Town Grants South Port $180,000 Utility Fee Deferral
South Port Investors’ Cape Charles Yacht Center looks to cater to this clientele.
By GEORGE SOUTHERN
Cape Charles Wave
January 23, 2014
Town of Cape Charles offices were closed yesterday due to snow, but that didn’t stop Town Council from holding a special meeting to grant a deferral to South Port Investors of up to $180,000 in utility connection charges.
South Port, the developer of Cape Charles Yacht Center, is engaged in yacht repair and storage, and is soliciting vendors for boat manufacturing, yacht brokerage, boat rentals, sail making, ship stores, insurance, a bistro, retail shops, and a bed & breakfast.
South Port last month requested a waiver of utility charges and fees for property it is leasing from the Town. Unable to reach consensus at its December meeting, Town Council held a special work session earlier this month to further discuss the issue, but still could not agree on what to do.
A week ago, Council held a closed meeting, revealing only that the discussion concerned “property leased by the Town and Town-owned property,” leading observers to conclude that South Port again was the topic.
The thorny issue is that although Town Code requires utility connection charges, Town Council has begun making exceptions. The Shanty Restaurant, built on property leased from the Town, was not required to pay a utility connection fee (which would have been $60,000).
South Port’s legal representative, Cela Burge, said South Port is only asking for equal treatment. She also pointed out that the Town waived a portion of connection fees for the developer of the apartments planned for the Old School at Central Park. (The fees essentially were eliminated by cutting them 75 percent and then giving the developer $41,000 to apply toward the remainder.)
Council member Joan Natali appeared to have forgotten about the Old School: “To my mind our precedent is limited to leased Town property,” she said.
Most recently, the Town reduced connection fees for the new Bay Creek Beach Club from $153,000 to $44,000.
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South Port also maintains it should not have to pay water bills for property it has leased from the Town since 2007. The property included a building connected to Town water and sewer, but the structure subsequently was demolished. Last February, South Port asked the Town to turn the water back on. But in accordance with Town code, officials demanded over $5,000 in back charges, including over $400 interest and penalties.
Town Code Section 72-9.c states: If a connection existed as of June 30, 2007, and the house or building has since been demolished, the owner shall continue to be liable for the minimum charges.
South Port director Eyre Baldwin asked Town Council to waive the utility charges since the land had been vacant all those years. But Mayor Dora Sullivan said that would set an expensive precedent: Many other Town properties also have the water turned off but continue to be billed. But the “expensive precedent” seems already to have been set, since the Old School developer has never received a water bill in the year he has owned the property.
In the case of South Port, the Town sends a monthly bill, but Town Council has yet to rule on whether the bills must be paid. At yesterday’s meeting, Vice Mayor Chris Bannon was adamant that “the first thing is that [South Port] pay their outstanding water bill.” Council member Natali agreed.
On the issue of utility connection charges, Council member Steve Bennett said, “I’d be willing to consider incentives for anybody who wants to invest in this town.” But Council member Frank Wendell countered that “incentives should be uniform and understood – not made up each time.”
Bannon recommended “one free connection” for each parcel leased by South Port. But Council member Tom Godwin was not comfortable with that. “This is not a mom and pop operation,” he pointed out. “If you are a businessman, you know these are the fees and this is what you pay.”
The resolution of the issue ultimately may have hinged on the absence of Council member Mike Sullivan, who at the earlier workshop had expressed opposition to cutting South Port connection charges. Had Sullivan been present, the vote could have gone 3 to 3, with Bannon, Bennett, and Natali favoring relief, and Godwin, Sullivan, and Wendell opposed. In cases of a tie, Mayor Dora Sullivan (wife of Mike Sullivan) casts the deciding vote. But both Sullivans were absent.
With only Godwin and Wendell opposed, Godwin said that “in the interest of unanimity” he would vote in favor of South Port.
South Port is leasing five parcels from the Town, two of which already have water/sewer connections. Bennett’s motion was that for the other three parcels, one connection charge per parcel would be deferred for not more than $60,000 per parcel. If South Port later purchased any property from the Town, a “portion” of the deferral must be paid. The motion did not specify what that portion might be – nor did it address the demands of Bannon and Natali that South Port first pay its outstanding water bills.
The motion passed 4-1, with Wendell opposed.
The Council meeting was open to public comment, but no one spoke. The meeting had been advertised to begin at 6 p.m., but was moved to 4:30 due to weather. Among the few members of the public who attended was Northampton Board of Supervisors Vice Chairman Rick Hubbard, but he did not speak. Also attending for South Port Investors was Dan Brown.
Last year the Town enacted the largest utility rate increase in its history, citing increased costs. But over the past three years Town Council reduced utility connection fees for the Old School developer by nearly $200,000, for the Shanty by $60,000, and for Bay Creek Beach Club by almost $110,000. Add yesterday’s concession of up to $180,000 for South Port, and the total is some $550,000.
This utility (water) hook-up fee is very confusing, and quite arbitrary. The fees seem (to me, anyway) very high, but perhaps would not be an impossible hardship for the large developers and/or corporations mentioned above to pay, yet are routinely waived or reduced. But then, I hear stories about small businesses who would like to “invest” in Cape Charles but are discouraged by demands of $30,000 utility fees and ultimately go elsewhere. A much-needed veterinary practice, I believe, is the latest example. Also, money is apparently so tight for the town that the minimum monthly water charge has been hiked, which impacts every town private citizen. I continue to be amazed by the capriciousness of the town council. However, is that a desirable trait for a governing body?
Certainly, Southport has every right to demand fair and equal treatment. If the Shanty has been the beneficiary of back-room deals, why shouldn’t they? However, just because it happened in the past is no reason to begin to treat it as legitimate public policy. The problem is, this is not a deferral, but a transfer of the fees (transfer of wealth from the poor to the rich). These fees that should have been paid by a multi-million dollar business group are instead being thrust upon the ordinary people of Cape Charles–you know, the ones that are having trouble keeping their homes warm due to being buried by the increased taxes and service fees that are the logical outgrowth of these giveaways.
Essentially, this is nothing more than corporate welfare in its most degrading form, a methodology of robbing Peter to pay Paul. Of course, in this case, you can always depend on the support of Paul, which accounts for how the same cutting crews continue to infest local government, and the circle of corruption forever goes unbroken.
The argument that this is somehow an incentive for “anybody who wants to invest in this town” is bogus on its face, and is more evidence of the corrupt influences that have infiltrated this town. Wendell is correct that this type of business needs to be part of an understood and agreed upon piece of policy, such as a predefined Special Economic Zone or Technology Investment Region (in other words, you receive uniform tax incentives to move into the zone or region). This form of ad hoc rate reduction methodology is prone to abuse and corruption, as we witnessed with the Old School deal.
Bottom line, we needn’t cry for Southport — anyone that picnics on the Bay in a Hinckley sailboat should hardly need welfare from the town. They’re big boys, and they knew what the cost of setting up shop was long before they poured the first yard of concrete. They need to stop whining like babies with wet diapers, and pay the money they owe, and not try and pass the fees onto the struggling residents of Cape Charles. That goes double for Bay Creek and making good on the Annexation Agreement.
The Shanty should also do the right thing, and refund the money usurped from the blokes on Monroe, Madison, Jefferson and Washington. They seem like they’re doing okay, and Town crews even maintain the lot for them — we can put the cash in an Escrow account, to be used to refurbish the basketball courts, gymnasium and 102 year old stage once the Old School is back in the public domain.
Independent of how others are voting, I would encourage elected town officials to vote their convictions.
Waived or deferred? The town goes out of its way to grant concessions to those who may want to establish a business. That’s a good thing! However, there should be an upfront written agreement that if the business fails, the fee will be waived. If the business is successful, than the owners should pay back to the town some percentage of the deferred fee.
Agree that the town citizens, many on fixed or stagnant incomes, already bear a rate for water and sewage that is excessive. Example: San Diego, a city built on a desert in a drought ridden state, charges $44.00/ month for 6000gal/water consumption per month. In Cape Charles that same consumption per month would be $47.65. In addition, businesses need to hire or attract labor into CC. Labor needs to know that putting down roots in CC is affordable and has good schools for their children. Schools are another issue that needs attention. Not a water and sewer line to US 13 for a handful of businesses.
Why do the people running this town continue to give breaks to multi-million-dollar developers and charge the locals exorbitant water bills? If Southport and [Old School developer] David McCormack don’t have to pay water bills, why do the little people — for instance those who have had their water turned off for the winter — have to pay the minimum bills?
I, for one, am tired of paying FAT water bills for water I would NEVER drink and water that rots the chains in my toilets every three or four months. If the water does that, what is it doing to the internal organs of the people that drink it? I can’t even let my dog drink this water! For that matter my husband washed my car last week and could barely get the residue of the chlorine off my car!
I am tired of the little guy getting screwed over and the businessmen getting all of the concessions. At least three out of four of the previous comments are right on point.
A “deferral” implies a date in the future when said deferral ends, does it not? A “waiver” is an absolution of responsibility. A “reduction” is a giveaway. I’m unclear as to exactly which entity was given which benefit, or why. Heck, I’d be happy with any or all of the above!
The “deferral” lasts as long as South Port continues to lease Town property. If South Port exercises its option to buy the property, it then would have to pay a “portion” of the deferred utility connection fees. How much that “portion” might be was not specified in the motion. –EDITOR
Usually I stay out of the town’s business, but this article captured my attention.
First, I’d like to thank the people who are serving the Town of Cape Charles in these elected positions. They’re not getting paid a lot of money but they are certainly working some long and frustrating hours on some of these issues.
However, I’d like to ask how and why the town got in this position of granting “deferrals” to these projects?
Two of these projects, South Port and the Old School, don’t even seem to be off the ground yet and we granted them what amounts to large amounts of taxpayers’ monies.
My question is a simple one: now that we have made these concessions to the latter projects with taxpayers’ monies, when do we expect to see some movement forward in the way of local employment, tax revenues, and the actual construction for these projects? Is there an actual completion date or do they get to hang more nifty signs in the area?
I’m well aware of work schedules, contracts, weather issues, EPA compliances, etc., and I can see what has been accomplished and being done at Bay Creek and The Shanty, but the latter two projects have raised my concerns on what “other concessions” the town will allow next. One of these projects has been bantered around for some 6+ years now and seems stalled at the gate. Good luck to all.