NewburyportNews.com, Newburyport, MA

July 20, 2013

Gov't could buy PI properties

In rebuilding, owners struggle with rising insurance, costs

BY DYKE HENDRICKSON
STAFF WRITER

---- — NEWBURY — It’s getting costly to rebuild on Plum Island. As a result, the town might someday be asked to buy oceanfront property should current homeowners chose to take a government “buyout” and leave their seaside land.

At a meeting of the Merrimack River Beach Alliance yesterday, a town official said that several oceanfront property owners are considering selling their properties to the government rather than rebuilding.

Government agencies, including the Federal Emergency Management Agency and the Massachusetts Emergency Management Agency, maintain a fund of about $7 million that can be directed to communities that are attempting to mitigate storm damage. Officials from the state Department of Environmental Protection said that this acquisition fund can be used to purchase property from owners, with the land designated for conservation purposes. Former owners would have no further claim on the land.

Six houses were destroyed and removed from Fordham Way and Annapolis Way during winter storms. Now several of those property owners are considering taking the fund rather than rebuild, according to Doug Packer, the town’s conservation agent.

If a property owner’s application is approved by government agencies, the fund would pay for about 75 percent of the market value of the land. The remaining 25 percent could be picked up by the town for conservation purposes, should residents choose.

“It would have to be approved at Town Meeting,” Packer said. “And passage would be difficult at best.”

There are currently three vacant parcels on Fordham Way and three on Annapolis Way. One property owner on each has expressed interest in the buyout program, but town officials did not identify those who are considering leaving.

It is unclear what would happen if the mitigation fund paid for a property, but the town did not agree to take possession and financial responsibility.

Discussion at the meeting, which was chaired by state Sen. Bruce Tarr, R-Gloucester, and attended by Department of Environmental Protection Commissioner Kenneth Kimmell, revealed that some island residents whose homes were damaged are having trouble in generating the money to rebuild.

State officials are insisting that new houses be elevated. Construction professionals said that the cost of driving metal stanchions into the earth prior to construction can cost close to $60,000.

In addition, some homeowners are facing higher insurance costs.

Many Plum Island residents have federally subsidized insurance rates that are grandfathered, and they haven’t changed much in recent years. Putting up a new, elevated structure could rates could rise significantly.

One property owner said following the storms, his rate is going to rise from several thousand dollars a year to $400 to $500 dollars per month.

“A lot of people on the island are blue collar, with limited funds,” said Ron Barrett, who heads the Plum Island Taxpayers & Associates. “When you consider the note, taxes and rising insurance rates, some owners are considering their options.”

Police Chief Michael Reilly said several families have applied to rebuild houses on their oceanfront property, but no final building permits have been granted.

In a separate development, officials reported that a house on Annapolis Way has been raised on wooden blocks in preparation to moving it across the street to land the owner also owns. Such a move would result in open property on the beach.