GloucesterTimes.com, Gloucester, MA

September 23, 2013

No lease answers at Long Beach

By James Niedzinski
Staff Writer

---- — ROCKPORT — The town’s selectmen, in a rare and special Saturday morning meeting designed to flesh out details and options over leases for the houses on the town-owned land at Long Beach, formally agreed to allow them to run to their Dec. 31 expiration date.

But officials did not render any other decisions regarding the 10 year leases for the tenants of 154 seasonal houses, with the board due to revisit the issues in their regular meeting Tuesday night at 7 in Town Hall.

Although the Saturday meeting had no public comment period, there was still plenty to talk about as an estimated 50 residents — from Long Beach and elsewhere — listened in on issues ranges from year-round use, rental rates, property taxes and property assessments.

Town Administrator Linda Sanders said the town had been doing research about the upcoming issue for years, speaking with Long Beach residents and taking in data from Conomo Point in Essex, Little Neck in Ipswich and from a similar land lease situation in Ohio.

Selectmen Paul Murphy suggested continuing a lease for two years, for which the rental rates would move toward fair market value while a town task force would approach the longer-term questions and concerns — similar to the Tool Company Task Force.

“It’s a very big issue that’s facing Rockport,” he said.

Other officials had different views.

“I don’t know what (a one- to or two-year lease) gets us,” said Erin Battistelli, who chairs the Board of Selectmen, adding that she is not thrilled about the idea of waiting two more years to make a long-term decision.

“I don’t like the message that we would be sending with a bridge (short term) lease,” added Selectwoman Eliza Lucas.

Lucas acknowledged that her family has a house in Conomo Point in Essex, where cottages also sit on leased, town-owned land. In Essex, some Conomo Point tenants have filed a class action lawsuit challenging the appraisals and rental rates of a third year of short term or “bridge” leases, claiming the lease rates are far too high.

Despite the similarities between Long Beach and Conomo Point, Sanders pointed out that there were multiple appraisers in Essex, one hired by the town and another hired by residents.

“They were serving different masters,” she said.

“We need to see what the town would like to do as a whole,” Selectmen Wilhelmina Sheedy-Moores said, later adding that one of those options could be a ballot question on whether the town should continue leasing the land and what course the town should take.

Selectmen Sara Wilkinson, however, said she would support extending a new lease between 10 and 20 years, increasing rent as the leases went on.

“Let’s just do something ... what we’ve done for the past 110 years has worked well,” she said. “The rents they have paid have been low, but we can slowly increase that.”

Officials are also considering extending the current leases beyond Dec. 31, and holding off any longer-term action until getting more data and information about how assessed and market rates translate into fair rent.

The Finance Committee has recommended short-term leases until more questions and concerns are answered.

Sheedy-Moores, who said she reviewed the 11 sales of cottages throughout the past three years, said the sales have been on par with their assessed value, some going for around $700,000.

Officials also brought up a more existential question; whether or not Long Beach was purely a financial decision, or one that involves the image and the culture of Rockport, with parents passing down cottages to their children, and many tenants coming to Rockport for many years.

Lucas proposed doubling the rent for the first five years; then increasing from there, preventing any Long Beach tenant from being forced out because of sudden, high rental costs.

She also brought up whether the town’s relationship with the residents should be factored into the lease rate question. If a fair market rate was determined to be $15,000 a year for example, would that rate need to be adjusted?

Lucas said Rockport is the “model” for a town that has a good relationship with a group of tenants.

But in 2004, front-row cottage land was leased for $2,100 a year and the back rows $1,300 a year; with that rate going up slightly based on the consumer price index over the 10-year terms of the current leases.

Battistelli said a 10-year lease would provide stability to both the cottage owners and the town.

Murphy said the discussion was an important one, but reiterated “I really think a task force should be looked at.”

The idea of selling the lots to the tenants was also discussed, though some pointed out it would be a lengthy process involving Town Meeting articles and special legislation.

Still, Sheedy-Moores noted concerns over the town continuing to own the land and leasing the houses or cottages.

“I don’t know if a city or town should be responsible for being a landlord,” she said.

Officials also addressed how — if at all — the damaged seawall, with an estimated repair price tag of $22 million, should impact the rental rates. Generally, all agreed that they are separate issues if the town continued to lease land, but the seawall should be factored in if selling was an option.

Selectmen said other things to consider in lease negotiations include a clause allowing selectmen to cancel a lease at any time with a super majority vote, and how subleasing should be handled, although they agreed it would be hard if not impossible to enforce.

A Times story last week reported that online rental ads show that tenants have sublet their Long Beach homes for up to $3,000 a week, essentially skirting a town bylaw that bans subletting as a means of generating “primary income.”

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