ROSS’S LANDING MARINAThe Ross’s Landing Marina has grossed more than $5 million in income twice over the last five years. The annual gross income over those years is:* 2005: $2.7 million* 2006: $5 million* 2007: $7 million* 2008: $3.1 million* 2009: $2.7 millionSource: Chattanooga
Chattanooga City Council members approved renewing a five-year contract Tuesday night with a marina operator who received an unfavorable audit just seven months ago.
Councilwoman Deborah Scott, who voted against the resolution, said the new contract addressed “some of those” issues from the audit.
“It didn’t address all those that I would have seen,” she said.
The council approved the contract with MarineMax East Inc. on a 6-1 vote. Councilman Russell Gilbert was absent for the vote.
Sam Lowrey, director of real estate for MarineMax, said the new contract is not the same as the one before.
“The term is for five years, but it’s not a renewal under the same terms,” he said.
MarineMax has operated the marina at Ross’s Landing since 2005. The city owns the marina, and MarineMax pays the city a share of the marina’s income.
In May, however, the company received an audit from the city’s Internal Auditor that showed several problems. The audit showed that the city only received payment if the marina’s gross income exceeds $5 million. In five years, that has happened only twice, the audit showed.
MarineMax paid the city $332.13 in 2006 and $20,256.29 in 2007, city records show.
The new contract calls for MarineMax to pay the city once the marina’s income reaches $3 million, Lowrey said.
DOCUMENT DOWNLOADSPDF: Marinamax audit
Another portion of the audit found problems with how the deal was set up five years ago, with the city paying MarineMax’s utilities and the contract having no “out” clause for the city.
Larry Zehnder, the city’s director of parks and recreation, said those issues have been addressed.
He said the city saves money by having a private operator run the marina. If the city ran it, the parks and recreation department might have to spend more than $100,000 on operating expenses, he said.
“The biggest asset is they are operating the waterfront,” Zehnder said.
Scott said after the council meeting that the contract still has problems, but acknowledged it “is better than the last time.”
Contact Cliff Hightower at chightower@timesfreepress.com or 423-757-6480. Follow him on Twitter at twitter.com/CliffHightower.