Local marina presents a taxing situation

Published 4:14 am Friday, March 12, 2010

Staff Writer

Editor’s note: The following story sets the stage for a series of articles on The Marina at Moss Landing in Washington. The series begins Sunday.
At first report, the Beaufort County tax assessor’s office was baffled as to how it should tax the The Marina at Moss Landing, a new and still-unfolding development on the Washington waterfront.
The county tax collector’s office collects property taxes for the city as well as areas outside the city limits.
The marina presents a new challenge to seasoned appraisers in the tax office.
The issue is that a walkway by which guests and owners access the marina is attached to a boardwalk owned by the City of Washington. The city boardwalk, which spans a publicly owned, created wetlands, is tax-exempt property, said county tax officials, who asked not to be quoted directly.
So, does this mean that the marina is tax-exempt property?
Of course not, tax officials advised.
The marina structures will be assigned some value, and the boats berthed there will be taxed as well.
The county will have to determine the marina’s tax value, and that’s where things could get tricky.
Public documents show that each boat slip owner will be taxed for his or her unit.
“In the county’s opinion, each individual boat slip represents a separate condominium unit that will be taxed as real property on a property-tax card belonging to each individual owner,” said County Manager Paul Spruill.
Spruill confirmed that a mailbox is the real property that a person purchases when he or she buys into the marina, but that appears to make little difference in the overall taxing scheme.
Because the marina will be taxed in the manner Spruill described, the city and county stand to reap significant revenues from the development.
Moss Landing’s Web site lists retail values of $48,000 to $125,000 for the slips, not including 15-percent discounts the site says are on offer.
Permits have been issued for 92 slips, but fewer slips have been built so far, confirmed Stan Friedman, an investor in the marina.
The slips are being constructed in phases, Friedman said.
“The economy is not the greatest right now,” he pointed out. “We would all like to complete everything at once, but financially it just doesn’t work that way.”
When a buyer purchases a slip, he or she essentially buys the rights to take advantage of the marina and its amenities, public documents show.
“Each Unit shall be conveyed and treated as an individual property capable of independent use and fee simple ownership,” reads a declaration issued by Moss Property Partners, the marina developers. “The Owner of each Unit shall also own, as an appurtenance to the ownership of said Unit, an undivided interest in the Common Elements.”
Calls seeking further clarification of the documents were placed to an attorney for the developers. The calls weren’t returned.
“What makes this particular example unusual is the fact that the recreational infrastructure will be owned by individuals who may not necessarily be residents in an adjacent housing development,” Spruill commented. “Of course, there is the curve ball that the City of Washington had to work with the developer in order to set aside appropriate easements for the infrastructure to exist.”
A similar conundrum arose in the Craven County city of New Bern.
Until last year, a marina in the city was listed along with a hotel, and both were valued together for tax purposes, according to Ronald Antry, Craven County’s tax administrator.
This year, the property has been remapped and the marina has been attached to a 1-foot-wide strip of land owned by the New Bern Grand Marina Yacht Club, Antry said.
The marina has been attached to the yacht-club parcel because the boat slips are physically adjacent to city-owned property, Antry explained.
The hotel property is listed under a different corporate name than the marina, he said.
“The marina will actually be separated from the hotel valuation,” Antry said. “I guess that creates somewhat of an anomaly in that the value for the marina will be attached to a parcel it’s not directly adjacent to.”
Attaching the New Bern marina to city-owned property would make the marina tax exempt, and that couldn’t be allowed because the city doesn’t own the boat slips, Antry explained.
“It’s awfully complicated,” Antry stated. “No, I haven’t seen anything quite like it before. We had to consult with the county attorney to try to figure out how to manage it.”
Antry, who’s been on the job for 35 years, began his career with the county as a mapper, so he’s seen a lot of land-ownership arrangements.
“This is the first time I’ve seen one like this,” he said of the New Bern arrangement.
Asked for his thoughts on the Washington marina, Joseph Kalo also drew from the New Bern development as an example.
Kalo is co-director of the North Carolina Coastal Resources Law, Planning and Policy Center and a Graham Kenan professor of law the University of North Carolina at Chapel Hill.
The marina developers “can certainly give people rights to use certain slips, but they can’t sell a water space, they can’t sell the submerged bottom,” Kalo said.
The developers can grant someone “exclusive rights to use a particular slip,” he said of the Washington marina.
“The only reason it works is that they’ve got the public walkway which gives them access to that narrow strip (of waterfront land),” Kalo said.