The McHenry City Council gave city staff a green light Monday to work on a package to waive utility connection fees and partially reimburse future sales taxes for boat dealers planning to buy and redevelop the Watertower Marina.
Some members of the council were hesitant to support the idea of giving a tax break and fee waiver to the potential new owners without knowing details.
However, the decision was not final, and the proposal will have to come back before elected officials with the specific financial incentives before complete city approval.
An agreement with the city, if completed, could aid Mary Jo and Mark Munson in transforming the marina into a boat showroom, sales and service location. It would be the couple’s first facility on the water after they have been in the boat-dealing business for decades, and they said they may invest $4.5 million into the project.
Their Lakemoor business location, Munson Ski & Marine, grossed $27 million in sales last year, Mary Jo Munson told the council.
That could mean substantial tax revenue for McHenry as well, McHenry Mayor Wayne Jett and city staff noted. The mayor supports the city cutting a deal with the Munsons.
“We want to either remodel or tear down the existing [Watertower Marina] service building they have there and turn that into sales and service,” Mary Jo Munson told the council. “The front showroom is something they did a little bit of remodeling to. They put a new roof on, and so we’ll keep that.”
The goal is to add a swimming pool and concession bar on the marina property in the future and to hold events there, she said.
“We’re going for green space, upscale and to beautify the entire area,” she said.
She was uncertain how many people the marina might employ under Munson ownership.
The Watertower Marina, prominently located on the Fox River’s east bank just north of Route 120 in McHenry, shut down in 2009, according to its webpage. In 2018, Keith Carpenter, then a new owner of the property, proposed a redevelopment with plans to run a boat storage and service business, the Northwest Herald previously reported.
But additional plans to open a restaurant there, which the city permitted, were scuttled this year by the COVID-19 pandemic, and a long-term vision to construct condos on the north side of the property was proving difficult to bring to fruition, McHenry Community Development Director Ross Polerecky told the council.
Carpenter declined to comment further to the Northwest Herald other than to say the property has been listed for sale for a good amount of time.
The Munsons put an offer on the marina in recent weeks and hope to close Oct. 30, they told the council.
Mary Jo Munson declined to be interviewed until the sale is final, but she and Mark Munson addressed the council Monday evening.
Once the marina is under their control, the Munsons said they hope to start carrying new lines of boats that are not offered at their other sales locations in the region. Fueling services also would continue at the marina.
It could take until the 2022 boating season for some of their newly offered boat models to become available in McHenry if their purchase of the marina goes through. That’s because boats have been in phenomenal demand during the pandemic, with Americans flocking to outdoor activities as the virus limits recreational options, the Munsons said.
They said they and many dealers ran out of inventory this year, and that could be the case next year, too.
The McHenry location could hit $4 million in boat sales in its first year, Mark Munson said. “We also do a lot, a lot of service,” he said.
Granting full-on waivers of city fees for connecting the marina to city water, sewer and stormwater utilities gave 2nd Ward Alderman Andrew Glab pause.
Those fees could cost up to $21,000, depending on the size of pipelines needed to connect the property, Polerecky said. The property currently operates with a well and septic tank system.
Glab suggested finding another mechanism to help with the cost of redevelopment.
“I have no problems if we were to find a way to reimburse that money, but as far as to waive a fee that is to the water and sewer funds, that’s a completely different funding mechanism,” Glab said. “Every time we take and we pass waived fees, it costs the water users and sewer users more money in the long run. Therefore, I have no problems negotiating that, but not right out of those funds. I think we need to find a different way to fund it.”
First Ward Alderman Vic Santi said he supported forgoing city fees on the utility connections.
The Munsons still are calculating the cost of redevelopment, which will influence the ultimate tax rebate and fee waiver proposal put forward to the council by city staff.
“Obviously, they’re putting a lot of money into this property. They want to test the waters and temperature of the council, and that’s what this is for,” Jett said of the conversation with the Munsons. He added there are “no guarantees” that a tax rebate program will be approved.
The city provided no financial incentives to the current marina owner, Polerecky said. Neither Carpenter nor the Munsons disclosed the price of the pending contract.
“The boat sales aspect of this, there is a potential for a good amount of tax dollars coming off this property that the previous owner with the restaurant, we weren’t going to get that,” Polerecky said. “I think this is a really good