Marina Joint Ventures Lease

Posted below is a copy of the lease Marina Joint Ventures has with the city.  I have read through it, but I am not a lawyer and I could have missed a thing or two.

One thing that jumps out at me is there is NO requirement to rent a slip to an IOP resident (you know, the people who bought and own the property.)  In fact, it does not appear there is any requirement to rent a slip to a private boat owner at all.  Presumably the tenant could rent every slip to a subleased business if he could find enough of them to fill all the slips.

The contract defines gross profit as sales of goods and services minus the cost of the goods.  In the original contract the tenant was to pay the city 15% of any gross profit over $450,000.  The tenant is to provide an annual financial statement provided by his financial officer.  In addition, the tenant is to provide the city with annual audited financial statement.

If you look at the first amendment on page 23, you will see the lease was changed to permit the rental of Low Speed Vehicles (LSV).  This has not been done to date, but certainly could be.  They would have to be parked somewhere.

The lease was amended a 2nd time to change the the profit structure.  Page 25 shows the city is to get 2% of any gross profit over $500,000.  Think about this for a minute.  If the gross profit were to come 1 million dollars, the city would get a whopping $10,000 extra.  It is not clear why this change was made.

Another part of this 2nd amendment says the tenant no longer has to provide an audited financial statement, but must still provide a statement from his own financial officer.  (See page 26.)  I wonder why this change was made.

Finally, the lease was amended a 4th time and now the city is to receive 15% of gross profit over 1 million dollars.   So if the gross profit were $2 million, the city would get an extra $150,000.

I do not know if the city has ever received any of these profit toggles.  Perhaps someone reading this knows and would like to comment.

MJV_Lease_With_4th_Ammendmet-scanned 2.22.2016

What Should the Marina be?

I had productive discussions with Elizabeth Campsen, Randy Bell, Mike Loftus, Catherine Malloy, Brian Duffy and a number of other residents this weekend.  Thanks to everyone for talking to me.

What I came away with from all these discussions was the following:  the residents of the IOP need to decide what they want their marina to be before putting any more money into the site.

Do you want it to be a somewhat quiet area primarily for the use of residents to launch boats and hang out with our families?  It would not be a cash generating machine, but would have to generate some money to cover maintenance and upkeep.

Or do you want it to be primarily a commercial district where the focus is on visitors and generating money?  In this scenario it could generate a ton of cash and under proper leasing terms a lot of money would be paid to the city.  There will be (is) a lot more traffic on Waterway Blvd and residents will not get priority.

These are the 2 options.  Neither one exists currently.  Right now we are closer to the second option except that the tenants don’t generate a lot of money for the city.  Several people have asked for the financial statements of the tenants but have not been able to obtain them.

The tenants could easily clear up this picture by releasing their financials.

I want to make it clear that my preferred option is the first one.  I don’t want more commercial activity at the marina.  I seriously doubt that short term renters would stop coming here if there was not easy access to parasailing, kayaking, paddleboarding, deep sea fishing, boat rentals, etc.  I am not saying all these activities need to go.  City council, by listening to the wishes of the residents, needs to decide how much, if any, commercial activity will occur at the marina.

I really think this is what the referendum is all about.  I would appreciate any and all comments.  Just mash the reply button!

Litter on a Stick!

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In about 2 days a tidal wave of campaign signs will wash ashore and cover the Isle of Palms.  The campaign is on!

My campaign is in desperate need of volunteers.  The following positions are open:

  • Statewide chairperson
  • County chairperson
  • City chairperson
  • Precinct captains
  • Block captains
  • Household captains

In addition to these political positions, I could also use the following:

  • Executive chef
  • Personal assistant
  • Media affairs coordinator
  • Driver
  • Masseuse
  • Clothing coordinator
  • Pool boy

Let the games begin!  In all seriousness, good luck to all the candidates.

How is a Marina Tenant Like a Wall Street Bank?

Answer:  Both have figured out how to socialize their losses/costs and how to privatize their gains!

This is ridiculous and it needs to stop.  The residents of IOP will pay for all the repairs and beautification which will permit the tenants to make a lot more money.  All of which will probably go in the tenant’s pockets because it appears the “profit toggle” has never been met.  This is a sweetheart deal any business owner can only dream about!

So the city wants the residents to finance a $5.5 large renovation so more access and slips will be available for Mt. Pleasant residents.  Have we lost our mind?

City Swimming Pool

I have lived here for 18 years and this issue comes up every few years.  I do NOT favor building a city pool at this time.

Will the pool be indoor or out?  How much will it cost to build it?  How much will it cost to maintain it?  Remember, this would a be public pool, so there are going to be all kinds of DHEC requirements that must be met.  How much will insurance cost to cover expenses when someone gets hurt?  How many more employees will the rec center have to hire?  Etc, etc.

I think those advocating for a city pool need to answer those questions.  I can tell you this:  it will be expensive.  Right now that money would be better spent on infrastructure such as our drainage problems.  Sure, it would be nice to have a pool, but currently there are more pressing issues.

It has been my observation that smaller kids like pools.  Once they get older (teenagers) they would rather go to the beach.  There are quite a few family pools on the island.  My suggestion is to befriend a neighbor with a pool!  We have one and the kids in the neighborhood use it all the time, and we are happy to let them use it as long as they are supervised.

And I can tell you this:  it is not cheap to maintain!

11 “Angry” Candidates

There are numerous comments out there that equate the large number of candidates running for city council with overall dissatisfaction with the city government and some council members.

Nothing could be further from the truth.  The reason so many people are running for council is the barrier to entry is now much lower.  Until this election it was quite onerous to get on the ballot.  The candidate (and any friends the candidate could coerce) had to get the signatures of 5% of the registered voters on an official form.  That comes to over 200 signatures.  That is hard enough, but hang on, because you are still not done.  You then must include each person’s voter registration number.

You could ask each signer to include their number, but no one knows theirs and if they have to go find their little green card, well, you will be at this task for over a month.  The city has a master list so you can go down to city hall and look each one up, a task that will take hours.

Alternatively, you can purchase the IOP voter database from the SC Election Commission for something like $160.  What is emailed to you is a CSV (comma separated variable) file, that looks just like what it is: a massive data dump.  (But if you sift through it you can find out the ages of all your neighbors!)

The last election was uncontested.  There were 4 candidates for 4 seats.  Why?  Yep, you guessed it, no one else wanted to go to all the trouble to get on the ballot.  So council decided to drop the signature requirement and replace it with a fee of $100.

Speaking as one who has collected signatures in the past, I would rather pay $500 than have to go through that ordeal again.

So don’t believe all the hype out there that 11 people running are a sign the citizens of IOP are all pissed off.  Look around.  They aren’t.  Methinks some people are using this argument to try to bolster their own campaigns.

How to Post and Read Comments

If you click on the title of the essay, it will open it on it’s own page.  At the bottom of the essay you can post comments and read any comments that have been posted.

As previously stated, I post all comments as long as they are not purely inflammatory.  And I post all comments that take a shot at me.  Just ask Jeff Forslund.

Jimmy Carroll’s website neither posts comments nor responds to ones sent to him.  How do I know?  Because I have sent replies twice and nothing was posted or responded to.

City Emergency Fund

As the campaign for city council and Mayor gets underway we are hearing candidates say the city needs a larger emergency fund for “when the next hurricane comes.”  Unfortunately no one is saying how large the fund should be.

Should it be large enough to cover city operations for a year?  For fiscal year 2018 the city budget is a little over $11 million.  That is quite a bit of money to park in an interest bearing account that currently pays very little due to historically low interest rates.  Because this is emergency money that may be needed tomorrow it cannot be invested more aggressively.

The more important point is this is your money!  Shouldn’t it be under your control to use as you best see fit for you and your family?  Besides, we may not need this money for 10, 20, even 40 years.  Who knows?  By then you may no longer live here.  In that case why should you be paying for the rebuilding of some place you no longer live?  Let the people who live here pay for the lifestyle they have chosen.

There are currently 4300 dwellings on the island.  Should the city need to raise the entire budget from within the island (and it is unlikely this would ever be the case) it would need about $2600 from each dwelling.  This is a good chunk of money, but not an amount that would financially destroy most who live or invest here.

Yes, in an emergency each of us will need money to repair our properties.  Unless you are rich enough to be “self insured” you need homeowners, flood and wind and hail insurance.  If you live here and don’t have it and you are not rich you are a damn fool.  But hey, I believe people should be permitted to make foolish choices.

So, if someone tells you we need a larger emergency fund, please ask them how large it needs to be and why the city should be holding your money instead of you.  As for me, I think a 2-3 large is plenty of money.  Let each of us keep the rest.  We are responsible people and we know how to manage our own finances with plans in place for future emergencies.

Marina Contracts – How Did This Happen?

The IOP marina and the marina store have been under the same operator for a number of years and by all accounts both are well run.  Until late in 2014 the contracts were 5 year renewable leases.

The contractor asked the city to give him a 30 year lease.  His reasoning:  he could not get loans for major capital improvements with a lease of only 5 years.  This was taken into consideration by city council at its November 18, 2014 meeting.  The minutes of that meeting can be found here.  Despite opposition to this request from Jimmy Carrol and Sandy Ferencz, the rest of council jumped on board.

Those voting for this 30 year, NO BID lease were the following:  Barbara Bergwerf, Marty Bettelli, Ryan Buckhannon, Dick Cronin, Patrick Harrington, Mike Loftus and Jimmy Ward.  You will note that 5 of these people are running for election this November.

It has been 3 years since this change was enacted.  Has anyone seen any major capital improvements at the marina store or dock?  Me neither.

Currently the Marina Store will pay the city a rent of $75,276 and the Marina Operations will pay a rent of $167, 682 this year.  (See page 38 of this year’s budget.  The budget can be found here.)  Are these even reasonable rents for this valuable piece of property?  I don’t know the answer to this but it seems to me the city could have engaged the services of a commercial real estate broker to help them in this process.  There are a number of excellent ones in this town.

Presumably the city gets a percentage of any profits generated.  (I say presumably because I have not seen the contracts.)  Who and how determines if a profit is made?  Are these businesses audited?  After all, “profit” is pretty easy to hide.  For example, if there is extra money left over at the end of the year, the company could buy a new vehicle with that money and poof!, the profit is gone.

This is what happens when a council does not do their homework.

If elected to council I can assure you I will never vote for a 30 year NO BID lease.

Piening Puts Residents First

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The Isle of Palms has an election coming up on November 7, and Ralph Piening (me) has entered the race.  Why?  I am entering to make sure the voice of the resident is heard loud and clear.  You know, the person who actually lives here all year.  Not the investors, the developers, the real estate cartel, the daytrippers, etc.  The Residents.  You and Me.

This is the Vision Statement taken from the City’s comprehensive plan:

Isle of Palms has developed into a premier barrier island residential
community with a variety of housing styles, commercial uses and
recreational facilities. Despite the natural cycle of beach erosion that is
inherent on barrier islands and the extensive development of the island, the
natural resources that make Isle of Palms such a wonderful place to live and
visit remain intact and in good condition. Measures that will enhance the
existing character of the island as a quality place to live, and protect the
environment both on and around the island, must be taken to guide
development and preserve the quality of life for generations to come.
January 31, 2002 (revised May 26, 2015)
The entire comprehensive plan for the IOP can be found here.

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