# Lexington State Marina Takeover



## Mullins Sports And More (Dec 13, 2002)

Well here is the news on the harbor to date. I was on the Marina Use Study group who was responsible for making a recomendation to the village on the future of our harbor. Here is what we presented. Your comments are welcome. Mike

History...In 1973 the Village of Lexington entered into an agreement to lease space to the Michigan Waterways Comminssion to construct a marina along its waters edge. The Lexington marina is one of 77 harbors of refuged in Michigan juristiction along the Great Lakes and has 108 slips. The original lease ran twenty years and was renewed for an additional ten years. A provision in the lease allows the Village to reconsider its postion every ten years. On February 25, 2003, the Village under Section 13 of the lease exercised its option not to renew the lease. The Michigan Department of Natural Resources suggested rather than purchasing the State's assets that the Village consider entering a Grant-in Aid Agreement. 
GRANT-IN-AID AGREEMENT...Under a Grant-in-Aid Agreement with the State, the operation and ownership of the assets in the marina would transfer to the Village. In exchange, the Village would maintain a harbor of refuge and attend to the transient boater needs. A key benefit of the agreement would allow the Village to seek matching grants to address needs of the marina of the State. Although the Village would negotiate an individual contract with the State to define the partnership based on our uniqueness, it is expected the partnership would require the Village to seek concurrence from the State, at a minumm, on set asides for transient slips, improvement/construction plans at the marina, and subcontracting of management of the marina to another. In addition, the Village would be required to submit an audited annual report to the State, participate in the State Reservation System, and use the rate structure established by the Waterways Commission. All revenues in excess of expenses could only support improvements/enhancements to the marina and it bordering lands. The preference of the State is to place those funds in a fund reserve account to use for future grant matching.
MOTIVATION....According to the State it does not promote one harbor of refuge marina over another. Further, it is contended the budgetary limitations resticts the state's ability to operate the marina at its greatest capacity. The Lexington Business Association feels substantial business opportunities are missed due to the management of the marina by the State. They are the driving force for this review and primary beneficiary. With the restrictions on the revenue disbursements, the venture can only marginally assist the Village with its finacial concerns. Therefore, operation of the marina as an enterprize should be considered as an economical stimulus for the Village's commerce. The Village would put in place practices that address boater's needs above the State's current ability. The goal of building a user friendly reputation will draw more boaters to the marina. Suggested advantages of the Village operating the marina are extended boating days, addtional staff to address customer's needs, better coordination with Village events, creation of new events to draw boaters to Lexington, and improvements to Tierney Park.
STUDY GROUP ACTIVITIES...The group has reviewed financial data from the marina and of other like marinas around the State. Preliminary analysis indicates there are sufficient revenues to cover operational and capital expenses while building a required fun balance for future matching dollars toward state grants. There is no indication that the Village would ever be in a postion to have to subsidize the marina operation. The group has visited other like marinas around the State. The review has revealed that the Villge would have autonomy with the day to day operations. Further, the State is an active, positive partner with techinical assistance and financial support. Finally, the visits did not uncover any major obstacles or problems with the municipality operating the marina.
RECOMMENDATION...the group approached the task as a panel of investors making this decision by building a business plan. Although, there are certain measured risks, there is no evidence that by opreating the marina directly would the Village be placed in harms way. Further, the evidence clearly indicates that the operation of the marina would be enhanced substantially under the Village's direction. Its is the unanimous recommendation of the study group to proceed with the State in the negotiations to take over operation of the marina in a grant-in aid relationship.


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