TVA easement for Fort Loudoun Marina to go to private sector

Tammy Cheek News Herald

Lenoir City Council members Monday decided to withdraw the city's application for an easement license at the marina with Tennessee Valley Authority (TVA).

This gives the marina's operator, Ed Loy, the opportunity to apply for the easement and negotiate with TVA directly. 

During their meeting Monday, council members heard from TVA representative, James Adams. Darrell Cuthbertson and Bert Robinson from TVA also attended. "We did meet a couple weeks ago with Mr. (City Administrator Dale) Hurst and Mayor (Matt) Brookshire," Adams said. "TVA is looking at this valleywide to try to be more consistent." 

He explained since TVA started in 1933, it has been putting easements, leases and licenses in place for marinas and campgrounds, and they have developed over time. "They've changed a lot in revenue structure and what happens on those," he said. "We've had a lot of complaints about their being inconsistent. Over the years we've put in a percentage of gross revenue. We've had fair market value, and there is some rationale for how that happens. If you give someone land rights, long-term agreements like in a lease or an easement, we have charged fair market value. 

"We have other things," Adams said. "We have a lot of licenses, and those are revoked every 30 days. What will happen over a long period of time is somebody operating on a license may grow in infrastructure, and the business grows and grows to finally a point he is on a 30-day license but yet he has this massive operation."    Adams said over the last couple of years, TVA has had several complaints about how it is charging fair market value or 5 percent of gross, so last year the board asked him and his staff to take a look at the issue and get some outside consultant advice. "We did that," he said. "We have taken that advice, and we have produced. We developed a new guideline that has gone up through senior management and was presented to the board on how we're going to do this."

Adams said there are 260 campgrounds and 224 marinas up and down the reservoir. He explained every time TVA looks at a campground or marina, it has to look at the specific agreement because it may have been done in 1960 or 1990. "They'll read differently," he said. "We have state parks, cities, counties and we have some that are completely commercial interests," Adams said. So, TVA has decided on this guideline."We have five requests (for easements) in the door right now," he said, adding Lenoir City is one of those. 

Of the campgrounds and marinas, not everyone will be touched. For example, the easement at Joe Wheeler State Park was transferred to the park. 

He indicated TVA has cities and counties operating marinas and campgrounds. In those cases, TVA has decided to let them continue and let them operate at no charge. 

Adams explained cities, counties and other government agencies provides free services and their interest is not to make a profit, so TVA would not charge. On the other hand, commercial interest's intention is to make a profit. So, while TVA would allow the city to operate a campground or marina without charge, it will not allow the city to sublet to a commercial entity. "So that's why we're separating between the two," he said. 

Nevertheless, Adams pointed out if TVA has an agreement out there that's been in place 10 years, TVA is going to abide by that agreement. Lenoir City presently has a 30-year easement agreement with TVA. "If we have a 30-year easement and we put the charge value in there, we won't change that until it expires," he said. "But, when given the opportunity, we're going to try to separate those two."Initially, there was a 30-year easement that expired in 2005. Before, it had been a public recreation easement. It had the marina that developed on it over the years," he said. "TVA did give a public recreation easement - about 34 acres of it - two years ago, so that is in place. Nothing changes about that. "We're only talking about 8 acres around the marina and about 24 acres of the harbor area. And, then we have the access that comes into it," he said. "So, there's no easement right now over the access road."

Lenoir City Council member Eddie Simpson asked if TVA is going to allow different people to bid on the operation of the marina or is it going to stay with the present operator."The intention, my anticipation, is that it would stay with Mr. Loy, he is the one who is in the agreement. He's been involved with this for all these four years," Adams said. "The license agreement we have right now is with Lenoir City. The application we have is with you. We can't start to work with someone else until we know what you want to do."

Although he said TVA's intention is to work with Loy, following the city's withdraw of its application, he warned there are no guarantees. He explained others could come in and state their interest in the easement, causing "an adversarial relationship," leading to the a public auction of that property. 

Simpson asked, with its withdraw, how does the city recoup the money it invested in sewer lines and cost of maintaining the street there. "We have an agreement now with TVA to maintain the street," he said. "We've committed we will keep that street up. Now it's going to be going to a commercial site with us having no revenues."

Adams said he looked at the agreement and said he did not see where there was an easement over the road leading from the dam to the marina. He wasn't sure there was an agreement. 

Council member Bobby Johnson Sr. said that was a condition where the city got the commercial easement that they city also accepted the road maintenance.

The TVA representative  said right now the city isn't responsible for the maintenance of the road. It's still a TVA road."So, it wasn't tied to the recreation side, it was a condition of the commercial," Hurst said.

So with the city's decision to withdraw its application, it is no longer responsible for the road, the Mayor reiterated. "So, all we stand to lose, then, is - I guess I'm going back then to 2003 or 04 - we were collecting $28,000 on the average per year for that commercial property," Simpson said. "We anticipated we would continue to collect something from it, and now we won't be collecting anything from the properties." Now, any lease revenues will go to TVA. 

However, the $5,000 submitted with the city's application for easement will be refunded to the city, TVA representatives said. Loy will be paying those costs. 

Following discussions, Council member Tony Aikens moved to withdraw the application, which was seconded by Council member Mike Henline.