An impasse over a homeless encampment in a downtown Sausalito park has led organizers of the city's annual art festival over Labor Day Weekend to say the festival is being canceled for the second year in a row.

COVID-19 restrictions aren't to blame for the fact that the Sausalito Art Festival isn't happening this year. But between a disagreement among residents and city leaders over the use of one waterfront park for the festival, and a delay in a decision by a federal judge over the possible relocation of a homeless encampment from one park to another, festival organizers say they have run out of time to make the event happen in September.

"In December of last year, one man erected a tent to live in on the Sausalito waterfront next to Dunphy Park," writes the Sausalito Art Festival Board of Trustees on the festival website. "Since then an entire encampment of homeless people has developed. Thereafter, the Sausalito City Council has been trying to relocate the homeless encampment from its central and prominent location near Dunphy Park to the less visible area of Marinship Park."

Marinship Park is where the festival is typically setup, according to a multiyear agreement with the city. At the moment, U.S. District Court Judge Edward M. Chen is still mulling a decision on whether the city should be allowed to physically relocate the encampment there, and the lack of a decision has led to the festival's cancellation, organizers say.

Simultaneously, there was pushback from residents and park commissioners over the temporary relocation of the festival to Dunphy Park.

"This situation is extremely difficult for everyone involved," the festival board says.

In a press release, Sausalito Art Festival Foundation Chairman Louis Briones says, "Unfortunately, we are simply out of time to work through the opposition voiced to the movement of the Festival to Dunphy Park." Briones explains that contingency plans were drawn up to host the festival in either Marinship or Dunphy Park, but but the needs for each park are "vastly different," Briones says. He adds that "the events industry is rapidly coming back to life and we can’t wait any longer to start ordering and reserving materials," and he says that the festival wants to release the artists planning to exhibit there so that they can make other exhibition plans for Labor Day.

Tensions surrounding homeless individuals and "anchor-outs" — people living on boats anchored in Richardson Bay — go back to pre-pandemic times. But the situation escalated last fall when a state agency, the San Francisco Bay Conservation and Development Commission (BCDC), began enforcing 72-hour anchorage rules in Richardson Bay. The agency had for years decried the environmental damage being done to the bay when these vessels — often inoperable and in states of extreme disrepair — frequently sank. And in February, one of these boats exploded and sank, likely due to a leaking propane tank, and the individual onboard was injured.

As the Pacific Sun reports, many of the unhoused individuals living in the tent city at Dunphy Park are displaced "anchor-outs" who were forced to give up their floating homes in recent months. In one photo published by the Pacific Sun, one of these people holds a protest sign about the Richardson’s Bay Regional Agency (RBRA) that has been reporting loitering boats saying "RBRA Terrorizing People."

Adding another layer of complication is the fact that Marinship Park, where the city hopes to relocate the encampment, is contaminated from a former boat-crushing operation there. As one activist and sometime resident of the camp tells the Pacific Sun, "Nobody from this camp is interested in going to Marinship."

According to a homelessness policy analyst with Marin County Health and Human Services, the county currently has about 500 individuals who have been assessed as qualified for supportive housing, however that housing doesn't exist and they are all on a waitlist. About 16 of them are residents of the Dunphy Park encampment.

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