State boosting rents for yacht, boat clubs
Harvard to pay $18,000
state officials are trying to put their property management practices in order, preparing to charge 31 yacht and boat clubs more for the public lands they are leasing and possibly taking one deadbeat yacht club to court for failing to pay its long-overdue back rent.
The new rental system, being phased in over the next 12 to 18 months, will replace one-year permit rentals with 30-year leases and steadily increase the rents. It would also require the clubs to provide in-kind contributions as part of their lease agreements, with possibilities including picnic tables, public restrooms, bike racks, boating instruction, and local scholarships. The clubs will also be required to make repairs and improvements to their facilities, the cost of which won’t be deducted from the rent.
For educational institutions such as Harvard and Boston University that are renting land for their boat clubs and sailing pavilions along the Charles River and elsewhere, the increases will be the most dramatic. The schools are currently paying $5,000 a year in rent (Harvard was only paying $1 a year for its sailing pavilion until last year), but payments will initially jump to $18,000 the first year under the new plan and increase every year thereafter. The rents will double by the fifth year and max out at $100,000 a year in 30 years.
| Wollaston Yacht Club owes more than $30,000 in back rent. DCR referred the
matter to Attorney General Martha Coakley.
The new system allows all of the clubs to deduct dollar-for-dollar the value of in-kind contributions from their rental payments starting in the sixth year of the lease.
Jack Murray, the commissioner of the Department of Conservation and Recreation (DCR), which owns the land rented by the 31 clubs, says the state has been patient with the Wollaston club, hoping members would work out a payment plan. “But as we got further into the process, it became clear that either they were unable to make these payments or did not have any intention to do so,” he says. “So we have referred this case now to the attorney general for possible litigation.”
The commodore of the Wollaston Yacht Club, Michael Pelosi, declined to comment.
Officials at MIT, Northeastern, and Tufts say they are in discussions with the state about new lease terms but had nothing more to say at this point. A Harvard spokesperson was unaware of the upcoming rent increases.
A law passed four years ago called for the development of a new lease system for yacht and boat clubs on state property. Implementation has been slow, which has meant lost revenue for the state. If the new rental program had been implemented one year after the law was passed in 2010, the state would have pulled in about $668,000 more in revenue from the clubs than it has under the present system. If it had been launched two years after the law took effect, the state would have about $377,000 more in its coffers.
The responsibility for drafting the new leases belongs jointly to the Department of Capital Asset Management and Maintenance (DCAMM), the state’s real estate arm, and DCR. The leases must also be approved by the state inspector general.
“There is a little bit of lag time that goes along with the agency getting the legislation, looking at it, and interpreting it. And it was a significant charge that we were given,” says DCR’s Murray.
Under the existing permit system, clubs are grouped into four tiers. Small clubs and virtually all of the clubs affiliated with educational institutions are in the first tier and pay fixed rents of $5,000 a year. Medium, large and very large clubs are in the second, third, and fourth tiers, paying $8,000, $10,000, and $15,000 a year, respectively. All the current rents are below market rates.
The educational institutions will all be moved from their lower tiers into the highest tier, paying $18,000 in rent the first year. The other clubs renting state land will be divided among the four tiers based on factors such as membership size and land and water area. The rents for the three lower tiers will start at $6,000, $9,600, and $12,000 the first year. The annual rent in each tier will double over five years and then rise 5 percent a year thereafter before topping out at $33,000, $53,000, $66,000, and $100,000.
As previously reported by CommonWealth, oversight of state leases, licenses, and permits by the short-staffed DCR and DCAMM has been lax in the past. Rent from some of the state’s agreements was going uncollected, expiration dates on others were being ignored, and deals were being renewed in perpetuity at bargain-basement rents.Ed Lambert, the DCR commissioner at the time, called in state Auditor Suzanne Bump to investigate the state’s property management practices. The July 2013 audit report identified $367,000 in uncollected fees dating back to 2005.
Part of the agency’s problem in administering the leases is that information on them is in disarray. To help bring some order to the records, DCR hired a company called TR Advisors in April. The firm is being paid $514,000 for its services.