Dewey Business Partnership rescinds $250,000 offer

Town cites ongoing Highway One suit as reason for delay
May 30, 2014
Dewey Beach Partnership has rescinded its offer to pay the town $250,000 over the next five years. The proposal was made as an alternative to Dewey Beach town officials instituting a gross receipts tax. SOURCE FILE PHOTO

After not getting a response from the town for more than three months, a proposal by 12 Dewey Beach businesses to pay the town $50,000 annually for the next five years has been rescinded.

On Feb. 7, the Dewey Business Partnership presented a proposal to pay the town $250,000 over the next five years as an alternative to the town implementing a gross receipts tax on businesses that make more than $200,000 annually to help offset growing town costs.

In March, council decided to delay action on the proposal in light of an ongoing lawsuit with Highway One. The partnership had requested a response by April 14.

On May 14, partnership members Steve Montgomery, Jimmy O'Conor and Kelly Ranieri sent an email to Marc Appelbaum, Dewey Beach town manager, officially rescinding the offer.

“Although Jimmy O'Conor and I have heard orally that our offer is rejected and 'not even in the ballpark' by three of our five commissioners, no formal response has been received from the town despite our April request,” writes Montgomery, Starboard owner. “With the start of the summer season, I write to inform you that the board of directors of the DBP has voted to rescind the offer.”

Talks between the town and its businesses began after the town proposed a gross receipts tax in November 2012 on businesses that make more than $200,000 annually. The town’s budget and finance committee estimated 19 businesses would be eligible for the tax, which would raise about $160,000 in revenue annually.

In July 2013, after voting 3-2 against putting the tax to referendum, town council gave the business community six months to come up with an alternative solution for revenue.

The partnership’s proposal came in February 2014. Under the proposal, 12 businesses would have split the $250,000 – the Lighthouse and the Starboard will pay $9,000 annually, while Highway One's six businesses will pay $4,166 each and Hammerheads, Nalu, Que Pasa and Woody's will each contribute $1,000.

Town commissioners David Jasinski and Gary Mauler worked with the business community to come up with a viable proposal the town could agree to.

Jasinski said he thought the proposal was more as a framework to begin with, not necessarily the final product, which won't be decided until after a decision on the lawsuit.

“The issue of the businesses is still out there,” he said. “We really could never have accepted the proposal while the lawsuit is pending.”

Appelbaum said he didn’t understand the purpose of withdrawing the proposal.

Montgomery said partnership would be willing to begin discussions with the town again in the fall.

“If there is an opportunity to work together over the next winter season on ideas that may help to increase revenue, we look forward to continuing the working relationship,” he wrote. “Thank you and best of luck on a safe and successful summer season.”