North Point Marina, the largest marina on the Great Lakes in Winthrop Harbor. – Illinois DNR
by Jack Crombie
We recently joined a flock of Snow Birds for a brief vacation in Southern Mexico. Interestingly, the snow birds were predominantly Canadian this year, at least where we were staying, with few Americans to be found. I suspect the reason for this dearth of Americans in Mexico might have something to do with the downright unfriendly political rhetoric currently emanating from the White House targeted at our immediate neighbors to the south.
All of a sudden the more expensive island destinations in the Caribbean seem more attractive. While we were there not only did we experience our first earthquake, but nine earthquakes in seven hours – four of which were between 4.5 and 4.9 on the Richter scale. It was like a freight train driving through our bedroom at 3 a.m. Disconcerting to say the least. Despite the earthquakes, the sunburn and a “moderate” case of food poisoning, we had a pretty nice time.
On our return it was with some surprise that we found that we had not left the seismic activity in the south of Mexico. Reports of great upheavals in Washington are being reported daily and even here on the shores of sunny Lake Michigan and in Winthrop Harbor. Events are unfolding that might well be described in local terms at least as earthshaking.
….not only is the private company getting a sweetheart of a deal with little risk, but the local community is being asked to provide various services to the marina at local taxpayers’ expense and for questionable benefit.” – Jack Crombie
North Point Marina, the jewel of Lake Michigan, is about to undergo the transfer of administration and control from the Illinois Department Of Natural Resources, an organization which always seemed divorced from any public control and unconcerned about public input, to a private for-profit company which might be sensitive to local input and concerns.
How did we end up at this point?
North Point Marina is indicative of what has been happening in Illinois in particular but also in the entire country in general. Monies that were set aside to be utilized for ongoing maintenance, upgrades and improvements have been pirated by politicians unwilling to make difficult decisions and used as stopgap funding for programs that are politically advantageous but financially unsustainable. The result? North Point Marina and the country as a whole is served by an old and decaying infrastructure in urgent need of attention.
At North Point Marina, if the $700,000 that the state had removed from the marina’s maintenance fund in the good years just prior to the crash in 2009 had been spent on maintenance and improvements, the projected 2017 occupancy level of only about 20% of capacity might be much higher. At the very least, it would now be in a good position to take advantage of the current upsurge in boat ownership. As it is, due to the continuing difficulty with even basic maintenance, North Point has been left behind as neighboring marinas have both maintained and updated their facilities and continues to see an exodus of boaters attracted to more spiffy docks.
Thus we found ourselves at the Winthrop Harbor village hall a couple of weeks ago listening to
Brendt Krebs of the IDNR blame previous administrations for the incompetence that has resulted in the current state of affairs. He of course did not mention the 50% decline in mooring rentals and the precipitous decay in infrastructure that has occurred under the current administration in Springfield.
This once jewel of the Great Lakes, North Point Marina, completed in 1989 at a total investment of about $50 million dollars, is the largest marina on the Great Lakes situated on 300 acres of prime real estate with slips for about 1,500 boats. Initially very popular with over 1,400 slips occupied, it is projected to house only 350 boats this season. Brendt’s answer is that “we” have no alternative but to practically give away this publicly funded asset on 300 acres of the most desirable real estate in the area, to a private corporation for an initial rent of about $2,500 per month. If the place fills up to full occupancy, then the rent might rise to about $21,500 per month in 10 years (my projection based on 5% of gross receipts at current rental rates.)
Just to give this a little perspective, the $2,500 monthly first year rent for the entire marina is a lot less than the monthly rent for the Tropics restaurant at the marina. The monthly rent that I project in 15 years of $21,500 is about the rent that one might pay right now for a commercial property outside of the downtown area in Chicago of about 7,000 square feet. Commercial leases usually come with significant risk to the tenant who will be personally on the hook beyond their investment in the premises for the value of the remainder of the lease. This is not the case regarding the lease for the marina.
In this case, not only is the private company getting a sweetheart of a deal with little risk, but the local community is being asked to provide various services to the marina at local taxpayers’ expense and for questionable benefit. Pat DiPersio, the economic director of Winthrop Harbor, has said that even when the marina was almost fully occupied it had negligible economic impact on the village. At the recent meeting Mayor Loy struggled to get some economic benefit for the village written into the deal. Could the village impose some small percentage of a tax onto the mooring fees? Can the village assume management of the beach to the north of the marina that it might then utilize to drive economic growth?
At the meeting, one could not help but think the scales were tipped very heavily in favor of Westrec Marinas, the private company in negotiations to take over the marina. Despite the phenomenal deal with an incredible upside and very low risk that was on the table, when Westrec’s representative Scott Stevenson threatened to walk out on the deal if there was a tax imposed by the village, some gullible members of the audience actually believed him and started to ask the mayor to be more reasonable. One such person was Representative Jesiel who said that she “was embarrassed” at the lack of cooperation she was seeing being provided by the village towards the new business coming into the area. Really? A cynic might at this point wonder who Representative Jesiel is actually representing.
The fact is that there is not a person in the area who does not wish Westrec Marinas the greatest success. Everyone wants to see them turn the marina around and if they make millions in the process, good for them! It should nevertheless be understood by all, that good, long lasting relationships are based on strong foundations where all parties derive some benefit. The mayor of Winthrop Harbor for years has been spitting mad at how his town has been marginalized and ignored in almost all things relating to the marina. He was rightly determined at this crucial juncture to try and secure a deal for the village, where at the very least, the costs the village would experience for providing services, emergency and other, would not be borne by the already overburdened taxpayers of Winthrop Harbor. It is in everyone’s best interests that a deal is cut that all parties will benefit from. It should be understood that Westrec is working diligently to secure the most advantageous lease/deal it can get, one that will provide the greatest benefit to its owners. No one would expect otherwise
What is important is that the representatives of the village, Pat DiPersio, Mayor Loy and attorney Long are trying to stand toe to toe with the heavy weight fighters of Westrec to get the best deal that they can for the village. The good news is that unlike the IDNR, Westrec is engaging the village in negotiations and look like the new owners will become good neighbors and partners for the future growth and development of the area. At the time of this writing, negotiations are still underway and it looks like the village will, perhaps after a year’s moratorium, be able to impose a small tax on the mooring fees.
The bad news: The beach that the village wanted to manage appears to be off the bargaining table. The IDNR, while requiring Westrec to maintain the beach, is not ceding any real control over the use of the beach. The upshot (at this stage in the ongoing negotiations) as far as the village is concerned, is that the local community is getting ignored once again by the IDNR and will be denied any control over the long lost and much desired beach.
Stay tuned. Aftershocks from this local earthquake are expected to continue.
Guest Columnist Jack Crombie is a Winthrop Harbor resident and Chicago area businessman