, Gloucester, MA

September 20, 2013

Editorial: Interim 'bridge' leases are only answer for Long Beach

Gloucester Daily Times

---- — It’s not clear whether Rockport’s Board of Selectmen will render a decision tomorrow when its members gather at Town Hall for a rare 9:15 a.m. Saturday public meeting to discuss their best options for dealing with the town’s leases with the seasonal residents of Long Beach.

But it’s become clear this week that town officials have one realistic short-term choice, with the expiration of the current 10-year leases looming on Dec. 31. That’s to offer the tenants and residents short-term, so-called “bridge” leases while the town carries out a number of studies into how to manage perhaps the town’s most valuable single piece of property for decades to come.

The issue has been simmering since a group of Long Beach residents, including the private Long Beach Improvement Association, raised the prospect of seeking leases for up to 30 years — and drew support from Rockport’s Annual Town Meeting in April.

On the surface, the proposal makes sense for the tenants; with a lease assuring their holding of the land for another 30 years, the residents could secure mortgage-type funding to cover costs of the rents they pay to Rockport for the town-owned land, and the property taxes the pay on the land and on the houses, which they own.

But a growing number of residents have since asked whether such a deal would be fair to the town and its taxpayers. And that is indeed a very good question, considering that the town’s Finance Committee headed by Wally Hess found that, while the Long Beach properties are worth $63.02 million, all of the tenants at the 154 houses of cottages collectively paid just $1,005,084 in fiscal 2013 taxes and rent combined. That’s just 1.59 percent of fair market value — and that’s ridiculous.

To be fair, the Long Beach Association has recognized that any new leases will have to come with rent hikes. Yet it has also pitched the idea that many tenants are on fixed incomes — and that may be true. But town residents and some town officials have emphasized that, by definition, all of these seasonal houses — with no water connections in the off-season — are in fact these residents’ second homes.

And Wednesday’s package of Times stories by our own James Niedzinski spotlighted what seems to have been one of Long Beach’s and Rockport’s dirty little secrets: that some tenants, paying a high of $2,500 in annual rent to the town, have sublet their houses for anywhere from $250 to $500 a night, according to ads on some vacation and travel websites, and for as much as $3,000 a week. Not a dime of that, of course, has gone to the town, seemingly skirting a Rockport bylaw that seems to forbid any such leasing for “primary income.”

All of these factors, including the rental income values, must now be taken into account when town officials weigh their long-term options. And those options, in addition to extending new leases and other choices, should also include selling off the town’s entire Long Beach property to perhaps a private land management company or investor.

In addition to selling itself short on the rental rates and perhaps on property tax assessments, the town cannot — and should not have to — police whether residents are abiding by or abusing subletting rules. And cities and towns historically have not been effective landlords or property managers. In that vein, a sale of the site could not only generate a one-time financial boost that could serve the town for years, but also ongoing tax revenues generated at fair market rates from the houses and land alike.

Any of those choices, however, will take time. And the town should indeed follow the Finance Committee’s recommendation to carry out independent, third-party appraisals and revisit other issues, while any final decision on a potential sale would rightfully have to go to a town referendum, as we’ve suggested previously.

But all of that adds up to one current choice:

The town simply cannot offer any more than one- or two-year interim bridge leases while officials and residents work together to make these long-term, landmark decisions. And any true decision on Long Beach’s long-term future cannot be made by Dec. 31.