Boats tied up to docks in Boston Harbor. Potential marina buyers are responsible for complying with existing wetlands orders of conditions and Chapter 91 licenses under Massachusetts law. iStock photo
Massachusetts is blessed with abundant navigable harbors and inlets that can accommodate watercraft of all sizes. It is unsurprising that the commonwealth’s coastline hosts numerous marinas. Marina properties are currently in high demand by investors, but they present special due diligence issues.
In many ways, marinas operate like hotels and other hospitality properties. Revenues are generated by selling slips and providing maintenance, storage services and retail sales to boat owners. Potential investors must familiarize themselves with the usual business issues related to hospitality properties, such as occupancy rates, labor, major contracts and the physical condition of the properties. But unlike most hotels, marinas present interesting challenges involving wetlands and waterways permitting.
Two Massachusetts statutes are of particular concern for marina operations, namely the Wetlands Protection Act and the Waterways Act (also known as Chapter 91). The first of these statutes is an environmental law that protects wetlands, and the plants and animals that inhabit them, from development. The second ensures that properties now or formerly in tidal zones are developed for water-dependent uses, while preserving public rights to tidelands. Both statutes are administered by the Massachusetts Department of Environmental Protection (DEP), which has adopted extensive wetlands and waterways regulations.
SJC Clarifies Enforcement Timeline
One cannot assume that DEP or local conservation commissions will ignore latent or longstanding violations of wetlands or waterways statutes when brought to their attention. The Supreme Judicial Court’s 2021 decision in Conservation Commission of Norton v. Pesa exemplifies the risk of ignoring unresolved wetlands violations. Although that case did not involve a marina, it is nevertheless instructive.
In 1979, a developer obtained a wetlands order of conditions from the Norton Conservation Commission to build a store. The order limited fill near adjacent wetlands. The Conservation Commission later expressed concerns that the project exceeded permitted fill limits, but otherwise refrained from acting.
The developer’s widow sold the property in 2014. Before closing, the buyers asked the conservation commission to issue a certificate of compliance for the 1979 order of conditions. The commission refused, claiming that the land had 11,000 more square feet of fill than permitted. The buyers proceeded with the closing anyway, whereupon the commission demanded that they restore the affected areas to their original condition, and sued them in Superior Court for the violation, seeking injunctive relief and civil penalties.
The buyers hoped that a three-year statute of repose under the statute would exonerate them. However, the Supreme Judicial Court ruled against them, holding that the statute of repose allows enforcement actions against buyers who acquire land that violates the Wetlands Protection Act within three years after the buyers acquire the land. According to the SJC, the statute does not bar enforcement actions against subsequent buyers of the land, even if no enforcement action was brought against any prior owners within the three-year period. Instead, the three-year period starts to run anew upon each sale.
Christopher R. Vaccaro
A Missing License in the North End
The Massachusetts Appeals Court’s 2021 decision in Commercial Wharf East Condominium Association v. DEP shows the perils of noncompliance with Chapter 91.
Boston’s Commercial Wharf was built 150 years ago on filled tidelands under an 1832 statute. After the wharf fell into disrepair, the city and the state legislature produced an urban renewal plan and legislation to rehabilitate the wharf. A developer signed a rehabilitation agreement with the Boston Redevelopment Authority (BRA) in 1974 to renovate the wharf for residential, marina and other uses.
The rehabilitation agreement included plans for parking near the main building. The resulting condominium project included 12,000 square feet of filled tidelands designated for private parking and vehicular access. However, the developer neglected to obtain a license under Chapter 91 for those ancillary uses.
For nearly 40 years nobody seemed to mind the missing Chapter 91 license for private parking and vehicular access. This blissful ignorance ended in 2011, when the owner of an abutting marina and inn alerted DEP to the issue. The condominium association argued, unsuccessfully, that prior legislation and the BRA rehabilitation agreement authorized private parking and vehicular access, but DEP ruled that those uses were unauthorized without a Chapter 91 license.
Both the Superior Court and the appeals court upheld DEP’s decision, confirming that the rehabilitation agreement and related legislation did not substitute for the required Chapter 91 license.
These court decisions show that investors in projects that impact wetlands and waterways cannot afford to “play ostrich” when it comes to permitting. Vigilance is especially important for marinas, which usually require multiple wetlands orders of conditions and Chapter 91 licenses for their operations.
Christopher R. Vaccaro Esq. is a partner at Dalton & Finegold, L.L.P. in Andover. His email address is cvaccaro@dfllp.com.
