Tax district eyed for nourishment funding gap
Workers shore up a cottage on the surfline in South Nags Head. (Voice photo)
The district could include up to 1,100 properties on the east side of N.C. 12 and Old Oregon Inlet Road, with 647 of them on the oceanfront.
Among the options discussed by the Board of Commissioners Monday was charging oceanfront property owners $193 per linear foot of property along the beach, which would raise $8 million.
But that left open the question of where to get the money to maintain the beach after the initial project is done. Nags Head’s original plan called for assessing oceanfront properties $100 a foot to get the $5 million needed for maintenance in five years.
If east side properties not on the oceanfront are included, another formula would probably have to be used since they would not have linear footage on the beach.
A special assessment district would require the agreement of two thirds of the property owners in the affected area.
Adding to the town-wide property tax to help fund beach nourishment appears to be off the table. Each penny of tax per $100 of value raises a little over $300,000. Town Manager Cliff Ogburn said it would take a tax increase in the neighborhood of 24 cents to cover the $8 million gap.
Commissioners told Ogburn to look into what the law would allow for an oceanfront district and the various options besides a per-linear-foot rate, including charging per parcel or basing it on assessed value.
But Commissioner Anna Sadler noted that oceanfront properties have “a false value” that is less now than they were after the last revaluation in 2005.
The funding question led to a larger discussion prompted by Mayor Pro Tem Wayne Gray, who asked what beach nourishment was expected to accomplish. He said that it originally was intended to protect the beach and infrastructure but it has since shifted to “protecting rental properties.”
Sadler agreed that the primary intent was to protect the beach, but along with it was the broader goal of protecting the town’s major industry, tourism. Mayor Bob Oakes said that he didn’t see a philosophical disagreement among commissioners on the purpose of the project.
Grey, however, expressed concerns that nourishment would have to be redone in three to four years.
Meanwhile, the town has asked for $11.55 million from the state Division of Water Resources as another source of funding.
A request by the town for $11 million last year was knocked down to $2 million, which was rejected by the General Assembly because it would only consider matching money for federally funded beach nourishment projects.
In a letter to Tom Reeder, division director for the North Carolina Division of Water Resources, Town Manager Cliff Ogburn asked that the $11 million be restored to the division’s capital improvement budget for 2011-2012.
“We need your help,” Ogburn wrote. “Erosion is disabling our economy, which is based on tourism, and greatly damaging property, infrastructure, and the county tax base.”
Ogburn added $550,000 to the request to cover the cost of a study of benthic organisms that live in the surf zone. The state’s Division of Water Quality required the town to develop a plan for the study before a Coastal Area Management Act permit could be issued.
“This was a surprise to us,” Ogburn wrote.
The subject of state funding has come up frequently in Nags Head’s discussions of beach nourishment. Early on, the Board of Commissioners agreed to to include a request for at least $5 million from the state.
Commissioner Renee Cahoon, who is on the Coastal Resources Commission, has questioned why the state will not consider providing money for Nags Head’s project since other communities have received funding for beach nourishment.
But in those cases, the state provided a match for federal funding. Beach nourishment for Dare County’s shoreline was authorized by Congress years ago, but it never received federal funding. Early this year, Nags Head moved ahead with a plan to “go it alone” and pump offshore sand onto 10 miles of beach.
Nags Head’s original proposal called for using $20 million from the $22 million county Shoreline Management Fund. The balance would have been covered by a $16 million bond paid back by the first five years of an additional 1 percent of the occupancy tax.
The Dare County Board of Commissioners last week approved a resolution asking for authorization from the General Assembly to add 1 percent to the occupancy tax for shoreline management. Plans tentatively call for Nags Head to receive $2 million annually over five years for debt payment and for $1 million to be set aside for a $20 million project Kill Devil Hills is considering. The extra 1 percent would generate $3 million to $3.4 million a year.
County commissioners have not yet voted on a proposal to cover 50 percent of project costs each to Nags Head and Kill Devil Hills. As it stands now, county funding would leave Nags Head around $8 million short, even if the General Assembly approves the occupancy tax increase.
Nags Head’s CAMA permit has been approved. The final permit will come from the U.S. Army Corps of Engineers.
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Gail M. Jones says:
For many of us, it looks like this approval is a day late and a dollar short. I wonder if the reason other communities received the State’s help for funding beach nourishment was how, who, and when they strongly began to campaigned for help. I heard through the grapevine that one Senator said he would gladly do all he could, if the Town would only ask. True or not true, I don’t know.
As for a special assessment, let’s get on with it and put that question to the oceanside homeowners with oceanfront owners paying more. The $193 per linear foot is a whole lot cheaper than the price I paid for sandbags to be installed a few years ago. They did an assessment in Sandbridge and it was overwhelmingly approved. They have their beach and their homes. Like I said, a day late and a dollar short.
Mabel Choate says:
Erosion is disabling your economy and damaging the county tax base? Really? How? Prove it!!!
Fish says:
I don’t understand that “day late and dollar short” comment.
If you’ve owned a house for 35 years on the beach, rented it weekly, you’ve pocketed several million dollars.
Plus, it cost so little to build back then. What is the profit margin? 2000 percent? More?
The rental investment paid off HUGE. That you complain it won’t last forever does not make anyone very sympathetic. No investment pays forever.
Ray says:
I agree, Mabel. If “erosion” is disabling our economy and damaging our county tax base, why did we just go through the biggest building boom in history? Why were oceanfront lots scooped up as fast as they became available? Oh, I forgot, the banks have caused our shorelines to erode.
Michael F. says:
Jetty…… J.E.T.T.Y. ……. I’m just saying…
Gail M. Jones says:
Well Fish, I guess you need to know the facts….I fell in love with The OBX when I got married in 1957. My husband’s family from Suffolf always went there for the summers. While living in Texas, NY, NJ, we always came back to the OBX for vacation. After moving back to VA and starting our own business, we scraped together everything we could to buy on the OBX. Our investment was tough and we lived within our means, just to have a piece of property to spend valuable time with our children and grandchildren and show them the meaning of the simple life… good life. In our 4-bedroom house, we happen to have only one TV and one stereo. The closet is bulging with game, puzzles, …you name it, it’s there.
I’ve owned this home for 33 years and it has NEVER been rented..No rental millions went into my pocket, so I’d like an apology…My whole reason for being on the OBX was purely a family connection, not a make-money issue. My heart aches, that so many like you think like this and don’t have a clue as to why we bought down here to begin with. The money I’ve spent with locals to maintain my property would rock your world. Now, that’s coming to an end and I know of several locals that can’t afford to keep their tractors and other equipment because we can’t hire them anymore due to being a nuisance in the eyes of the TOWN. Maybe you have a solution…..
Tim says:
The reason oceanfront property was scooped up is the Outer Banks is a great place to invest and vacation. It is a place where people like Gail can bring their families and spend wonderful time with them. Most locals do appreciate this fact. There seems to be jealousy, which is its own form of greed, fueling the fight against beach nourishment. We need to keep our beaches in good shape so people will continue to invest and vacation here. Beach nourishment is the way to do this.
Bob O says:
Fish, your math is lousy. Even if the cottage netted $20,000 per year for 35 years, which is highly unlikely considering cost of maintenance and repair, utilities, and management fees, it would have made $700,000 in 35 years.
The fact is, most families have bought with the idea of using the home for their family, and renting it out to help with the costs. The folks who have sold had great price appreciation for a long time. But you don’t realize that kind of appreciation until you sell.
The property owners that stay have a different kind of appreciation from the memories that come with annual family get-togethers at the beach and shared experience.
The time and effort that has been spent on sandbags and short-term protections could have been redirected to a better solution and I hope nourishment will be that solution. I am sorry that it may not be in time for the homes that are on the public beach. Whether we get nourishment or not, I believe the Town’s priority has to be to retain a clean and passable public beach.
Fish says:
A solution?
Stop building homes in really stupid locations. Move the ones that are there now.
That area has been designated a really stupid location since the 1930s. You must have, at some point, as the ocean crept up, over 33 years, realized, “Hey, I wouldn’t build a home below sea level in New Orleans. Nor would I build below a levee on the Mississippi. Why am I here?”
But on the other side, I very much appreciate that you don’t rent. You are a minority, and a very welcome one, thanks for that.
Fish says:
Bob, my math may be lousy but yours is better. 20k per year? Your own advocates were saying the OF homes are getting 5 grand a week for 12 week summers. That’s more like grossing, yes I meant grossing, 60,000 per summer for 35 years. Add that up. I wasn’t too far off.
But that said, Ms. Jones doesn’t rent. Her motive is not greed. I can respect that, even though I would guess that she has suspected for decades there would be an eventual end to the place.
Gail M. Jones says:
I guess we should say, “Stop selling property to people that are going to build a house on it.” I think that’s where the problem lies. With 350 ft. between house and water, believe me, I was clueless about erosion. After a big storm in 1985, we discovered we were on a nourished beach. It took the Town a week or so to clean up all the debris, old cars that had been buried…you name it and it was there. What a shock that was….the property was sold to us without any disclosure of this fact. Such a sad situation!!
Kim Savage says:
Fish does not read very well…the home Ms. Jones has owned for 35 years on the ocean in S. Nags Head, has NEVER been rented. There are no millions that were pocketed…only hundreds of thousands spent over the years on sand bags, new pilings, repairs to a weather beaten home after every hurricane and northeaster, and taxes…lord the real estate taxes too. This family has spent hundreds of thousands of dollars trying to preserve a 2nd home, and even pushed for owner expense beach nourishment but was denied over and over. If any of the . . . locals, think that beach erosion in Nags Head won’t affect their economy and livelihood, they got another thing coming. No beaches…no tourists…no buy at your stores, no buy at your restaurants, no spend no money in your town…see if you can keep your business or job!
Fish says:
Ms. Savage forgets that the entire island is not at risk. Even with maximum erosion, the only affected areas (as has been the historical rate, erosion has been going on for decades) would impact less than 1/10th of 1% of our total tourist occupancy.
And, even then, our housing starts far outnumber our rental losses. Nags Head itself just added dozens of condos over the last month.
That No Beaches No Tourists thing is just a jingle and does not apply here, our island, all 70 miles of shoreline, is in no way at risk.
Tim says:
The entire island is at risk when we ignore the most valuable place on the island. The beach.
Gail M. Jones says:
Tim, You’ve got that right and I couldn’t agree more!
Jed says:
You two are so “all or nothing” with this. Just because most of the people here do not agree that this sand dump is affordable or smart, it does not mean anyone is “ignoring” the beach.
That’s the issue, the majority wants to consider all the options, the homeowners only can see one outcome that will make them happy, even if it bankrupts the island and still washes away just like the last ones did.
Tim says:
Not sure what the “all or nothing” means. I do know the nothing option we are doing now is not working. What are all the options and what will they cost. What will the property taxes in the middle of the island be when the oceanfront loses its value? Beach nourishment is a maintenance option that can work and will not cost locals money using occupancy tax.
Jed says:
Exactly my point Tim. What would a planned, slow retreat really cost? using the HISTORICAL numbers for houses we lose vs. the houses and condos and expansions we build.
What would completely removing a row now and going to a sustainable dune system cost?
What would it really cost to keep doing the minimum, sand fences, condemning nuisance property etc?
No one will run the numbers and the ones we do get from Mr. Oakes are assuming a complete catastrophe where all houses stop producing all revenue overnight. That isn’t going to happen. This same exact, slow erosion has been going on for decades, and the island has yet to lose all its tourism as you guys claim it will.
So really, what would it cost? As Selena points out, at 36 million for a pie-in-the-sky project that lasts 5 years, we are spending 7+ million per year to preserve 1.7 million in ACTUAL tax revenue.
Butch says:
to Jed
you said we are spending 7 million per year to preserve 1.7 million in actual tax revenue.
you won’t be spending anything -the tourists will pay for it all..
you forget about the bad name that this will give to people if they have a crappy beach. and about the people that spend there money here when they come-at restaurants and stores-
do nothing and that is what you will have one day– NOTHING!!!