The owners of Aquacultural Research Corporation (ARC) have been attempting to sell their privately owned business for several years. It appears they have finally found a willing buyer; the taxpayers and shell fishermen of Barnstable County.
William Clark, director of Cape Cod Cooperative Extension Service, has proposed that the county borrow $4,000,000 to purchase the flood-threatened 39 acres that are currently assessed for $951,900. Another curious aspect of this purchase is that the $4,000,000 to be received by ARC is for real estate only. The business itself will still be owned by ARC. Since the owners have stated they will not release any financial information regarding the business operation, one is left to assume this is a local corporate bailout.
Part-owner Richard Kraus stated at the Aug. 15 Barnstable Shellfish Committee meeting: “We’re not looking for a bailout. Our business works.” If the business works, why the county purchase? To make this “public-private partnership” even sweeter for the private party, ARC will obtain a rent-free 20-year lease to continue to operate their shellfish business “as usual.” This deal calls for only $1,000,000 of the purchase price to be used toward renovation of their property and the remaining $3,000,000 to the owners, which will create three new millionaires.
This scenario comes on top of ARC’s ongoing court battle to overturn Old King’s Highway Regional Historic District Commission’s (OKH) denial to allow the construction of a 242-foot industrial wind turbine on the property. This is a separate project that will benefit the owners at public expense. This $2.2 million taxpayer-subsidized turbine would produce approximately twice the amount of electricity that will be consumed at the ARC site. This would allow them to then sell this excess power back to the same taxpayers who are unwittingly footing a large portion of the construction costs.
In addition, Dennis taxpayers have to date contributed more than $20,000 in legal fees to assist ARC as an intervener in the case, which is only in the pre-trial stage. The Town of Dennis became involved because Mr. Kraus acknowledged at the Oct. 5, 2010 Dennis Board of Selectmen meeting that the viability of the business is in jeopardy without the turbine. The selectmen heard from Mr. Kraus that the business is irreplaceable and could be lost forever. Yet, he also said, “We are not able to transfer that cost (energy costs) to our product because it’s the marketplace right now.” This would imply that there are competitors in the “marketplace” and maybe the business isn’t irreplaceable. The court trial will soon begin in Orleans District Court. OKH is the only regulatory body that has a voice in the construction due to ARC’s farm status.
This brings us to the property that is being invested in. These 39 acres are located on a coastal spit of rapidly eroding barrier beach. The property is approximately five feet above sea level with an estimated 10-year flood level of approximately 10 feet. National Flood Insurance Maps identify this as a “velocity flood zone.” The only access to the property is Dr. Bottero Road to Chapin Beach Road. This road is washed out by storm surge several times a year. The Town of Dennis recently hired the Woods Hole Group to study possible solutions. If it can be done at all, it will be at an extraordinary cost with slim to no hope of a permanent fix. The Woods Hole Group prepared an Erosion Management Plan in March 2012 that describes the dramatic erosion of the beach, coastal processes, coastal resources, geomorphic change, and extreme costs of potential management activities. This plan can be accessed on the Town of Dennis website.
This proposed purchase needs to be approved by the Assembly of Delegates and increased shellfish fees need to be approved by the boards of selectmen of the Cape’s 15 towns. If you feel that a $4,000,000-plus expenditure for a shellfish hatchery in a velocity flood zone that may be soon inaccessible or under water is not a prudent use of public money, let your Assembly of Delegates representative, county commissioners, and town selectmen know.
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