2014-03-13 / News

City Learns It Can’t Buy Coal Dock, After All

Mackinac Island to Have Open Meetings; Mayor Cuts Public Discussion Short on City’s ‘Settlement’
By Stephanie Fortino

Mackinac Island community members raised concerns and doubts over a recent plan to solve lingering issues for the City of Mackinac Island at a special council meeting Monday, March 10. The meeting was a chance for the public to address council regarding various aspects of the settlement, negotiations that were deliberated and fine-tuned behind closed doors, then presented at an open meeting March 5.

Attorney Dennis O. Cawthorne, working for the city, also revealed that a plan for the city to acquire the Coal Dock for $2.34 million would not go through. In a conversation with a company representative since March 5, Mr. Cawthorne said property owner Union Terminal Piers could not provide a clear title of ownership.

Mr. Cawthorne hedged the discussion with the question, “What if Arnold Line went dark?” as a way to bolster public support for the plan. He said UTP president Jim Wynn is no longer with the company, but stressed that no other assumptions about operations of Arnold Transit or UTP could be made from that.

While council members had earlier met for more than 3.5 hours with its attorneys behind closed doors, Mayor Margaret Doud ended the meeting March 10 after about 90 minutes. Many citizens still had questions and comments, but Mayor Doud said any more discussion would not be productive.

A committee of the mayor, councilwoman Anneke Myers, councilman Jason St. Onge, and several businessmen will continue discussion, and a committee meeting is scheduled for Wednesday, March 12, at 9 a.m.

Before presenting their decisions to the public March 5, three of the city’s attorneys worked with Main Dock Inn developers Ira Green and Melanie Libby to develop a plan for the city to secure access and riparian rights to the Arnold Dock. The attorneys, Mr. Cawthorne, Tom Evashevski, and Michael Cavanaugh, then presented those “settlement negotiations” to the city council behind closed doors, and later that day they were presented to the public.

Mr. Cawthorne said that whatever entity has the easements and riparian rights to the Arnold Dock controls the Island’s main port of entry. UTP sold the property in front of its dock to a company owned by Mr. Green and Ms. Libby called Main Dock 7271 and agreed to pay for future access from the street to the dock across that property. But UTP has not made its 2013 payment, and so legally, Mr. Cawthorne said, the property owners could deny Arnold Transit access from its dock to the city street, since the driveways are on private property.

“No one is saying that the present owners of the uplands are going to close that dock today,” Mr. Cawthorne said, referring to Main Dock 7271. “But they have the power to do it. They have a stranglehold on Arnold Transit.”

Whether this is the case is contested, particularly as an opinion from attorney Hans Rentrop, hired by cottager Jay Stingel, pointed out that, according to the city’s charter, the city has a claim to control the Island’s wharves. Indeed, Chapter XV, Section 3 reads: “The council shall have authority to prohibit the incumbering of the public wharves and landings, and to regulate the use of all wharves, docks, and landing places within the city…”

But overall, Mr. Cawthorne asked how the city would cope if the Arnold Dock was not in operation, especially with summer rapidly approaching.

It seems the easements and riparian rights are up for grabs, as Mr. Green said Shepler’s Ferry has expressed interest in acquiring the easements and strip of land to expand its passenger operations. Such interest indicates, Mr. Cawthorne said, that if the city exercises the option, dock users would repay the company.

At the special meeting March 10, audience members challenged Mr. Cawthorne on aspects of the plan, particularly the simplicity of the city’s position if it takes the deal and the proposed annual fee of $250,000 for easements and strip of land for riparian rights to the Arnold Dock.

Mackinac Island businessman Steve Moskwa asked for more clarity and details about how the city came to the proposed plan. While Mr. Cawthorne explained the deal in simple terms, Mr. Moskwa responded, “Dennis, no one here believes the song you’re singing.”

Mr. Moskwa made the point that if any company wanted to run service out from the Arnold Dock in the event of UTP’s demise, the interested party would still have to own the dock to do so.

Whether that would actually be possible is unknown, particularly since the city purchase of the Coal Dock will likely not be successful.

The city’s attorneys presented the city council with drafts of a resolution for the easement and a purchase agreement for development restrictions at the head of the Arnold Dock. Copies of the documents were not readily available to the public in council chambers, Mr. Moskwa pointed out. He expressed his frustration and asked council how the public could be asked to comment on documents they could not read.

The documents are posted at the Mackinac Island Town Crier Web site, mackinacislandnews.com, under the tab “General Documents.” They are free to access.

Island businessman Bobby Benser said the asking price of $250,000 a year, plus adjustment for the Consumer Price Index (CPI), for the easements and strip of land for riparian rights was too much for the city to pay. The payments would continue in perpetuity as long as the city wants control of the Arnold Dock. Even without the CPI adjustment, the city would pay $2 million after eight years, $2.5 million after 10 years, $5 million after 20 years, $10 million after 40 years, and so on. The deal would only be an option if Arnold Transit goes out of business.

Grand Hotel President Dan Musser spoke in favor of the proposed deal and echoed concerns about the future of the Island’s business community.

“It will be very difficult to operate Grand Hotel without an Arnold Line asset, one or both those docks,” Mr. Musser said.

“This is very timely and all of us hope and wish that Arnold Line keeps running forever,” he continued. “…But if it doesn’t happen, and in the near future, I can’t miss a season. I don’t know about you. Maybe you’ve got a lot of money, but I can’t miss a season. And while I believe this deal that Mr. Cawthorne and others have talked about and negotiated is probably a little too rich for Mr. Green, I think that the practicality… of the deal helps us more than hurts us. And if the council and the city is willing to swallow it, I would urge you to vote for it and move it forward.”

Several community members have suggested the city acquire dock properties through eminent domain, a legal action through which the city could take property, providing just compensation to the property owners. Mr. Cawthorne said the process is complex with an ultimately unknown financial impact on the city. And if the city exercises the option to acquire the easements and the strip of land, then the city would have a better case for eminent domain in the event Arnold Transit went out of business.

But some councilmembers and audience members disagreed and think eminent domain is still a viable option.

Another option could be to access the dock from property adjacent to the Main Dock 7271 parcels.

Planning Commission Chairman Michael Straus asked about the development restriction aspect of the settlement negotiations for the Main Dock 7271 property across the head of the dock. If the city agrees to allow the developers to demolish buildings downtown, Mr. Straus wondered whether that would create a precedent and opportunity for other property owners to develop demolition plans as a way to circumvent the requirements of the city’s Historic District Ordinance.

HDC attorney Gary Rentrop told The St. Ignace News a precedent would likely not be set if this aspect of the plan is successful, as it would be part of a greater development program. The HDC would have to consent and secure a historic preservation easement with the property owners, as well.

Other than Mr. Straus’ question, there was no discussion about the development restrictions. Mayor Tries to Circumvent OMA

In an attempt to circumvent the requirements of the Open Meetings Act, particularly meeting announcement requirements, Mayor Doud suggested she appoint a committee of herself, Mr. St. Onge, Mr. Benser, Mr. Musser, and Brad Chambers to continue fine-tuning aspects of the proposed deal. Mayor Doud incorrectly said appointing less than a quorum of city council would exempt the committee from OMA requirements, but the courts have upheld that a committee of a public body, even a committee of one person, is also a public body and a quorum applies to the committee, not the parent body.

Since the city would have delegated to the “small committee” the responsibility to deliberate, consider options, and provide a recommendation, it would be a public body subject to the requirements of OMA.

Council members St. Onge and Frank Bloswick, Jr. voted in favor of the small committee, while Mrs. Myers, Kay Hoppenrath, and Dominic Redman voted against it.

Mrs. Myers asked, “What’s wrong with an open meeting?” and Mrs. Hoppenrath and Mr. Redman concurred.

Mr. St. Onge then submitted Mr. Bloswick as an additional committee member, but Mr. Bloswick refused, then Mrs. Hoppenrath was suggested, but she, also, did not want to participate in the negotiations. Mrs. Myers then volunteered to serve, and council approved the committee.

Mayor Doud said she tried to circumvent OMA and an open meeting to avoid the OMA requirement that public meetings be posted at least 18 hours in advance. The requirement ensures the public has advance knowledge of meetings and has an opportunity to attend.

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