WESTERLY — The Misquamicut Business Association will pay the town 10% of net revenue it generates from use of property at 316 Atlantic Ave. under terms of a new one-year lease agreement. The association runs a popular drive-in movie theater and tourist information booth on the property.
The Town Council approved the new lease by a 6-0 vote Monday. Town Councilor Caswell Cooke Jr., who serves as executive director, a part-time paid position, of the MBA, recused from the vote. Cooke did not participate in any of the discussions or negotiations related to the lease and received an opinion from the state Ethics Commission stating he should not participate.
The new lease, which runs from April 1 through March 31, 2022, authorizes the MBA to continue running the tourist information booth, the drive-in theater and other recreational offerings on the property. The town will continue to operate the property as a beach parking lot during the day. The MBA is also allowed to sell retail and promotional items in conjunction with tourism from the property.
The MBA is responsible for maintenance and upkeep of the property and will assume 100% of electric costs. Previously the MBA paid a percentage of the electricity cost. The MBA, under a provision in the lease, indemnifies the town from liability for damage claims or injuries and is required to obtain an insurance policy that provides for $5 million for each person injured and $200,000 for property damage.
The insurance requirements in the new lease are more comprehensive than those required in the previous agreement.
The MBA has run the tourist information booth for about 15 years and the drive-in theater for about 10 years. The previous three-year lease expired in September. The MBA paid $1 per year for use of the property under the previous agreement.
Council President Sharon Ahern on Friday said the council took a more deliberate approach to the new lease because Town Attorney William Conley advised the council that previous leases were akin to operating agreements rather than leases, and Conley recommended a more formal lease agreement. The town has similar leases for the concession stand at the Town Beach and town-owned property on Margin Street that is leased by a marina operator.
The council, Ahern said, also wanted to take a more formal approach for the new lease because Cooke was not a member of the council when the previous agreement was signed. “We had to be super careful and he recused himself immediately,” Ahern said.
The council was also interested in new lease terms, Ahern said, because the MBA “good for them, they had done really well last year and we hope for their sake and the town’s that they continue do well, which is why we put some new terms in there,” Ahern said.
The MBA added movies and other events last summer when it discovered that the drive-in movies were proving quite popular during the COVID-19 pandemic when many activities were canceled due to safety concerns. According to a summary provided by the MBA, the association made $53,159 in net revenue from operations at the property last summer.
Ahern also said she was pleased with the new insurance requirements. “The language on insurance is spot on. That was my number one concern so that we as a town are not liable,” Ahern said.
The MBA was represented by Rebecca Greene, one of its board members, in the negotiations with the town. On Friday, Greene said the experience was frustrating at times.
“One reason I don’t understand or care for it is because we never really got any justification for why they were doing this … why all of a sudden they wanted to do it this year and not in any of the other years,” Greene said.
While some members of the MBA might disagree, Greene questioned whether it was appropriate for town officials to seek a percentage of revenues generated at the property following a particularly strong year that appeared driven by the pandemic.
“The agreement is fair. It is what I counter-offered with them. Obviously we would like to not have to pay anything and we’re not sure it’s completely fair for our group to have to pay because we made some revenue off of what was some crazy times with COVID,” Greene said.
Greene also noted that the MBA stopped applying for annual financial subsidies from the town a few years ago. “They saw that we made some money in 2020 and now they want their cut I guess,” Greene said.
Councilor Philip Overton said he was satisfied with the new lease.
“I want to thank the town attorney and my fellow councilors and the MBA for working this agreement out. It seems to be very fair for the MBA and the taxpayers. There’s no forced cost; if they make money after expenses, 10 percent goes to the town … which I think is very fair to all parties,” Overton said.