Peter Foster's asking price for the GMF building on Commercial Street was initially $1.6 million. After two years on the market, the building sold for $650,000.
"It started priced at $1.6 million, then was assessed at $1.309 million," Foster said. "We sold it for $650,000. Because of all the restrictions, the city lost tax money."
The city has not reassessed the building yet, but because it sold less than its assessed value, it is likely that the new owner will be paying less in taxes than Foster was.
Using Gloucester's commercial tax rate, the city would get $14,800 per year for a commercial property valued at $1.6 million. With the same rate on a business valued at $650,000, the city receives about $6,000. Or, as Foster points out, a yearly net loss of about $9,000.
Owners such as Foster are finding it difficult to sell or redevelop empty space along Gloucester Harbor because, owners say:
* The fishing industry has contracted, caused by federal regulation.
* Tight state and city restrictions on property uses on the Inner Harbor demand the land remain marine industrial, a zoning with few qualifying businesses left.
They say it is scaring buyers and tenants away from using land around the waterfront and preventing owners and managers from redeveloping or diversifying their businesses, creating great amounts of unused space.
Now the stage is set with property owners, city officials and the state - the former two with plans to rezone and revitalize the city's harbor and the latter with the power to say no.
"We can't survive the current regulations, together with the decline of the fishing industry," said Viking Gustafson, general manager of Gloucester Marine Railways, which repairs and paints vessels at the tip of Rocky Neck.
Businesses see steady decline
Gustafson said the tight protections were not a problem when the fishing industry was strong and vibrant because the fleet, which boasted hundreds of boats that were often bunched close enough together to walk around the harbor on them, justified the amount of space by providing for all the businesses in the protected zone.
With federal regulations reducing the Gloucester fleet, harbor businesses that attended to the needs of fishing vessels have seen a dramatic decrease in revenue, particularly in the last three to five years, but are in a regulatory straitjacket that prevents them from finding other ways of making money.
"It started priced at $1.6 million, then was assessed at $1.309 million," Foster said. "We sold it for $650,000. Because of all the restrictions, the city lost tax money."
The city has not reassessed the building yet, but because it sold less than its assessed value, it is likely that the new owner will be paying less in taxes than Foster was.
Using Gloucester's commercial tax rate, the city would get $14,800 per year for a commercial property valued at $1.6 million. With the same rate on a business valued at $650,000, the city receives about $6,000. Or, as Foster points out, a yearly net loss of about $9,000.
Owners such as Foster are finding it difficult to sell or redevelop empty space along Gloucester Harbor because, owners say:
* The fishing industry has contracted, caused by federal regulation.
* Tight state and city restrictions on property uses on the Inner Harbor demand the land remain marine industrial, a zoning with few qualifying businesses left.
They say it is scaring buyers and tenants away from using land around the waterfront and preventing owners and managers from redeveloping or diversifying their businesses, creating great amounts of unused space.
Now the stage is set with property owners, city officials and the state - the former two with plans to rezone and revitalize the city's harbor and the latter with the power to say no.
"We can't survive the current regulations, together with the decline of the fishing industry," said Viking Gustafson, general manager of Gloucester Marine Railways, which repairs and paints vessels at the tip of Rocky Neck.
Businesses see steady decline
Gustafson said the tight protections were not a problem when the fishing industry was strong and vibrant because the fleet, which boasted hundreds of boats that were often bunched close enough together to walk around the harbor on them, justified the amount of space by providing for all the businesses in the protected zone.
With federal regulations reducing the Gloucester fleet, harbor businesses that attended to the needs of fishing vessels have seen a dramatic decrease in revenue, particularly in the last three to five years, but are in a regulatory straitjacket that prevents them from finding other ways of making money.
Those not making enough money are seeing their businesses shrink and have few options to create new revenue sources.
"We're trying to replace business lost," said Scott Memhard, owner of Cape Pond Ice on Commercial Street, which sells ice to fishing vessels. "Our business has shrunk dramatically, over a 50 percent decline in sales."
John "Beanie" Nicastro, owner of Felicia Oil Co. on Commercial Street, said fishing regulations have greatly reduced the number of boats around the harbor to which he can sell fuel, and of those boats that are going out, they aren't traveling as far or staying out as long as they used to because of fishing regulations. Those reasons have reduced Felicia Oil's income by about 65 percent in the last three years and Nicastro said the reduction could shut his doors soon.
"We can't do anything but service commercial fishing boats," he said. "It's hard, when you don't have the profit, to expand. If we wanted to do anything on the upland, we can't. Not that we have the money to do it."
A tough sell
When businesses do leave, the buildings remain almost unsellable because the city and state tightly restrict what harbor land can be used for. Foster said the restrictions on what the facility can be converted into kept the building on the market for two years.
Douglas Lemle, a Boston developer and restaurateur, has been waiting since 2001 for the city to change its zoning laws to redevelop a parcel next door to GMF on Commercial Street into a facility that would include a ferry dock, space for research vessels and a restaurant among other things.
"I love Gloucester and adore its harbor and it's dying," he said. "The city has an opportunity to reverse that and save it. They need to allow mixed-use development to save it. If they don't, it's going to die."
Many owners and managers are urging the city and state to loosen restrictions to keep the waterfront from becoming a ghost town. The first step, they said, is to change the city's marine-industrial zoning around the harbor, in a stretch that runs from the Fort, around the Inner Harbor to the docks just south of the AmeriCold freezers on East Main Street and Gloucester Marine Railways.
That change is necessary for any push to convince the state to relax its restrictions on the Designated Port Area, which includes almost all the area the city zoned marine industrial. Specifically the Designated Port Area, a 1970s-era state law designed to protect Massachusetts ports deemed to be essential to the commonwealth, prevents development that would replace marine activity and specifically prohibits hotels, residential projects and recreational boating facilities.
"Everywhere we turn, it seems to be the same thing: Amend your local zoning to send a signal that we want to make a change," said Joseph Parisi, president of the Building Center on Harbor Loop. "If you go to the DPA, they'll say your own town doesn't agree with you."
The Building Center does not sell lumber or supplies to fishing vessels, Parisi said. It was built on the harbor when the company received coal and lumber by ship, though the business is no longer marine-based.
Sam Parisi, owner of Pier 7 Inc., a lobster-buying company on Commercial Street, said he has difficulty finding tenants to make use of the vacant space in his building.
The Building Center's Parisi cannot convert a strip of land on the water at that property to any kind of use.
Properties sitting empty include the GMF building, a vacant undeveloped parcel known as I-4, C-2, two parcels on the southwestern end of the Fort, the Rogers Street building that use to house West Marine fishing gear shop and the former Fishermen's Wharf on Rogers Street.
Plans in works
A redrafted Harbor Plan proposal, given to Mayor John Bell last August by a committee he appointed and passed on to the City Council last month, includes a rezoning concept that loosens limits around Harbor Cove and East Gloucester while keeping the controls around Jodrey Fish Pier.
That plan subdivides the 100 acres of harborfront into three zones. In the center, around the Jodrey Fish Pier, the rules do not change, preserving a requirement that no more than 25 percent of the parcel can have nonmarine uses. But in Harbor Cove and East Gloucester, the demands for marine industrial use up from the piers and wharves soften to half-and-half.
"I think the Inner Harbor should be protected," Sam Parisi said. "But people not using the back of the property, like the Building Center, should be able to do something with it. That's all wasted space right now."
A coalition of harbor business owners believes the rewritten Harbor Plan does not go far enough and proposed the restrictions need to be relaxed further.
The coalition proposed zoning changes freeing properties just up from the piers in the marine industrial zone from Harbor Cove to East Gloucester to fill with hotels, recreational marinas, restaurants, shopping centers, offices and arts and crafts.
On the waterfront itself, it wants the right to convert fallow space and dilapidated piers to boat slips, with at least one in every four new slips dedicated to commercial dockage, priced the same as at Jodrey Fish Pier.
Those changes, however, would entail a rollback, or even complete liberation of the port, from the state's tight control under the Designated Port Act.
"You have to allow for some kind of mixed use," said Joseph Parisi. "Some properties would even be good for second-floor offices or restaurants."
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