C. Edmund

That is certainly his opinion - and he makes an interesting case. BTW, that above was a cut and paste from a blast email sent to many of the current boat slip tenants at Crosswinds..

Crabpot Man

Funny he mentions 8 cents on dollar for replacement value of the leasehold improvements. What is the depreciated value? How much will it cost to remove and dispose?

C. Edmund

Interesting questions, and I can only guess using a only a little bit of knowledge about the marina business and a lot about business in general. . One thing is for sure, 8 cents on the dollar is an insult. 25 cents might be acceptable. Close to 50 would be fair,

Improvements like fencing and dockage and ramps and so on don't depreciate that much especially since they are maintained and repaired all along. Removal and disposal is something I have no idea about. I don't know if the floating docks could be transported and sold or not. Interesting idea. The buildings could be sold. The in ground improvements are something else of course.

Looking at it another way, did the new vendor make a mistake thinking they could take over a 2.5 million dollar facility for 200 thousand bucks? You know, did they think they could virtually "steal" the facility from the current vendor and therefore pay the state an unrealistic amount of royalties and get the bid that way? It appears that was their calculation - but again, all just speculation.

glacierbaze

I think that if I were Albert, I might just pull all my docks and stuff that was fairly modular, find some land nearby to stack and store, and just wait and see if the new tenant has the wherewithal to make good on his proposal to build out the facility. Getting too destructive may end up just shooting himself in the foot in the long run.

C. Edmund

Hell of an idea actually. Could roll up the fencing too perhaps.

zigzag

sounds like a lot of favoritism going on here somewhere, but surely not in NC

C. Edmund

Oh no, NC government is pure as the wind driven snow - as long as the snow was driven through Buffalo and Cleveland and Detroit and then made a quick pass thru Looziana...

nccoaster

After reading all of this. It is easy to understand the poor decisions on both sides.

The current lessee made improvements to property he was LEASING without re-negotiating during the existing lease. He might have tried and the state was unwilling to re-negotiate.

He obviously knew the lease would expire and then would have to be renegotiated, yet he made a business decision to put his personal money into something he does not own.

The State did their usual "put it out for bid," took the highest bid without considering the actual ability of the new guy to pay the new rate. Basically, the new guy is going in with no cost to promise something that he might or might not be able to deliver. Obviously, the parameters of the lease don't seem to be very detailed.

I have seen this happen before, where the new lessee leaves because he can't deliver on his promises or make the business work.

If the new lease had gone to the current lessee without any open bid. The News and Observer would have been all over it. Claiming how "unfair" it was.

Basically, a bad situation.

Unfortunately, the only solution would be for the current lessee to sell the improvements to the new lessee at whatever price they can agree to. Doesn't matter if it is .02 to 2.5 million. If they can't come to terms, as mentioned, the current lessee should pull his materials and wait for the state to beg him to come back.

Sadly, by that time, it will take a long time for anybody to trust the marina operator.

C. Edmund

Well, um, yeah, that's about where we are. As of this minute, they can not come to terms. I would imagine there's posturing on both sides as they play a game of chicken. As for the business decision to put personal money into something not owned - that's the prerequisite for anyone running any of these core of engineer properties so it's not accurate to call it a decision per se. That's the gig. Period. That's why the leases are 20 to 30 years. Most are not as poorly written regarding transition as this one is.

glacierbaze

I don't see a trust issue for the current operator. He has been there 30 years, is generally well liked, and if he prevails, may be viewed as the one who saved the day for the boat owners there.

Not going to go back and read the lease, but some questions come to mind:
Can the new operator withdraw his bid?
Does he have a deadline to build out, and open to the public?
Is there a minimum rent due from month one?

I read Craigslist "Boats for sale" several times a day, and I haven't seen
a Jordan Lake houseboat for sale yet. I am a little surprised by that optimism. As they say, "Hope is not a strategy".

zigzag

[quote=C. Edmund;4388555)As for the business decision to put personal money into something not owned - that's the prerequisite for anyone running any of these core of engineer properties so it's not accurate to call it a decision per se. That's the gig. Period.
quote]

That is something I don't understand here, how does the corp of engineers own any property? Are they a private company with private investors?

C. Edmund

Zig, as I understand it: The Core of Engineers (tax payers US Govt) built the lake and gave ownership to the State of NC, who now owns and manages it. The state decided to lease it out with vendor spending all the money for improvements.

zigzag

I guess that is my question, when the corp says they built and own the lake are they they're own business with investors or are they a branch of government working off taxpayers money doing taxpayer work, if this is the case how do they actually own anything?

C. Edmund

Again, the Core does NOT own the lake. They did BUILD the lake then deeded it over to the State of NC -(I think) so now the State now OWNS the lake and manages the use of it while the Core still manages the dam (I think) and the Core controls how much water to release, etc.

I do not know for sure, but I assume the state owned some of the property that is now the lake basin, and either the state or Feds bought the rest of it then the Core dammed up the river and the lake was built. This was done for flood control down river and for a water source - with the benefit being a recreational lake as well.

This is info I have heard in bits and pieces over the years, and I think I have it at least mostly correct.

tbg0519

A thought that relates to a question I posed on a different thread last night; Albert may want to contact the guys at Willow Grove Marina on Kerr Lake. I spoke to the guys up there this AM, and they said they were still not open and were trying to raise the capital still to open the marina. Albert may be able to either sell his docks etc to them for more than the new Crosswinds people, or possibly even partner with them. Who knows. Kerr Lake has a major shortage of slips on the VA side (only 1 small marina in Clarksville) and the only other 2 marinas are at the far end of the NC segment of the lake.

Crabpot Man

According to this news clip the Army Corps of Engineers owns it and leases it to the State.

It also states the current operator has ordered boats out so he can demolish the marina.

http://www.wral.com/news/local/story/10768110/

The USACOE is part of the US Army, which is obviously part of the federal government.

http://www.usace.army.mil/

yellowdogblues

I always heard the Corps of Engineers owned the lake and the dam and the federal game lands surrounding various areas of the lake. The state parks owns/leases the other areas. You can duck hunt from a boat blind 3 feet off the bank that has no hunting signs posted by the state as long as you are afloat because the lake is federal land.

C. Edmund

Ok, thanks for clearing up. The state acts kind of like an owner in that they lease it out and they patrol if with the NC Wildlife Dept, etc. That's where I was confused. The lease is paid to the state also.

I knew the Core was still involved in the water control and the dam, etc, but I did not know they still did own it.

And yes, the owners have been told to have boats removed by March 31 I think it is, to allow for demolition before Albert has to vacate the property. There is still time for he and the new folks to reach agreement on payment for the improvements.

The offer of 200 K will probably have to triple to do that - in my wild guesstimate.

Crabpot Man

I tried to be subtle, appears it didn't work.

corps; a : an organized subdivision of the military establishment <Marine Corps> <Signal Corps>

C. Edmund

Sorry - my bad - I have a house in Beaufort on CORE CREEK and it is named after the Army Corps of Engineers who built it, but still called Core Creek. I see the sign all the time for Core Creek Drive so CORE is in my brain. Oops.