MURPHYSBORO — An attorney representing the management group operating the Kinkaid Lake Marina said he will file a lawsuit against the Kinkaid-Reed's Creek Conservancy District Board for terminating his client’s contract last month.
The board terminated the contract of the DAR group last month after it had learned earlier this summer that DAR had collateralized structures at the public marina for a $1.3 million loan, despite contract language the board says forbids it.
DAR is comprised of three Cape Girardeau, Missouri couples who took over the marina last year. Brittany and Mark Dirnberger, Agan and Stephanie Alkan, and Mike and Diane Rampley purchased the marina’s assets from its previous longtime owner. They entered into a 32-year land lease agreement with the Kinkaid-Reed’s Creek Conservancy District Board.
The board acts as a landlord to the concessionaire who purchases the assets on the property. The board, however, has to approve of the buyer before the sale can go through.
Among the privately-owned assets that were collateralized were the docks, infrastructure for the camp ground, oil and chipped roads, boat slips, marina area, boat shop and restaurant.
Board Chair Steve McGriff and other board members said the violation isn’t a technicality — it was clear language. However, while the board is concerned that a potential default on DAR's loan could impact the marina property, the group has not defaulted, according to its attorney, Matthew Ferrell.
“It’s a serious breach,” conservancy district board member Chuck Novara said Thursday. “That property cannot be collateralized — those rights cannot be assigned to anybody else,” he said of the contract language.
Ferrell represents DAR and has a completely different read of the contract language.
“I think that the contract is anything but clear,” he said.
The contract language in question is:
“Concessionaire shall not be allowed to assign, sublet, or subcontract any of the rights of Concessionaire under the Concession Agreements and Addendum to any person or entity without the District’s prior written approval, or to pledge as collateral or for any other purpose any rights pertaining to the concession rights, or the site rental contracts or occupancy rights, to any of the District owned lands."
Ferrell said the specific words about infrastructure, boat docks or other structures are not in the contract language that the board claims has been violated.
Ferrell said his clients weren’t trying to slip anything past the board.
“It’s never been the intent for DAR’s members to violate the contract,” he said.
This alleged violation caused the board to terminate the contract with DAR in September. DAR was told to vacate the premises and present a potential buyer to the board by the end of the year.
The termination of the contract caused significant public outcry. Some who opposed the decision came to Wednesday’s Kinkaid-Reed's Creek Conservancy District Board meeting in support of DAR.
“We are quite disturbed (to hear) of the termination,” one said during the meeting’s public comment period.
“It will hurt the local economy, not to mention you are hurting people’s livelihood,” another said.
After public comment ended, the board voted to go into executive session. After returning, McGriff said they had the pieces of a contingency plan in place. The board ordered DAR to find another concessionaire. If they don't do so by the end of the year, McGriff said, the board will find a way to make sure house boats can be served at the marina — house boats can rent marina space outside of the assets managed by concessionaires. He said by spring, hopefully things will be settled out.
Ferrell said he and his clients were hopeful that Wednesday’s meeting would present some way forward without having to take things to court. But, he said, he plans to file a temporary restraining order on behalf of DAR in hopes that a judge will order a return to status quo until a ruling could be made as to whether the group did violate its contract with the board.
Moving forward, he said it would make sense for the two parties to sit down and write a new, more concise contract. But he said that would have to come after the legal action is settled.
McGriff said it is vital to remember the purpose of Kinkaid Lake.
“It’s a public property and we’re there to see to it that our water quality control is all right, and then the other part would be recreation, but we still have to be the stewards of all of it,” he said.
“I think that there is blame on all sides,” Murphysboro Mayor Will Stephens said Thursday. He appoints three of the board’s members, while the Jackson County Board appoints four. He spoke to the board Wednesday and hoped for a tidy resolution.
“If peace can be found I think that is better than conflict,” Stephens said during the meeting. Talking with The Southern Thursday, he said the structure of how the marina is run could need a change.
“My takeaway is that the current configuration of a concessionaire, and the board overseeing that (concessionaire), is probably always going to (form) acrimony,” he said. From his stance, it should be all private or all public, he said.
Looking forward, McGriff said they are waiting to hear from legal counsel as to whether the bank can in fact collect on the public property DAR listed as collateral. He said he’s not sure if the bank has the legal wiggle room to seize any of the property if the loan is defaulted on.
This shouldn’t even be a concern, Ferrell said. He said his clients individually own several successful businesses in Missouri and primarily use the same bank for their ventures.
“The bank couldn’t be further from concerned about this loan,” Ferrell said.
On Twitter: @ismithreports
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