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Lawrence Cannon said the rent he pays the city for Waterboat Marina is fair.
Lawrence Cannon said the rent he pays the city for Waterboat Marina is fair. (Globe Staff Photo / David L. Ryan)

Melrose man gets BRA bargain on marina lease

Boston is leasing prime harbor marina space to a Melrose man for just $58,000 a year, a fraction of what it charges in rent for waterfront space less than 100 yards away.

Wealthy yacht-owners and companies that run boat cruises pay hefty prices to rent boat slips and mooring spots at Waterboat Marina. But the Boston Redevelopment Authority, which owns it, allows Lawrence Cannon to lease it each year without putting the contract out for competitive bidding. City records indicate that Cannon doesn't pay taxes on the property, either.

City watchdogs say the city could be collecting several hundred thousand dollars a year in rent for the marina and needs to find a way to recoup that money for the taxpayers of Boston.

''This is a huge ripoff," said Jeffrey Conley, executive director of the Boston Finance Commission. ''It should be competitively bid or made a public marina."

BRA officials acknowledged that the agency charges Boston Harbor Cruises $294,318 in annual rent for a docking area on Long Wharf not 100 yards from the Waterboat Marina. The officials said the rent is larger for that property because it occupies more land than the Waterboat Marina, even though the Waterboat Marina appears to have more slips and docks and occupies more space in the water.

The city apparently is not even getting taxes on the Waterboat Marina, despite a state law requiring businesses that lease publicly owned land to pay property taxes. City records show no tax payments from the lessor. Tax records did not show an assessed value of the marina. One nearby privately owned marina on Commercial Wharf, valued by the city at $3.5 million, pays the city $116,226 in annual real estate taxes.

BRA officials defended Cannon's lease arrangement, saying the agency hasn't put the lease out to bid because Cannon has been operating the marina for decades, even before the BRA acquired the property in the 1960s.

Cannon was allowed to pay just $25,000 until about a year ago, when the Finance Commission raised the issue and the Boston City Council held a hearing to look into it. After that, his rent was increased to the current rate.

''It's not our practice to displace existing tenants for no reason," said BRA spokeswoman Meredith Baumann. ''The BRA is not looking to gouge the market. We can't compare ourselves to the private sector. We can't gouge because we can or because someone says we can make more money. What we are in is the business of activating the waterfront and bringing people to the waterfront and creating ways for people to enjoy the water. This marina is a piece of that goal."

With several-dozen slips and 10 moorings, the marina is home to pleasure yachts and schooners that dock there for the night, the week, the summer, or the year. According to Cannon, the owner of a 37-foot boat would pay $4,810 to stay for the summer season. The same boat would pay $120 to stay overnight. Boats over 45 feet are charged a higher rate, and extras like electricity are added on.

Cannon, a retired ship's pilot, said that ''off the top of my head," the marina makes no more than $170,000 a year.

But Conley, who has studied the marina for several years, said it probably generates more than that, based on the marina's prices and occupancy rates.

''The boat slips are operational 12 months a year," Conley said. ''If you do the math, his gross revenues have to exceed $500,000. The math is simple. He's making money at the taxpayers' expense."

BRA officials said they don't care what the marina makes. The rent they charge him is not tied to revenue, Baumann said.

''The rent was based on an independent market analysis we had done," she said, adding that the agency does not have revenue figures for the marina. ''The rent is based on the real estate, not what the business pulls in."

The Waterboat Marina occupies some of the city's premier waterfront real estate, behind the Marriott hotel on Long Wharf. This week, people partied aboard a 46-foot yacht, the Wilde II, that docks at the marina for about a month each year. A prime slip was occupied by a 55-foot yacht, Lady Irene, outfitted with sport fishing gear.

Cannon said that the rent he pays is fair and that his business belongs in the spot, where his family were pioneers long before Boston's waterfront became fashionable.

''There has never been a [written] agreement," he said. ''We were here before urban renewal. When my family was here, people wouldn't come down the waterfront. It was taboo."

Fincom's Conley said the BRA can't know what the market value of the property is without putting the parcel out to bid.

''There are nice marinas out there, but they're all privately owned," Conley said. ''There is nothing like this. He's got a great deal -- a sweetheart, a no-bid deal. If the BRA thinks otherwise, they should put it out to bid, and they'll find out."

Said the operator of a private marina in the Boston area of the deal: ''I'd take it in a heartbeat. It's prime waterfront property."

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