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TVA Ups Campground/Marina Charges

October 25, 2010 by   - () Leave a Comment

A change in how Tennessee Valley Authority (TVA) charges rent for marinas and campgrounds worries many operators of the facilities.

Eva Scull, manager of Florence Harbor Marina in Florence, Ala., said changes could hurt the business, the Florence Times Daily reported.

“I haven’t heard anything from TVA officially, but it looks like I will have to pay TVA $1,500 per surface acre of water in the marina or 4% of my gross revenue, and that will be on top of 2.5% we already pay the city of Florence. Even if I don’t make a dime, I will still have to pay TVA every year.”

Fred Myers, an avid boater from Florence, said the changes likely will put some marinas out of business.

Myers, who speaks at boating seminars throughout the nation, questions the wisdom of enacting rules that might harm marina and campground operators.

“There’s already a shortage of marinas on most TVA lakes,” Myers said. “The last thing TVA needs to be doing is anything that will discourage new marinas from being built or anything that would cause any of our existing marinas to go out of business. This is absolutely ludicrous.”

Myers said marina operators throughout the Tennessee Valley have expressed concern to him about the changes.

James Allen, a TVA land-use specialist based in Muscle Shoals, said the intent of the changes, which were approved in February, is to place all marina and campground operators on equal terms, not to make it difficult for them to remain in business.

“We definitely don’t want to put anybody out of business,” Adams said. “We want to be consistent and fair in what we charge for rent.”

Adams said some rent agreements for commercial campgrounds and marinas were created in the 1940s. Others have been created within the past five years. Some agreements charge a fixed rate for rent. Others are based on a percentage of the business’s gross income. Some agreements are lifetime deals, others are for 30 years and some severable with only a 30-day notice.

“What we’re trying to do is something positive,” Adams said. “We want to improve the consistency of our agreements.”

The new rules will charge rent based on where the campground or marina is located. A campground operator in a rural area can choose to pay annual rent of $80 per campsite or 6% of the gross revenue if the campground was built by TVA or 4% if it was built by a private business. A campground in a metropolitan area would pay $140 per campsite each year or the same percentage for gross revenue as those in rural areas based on who built the facility.

A marina in a rural area would pay $600 per surface acre of water annually while one in a metro area would pay $1,500 per acre. Operators in both markets could opt to pay 4% of their gross revenue instead of a fixed fee.

Marina restaurants, fuel sales and boat and motor sales on TVA property also would be charged a fee.

The minimum rent fees would be reassessed each year.

Under the new rules, all lease agreements will be for 30 years.

Campgrounds and marinas operated by a state or local government, such as Joe Wheeler State Park in Rogersville, would be exempt from the changes. Those operated by a commercial business within a state or local government park would be subject to the terms of the original agreement with TVA.

Keith Mullen, owner of Steenson Hollow Marina on Wilson Lake, is unsure how his business might be affected.

“I’ve heard a little about what TVA is trying to do, but no one from TVA has contacted me about anything,” Mullen said. “I’m not even sure if what they are doing will apply to Wilson Lake because private property owners own the land under the water. I wish someone from TVA would let me know what’s going on.”

Adams said it is possible marinas on Wilson Lake will be exempt because TVA does not own all the shoreline as it does on most of its reservoirs. He said the new rules only apply to campgrounds and marinas built on TVA property.

Adams said TVA has created a division to administer its commercial recreation use. He said members of the group will visit each of the 230 marinas and 270 campgrounds along TVA’s 49 reservoirs in seven states to discuss the rule changes. He said the new pricing structure will take effect after every campground and marina operator in the Valley has been briefed.

In addition to changing the pricing system for rent, the new rules will require each campground and marina to have at least $1 million in commercial liability insurance, have a performance bond, irrevocable letter for credit naming TVA as beneficiary or make a non-interest earning cash deposit to TVA to ensure the marina or campground operators fulfills it payment obligations to TVA. It also will restrict long-term campsite allocations and require all campgrounds to shut down for at least two weeks each year for inspections and upgrades. Lease agreements for boat slips at marinas will be limited to one year.

Adams said TVA plans to work closely with marina and campground operators to ensure a smooth transition to the new pricing plan.

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