Former Ward Eight Candidate on "National Sailing Hall of Shame" ~ Annapolis Capital Punishment

Friday, February 5, 2010

Former Ward Eight Candidate on "National Sailing Hall of Shame"

(The below comments were submitted by Eastport resident Rock Toews, who recently ran for Alderman in Ward Eight as a Republican. The views here are solely those of Toews and do not necessarily reflect those of the publisher of this blog)

I have nothing against building a National Sailing Hall of Fame in Annapolis, but I am opposed to locating this facility on state owned land at City Dock. The current proposal and lease have significant fiscal ramifications for all citizens of Maryland, and potential regulatory implications for businesses and citizens in Annapolis.

From a fiscal standpoint, the deal would cost state, county, and city property tax revenues, and the state and city dockage fees.From a regulatory standpoint, the NSHoF could be exempted from local codes, ordinances, licensing statutes, and historic preservation requirements by virtue of its operating from state-owned property.

The proposed location of the NSHoF is the current DNR property at the end of Prince George Street along with adjoining property which was formerly the “porch” of Phillip’s Seafood. The DNR property has been appraised at $3.5 to $3.7 million. The NSHoF recently purchased the Phillip’s porch for $2.8 million. The NSHoF intends to deed the Phillip’s porch to the state, then lease it back, along with the current DNR parcel, for $1 per year for the next 50 years. There is an option to renew for another 20 years.
NSHoF advocates argue that the gift of their $2.8 million property to the state justifies the peppercorn lease. This is nonsense. The state desperately needs revenue, not additional property that produces no income. All this gift does is to transfer the real estate carrying costs to Maryland taxpayers while the NSHoF retains full use and benefits of the property for the foreseeable future. It removes a $2.8 million property from the tax rolls, costing the state, county, and city over $40,000 per year. Furthermore, it precludes the state selling the existing DNR lot, which keeps another $3.5 to $3.7 million property off the tax rolls.
But wait, there’s more. The state and the City of Annapolis currently control the docks and riparian rights in front of the DNR property. These are to be given over to the NSHoF as well under the proposed lease. This represents another loss of about $400,000 in dockage fees per year between the city and state. Some of these losses will be offset by sales taxes generated by visitors to the NSHoF, but keep in mind that at the state’s current rate of 6% it will take sales of $6 to $8 million to break even. Let’s just say that’s unlikely.
But wait…there’s still more. In the hierarchy of government, the federal government is exempt from state laws, and the state is exempt from the laws and codes of local municipalities. There are logical reasons for this. However, it is now being argued that the state can pass this exemption on to a private entity occupying state-owned land. If so interpreted, this would mean that the NSHoF would not have to comply with the Annapolis City Code. These are the rules that govern things like size and scale of buildings, business licenses, liquor licenses, etc. The private entity, NSHoF, stands to be exempt from local zoning, licensing, and historic preservation requirements. Is this what Annapolis residents really want? I think it opens the way for abuse and completely distorts and disregards the intent behind the principle of state’s immunity. The state’s exemption from local laws was not meant to be transferable to private entities.

If we allow it I expect property owners to take note. Say you own a house in the historic district and you want to put up a three storey glass and steel addition with rotating lighted pinwheels on the top. You’ve heard this might be difficult to get through Planning & Zoning. What do you do? Simple: deed your house to the State of Maryland then lease it back from the state for the next 70 years at $1 per year rent. Convince them it’s a good deal by pointing out that you are giving them valuable property. Build your addition. Pay no property taxes. Pay no rent. Open a bar in the garage to help defray your construction costs. Why not? You’re beyond the reach of the local liquor board after all. You only have to comply with state laws.
Extreme example? Maybe, but you begin to see the problems with allowing the state to pass its cloak of immunity to private entities not necessarily engaged in state business.

Again, I have no problems with establishing a National Sailing Hall of Fame in Annapolis. But it needs to stand on its own, financially, and not use the state’s immunity to shield itself from local laws.

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1 Comment:

Ald. Fred Paone said...

Well said. The City and its residents are being ignored. The LOCATION (not the concept)is a huge mistake and I fear the residents will be paying for this for years to come.

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