City responds to boathouse leases

New Orleans - Ray Colvin spends a lot of time at West End fishing and enjoying the lakefront. He parks his truck just a half a block away from elaborate boat houses that sit on city property.
Colvin was shocked to find out that the city of New Orleans is charging residents of 130 boat houses at the Municipal Yacht Harbor on average just $2,400 a year.

"That's very cheap. I think anybody could afford that. I didn't realize that was so inexpensive," says Colvin.

"It's an unique arrangement. The city leases the actual space through the yacht harbor corporation and then the tenant invests in the improvements," Says Mike Sherman.

Sherman is the Director of Intergovernmental Affairs for the Landrieu Administration.

Through the years, boat houses and leases have been sold from one tenant to the next. In the last 15 years, private tenants have walked away with almost $13 million.

75 of the leases were sold on the private market, according to the documents obtained by our partners at The Lens.

The city has only pocketed a three percent transfer fee from the those sales.

"Our legal department is analyzing the existing leases and our goal is to get these to fair market value," says Sherman.

The city admits it has to be careful moving forward. The leases expire in the year 2030 and at least one realtor believes prospective buyers might hesitate to purchase a lease.

Realtor Jay Ory says some of the current boat house tenants may be realizing that changes are on the way, prompting them to sell. Several of the boathouses are up for sale.

"I do believe that somebody that currently owns a boathouse is seeing a declining value as the lease term reduces because the next person is going to be stuck with negotiating the lease if it's not done currently," says Ory.

FOX 8 also found a number of "for rent" signs on the boat houses. Tenants, though, are forbidden to sublet unless they receive permission from the harbor and pay the city a 10 percent fee on those rental revenues.

According to the city, the Municipal Yacht Harbor Management Corporation has not given anyone permission to sublet.

"That's an issue of enforcement. The Municipal Yacht Harbor is currently looking for an executive director and we take enforcement very seriously in this Administration and we are going to make sure that all the terms of the leases are adhered to," says Sherman.

The city says money collected from the leases go toward the revitalization of West End. It's money very much needed to improve an area still recovering from Katrina.

Mayor Landrieu identified the yacht harbor as one of his top 100 recovery projects slated to receive a portion of recovery dollars from FEMA.

In the meantime, Inspector General Ed Quatrevaux has slated the harbor for an investigation in his strategic plan for 2012.

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