Harbor fuel dispute prompts Oak Bluffs plan to sell fuel
A financial dispute involving the only marine fuel retailer in Oak Bluffs left the busy harbor without fuel for the Memorial Day weekend. Concerned about a potential loss of revenue if boaters avoid Oak Bluffs Harbor because of uncertainty over fuel availability, the town is moving quickly to establish a temporary fuel pumping facility near the harbormaster's office.
Town officials fear a loss of harbor slip and mooring revenues, if boaters are uncertain about the availability of fuel. Photo by Steve Myrick
Harbormaster Todd Alexander said doubts about the fuel situation are already having an effect. "It did last year," he said. "It's too early to say this year. Once the word is out that there's no fuel, we're afraid that's going to start changing the pattern. It doesn't take long. We're a marina. We have everything a marina is supposed to have, and fuel is on the top of the list. It's not an option, it's not a luxury, it's a necessity."
Oak Bluffs realizes a great deal of money from the town-owned marina. Last year, the total revenue was $992,978. Of that total, 93 percent came from seasonal and transient rental of slips and moorings.
Oak Bluffs is seeking permits to begin operating a town-owned marine fuel station for boaters in the busy harbor.
"It's not as much a question of getting the town into the fuel business," said town manager Michael Dutton, "as it is protecting the town's interest in revenue generated by the harbor."
David Pothier, chairman of the harbor management committee, said the town received a lot of complaints about fuel service last summer. "They can't get fuel, they can't get water," he said. "The last couple of years, fuel in the harbor has been spotty at best. I've been taking my boat to Falmouth for fuel. I'd rather buy locally."
Mark Wallace, who owns Jim's Package Store and the automobile fuel station at 27 Lake Avenue, provided fuel for boaters last year from Church's Pier on the harbor. He disputes the charge of town officials that there were problems with the availability of fuel, and says he intends to have fuel readily available this summer. "It's not in their best interests to say I'm doing a great job," he said.
Mr. Wallace said that the marine fuel operation is not profitable enough to have an attendant stationed at the fuel dock, but boaters can contact his staff at the nearby automobile fuel station by phone or marine radio to request service. "They're one minute away," he said.
Mr. Wallace said fuel has been available to boaters when his gas station is open, from 7:30 am to 6 pm, seven days per week during the summer season. He added that he expects to open for the season next week. Fire chief Pete Forend said Wednesday he does not yet have a permit application from Mr. Wallace to dispense fuel, but expects one soon. A safety inspection of the fuel facility will be required before the town issues a permit.
Permit process
Last week the town began the process of getting regulatory permits to install temporary fuel tanks and begin selling diesel and gasoline. Mr. Dutton and Mr. Alexander presented their plans to the land use planning committee (LUPC) of the Martha's Vineyard Commission (MVC). The LUPC initially considers applications in a more informal session, and can make recommendations to the full commission. Oak Bluffs harbor is designated as a district of critical planning concern by the MVC. The commission has wide latitude to control development in such districts. Among the key issues listed by the MVC staff are economic loss, the possibility of fuel spills, vapors and smells. Also listed as a concern is the flow of ferries, cruise ship launches, and other boat traffic through the channel as boats get fuel.
"We ran into a lot of questions, but not any particular opposition," said Mr. Dutton of the session before the MVC committee.
According to the town's application plans call for installing temporary fuel tanks on the harbor bulkhead, across the sidewalk from the harbormaster's office. Fuel would be dispensed from the floating dock next to the office. The tanks would rest on a gravel bed. The bottom of the tanks would rest two feet below grade, about three feet would be above ground, surrounded by a decorative fence.
"While it is being proposed only to cover the fuel demands for this summer and next summer," said the town in its application, "if it works for the boaters and the town, it may become a permanent facility. If this happens, the town could propose to bury tanks rather than have above-ground tanks."
Mr. Wallace criticized the plan in a conversation with The Times. "They want to put above-ground tanks in front of people's houses," said Mr. Wallace. The town's proposal says the tanks would be approximately 60 feet from the nearest residence. The application says the end of the floating dock, where fuel would be dispensed is approximately 140 feet from the nearest residence.
The MVC has scheduled a public hearing on the proposed fuel tanks for June 4. Mr. Dutton said the town hopes that all permits will be in place for the town to begin selling fuel for the July 4 weekend.
Permits will also be needed from the town's conservation commission, planning board, zoning board of appeals, and fire department. A permit is also required from the state Department of Environmental Protection.
Court concern
Much of the concern of Oak Bluffs officials stems from a legal and financial dispute that involves Mr. Wallace's business. He owns the fuel tanks where marine fuel is stored, but he sub-leases the Church's Pier marine fuel facility from R.M. Packer Company, a fuel wholesaler in Vineyard Haven owned by Ralph Packer. Mr. Packer once owned the property and still holds a long-term lease on the fuel dock. According to Dukes County registrar of deeds records, Packer Company also holds a $250,000 second mortgage on the property owned by Mr. Wallace.
Earlier this year, Mr. Packer initiated foreclosure proceedings against Mr. Wallace.
"They are far behind on their payments on their property, and we've got to take some action, to try to remedy the situation," Mr. Packer said this week.
On May 8, the Dukes County Superior Court granted a request from Mr. Wallace for a temporary restraining order to halt the foreclosure proceedings. The civil case was transferred to Bristol County Superior Court, where a judge heard arguments from both sides of the dispute on May 14. The court took the matter under advisement, continued the temporary restraining order, and asked the two sides to return to court for a hearing next week.
Further complicating the issue is a dispute over the cost of cleaning up a fuel spill that occurred on July 8, 2007. A deliveryman for R.M. Packer Company began pumping fuel into a tank that was already full. A pressure safety valve on the underground tank opened, sending a geyser of diesel fuel into the air. About 700 gallons of fuel was spilled onto the outdoor patio area of the Sand Bar restaurant.
Who was responsible for the spill, and who will ultimately pay for the costly clean-up, is the subject of another legal dispute among Mr. Wallace, Mr. Packer, and their insurers. Mr. Packer said he covered the initial cost of the clean-up. After the incident, Mr. Packer did not deliver any more fuel to the Oak Bluffs facility. Mr. Wallace began buying fuel from a mainland supplier, who delivered fuel with a tanker truck, by way of Steamship Authority ferry.
