GloucesterTimes.com, Gloucester, MA

June 12, 2013

Rockport officials prep for Long Beach lease talks

By James Niedzinski
Staff Writer

---- — ROCKPORT — Town officials say they are in the process of information from the 154 summertime residents of Long Beach who are looking to negotiate new leases.

Earlier this year, at the Annual Town Meeting, voters backed an article allowing the town to extend the length of the leases; Long Beach residents could have the option to take out 30-year leases instead of 10-year leases as they have in the past.

Town officials have not began any specific lease negotiations to date.

“We haven’t really gotten to that stage yet,” said selectmen Paul Murphy. “We’re still gathering information.”

Murphy said the board will weigh the pros and cons of allowing the properties to be sold for a one-time financial gain, against leasing, which brings in revenue every year.

If the town were to sell the properties to the lease holders, however, the town would also be giving up beachfront property. The leaseholders also pay taxes on the cottages.

Right now, the town is doing its due diligence by exploring all possible options between buying and leasing, selectmen Erin Battistelli said.

“We’re open to all the possibilities,” she said.

Last week, the Long Beach Improvement Association approached the Board of Selectmen, who will be involved in negotiating the lease agreements, about the history of the cottages.

“We’ve been leasing the homes for over 100 years,” association president Richard Carbone said Tuesday.

Carbone said that longer, 30-year agreements are more beneficial to both the town and the lease holders. He said mortgages could only be obtained from the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) for the 30-year duration, but not always for shorter terms.

“You can’t obtain a 10 year mortgage,” he said.

Those mortgages essentially give the leaseholder five years off, he added, so they would only be paying the equivalent of a 25-year mortgage while holding the lease for 30 years.

In addition, should leaseholders have the option to buy the cottages, they would have to put down less money up front compared to local banks.

However, Carbone could not say if any leaseholders are interested in buying their cottages.

Longer leases may also free up cottage dwellers to add onto their cottages, Carbone said.

Town bylaws state that any improvements — such as the addition of decks or porches — cannot be more than 20 percent of the building’s footprint, while any vertical addition must be approved by the Board of Selectmen and no existing cottage can be altered or enlarged beyond the building’s footprint.

But improved cottages could mean more tax income for Rockport, Carbone said.

Additionally, the cottages cannot be used for primary income purposes, and commercial use is prohibited.

The town is in the process in creating draft proposals for the sediment transport study, according to Department of Public Works Director Joe Parisi.

Voters at the Annual Town Meeting in April approved $75,000 for the study, with the funds to be released in the next fiscal year, which starts in July.

Town officials have previously met with state officials, who advised them to address the beach itself before repairing the seawall. The seawall repairs have been estimated to cost $13 million.

Parisi said he was unsure of what the next step after the study would be, but hopes the seawall is addressed before it’s damaged by future storms.

“I would hope there is still an opportunity to address the seawall itself in some way,” Parisi said. The seawall was heavily damaged during the Blizzard of 2013 and other storms.

Those seeking mortgages have not run into any trouble from insurance companies, Carbone said.

The current Long Beach leases expire at the end of this calendar year.

James Niedzinski can be reached at 978-283-7000, x 3455 or at jniedzinski@gloucestertimes.com.