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Resort Owners Bemoan TVA Lease Increases

March 7, 2012 by   - () Leave a Comment

The Tennessee Valley Authority (TVA) says new fees levied on marinas, resorts and campgrounds will provide for better maintenance of public lands.

Business owners in Calloway County in southwestern Kentucky say the fees will likely take a big bite out of their bottom line, and will lead to increased rental prices, the Murray Ledger & Times reported.

Nine marinas and resorts in Calloway County are among some 200 commercial properties that will be effected in 2013 by the TVA land and water use fees. TVA uses the money collected from commercial leases to maintain its day-use areas, boat ramps and other public spaces along the Tennessee River, said TVA spokesperson Travis Brickey.

Brickey said TVA believes the new few structure will be more “fair and consistant” to businesses.

“Some marina operators pay little or nothing in rent to have their business on public land that TVA manages. And there are other marina owners, mainly the newer marina owners, who are paying a lot, substantially more than zero, for the use of public land,” said Brickey.

Business owners have two options to pay. They can pay 4 percent of the assessed market value of the TVA property, or they can pay 4 percent of monthly gross revenue.

Neal Parker, co-owner of Lakeview Marina Resort in New Concord, operates a harbor with berths for 70 small boats. Parker said when the TVA fees go into effect in the 2013 season, he will have to pass the cost on to his customers.

“I wouldn’t be the least bit surprised to see my yearly payments to (TVA) double,” said Parker. “It’s not going to make things easy for me. … I’ll only have one thing I can do, and that is to increase my prices on my nightly and yearly boat slip rentals to compensate for it, because I just can’t continue to eat (with the) cost of living increases, and taxes going up, and permits going up and now TVA wanting to approximately double what I pay in fees.”

Sugar Creek Bay owner Water Allred pays around $1,200 a year in his current lease agreement with TVA. He recently leased more TVA shoreline and water property to install additional docks, and he worries about the additional financial burdens piling up.

“Me taking more land from TVA, which isn’t including the water, I’m looking at going from maybe $1,200 a year to maybe $4,000 or $5,000 a year,” said Allred.

TVA currently makes between $500,000 and $600,000 annually on its commercial leases.

Brickey said revenues from the system will not be clear until it’s determined how many business owners will take the assessed value fee and how many will choose the percentage of gross profits option.

The fee changes will not affect TVA agreements with municipal governments, nor will it affect businesses that have long-term leases with TVA, said Brickey.

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