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1996-09-04 SP ~ FILE QUEENS BURY ZONING BOARD OF APPEALS SPECIAL MEETING SEPTEMBER 4, 1996 INDEX Use Variance No. 82-1996 Mooring Post Marina 1. Area Variance No. 83-1996 Mooring Post Marina 1. THESE ARE NOT OFFICIALLY ADOPTED MINUTES AND ARE SUBJECT TO BOARD AND STAFF REVISIONS. REVISIONS WILL APPEAR ON THE FOLLOWING MONTHS MINUTES (IF ANY) AND WILL STATE SUCH APPROVAL OF SAID MINUTES. /- ~.,~" j ;~ '::/' ø>t?¥;;";'~ ~ \, -./ (Queensbury ZBA Meeting 9/4/96) QUEENSBURY ZONING BOARD OF APPEALS SPECIAL MEETING SEPTEMBER 4, 1996 7:00 P.M. MEMBERS PRESENT FRED CARVIN, CHAIRMAN CHRIS THOMAS, SECRETARY DAVID MENTER WILLIAM GREEN BONNIE LAPHAM ROBERT KARPELES DONALD 0' LEARY EXECUTIVE DIRECTOR-JAMES MARTIN CODE COMPLIANCE OFFICER-JOHN GORALSKI STENOGRAPHER-MARIA GAGLIARDI MR. CARVIN-Before we begin, I have a couple of housekeeping items' that I'd like to get cleared up. I think one had to do wit~-the- minutes of August the 14th, which is in relation to the Mooring Post. Mr. Thomas has a correction to the minutes. MR. THOMAS-Yes, on Page Seven, on the 11th line, it reads "Application The Zoning Board of Appeals issuèd a Negative Declaration". It should read "The Zoning Board of Appeals issued a conditioned negative declaration." MR. CARVIN-Okay. Does everyone understand the change? Okay. Then I move that we accept the minutes as corrected. MOTION TO APPROVE THE MINUTES OF AUGUST 14, 1996 AS CORRECTED, Introduced by Fred Carvin who moved for its adoption, seconded by' Chris Thomas: Duly adopted this 4th day of September, 1996, by the following vote: AYES: Mr. Green, Mr. Menter, Mr. Karpeles, Mr. Thomas, Mrs. Lapham, Mr. O'Leary, Mr. Carvin NOES: NONE OLD BUSINESS: USE VARIANCE NO. 82-1995 TYPE I WR-1A CEA MOORING POST MARINA OWNER: JOHN BROCK WESTERN SIDE OF CLEVERDALE ROAD, NORTH OF THE INTERSECTION WITH MASON ROAD APPLICANT SEEKS TO CONSTRUCT AND USE NONCONFORMING COMMERCIAL BOAT STORAGE BUILDINGS ON A PRE-EXISTING, NONCONFORMING SITE, AND SEEKS RELIEF FROM THE USE AND AREA REQUIREMENTS OF SECTION 179-16, WATERFRONT RESIDENTIAL - ONE ACRE (WR-1A) ZONE. LAKE GEORGE PARK COMMISSION ADIRONDACK PARK AGENCY WARREN COUNTY PLANNING TAX MAP NO. 13-3-19 TAX MAP NO. 13-2-20, 21 AREA VARIANCE NO. 83-1995 MOORING POST MARINA SAME DESCRIPTION AS USE VARIANCE ABOVE. MR. CARVIN-If the applicant would come to the microphones. Does Staff have any additional input at this point with regard to this submission of material? MR. MARTIN-No, we have no formal comments at this time. MR. CARVIN-Okay. You've given us a lot of information, John. - 1 - ~ (Queensbury ZBA Meeting 9/4/96) Would you care to go over it, or does anyone on the Board have any questions of the applicant? RICHARD FRANKEL MR. FRANKEL-Richard Frankel, the attorney for the applicant. Submitted pursuant to the request of the Board, the Board should have now a memorandum submittal dated August 27, 1996 with 17 exhibits attached to it. Some of those exhibits are separated, due to the volume of paper, one of which is the real estate appraisal, which is in two forms. There should be a red bound portion, thin, and then a thick with a binder clip appraisal. The questions that were asked of the applicant I believe are answered in· this memorandum submittal. Essentially the lack of reasonable return, dollars and cents. MR. CARVIN-Okay. Could I interrupt you just for one second. With relation to the red booklet, this is addressed to Mr. Brock, and upon my reading, I do see a copy right coverage, which states that, on Page 5, the last paragraph, as I interpret this to be a copy right. I am just pointing this out that this has been submitted to us, and that any copy right violations are Mr. Brock's responsibility. MR. FRANKEL-We have the appraiser here, Mr. Bauer, and he has a letter, I believe, to the members of the Zoning Board of Queensbury, regarding our appraisal number 96-243 and number 94243. "Despite what may be contained in our contingent and limiting conditions of the reports, they may have been disseminated for your review regarding a zoning application for Mooring Post Marina." MR. CARVIN-Okay. I'm to assume he has permission from the appraisers to disseminate this information. MR. FRANKEL-Mr. Bauer is the appraiser, and this is on behalf of Mr. Brock, yes. MR. CARVIN-Okay. Go ahead. I'm sorry. As we cross these bridges, I'll let you know. MR. FRANKEL-In addition, recently was submitted an additional support to answer the questions, are letters dated August 30, 1996 from Ruff and Rack, Inc., and letter dated August 30, 1996 from Coastal Marine International, dealing with feasibilities of the building as presently proposed. In the recent documents, we hope that we have presented to the Board the lack of reasonable return, in conjunction with previous documentation that has already been submitted. We established what the purchase price of the Marina property is, the loans that remain outstanding as well as the original loans that were taken out, the loans, how they have been paid down, from what sources they were derived from, cost of demolishing the building, pursuant to the original demolition and also costs incurred in having to preserve the site. These new building expenses are shown on Exhibit 14, Page Three of your proposal, and it is our contention that those building expenses are properly before the Board. There's the appraisal both for the property presently as a commercial marina with the buildings torn down. There is an appraisal, also in the appraisal is the valuation of the property as residential. The expenses associated with the property are shown on the income statements, and I believe that in Exhibit 14, which is the accountant letter. MR. CARVIN-Excuse me just one second. You had mentioned Page Three in this maroon book. MR. FRANKEL-No. I'm sorry. I'm now in our memorandum submittal, Exhibit 14, Page Three. - 2 - "--' '-" (Queensbury ZBA Meeting 9/4/96) MR. CARVIN-Okay. I just happened to notice here, going through, that I go from Page Two to Page Four. I do not have a Page Three. Does anyone have in your red book the Page Three? MR. MENTER-No. MR. THOMAS-Could be misnumbering. MR. CARVIN-Yes. It reads through okay, but I'm just wondering if it's a misnumbering, or if we're missing a page. MR. FRANKEL-While Mr. Bauer, the appraiser, is checking that, I'll continue on, for the sake of brevity, but we believe it most likely is a misnumbering, but the Exhibit 14 that I was referring to is found in the memorandum submittal, the bound volume here, Page Three. Exhibit 14 is a letter from Bud and Carotto, Certified Public Accountants, addressed to the Town of Queensbury Zoning Board of Appeals, addressing some of the accounting issues that the Board had concerning rent, depreciation, legal and accounting fees, insurance and consulting fees. In addition, there is, as you can see on Page Three and Page Four, calculations for purposes of showing the expenses and income of the applicant through the pertinent years, and the accountant's opinion, I believe, as to the reasonableness of these expenses. We have one of the accountants from that accounting firm here to answer any questions the Board might have further, after reviewing that letter. I believe that the prior information provided establishes the other issues that the Board has questions about concerning the essential character of the neighborhood being changed, the hardship being unique and that the hardship is not self created, with both respect to the Use and the Area Variances, and if the Board has any further questions, we'd be more than happy to answer them. MR. CARVIN-Okay. I'm assuming all the Board has received their packet and have gone through them. Are there any questions of the applicant at this point? MR. MENTER-Well, the format, we're still open, right? MR. CARVIN-Yes. Well, I'm giving the Board the first opportunity to ask any questions on any of the recent submittals before we continue with the public hearing. So if you've got any questions, comments or thoughts? MR. THOMAS-I'm set, until after all the public input. MR. CARVIN-Okay. I guess everybody is comfortable at this point. So Staff has no additional comments? MR. MARTIN-I had a question for the appraiser, and this is from the previous appraisal from 1994, on Page 94, the calculation of capitalization rate. I was wondering if I, you know, not being in the appraisal business, if I could have a definition or an explanation of what is the modified band of investment method, and further explanation behind the statement that's made, "Investors of similar property require an equity dividend of eight percent." Can you answer those two questions? BRUCE BAUER MR. BAUER-My name is Bruce Bauer of Bauer Appraisal Group 125 Wolfe Road, Albany, NY. As regards the modified band of investment, that's a method in determining a capitalization rate. A capitalization rate is basically a factor that's used to convert the net operating income into a value estimate. One method of doing that is the modified band of investment, where you take the cost of debt service, the cost of equity or the amount of down payment or owner's equity into the property and determine a factor - 3 - (Queensbury ZBA Meeting 9/4/96) applicable to each of those, and then when added together, indicates an overall capitalization rate, or yield, not a yield, a cash flow dividend for one year. MR. MARTIN-And the statement "Investors of similar property acquire an equity dividend of eight percent." That means? MR. BAUER-As of that date of valuation, general commercial properties would require at least a dividend of eight percent. MR. MARTIN-Okay. Thank you. MR. CARVIN-Okay. Now you said "as of that date". Has that nuritber significantly changed? MR. BAUER-In other words, what was a typical treasury bill going for at that time period, something of that nature. MR. CARVIN-Okay. Would that figure still be true today? MR. BAUER-It changes constantly. MR. CARVIN-Okay, upwards or downwards, do you know? MR. BAUER-At this point in time, upward. MR. CARVIN-Okay. So we'd be looking at nine or ten, possibly? MR. BAUER-In a range of around nine to twelve. MR. CARVIN-Nine to twelve? It would be that much of an increase? MR. BAUER-Yes. MR. CARVIN-Okay. Any other questions, Staff? MR. MARTIN-No. MR. CARVIN-Then I'll continue with the public hearing. wishing to make comment on any of the material? Anyone PUBLIC HEARING OPEN MICHAEL O'CONNOR MR. O'CONNOR-For the purpose of your record, I am Michael O'Connor. I speak on behalf of a coalition of neighbors, and we speak generally in opposition to the proposal as it is presently before the Board. The first thing which I would like to focus on is the moving target, again, and I've complained about this before. We seem to be getting new information, new facts, new figures every time we sit down at this table, and it is difficult, maybe, to try and analyze everything. I honestly think you should re-visit your SEQRA determination where you gave the conditional negative declaration, based upon the information that has been submitted to you in the last couple of weeks by the applicant. A couple of the things that I'd call to your attention is the appraisal. If you take a look at that on Page 34, they're talking about there, and you've got to remember, and I apologize for the Board members that . . ¡ weren't here when we went through th1s 1n the last two years. MR. CARVIN-Okay. When you say Page 34, Page 34 of what, Mike? We've got a lot of Page 34's. MR. O'CONNOR-Of the 1994 appraisal. You will remember how much difficulty we had in trying to find out measurements of buildings that were removed, and nobody had any information, but apparently there was in existence, even throughout this application, this - 4 - "-' ,-' (Queensbury ZBA Meeting 9/4/96) particular appraisal, and it looks like the appraiser who is here tonight and can verify it, went out and actually measured the buildings before they were demolished. The point that I would call your attention to, on Page 34, is that building height of building number three, which is given as 14 feet. Now the applicant has indicated that all these buildings were 20 to 25 feet in height. I think that's a clear indication, contrary to that, that's presented by the applicant. I think a couple of pages before that, and I didn't understand it, and I thought the pages might have been out of order, but it said the average height of buildings was 11 feet, and I don't necessarily refer the Board to that particular reference, because I couldn't understand it, and in the page order in which they were downstairs, and that may have referred just to a single garage, but I don't think there's been any testimony by anybody that those buildings on the back of Mason Road varied greatly in height, and they had a pretty well uniform peak line, if you will, as you went up the road, and here is somebody who has come forth and given us an actual measurement of 14 feet. A lot different than what everybody was comparing, the proposed buildings of 25 to 28 feet to, than what we've had in the past. The other thing, which I don't understand at all, if you look at Page 108 and 109 of that appraisal, and not necessarily on those pages, but' those pages have a reference, and I think a table as to what the volume of use that is on the property, in the terms of the appraiser, the information that was given to the appraiser in 1994. Elsewhere in the appraisal, it indicates that either Mr. Bauer or his assistant actually interviewed the applicant and obtained the infOrmation from him. I don't know any reason why anybody would give an appraiser, other than what was actual fact, and there, they're talking about the as is quick launch of 60 boats. Quite different than the figure that you've been comparing impact to in this particular application. There, they're talking about winter storage, indoor, of 120, exterior 30. What's been proposed, at least at that time what was proposed was 140 quick launch. You've pared it down, I think, to 140, and my recollection of even the SEQRA findings is that there's no limitation on the winter storage, although we have talked about 200, but again, you're talking about facts that are completely different than what the applicant has submitted up to this time, and facts up which you, in fairness, made your comparisons and your proposals or your findings. If you also look at Page 40, and I apologize, but I'm out of place here, and you know, you had a deadline for submittals from the applicant that, honestly, wasn't met and the numbers that came in weren't very sufficient, and it was rather difficult to review some of this information, and there's some information that apparently was submitted tonight that I don't think was even here the day before yesterday, the two letters that were mentioned. So I haven't even seen those or had an opportunity to make comment on those, and I was here for a good three or four hours, I believe, yesterday, and Mr. Dowen was here for a couple of times, too, trying to get a handle on what we're talking about. Page Three of Three, and that's one of the exhibits, that might be Exhibit 14, and I apologize, but I don't have a set of the exhibits, and that's where they were doing a comparison of their projected cost. It was Page Three of Three. I'm not sure, and if you notice in there, again, when we're talking about, is there any increase in volume, or whatever. They are projecting two new employees for lift operation. Am I on the right page, Page Three of Three? They have a cost analysis. MR. CARVIN-I don't know, but I don't remember seeing anything about two employees. They tell you increase in waqes. MR. 0' CONNOR-Under Payroll. Mooring Post projected net income, and there's three pages. Is there an index to that? MR. MENTER-I'm not sure where you are, Mike. - 5 - .- (Queensbury ZBA Meeting 9/4/96) MR. O'CONNOR-Exhibit 17. I apologize. MR. CARVIN-Exhibit 17. MR. O'CONNOR-If you look at that, you're now talking about two, and this is, as I understand it, it's under the caption "proj ected Additional Expenses Assuming New Buildings are Constructed." Payroll - Forklift Driver, and these are new expenses, so I've got to presume that these are two new forklift drivers, and also yard, they're talking about two new employees there, and if we're still dealing with the same volume that we had beforehand, we're dealing with more efficient buildings, more efficient operation. I just don't understand the relationship of what the applicant has presented, particularly to your findings in SEQRA, that there is going to be no actual increase in volume of boats, even if there is an increase in volume of the building. I think you have a problem here with what you found under your SEQRA, and even in the appraisal, I'll go back to the appraisal, and I don't mean to jump, but if you'll look at the appraisal, I think it's Page 29, you talk about volume of boats. I think they're talking about winter storage there, and they're talking about a total of 122 boats, 39 of them are in a building that is not being removed. So you're talking about 83 in the buildings that are being removed, and we're talking about building a structure, if I'm on the right exhibit, and I apologize if I'm on the wrong exhibit, we're talking about a structure that's going to potentially house 140 boats, with them telling us that they're only, in fact, replacing storage or buildings for storage, for 83 boats. This, I think, is a SEQRA issue. It also is actually an issue as to the extent of variance that's required, which is one of the rules that you have to follow when you get down a little bit down the line. Section 617-7 Subsection One, Subsection 2, says that the Board can, at any time prior to making a determination rescind a negative declaration if prior to its decision, and one of the grounds is new information is discovered. I think based upon what you had, simply by what was submitted in the September 1994 appraisal, done not by somebody' opposed to the project. Done by somebody who was involved for an independent purpose, but who actually observed, I believe, and wrote what they observed on the property, has contradicted, greatly, the information that's been given by the applicant, and is grounds for you to ask for a full Environmental Impact Study, so we can sift this thing out, and we don't keep seeing the ball bounce up and down, depending upon what meeting we go to. So I actually would ask you to rescind your existing negative dec, before we go forward, and ask for a full Environmental Impact Statement, and I would step aside if somebody wants to try and answer the difference in facts that we've got in the application or the facts of the record. MR. CARVIN-Well, perhaps Mr. Brock will answer it when we get through the public hearing a little bit further. I don't have any answers for you at this point, Mike. MR. O'CONNOR-Okay. Again, part of the problem with focusing on this whole application, and it's focusing on, really, what are the variances that are required. The volume of buildings in the latest dissertation that I've seen, they're talking about prior buildings of 394,807 square feet, or volume feet, as opposed to 573,000, which would be an increase of 178,000 or 45% increase. In your SEQRA findings, I think you were talking about an increase of 212,000, which was an increase of 54%. Again, to weigh what the impact is., I think you have to determine what your base it. MR. CARVIN-I think I'll correct that now, because, having gone through the SEQRA report, it comes out exactly 45.3%. So, I'm not familiar with this 50, whatever percentage is 212, I mean, but our SEQRA, what our SEQRA numbers came down to, because I think originally when I looked at it it was going to be one set, and we - 6 - "- --- (Queensbury ZBA Meeting 9/4/96) added a foot, which actually made it a little bit larger, which I originally thought it was going to be about 43 and it came up to 45.3 when we got all done. MR. O'CONNOR-Both figures agree upon 573,000 as being the proposed building. MR. CARVIN-I believe that's cubic feet. That's cubic volume. MR. O'CONNOR-Cubic feet, right. Okay~ MR. CARVIN-Yes. I think that's what the SEQRA says. MR. O'CONNOR-I think the difference is the cubic feet of the prior buildings, and one submittal by them tells us it was 394, and another tells us it was a different figure. The other area that I think you have to focus on is the use of Lot 59. MR. CARVIN-I thihk the figure that we came to'394,807 cubic square feet. Are you saying that that is an incorrect figure? I have a figure of 394,807. That's what the SEQRA was based on, as existing. MR. 0'CONNOR-394,807? MR. CARVIN-That's correct, and the proposed comes to, I have 573. MR. O'CONNOR-My math doesn't agree with it. That's all. My math shows. MR. CARVIN-I don't want to go through, you know, seven meetings ago. I mean the figure that I pulled out of the record today was 394,807 was what the SEQRA was based on, with the proposed at 573,672. MR. O'CONNOR-I have those figures as being part of their original application, and that was an increase of 178,000, but I also have figures showing that the actual increase is 212,000, and that's the difference. I don't think we have a difference in what the total build-out is proposed. MR. CARVIN-Well, again, my question is, are you saying that that 394 is incorrect? MR. O'CONNOR-I believe it is. MR. CARVIN-What should the correct figure be, and how did you base that? MR. 0' CONNOR-Based upon the record of the application, and the submittals by the applicant earlier. MR. CARVIN-Well, I mean, we went through the SEQRA. These numbers have all been crunched down, Mike. I mean, I'm not going to waste the time to go through. I mean, we went through that meeting, and that was the number that we came up with. MR. O'CONNOR-Okay. My belief is that the volume increase at this point is not 45%, it's 54%. MR. CARVIN-Okay. MR. O'CONNOR-And I can dig out the figures and give them to you. The other issue on the Use Variance is the use of Lot 59. I don't think that that has really been focused upon or determined. Lot 59 is the tax map parcel, 13-2-20. I will submit to the Board an affidavit of Cathy Poland who was principal of the Mooring Post Marina from 1971 to 1985, and the essence of that Marina is, "That - 7 - (Queensbury ZBA Meeting 9/4/96) during the time I was associated with the Mooring Post Marina, it did not utilize or use Lot 59, tax map parcel 13-2-20 for Marina purposes. In 1973, an application was made for a variance to build a building partially on the above lot, but said building was never constructed. From 1973 to 1985, I do believe there never was any commercial activity carried on on Lot 59, which is also tax map parc"el 13 -2 -20. In the 1980' s, the lot was used for parking a' large recreational motor coach that belonged to my parents. This was a residential use." If you take a look at, I have a copy of the tax map that shows you what we're talking about, and I also have a copy of a portion, I think, of the 1973 survey that was done, which shows at the very top of it what I would call the display building or the large building that's there, and then it shows a 50 foot lot next to it, which had two garages on it back then, and then you have the 50 foot residential lot that we're talking about, and then the other two residential lots that we haven' t talked about, which are the cabin that's next to it. Cathy Poland, clearly by her affidavit, indicates that that was not used for commercial purposes during the period of '71 to '85, and I also attached to the back of this a copy of the 1971 variance, which showed what they had proposed to do, and they would have built a building that would have gone across that lot, but they never did. The 1967 Ordinance, which would be in effect probably until 1982 or 1983, has a section of termination of nonconforming uses. "When discontinued for a period of 18 months or more, a nonconforming use shall be terminated. The 1982 to 1983 Ordinance, and I'm confused in my own notes as to when in October that was adopted, whether it was '83 or '82, but that was our next Ordinance, and it was the only Ordinance prior to the purchase by Mr. Brock. The terminology on discontinuance in the nonconforming use is that if a nonconforming use is discontinued for a period of 18 months, further use of the property shall conform to the Ordinance, or be subject to review by the Zoning Board of Appeals. Now I'll give you copies of all of that, and also, on the same issue, there was an application made by the applicant in 1988 for very similar variances to what's before the Board today. In the Staff Notes of that 1988 application, it says "The change in use of the three northeasterly corner lots, and residential commercial lots has not been applied for as a variance, although the applicant had apparently expected the Warren County Planning Board to take action", and I didn't copy the back page of that. I did copy a part of the decision of 1988 which says that the requirement that he had to show that the property cannot yield a reasonable return was not met, especially pertaining to the residential property. I think the record is clear that that lot in question is residential and you should consider it on that basis as needing a Use variance if you're going to allow this building that's proposed to be constructed. Because that building is, in fact, in a great portion on that lot. I haven't got an overlay of it, but I don't think there's any question on it. I will submit to the Board what I just spoke of for your records. The other thing which was just handed to me, I think one time before we handed it in, and I really think that the Board has to have a finding that this applicant is estopped from claiming this property is not residential. In 1987, the 'Manager of the Mooring Post wrote a letter that he had "been contacted by Burt Martin of the Town of Queensbury Building and Code Department. He has informed me, due to complaints from the residents of Cleverdale, I must comply with Section 7.079. This basically states I can no longer use properties zoned residential for commercial use. A portion of the total property here is zoned residential. This limits the space I have here. Therefore, I must regretfully inform you the Mooring Post can no longer store your boat trailer. I would appreciate you contacting Jay Waterman our Service Manager to make arrangements for its removal at your earliest convenience. Thank you for your understanding in this matter. Sincerely yours, Paul Middleton General Manager" I believe the problem that was brought to the attention of Building and Code Department was that they were parking on this residential - 8 - '---' (Queensbury ZBA Meeting 9/4/96) lot the trailers, and they were asked to have them removed. I have only one copy of this, but I'll submit it to you. You also can take a look at Section 179-92 of the existing Ordinance, and that talks about variances if they're not acted upon, I think, within one year, they expire. I'm not sure which of those three time limitations you really want to key in on, but the first two are 18 months, and the other is one year. Cathy Poland gives you a period of 1971 through 1985, that there was no commercial activity on the lot in question. If you will recall, back when we were getting testimony from the neighbors, they talked about turning the garage around so it faced into the Marina. That garage is not on the lot in question. That is on a lot that's immediately adjacent to the display room or the show room, and what Cathy Poland told me was that what they did is they turned that around. They stored batteries in that garage. MR. CARVIN-Okay. Mike, can you kind of hurry it up, otherwise I'm going to have to limit this to a time, because we've got a room full of people here, because I know we've heard a lot of this already before. I think you've made submissions of this nature. ' MR. O'CONNOR-Well, respectfully, Mr. Chairman, I think we've got to make a record here. I think everybody's aware that both sides. - MR. CARVIN-Okay, well, as long as the public realizes that I will have to invoke a time limit. MR. O'CONNOR-I know that you have focused upon the cubic volume of the buildings, but I think in the question of the Use Variance, you are also going to have to focus upon the increase in boats of some nature. You partially have done that in your SEQRA by trying to limit it to X boats during the period of the year, but if you go back over the information that's being developed here, you remember that when Cathy Poland sold this property to the applicant, in 1985, her entity sold the property, they then had 60 quick launch and probably 140, if I remember her figures of winter storage. In the applicant's appraisal, he was talking about 60 quick launch and 120 winter storage, and now we seem to be moving toward 140 quick launch. This is a vast difference between 60 in either of those two figures, and the 120. Okay. On the question of the Use Variance and the four or five items of criteria, basically, it's up to the applicant to meet the burden of proof, and I have to tell you, I think what has been submitted is totally contradictory and still meshed up with the operation of other businesses, in his expense sheets that he's given to you. There's one re-financing, which was entirely to take out the initial financing or a good portion to take out the initial financing for when the Route 9 property was set up. I think it's re-financing of 1990. That replaced earlier financing that was for Route 9 property, and I'm a little lost as to why it's in this set of facts, or in this material that's been submitted. You see a lot of comparison in the financial statements as to perhaps boat storage revenues, but we don't see anything or any dissertation as to the total property, as to apartment rents, whether there's been decline or increase in those, gasoline sales, has there been a mark up, not a mark up. We have total bottom line, but we don' t necessarily have a breakdown as to what the different elements are, and still we're comparing the expansion of just boat storage, and we're blaming downsides of the financing upon the lack of boat storage. You also have dockage and you have service revenues. There's no breakdown of service revenues with comparison over the years and what not. If you look at the appraisal, again, that was submitted, I think it's very thorough. It talks about a general decline for the Marina of 10%. That doesn't seem to be discounted or taken into place. You talk about uniqueness of the property. I've not seen any proof submitted that indicates that the problems that are alleged here are unique to this property. The only thing that I've, seen to support a finding of unique or request for support of - 9 - (Queensbury ZBA Meeting 9/4/96) uniqueness of the property is that the Town revoked a building permit to demolish and construct new buildings, but I will submit to you, and I'll submit to your counsel, that that is not the basis in this particular application for a finding of uniqueness. You have a supreme court decision right now, before you, and that's the rule on that particular issue, that says that the Town did not improperly revoke that building permit. The cost associated with going forward in reliance of the building permit, or what happened after revocation of the building permit are not grounds for uniqueness, and I don't think you're going to be sustained if that is what you're going to hang your hat on as to this being a unique property. If you talk about this property as itself, you have to find something that's special and peculiar to the applicant's property, and I'm quoting, obviously, terminology that other people have used. You have to remember, it's a nonconforming property, and you have to distinguish it from other nonconforming properties, and I don't see any proof that's been submitted, and they have the burden of proof, that distinguishes that. Everybody would like to come in and revitalize their property, modernize their property. That is not proper' grounds for saying that a property is unique. The applicant's appraiser in that September appraisal, I think on Pages 75 & 76, did not adjust the valúe for functional obselence. In fact, the appraiser found that there was no adjustment necessary. So you get into removal of buildings or not. I don't think that that is really a grounds, and can be a consideration for you when you come down to saying, okay, we've met this, we've met tha t " or we haven' t . I think you've got to find why thi s ' nonconforming marina is different than all other nonconforming marinas within the district in which it's situated, and I've been told there are seven to nine marinas. I'm not sure if somebody else has done some research on that, but you had the Harris Bay Yacht Club in front of you for an expansion, under a Use Variance, and there again, you found that that was not unique. I think you have a very possible precedent here that you're going to have to look at when you look at either the Harris Bay Yacht Club, the Castaway Marina, or the couple of marinas that are in Dunham's Bay, or Fischer's Marina, and I'm not sure if Fischer's Marina is, I think it's partially in the Town. Part of the boat storage might be in the Fort Ann. Part of the Marina part might be in the Town. They're all similar. They have all got older facilities or facilities that probably could be updated. Many of them are in residential areas. They are similar properties in the same district, and I don't think that you're going to find that this thing can be sustained as being peculiar. If I remember what we went through on the 14th, the only ground that was offered was the fact that the Town had revoked the building permit. I think the record and the minutes will stand on that. You talk about character of the neighborhood. We submitted an opinion letter from Irene Fitzgerald of Fitzgerald Realty of Glens Falls that she thought that this warehouse type building would not be in character with the character of the neighborhood. Now, if you go back to one story storage buildings, I don't think you have anybody here complaining, but when you go to buildings that are 25 to 28 feet in height, particularly when you're going back and comparing to the figures that we've now discovered documented in the appraisal of 14 feet, you've got a change of character of the neighborhood. I'm not sure, in the rush of last month, what happened with Irene Fitzgerald's letter, so I will give you another copy of it. Basically, she had a letter of January 3rd, and she re-dated the letter of August 14th, saying that in her opinion the change of character was still there. I don't see, correct me if I'm wrong, somebody from her office. Irene Fitzgerald underwent surgery at the end of last week. She thought she would be here. I talked to her yesterday about being here, her office, didn't talk to her. I talked to her today. She said it was definitely out of the question. She is going back for some other problems, so she couldn't be here, but I thought somebody else was going to come from her office. I think their office is one of the premier - 10 - -- (Queensbury ZBA Meeting 9/4/96) residential operations in the community. I think she has a good understanding of whether or not this warehouse next door to the existing residences that you're going to set this down on top of are going to be affected. I don't think it takes a world genius to take a look at that and see. I think if you actually look at your record from the last public hearing, you had some real explicit testimony of Hammond Robertson and his wife and his wife Joan Robertson as to what they thought the change of volume that they've witnessed, even this summer, as on the character of, their neighborhood and the use of their adjoining residential property, and I think also if you take a look at the Master Plan for the Town of Queensbury and you see how it is suggested in there that nonconforming uses, where permissible, be phased out to make everybody come into compliance. That's kind of contrary to what's going on here, where you've got a requested expansion of a nonconforming use. One of the other elements on the Use Variance table that has to be satisfied is was this hardship, if there was a hardship, self created. There's been no change in zoning since the present applicant has obtained this property that's substantial in any manner that effect's his rights on the property. We've gone through three or four changes in zoning, but none of them have effected him, that I'm aware of. He basically was a nonconforming use when he made his first investment in the property, in 1985. / It was a nonconforming use when he went to your predecessors in 1988 and asked for substantially the same Use and Area Variances of the nature that he's asking for today and was turned down. He then made a second investment in the same property, after being turned down in 1988. I believe, and I stand corrected and acknowledge that I stand corrected. I thought there was one parcel that was still in his name and his brother's name in title, and I said that the last time I was here. In 1989 he apparently bought his brother out, four years after he bought the first investment and one year after he was turned down for the Area Variances for expansion. That's the classic argument that it's self created. He, in fact, made his second investment in this property after being turned down for Use Variances, a Use Variance and Area Variance. There's nobody can complain that this was not self created. The other issue that you have, and I haven't tried to duck the issue, is the basic issue of reasonable return, but I don't even think you even have ,to get to that issue, but when you're looking at reasonable. return, you also have to look at whether or not, in part, this hardship was self created because he paid too much for the property in the very beginning. It's not your obligation to guarantee a foolish investment, and from what I've seen of the appraisals that we've got submitted to you, and we now have an appraisal of what the property would be worth as a Marina, and I think there was a little disagreement last time that you weren't entitled to consider the value of the property from the nonconforming use as well as the permitted uses. My argument is that you have to consider it both ways. If you consider the value of this Marina as an existing Marina, I think you've got a very low ball figure of $500,000, on an investment or a purchase price to the Marina, and it's confusing wi th what you've got there. I think we've done away with the $750,000 purchase price, because we've clearly shown that $250 of that was for the residence, perhaps $200 for the residence that's on the lake, that's occupied by the applicant, and $50,000 for the cabin on the two lots that are internal, that are not part of the Marina application. Even if you've got $414,000 as the initial purchase price, which would be the $364, and the applicant in his dissertation here says that if there's some confusion. You should look at the deed stamps on the deed and use those as being the appropriate values of what was paid, and I think that's $414,000. Their appraisal shows $500,000. There's no showing, in the record here at all, of any attempt to market the property, that would say that they cannot get a reasonable return out of the property for its present, nonconforming use. Probably the most confusing of all the issues that you've got before you is whether or not there's a reasonable return. I didn't try to dissect, I said I wouldn't try - 11 - (Queensbury ZBA Meeting 9/4/96) to dissect the figures. Paul Dowen has done that. I'd ask Paul to make a statement to give you his findings on reasonable return, what he anticipates or what he sees from the findings that he has there. PAUL DOWEN MR. DOWEN-I'm Paul Dowen from Whittemore, Dowen & Caruso, and I had the opportunity to review the information yesterday, and I have a letter that I believe all of you have a copy of, dated'today, to Michael, regarding some of my comments, and also two spread sheets that I produced, trying to evaluate what a reasonable rate of return on this investment would be, and there is some conflicting information in regard to what is a reasonable rate of return, or what the applicant says is a reasonable rate of return. At one point, they talk about an eight percent rate of return. They also point out 11.15%. From my point of view, because you're involved in a much more of a risk type of business than investing in some type of stocks or bonds, my general feeling is a more appropriate rate would be about 15%, and that's where I did my analysis. Also in my letter, if you look at Number Two, it does show the increase in the volume from the original versus the proposed, as Michael has already pointed out, and if you look at, Page Two is where I really tried to focus on, from my point of view, where we really stand, and I think that, instead of reading the text, if we want to go to the two spread sheets, we have two items there, and we were submitted some information, as far as what the September 30, 1995 net loss was, which was a loss of $89,107, and there was some talk, last meeting, of what were proper expenses, one time expenses, that were incurred in the given year, and as the information was re- submitted, I've indicated the adjustments that they made in their own numbers, also the adjustment for the officer's salary, which was explained in prior was not able to be taken in any of the years that we've been reviewing, which is ' 92, , 93 and '94, or, I'm sorry, '93, '94 and '95. So they've come down to an adjusted net loss of $30,463, without any change, or new construction of any buildings. Then they came down, and in their information, they projected additional revenue, assuming that the buildings were reconstructed, as well as the additional expenses, coming down to a projected new net income of $33,806. What I put down in the second column is my revision, and my rebuttal against the additional expenses, as well as the additional income that is needed, and under the additional expenses they had indicated that there was debt service on the new building. Yes, there is going to be debt service on the new building, but as a landlord is improving their property, the entity is already paying rent of $8,000 per month, or at least it's been indicated if it's not been paid, it's included in the $89,107. They tore down buildings, are going to construct new ones, and now is asking the tenant, even though they are a related party, to pay an additional amount of money. I submit that that should be covered within the $8,000 of original rent. A new forklift was indicated on the debt service of that. A new forklift, I question whether it's really needed if the volume was to remain the same, why an additional forklift would be needed. Michael had already indicated the information as far as payroll, why would four new individuals be needed if you weren't creating any more capacity than what's already existed, and to go along with that would be the Workmen's Compensation. If there's no payroll increase, the would be no increase in Workmen's Comp, and then the real estate taxes. If the buildings that you tore down you're just replacing, why would there be an increase in real estate taxes? So I reconstructed those numbers, as you can see on there, and that brings the projected net revenue, or net income, from $33,806 to $68,810, and then Page Two, I think we tried to more clearly show that. There was some talk at the last meeting regarding the amount of money that, and what is the true investment in this property, and what I submit in my letter is that it is very confusing, when you're looking at the information, of what is really the income - 12 - '"-" -- (Queensbury ZBA Meeting 9/4/96) that's being derived from this piece of property. The initial investment was $750,000. I think we've tried to, or it's been clarified that the real investment in the Marina is only $500,000, and you'll see down near the bottom of the page, that's what I've put down as the initial investment of $500. The new buildings their submitted that is going to cost $350,000, and then I have a line item down here from loans from stockholder which they've indicated is $206,000 presently that has been loaned to the corporation that has not been paid back, and what I've tried to do here, which is extracting information from Page One, is tried to consolidate and treat these entities as one. It doesn't make any difference whether you're paying the rent to yourself. It should be treated as one entity, looking at the total rate of return, and if we start at the top, we have the $89,107 in the first column, with the add back of adjustments. The officer"s salary, as indicated on the first page, still comes down to the $30,463. From there, we want to add back the rent that's included in there, which is $96,000. In those numbers there's also the debt service on the buildings of $77,664. From the first page it's the same income they've projected with the new buildings, the $214 and their projected additional expenses is the $150. The reason the debt service on the buildings is in the column is because, under projected additional expenses, it's also included in that number. So those two numbers net out. So under this scenario, their projected net income is $207,470 for the combined property that encompasses the Marina, and their initial investment plus the new buildings would give them an equity investment of $850,000, which would yield a rate of return of 24.41%, well in excess of what ~ believe is a reasonable rate of return of 15%, and certainly well in excess of the 8 to 11.15% that's been proposed. The second column I included because of the discussion on whether or not the stockholder loans should be included. You'll see in that second column you've got a line called stockholder interest. In the middle of the page under "Add Back" says $14,400, which is about a seven percent interest rate, which I believe has been accrued on their corporate balance sheet, assuming that it's not been paid but it's been accrued as required by IRS Regulations. If I add that back, and then use that stockholder's equity, or stockholder's loan as if it was additional equity, that rate of return would dip down to 21.01 percent, but still well in excess of the 15%. My far right two columns comes back to, using the same information but using the additional revenue as I've projected it, based upon a lower volume, because I don't have the exact information, and I was making assumptions that if it went back to the original size, the buildings the same size, the same volume of business, what I attempted to show here is that they could actually do this project creating lower income and still be able to receive a return on investment well in excess of the 15%, and as is indicated here, that comes out to 20.60%, and if you use the loans, it's still 17.81%. Still, again, well in excess of the 8% to 11% that they've used, and in excess of the 15%, and that's on a scaled back, trying to treat and extract the information the best that ~ could on using the same volume that they once had back prior to 1993. MR. 0' CONNOR-Actually, that's even a higher volume than what they've had. That's based upon a volume of 80 boats quick launch and 160 boats winter storage, and that's using, in total, their figures as to what they think revenue per foot would achieve on eacþ' of those levels of boats, and I say the 80, my clients indicated to me to present what was reasonable. I haven't gone over that with everybody that is sitting behind us, that's part of this coalition, but that's higher than Cathy Poland's figure of 60, or the 1994 appraisal of the applicant, which was also at 60 quick launch, when we talk about 80 quick launch boats, and it's higher, I guess, also on the winter storage of 160, because we're presuming it's indoors, but I think that that shows a reasonable rate of return, or in excess of reasonable rate of return based upon the percentages that were poured forth by the applicant's initial - 13 - (Queensbury ZBA Meeting 9/4/96) appraisal of eight percent, and it's now, I guess updated to eleven or twelve percent, and our estimate of trying to be in the middle of the road, talking about fifteen percent. MR. DOWEN-That's really all I have, unless you have specific questions on those I can address for you. MR. CARVIN-Does anybody have any specific questions? MR. O'CONNOR-On the issue of reasonable return, too, I'll go back, again, to the issue of the separateness of that one lot. I have a letter to submit, and I'm not sure, again, if it was submitted in a prior meeting, of an appraisal by Fitzgerald Realty of Glens Falls that should be a marketable lot, the market price of $35,000. I also have a copy of, documented proof of the second issue that I raise as far as self-created hardship. There is a copy of the 1989 deed, which would indicate that investment was made after the application in 1988 was turned down. On the issue of Area Variances, again, you have a checklist of findings that you'rè supposed to make, and I honestly don't think that the applicant can meet any of those, or hasn't submitted any proof, as is his burden of proof, to meet those requirements. My understanding of your SEQRA finding was that you eliminated the setback variance that was requested from Mason Road because you structured all buildings at 30 feet, which would be the setback on that particular road. You've changed the requested variance on the north and the south line. They initially had them set at 11 feet, I think, and we're looking for, they had them at 11 feet, and you've set them at 10 feet, if I'm correct. So they're looking for a 50% variance on those two areas, on the south line, which would be Evans, and the north line, and the name escapes me at the moment. There's a 58 foot dead spot, if you will, between Buildings Two and Three, which if you· took advantage of, you would be able to eliminate any suggestion or any requirement of the setback variance requirement here or here. What somebody just spoke of is they're talking about the setback variances that are on the property that front on Cleverdale Road. I really didn't address those. Mr. Brock owns this property and he's suggesting, or somebody's suggesting, a five foot setback to his own property line. Our issues are that if you're going to grant Area Variances, you should grant only what is the minimum required, and it doesn' t appear to be any real or actual need to have this space between these two buildings, or if there's that need to have that space between those buildings, there's no reason that these buildings can't be shifted down a little bit, one way or another, to accommodate both of those two setback requirements. You talk about a balancing analysis, you talk about a minimum variance necessary, and again, I think even in those buildings, you're talking about a 25 foot height on the eaves and 28 feet maximum on the peak. That's pretty close to somebody if you're 10 feet off the property line. I guess I had some questions, there are some basic questions as to the appraisal, and I don't know why some of the more recent, there was a marina sold in Bolton in April of 1988 that was not included in the August of 1988 update, which I think would give you a higher yield on existing marinas than what was projected, and also there seemed to be the Snug Harbor Marina, which was sold in June of 1994, was also not included as a comparable, and I think it's pretty well accepted as part of the Marina life and sales, particularly on Lake George. I still have not seen, and I'm trying to rush ahead, revised landscape plan, which was called for in the SEQRA findings. I have not seen any depiction of the area that would be limited to outside storage of boats in the winter, which was required, seemed to be required in the SEQRA findings. The two things I would ask you to look at, if you do go forward on this thing, and you don't require the full Environmental Impact Statement, if you re-visit that after you get done with everything this evening, is that you should reserve in your decision, as a condition of your decision, thè right to revisit parking if problems develop due to the number of - 14 - ,-,' ~ (Queensbury ZBA Meeting 9/4/96) parking spots that are required. My recollection is that we're now showing 107 minimum, or we now have a need for 107 minimum. We're showing 92, without inclusion of first floor, or first story parking in the buildings that are going to be created. That would seem to be a problem waiting to happen, and would be the first complaint that you get from the neighbors. The other condition that you should make is that you should condition any approval upon the obtaining of a valid Lake George Park Commission permit to operate a quick launch facility. Those are my comments. If you have questions of me, and I can dig out. MR. CARVIN-Any questions anyone? Does Staff have any questions or comments? Okay. MR. O'CONNOR-One other question, I guess, Fred, I'm not sure, when you revise this thing at the night of the hearing, and really, we'd already put in our input, as far as the public goes, we kind of got short stopped a little bit as far as input into the new design that came out on the Board. I'm not sure why in your finding, in Finding Number Ten, you talked about noise level. You talked all forklifts and tractors moving, used for moving boats shall be equipped with mufflers and resonators to reduce noise levels to a maximum of 75 db at 65 feet, and will not be equipped with activated air horns. If you actually look at what they had submitted, they were talking about less levels, and you've built in there a cushion for them to build two, which would seem to be contrary to SEQRA. They talked about mufflers that would go to 71 db at 50 feet, and to me, that has got to be greater, or less noisy than a 75 db at 65 feet. They talked about resonators reducing it between five and fifteen db beyond that, and you didn' t take advantage of that either. I understand that there's some question that apparently what they said they could do they found out:. afterwards that they might not be able to do, but I think that that, even aside from that, you've allowed more noise here than is required, and that's going to be a problem. Thank you. MR. CARVIN-Anyone else wishing to make a comment? KARL KROETZ MR. KROETZ-My name is Karl Kroetz. I have lived on Cleverdale for almost 30 years, as a year round resident. I have written some comments down. They have been all talked over by Mr. 0' Connor, but perhaps I'll be saying them in a little different way. During the past two years, the owner of the Mooring Post Marina has submitted three different plans to replace the storage buildings that were demolished. The first plan, if you remember, was two buildings, very large buildings, along Mason Road. The second plan was one large building with two smaller buildings along Mason Road. The present plan is four small buildings, smaller buildings, along Mason Road and one large building along Cleverdale Road. Now, in each of the three different plans submitted, one factor was kept constant in all the designs. It is the total cubic feet, the total usable cubic feet of storage space or volume in the new buildings was always kept double what the usable storage volume space was in the old buildings. This was a common factor that was in everyone of the plans that was submitted, at least double the amount of volume in the new buildings, as compared to the demolished buildings. Now this simply means that the Marina was always sure to have as many, they could store as many, it simply means that the Marina was always sure that twice as many boats could be stored in the new buildings as compared to the old buildings. It's as simple as that, if you've got twice the volume, and this is what all of the buildings incorporated, and it's also true with the latest plans, that virtually all the boats stored in these five buildings will be accessible for quick launch service, and it is this quick launch service that is so harmful to the lake, and to the Cleverdale residential community as so many concerned residents - 15 - (Queensbury ZBA Meeting 9/4/96) have already stated. We look to the Town to enforce the existing zoning regulations, to protect us from the commercial, this huge commercial expansion in our residential area. We ask that the Zoning Board of Appeals not grant the necessary variances to allow this huge expansion of the Mooring Post Marina to occur. That is my comments, and I have copies of these comments for each of you, but I will be glad to answer any questions about anything that I have said. MR. CARVIN-Does anybody have any questions? you, sir. Anyone else? I guess not, thank TED ARNSTEIN MR. ARNSTEIN-My name is Ted Arnstein. I happen to be the President of the East Side Property Owner's Association, 284 members of properties on Lake George in the Town of Queensbury. I, personally, live several miles away on the lake in Harris Bay. I am not personally directly concerned about this, but I am concerned about Lake George, the tremendous increase, and there's no way of getting around the fact that the doubling, possibly tripling, of capacity will affect Lake George. The quick launch will change forever, as it has already, the use of Lake George. If. you examine, before I go into that, I'd like to say again because there seems to be at every meeting some misconception. No one in their right mind can say that this gentleman has not got a right to have a marina. It's been there since 1906. It's been an integral part of the community, and he deserves and should have a marina, not a double or triple size marina which will change the character of that little hamlet forever. We hear constantly from my friend Jim Martin about permeability and about setbacks. We're going to enlarge them. Here you have five feet. Here you have permeaþility. You've never heard this, but in order to carry the weight of these, he's going to have to pave in here to carry the weight, in the spring and the fall, of these boats coming in and out, and possibly in the summer. If you talk about that, that the Town now, I believe is 65%. Is that not correct, Jim? MR. 'MARTIN-That's correct. MR. ARNSTEIN-If you can show me how, on this property, you have 65% now, you're going to get it down to where it's 20%. Once again I say to you, the man deserves a marina, but not a giant facility, and let me talk about the prices. We've touched on the Castaway Marina, where over a million dollars was paid for them, probably a million five, a million two, I understand a million five, and they're not unhappy. They're pouring money into it again. Properties just to the back of this marina, over here, have sold in the last year or so for $375, $475. A little piece just up the way, where two ancient houses are, was sold for $285,000. You can't tell me this property's only worth $500,000. It's worth a hell of a lot more than that. So I ask you, please, take these things into your consideration. We're talking about the future of Queensbury, the future of Lake George. We need your help. Thank you very much. DON KLINKWITZ MR. KLINKWITZ-My name is Don Klinkwitz. I have worked for John Brock for 10 years. I've lived and worked at the Mooring Post for the past six years. I do the vast majority of boat storage and quick launch, and I think one thing that, there's a lot of misconceptions. Having lived there and worked there for six years, I see a lot of things that are said that are absolutely not true, but I think what it boils down to is John wants to build a building to store boats. The number of boats that you can store, in the past, has already been exceeded. I can remember, in the early years when I worked there, of quick launches of like 140. Winter - 16 - '- -~ (Queensbury ZBA Meeting 9/4/96) storage of boats on the property of over 200. I think a lot of people don't remember that. It was 10 years ago probably. Another point that's coming out is that even without the building, we can do more than what he's proposing to do with the building. In other' words, at any point, today even, we could quick launch 140 boats. We could store 200 outside, you know, and quick launch from outside without the building. It seems to me that people that are living around the Marina, it would be more attractive, at least to me, I don't know, to be looking at a building with boats inside it than it would be to look at 140 boats, parked outside in an open space. I think it's a matter of, you know, we can already do what he's proposing, and the Marina's done that in the past. So I don't see where a lot of the talk of expansion, you know, is coming from, basically. Any questions, I mean, there's a lot of misconception. I can remember just this evening somebody talking about a height of one of the previous buildings of being 11 feet or 14 feet or something. That's ridiculous. The buildings, we could put a boat that was 14 feet high, through the door of a lot of the buildings, and the door was halfway up from the peak. So you're basically talking about a 20 something foot high building. It seems to me that there's just a lot of misconceptions about our operation, how we do it, and what we've done in the past, and what we can do, basically, and I'd be willing to, from illY knowledge, answer/any questions that anybody might have about the operation, how we handle the boats, that kind of thing. MR. CARVIN-Has anybody got any questions? MRS. LAPHAM-How many boats are on the property right now? MR. KLINKWITZ-I haven't counted them. I would guess that there's probably 120, 130 maybe, something like that. I wouldn't know without counting them, but there's certainly over 100. MR. CARVIN-Okay. Is that including in the water, or is that just on land? MR. KLINKWITZ-No, that's on land, that's not including in the water. There are not an awful lot of boats in the water. That's the quick launch angle of it. Most of them are put in and taken out on a demand basis. MR. CARVIN-Okay. All right. If this lady has a question, she can come to the microphone and identify herself. I'm not going to have this as a press conference. DIANE COWEN MRS. COWEN-Diane Cowen from Cleverdale, on Cleverdale Road. The 200 boats that you said used to be launched. MR. KLINKWITZ-No. I didn't say 200 boats were launched. MRS. COWEN-Quick launched. MR. KLINKWITZ-No. I never said we had 200 quick launch boats. The most I can remember is 140 to 150. MRS. COWEN-Because you mentioned a 200 figure. MR. KLINKWITZ-Yes. There were at one time, I'm sure on the property in the winter time 250 boats, including boats that were winter stored, boats that were from quick launch, and boats that were new for sale. MRS. COWEN-So they were launched just once to people's docks? MR. KLINKWITZ-No, not the 140. That was quick launch. Yes, the - 17 - (Queensbury ZBA Meeting 9/4/96) 200 or excess were boats that were for sale on the property, boats that were there for winter storage, which would be launched once in the spring and taken out in the fall, and whatever remained of the quick launch boats that were there, you know, during the winter time. MRS. COWEN-Thank you. MR. CARVIN-Any other questions of the applicant by anybody? Okay. Thank you, sir. MR. O'LEARY-Just one. MR. CARVIN-Okay. Go ahead, Don. MR. O'LEARY-Under the proposed facility expansion, how many more personnel and/or equipment would you need to handle it? MR. KLINKWITZ-Well, see, that's another thing that's sort of a misunderstanding is that now, the way we launch boats, we use a tractor and a trailer. If we got the building, and there were racks in it we would have to take the boat off the rack with a forklift and put it onto the tractor trailer arrangement or onto another, I don't know, some sort of stand, where the tractor and trailer could pick it up. Now, that would mean that you would have to hire somebody to drive the forklifts that we don't have now, but it doesn't necessarily mean that there would be any more quick launch. It just means that we would be doing it in a different manner. In other words, if we had 140 quick launch now, and we just used the tractor and trailer, the people that drive the tractor and trailer could handle that number of boats. If we went to 140 in a rack storage arrangement, you would need somebody with the forklift to take the boat out of the rack and put it down onto the ground where we could pick it up with the tractor and trailer. So it's not really expanding the number of people or the number of boats or anything. It's really just a different, somebody doing a different job at the Marina. I mean, if there were two tractor and trailer drivers, one, and it wasn't busy, one could be using the forklift and the other one could be using the tractor and trailer. So that might not even be an increase. If it got busy enough to use two tractors and two trailers, then obviously somebody would have to drive the forklift to get the boat out of the rack and set it onto the ground so the tractor and trailer people could take it away and launch it, but it doesn't necessarily mean that it's an increase in the number of people that are needed to do the same kind of job that we could do now. It's just a different job classification. I'd just like to say that I've enjoyed working at the Mooring Post. MR. CARVIN-This lady has got a question. JEAN MEYER MRS. MEYER-I'm Jean Meyer of Cleverdale. The boats that are up there in the field are in your area now. Do they all have stickers, and can they all be put into the lake? MR. KLINKWITZ-Yes. The boats that are in the backyard now, that are' on block, that are on quick launch all have Lake Georgê permits, and they can all be launched and retrieved at any time, if a customer demands. MR. CARVIN-Anything else? questions. Thank you. Okay. I guess there's no other MR. KLINKWITZ-Okay. Thank you. ROBERT EVANS - 18 - "--- ~ (Queensbury ZBA Meeting 9/4/96) DR. EVANS-My name is Ròbert Evans. My wife and my four children live directly across from the Mooring Post. We border it, not only on the west, but also on the northern part of our property. Since Mr. Martin issued this permit nearly a couple of years ago, we feel like we've been chasing a train out of the station in all honesty. I've lived where I have since 1984, and it's never been my contention this has been a Marina. We've used it when the Polands owned it. It was neat. It was well kept. They were neighbors. They were friendly. They were lake friendly. The current expansion of three stories, 10 probably less on my property line where my septic, where I have a building, is unacceptable to me. I've really never had a chance to comment on this. I know Mr. Carvin designed it. You've put a lot of time into it, and I think as neighbors, I mean, how can you mitigate the turn out that we've had, meeting after meeting, year after year. It's not mitigatable. This does not fit in our community. You've heard the counts. I mean, my God, if I had income accounts like that, the IRS would be auditing me every day. God knows where the money is coming and going when you listen to these reports meeting after meeting. He's making money there. We've showed he's making money. I mean, the manipulation and the self set up that Mr. Brock has had really makes this expansion unacceptable to us. Why do we, as neighbors, when you're talking probably three to five hundred million dollars in real estate need to support the expansion of this Marina when he's making a decent living? It's not acceptable to us. It's inconceivable that really you've negated the environmental impact study. How do you mitigate the public opinion? I mean, stand in our driveway and listen to the smell and listen to the diesel fuels, the traffic, the parking issues. I mean, Mr. Martin can't come up anymore. He won't come anymore, and we've talked to him about parking allover the place and trailers. I mean, he can't control it now. Don, his employee, said, I mean, I'd accept the current setting now with the boats where they are. Why build three more stories. I've got to live with 28 to 35 feet right on my property line? I'm sorry, that's not acceptable to me. Since 1988, the Zoning Board told Mr. Brock that this is unacceptable. We've told him year after year, resounding no, this does not fit into the community. He's very aware of it. We've talked to him. It's self created. Bad business decisions have really lead to the fact that he's torn his buildings down. Re-build what he had, modernizing. We could all leave this meeting now. We've spent tens of tens of thousands of dollars to try to get the Town to enforce their own zoning laws. Finally we're here. Two wrong decisions do not make a right. It's a wrong decision that he was ever given this permit to begin with. It's been proven in Supreme Court that the information, etc., does not hold up. Why make another wrong decision tonight? The neighborhood is not friendly to this. The mitigation, the neg dec is unacceptable to us. I can guarantee you there's going to be an appeal. I can guarantee you that the Town Assessor is going to be blasted with us coming in talking about what's going to happen to our property values. Please, when you make a decision tonight, think of this as your own neighborhood. Think of it as your own backyard. Think of it as your own neighbors. When we leave tonight, if you leave the Marina the way it is, if you modernize it, if you upgrade it, fine, but to double it and triple and go from one to three stories, I'm sorry, is not acceptable to us. Please, again, I know it's been a long haul through this. Don't make a rash decision tonight. You've had a lot of information to digest tonight. Please decide on this as if you were deciding on your own neighborhood. Thank you. JOE ROULIER MR. ROULIER-My name's Joe Roulier. I'm from Cleverdale. As a businessman working in the community, I just have a hard time wondering why someone would put such a massive amount of money into a piece of property if it wasn' t for the sole purpose of an expansion, and ultimately effecting the bottom line. I have no - 19 - (Queensbury ZBA Meeting 9/4/96) idea of how much money Mr. Brock has spent at this juncture, nor do I know how much money the proposal that's before you will cost, but I can tell you that, from a business investment standpoint, no one in their right mind would put this kind of money into this investment without expecting some massive type of return. The accountant that was before you a little while ago said that there's returns already 15 to 20%. Obviously, anyone that would make this kind of investment has to be thinking in the lines of increasing the number of boats into the area, which ultimately will effect the bottom line. The second issue I have is that, having done a lot of work in Queensbury and being on a couple of Boards, it's always been my understanding that commercial property was worth substantially more than residential property. I've seen this not only in North Queensbury. I've seen it throughout the entire Queensbury area, and tonight we have a representative, an appraiser here, that's telling all of us that this property is worth approximately $500,000. There are properties, as Mr. Arnstein has just said to you, on Mason Road, that have sold routinely for four to six hundred thousand dollars, with 100 foot of lake frontage approximately 150, 200 feet at tops deep. I see property changing hands over on Seeley Road where I live, in the five to six hundred thousand dollar range. I see smaller pieces of property, 50 foot by 60 foot, up in the Rockhurst area, changing hands at $250 to $300,000, and yet a man walks in here tonight who none of us have ever seen, I don't know his experience, I don't know his experience in terms of commercial property in Lake George or residential property in Lake George, and said that's $500,000. I can tell you right now there are numerous people behind us, behind me, that would cut a check for $500,000 right now, and I think it's imperative that the man identify himself. MR. CARVIN-Let me set the record straight, then, because the appraiser is well documented. MR. ROULIER-Okay, but I would like to know what his experience is in appraising residential and commercial property within the Lake George area. MR. CARVIN-Well, I've got four pages of credentials here, and I'm not about to read it all in, but it is available for your examination. If you'd care to look at or are challenging the appraiser, I can tell you that there's actually more than that. I mean, there are page after page of qualifications, licenses and so forth. So, for the record, it is available. The man, as far as I'm concerned, does anybody have any questions? Bonnie, you're a real estate person. MRS. LAPHAM- I'm an appraiser and broker, yes, and I'm very impressed with Mr. Bauer's credentials. MR. ROULIER-Are we impressed with his credentials or the amount of experience he has appraising property within the Lake George area? MR. CARVIN-Well, again, we're not here to render a verdict. I have, what I feel is a substantial amount of credibility on this appraisal. Okay. Now Mr. 0' Connor has also submitted other appraisals or comments from other realtors, and that's what we're here to try to do is to sort out somewhere in between where the truth lies, but I'm not about to discount this report, because I am very comfortable with this, because this was an independent appraisal that was prepared for the bank, for the Glens Falls National Bank, and this one was prepared for Mr. Brock, with all of the qualifications and disclaimers. MR. ROULIER-I think it would be in the best interest of this Board to go to a couple of the local realtors, whether it be Owens/Davies or Levitt, to find out, factually, what properties are selling for in the Lake George area. - 20 - '- ~ (Queensbury ZBA Meeting 9/4/96) MR. CARVIN-Well, again, I could get two dozen decisions from four dozen different people, and, I mean, I don't have the time. The Town doesn't have the expertise nor the money to get 15 different appraisals. This has been submitted and this has been accepted. If you have another appraisal, I would be more than glad to entertain it. MR. ROULIER-I think that what you should consider is looking at what specific pieces of property in the Lake George area sell at. That's my only comment. MR. CARVIN-Well, I'm only concerned with this particular piece of property. MR. ROULIER-Okay, and I happen to believe that, based on my information of what properties sell for that $500,000 is a totally erroneous figure for that piece of property. MR. CARVIN-Okay. Again, you are entitled to your opinion as this is the public hearing. So, having expressed that, we will accept that. MR. ROULIER-Okay. On a couple of other issues I'd like to get on to. Apparently under the new proposal there's a large septic system that's proposed up, adjoining the Cleverdale Road. Is that correct? MR. CARVIN-I'm not sure. MR. ROULIER-Okay. Years and years ago, and I'm not sure who specifically put it in, but there were drainage systems put through the center of Cleverdale, and I happen to know that many of those drainage fields that drain from the center of the Cleverdale area itself drain down through various pieces of property into the lake, okay, and I'm very concerned that any massive type of septic system that could be incorporated into this proposal would ultimately make its way into those drainage systems and then down into Lake George. That's my first concern. The immediate resolution to that, of course, would be to have holding tanks for any commercial activity through the center of Cleverdale, and also holding tanks for any proposed boat cleaning facility that Mr. Brock may be currently proposing. The last question that I had was regarding the rate of return, and my understanding is, based on investments that I've' had, and other information that I've read, that the overall rate of return is based on what a dividend could be, and also what your investment is, and the investment itself. If you have a $10 investment and it goes to $100, that would be considered, lets say, a 1,000% return on your money. If Mr. Brock, for example, bought this with a net out of pocket investment, lets say, of $50,000, and he sold the property, lets say, for $1,050,000, that incremental difference or $1,000,000, would also be included in what his total rate of return would be. We just can't simply look at what the dividend or what the yield is in one particular year. The total rate of return is what we have to look at for the total time you are into an investment, and I think if we were to have an appropriate, reasonable assessment of what the property was worth and review what the equity is in the property, and I don't mean by that what borrowings are against that. I'm talking about what his out of pocket investment is, then this Board, with proper documentation could find out what a reasonable rate of return could be. Thank you. MR. CARVIN-Anyone else? DAVE KLINE MR. KLINE-Hi. I'm Dave Kline. of the Cleverdale community. I'm not a resident of Queensbury or I'm a local businessman in the area, - 21 - (Queensbury ZBA Meeting 9/4/96) and normally have a sympathy for business. I've been watching what's been going on with Mr. Brock through the years, and I felt' sorry for him, until just recèntly. Last year we bought a Hacker Craft boat, mahogany boat from Morgan Marine up in Silver Bay, and I had the boat for a couple of weeks and needed gas. So we've been buying gas at Hendersons and the Mooring Post for years, the family has, so we pulled into the dock, and the dock was in a little bit of disrepair. It had a post broken off and there was dock spikes sticking out of the dock, and the dock boy let the boat drift and it came up and smashed up against the dock spikes and put a couple of gouges in the boat. So I asked to see the owner, and Mr. Brock came down and offered to fix the boat, and I said, well, I just got it from Morgan Marine, and I don't want to take it out of the water now. I'd like Mr. Morgan to fix it when we bring it for storage there this winter, and he agreed to fix the boat, have Morgan fix the boat and send him the bill. So, I did that, and I sent him the bill this spring, when I got the bill, and didn't hear from him. I guess he called up Morgan Marine and complained about the $500 bill, and I called Mr. Brock on several occasions and he refused to take my phone call, had to cut me off because he was dealing with his lawyers on this project, I assume. I finally had to send my wife over to get payment on the bill. MR. CARVIN-Not to interrupt, but what has this got to do with the zoning? MR. KLINE-Well, it's about having a business such as this, an expanding business, getting in a residential community. I wouldn't want to live in that community with a business like this next door to me. We've been doing business with Hendersons for a long time. I remember when I was a kid, talking about runoff and degradation to the lake. I remember when I was a kid, friends of ours pulled up and got gas at Hendersons, and they stuck the gas thing in the thing and the gas thing broke off and it filled up the bilge with gasoline. They went into Sandy Bay and went back and said, hey, you know, there's gas in the bilge. So what did they do, they pumped it into the lake. When you have boats, oils and increased use of boats and maintenance of boats around the lake, you're going to have spills like that, and anyhow, when my wife, back to the story about the Hacker Craft, we tried to get Mr. Brock to pay for the damage this spring, and he negotiated some deal with my wife for a couple of hundred dollars and left us stuck for the rest of the bill. So we paid the rest of the bill and went on, and that's why I'm hear tonight. MR. CARVIN-Thank you. KATHY VILMAR MS. VILMAR-I'm Kathy Vilmar, Director of Land Use Management for' the Lake George Association. The Lake George Association has a long standing position on Marinas. That is Marinas should not be located in residential areas. I had an opportunity, the other day, to review the additional material requested by the Zoning Board at the last meeting. I'm not familiar with what standards the Zoning Board has set up for review of hardship claims on Use Variance applications, but while reviewing the information I noticed that on the document entitled "Memorandum Submittal" dated August 27th, Number Nine states that the present value of the land as a Marina is $500,000, and that the present value of the land as a residential property is also $500,000, minus what the 8/23 letter from the Bauer Appraisal Group says needs to come off of the property to make it residential ready. It doesn't make much sense to me. Lets say I have two pieces of property with frontage on Lake George. They're located near each other, both located in a residential zone. One is allowed only residential uses. The other, the second parcel has on it a pre-existing nonconforming commercial marina. The second parcel is allowed to continue that - 22 - -- .---- (Queensbury ZBA Meeting 9/4/96) commercial venture or go to residential use. It has a choice, residential or commercial, that the first piece of property doesn't have. Should both pieces of property be appraised at the same value? I don't think so. The residential parcel is restricted to a greater degree than the parcel with the pre-existing nonconforming use on it. Especially since that use runs with the land and can continue as long as the Marina use continues. It's difficult, then, to believe that the present value of the residential parcel is the same as the present value of the land as a Marina. It doesn't make any sense, and the LGA requests that the Board look further into it. The LGA would once again like to emphasize the findings that the Board needs to make to grant a Use Variance, and I'm sure you're all very well familiar with this, but I'd like to reiterate them for the record one more time. The Zoning Ordinance specifies "A variance to allow a use within ~ district other than the use allowable as a permissible use or site plan review use may be granted only in the event that all of the following circumstances are specifically found to exist by the Zoning Board of Appeals, and are each so stated in the Board's findings, and no such variance shall be valid unless all of the following circumstances are so found." That's a pretty tough criteria that this Board needs to meet. The Lake George Association believes, in reality, that this Board cannot find-that all of the circumstances listed under the Use Variance criteria apply to this Use Variance. Briefly, review of Number Four is broken into three parts, that the variance would not be materially detrimental to the purposes of this Chapter or to the property in the District in which the property is located. There is absolutely no proof or testimony that the expansion of this Marina will not be detrimental to the neighboring properties and to Lake George. The Zoning Board of Appeals cannot find that the variance would not be detrimental to the adjoining properties and to Lake George. That the Zoning Board of Appeals must find that the variance would not conflict with the description or purpose of the District or the objectives of any plan or policy of the Town. The purpose of Waterfront Residential zone is to protect the delicate ecological balance of all lakes, while providing adequate opportunities for development that would not be detrimental to the visual character of the shoreline. This Zoning Board of Appeals cannot find that this proj ect conforms to any plan the Town has for this area. Eliminating regulations on marinas, as you have done in your own Zoning Ordinance, speaks for itself. Also, the Zoning Board must find that this variance is the minimum variance to relieve any substantial hardship. It's not. The Zoning Ordinance requires the Zoning Board to make a factual determination of whether a proposal like this would further the goals and take into account the factors contained in the Comprehensive Plan. This proposal does not. Under the requirements of the Town's regulations, this Zoning Board of Appeals cannot approve this Use Variance. The burden of justifying change is on the applicant who stands to profit from the change, not on those who prefer to retain the character and the qualities of this area. Thank you. ESTHER FREDERICK MRS. FREDERICK-My name is Esther Frederick, and I live on the north side of the Mooring Post Marina. My house is right next to Mr. Brock's, and I might say at this time that Mr. Brock has always been, as far as neighbors go, a very good neighbor to me, but my reason for speaking tonight is to assure you all that, contrary to some of the rumors that I have heard, we certainly do not want to put ,Mr. Brock out of business. I would be one of the last ones to want this, because my father established the Marina in 1906, and r' would really hate to see it fail after all these years. What we do object to is the further expansion of the business, an expansion that I feel would have a serious impact on the surrounding neighborhood. You have already heard our many concerns, and I would go into that again. Please listen to the voice of the - 23 - (Queensbury ZBA Meeting 9/4/96) people. These issues are not only important for us, but also for the health of the lake, for our community as a whole, and for what might happen in the future, what might set a precedent to other areas in the Town of Queensbury. Thank you. TOM WEST MR. WEST-Good evening. My name is Tom West, and I'm an attorney, but I'm here tonight without any client. Some of you may recall or may have seen in the minutes that I've had some history with this project. I was representing the Lake George Association in 1988 when this project first came up, and the project fortunately resulted in a denial of the variance application at that point in time. I was here in 1994, when we went through the second round with Mr. Brock, dealing with a project after the buildings had been torn down, based upon the false information that had been submitted to the Building Department relative to calculations that ultimately lead to another denial, and the affirmance of that denial by the New York State Supreme Court. I have been asked to represent people here tonight, but in good conscience I could not ask anybody to pay me. They're in capable hands, but I come before this Board tonight because it's my legal opinion that any expansion of this Marina, beyond the level which existed prior to the time period when the buildings were torn down, would be both illegal and a travesty. Now, a number of people have focused on a great number of issues before this Board, including the many legal requirements that the applicant has to meet. Clearly it's the applicant' s burden to meet each and everyone of those requirements. What I would like to do is focus on a couple of aspects of those requirements that I feel are grounds for this Board to deny this project out right and to send it back to the drawing Board to re- plan a project that is consistent with the historical use of this property. First of all, I think it's very clear, when you look at the case law, when you look at professor Anderson's treatise on granting Use Variances of the kind that are being requested tonight, that you have to look at whether or not there is a reasonable rate of return from a permitted use, and you've had a great deal of testimony on that, and you've had appraisals, and people have looked at various permitted uses of the property, but a sub-component of that comes from professor Anderson's treatise, is that the applicant has the burden to prove that there is no reasonable rate of return from the existing nonconforming use. What I'd like to do is submit for this Board a copy of a decision, a recent decision, and I have one for Mr. Frankel, that was decided by the Appellate Division Court Department in 1989, and that is the Cohen vs. Han decision, which is found at 155 Appellate decision 2nd 969. I have a couple of copies for the Board and one for your Counsel, and this case confirms what is stated in professor Anderson's treatise, that it is the applicant's burden to prove, not only that there is no reasonable rate of return from a permitted use, but, if you look near the end of it, the Court went on to say that the petitioner failed to meet his burden of showing that he could not realize a reasonable rate of return by operating the subject property as a three unit dwelling, the legal nonconforming use. Thus confirming that it's the applicant's burden to prove that issue as well. Now, I watched with great interest the explanation of the various accounting numbers that were submitted to this Board back at the meeting on August. I happened to be on vacation, stopped in to see what Round Three was all about, and I noted the 1993 income statement that was submitted by Mr. Brock and Mr. Brock's accountants at that point in time, and I think you have that before you, and if you review that 1993 income statement, which if my memory is correct, is the last full year Mr. Brock operated before he tore down the old buildings, you'll see that he shows, using his own numbers, a profit of $108,720, and if I recall Mr. Brock's testimony given this past August correctly, I think he said that was a down year, implying that business was off. It had not re-bounded to some of the - 24 - -- '- (Queensbury ZBA Meeting 9/4/96) current levels, and yet he was still making a healthy profit. Well, if you apply the rationale of professor Anderson's treatise, and the rationale of the case that I've just handed to you, Mr. Brock has actually proven that he's not entitled to any variance at all, because he's proven that his prior nonconforming use, that is the use that existed before we went through the shenanigans that lead to the razing of the buildings, was turning a healthy profit, and under the case law, that means no expansion is permissible whatsoever. What does that mean? It means that the buildings can't be one inch longer. They can't be one inch wider. They can' t be one inch higher, and I wholeheartedly agree with the comments of many that you also cannot allow an expansion of the number of boats that were used, because that's the ultimate determining factor of how intense the usage is and how much impact there is on the character of this already very crowded community. I think it's also very refreshing, after having been involved with this project now for eight years off and on, both professionally, on behalf of clients and now personally, as a resident and lifelong part time resident of this Town, that the truth has finally come out, and we've heard what those of us who live on Lake George and spend a lot of time on Lake George have known for years, and that is that this Marina was really never very much of a quick launch facility. The quick launch was a secondary aspect to other services, boat sales and services, winter storage. I think the number of 60 boats that Mr. O'Connor referenced that comes out of the applicant's own appraisal, and that's a very important number, because there is a document submitted by a professional on behalf of the applicant that establishes that 60 boats was the level of quick launch use. That should be the starting point in your analysis as to what expansion is allowable. Let me also, for a moment, address some of the income data that has been submitted to you relative to years subsequent to 1993. Now I didn't have the time'to come up here and plow through the recent numbers that are' before you, but I'm quite confident that the applicant has bent over backwards to try and prove to this Board that he's not making money. Well, if any of you have been up there to look at this facility, you'll understand why he's not making money. He's trying to run a quick launch facility without the facilities for a quick launch, and he's competing against other Marinas around this lake that have much better operations. I would liken the situation to the Grand Union trying to operate a supermarket without a building, and coming before this Board with profit and loss data and saying, we're not making a profit. Therefore, we're not getting a reasonable rate of return on our property. Therefore, we're entitled to a variance. The simple fact of the matter is that because he tore down his buildings, he doesn't have the same capacity that he had before to operate a clean and efficient operation, and there's some people, when they pull up and are looking for a place to house their boat, and they see the boats housed haphazardly around the property on trailers will decide that this is not a first class operation. This is not the place for me, and they will go elsewhere, and I think that's, fundamentally, one of the reasons why the current income data shows that he's not making money, and I don't think that data has any validity at all. Again, the 1993 data shows that he can make a profit with the old, pre-existing historical use, and that's the only thing that this Board should allow. I'd also like to take a moment to address the SEQRA issue. I feel very strongly about the role that SEQRA plays in reviewing projects like this. What is an absolute travesty is the fact that this Board, in one form or another, and I know probably no one was here back in 1988, has been asked by myself, on behalf of clients, and by residents of this community to require this applicant to prepare an Environmental Impact Statement to deal with some of the issues that have been raised, to look at alternatives, alternatives to project design, alternatives to the way boats are handled, to look at some of the issues that are very real to these people, noise, odor from a forklift, the traffic congestion, the parking problems, the traffic congestion in Sandy - 25 - (Queensbury ZBA Meeting 9/4/96) Bay. If you recall, back in 1994 when I spoke to you, I mentioned that it was the area in Lake George that the Lake George Park Commission identified as being one of the greatest problem areas and warranting a buoy system because it was so congested, it deserved special attention, and that was a bold move for ,the Park Commission to go out and try and regulate, to try and de-intensify the use, because it was so intense, and you haven't even addressed that use in your Conditioned Negative Declaration. I think that I agree with Mr. O'Connor that the SEQRA regulations say that you may, at any time, go back and re-visit a negative declaration. I would go one step further and say it's the duty of this Board, once you identify environmental impacts that haven't been properly mitigated, to require an Environmental Impact Statement, so that if you're not prepared to deny this application tonight, on the basis of the total failure of the applicant to meet his burden of proof, the only proper decision is to rescind the Conditioned Negative Declaration and to require that there be a full Environmental Impact Statement. I'd like to address some of your conclusions and some of the problems that I see with the Conditioned Negative Declaration as it's written. Condition Number One, which talks about the right of the lead agency, that being this Board, to re- examine the impacts and mitigation measures if more than 140 boats are stored is like a license to this applicant to store more than 140 boats. You're telling him, go ahead and do it, and if we get enough complaints, we might make you come back. That is an unenforceable condition. It's not an absolute limit. The limit should be 60, not 140. It should be stated in black and white, and it cannot be written in terms such as this, that it is an invitation for the applicant to go beyond the numbers that you've said. Item Number Ten, the forklift issue. First of all, you are telling the applicant that the forklift shall not be activated with warning horns. Now I haven' t taken the time to research this issue, as to whether or not warning horns are required in this type of very congested situation, where this forklift will be backing up, I don't know, and I'm not going to tell you, that it is required under OSHA Rules and Regulations. I suspect it is. I suspect if OSHA did an audit of this facility, they would say that that type of back up alarm is required. I will say this, for this Board to sacrifice safety, in order to try and squeeze this oversized project into an already congested neighborhood and an already congested part of the lake is not proper. If a warning, a back up warning alarm is required, that shouldn't be waived by this Board. It exposes the Town to potential liability. It may expose the Zoning Board members to potential liability for putting that kind of condition in. Condition Number 11 delegates some of the very important issues concerning stormwater and wastewater management, particularly stormwater management, to the Planning Board. There are a number of cases that say that this Board cannot delegate its SEQRA responsibilities to another Board. If you can't answer the question tonight, as to whether or not this project is going to meet the requirements, the stormwater requirements, of this Town, the Lake George Park Commission, then you haven't done your job under the State Environmental Quality Review Act. I think you have similar illegal delegations in Condition Number 12, relative to the proposed landscaping plan. I have to ask this Board, after eight years of frogging around with this project, in one form or another, what's wrong with having a little truth and light shed on the project in the form of an Environmental Impact Statement? Clearly, there are impacts. Clearly this community will be dramatically and significantly impacted by this project, and it's very important, if this Board is going to entertain this project at all, that there be a full Environmental Impact Statement addressing all those issues. Thank you very much. I'm happy to answer any questions that the Board has or anybody else has. MR. CARVIN-Has anybody got any questions? Does Staff have any comments? Okay. Before we go on, I'm going to calla five or six minute recess. Okay. Yes, sir. - 26 - ~ -" (Queensbury ZBA Meeting 9/4/96) BILL WETHERBEE MR. WETHERBEE-My name is Bill Wetherbee. I live on Mason Road in Cleverdale. I would like to respond to some points made both tonight and at the meeting on August 14th. I would firstly respond to the assertions made about five or six speakers ago by an' employee of the Marina, who declared, among other things, that the level of business to be accommodated by these expansions will be unchanged from that which previously was the case, which totally tests the credibility of all of us who live on Cleverdale and have witnessed the operation. One simple statement within that set of statements establishes the invalidity of it. Consider this. He said that everything will be the same, but more employees will be added to accommodate these far more efficient operations. More employees will be added to accommodate the same number of boats, although the facility will be far, far more efficient. In an era of downsizing, when the basic thrust is to reduce employee levels, to use fewer personnel and concomitant expenses which they bring, we are to be lead to believe that the same level of business will be maintained, with more employees, and that this will be far more efficient. I don't know what kind of credibility that establishes with you, but if that doesn't say tremendous expansion, I don't know what else could. Why would one add personnel, to maintain the same level of business? Why wouldn't one have maintained it the way it was, if that was the case? Similarly, you were told, on that hand, that the buildings were entirely appropriate to accommodate sizeable boats. If so, why were they destroyed? Why were they knocked down? At another time, you were told they were no longer efficient, and that's why they had to be replaced, but he indicated they were entirely adequate to take sizeable numbers of boats at sizeable sizes. Which is it? Were they okay then, and if so, why the change, or were they not okay? Which was it? It has been stated previously, and I will not be redundant, but it has been stated, earlier this evening by Counsel for the applicant, that the problem was not self created. Nothing could be further from the truth. Counsel was not there in 1988 when the neglect and ignorance and lack of maintenance began, which lead to the fact that the claim was advanced that the buildings were no longer serviceable. No buildings could be serviceable under any conditions if they are totally and consistently ignored, and if their basic housekeeping and maintenance needs are similarly ignored. I would just like to underscore another thing that was repeated by a previous speaker. I believe that the use of data with respect to profit and loss for October 1994 is very deceiving. Why wouldn't the business profile change after the buildings are knocked down? Why wouldn't the profitability of the business change after October of 1994? To get a true picture of what was happening in terms of profit and loss, I think you have to look from that period previous to it, not afterwards. On March 20, 1996, this Zoning Board failed to approve a variance for an animal shelter to be erected on a 26 acre plot on County Line Road in a general locality where Light Industrial land uses are not uncommon. No approval for those variances. The variances failed to pass because the Zoning Board of Appeals concerns over the impact were' summarized by a member of the Board as follows "We couldn't overcome, in giving the variances, the effect on the essential character of the neighborhood." Twenty-six acre size, one and a half acres to be devoted to an animal shelter, couldn't pass muster because of the impact on the character of the neighborhood. We would ask for consistency of application. If, on a 26 acre plot, a one and a half acre animal shelter is unacceptable in an area which is Light Industrially zoned, how can a project of this magnitude be considered in a residential area on approximately two acres of land, if we are concerned about the character of the neighborhood? Finally, at the end of the last meeting, the Chairman of the Zoning Board advanced the opinion that the people of Cleverdale did not want a Marina. That was later confirmed in a private conversation by yet another member of the Zoning Board. - 27 - (Queensbury ZBA Meeting 9/4/96) I would like to respond that with an example, and just excuse my belaboration of the point. Slightly over one year ago, the applicant and his engineer summoned the residents of Cleverdale to a community meeting, no lawyers, no representatives of the Town, although Mr. Martin was good enough to attend, purely as an auditor, he will verify this for you, we were asked and told, as we came to the meeting, that we really were interested in soliciting our ideas, as to what would be acceptable. A large number of the people who are here tonight attended that meeting. Many others were there who could not attend. They came in good faith, because they were told that the engineer and the applicant really wanted to hear what the people wanted. As it turned out, the meeting was a ruse. It was yet another act of deception in this process that's been going on for over two years. We were not listened to. We were ignored. An extraordinary amount of consensus that was developed at that meeting was totally bypassed, but my question is this. If the people were not amenable to the continuation of a Marina, why did most of the people in this room tonight, and many others, give up an evening and go to be heard, and to express what they thought were their views on what was acceptable, only to find that they were being tricked and deceived? I believe that example further endorses what a couple of other speakers have said. Nobody contests the conceivability or the probability of the certainty that a Marina will continue, but we do contest an expansion of the magnitude that will irreparably damage, if not destroy, our community. Thank you. CAROL FREIHOFER MRS. FREIHOFER-Carol Freihofer. I live on Cleverdale. I recently initiated a petition in the Cleverdale area, asking property owners to oppose the proposed plans for the Mooring Post. At the time of my petition, I asked property owners what they would like the Mooring Post to do. The consensus was that the Mooring Post should replace what was there before the buildings were demolished. I have a petition with 108 names that I would like to submit to the Zoning Board. Can I give them to you? Who would like them? MR. THOMAS-Thank you. MR. CARVIN-I'll just note for the record that the petition signed by approximately 108 people has been submitted for the record. Why don't you read the top. MR. THOMAS-II Petition, August 1996, to the Town Planning Board and Zoning Board of Appeals, We the property owners of Cleverdale area are opposed to the granting of variances to the Mooring Post Marina. The proposed plans would permit expansion, and this would be a detriment to our community and the greater Lake George area. II There's approximately 108 signatures on this petition. FRANK ENGLAND MR. ENGLAND-My name is Frank England. I live on Hillman Road. I guess actually it's Harron Hollow now. I'd like to approach this from a little different side, and the things I've done over the past 40 years, some of my experiences I think dwell directly on what's going on here tonight. First, I've been a Chairman of the Board of Selectman in a town in Massachusetts, so I understand your side of the thing. However, my civilian experience as bonding contractors, they're the kind of bonds that contractors need when they build a school or they build a road, and our job is to analyze their financial statements, and 90% of the contractors that we bond are not large companies, but most of the companies are owned by one person, and so we have a difficult time in analyzing their financial statements, and I was here last week and I listened to the financial information that you were given, and in my estimation as a financial, doing analysis, you people were not given the - 28 - '-- (Queensbury ZBA Meeting 9/4/96) proper information, pàrticularly when you're dealing with a privately owned corporation. What you need is not just the income statement. You need the balance sheet. You need the profit and loss. You need the expenses, and you need the note from the accountant. In other words, what you do is you ask for the fiscal year statements and also what you would do in bonding, we go back and we ask for at least three years. We ask for their fiscal year ending statements and we also ask for the financial statements of any other entity that they own. Along with it, we also ask for his personal financial statement, all of the same date, because when you own various corporations, it's quite legal for you to change things through. However, if you give me a statement of one date, you can move an asset out of it, and then when you give me your fiscal year ending statement, you can put it back in. Therefore, you should ask for, and I would say in this case where they've torn the buildings down, I would think proper financial information for you people to make any kind of reasonable analyzation to see if this man is not getting a proper return would be at least four years. I would ask, and if he has any marinas anywhere else, he should have the statements, the fiscal year ending statements, done by an accountant, plus his own, personal financial statement of the same date. Also you should ask for the tax returns of the corporations that he's owned. Normally you wouldn't have to do this, but he is asking you for a variance on, that he's not making any money. If you look at your own Town law, on a Use Variance, it says here, substantially as demonstrated by competent financial information. The information that you had last week, you shouldn' t even have spent ten minutes on it. I think your Counsel finally said something. You shouldn' t have wasted five minutes on it. You gentlemen and lady have not gotten the proper financial information, and you've got grounds to turn this thing down until Mr. Brock gives you the proper information. Thank you. JANE FREIHOFER MRS. J. FREIHOFER-My name is Jane Freihofer. I've been here before. I'm terrible at this, but it's important that you know that I haven't changed one iota on this program. In fact, I feel stronger about it then when I spoke before. I own two properties, one house north of the Mooring Post. I thank you for your patience, and I know much of what I'm going to say is repetitive, but this business has dragged on far too long for any of us. Mr. West and Mr. 0' Connor have encapsulated everything that I can imagine that you'd have to know, and I won't dwell on it. I only have one point in coming up here at all tonight, and I don't see how you can deal with Mr. Brock's request knowing that one of the buildings that he's proposing is sitting on a residential piece of property. It's key. I mean, it's key to this whole thing. It has to be thrown out, doesn't it? I don't know the law, but it would seem to me that when I walk in my back road and I see this building that's going to be a giant, it isn't just the parking, the sewage, the cars, the noise. It's on a lot that isn't commercially zoned. I would think Mr. Brock's first move would be to come to you and try to get you, convince you to zone this commercially, and he hasn't done that. So I don't know where you are. I think you're back at Square One. Certainly for those drawings you are, if that's the case. Now tonight you've been handed 108 signatures. That's a lot of signatures, and this wasn't even begun to be covered. It was the people that were home, that Carol Friehofer worked down the road to meet, to talk to. She didn't try to convince them they didn't want a marina. We've never asked to have this Marina demolished. All we want is it kept down in size, keep those building levels right. Certainly it would look better than what I look at now. I mean, I look at those trailers and those hitches and the junk sitting up there in the road. It's not, I'm embarrassed. Everybody's embarrassed by it. It's not good for us, but, by the same token, he apparently does not want to discuss a plan where the height and the content and so forth is going to be - 29 - (Queensbury ZBA Meeting 9/4/96) as it was, and until he wants to do that, I'll oppose it every inch of the way. Thank you. We need your help on this. We're hoping you'll see it our way. JOHN SALVADOR MR. SALVADOR-My name is John Salvador. I'm here with my wife Kathleen. We're residents on Dunham's Bay. Earlier in the evening you were presented with an appraisal, which I believe lists the market value of this property, present day market value of this property. It's my understanding that an appraiser, in coming up with that value, is supposed to determine, by whichever method possible, what a willing and knowledgeable buyer will pay for the property. It's as simple as that, a willing and knowledgeable buyer. Key to our situation in North Queensbury is knowledgeable. It was mentioned earlier that the Lake George Association does not favor marinas located in residential zones. Prior to zoning in our Town, which I think goes back to 1968, most of the marinas in North Queensbury existed in their present form and size. In 1973, when we came here, our business was an allowable use. An allowable use, and we went through a series of hearings and permits and zoning changes and what have you until 1982, October 1982, when all of a sudden we became a pre-existing, nonconforming use. This is the situation Mr. Brock walked into. His business is a pre-existing nonconforming use, and yet it pre-exists the concept of zoning in our Town. Knowledgeable buyer. That's key. I don' t have any more to say. MR. CARVIN-Anyone else? Anyone else wishing to be heard? JOHN SKINNER MR. SKINNER-My name's John Skinner and I live on Cleverdale. It's been some time since I came to one of these meetings, and I'm embarrassed about that. When I did come, I made an analogy to this mural in the back, and I said, how would you like it if we painted a big blue aluminum building in that mural? I mean, obviously, that's not what people like to see on Lake George. That's not why people come to Lake George. That's also not a reason, necessarily, to deny Mr. Brock what he wants to do. There's a lot of other reasons you've all heard why it should be denied, and I agree with all of them. I'm sorry for him. I'm sorry for those people that work for him, who see to be the people who primarily are in favor of this. I signed the petition that Carol Friehofer came around with. She did not try to persuade me. She did not have to. I feel a little bit like I'm looking at O.J Simpson's Dream Team here behind me with the suits. I'm sacrificing an evening with an eight year old who I don't see very much because I work very hard, and I travel all week. My wife will be leaving at five o'clock tomorrow morning. will be gone for two weeks. We work very hard to live where we live. We just got our tax bill which was about $4700, but I don't mind that because, you know, where I live is very beautiful and I work very hard for that. This expansion, as far as I'm concerned, will depreciate the value of mY property. I had never, even thought about the liability issue for you guys, as far as somebody being injured. In my business, we do human resources out sourcing. I have an OSHA Safety Specialist on Staff, and I'm sorry I didn't know that that issue was going to come up, because I would have brought him because if, in fact, there is some sort of a horn that's required, Cleverdale is a very narrow point, and sound travels very quickly. If you've ever been out on the lake at night, which I discovered when I was about 16 and my father was waiting for me at the top of the stairs after I'd been out in the boat telling some off color jokes, the noise travels very easily. So, I mean, the thought of this horn every time someone is taking a boat across the road, which happens very frequently, because I go up and down the road every day for work, it's very distressing to me. If this was something informal and everybody said, okay, lets - 30 - ',- (Queensbury ZBA Meeting 9/4/96) see a show of hands for and a show of hands against, I think that the show of hands for would be very hard to see. I'm not sure, you know, I understand this is a volunteer thing for you folks, and I very much appreciate the fact that you're doing this and I just want to say that, as a resident of Cleverdale, I feel sorry for Mr. Brock. I'm not a confrontational type person. I tend to be kind of a person who tries to make everybody get along, but I have to say that I'm absolutely opposed to this expansion for all the reasons that have been stated before. Thank you. MR. CARVIN-Okay. comment at all? Anyone else wishing to be heard? Any public CHERYL EVANS MRS. EVANS-Hi. My name is Cheryl Evans, and I did not want to speak, but I think there's a couple of issues I would like to talk about, which you really don't want to hear, but it's number of boats that these sheds could hold. I had called the company, and I had given them the volume of these new sheds, and the company. told me how I could work it out, in regard to filling these sheds up with boats. Number of boats, for the total quick launch, is 168 boats, for quick launch. The total winter storage is 204 boats, for winter storage. This is excluding the showroom building that he has turned into a showroom, because everybody keeps forgetting about that building, but that building is where a lot of the boats were stored also, but now he has taken this building and made a showroom out of it. So he's trying to, you know, it's almost like a sneaky expansion. He's kind of left that big building away and then filled up these other buildings. One point I'd like to make is my property line is adjacent to the southern parcel on Mason Road. I have a garage that has a second story on it that has a window above it. If you put that building up, at 28 feet high, it's going to totally block the whole window. I'm 20 feet from the back lot, and 20 feet from the side lot. That building is, what, 10 feet from the property line. It's going to be right on top of my garage. Also, back in '73, what is now considered a showroom, they had expanded that building. So when they expanded that building, they had asked for a variance for my back property line, which I did not own at the time. So now that piece of property is encompassed with one building on the east, on the back, and now it's going to be on the side, and both of the buildings are about 25 feet high. That's just, you know, two corners of my property line is going to have building on it. The set up of the back buildings, I don't like the building that's on my property line because it's too close and it's too high, and also Mr. Haraden's, which is north of the property. He has a piece of land that is right next to that property line, on the other side of the property line, that has a septic and also his garden. So a 28 foot building is going to totally give him no sun, and then the building on my property line, you're going to be able to see it coming up Mason Road. Mr. Brock had talked about the boats being bigger these days, and, you know, he needs a certain size of the boats to have a business. I stopped by Parillo's, who's on the corner of Bay and 9L, and I asked what's the minimum size boat you need to go under this bridge, and his minimum height to go under that bridge is 58 inches. So, if you ever go on a weekend and you notice that Bay is totally packed on the weekends, wall to wall boats, wall to wall cars, trailers, whatever the case may be. So, at 58 inches high, you have, you know, an almost six foot high boat. So that's how I came up with the numbers of the new buildings being three times, three stories high of boats being, actually three stories. So we're going from one story to three stories. I mean, that's just a visual thing. That's the impact, and that's what I'm opposed to, and I think that's it. MR. CARVIN-Anyone else wishing to be heard? Did you have another commènt, Mike? Okay, if there's no other comment. - 31 - (Queensbury ZBA Meeting 9/4/96) MR. 0' CONNOR-Just so the record is clear as to what I said or didn't say, we have adopted the figures that Mr. Brock has submitted, and used those figures, and I'd just caution you. I'm not sure where his personal financial statement would begin, as opposed to what he's shown as his business financial statement. I know, last month, you asked for personal financial statements as well, and I haven't seen them submitted in any form or any personal income tax returns submitted in any form. I'm presuming, and maybe I should ask or somebody on the Board should ask, whether or not his return, as he's shown, and it's something that occurred as I sat here. I'm presuming that that included the rent that he gets from the two apartments, although that may go on a personal income statement because he owns the property personally. I'm not sure if he rents, I guess he rents to the Marina operation, but $96,000 a year is the tenant, or the apartment sub-tenants of the Marina operation and the money goes into the corporate statement or not, but that, if you get to the nitty gritty, there's another $8400 I think that the appraiser used for income for the apartments, and I presume from information that was supplied. I don't think that that's included. So I think you ought to be clear as to whether or not all sources of income from this particular property have been reflected in the information that has been submitted or is there something outside of that that has not been put on the table-. In my statement as to the appraisal, I didn't argue with the appraisal, in all honesty. What I pointed out was the information that was oddly supplied to the appraiser and reported in that appraisal that is very contrary to what has been submitted by the applicant up to this point. As to marinas being an allowable use in this district, I honestly don't ever recall a marina being an allowable use any place within the Town, contrary to what Mr. Salvador has said. It's never been an allowable use. They've always been nonconforming uses since 1967. It's kind of like fraternal organizations, and then I think fraternal organizations and maybe funeral homes. Until people started moving out of Glens Falls, we never had those in any schedule either, and we created them, I think, when the Elks came, or after the Elks came and the K of C came and then a couple of funeral homes came. A marina has never been a conforming use within any version of the Ordinance. It's always been a nonconforming use. The most interesting thing of what's being presented tonight, even the comments of the employee of Mr. Brock, is that a variance isn't necessary. He says that he can operate now with 140 to 150 quick launch boats, without this building. He says he can store on site 200 buildings for winter storage. I'm totally confused, and I'm not being facetious on purpose, or for the sake of being facetious, but that's the record that you have in front of you. That's the basis that you're looking at to determine whether or not a variance is justified. A manager, or whoever this fellow was, came up and spoke, and said, we operate right now with 140 boats quick launch to 150. We have 200 winter storage. I think you really have problems coming over the hurdle and the burden of proof that the applicant needs. MR. KLINKWITZ-Donald Klinkwitz, again, an employee of the Mooring Post. I said we could operate now with 140 quick launch boats. I didn't say we had 140. It's no problem for us, would be no problem for us, to operate, to quick launch 140 boats with the facilities that we have and with the equipment that we have, with a building, without a building, and I'd be willing to answer any questions or even give a demonstration if that was needed. MR. CARVIN-I don't have any questions. Does anybody else have any questions? MR. KLINKWITZ-Just to clarify what I said. MR. CARVIN-Okay. Thank you. Mr. Salvador? MR. SALVADOR-John Salvador again. Up until 1982, we were in an R-4 - 32 - -- (Queensbury ZBA Meeting 9/4/96) zone on Dunham's Bay, and a Marina was an allowable use. What the Mooring Post and that area was zoned at, I am not sure. Mr. 0' Connor is exactly right. Marinas are not an allowable use anywhere in the Town of Queensbury. This is a prime example of exclusiary zoning, and Mr. O'Connor and Mr. West can both speak to the court decisions that have been made in that regard. It simply is not allowed, exclusiary zoning. JUDY WETHERBEE MRS. WETHERBEE-My name is Judy Wetherbee and I live on Mason Road, and Mr. Klinkwitz said that all the boats there could be quick launched. That is not true because there's one particular boat that would sink if it was put anywhere near water. This is what happens all the time. We're given figures. We're given facts of numbers. It doesn't count how many boats, and as I say, that one in particular, there's no way it could be quick launched. If you would just consider and if Mr. Brock would just consider and listened to us in the very beginning, we wouldn't have had to have all this. The buildings were inefficient. We recognize that. Build the same square footage, not cubic feet, square footage, stuff them with boats, and nobody would complain. If you go higher, you get twice or three times the number of boats. That's too many for Lake George, and as Lake George goes, so goes the Town of Queensbury, and you're all members who live in the Town of Queensbury, I assume if you're on this Board. What happens at Lake George directly effects the Town of Queensbury so much, and if you mess it up with this Marina, and then you begin getting requests from eight or nine other marinas, which you will, because they're just waiting to hear the results of this, you're going to have a heck of a mess on your hands. Thank you. MR. CARVIN-Is there anyone else wishing to be heard? Okay. Any correspondence, Chris? MR. THOMAS-Yes. We received two letters. I won't read them in. I'll just state that a letter dated 8/15/96 from Judy Wetherbee, and a letter dated August 28, 1996, from Carol L. Friehofer, put into the record with the other letters. MR. CARVIN-Okay. Anyone else wishing to be heard? Last call. MR. FRANKEL-Mr. Chairman, Richard Frankel on behalf of the applicant again. We would like to be able to respond, on the record, to some of the issues that have been raised, if I could just have maybe a five minute recess to confer with the accountant, the appraiser and my client. I don't want to delay this too long. MR. CARVIN-Five minutes is fine. MR. FRANKEL-Thank you. MR. CARVIN-Okay. Mr. Frankel, you wanted to make some comments? The public hearing is still open. MR. FRANKEL-Thank you, Mr. Chairman. Just to clear up a few items that we talked about tonight, one, I believe somewhere along the way, I believe it was Mr. O'Connor indicated that the building sizes are not consistent with what was originally on the site, in terms of height. I think if you take a look at, and he was looking at the appraisal. I think if you take a look at a close look at the appraisal, the appraiser is talking about averages between the eaves and the peaks, and if you take a look at Mr. Nace's 3/16/96 proposal, we're talking basically the same thing. One, the appraiser is dealing with averages, heights, taking 11 and 24 and taking an average, and Mr. Nace laid out what the building heights were at the eaves and at the peaks. So I just wanted the record to be clear on that. The number of the boats have been 140. Mr. - 33 - (Queensbury ZBA Meeting 9/4/96) Brock has indicated, and will talk to that again, about why they have reduced to a number, because the new boats that presently exist, from what Mr. Brock tells me, are wider and larger and necessitates this larger building. The boat calculations on Page 29 that Mr. O'Connor referred to of the appraisal, Mr. O'Connor's statement is incorrect, because part of the main building, I believe was to be taken down, and if you throw in those boat numbers, you come back up to the original numbers, rather than the, I believe it was 60 or 89, I don't recall at this point, that Mr. O'Connor was mentioning. We've heard some testimony as to why would you need two new forklift drivers and two new employees in the yard, and Mr. Brock will explain that further. It is a more efficient manner from the way it's been explained to me, in that you are stacking and being able to use a forklift to pull the boats out as opposed to having to move two or three boats to get to another boat, and this requires the additional manpower. Mr. 0' Connor raised the issue, he didn' t understand why Route 9 financing was even involved. I submit to the Board that's fully explained in Item Number Five of our memorandum submittal, which shows that the monies were infused into the business. The collateral was other property, which goes right to the point that this business needed additional capital that Mr. Brock infused into the money into it, due to a changing business climate, due to the new types of boats that we've heard from the size of the boats that dictated that money be infused in there, and the necessity of this variance to state that you can't infuse money into a business to keep it going, I think is ridiculous and I was surprised by that comment by Mr. O'Connor. There was an affidavit of Cathy Poland. She's not here. I've read the affidavit. It's not clear to me if she's stating upon information and belief or if it's an affirmative statement. It looks to me like she's stating upon information and belief as to this residential lot versus commercial activity lot. I believe that this was a variance that was granted and Mr. Brock will indicate that, to his knowledge, it's been used consistently since the variance was granted for commercial purposes, even though the building for which the variance was granted may not have been built. The other issues that were raised were that this property is not unique and that this is a self created hardship. That is not the case. This is a nonconforming use in a residentially zoned area. The building permit that was issued was revoked after the buildings had been torn down. I don't want to get into the legal aspects. I rely upon your own Counsel to tell you, but we're not talking here about the vested right issue. That's for another forum at this point, but the case law in this matter is clear, and that is reliance even upon an albeit possibly improperly issued building permit. The Board can take that into consideration for uniqueness as well as for it not being a self created hardship. I don',t have the cases with me, but for the record you can look at, 142 Appellate Division 2nd 848, 169 Appellate Division 2nd 896. There's also a Court of Appeals decision in this 22 New York 2nd. I don't have the specific, I may actually, have the specific site, and I can get it to you, but this line of cases does indicate you can take into account the fact in determining to grant a Use Varianc~ and an Area Variance the fact that there was reliance on a building permit issued, even if it was later turned out to be improperly issued, and for that matter that line of cases also indicates that you can also deal with the expenses that were incurred in reliance upon the issuance of that permit, and those have been broken down as well, in the materials that were provided to you as part of our most recent submittal. Just to sum up, in terms of the character of the neighborhood. We've gotten one page letters from an appraiser, from Mr. O'Connor with no background or credentials provided. We did provide a letter from our appraiser, Beaty Appraisers, that indicated that the values of the homes in the area would not be adversely effected, attached to the original Mr. Beaty appraisal Mr. Beaty originally submitted here was also his credentials. I believe in the SEQRA review you've gone through such things as noise. You have gone through such things as - 34 - '- (Queensbury ZBA Meeting 9/4/96) parking. You've taken a look at the color of the building, the landscaping, all these things, and have determined that these mitigate any effects that the character of the neighborhood would have. This is a unique site in that it is, has been a Marina since 1906. I'm going to stop now and let Mr. Brock talk a little bit further about the need for these Use and Area Variances in relation to the boat sizes and the building. Then I would like the accountant to come forward to explain some of the financial matters that have been addressed by the accountant brought in by Mr. O'Connor. JOHN BROCK MR. BROCK-My name is John Brock, the applicant. In explaining the. numbers of boats that we've been dealing with, we have said right along, okay, that in the past, at times, we have had 140 quick launch customers. As Don stated, there are probably 120 to 30 boats on the site right now, of which about 80 of those, 75 to 80 of those, are on quick launch. Some of those boats are there for service and some of those boats are boats that are there for sale. We haven't said that we could do 140 boats right now. We could quick launch boats, if we could get the customers. However, without having inside space to store these boats, leaving the boats out in the weather, and having the sun fade them, we cannot maintain our customer base. It keeps dwindling. That's the reason for the decline in the customer base along with that fact that the original buildings were too narrow, okay. Yes, we did have some buildings that had doors high enough and we could put boats in with radar arches. That was two buildings out of the five, okay. Several of those buildings that we couldn't put the bigger boats in, and therefore, we would lose space inside. We would have to put smaller boats inside those buildings, and line them up. So we may have to move three or four boats to get one boat, just to try and keep a customer base. It was so inefficient that it didn't work. The new building, having a fork truck operator does not require more boats. What it does is requires a person to make a move. This person will move the boat, like Don said, from the rack to a stand where the tractor driver takes it to the lake. It's still one boat, okay. It may take two moves, but every boat is always accessible. The other buildings, if we filled it full of boats, we would have to jockey three, four boats around in order to get one boat out. That took far longer than what it's going to take under the new system. As far as the winter storage goes, again, we can probably put 200 plus boats on the lot right now. I know we can, but we can't get that number of customers for outside storage with everyone else offering inside storage. Our buildings are obsolete. That's why we came for the proposal, to get the bigger boats inside. There are more bigger boats now than there ever were. You were told about Parillo's docks. All of the boats at Parillo's docks have to go under the bridge, okay, on Route 9L. None of his boats will be large, because they can't go under the bridge. That's not the average on the lake. Most boats on the lake, as you can talk to Mr. Salvador and look at the boats along his marina, are far larger than that. They can't go under the bridge, and that's the way it is with most boats on the lake. So therefore you won't get three boats high in these buildings. You won't get 160 some boats. I've had letters from manufacturers which have been submitted which tell you that we will probably lose at least 25 to 33% of our boats because we came down from 35 feet to 28 feet, 140 boats will be all we're able to get as far as quick launch goes, and then maybe we will get boats in the aisle. We will' get boats in the aisle for winter storage, and the remainder· will be outside. That's how we'll make up the 200, and that's how we'll make up the 140. You will not get three boats high in those buildings, and as stated by professionals in the letters we submitted. I don't know, does anyone have any other questions? MR. CARVIN-Has anybody got any questions? - 35 - (Queensbury ZBA Meeting 9/4/96) MR. FRANKEL-I'll have the accountant come forward. JOHN SKELLIE MR. SKELLIE-My name is John Skellie. I'm a CPA with the accounting firm of Bud & Cariota. One thing is, I was just recently engaged by John Brock to come in and take a look at the prior three year statements that had, I believe, previously been seen by the Board, and one of the things we do when we are engaged in this type of situation, and it's very similar to when we're doing a business evaluation, is to try to take a look at the financial statements as they were prepared, and I believe, it's my understanding that these statements were not prepared by a CPA. They were prepared by an accountant. They are not compiled, reviewed or audited financial statements. So some of the people had said that the data is not reliable, and to some extent that's true. So what we try to do is take a look at it and come up with a revised income, a more accurate income if they were prepared by CPAs. So some of the adjustments we've done, and it's very typical. We call it, we normalize the earnings, and one of the key things we look at are any payments made to related parties. In this case one of the key areas is rent expense. On these schedules that were done by Paul Dowen, he is adding back $96,000 for rent expense, and when he does that, what he's doing is he's allowing zero expense for the rental of the property at the Mooring Post, which, I don't know how anybody could go into a business, operate that property, and not pay any rent. So what we try to do is determine what a fair market value rent would be, and adjust the net income, and the other adjustment that we thought should be made is an adjustment for officer's salary, which Paul Dowen has put in on the schedules that he has done. So if you took a look at the net income for '94 and '93, not even considering '95, after the buildings were torn down, if you make an adjustment for rent, if you adjust it up to $96,000, and if you make an adjustment for officer's salaries, there is going to be a loss for '94 and '93. I've heard a lot of people come in here tonight and say that there was income in '93. If you normalize the income, there is no income. There was no income in '94, and if you normalize the income in '95, there is no income in '95 either. One thing with the rent, the argument is made that rent is being paid to John Brock who is a related party. If you take the rent expense out, John Brock personally has to incur a debt service on that piece of property. If the corporation Mooring Post doesn't pay it, then John Brock personally has to pay it. So whether you add back the rent expense that the corporation pays or add back the debt service that John has to pay, you're still going to come up somewhere in the neighborhood of a $96,000 expense to operate that property. MR. CARVIN-Excuse me just one second. You said there was, you're giving us '94 and '95 figures? MR. SKELLIE-'94 and '93. MR. CARVIN-Okay. You said in '94 there was no profit and in '93 there was no profit? Did I hear that correct? ,MR. SKELLIE-From information that was provided to me, the '94 net income that was on information done by the accountants that John Brock had engaged in '93, there was a $30,000 net income, approximate. MR. CARVIN-Are you familiar with the 1994 appraisal, that in the back of that that they have the balance sheets for '91, '92 and '93? Were you able to look at those? MR. SKELLIE-I have not seen them. MR. CARVIN-Page 123, starting at 123. Just to keep it on the - 36 - '- (Queensbury ZBA Meeting 9/4/96) simple side, because I'm not a very complicated person, but if I take a look at the Page 123, and I see the column "Mooring Post", which is one of four enterprises that apparently are being operated by J & A Marine Enterprises, can I ascertain that he made $148,000, or is that a loss in 1991? MR. SKELLIE-That's a loss. MR. CARVIN-That's a loss in '91, and can I assume that in 1992, again on Page 125, that I have a profit of $53,000, approximately? MR. SKELLIE-That's correct. MR. CARVIN-And in '93, on Page 128, I have total income of $108,000. MR. SKELLIE-That's correct. MR. CARVIN-Okay, and then a pro-rated '94, because that was only based, I believe, on 10 periods, I have, and that's on Page 133 I believe, an net operating income of about $5,000, or am I wrong on that, is that $110,OOO? I'm not sure. .--- MR. SKELLIE-I think if you look on Page 134, the next page, the actual bottom line appears to be, I believe it's, the income before taxes of approximately $4,000 less the New York State Franchise tax of approximately $3500. So there was income of approximately $500. MR. CARVIN-Okay, but what's the 20 periods $126,000? MR. SKELLIE-Okay. All right. It would be $124,000, in profit. MR. CARVIN-In 1994, and you just indicated 1994 he didn't make anything. I mean, did he blow $124,000 in two months? MR. SKELLIE-No. If you take the full year for '94, the actual income reported for the year, was approximately $30,000. MR. CARVIN-Okay, but is that inconsistent with these figures that were through ten periods I guess is my question. MR. SKELLIE-I don't know. I mean, I was not involved with this ten period statement. It's hard for me to say why there was such a big change from 10 months to 12 months. MR. CARVIN-Yes. Well, you see what this Board is confronted with. I mean, I'm looking at an independent appraisal that was done in 1994. MR. SKELLIE-I would question a 10 month statement. I would rely on the accuracy of a 12 month statement. MR. CARVIN-As luck would have it, I believe we have the people that did the appraisal. Can you tell us where these figures were derived from? Do you stand by these figures? Page 134. I just want to know if I'm reading this right, that's all. MR. SKELLIE- It would appear to me that these statements were internally generated on a computer system. It looks like a computer print out. MR. CARVIN-Okay, well, I'm just saying that it's part of the record here, that I've got to make sure that it's accurate. MR. SKELLIE-Okay. Just to let you know, a lot of times internal statements prepared on a 10 month basis do not take into account a lot of adjustments, and especially if it's being done not by a CPA, but by probably a clerical person, not even an accountant, in - 37 - (Queensbury ZBA Meeting 9/4/96) house, no outside accountant, I would guess there would be no outside accountant involved in the preparation of this 10 month statement. MR. CARVIN-Okay. Well, I'm going to ask the appraiser if that's the situation here. How were these figures derived and when did they come? MR. BAUER-This is information that was provided by the Mooring Post to us. MR. CARVIN-Okay. How about all the previous? These were all Mooring Post? And again, I'm coming down to that, through 10 months, the Mooring Post is showing, and I just, and I'm showing approximately net income before taxes of roughly $124,000. I just want to make sure I've got a figure on Page 134, that I'm reading this correct. MR. BAUER-That's what this is showing. MR. CARVIN-That we have a net income before taxes. MR. BAUER-Our valuation was based on an analysis of historical information that was provided for us, reconstructed our operating statement. all the and we MR. CARVIN-Okay. So that we are looking at approximately $124,000 income before taxes through a ten month period, on Page 134, and the CPA is indicating that when the actual figures were filed that we only had a total income of $30 some odd thousand, was it? MR. BROCK-I could explain it. MR. CARVIN-Okay. MR. BROCK-The information given on a 10 month basis, okay, our year end is September 30. The bulk of our income for winter storage is generated from October 1st through January, for winter storage, and then in January we start building our quick launch for that season. Those monies come in, starting in the spring, through June when most of the people have their boats in. At that point, we will have, the bulk of our income has already been brought into the business. While we're launching the boats, during the summer, and everyone is there working, we are working off the income for the last two months that has been generated before that. So our tax return for that year showed what happened the last two months. Your expenses the last two months will be extremely high, compared to your income because there's nobody, at that time, that's paying quick launch or dockage. That's all contract money that comes in first. Your dockage money is all contract money that comes in early in the season. The last two months, you work at a minimum income and rely on what you have taken in previously for your dockage and your quick launch services and all your other, what you're going to do. MR. CARVIN-I'm not arguing that, John, but I'm seeing that your net income, or your net sales during that 10 month period was $378,000, and these are net figures after expenses. So what you're saying is there's an additional expense from that two month period that would substantially reduce that down? MR. BROCK-Yes. That's why the tax return, okay, these were figures taken from the books and off the computer, and then we filed that tax return for that year. So if you look at the tax return figure, that'll show you what the total income was for that year, and you do have the financial statement and the income statement taken from the tax return, and for '94, the income from the operation was $32,309. You have that statement. - 38 - -...- ..- (Queensbury ZBA Meeting 9/4/96) MR. KARPELES-What page are you on now? MR. BROCK-I'm on the statement which compares '93, '94 and '95 that was submitted to you. MR. O'CONNOR-Mr. Chairman, I think he's reading from the statement Mr. ,Dowen submitted at the last meeting comparing what his financials were at that time. Remember we did the three column analysis? MR. CARVIN-Yes. MR. O'CONNOR-I think that's what he was just reading from. MR. BROCK-Yes. That is from theirs, and we submitted income statements for three years to you, and they were taken right off the tax return. That information was submitted on the original proposal that you had in a blue book I think at one time. MR. CARVIN-Okay. We've got two blue books. MR. BROCK-We submitted three income statements when you originally asked for them, , 93, '94 and '95. They were the original submittals, and those were right from the tax return. The '95 was revised after the tax was done. That's why you had two columns for , 95 . You have one, and then you have another one that was slightly different after the tax return finished. MR. FRANKEL-If I remember correctly, Mr. Chairman, from the last meeting, when we also turned in all the balance sheets, and Staff was kind enough to make copies and distribute them. MR. CARVIN-I've got it here, I'm sure. MR. SKELLIE-Just to point out a big difference in the expenses that are on the 12 months but not the 10 months. There is depreciation expense of approximately $45,000 on the 12 month statement, and there was rent expense of about $42,000, which is approximately $85,000 in expenses. On the 10 month statement there is depreciation of approximately $2,000, and there is no rent. So there's an increase of approximately $83,000 in expenses on the 12 month statement that don't show up on the 10 month statement. MR. CARVIN-Okay. MR. BROCK-On that statement, when that appraisal was done, the tax return was not done at that time. That was two months prior to our year end. MR. CARVIN-Okay. MR. BROCK-We have a copy of this submittal that was submitted to the Board with a letter, and the three submittals. MR. CARVIN-All right. Well, I've got mine here. I don't want to take yours. MR. FRANKEL-I think, Mr. Chairman, for purposes of the appraisal, because you were asking the appraiser, he can answer the question as to how he derived the amount, using a reconstruction of the numbers that were given. MR. BAUER-That one column for 1994, the 10 month, is not what we based our valuation on. We looked at a historical income and expense statement of the past three or four years whatever it was, I forget off hand, and reconstructed our operating statement, which was shown earlier in the appraisal report, and that's how we did it. We don't just look at one column of activity, because it - 39 - (Queensbury ZBA Meeting 9/4/96) wasn't even a complete year. We looked at, historically, what was happening, and based the projection on that. So that one column you're looking at really doesn't factor into the whole picture. MR. CARVIN-Okay. So what you're saying is that that 10 month period is an average? Am I understanding that to be correct, an average of previous activity? MR. BAUER-It reports what happened in that 10 month period, but it's not reflective of the whole full year. As Mr. Brock said, timing of income and expenses isn't always equal every month, and this is the nature of that business. So we look at it over a historical three or four year period and reconstruct our operating income and expense statement, which is the basis of our value. MR. CARVIN-Is there anything that you'd care to add? MR. SKELLIE-Yes. I would just add that a lot of times internally generated statements, especially something from an interim period, which a 10 month statement would be. The people doing the work, and the person who generated this, was somebody, an employee of the Mooring Post, probably a clerical person who does bookkeeping, but probably has no formal accounting training. If we, as a CPA firm, were to come in and issue a 10 month statement, we would make numerous adjustments to this statement and the net income would look nothing like it looks on this internally generated statement. It would decrease substantially, and it's not something that's uncommon. Even if, I would make an educated guess that if I looked at the internal 12 month statements and what they showed as a net income versus what was reported by the accountant engaged by John Brock at that time, there was probably also a large discrepancy between the two. MR.. CARVIN-Okay. Did you have a question, Mike? MR. 0' CONNOR-Let me ask YOU a question. As I understand the Board's task here was to determine the rate of return of Mr. Brock from this property, and rental income to him should be included whether it was paid by the corporation or paid by the apartments, and I understood that there was a question as to including of the rent in our calculation of the actual rates of return. I don't know how you would exclude that from the actual rates of return, although it might be fuzzy because you still don' t have his personal information, and apparently even his corporate information might be questionable because it's only a compilation of what was reported to either the CPA or the appraiser. Shouldn't the rent that was paid to the owner of the property be considered as part of the rate of return to the owner on the property? MR. SKELLIE-If you're looking at a combination of both the corporation and personal property, yes, but you also have to take into account the expenses that are personally incurred, which there are no expenses on this schedule. If you're going to put in the rental income, you have to put in the expenses. You can't ignore the debt service on the rental property and pick up 100% of the rental income. MR. O'CONNOR-Does the accountant understand that we were told this was a debt net lease? MR. SKELLIE-Yes, I do. MR. O'CONNOR-So that the expenses of the property were included in the financials of the corporation. MR. SKELLIE-The real estate taxes we've included. Repairs and maintenance we've included. There would be no interest expense or debt service included. - 40 - "- -' (Queensbury ZBA Meeting 9/4/96) MR. O'CONNOR-I would partially address that, but I just wanted YOU to understand why the rent was in there and have this fellow agree that the rent should be included, if you're looking at the whole picture. MR. CARVIN-Okay. Well, I just want to find out what years he made a profit over the last four, for example. MR. SKELLIE-If I take the '94 income of $30,000, I'll start with '94, and make the adjustments that we would make to normalize the income, we would bring the rent expense up to $96,000. What is in here right now is $42,000. So we'd have to increase the rent by approximately $54,000, the rent expense. MR. CARVIN-Okay. Can you describe for me what the rent expense really represents again? MR. SKELLIE-It represents an approximate fair market value of what the rent would be on that property and we came up with the $96,000. It's a historical figure that was used for the debt service back when the property was first acquired. MR. CARVIN-Okay, but are you also aware, again, I'm going to go back to that the only year there was no rent was, I believe, 1993, and that in 1991 there was rent of only, I think, $10,000. The amount is an arbitrary amount, is it? MR. SKELLIE- Yes. A lot of times, and we run into this all the time' on business evaluations, the amount of payments being made to related parties is most of the time tax driven or just based on what the company can afford at that time. It is not something, when you're dealing with closely held businesses, because you do not have a bonafide, non related party transaction, the rent expense is not what it would be if you had two parties that were not related. So if the Mooring Post cannot afford to pay the rent, John Brock will forgive the rent to the Mooring Post. Any other landlord would not do that. John Brock still, personally, has to come up with the debt service and all of the expenses he has personally on that rental property and has to pay it personally. So the reason for the fluctuations in the rent expense on the corporate books is really tax driven and based on what the Mooring Post economically could pay during those years. MR. CARVIN-Okay, but correct me if I'm wrong, then, the rent still is revenue driven. Is that correct? If they did not earn $30,000 then they would not pay the $30,000? MR. SKELLIE-If the Mooring Post did not have the cash flow to pay the rent, it would not pay it. MR. CARVIN-Okay, but when I see a rent figure of $30,000 or $10,000 or $96,000, can I assume that there was revenue behind that, because I realize it may be just going from one pocket to the other, but it's still real money, or are we just playing with an illusion here? MR. SKELLIE-Because I did not prepare these, I don't know if the rent was actually paid in cash or if it was booked as a payable on the corporate books. MR. BROCK-The Mooring Post property had a mortgage with First National Bank of Glens Falls. I, personally, own the property. I had to issue First National Bank a check every month, depending on the interest rate ranging between $7300 and $7600 a month. That was for the mortgage, that was in my personal name. I tried to get the Mooring Post to pay $8,000 a month, which would give me the $73 to $7600 to give to First National Bank, and I would have the other $700 or $500 left over. If the Mooring Post could not pay me the - 41 - - (Queensbury ZBA Meeting 9/4/96) money, which comes to $80 some thousand a year, or almost $90,000 a year they were supposed to be paying, if they couldn't pay that $96,000 a year, lets say they only gave me, in that one year, $40,000, I still had to pay First National Bank $85,000 or $90,000, whatever it was. So that meant that I had to go to another source, whether it be other investments in stock, whether it be rent on other property over at the Route 9 Mall, whether it be anything. I had to take money from some place else to pay that mortgage. So even, if they didn't give me the money, I had to go elsewhere and find it, and it would be the same thing as if you had to pay $90,000 a year, and they only gave you $40,000. That would be your problem, and that's why I say, if I put that on the books, and carried it as $96,000 every year, the Mooring Post financial statement would be so drastic that they would be in debt by hundreds of thousands of dollars. MR. CARVIN-Believe it or not, I understand that, John. MR. O'LEARY-Could the mortgage not be taken out in the name of the company? MR. BROCK-It could have been, okay, and it was advised at that time, when we bought the property, to put the property in.- our personal name, okay, and have the corporation run, so that if there was a lawsuit or something against the corporation, we, personally, would try to have some shelter from that. So the property would not be attached, but the assets of the Marina, such as whatever it owned, could be. That was recommended by lawyers and accountants when we bought the property. So that's the way we did it. It could have been, but we had to sign personally on the note anyway. MR. O'LEARY-Well, it's just that you're saying it's a legitimate expense of running the business, a debt service. MR. BROCK-Yes, it is, a debt service. MR. O'LEARY-Unfortunately, it appears to other people that it's an income in the form of rent to you. MR. BROCK-Yes, but it is a debt service. That's exactly what it was, and we did submit that note from the First National Bank. MR. O'LEARY-That's why it would have been cleaner to have it in the company name to begin with. MR. BROCK-It would have been, and that's why we submitted the note from First National Bank on the property, showing that we had that mortgage on that piece of property which was described with that note. MR. CARVIN-But let me ask you this, in the same vein, could not the Mooring Post also payoff the debt service of another? Lets say that the Mooring Post had the money and you didn't. Could the money not go to your personal residence? MR. BROCK-If the Mooring Post had the money, it could have, but the Mooring Post didn't have the money, and as we go back through the years, you can go right on back to, I think you have statements back to '91. MR. CARVIN-I've got '91 in this report here. MR. BROCK-Okay. You can see where, from '91 to date, the Mooring Post has not had the money to pay the rent, and it has been being supported by other assets. It has never come up with the $96,000. It did in the first early years, okay. We were collecting the rent, back in the early, well, the mid 80's. - 42 - ""-' '-' (Queensbury ZBA Meeting 9/4/96) MR. CARVIN-Well, can I assume that if we go from, and I'm looking at the liabilities on Page 126 for the stockholder, and I'm assuming you are the stockholder? MR. BROCK-Yes. MR. CARVIN-Okay, and we go from a stockholder liability of $227,000 in 1992, yet in 1993, that same liability is now at $93,000. MR. BROCK-From 1992 to 1993. MR. CARVIN-If you look at Page 126, I'm showing a loan payable stockholder $227,199, and in 1993, on Page 129, I'm looking again under that same column, that that loan payable is reduced down to $93,000. MR. BROCK-That's true. MR. CARVIN-All right, and again, correct me if I'm wrong, but I'm reading that that that money went out to payoff the stockholder liability, that that's the reason why you had a loss, was because it went to payoff the stockholder, that this money flowed out of the corporation some place else. MR. BROCK-And that's how the mortgage was paid that year, okay. Rather than the Mooring Post, where they could not pay rent, okay, they paid off the debt service. I took that money, which is a tax, if they pay me a return, if I give them money, when they give it back to me, that is not a taxable income. So, I took that money and paid the mortgage with it. They would issue me some money, if they had it, and I would use that money to pay back, I would use that to pay the bank. MR. CARVIN-Okay. So, I mean, that's in lieu of rent. MR. BROCK-It was in lieu of rent to decrease the corporate debt, and make the corporation look that much stronger. MR. CARVIN-Okay. Well, in 1993, you still had a net income, after paying off the debt, of $108,000, but there was no rent that year. MR. SKELLIE-The payment of the debt does not effect the income statement. So that the payment of the debt is not an expense on the corporate books. If you were to pay the debt, you'd have to reduce the debt payments from the $108,000 in income, and the reason the payments were charged against the loan and not to rent expense is purely tax driven on John's personal tax return. If he pays the loan back, he doesn't have to pick up rental income. MR. CARVIN-I guess my bottom line question is, we're still generating seven, eight hundred thousand dollars in revenues. We're still netting $310,000 in Gross Profit, is that correct? MR. SKELLIE-That's correct. MR. -CARVIN-That's where all of this money is bouncing back and. forth. MR. SKELLIE-Right. MR. CARVIN-Okay. I've got to find somethinq I can hang my hat on here. Okay. Anything else? MR. SKELLIE-I do have a few comments on the information that was submitted by Paul Dowen tonight. This is the first time I've looked at it. On Page Two of Two, on his schedule, his statements of income, if we go right to the revised, the last column on the right hand side, I mean, if we work with his revised numbers, - 43 - -- (Queensbury ZBA Meeting 9/4/96) assuming with the loans as an investment. Again, we question his add back of~ we disagree with his add back of $96,000 in rent. If he's going to add back the rent, we say he's got to deduct the debt service, which is going to approximate the $96,000 in rent. His add back on the stockholder interest of $14,400 is not correct. If you look at the '95 income statement, the interest expense on the '95 income statement only totals approximately $1,000. So for him to assume that there's $14,000 in interest expense on that statement is not a correct assumption, and he should have known that because he saw the ' 95 income statement. He could have looked at the '95 income statement and have seen that the rent expense was only $1,000. I question the projected additional revenue. Well, I guess I question the debt service on the buildings. On his narrative on Page Two, the first sentence of the second paragraph, he's saying that these spread sheets, the revised calculations showing the reasonable rate of return with the scaled down approach. So basically he's saying if you scale down John's proj ect, modernize the buildings, you know, this is what the revised net income would be. To think that there would be no additional expenses to modernize those buildings, to me, is just incorrect. It's going to cost money to modernize the buildings. Somebody's going to have to pay for it, and those payments have to be taken into consideration. So he's coming down with a projected net income of approximately $179,000. It has to be reduced by the $14,400 in the stockholder interest. It has to be reduced by the $96,000 in rent. There has to be some expenses to modernize the building, and another thing that is not taken into consideration on these statements is corporate income taxes. If you're going to project $179,000 in corporate income, there's going to be approximately a 35 to 40% corporate income tax rate that's going to reduce that income. So there would be a substantial reduction in the net income available to John Brock, just by taking corporate income taxes into account. MR. KARPELES-Well, if you do everything you're talking about, what does this end up, this 17.81% end up with? MR. SKELLIE-Well, there's going to be a profit, but it's not going to be close to the $179,000. MR. KARPELES-But I think that's important as to what percentage you think it is. MR. SKELLIE-Well, you would add $96,000 to it. I mean, you would subtract $96,000 from it, which is the rent expense. You would have to subtract the $14,400 from it. I have no idea what the expenses would be to modernize the building, but, you know, right now that's an unknown, but it's going to be something, but I think you can see that it's going to be substantially less than $179,000. It's going to be below $100,000. I believe it would be a profit. John did a projected income that I think is Exhibit 17. MR. FRANKEL-Exhibit 17 to the memorandum of submittal dated August 27, 1996. MR. SKELLIE-And he came up with a projected income of approximately $33,000. MR. KARPELES-Where is this, which tab? MR. FRANKEL-Exhibit 17. MR. CARVIN-When were the buildings torn down, '94? MR. BROCK-October '94. MR. CARVIN-All right. So you're saying your September the 30th' 95 actually made an income of about, roughly $34,OOO? - 44 - '-' (Queensbury ZBA Meeting 9/4/96) MR. FRANKEL-No. Mr. Chairman, what Exhibit 17 is showing is that if the Board will allow Mr. Brock to do what has been proposed, this is what he projects the income will be. What he has done is he has taken the last three years, and even taking into account certain add backs, add ons, calculating into it the debt service for constructing the new buildings, what are his expenses going to be, additional employees, additional insurance, etc., what will he be able, best case scenario, 100% occupancy, be able to do, and this is what that was intended to project. MR. O'LEARY-I think if you add back the $96,000 and the $14,000, as you suggest, you would be looking at roughly $100,000 less on the income side, against what they claim to be a total equity investment of a million six, which would give you a return of 7.87, as opposed to the 17.81. MR. KARPELES-And this is with no salary for Mr. Brock, is that right? MR. SKELLIE-No. There was, I believe. Yes. adjustment made for a salary for Mr. Brock. There was an MR. GREEN-Let me ask one quick question, Fred. If the Mooring Post Marina was a publicly held or privately held corporation, rather than Mr. Brock's son, for lack of a better term, is this company, has it been making money in the last four years, if it had to pay all the expenses of a regular "corporation"? MR. SKELLIE-That's what I was trying to explain. The way we look· at it, that's what we would do. We would look at this and say, okay, if there was no related parties involved, if this was a public company, what would have been paid in rent expense? What kind of salary would have been paid to somebody to run the company, and we call that, we'd normalize the earnings. We'd take the earnings per the income reported on the books of the company that we're evaluating. We make the adjustments and come up with a normalized net income, and by taking the rent expense into account, and just a reasonable salary for John, it would not be making income. It would not have made income in '94. It would not have made income in '93, and in '95 it would not have made income. MR. FRANKEL-And I think that's even shown on Exhibit 17, even taking into account some of the alleged add backs that people have been saying should be taken into account. There still is an adjusted net loss, when you look at Exhibit 17. MR. GREEN-Does Mr. Dowen agree with that assessment? MR. DOWEN-Absolutely not. Again, my name is Paul Dowen. I'm the one who prepared some of these projections that they're using here. MR. GREEN-I would ask the same question of you. If this was held by, you know, if 1 owned the Mooring Post and wanted a reasonable return on the money that I spent to purchase it, would I be making money? MR. DOWEN-Yes, you would be. I made some notes here, and I'll try to address each one of the issues that came up. I guess the first thing I have to say is they've always said that if you have two different accountants preparing the same tax return, with the same data, you're going to come up with two different answers, and that's really what we are, I'm not trying to be smart, but that's really what we're coming up with here tonight. First of all, to address the issue regarding the rent, and whether it's $42,000 worth of rent or $96,000 worth of rent, it really doesn't make any difference. As we talked about before, we're really looking at, we have Mr. Brock personally, and we have the corporation. Whether the money is paid by the corporation or the mortgage was originally - 45 - -' (Queensbury ZBA Meeting 9/4/96) taken out by the corporation or by Mr. Brock really doesn't make any difference. If you're looking at a rate of return on an investment, and you get rid of the Marina for a second. If you were to take a regular piece of rental property, and you had $100,000, and you chose to invest that into a rental property, you would look at that rental property and look for a certain rate of return. The same person could also look at that same piece of rental property and go to the bank and borrow 100%. When you're calculating the rate of return on that piece of property, it's the same rate of return for each individual. One person is investing cash, one is investing borrowed funds, but that person has to take the income derived each and every year to pay back that debt, the one that borrowed the money. The individual that took it out of his bank account wants to put it back in his bank account. So whether there's debt against the piece of property does not make any difference on what that rate of return is, and that's really what I've indicated here. So it doesn't make any difference whether $96,000 of rent was paid or wasn't paid. The idea is to take rent out of the equation and look at what the total rate of return is for the combined piece of property. Now originally when he took this mortgage out, it was for $550,000. He originally paid $750,000 for that piece of property. He put $200,000 worth of cash, or we're presuming that he put $200,000 worth of cash -into this investment, $250,000 of that $750,000 pertains to him personally. So in reality, when you look at the initial investment in 1983, he put zero dollars in it. In fact, he took $50,000 of borrowed funds and put it into the Marina. So he has no cash investment up front, but over a period of years, he had to take his own personal funds, or what he's indicating to us he took his own personal funds, and had to payoff that mortgage. Well that's his build up of how I come up with his initial investment of $500,000. I'm giving him credit for that right up front, rather than as a build up over a period of time. Second of all, that mortgage was paid off in July of '94. He took $56,000 from other investments, as indicated in the information, and that mortgage is paid off. So when you look at the September of '95, where he has accrued, he hasn't paid, but he's accrued, the $96,000 worth of rent. In: reality there was no mortgage to pay, as far as that original mortgage is concerned. Now, yes, there was additional funds borrowed. It was funds borrowed for different purposes, and I have also given him credit for the $206,000 that he's still sitting on, that is still sitting on the books, that he's indicated. One of the questions that wasn't addressed is there's apartment rentals, and I guess one of the speakers did address whether or not that was included in his numbers, or whether it was included in his personal. I've made the assumption that, for the $8400, it's not in any of illY numbers, and assuming that if it's i~ the corporation, fine. If it's not in the corporation, then it has to be added back to here. Coming back to some of the other financial information, whether or not, how long has it been since this entity has made any money? I don't have copies of the information that you have, but I did look at the information, and if you want to turn to the information for September of 1991, which included the Route 9 property, the Route 9 Mall property. It also included another marina, as well as the Mooring Post Marina, and the first indication was that the Mooring Post Marina lost $126,000, which was very interesting, because the other piece of, the other marina property made money, and if you look the Cost of Sales and the Gross Profit that has been derived on this internal financial statement, it's not a, and the other comment I'd like to make is none of this information has been derived from corporation tax returns. All this information has been generated by either an accountant or internally. It's not copies of tax returns, which is very important, but if you look at that informatio~, you look at the Cost of Sales, and if you look at the two different marinas, in the Mooring Post Marina, they have $115,000 worth of Gross Profit, on approximately, if I recall correctly, about $80,000 worth of less sales, but yet the Gross Profit on the second marina is almost - 46 - '-- ,-" (Queensbury ZBA Meeting 9/4/96) twice that dollar amount. So when I first looked at this, I just discounted the information and said it's not even worth looking at because there's not been a proper allocation between the Cost of Sales between the two marinas. How can you take one marina and have it earn $352,000, if I recall the number correctly, of Gross Profit on $565,000 of Sales, and yet the Mooring Post Marina only makes $115,000 worth of Gross Profit on $465,000. The percentages don't add, and it just didn't make any sense why the one marina would lose such a large dollar amount. So I've discounted that, and I've only looked at really the three years worth of information, and if you want to turn to my Page Two of Two, I would like to clarify some of the assumptions made on that. The first, the upper section, down to the line, it says Adjusted Net Loss, is information derived directly from the information provided by Mr. Brock and his accountants or attorneys. As we said before, the rental add back is added back because we're looking at these as a combined entity. It doesn't make any difference whether it's paid to Mr. Brock so that he can pay the mortgage, because we're not concerned about the mortgage. We're looking at what is the income that is being derived from this piece of property, whether it's being derived personally or being derived from the corporation, and what is his rate of return. If he has to mortgage the property to acquire this property, he's got to use his profits to do that. If he had funds in the bank and he could pay cash for this, he's still looking for the same rate of return, and that's why that is added back. That is also why the new debt service on the buildings, again, doesn't make any difference. I've given him credit for the new buildings, the monies that he's going to invest in the new buildings, $350,000. We're giving that to him as an equity investment. Now truly he doesn't have any equity investment in that at all. It's all borrowed funds. So, if you want to give him credi t for debt service, you can't give him credit for already investing the $350,000 into new buildings. It doesn't add. You can't do that. So I chose to add back the debt service and give him credit up front for the amount of money he's going to put into the new buildings. The other question had to do with the building expenses and why, in my projections, there's no expenses for the buildings. Well that's what the $350,000 is, and in your information it indicates that he is expecting to spend $348,000 in change on the new buildings, which includes them being up and functioning. So there would be no expenses included in your operating expense for the year to do that. As far as the taxes are concerned, I agree with the other CPA that a majority of these motives for taking the rents or not taking the rents and passing them back and forth is to save taxes. I don't know what tax bracket Mr. Brock is in. I could make assumptions that, yes, he is going to have to pay roughly a third taxes on this investment. So that would bring down your rate of return on investment, but if you're also looking at, if you were investing in stocks and bonds or," as you had indicated, in a publicly held company and you received your dividend income, you've got to pay taxes on that also. So you're not, if you're comparing your rate of return before taxes in both issues, then you can compare apples and apples. You can't compare an after tax rate of return in one circumstance with what you expect to get as a before tax rate of return on another investment. So that's why the taxes would not be addressed. We want to try to compare apples and apples. The dollar amounts of how I come up with the projected income, I think I've highlighted on Page One of the Two. Certainly it was with no input but my own. I was looking at the fact of trying to estimate if the project was scaled back to the original size, what would be our estimated level of income. I also gave him credit for not knowing that if we scaled back the size of the buildings, what that cost would be. I gave him the benefit of the doubt and had that as a figure which I believe is a high figure of $300,000 of my total investment, and if the investment was only $250,000 in scaled down buildings, that's certainly going to raise the rate of return, not decreasing it. So I think I've given everybody the benefit of the - 47 - (Queensbury ZBA Meeting 9/4/96) doubt here. We've given him credit for Officer's salary that supposedly is being unpaid, and looking at the reasonable expenses of coming back to why I excluded the payroll and the workman's compensation insurance, as I indicated in my written memo, if this truly is not an increase in volume, why would you have to increase the number of your employees? As he's indicated before, they've had to move these boats two and three different times on the pieces of property. If they had to do that, or they don't have to do that with the new buildings, they've only got to move it once or twice,' why would that take more employees? To me, it sounds like it would take less employees, and that's why it's indicated as such. If there's any questions, I certainly will try to address those. MR. CARVIN-Is there any questions? Again, I have one question, Paul. Your revised proposal with the loan would be the worst case scenario, if he were to construct buildings of roughly 400,000 cubic feet? MR. DOWEN-With a $300,000 cost. MR. CARVIN-With a $300,000 cost, all right, and that's assuming that he took the loan. I mean, that's the worst case, according to your projections? MR. DOWEN-Right. The reason I included the loans, and it wasn't trying to confuse the situation. Typically what happens in these circumstances, as you build up loans in the corporation, and it's going to take a long period of time to get those loans back, you are required to record interest on the books, anything over $10,000. So I treated that and said, well, because it could potentially take them a long time to pay those back, lets treat them as equity, and that's why I added back the stockholder's interest. The stockholder's interest, on the second column and the fourth column, that is the dollar amount that's sitting on the balance sheet. I made the assumption that it does represent the accrued interest on the $206,000. If that truly is a properly reflected balance sheet that would be on someone's tax return, that money should be accrued on there. No, it is not on the income statement, but there's a lot of other conflicting numbers on the income statement. So I made the assumption that it should be there, if this truly was information coming from a corporate tax return. It is required to be there. So that's why that number was added back, even though it's not specifically identified on the income statement. MR. CARVIN-Okay. Thank you. If you would continue. MR. SKELLIE-Okay. I'd like to comment on a few things that Paul just talked about. One thing he mentioned earlier was that the financial statement is not coming from the tax return, and he just said that he wants to add back the interest expense because, on a tax return, you're required to put in interest expense. Well, if the statements aren't from the tax return to begin with, then why is he basing the interest add back based on a tax return? The fact is, when he adds that $14,000 back to the income, he's increasing the income of the company. To correctly do that, you would have to have $14,000 of interest expense being deducted, in arriving at the. net income of the company. You can' t add back $14, 000 when there's not $14,000 deducted on the income statement, and that's what he's doing. So, it's an improper add back. He says he's not concerned about the mortgage. The question asked to him was, if the Mooring Post was a publicly held company, would it make money. If the Mooring Post was a publicly held company, it would have to pay rent expense. It's that simple. I don't know any publicly held company that's not going to pay rent expense. So to say the rent expense is irrelevant just is not a correct statement. If you're going to look like what this statement would look like if it were a publicly held company, you'd have to pay rent. Another thing, he talked - 48 - ',----, -' (Queensbury ZBA Meeting 9/4/96) about the reason why he didn't make an adjustment for corporate income taxes is because, if you look at, he said you have to compare apples with apples, and for a publicly held company, the dividend that you get, you have to pay personally income taxes on. I'm trying to explain this in a way everybody can understand. The dividends that a publicly held company pays is based on the net income of the publicly held company. All publicly held companies pay corporate income taxes. So the amount of dividends that a publicly held company can pay is reduced by the corporate income tax it has to pay. If it's got to pay the government, it can't pay it's stockholders. So, to properly look at what John Brock would have available, to properly look at the net income, the income coming from a publicly held company, you have to take corporate income taxes into account. The publicly held company cannot pay dividends if it has a corporate income tax liability. So that, I mean, the bottom line is, if you're going to compare this to a publicly held company, you have to make an adjustment for corporate income taxes, which is approximately, taking into account both federal and state taxes, 35 to 40% of the income. MR. FRANKEL-Not to belabor this, but also I think one thing we're losing sight of is the fact that we do have an appraisal here. We do have what was the purchase price. Referring back to Anderson on Zoning, to 23.13, one thing that I heard the accountant state, and I'm not here to argue as an accountant, because I'm not one, is that you don't take into account mortgages or encumbrances, and Anderson says you do. This Board has to consider those things. Now, there are cash infusions that have mortgages that are backed by them, and I think that's a consideration that this Board should look into when we have a purchase price, we have cash infusion into the property, which goes beyond what the appraised value now of the property is worth. There is a net loss right there, if he were to try and sell it, according to the appraiser. We shouldn't lose sight of that, as we talk about the numbers and the income statements. Don't lose sight of the fact that Anderson says you've got to look at those things, too. Thank you. MR. CARVIN-Are you finished, are you? MR. FRANKEL-Unless the Board has any other questions. MR. MENTER-I have a quick question. Lets get a little more basic. Lets talk about sales, okay. In the Section 17 here, your submitted materials, here, you've got storage dockage and quick launch revenues for the years '93, '94 and '95. Do you see where I am? MR. FRANKEL-Yes. MR. MENTER-Give me the relationship between that number, for instance, the '93 number, which you total $132,588, all right, John, which represents, I guess, the total of your dockage, quick launch and storage sales for that year, correct? MR. BROCK-Yes, in '93. The first number is dockage and quick launch income, was $81,009, and the storage was $50,590. Okay. That's the total put together. In' 94, our quick launch and dockage income, again, was $94,000 and our storage money was $61,000. In '95, we dropped storage to $46,000, and our dockage and quick launch money was $113,000. The average, what we did is we took, in figuring this statement, I took all the income for dockage and storage for the three years and averaged it. Okay, and that is how I came up with what the existing dockage, quick launch and storage income was, so that I could subtract that from the income of the new building. If you took the income of the new building, the projected revenue of $364,000, we're already receiving $149,000 of that, all right, so it wouldn't be fair to say that was an increase. So the actual increase in the projected - 49 - (Queensbury ZBA Meeting 9/4/96) revenue was $214,000. The added expenses were $150,000. So that left us with an additional revenue of the new project, if we do the building and we have the 140 quick launch customers, we will have a profit of $64,000, basically. MR. MENTER-Okay. Keeping those numbers in mind, looking back at the appraisal figures for '93, it shows a sales for the Mooring Post is $706,133? MR. BROCK-Yes. MR. MENTER-What's the make up of that $706,000? MR. BROCK-That would be a total sales of everything. That would be boat sales. That would be gas sales, service, parts, all the income, whatever the income to the Marina was, that would be it. MR. MENTER-Okay. So that percentage, without going through the numbers, is generally maintained itself? MR. BROCK-That's hard to say, depending on new boat sales. That'll throw your numbers one way or another. When you have a high sales number, due to boat sales, you also have a high cost of sales because you have to pay for the boats. So your income numbers won't change a lot, but your cost, your sales numbers and your cost of sales numbers will change drastically. You can sell, you know, five boats, okay, for $200,000, yet if you paid $190,000 for them, you only made $10,000. MR. MENTER-Right, and if you don't rent a slip and it's sitting there, you might as well not have it. MR. BROCK-Exactly. MR. MENTER-Okay. MR. CARVIN-Can I just ask, these are just the revenues for these particular years, is that correct? Or is the $114,000 the '94 and the '81. Your dockage and quick launch, those are just pure figures for those two items, right? MR. BROCK-That's strictly those two items, yes. MR. CARVIN-Well, in '95 the buildings were down, is that correct? So it indicates that at least the dockage and the quick launch figures actually went up with no buildings, and I understand why the storage went down. You didn't have the storage. MR. BROCK-That's right. They went up in those years, okay. MR. CARVIN-Well, '95. I'm looking at '95 with no buildings, and you're still doing better than before when you did have the buildings. MR. BROCK-In '93, okay, we went to 1994. I told my customers all that stuff was going to be inside, because we had building going up. So, we had anticipated having buildings up. We came back that next spring, okay, the following year, and came in with a proposal expecting to have buildings up for the ' 95 season. Again, it didn't happen. These people have, I'm not going to get to keep these people, okay. I've been promising inside storage. I've been promising to try and keep the boats covered, keep tarps on them, keep the pine pitch off them and all that. It's not happening. We can't do it. We cannot possibly survive. These numbers will drop drastically without inside space for the boats. MR. FRANKEL-And Mr. Chairman, letters have been presented already in this proceeding to the Board, but to facility the understanding - 50 - ',- (Queensbury ZBA Meeting 9/4/96) of that argument, attached to the recent submittal, Exhibit 15, are letters showing that these customers are not going to return. MR. CARVIN-Okay. Any other comments? Any other questions anyone? Any other public hearing? MR. DOWEN-Again, my name is Paul Dowen. I think one of the key issues here is coming back to the interpretation on this rent expense, and I really don't know what I can explain to you to make you understand that the rent really should not be a factor into the situation. If you were to look, as I addressed before, if you were to buy a rental property, and that is paying you a rent of $1,000 a month, and you have no debt service on that piece of rental property because you had $100,000 sitting in the bank, earning five percent, you decide to take that money out of the bank account, which was earning five percent, invest it into a piece of rental property, and you're getting cash back in your pocket of $1200 a month or $14,400 a year, your rate of return on that $100,000 is 14.4%. In the same instance, if I went out and bought that rental property and I went to the bank and borrowed 100% and had no money into it, I could look at it two ways. My rate of return on my original investment is, well, there's not even a percentage because I don't have any original investment. I'm earning $14,400 and I have no investment out of my pocket in that piece of property, but what I do have to do is I have to take that $14,400 which is income I've now got to pay taxes on, and I've got to take that and pay down debt on that piece of property. As I submitted before, my rate of return on that piece of property is no different for myself as it is for the other individual who paid cash for the piece of property. It's still 14.4%, because eventually I'm going to pay off that $100,000 worth of debt. Coming back to the interest expense, and we can argue back and forth, and I'm not looking to hear an argument back and forth on this. If you want to take a recalculation of the sheet that I gave you and if you want to ignore the stockholder interest with those numbers, the second column comes out to 19.65% instead of 21.01, and in the far right hand column it's 16.38% rather than 17.81, not a significant difference as far as the percentage. I think the key issue here really does focus on debt service and whether or not that should be included in the net profit of the company. Yes, it should be, looking, if you're looking at acquiring a business, it should be taken into consideration as far as cash flow is considered, as far as you want to make sure that you're receiving net income sufficient to pay your own salary, and to pay the debt service on the building, because after the debt service is paid off on that building, all that cash comes to you personally, and whether the money comes to him personally through, and he's paying personal income tax on it versus corporate income tax really doesn't make an issue, it's not really an issue here. Coming back to my analogy on the privately held company, maybe that was a bad analogy. r1Y point was if I invested $10,000 into IBM stock, and that IBM stock is paying me 10% versus taking that $10,000 and investing it into some other investment, I want to make sure, from mY point of view, that I get at least my 10% back, and if I don't consider what my after tax effect is on my IBM stock dividend versus the other investment, we really are comparing apples and apples. I was not trying to make a comparison that IBM was not going to be paying corporate income taxes on the dividend income. I was looking at it from an individual's point of view. No matter what that investment is, you're going to expect to pay tax on whatever personal income you derive, no matter from what source it is, at least hopefully everybody's reporting that on their tax return. MR. O'CONNOR-My comment, I guess, is you're supposed to be looking at competent financial information, and I don't mean to make light of what has been submitted by the applicant here, but I think you still have a question that you just don't necessarily know what's there. I'd look at it from a non accounting point of view. He - 51 - ~' (Queensbury ZBA Meeting 9/4/96) started with a project that he paid $750,000 for, that included his residence and a cabin. That has an acknowledged value, by his statements, of $250,000. He put down, apparently, $200,000, because he borrowed $550,000. So he immediately moves over to his side of the balance sheet $50,000 of the land where his house is and the cabin is, and leaves on the balance sheet of the corporation the $550,000. That $550,000 over the course of a period of time got paid off in full. Now the payment of that, whether it's through a rent expense and then a check from John Brock doesn't really make a lot of difference, whether it goes to John Brock and then to the bank or it goes directly to the bank. He still improved his picture $550,000 over the course of the ownership of that asset. Now there's another borrowing in 1991, I think, of $400,000, and of that, in the notes that were submitted, $200,000 was prior debt for the Route 9 retail operation. So, I'm not sure what happened or how that was paid off, but that debt was also paid off in 1994, and presumably the payoff of those debts, at least from the information you have, is again some type of revenue stream that's generated out of this Mooring Post Marina. That benefits his balance sheet. He's got additional mortgage, now, which has a face value of $140,000, and I think a draw down of $120,000 or $160,000, I'm not sure, at Glens Falls National for the current project. It's not clear where that $120,000 or $160,000 went, but you can't separate John Brock as a receiver of rent from the return that the corporation is showing on its financial statement. You're supposed to be looking at, what is the return of this property, and he apparently is deriving it in two different ways. We still haven't heard a direct answer whether or not we're right or wrong as to the $8400 in rent to come out of the apartments. Does that go to him personally? Does that help him payoff the debt of the bank? If it does, that's over and above the 17%, the 19% or the 16%, and I'm not trying to prolong this. If you look at what you have, I think you look at our analysis of it, we're conservative in our analysis of it, and at this point, it appears as though he's got a 16% return, worst case scenario, if he were to expend a total of $300,000 to try and get back some buildings to the point where he was before. We haven't even calculated a return if he did nothing and he just left the land as is, and you go back to the testimony of his employee, and you go back to what you have just picked up, he tore the buildings down in October of '94, but his rental income, or his dockage income and what not is up for the period ending September of 1995, and I'm still confused in my own mind why we aren't also talking about gas sales, boat sales and service and repairs, because those are elements of return on that property, but we've gotten into this scenario because this is the way it was presented. I don't think you have competent financial evidence before you to declare that this' applicant does not get a reasonable rate of return from this' property. MR. CARVIN-Okay. Anyone else? MR. MENTER-I think I would just like to say, these guys could go back and forth all night. Maybe what the rent issue boils down to is, who is the applicant? MR. CARVIN-Well, again, let me close the public hearing. MR. SKELLIE-Could I just explain one more point? If you're looking at IBM and you're coming up with a net income, if you're coming up with an income before tax of $179,000, IBM will not be able to pay a dividend of $179,000. It has to pay 35 to 40% of that income to the government. It's going to have left over to pay a dividend of maybe whatever the number works out to, approximately $100,000 to $120,000. That's what IBM could distribute to the shareholder to compute a rate of return on. You would not take 179 and divide it by the investment of a million dollars. You would have to take the net income that IBM would generate, after taxes, and divide that - 52 - '-- ~- (Queensbury ZBA Meeting 9/4/96) into the investment to get a rate of return, which in this case would be substantially reduced from the 17.8%. If you took 110 and divide it by that 1.6, you're not going to get 17%. You're going to get 10%, 11%, and that's what a public company like IBM would return as a percentage on your investment. MR. O'LEARY-Can I ask a question of the accountant? I think one of the problems here is that we have a co-mingling of interests, and to really get the accurate financial picture of, would you not agree that you'd be consolidating the financial statement of the interests involved? That way you can see the contributions. You can see the adds and subtracts from the Marina to the consolidator. MR. SKELLIE-I'm not sure what you mean by consolidated? MR. O'LEARY-Well, we have suggestions here that we have personal, financial statements involved. We have other businesses that are involved, and we have the Mooring Post involved, and there is a financial relationship among these entities. So that it's difficult to say which one is being benefitted and which one is not being benefitted. I mean, a good example is the rent situation, and the interest on the debt situation. We have the Marina paying the rent to the mortgage owner or the mortgage borrower. MR. SKELLIE-Right. MR. O'LEARY-He's got the liability. They have the asset, they're paying rent. They have the use of the property, but the co- mingling is what's confusing. MR. SKELLIE-One thing, you know, Paul's saying that you shouldn't take debt service into account at all, particularly with this modernization of the new building, a lot of the debt service is interest expense, and interest expense, you know, if you're borrowing the money, interest expense is a big factor, a big expense that's going to effect your rate of return. So if you don't want to deduct 100% of the debt service, you have to be able to deduct the interest expense, because that's above and beyond the loan that you're taking out. You're going to pay back the loan plus the interest. Also, I mean, you have to pay back, an example. If you buy your house and you only pay 10% down, and after 30 years it's paid up, do you think you only pay 10% of the purchase price of that house? No, you've paid 100% of it, because you've made the loan payments to the bank. They're being re-paid, and those re- payments should be taken into consideration. MR. O'LEARY-Just take the rent situation. We have the company paying the principle rent, but the principle is saying, that's not income to me because I have an off-setting expense by way of debt service. MR. SKELLIE-Right. MR. O'LEARY-However, the debt service is his personal obligation and would show up on his personal financial statement, but it does not show up on the financial statement of the company. MR. SKELLIE-If you were going to combine, I guess, the income from the rental property and the income from the Mooring Post, you know, the rent would wash itself out, but you would have interest expense on the debt service and you also have depreciation on the building, which is not even being taken into consideration here. The cost of' that building should be depreciated and should be deducted as an expense in arriving at the net income of the company, and that's a big number. MR. O'LEARY-I think the only problem is you have to look at two sets of financial statements in order to arrive at that. - 53 - (Queensbury ZBA Meeting 9/4/96) MR. SKELLIE-Right. If the Mooring Post purchased the building, and John did not purchase it personally, instead of the rent expense, you'd have interest expense and depreciation expense, and that would reduce the income. MR. O'LEARY-I think we all agree, I think. It's just that you've got to look at a number of places to come up with the conclusion. MR. SKELLIE-Right. MR. FRANKEL-Just as a final statement, I would submit to the Board that competent financial information has been provided, and that dollars and cents proof has been provided, both in writing, as well as through testimony of the first accountant, the CPA here present, the appraiser and with response also to Mr. 0' Connor, I think there's a mis-statement as to how the money was flowing and how debts were paid back. Once again, I refer the Board to the written memorandum submittal which shows, in a chronological manner, how the money was infused into the business, sources of where that money came from, and I believe it's laid out pretty straight forward, and I don't think I have anything further, unless you do, John. Thank you. /- MRS. WETHERBEE-I'm Judy Wetherbee, and I wonder if, on all these statements, the income from pump outs, which is considerable pump outs, income from gas sales, income from the rental apartments, income from the rental of the cabin, is all that in there along with the money from the quick launch and the storage? MR. SKELLIE-What is in there is all the sales of the corporation are in there. The gasoline sales are in there. The boat sales are in there, accessory sales parts sales. What's on this income statement is not just the dockage, the rentage, the quick launch, the storage, the rentage is not correct, the dockage, the quick launch and storage. It includes all the sales, including, you know, boat sales, parts sales, gasoline sales. As far as the rental of the cabin, John would have to address that, because I would say probably no, but John would know for sure. MRS. WETHERBEE-How about the rent of the apartments up over the office building? MR. SKELLIE-I don't know. MRS. WETHERBEE-I just wondered. MR. BROCK-As far as the apartments go, one apartment is not rented. It is used for storage. We keep records up there. We use it more as office space. The second apartment, I have an employee that lives in the second apartment, and he does not pay rent to the Marina. It is part of his compensation for driving the tractor and being at the premises. So if he paid rent to the Marina, we'd in turn have to increase his compensation. So it would be a wash. There is no additional income. I get no income at all from those apartments. It is an employee there, and it's part of his compensation, and the second apartment is used for office space, keeping records and that type stuff. MR. CARVIN-Okay. Any other public comment? Seeing none, hearing none, the public hearing is closed. PUBLIC HEARING CLOSED MR. CARVIN-I'm going to take a five minute break so you can collect your thoughts, and then I'll come back. Okay. If we could reconvene the meeting, if everybody's ready. Okay. The public hearing is closed. Are there any additional questions of the applicant? Does Staff have any questions of the applicant? Okay. - 54 - '- '...../ (Queensbury ZBA Meeting 9/4/96) We stand at the crossroads of indecision. After two years, or almost two years of testimony, it comes down to us. Number One, do you feel that we have sufficient information to move on this thing? Bonnie, do you feel that you have enough information? MRS. LAPHAM-I'm a little confused by the wealth of information by both sides, but on the other criteria, I'm set. MR. CARVIN-Okay. Well, I guess, does anybody feel that they have insufficient, or they need more information to make a decision? MR. O'LEARY-Well, obviously, Mr. Chairman, because of most recent appointment and the long history involved in this matter, I'm going to abstain from the vote, in deference to the people that have been involved in the issues all this time. MR. CARVIN-Okay. Thank you. All righty. We have, actually, 30 days. Do you want to make comments and try to move it tonight, or do you want to postpone it and gather your thoughts? It is actually midnight. We've been at it now for five hours. MR. THOMAS-I think we should move it, since this is your last meeting. MR. CARVIN-Well, not until the 14th. MR. THOMAS-Well, theoretically, this could be your last meeting, and I don't think we should make a decision without you being here. MR. GREEN-I would agree with that. That doesn't necessarily mean that I agree that we should do this this evening, although that would almost force another meeting, which I'm not fond of. I don't want to be rushed simply because of that factor, but I would like your vote on it. MR. KARPELES-I feel that, after kicking this thing around for two years, we ought to be ready to move it tonight. MR. MENTER-I agree. MR. CARVIN-All right. Then we will address the Use Variance first. I would ask anyone and everyone to consider the preponderance of information that has been given us, but I would ask the Board it's thoughts on this, this particular motion, or this particular variance, and I'm going to have to apologize if I mis-speak because of the lateness of the hour. Bob, what do you think? MR. KARPELES-Well, the financial part of this has not been a real clear cut thing, but I think he has gone through all the hoops, and he's given us what we asked for, and I, myself, am convinced that he's not getting a fair return on his investment. I feel that the new buildings are going to be an improvement over the present situation where there are boats stored allover the place. I think almost anything would be better than that. Since Day One, I have thought of this as a modernization more than an expansion. It's hard for me to conceive of how a business could flourish in this day and age that was built 90 years ago, and I just think it is time for a modernization. MR. CARVIN-Okay. Bill? MR. GREEN-My biggest concern, as probably with the rest of you, is justifying this reasonable rate of return. I do feel that it is unique for a number of reasons. The nonconforming use almost makes it unique to begin with. I, personally, don't think there is an unmitigated detrimental effect to the character of the neighborhood as proposed. I think we went through that quite thoroughly at our SEQRA review that I still feel was done correctly, and I think Mr. - 55 - (Queensbury ZBA Meeting 9/4/96) Brock, as his accountants and judging by the real estate appraisal are apparently quite qualified gentleman, in my opinion has shown that he needs those buildings back there to have a reasonable return. It's that simple. MR. CARVIN-Okay. Bonnie? MRS. LAPHAM-I'm really not sure that he can't make a reasonable return from what he had before resurrected. I have nothing against modernization and bringing it into the 20th Century. I'm just not sure that expansion won't have a detrimental effect on the health, welfare of the Cleverdale community. MR. CARVIN-Okay. Dave? MR. MENTER-Well, when this originally came before us, I didn't believe that it needed a Use Variance, just because of the project itself and also knowing what a Use Variance requires relative to the business that was there. I felt that way about it and the Board didn't. I do stand behind our SEQRA. I believe that was properly done and as far as the Use Variance goes, and I knew it then. I knew I was going to have a problem with the reasonable return. In looking at the actual numbers from '93 through '95, '95 actually shows an increase in documented figures, and I don't really have what I would consider competent proof that there's going to be harm there. I have letters, but that just doesn't meet that criteria for me. Therefore, I don't have an option, just as nobody does, in getting by one of these hurdles in a Use Variance, you have no option. So, I would have to say that it doesn't meet the criteria for a Use Variance. MR. CARVIN-Chris? MR. THOMAS-I would also like to state that I will stand behind the SEQRA review that we did, and the conditional negative declaration that we gave it. I believe that the applicant can get a reasonable return from the property as is, as stated by a financial report made for the Glens Falls National Bank, and from other testimony tonight from I don't know how many different parties. It seems that the rate of return is anywhere between 10 and 24% for this property. MR. LAPPER-Excuse me, Chris, when you said "as is", did you mean' without any buildings or? MR. THOMAS-No, as is, in this statement made for the Glens Falls National Bank on Page 91. MR. LAPPER-So that was with the square footage that was there at the time? MR. THOMAS-The square footage that was there. MR. LAPPER-Okay. I just wanted to clarify for the record. MR. THOMAS-Yes, not an empty lot, but an as is, with the buildings that were there prior to their demolition. The number two thing, the alleged hardship relating to this property, I don't think it's unique. There's been a Marina there since 1906, and there's been a working Marina since 1906, and that hasn't changed. I think the essential character of the neighborhood will be changed if they put up these new buildings at 28 feet high, seeing that, again, in this report made for the Glens Falls National Bank, that it's stated the actual size of the buildings, and only one building was stated at 22 feet high. The others have been stated, the height, to be between 10 and 14 feet, as an average, and the fourth thing, that the alleged hardship has been really, I can' t say the alleged hardship has been self created. I think that economic times have - 56 - ,-- -~ (Queensbury ZBA Meeting 9/4/96) kind of sort of pushed Mr. Brock to do what he has proposed to do, but that's about the only one I can agree with, that the alleged hardship was not self created. MR. CARVIN-Okay. I guess you're all waiting for me. Well, I have, contrary to popular belief, I don't have a written statement. I normally like to try to have my thoughts a little bit more organized, but I'll try to take it best as I can. I guess I want to start by saying, how do you summarize almost two years of zoning process? We've had uncounted meetings, reams of public input, both written and verbal. We've had testimonies from experts in many different fields. I think it's a testimony that the zoning process, though it may be slow, hopefully does work. Going back to the beginning. We do have a court decision that emphasized that we are looking at an enlargement, and that the building permits were issued as a result of errors on the permit application, and I would just quote, very briefly, from that court decision. "That the court finds that although the petitioner incurred substantial expense in reliance on the building permits issued by the Town, the Town was not estopped from revoking the building permit. The building permit was initially issued as the result of errors in the permit application. The court further finds that the determination of the Zoning Board of Appeals, that the Use and Area Variance were required to be obtained by the petitioner in regard to the proposed Marina renovation, was not illegal, arbitrary or capricious or an abuse of its discretion. Section 179-79 of the Zoning Ordinance says that a nonconforming structure or use or a structure containing a nonconforming use may only be continued and maintained in reasonable repair, but may not be enlarged or extended. The petitioner's proposed new buildings will be approximately 10 feet higher than the pre-existing buildings, and therefore constitute an enlargement. Although the two new buildings will be within the maximum allowed height of 35 feet, this proposed increase in height still constitutes an enlargement of a nonconforming use/structure and therefore a Use Variance is necessarily required." So, as I said, we do have a cOurt decision that tells us that we have an expansion. We have conducted, I think, a very extensive SEQRA review, which has resulted in a conditioned negative declaration and like many of my colleagues on this Board, I stand by that finding, which outlined numerous restrictions and mitigated issues regarding any environmental concerns. Well, now we're confronted with the use and area issues, and we certainly have to be guided by the criteria for both those use and area issues. There is no doubt, in my mind, that we are being asked to expand a pre- existing, nonconforming use. However, there is also no doubt in my mind that Mr. Brock has a right to operate a Marina. At the very minimum, we are looking at least a 45% increase, by volume of the buildings which were there. So the question that comes up in mY mind, has the applicant shown that a 45% increase in volume or increase in use is going to continue the same amount of business? I think that cannot be supported. He has not supported that with competent financial information. I think that the financial information that has been submitted many times is contradictory. It is unclear. We have statements from his employees and I have substantiation from his own documentation that in 1995, the quick laun,ch aspect of his operation actually increased, so that the, revenues that he is not being deprived of any economic value from the quick launch by not having the buildings. However, I also, again, believe it is true that if buildings are not permitted, that he will suffer an economic hardship, and that if some sort of relief is not granted, that eventually we will put that Marina out of business. So, as far as a reasonable rate of return, or a reasonable return provided by the applicant, I do not feel that he has submitted competent financial information. Is the property unique? It is unique because it's a pre-existing, nonconforming use. I mean, that was a Marina since, I don't know, 1906 or 1903 or what have you. Will it alter the essential character of the neighborhood? I do believe that if we allow a 45% expansion, that - 57 - (Queensbury ZBA Meeting 9/4/96) we will alter the essential character of the neighborhood. I happen to disagree with Mr. Thomas as far as the hardship being self created. The applicant has indicated that this was not a self created because he had a building permit which he tore down his buildings. I think, as I said, the court case indicates that this was not the fault of the Town, and if we had proper information, maybe the building permits wouldn't have been issued. I think it's a moot question. I think it is a self created situation. However, I also feel that those buildings, which by documentation that has been submitted by the applicant, and I haven't heard anybody argue the fact that these buildings were not younger than at least 39 years old. So that these buildings were, for all practical purposes, reaching the end of their economic, functional and viable use. So that if we were not going to be hearing these Use and Area Variance issues tonight, that more than likely in the very near future we would be hearing them, but I do believe that this was a self created situation. I also do not believe that if we grant a 45% expansion by volume, that this would be the minimum variance necessary to address the hardship that's been indicated by the applicant, while at the same time preserve, protect the character of the neighborhood and the health, safety and welfare of the community. I have seen no indication that Mr. Brock is being deprived of the use of his Marina. He still can conduct business. I, personally believe, and it's just a personal feeling, that I think that the Marina is making money, in spite of all of the financial wherewithal. I am disappointed I do not have at least even a pro-rata figure for 1996. I feel that if Mr. Brock was being suffered economically, that I'd be seeing those figures. The latest data that we've got is your September of 1995. It's almost a year old. If he was making money in 1995 without the buildings, if he was not making money in 1996, my logic would believe that that information would have been presented to us, although I'm going to give him the benefit of the doubt. So, I guess when all is said and done, and certainly there's been more said than done, that I can't support this application. MOTION TO DENY USE VARIANCE NO. 82-1995 MOORING POST MARINA, Introduced by Fred Carvin who moved for its adoption, seconded by Chris Thomas: Because I do not believe the applicant has demonstrated that a reasonable return can be provided and has not demonstrated, by financial evidence, that the return can't be generated as either zoned or currently used. It is unique. I believe that it will alter the essential character of the neighborhood. That this alleged hardship was self created, and that the expansion that's being proposed is not the minimum variance necessary and adequate to address the hardship being indicated by the applicant. I do believe that if he were to submit another plan closer to what was there, that that was the minimum variance. Plus all the facts have been put into the record, as substantiation for this motion. Duly adopted this 4th day of September, 1996, by the following vote: AYES: Mr. Menter, Mr. Thomas, Mrs. Lapham, Mr. Carvin NOES: Mr. Karpeles, Mr. Green ABSTAINED: Mr. O'Leary MR. CARVIN-Now, having denied the Use Variance, do we need to move the Area Variance? All right. I am being told by legal counsel that because we don't have a Use, that the Area Variance is not necessary. MR. LAPPER-Right. - 58 - ~-- -.,./> (Queensbury ZBA Meeting 9/4/96) MR. CARVIN-If there's no other business, meeting adjourned. On motion meeting was adjourned. RESPECTFULLY SUBMITTED, Fred A. Carvin, Chairman - 59 - ~-