(New Buffalo, MI) - The proposed acquisition of Pleasure Isle Marina by the City of New Buffalo appears dead. The city council during its November 23 meeting voted to meet again the following night to further discuss and vote on the proposed purchase agreement. However, the meeting was cancelled when the owners, the William J. Deputy Foundation, withdrew its offer.
The foundation hoping to close on a deal by December 15 set a November 23 deadline for the city council to accept the proposal.
Mayor John Humphrey and two other newcomers to the city council, Roger Lijewski and Brian Flanagan, wanted extra time to further study and obtain additional public input on the proposal they were just recently handed. The three new council members were elected on November 3. “It was just too much thrown on our lap too soon,” Flanagan said.
Councilman Lou O’Donnell, IV, calling the proposed acquisition a “no brainer,” along with Mark Robertson were in favor of the proposed sale of the marina behind the Harbor Grand Hotel. O’Donnell said he was extremely confident money would be made by the city which could sell the property back to the foundation at any time if the venture ended up in red ink. He said profits from the marina could be invested in the public beach, the public boat launch and Lions Park. “There’s zero risk. I don’t understand why we’re picking this apart,” O’Donnell said.
Humphrey, not convinced a profit could be turned, said the foundation would have to agree if asked by the city to purchase back the marina. “I like the idea. We just have to research this for the good of the people of this town,” he said.
City Attorney Nick Curcio said the sale price was $500,000 for 26 boat slips and the lower level of a two unit condominium. The purchase would be financed by the city for five-years and profits from the marina could be used to make the installments. Curcio said the condominium has been renting for $1,000 a month while each private slip was leased this year for $4,800 during the season. He said operating expenses provided by the foundation were listed at about $25,000 annually.
Flanagan, a former 21-year employee at Service 1 Marine, said the operating expenses sounded “way too low. I know what it takes to run marinas,” he said.
Curcio said the foundation would pay the city 90-percent of the original purchase price if it ever agreed to buy back the marina under several deed restrictions that would be in effect for 75-years. Other deed restrictions for 25-years would include the city maintaining a separate account for revenue and expenses at the marina and providing an annual income report.
Curcio also said that once the current one-year leases on the slips expire, the city could make the slips available to the public to help address concerns about a public entity operating a private marina. “The way it’s operating in year one doesn’t necessarily have to be how it’s operated in year 75 as long as the city is complying with the deed restrictions,” he said.
Humphrey said he would be more willing to agree to a sale if the upper level condominium was included to provide an extra revenue source and other adjustments were made in the proposed terms. “I just have too many questions about the specifics of this deal. I know there’s a better deal to be had if the foundation wanted to address these concerns,” he said.