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City Council postpones marina lease vote

 

Lower Riverside Drive from the airThe City Council last night postponed its vote on a resolution to sign an lease agreement with Greg Batts, the designated developer of the proposed Clarksville Marina at Fairgrounds Park. The United States Army Corps of Engineers recently informed the city that the USACOE  could not begin its review of the marina permit application without a signed agreement in place.

“The reason for the end of year work on this is a request by the Corp of Engineers. They want an agreement for the marina signed as a part of their final approval. The city does not want to delay their review,” according to City Councilman Bill Summers in an e-mail to his constituency. That does not dovetail with a statement made to Clarksville Online by the USACOE.

“According the USACOE, the permit process will be the same for the TEPPCO terminal as the Clarksville Marina Fairgrounds Redevelopment Project. Upon receipt of a complete application:

  • an application review will be conducted
  • a public notice will be issued and public comment period would be declared where public questions, objections and concerns will be studied.
  • Following the resolution of the public comment and issues, an environmental assessment will have to be conducted and any issues and concerns resulting from that analysis would have to be resolved.
  • The USACOE would then consider issuing a permit.'”

Turner McCullough Jr., CO 12.22.08

Councilors seemed satisfied with the basic terms of the lease, which would assess a land lease price of $24,000 a year for the first five years, and adjust that rate with the consumer index for next 25 years. Batts would be required to pay the city 5% quarterly  of the marina’s gross  revenue, and 1% of on site boat sales over the site rental charge. (Ed. It must be noted that the area where the base of the former Fairgrounds Pavilion stood is already being used as a roadside  showroom for boat sales).

The agreement states that Bates would not pay the city any rent for the first year of operations, but would instead be required to invest $35,000 in advertising and marketing of the marina.

In the first year (Phase I) the city will provide or finance planning, permitting, and design services for buildings at the marina, for costs related to excavating the marina basin and securing the shoreline, and construction and maintenance of both the boat ramp and parking areas for the site. Batt’s will be responsible for other property maintenance and for dredging. This initial development includes floating slips for 100 boats and transient boat slips, a floating fuel center, office space for marina management and restroom facilities.

The lease also states that city would be buy-back the marina  and all its facilities should the lease be terminated before the initial term expires, the city would buy back all of the developed facilities for “fair market” cost.

Controversy emerged in the discussion of Phase II, which would require the building of an additional 100 boat slips and a drydock storage facility, but left Batts with four years to make those additions, a time frame that some members of the board felt was “too long.” Recommendation was made by City Councilor Bill Summers  that the time frame for Phase Two be shortened to one year or  “90%” of the slips being leased. The third phase covers similar ground with the addition of commercial, retail and residential (condominium) development.

Phases II and III are contingent on the sale of five additional acres (the Jaycees property) to be added to the 26.7 acres currently designated in the proposed marina development.

In his letter to his constituency today, City Councilor Bill Summers said:

Another issue that our city attorney brought up was a couple of emails, from folks and Clarksville Online, saying the city was not following Charter requirements in regard to finalizing the lease or dealing with a lessee. They believed the city was in violation of Charter Article VI, Section 8. This section describes the action required if the city is giving or lending its credit to aid a person, company association or company. If such actions were to happen a vote by citizens would be required. I have no idea how they perceived this was happening. The city is NOT in violation as it is NOT giving or providing any financial credit to anyone, in the city’s name. The city is legally leasing property that it owns to a marina developer and manager who will build a dock and associated facilities, which he will own. This developer (the lessee) is getting his own funding to build the marina and associated facilities. If you should hear someone state this concern, please provide them with the proper information.”

The issue stands: the city of Clarksville is entering into a $32 million debt package in part to underwrite a significant portion of initial costs for this development, beginning with Phase I.

The city may or may not be lending cash in the form of credit and loans, but they are funding “planning, permitting, and design services for buildings at the marina, for costs related to excavating the marina basin and securing the shoreline, and construction and maintenance of both the boat ramp and parking areas for the site.” The city has taken on a renegotiated $32m debt, which will be borne by taxpayers, to ensure the  project would  move forward. If the developer is going to build and own the marina, why is the city — and you, Joe Taxpayer — paying for these multi-million dollar start-up costs ?


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5 Responses to “City Council postpones marina lease vote”

  1. Turner McCullough Jr. Says:
    December 24th, 2008 at 11:53 am

    Fact: Mayor Piper sought the council’s approval of $32,324,000 million dollars of new debt for the marina development project in November. That is utilizing the city’s credit.

    “The lease also states that city would be obligated to buy-back the marina and all its facilities should the lease be terminated before the initial term expires, the city would buy back all of the developed facilities for “fair market” cost.”

    According Councilman Summer’s explanation, the initial term of the lease is only five years. Why would the city be required to “buy back” Batts’ assets? Batts will build the marina assets: the boat dock and slips, the floating fuel point, admin office, convenience mart sales and food center, boat sales facilities, etc. Those are his investments in this joint enterprise. He would own those assets, not the city. His lease payments to the city for the first five years will total $120,000 dollars, plus $35,000 during the first year for advertising and marketing the marina. That totals a $155,000 dollars return on taxpayer funded debt of $20 million dollars, excluding the Water Park addition. Additionally, 5 percent of quarterly sales totals is to be paid to the city.

    The city would need to receive $200,000 dollars a year for ten years, at a minimum, to recoup its marina investment costs. Does the economy look like it will support that projection? Keep in mind that for the first five years, we would receive a total of $155,000 plus five percent of quarterly sales total.

  2. Bill Larson Says:
    December 24th, 2008 at 2:38 pm
    Bill Larson

    $24,000 a year, 2,000 a month and only 5% of the take? Cheap rent indeed to transform land the public was happily using and turn it into privately owned property. This won’t even pay for the interest payment on 32 million dollars of debt the public is undertaking.

    The Charter defines as a requirement using public money in aid of any person, and that is exactly what is happening here, the city is using tax payers funds in aid of Joe Batts and his business. Otherwise Mr. Batts would have to pay all of these costs. The vote is required, end of discussion. No parsing, mincing, or twisting of logic is going to be allowed to stand.

    Why are the city leaders doing everything they can to avoid this vote I believe is required by our city charter? Well, because the city will lose this vote, as the tax payers would rather see their basic infrastructure upgraded and updated first.

    • Lets widen narrow roads, improve traffic flow at our lights, develop an intelligent traffic system
    • Lets build new civic and community centers all across Clarksville.
    • Fix the Red River stink.
    • Fix the Downtown stink which rises out of our storm drains like a unwelcome spirit.
    • Modernize our water system and sewage treatment plants.
    • Repave city streets, many of which are in dire need of maintance
    • Every ward should have a non-profit city owned and operated meeting facility.
    • I would even be in support of hiring more police officers and giving existing city employees the raises they so richly deserve but are getting denied because Johnny and the Council need the cash for their push to make Clarksville more attractive to a more well-to-do crowd.
    • Let’s pay down the debt the city already has.

    Making Clarksville more attractive is a fine and dandy goal; don’t think you can shaft the poor and middle class in Clarksville for the last four years by only catering to the rich, and expect them to continue to allow you to get away with it. We will call a halt somewhere, and I strongly feel that this fairgrounds project is it. Consider it our Boston Harbor, and the Marina is the tea.

    Keep it up and we may have to start a push to exercise our right guaranteed under article one section one and two of the Tennessee Constitution.

    § 1. Powers of people

    That all power is inherent in the people, and all free governments are founded on their authority, and instituted for their peace, safety, and happiness; for the advancement of those ends they have at all times, an unalienable and indefeasible right to alter, reform, or abolish the government in such manner as they may think proper.

    § 2. Doctrine of non-resistance

    That government being instituted for the common benefit, the doctrine of non-resistance against arbitrary power and oppression is absurd, slavish, and destructive of the good and happiness of mankind.

    I think Clarksville’s leadership has forgotten these wise admonishments. It’s time we remind them.

  3. Christine Anne Piesyk Says:
    December 24th, 2008 at 3:26 pm

    Those who read me may think I am anti-development; I am not. However, I like to see the T’s crossed and I’s dotted.

    I am a perpetual student of earth-friendly and user-friendly development, with the experience of years of working with/covering planning and zoning commissions, serving on future search commissions, and living and being impacted by waterway development.

    Investment is a part of development; that’s a given. But from my perspective there are many valid questions to be answered about this marina and waterfront development in its entirety (some may be answered or required by the USACOE); beyond questions about cost and financing, there are questions about noise mitigation, watershed reclamation, fuel management/storage, expensive and potentially exclusionary condominium development (how will the water park and marina lights and noise impact current and planned residential areas)…what about increased traffic on state highways leading to the site that the state says have no chance of being addressed/funded in the next ten years?

    And what happens if the USACOE says “you can’t do it that way” or just plain “No?”

  4. BillSummers Says:
    December 24th, 2008 at 9:51 pm
    Bill Summers

    As a city councilman, I work to provide complete and accurate information on city decision-making, operations and events. I do this through the city council email system that I helped develop upon entering office two years ago. As part of that communication effort, I also work to address misinformation or misperceptions that can occur due to the complexity and volume of projects that the city undertakes.

    I know from time to time that Clarksville Online has provided its readers with information from my council emails. I send out council recap reports to the hundreds of citizens that want to know what is happening in their city and the council. I am pleased that Clarksville Online is confident, in the validity and accuracy of information I provide to readers, to use it. In today’s electronic issue of Clarksville Online, a section of my latest regular after-action report to residents was used in the story “City Council Postpones Marina Lease Vote”. I noted that two writers for Clarksville Online, Mr. McCullough and Mr. Larson, provided feedback on the council actions and my comments. I do not comment on published opinions as everyone is entitled to their viewpoint, but several statements by these writers were listed as being fact. Some of these “statements of fact” are misleading or not accurate. Since some of these “statements of fact” are related to information I provided the public, I felt compelled to clarify some items.

    Mr. McCullough states that over $32 million of the new debt is for the marina development. That statement is too general. $9.1 million is devoted to the marina itself. Thus, any return on investment that he refers to is related to the $9.1 million and not $20 million as he stated. The remainder is an upgrade, rebuild, redevelopment and improvement of the River Walk, which will connect to the marina, and Fairgrounds Park. Readers will recall that the park has suffered damage and facility destruction over the past couple of years due to storms and tornados.

    Mr. McCullough also states that I had said, “the initial term of the lease is only five years”. This is incorrect. My email stated “Initial lease period is 30 years with seven extension options for a period of 10 years for each option.” The reference I made to “five years” was the following: “Rent stays the same for 5 years after which it will be adjusted up by the Consumer Price Index each year.”

    As far as Mr. McCullough’s concern on the “buy back”, his statement is but one of several scenarios explained in the lease. Such options and consequences are listed in several places in the lease, but considerable information is provided on the potential outcomes on pages 4 & 5 of the contract. This topic and it various outcomes were discussed several times at the council meeting.

    In Mr. Larson’s input, he states public land is being turned into private property. I am unable to find a specific reference that this lease automatically does that with the marina project.

    Mr. Larson’s allegation that the city is aiding Mr. Batts (marina developer) in violation of Charter Article VI, Section 8 is not supported by facts or legal review. I stated this in my email recap. The city owns the land and wants to have marina services available to the public as part of its parks and recreation capabilities. The city solicited proposals from marina operators to provide this service. Mr. Batts’ was one of several interested marina business owners who presented a proposal that was eventually accepted. Thus, the city is preparing its property for a recreational activity it wants for its citizens and will then lease that property to Mr. Batts to provide the requested service. The difference is the city wanted these services and selected/approached Mr. Batts. The city will pay for its part and Mr. Batts will pay for his. Perhaps if Mr. Batts had come to the city wanting to build a marina strictly for his own business interests and he told the city to dig the basin, then perhaps Mr. Larson’s allegation might have some merit.

    I appreciate the opportunity to clarify these points on for Clarksville Online readers. A Merry Christmas and Happy New Year from my family to each of you.

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