, Gloucester, MA

June 8, 2013

Letter: Long-term Long Beach leases a win-win for residents, town

Gloucester Daily Times

---- — To the editor,

Long Beach is one of six beautiful public beaches in Rockport.

A total of 154 cottage owners pay $311,000 in land rent and pay an additional $920,000 land and building real estate taxes. This represents a total of $1.2 million in annual lease and real estate tax revenue to the Town of Rockport. And from 2006-13, Long Beach owners contributed $7.9 million in total revenue to the Town of Rockport.

Considering 46 percent of the town’s budget is designated for the public schools, Long Beach owners have contributed $3.6 million to the schools over this same eight year period.

That information runs contrary to the point made by Mel George in the second paragraph in his letter headlined “Looking out for town’s interest in Long Beach leases” (the Times. Saturday, June 1).

Long Beach owners continue to receive the same tax rate and tax assessment as all other Rockport residents. Long Beach owners are taxed on their home and land valuations — and pay land rent. However and further, Long Beach owners pay real estate taxes on an annual basis even though they are currently allowed to reside at their cottages for only six months. The real estate taxes are in addition to the land rent Since 2006, Long Beach owners have paid $4 million in land taxes on land they do not own.

Many of the families at Long Beach are descendants of the original owners, and have been at Long Beach for over 33 years. For some, Long Beach is their only home, and they are displaced for six months annually.

The majority of owners are not wealthy, with many living on a fixed income. Long Beach owner professions include school teachers, home-makers, fireman, attorneys, bankers, registered nurses, etc., and many retirees including American veterans. Sons and daughters served our country in Afghanistan and other dangerous areas. Most importantly, our Long Beach owners consider themselves proud and contributing Rockport citizens.

Mr. George kindly wrote about the Long Beach Improvement Association (LBIA) in the second paragraph in his aforementioned letter that “our friends and neighbors at Long Beach make a convincing case that future financing for them would be easier to obtain with longer term security. The Long Beach Association very ably looks out for the best interests of the 154 beachfront home owners.”

Mr. George then asks a very important question: “But who is looking out for the Town’s best interests?”

The LBIA agrees with Mr. George that there surely are benefits for the owners when Long Beach properties are made mortgageable — i.e., an acceptable, longer lease term results in the ability to obtain mortgage financing at traditional terms and conditions. But we want every Rockport citizen to appreciate the significant additional revenues that the town will realize when Long Beach properties become eligible for conventional Freddie Mac/Fannie Mae mortgages. Our convincing case does indeed look out for the town’s best interest as well.

On May 28, 2013, the LBIA presented to the Board of Selectman that, by making Long Beach properties mortgageable, the town will realize millions of dollars in additional building valuation revenues over a 30-year term. Establishing Long Beach properties as mortgageable creates owner confidence to initiate capital improvements to their dwellings. (In the last seven years “building values” at Long Beach declined at an average annualized rate of minus-2.7 percent). When Long Beach property owners self-initiate significant improvements to their dwelling, the owner understands that the enhanced property valuation will result in a higher assessment.

Self-initiated dwelling improvements lead to increased real estate tax revenues for the town. It is a win-win for the owners and the town. Only those owners who self-initiate the improvements incur added building taxes, protecting fixed income owners. Yet, the town realizes significant additional revenues that are not possible from a 10-year lease. A 10-year lease is not readily acceptable to the mortgage industry.

Using town-provided tax records from 2006-13, the LBIA carefully reviewed public tax data on Long Beach owner properties that had self-initiated a dwelling improvement. For these properties, the annualized total revenue increase was between 9.4 and 10.7 percent. This range is greater than the 6.7 percent annualized average total revenue increase for the 154 property owners over the same period. Mortgageable properties create additional revenues for the town.

The LBIA shared an approach that serves both the best interests of the Long Beach cottage owners and Rockport. The additional revenues generated for the town with mortgageable Long Beach properties will undoubtedly serve the town’s long-term needs by achieving a predictable and stable revenue stream that can be relied upon by the Town for the next 30 years.


President, Long Beach Improvement Association


Secretary, Long Beach Improvement Association