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2013-10-23CITY OF BEVERLY PUBLIC MEETING MINUTES Board: Special Meeting of the Harbor Management Authority Date: October 23, 2013 Location: Beverly Public Library (Fogg Room) Members Present Chair Paul Earl, David Suminsby, Pat McAleer, Rinus Oosthoek, Don Neuman, Chris D'Alfonso, Maureen Troubetaris, Members Absent: Chris D'Alfonso, Paul Miedzionoski and Wes Slate Others Present: Rob Dever, Facilities Manager, City Councilor Scott Houseman John Silva, Mr. Joseph Leone Recorder: Eileen Sacco Earl called the meeting to order at 7:00 p.m. Public Input There was no public input this evening. Review and Recommendation to the Beverly City Council Re2ardin2 the Black Cow Lease Agreement McAleer addressed the HMA and stated that he recommends that some language be included in the lease regarding a three layer dispute resolution that provides for negotiation, mediation, waiver of a jury trial. He stated that it is just a suggestion for the HMA and the City to consider. Simon asked if the 40 year lease has a provision to sub lease the site. Earl noted that section 12 details the rights of the tenant, noting that the city has a right to reject. Earl stated that he checked this lease out with four lawyers that know the lawyers that drew up the lease for the city, and they are very highly regarded. Troubetaris stated that most of her questions are for Mr. Gelineau noting that she thought that he would be here tonight. Troubetaris asked if Beverly Waterfront LLC is solely owned by Mr. Leone. Mr. Leone, who was present at the meeting, confirmed that he is the sole owner. Page 1 of 5 Troubetaris asked if the public bathrooms are included for the first floor of the site. Earl explained that they are part of the Chapter 91 License as it applies to the DPA. It was noted that they will be part of the premises but will be the responsibility of the city not the tenant. Troubetaris questioned if the money for the rental of the slips from Mr. Leone will go to Mr. Leone and questioned why it would not go to the city. Neuman explained that Mr. Leone will be paying the City 50% above list price per slip (other than the required one which is at list price), and if he chooses to charge people to park there that would be up to him. Troubetaris asked who would maintain the parking lot. Mr. Leone will maintain the 69 spaces in the parking lot. Troubetaris asked how the potential elimination of the DPA would effect the Black Cow. Earl noted that it is spelled out in the lease. Earl noted that according to the DPA the tenant on the first floor of the building has to be a water dependent industry, noting that it cannot be retail space. Troubetaris stated that she has a grave concern that if we do not pass this lease and it goes to the next administration we may never see the Black Cow. Earl stated that it is the intention that the HMA make a recommendation to the City Council. McAleer asked if it is the intention of the HMA to modify the DPA. Earl stated that the HMA is not taking the lead on that but there have been discussions over the years regarding the modification of it. Neuman stated that he would like to see two things changed. He stated that he would like to see parking reserved for slip holders noting that there is adequate parking under the bridge that is not metered that could be reserved for slip holders. Earl noted that legally we need to provide '/2 space per slip. Neuman also stated that he would like to see a place holder for a kiddie fountain. Oosthoek stated that the alcohol license will be in Mr. Leone's name, not the City of Beverly if it is a home rule petition. Mr. Leone stated that it is his understanding that if he transfers ownership of the site, the license stays with the site. Oosthoek requested that the City clarify that any operator of the site will get the license. Oosthoek suggested that the City and the owner should come to an agreement on the number of slips that they will be leasing, rather than decided on a year to year basis. Earl stated that he thinks that what is proposed is fine as long as the HMA has enough notice on the number of slips that will be used. Oosthoek suggested that an independent review of the lease be done to be sure that we are doing the right thing. Page 2 of 5 Allowed by the Chair, Mr. Leone stated that he is going to spend $3 million dollars building a restaurant on the site that the city will eventually own. He noted that he is taking the risk and if he fails the city owns the building. He further noted that he has already spent $150,000 on this project and he would like to see it completed. Neuman noted that it is not the HMA responsibility to approve the lease, they are only required to review and get no vote on it. He stated that he does not feel that an independent review is necessary. Oosthoek again stated that he has concerns about the financial deal and that should be looked at. Earl noted that Mr. Leone is investing a lot of money and will need a reasonable period of time to recoup that. Mr. Leone also noted that in all likelihood the facility will have to be rebuilt in 20 years and he would be responsible for that as well. Mr. Leone also explained that he will be maintaining the first floor public bathrooms and noted that he will build it, insure it, secure it and clean it. He further noted that he does not have an exact plan for the rest of the first floor but stated that he would like something of an educational activity on the site. He also explained that they will maintain the park noting that it is right next to the facility, and he would like it to be pristine at all times. Suminsby asked if any consideration should be given to the concerns raised by the Atty. for Beverly Port Marine. Earl reported that Gelineau will respond to the concerns raised by the Attorney, noting that it is not for the Harbor Management Authority to decide. Troubetaris explained that once the HMA votes on a recommendation regarding the lease it will be sent to the City Council and the Legal Affairs Committee will review the lease and take the recommendation into consideration. Oosthoek noted that the HMA does not approve the lease, they only make a recommendation. Troubetaris: motion to recommend approval of the Lease for The Beverly Waterfront LLC d /b /a The Black Cow. Neuman seconded the motion. Oosthoek: offered an amendment to the motion to include an additional section in the lease that are of concern to the Harbor Management Authority. Simon seconded the amendment to the motion. Discussion: Earl stated that in the scheme of things Mr. Leone is investing $3 million dollars in City property. He noted that he likes the language that has been suggested and further noted that he has been told that it was drafted by very competent lawyers. He also stated that he feels strongly that if Appendix 4 is drafted by HMA and City officials, the regulations for the site could work well for the city. Page 3 of 5 Neuman recalled the history of the site and noted that the city issued 3 RFP's since McDonald's left. He further noted that only one guy expressed interest. He stated that he fears that if we do not execute this now we risk seeing another generation go by with the waterfront in the same condition. Simon stated that he is 100% in favor of the project, however he is uncomfortable with the base rate for 40 years, noting that there should be some kind of negotiation. Earl stated that this lease has been very well thought out and he feels uncomfortable having the HMA delay this. Suminsby stated that he has always been in favor of the Black Cow but noted that he has parking concerns. Troubetaris expressed concern that if the HMA requests an amendment to the lease it will further hold it up for as much as a month. She explained that the Legal Affairs Committee will have to review it and make a recommendation to the full council. Mr. Leone stated that the economics of the deal have grown and if there is a change that would kill the deal. Simon stated that he does not want to kill the deal he just wants it to be on the record that he is is uncomfortable with a 40 year fixed rate on the rent. Earl called for a vote on the motion and the amendment that are on the table: Troubetaris: motion to recommend approval of the Lease for The Beverly Waterfront LLC d /b /a The Black Cow. Neuman seconded the motion. Oosthoek: offered an amendment to the motion to include an additional section in the lease that are of concern to the Harbor Management Authority. Simon seconded the amendment to the motion. Vote: The HMA voted at this time on the amendment to the motion to include an additional section in the lease that are of concern to the Harbor Management Authority. Simon seconded the amendment to the motion. The motion failed 1- 5-1. Suminsby: moved to amend the motion to recommend approval of the lease to include that the BHMA should be directly involved in preparing Exhibit D Rules and Regulations for the site, given their responsibility for waterfront development plan per the act that established the BHMA. Troubetaris seconded the motion. The motion carries 5 -0 -2 . Page 4 of 5 Troubetaris: motion to recommend approval of the Lease for The Beverly Waterfront LLC d /b /a The Black Cow and to include language that the BHMA should be directly involved in preparing Exhibit D Rules and Regulations for the site, given their responsibility for waterfront development plan per the act that established the BHMA Neuman seconded the motion. The motion carried 5 -0 -2. Earl will draft a letter to send to the Beverly City Council and email copies to the HMA members. Next Meeting The next meeting of the Harbor Management Authority will be held on Wednesday, November 20, 2013 at the Beverly Public Library. Adjournment There being no further business to come before the Beverly Harbor Management Authority this evening, Simon moved to adjourn the meeting. Oosthoek seconded and the motion carried. The meeting was adjourned at 9:00 p.m. Page 5 of 5