THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, July 24, 1994 TAG: 9407240038
SECTION: LOCAL PAGE: B1 EDITION: NORTH CAROLINA
SOURCE: BY MASON PETERS, STAFF WRITER
LENGTH: Long : 130 lines
There is a squall line bearing down on boaters and marina operators in coastal North Carolina: The state is trying to figure out how to tax the water in which pleasure craft float when they are alongside a marina dock.
``If this proposal is allowed to go forward, it will mean the demise of all of our existing marinas,'' said Harry Schiffmann, proprietor of Manteo's Salty Dawg Marina, one of the busiest in Northeastern North Carolina.
``It would result in the legal destruction of marinas because there would be no way we could operate within the law,'' said Schiffmann, a former officer of the North Carolina Marina Association.
In Raleigh, state officials from the governor on down are trying to convince marina managers that their waterfront properties aren't being torpedoed. But a developing legal question about private use of public waters seems likely to increase marina operating costs, officials conceded.
Ervin Stahel, the owner of the Pelican Marina on the Pasquotank River, agreed with many of Schiffmann's views.
``They're talking about making us buy an easement that would involve a 10-cents-per-square-foot extra assessment on all docks and marina property on navigable waters,'' Stahel said about a recent state proposal. ``I'd have to pass the cost along to people who use the docks.''
Under the new state plan, Stahel said, he would have to buy an easement for about three over-water acres on which his marina facilities are located. He already pays heavy business and property taxes on the choice riverside land, he said.
``It would be like paying your regular household water tax and then paying another tax for every glass you drink,'' added Schiffmann, who estimates the proposed assessment would increase his Salty Dawg Marina costs by as much as $10,000 a year.
Caught in the eye of the legal storm are the North Carolina Department of Administration and Joseph Henderson, deputy director of the State Property Office. By statute, the property office is responsible for everything that North Carolina owns - including ``public trust'' waters in navigable sounds and rivers.
The North Carolina Department of Administration is ``the state's business manager,'' according to the official North Carolina Manual.
``The law requires us to get fair market value for the use of anything belonging to the state - including water,'' Henderson said.
Henderson emphasized that officials don't like to refer to the proposed water-use assessment as a tax. `` `No new taxes' is taken seriously around here,'' he said.
``This marina controversy involves difficult and complex legal questions, and what we're trying to do now is resolve three `guinea pig' cases that'll help us establish a future statewide policy,'' Henderson said.
There's more, he said.
``We're into the old legal doctrine of riparian rights that allows a property owner to wharf-out to deep water, and there's the conflicting question of state sovereignty going back to English Common Law,'' Henderson said.
The Department of Administration got involved after a North Carolina Court of Appeals ruled in September 1993 that a proposed new marina in Oriental, N.C., on the Neuse River east of New Bern would have to get an easement to use about six acres of public-trust waters where the docks would be located.
The easement from the Department of Administration would allow the owner of the new marina to build docks and other facilities over public-trust waters claimed by the state.
``That turned into the Catch-22 situation,'' Henderson said. ``The law seems to say that coastal agencies can't issue permits for marinas without an easement to use the water.
``And the easements can't be issued unless there's a prior marina permit,'' Henderson said.
The appeals court decision resulted in a lawyer's free-for-all between marina advocates, the Department of Administration and the North Carolina Attorney General's Office.
North Carolina Gov. James B. Hunt Jr. and the North Carolina Council of State, made up of cabinet-level department heads, will consider three proposals drawn up by a special committee called to draft easement regulations for marinas.
``We took the cases of three waterfront users - a small one, a medium-sized one and a big one - and tried to prepare proposals that would be fair to each of them,'' Henderson said.
A special meeting of the Council of State may be held early next month to discuss the proposals, Henderson said.
In one plan that grew out of the Oriental marina case, the state would be allowed to charge 10 cents per square foot for waters used for docks and a $250 application fee.
``I want to emphasize that there is no threat to existing marinas,'' Henderson said. ``There is a lot of concern here, and all we're doing now is reacting to court decisions.
``Ultimately, it will probably be up to the General Assembly to change the statutes, and that doesn't necessarily mean charging a fee for the easements,'' Henderson said.
But Schiffmann, Stahel and other marina operators are not comfortable with the prospects.
``The present statute says that `every such easement shall extend no farther than deep water,' '' Schiffmann said. ``The Coastal Area Management Act defines `deep water' has having a depth of 4 feet. Our docks wouldn't be usable if we didn't have more water than that.
``We could get an easement out to 4 feet of water, but everything beyond that would be illegal. We'd be out of business,'' Schiffmann said.
Stahel, the Pelican Marina operator, thinks the Department of Administration views some marinas as nuisances.
A couple of years ago Stahel sought a permit to build a second floor on his bustling establishment. The Pelican attracts hundreds of local and transient boats annually.
Stahel provides fuel, marine supplies and charts to transient boaters who cruise up and down the Dismal Swamp branch of the Intracoastal Waterway past Elizabeth City.
``I was shocked at the response I got to my request,'' Stahel said. ``Not only did the state tell me I couldn't build a second floor, they made it clear they would be happier if I simply tore down the whole marina.''
Stahel pulled a letter from a pile of Department of Administration legal correspondence about his building application.
The Feb. 24, 1993, letter by B. Clinton Jobe, then director of the State Property Office, told the permit-issuing Division of Coastal Management: ``Although we recognize the existence of numerous nonwater-dependent structures on state-owned bottoms, only in rare instances do we recognize a legal right for the structures to be there.
``Our informal policy is to encourage the eventual removal of most of these structures.
``We recommend that the division of Coastal Management deny permits for renovations to such structures.
``We will not issue an easement for the building subject to this application (the Pelican Marina).
``The applicant (Stahel) should recognize that he is at risk in that the state may at some point require removal of the structure or impose a substantial charge for the encroachment on the state-owned bottom.'' by CNB