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Revelations seen killing Orchid annexation of Marsh Island

(Week of April 14, 2011)

When the annexation of Marsh Island into the Town of Orchid comes back up for a vote next Monday, Orchid residents who expressed concern about the plan at a tumultuous Town Council meeting last fall are likely to find that the small island community’s condition is more unsettled – and unsettling – than many feared.

It turns out the promised “new developer” who was going to turn Marsh Island around appears to have all but disappeared from the scene.  The beautiful Marsh Island Marina, which hosted a wine-and-dine yacht show last month in an effort to persuade Orchid residents to buy into a “dockominium” scheme, turns out to have no insurance and is lacking needed regulatory approvals.

There also is the concern over a legal opinion that the Town of Orchid – if it were to annex Marsh Island – would become liable for legal fees and demolition costs associated with the condemnation of an unsafe, uncompleted home on Marsh Island Lot 15.

These and other revelations are contained in a report prepared by Council member Paul Johnson – the sole vote against accepting Marsh Island’s petition for annexation last September – who took it on himself to become the town gumshoe.  An attorney with 40 years in banking, Johnson authored the eight-page Appendix A to the Town report entitled “Legal and Financial Analysis.”

“I just took it upon myself as my responsibility to do this so the public could be informed,” Johnson said. “I pulled the records and talked to people.”

Johnson said the Town Council reviewed the document and approved putting it in as an appendix.

He said he also allowed Marsh Island Homeowners Association President John Von Hagen to review the document and correct any factual errors before it was circulated to Orchid residents.

The Orchid Town Council will consider the first public hearing of an ordinance to annex 44 acres of the Marsh Island Development into the Orchid at a special call meeting set for 9 a.m. Monday.

Johnson said this time he hopes to be able to “kill it quickly” to avoid another Town Council meeting “like that one in November. The Community Association has taken on the role of getting the information out and doing an informal poll of the residents.”

Concerns over the unsafe, uncompleted home on Marsh Island Lot 15 were raised back at that November meeting, but no research had been done on the matter or presented to council. That uncertainty and many other unanswered questions led the 200 or so town residents in attendance to insist that the staff produce an information packet, complete with legal opinion and financial analysis.

On March 30, a 36-page document was mailed to town residents.

The bound packet leads off with a fact sheet stating that the Town would be better off by about $14,000 annually -- and, as the lots eventually begin to sell and be built on – better off by $60,000 to $100,000 in building permit fees if it annexed Marsh Island.

If and when Marsh Island is built out, the Town would receive an estimated $36,500 per year in property tax and state cost sharing income, the report said.

But the executive summary does not include the most interesting tidbit on pages 21 and 26-- the fact that the Town could be required to take over the condemnation of Marsh Island Lot 15, which could easily eat up the $14,000 in increased revenues with legal fees and other costs.

In the opinion of its Town Attorney, Anthony Garganese of Orlando, “Upon the effective date of the annexation, the Town would have jurisdiction over this matter, not the county.”

The information packet states that a meeting with Assistant County Attorney William DeBraal raised “a number of serious questions.”

“If the annexation takes place before the condemnation issue is resolved, the Town of Orchid may become responsible for the condemnation process and incur all of the legal, administrative and demolition costs.”

In addition to helping uncover the potential liabilities surrounding Lot 15, concern from residents also nixed another part of the deal as it was originally laid out by Orchid Mayor Richard Dunlop last year.

A controversial proposal to give the Town a great deal on two lots in Marsh Island that Orchid could buy and use to build a Town Hall on the island was dropped in December.

That proposal was pitched to Dunlop by George Allen.

Allen was presented to the Town as the person who would be taking over Marsh Island Development Corporation, or at least ownership of most of the lots and boat slips that were under the control of MIDC.

Residents were skeptical of the turnover to a new developer and wanted to wait that one out.

Allen had obtained an option for two years on the development rights for four lots plus four boat slips owned by MIDC, not paying cash, but offering some other “good and valuable consideration,” according to the Town report.

“It has been brought to our attention that Mr. Allen, due to his management responsibilities for other projects, will most likely not exercise his option on the development rights,” the report states. “It has been reported by a number of people that he (Allen) is no longer active in the development at Marsh Island and has rented his house on the marina.”

Speaking of the marina, it turns out the “dockominium” planned for Marsh Island doesn’t have all the regulatory approvals it needs because there is no insurance on the marina as a result of “the excessive cost in this market climate.”

Johnson’s financial analysis concludes: “The legal and financial arrangements at Marsh Island are both complex and uncertain with no clear timetable for positive resolution.”