Confusion surrounds canal lease extensions in Lewes

A total of 13 properties along Pilottown Road in Lewes are up for lease extensions. Previously, two 10-year leases had been granted, but across the canal, 99-year leases are available to Lewes Beach owners. Pilottown Road residents would like the same opportunity.

The issue has been discussed in workshops leading up to mayor and city council’s Aug. 8 regular meeting. Officials believe the leases will be renewed, but what the renewal will look like and the cost have yet to be determined. During the July 28 workshop, Deputy Mayor Khalil Saliba said the current lease rate is outdated. Financial Officer Ellen Lorraine McCabe said the properties are assessed at the 2000 value, just like the rest of Lewes.

Councilwoman Carolyn Jones said she believes the length of the lease should be 99 years because that is what she has at her property in Dewey. Jones proposed basing the rate on street frontage, a figure she said would not change. Saliba proposed an assessment of the property in the name of consistency because that’s how Lewes Beach does its 99-year leases. Councilman Tim Ritzert said a proper assessment is in order to determine actual square footage, frontage, and, in some cases, commercial viability of each property. Ritzert, however, did not understand the need for 99-year leases and felt comfortable with the current length.

Lee Ann Wilkinson, a Realtor and owner of a home along Pilottown Road, said an appraiser would base the value of the canalfront property on frontage along the canal. Wilkinson said because there are restrictions on what can be built in the open space, the greatest value is derived from access to the canal. She also said that if there is only one year remaining on a lease – most  leases expire in 2025 – then the appraiser would not assign much value at all to the property. Jones said this was one of the concerns brought up by a group of owners the city met with regarding the issue. Saliba said he believes it’s important to provide taxpayers with certainty in uncertain situations, like taxes.

Mayor Andrew Williams said he wants a solution sooner rather than later, but questions still remain. The city is currently assessing the value of the properties, but it will not have those figures until the week of Aug. 15, nor have they determined if they will use street frontage, canal frontage or the tax bill. Saliba and Jones said they have heard loud and clear that the current duration is not long enough, while Ritzert doesn’t feel the need to extend to a full 99-year, like Lewes Beach. Mayor and city council has repeatedly said it is willing to settle on a length amicable to all parties.

The lease payment, once established, would serve as the city property tax, according to City Manager Ann Marie Townshend. Property owners in this situation pay taxes to both the city and county, while those leasing only pay a bill to the county. Officials say that in some cases, ownership of the property is unclear and supporting documentation is difficult to uncover. In previous workshops, residents said quitclaim deeds – deeds that do not guarantee a 100% clear-cut ownership of the property – had been used in the past, muddying up legal ownership. 

Along with questions over ownership, some members of the public believe there are inconsistencies as to what is allowed in the open spaces along Pilottown Road.

Pilottown Road resident Vince Walsh said he believes people are obstructing the view of the canal, which everyone living and visiting Lewes is entitled to. Walsh referenced something in the code that restricts what can and can’t be installed in the area. Townshend initially said she did not believe there was anything in the code, but corrected herself later in the meeting when Mandalas pointed to language regarding the Lewes-Rehoboth Canal. Townshend said the code states that no continuous fences, hedgerows or landscaping shall exceed 3 feet in height and that all naturally occurring or introduced trees, shrubs, bushes, plantings or vegetation of any kind of manner shall not obstruct more than 50% of the view of the canal from any point along the closest street parallel to the canal.

The properties along Pilottown Road may look different from other areas of open space around the city, but the canal plays a role in that appearance. Gazebos, boat houses and marinas, as long as they do not contain bathing, sleeping or cooking facilities, are all permitted on open space in Lewes. Offices and some services are allowed under conditional uses. The city does not have plans to restrict what is already allowed on the properties, but will be contacting the 13 lease holders to inform them of the rules already in the city code. 

Mayor and city council will continue discussion at the Tuesday, Aug. 30 workshop.