DCR, carousel negotiations go round and round

Getting a new lease is a lengthy, tortuous process

ONE DAY LAST SUMMER Leo Roy, the commissioner of the state’s Department of Conservation and Recreation, showed up at the Paragon Carousel across from Nantasket Beach in Hull with some ominous news.

Roy told Marie Schleiff, who heads the nonprofit group that runs the carousel that her organization would not be getting the $1-a-year, 25-year lease the Legislature had authorized the agency to sign. Instead, Roy said, he was making her group, the Friends of the Paragon Carousel, a tenant at will, meaning their lease would run month-to-month.

Roy’s decision was the beginning of a lengthy and sometimes tortuous negotiation process that is still far from over. The negotiations illustrate how the agency, which has come under heavy criticism over the last several years for its poor management of state properties, is trying to do a better job of managing public lands. But the talks also show how getting tough on tenants can sometimes be a delicate balancing act, with an antique carousel that attracts more than 100,000 visitors a year hanging in the balance.

The nonprofit that operates the carousel in Hull provides free space to an artisan who in returns maintains the carousel horses.

The Friends of the Paragon Carousel owns the authentic 1928 carousel and the building that houses it, but the facility sits on top of land owned by the Department of Conservation and Recreation. Listed on the National Register of Historic Places,  the carousel, the only surviving attraction from the long-shuttered Paragon Park, boasts 66 colorful horses arranged four-abreast plus two rare Roman chariots.  They go round and round to the merry tunes of a period Wurlitzer band organ.

Immediately next door to the carousel is the so-called Clock Tower Building, which is owned by DCR and used by the Friends group to run an ice cream stand and a

Paragon Park museum and for office and storage space. The building also houses an artisan who restores the carousel horses in return for free rent on a workshop for his business.

The rent for the land underneath the carousel and the Clock Tower Building was $1 a year until the lease expired in 2016. New carousel legislation passed that year authorized DCR to issue a new, 25-year lease at the same nominal rent. Schlieff and her colleagues thought the legislation gave them the financial stability they needed to continue operating the carousel for years to come.

“The Friends of the Paragon Carousel can now look at the next 25 year,” the group happily announced on its website at the time of the legislation’s passage.

But the legislation didn’t require DCR to sign a new lease with the Friends group; it only said the agency may execute a new lease. Roy decided to hold off, apparently figuring a new, 25-year lease at $1 a year would remove any leverage he might have to force improvements at the facility.

Roy said he was troubled by what he saw when he visited the carousel and Clock Tower Building last year. The four clocks on the Clock Tower Building didn’t work and the second floor was a shambles.

“They didn’t do what they were supposed to do,” Roy said in an interview, referring to a provision in the original lease that called for the Friends to devote about $1 million to renovating the Clock Tower Building.  The Friends group spent only a quarter of that amount on the building.

“The clocks don’t work for goodness sake,” Roy said. “That’s been on their list to repair for years. Wouldn’t it be nice to come to town and look up at the Clock Tower and actually see clocks that work?”

Roy estimates it would cost as much as $1.5 million to get the building into good shape, but that’s a big financial lift for a nonprofit that reported a loss of $27,000 in 2017 on revenues of $353,000 and expenses of $380,000.

Schleiff, the president of the Friends group and a former school teacher, said funds are tight. She also said Roy’s decision to make the organization a tenant-at-will accentuates the problem because funders are not inclined to donate money to an organization without a lease.

“We don’t have any rich patrons like the carousel on the Kennedy Greenway does,” Schleiff said. “And,  truthfully, because we don’t have a long-term lease in place that would allow us to apply for grants, we are running out of funding for regular operations.”

If the Clock Tower Building is taken away from the Friends, the game is over, according to Schleiff.  In 2017, the revenue from the building equaled the revenue from the carousel – about $150,000 each. “The revenue generated by our activities in the Clock Tower Building supports the operation of the carousel,” she said.  “If we were to lose that revenue, we would have to shut down the carousel.”

In April, the Friends submitted a three-page plan to Roy. One page consisted of a list of renovations to be accomplished over a five-year period. The other two pages listed possible sources for funding.

Roy didn’t respond for nearly three months, but then he met in July with the group in Hull and told them he was prepared to offer them a letter of intent for a new, long-term lease as long as they conducted an appraisal to determine the fair market value of the property and submitted a detailed maintenance plan with a timeline for repairs and upkeep of the Clock Tower Building. Roy didn’t indicate what the rent might end up being.

James Callahan, the carousel’s director of operations, said Roy also warned that the process of negotiating a lease could be a lengthy one, and will involve a separate state agency that handles real estate transactions for the state.

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Schleiff said she feels Roy is squeezing the Friends group. She said a letter of intent is not a lease and won’t help the organization raise more money. She said she is also concerned that Roy may be preparing to sell the Clock Tower Building to someone else. She noted that her organization has already given Roy a systems replacement plan, which is similar in scope to the maintenance plan he is seeking.

“I don’t think anybody reads anything we send them. We jump through one hoop and up comes another one,” she said in an email. “We are setting up the next step, but fully realizing our effort will not make any impact on his [Roy’s] thinking. Sad!”