Rec and Park believes the harbor’s revenues will be sufficient to pay off the debt.