New Dive Location?

[Bigstan]

Originally Posted by Riviera

I have a different take. The city owns the waterfront real estate that will serve the dock. If the city were to make this deal with the Dive, the city would only be deriving $1500 per year for the lease of that real estate. Assuming the dock is for the exclusive use of the Dive, during the “10 to 20 year” lease term, the city derives no financial benefit from the $100,000 expenditure by the business owners of the Dive. The $100,000 expense would be a leasehold improvement, for which the Dive alone would recognize a financial return. In fact, the dive “boat”, and the dock itself, are not taxable as real estate. The Dive would get be getting a spectacular deal.

Where does $1,500 a year come in ? You must be a lawyer, and probably a real estate lawyer. More worried about real estate tax loss than the opportunity loss of revenue taxes.

Ugh and ick to lawyers.

As long as we find reasons to say no instead of yes to businesses the area will stay a run down eyesore. Try and squeeze the most out of a business that survived two years and employs a couple dozen-plus people at good wages and you will win - they will leave or fold.

Then what do you have? Empty arcades with garage doors that spend all winter partially open because they can no longer even close, a dive bar and a surprisingly good Mexican restaurant.

Keep stifling growth, lawyers look for reasons to say no, business people look for reasons to say yes - let's take a chance and try. Guess which ones are really needed, especially now ?

[Riviera]

Originally Posted by Bigstan

Where does $1,500 a year come in

$250/mo X 6 months per year, as reported by the LDS

Originally Posted by Bigstan

You must be a lawyer, and probably a real estate lawyer.

Nope, but I am familiar with commercial real estate.

Originally Posted by Bigstan

More worried about real estate tax loss than the opportunity loss of revenue taxes.

Nope. I am as pro-business as they come. However, I believe all businesses should be on an equal playing field, and I do not believe it is appropriate for a municipality to offer terms to one business, and not others. If the City were to offer the land under a public RFP process, and allow the dock rights to go to the proposal that provides the best economic benefit to the community, I would support that approach.

Originally Posted by Bigstan

Ugh and ick to lawyers.

Like everything in life, there are good ones, and bad ones. The good ones are problem solvers. The bad ones are problem finders.

Originally Posted by Bigstan

As long as we find reasons to say no instead of yes to businesses the area will stay a run down eyesore.

I believe the City has been short sighted in its view of the Weirs. They have been saying "yes", to businesses that are focused on creating parking lots for MW week, instead of focusing on ways to alter that dynamic. I'm not opposed to the Dive concept, although I think they had a somewhat flawed business model, and are now grasping at straws. That said, I am opposed to them leasing waterfront access property, for $1,500 per year. The water rights to a dock are worth far more than that, and if the City is going to offer that land/water right up for private use, they should investigate all potential options, and select the best alternative that is presented. If the best alternative is the Dive, so be it.

[Descant]

It's not just $250/month rent. The Dive is offering $100,000 in improvements to the docks which will then be given to the city.

[Riviera]

Originally Posted by Descant

It's not just $250/month rent. The Dive is offering $100,000 in improvements to the docks which will then be given to the city.

Correct. However, if I understand the proposal correctly (and I may not), the dock would be used exclusively by the Dive for 10-20 years, while it is under their lease term. Accordingly, the City needs to consider it's value to the City upon the expiration of the lease term. I concur that there is value in the docking structure, but there needs to be recognition that the financial value is de minimis until such time as the lease expires.

I'm simply suggesting that the Dive is one option, and there may well be other commercial enterprises that might suggest alternative uses, that garner a higher economic benefit to the City.

The City also needs to consider who controls the dock if the Dive fails. The City should be sure that rights to the dock revert to the City in the event that the Dive ceases to operate. The last thing the City wants if for the dock to become a private docking facility, on public land, with no restaurant sitting at the end of the dock.

[Bigstan]

Originally Posted by Riviera

Correct. However, if I understand the proposal correctly (and I may not), the dock would be used exclusively by the Dive for 10-20 years, while it is under their lease term. Accordingly, the City needs to consider it's value to the City upon the expiration of the lease term. I concur that there is value in the docking structure, but there needs to be recognition that the financial value is de minimis until such time as the lease expires.

I'm simply suggesting that the Dive is one option, and there may well be other commercial enterprises that might suggest alternative uses, that garner a higher economic benefit to the City.

The City also needs to consider who controls the dock if the Dive fails. The City should be sure that rights to the dock revert to the City in the event that the Dive ceases to operate. The last thing the City wants if for the dock to become a private docking facility, on public land, with no restaurant sitting at the end of the dock.

Surely. I like small words though, so while the value is 'minor' until the lease expires I'm sure they know they wont get 20 years. Swing for the fences but take the single, if they get 5 yrs they may well take it. We don't know what they pay in rent now, if it's 20k a year then a dock @ 100k over a 5 yr lease @ $250 a month isn't any worse than they have now.

The offer is never unreasonable as it's just an ask, I am sure the town won't let the end deal be unreasonable. Either way I am assuming the city goes home owning the dock at the end of whatever the term is.

[FlyingScot]

Originally Posted by Descant

It's not just $250/month rent. The Dive is offering $100,000 in improvements to the docks which will then be given to the city.

It's worth giving Riviera's leasehold improvement post another look--he makes the point that is embedded in every commercial real estate rental contract. Since the $100,000 improvement is for the exclusive use/benefit of The Dive, the city does not receive any benefit from it, and we should not view the $100K as something being given to the city.

Another way to see this is to put yourself in The Dive's shoes. Let's say that you rent a building for 25 years and expand the septic system for a restaurant. You have not given the owner of the building the value of the septic system--by the time you leave, the system will be worth far less than it is today, maybe worth nothing.

[Bigstan]

Originally Posted by FlyingScot

It's worth giving Riviera's leasehold improvement post another look--he makes the point that is embedded in every commercial real estate rental contract. Since the $100,000 improvement is for the exclusive use/benefit of The Dive, the city does not receive any benefit from it, and we should not view the $100K as something being given to the city.

Another way to see this is to put yourself in The Dive's shoes. Let's say that you rent a building for 25 years and expand the septic system for a restaurant. You have not given the owner of the building the value of the septic system--by the time you leave, the system will be worth far less than it is today, maybe worth nothing.

I think more to the point would be lets say I build you a building on your land and have you rent it to me for a reduced rate for a set time.

The exclusive benefit is a benefit only to them only for the duration of the lease.

And the 'improvement' is the creation of something the doesn't exist. A pier will not be worth 'far less than it is today' because it does not exist today. If they didn't make this offer that space would have sat empty for another 100 years, I still don't see the problem assuming they agree on a term / amount.

[FlyingScot]

Originally Posted by Bigstan

I think more to the point would be lets say I build you a building on your land and have you rent it to me for a reduced rate for a set time.

The exclusive benefit is a benefit only to them only for the duration of the lease.

And the 'improvement' is the creation of something the doesn't exist. A pier will not be worth 'far less than it is today' because it does not exist today. If they didn't make this offer that space would have sat empty for another 100 years, I still don't see the problem assuming they agree on a term / amount.

I agree that there is a monthly rent they could pay to make this fair from a financial perspective. But let's stop saying the dock is worth $100K to the town. If I promised to give you a $100K (as new) dock 25 years from now, after it had sat in the water for the past 25 years, how much would you be willing to pay today?

[Descant]

This is not new territory for Laconia. Recall the building in Lakeport developed and leased to Lakeport Landing. At the end of the lease the building was sold to a high bidder. Lakeport Landing then made a deal with the city to develop Lakeport Fire Station.

[Riviera]

Originally Posted by Descant

This is not new territory for Laconia. Recall the building in Lakeport developed and leased to Lakeport Landing. At the end of the lease the building was sold to a high bidder. Lakeport Landing then made a deal with the city to develop Lakeport Fire Station.

I agree. That transaction was handled poorly. 30+ years ago, the city leased the land to Lakeport Landing, because they were the first to make an inquiry. More recently, they requested bids from only two bidders, after botching private negotiations. The proper way to handle both of those transactions would have been to advertise the property publicly, and solicit proposals from any party that might be interested. The award should have been based on the proposal that provides the best economic benefit, taking into account all factors, such as acquisition/lease price, future tax revenue, employment levels, and aesthetic improvement. In the end, all the city got was the best price offer from two marinas, and the same old building with a new paint job.

If you were selling your house, would you want to solicit offers from only one or two interested parties? Most would answer "no", unless you were disinterested in the best economic outcome.

[Bigstan]

Originally Posted by FlyingScot

I agree that there is a monthly rent they could pay to make this fair from a financial perspective. But let's stop saying the dock is worth $100K to the town. If I promised to give you a $100K (as new) dock 25 years from now, after it had sat in the water for the past 25 years, how much would you be willing to pay today?

They asked for 10-20 years according to the article, no reason to doubt that. You're already up to 25 years ? Fake news....deflate your # by ~ 75% and you're more in the ballpark.

What I would say is thank you for the pier I will own in (my guestimate) 5-10 years, and thank you for the taxes you will be paying me on your revenue the whole time. And also thanks for employing a couple dozen of my taxpayers as well.

Muchas Gracias.

[Riviera]

Originally Posted by Bigstan

What I would say is thank you for the pier I will own in (my guestimate) 5-10 years

If the lease term is 10 years, absent a default by the proponent, you won't get to say "thank you" for at least 10 years.

Originally Posted by Bigstan

and thank you for the taxes you will be paying me on your revenue the whole time

. There is no question that the city should look at potential tax revenue. However, the city derives no direct tax benefit from the rooms/meals tax, which is the only tax based on revenue. Further, unless the city were to negotiate a fee in lieu of taxes, there would be no real estate tax revenue, as the city would own the "real estate" to which the dock would be attached. There is no tax on municipal property, regardless of who paid for the improvements.

Again, I'm not arguing against the Dive. I'm arguing that a $1,500 per year payment is peanuts, for giving up a waterfront real estate benefit. There may be better options, and in my opinion, the city leaders have a duty to the taxpayers, to explore all options.

[birchhaven]

I feel like somethings are just being glossed over. I thought this was a great deal for both parties but after hearing the debate took a step back and have new take.

I have always assumed Laconia had its docks and could reconfigure it's SF but not just add docks. I never thought they could just add a new Pier without acquiring more lake frontage (FYI, if you look at the permits for the new docks, sited a few comments ago it was tied to lakefront LF, anyone of us could do the same).

If adding a new pier at the Wiers is on the table. A commercial dock to be leased to multiple commercial companies is a great idea. The city could have it be part of the reconfiguration of the docks, get some federal "free" money to help pay for it. The dive could simply sign a lease for it at market rate and so could other vendors. Like the Tiki Boats and who knows what else. This would be a great example of the government helping spur new Business rather than hinder.

Also, a pier with the Dive, the Tiki Boats, and a few other commercial startups on it would be dam cool. The city would make money and it would breed activity. The dive would save 100k (it would cost more than that by the way), but they would be paying market value.

One more thing, I actually believe something like this would only help the gringo and tower hill.

[Broken Glass]

Unanimous approval last night, the Dive will build a new dock at the Weirs.

[8gv]

That's a lot of money invested so far.

I wonder then they start making it back.

[Biggd]

Originally Posted by Broken Glass

Unanimous approval last night, the Dive will build a new dock at the Weirs.

Laconia is always looking for the cheap way out. The Weirs town docks will never get rebuilt.

[VitaBene]

Originally Posted by Biggd

Laconia is always looking for the cheap way out. The Weirs town docks will never get rebuilt.

I think their cost benefit analysis does not pay off for them to rework the docks. As boaters, we understand the issues with the Weirs town docks but I don't think they can sell it. Maybe they figure that they are busy enough in summer?

The overall issues with the Weirs are more evident off season- I think those are the ones they need to solve.

[Woodsy]

I am very happy the Dive found a home here in the Weirs! They will be a welcome addition/attraction to the area!

Congrats to them!


Woodsy

[FlyingScot]

I don't understand how they are able to increase dock space. But as a separate matter--this may be the best resolution for all. Once The Dive is ensconced dockside, why would they want to motor elsewhere?

[Descant]

This may be the start of a new/revised business model.
1. When will assembly restrictions be lifted for restaurants and bars?
2. What's the timeline for the new dock being in operation
3. Will they still operate out of the Pier until then?

[Hillcountry]

Originally Posted by FlyingScot

I don't understand how they are able to increase dock space. But as a separate matter--this may be the best resolution for all. Once The Dive is ensconced dockside, why would they want to motor elsewhere?

I think their whole “deal” (business model) was sandbar entertainment.
And weather permitting, it should stay that way.

[FlyingScot]

Originally Posted by Hillcountry

I think their whole “deal” (business model) was sandbar entertainment.
And weather permitting, it should stay that way.

Sandbars was the original thought. The "should" I leave to them. But when they do the math, they might ask themselves each morning why they would invest the time and fuel necessary to motor to a place that is likely less populated than their dock. I guess we'll know in mid July

[Descant]

Granted it was a long time ago,. but when I worked at the Weirs, things were pretty quiet on weekdays until 5:00-7:00 pm. If you can generate cash flow during the day, that's a better plan. It appears to me that there are a number of pposters speculating on the Dive's operations who have just not thoght itn through. The owners, on the other hand, have probably had their business plan scrutinized by professionals at several levels (bankers, investors, cpa's etc). If most restaurants fail in therir first 24 months and the Dive is in a position to invest $100,000 in docking, then it seems to me they have a better idea of what's going on than the naysayers on this Forum.

[Outdoorsman]

Originally Posted by Broken Glass

Unanimous approval last night, the Dive will build a new dock at the Weirs.

This is incorrect/misleading information....

The council voted unanimously to direct the city manager to use the proposal as the basis for a lease agreement which will be drawn up by the city’s attorney.

City Manager Scott Myers said Tuesday once the proposed document has come back from the lawyers he would review it before presenting it to the council for a decision. He said if there were no complications the council might be able to take action as early as its next meeting on May 11.

https://www.laconiadailysun.com/news...3c7f65d1c.html

[Biggd]

Originally Posted by Outdoorsman

This is incorrect/misleading information....

The council voted unanimously to direct the city manager to use the proposal as the basis for a lease agreement which will be drawn up by the city’s attorney.

City Manager Scott Myers said Tuesday once the proposed document has come back from the lawyers he would review it before presenting it to the council for a decision. He said if there were no complications the council might be able to take action as early as its next meeting on May 11.

https://www.laconiadailysun.com/news...3c7f65d1c.html

Incorrect/misleading information? That doesn't happen on the internet and never on this forum!

[Bigstan]

Originally Posted by Riviera

I believe the City has been short sighted in its view of the Weirs. They have been saying "yes", to businesses that are focused on creating parking lots for MW week, instead of focusing on ways to alter that dynamic. I'm not opposed to the Dive concept, although I think they had a somewhat flawed business model, and are now grasping at straws. That said, I am opposed to them leasing waterfront access property, for $1,500 per year. The water rights to a dock are worth far more than that, and if the City is going to offer that land/water right up for private use, they should investigate all potential options, and select the best alternative that is presented. If the best alternative is the Dive, so be it.

"This year the Dive’s owners, Jamison Merriam and Betsy Sullivan, are proposing to build a large pier at the city’s public docks on the opposite site of the Winnipesaukee Pier.

Under the plan, the owners would pay for the construction of the pier and installation of all utilities, a cost estimated to be as much as $100,000"

I'm not worried about the $1,500. Building a pier where there isn't one would be what I would call an improvement. So it's 100k + $1,500 a year as far as I'm concerned. And if they fail or move on in a year or two the town gets a pier they can sell @ market rate. I don't see how that's an unfair advantage or a great deal for them, they are in effect building their own lot to lease at a much reduced rate. I doubt they think their initial offer of $250/mo will be accepted, but what is fair market value for a pier that doesn't exist yet ? If the city thinks it's such a high amount they are free to build their own pier and sell/lease it.

Kudos to the Dive folks for trying to carve out a niche.