McCall council approves assignment of Mile High Marina lease to new investor group after public objections

The McCall City Council on Feb. 11 approved an application to assign the city's existing Mile High Marina lease from Mile High Marina LLC to RM Mile High LLC and consented to a related leasehold mortgage to First United Bank and Trust Company.

The vote followed an extended public comment period in which residents raised concerns that city staff and council had not disclosed that the marina's majority ownership might be sold to an out-of-state investor and that an $11.7 million loan appeared to be attached to the venture. Several speakers asked the council to reopen the conditional-use permit (CUP) process and hold a public hearing on the new ownership.

Supporters of the assignment, including the marina's current operator Sam Worley and attorney Steve Milliman, told the council the proposed investor, Resilient Capital Partners (through RM Mile High LLC), brings capital, marina-management experience and intends to keep Worley involved in day-to-day operations. Milliman said the State Department of Lands has already approved a parallel assignment of the state's submerged-lands lease and described the transaction as a standard assignment and financing arrangement intended to retire an existing lender and a minority owner while funding the marina's planned breakwater/boardwalk project.

City legal counsel and staff outlined the limits of the city's authority. City attorney William (Bill) Nichols said the assignment is of the existing lease for the remainder of its term (current lease runs Jan. 1, 2018'Dec. 31, 2027) and that a leasehold mortgage is collateralized by the lease, not the city property. Nichols told the council the lender does not gain veto power over a future renewal because the existing lease expires on its terms in 2027 and any extension will be a negotiated renewal between the city and the lessee.

Residents who spoke expressed three recurring concerns: (1) that the public hearings on the marina expansion did not disclose the new investor or the scale of the financing, (2) that an $11.7 million loan attached to the leasehold suggested the project was heavily leveraged on day one, and (3) that the city should either reopen the CUP hearing or hold a separate public hearing before consenting to the assignment. Speakers included people who stated they had led opposition to the expansion and others who said they felt misled.

Council members debated process and public trust during the discussion. Some members said the assignment merely transfers the existing lease obligations and does not change the CUP or the terms of the lease; others said the community needed more time to review letters and hear the investors' plans in person. That prompted the investors ' including RM Mile High representative Johnny Powers ' and operator Sam Worley to speak directly to council and the public, describing their intended role, the source of capital and their plan to keep Worley engaged in operations.

After the discussion the council voted to approve the assignment, landlord estoppel and consent to a leasehold mortgage. The roll call was recorded as: Council Member Machesek: Yes; Council Member Nelson: Yes; Mayor Giles: Yes; Council Member Thrower: Yes. The motion carried unanimously.

What the decision does and does not do: the council's consent authorizes the assignment and allows the lender's leasehold mortgage to be recorded; it does not change the terms of the current lease, which remains in force through Dec. 31, 2027. Any substantive changes to the lease terms will be part of a future renewal negotiation and are subject to council review.

Council members and staff said the renewal process in 2027 will be the appropriate point to seek specific contractual changes (for example, provisions addressing environmental or access conditions tied to the lake), and legal counsel reiterated that any such changes would be negotiated between the city and the lessee at renewal time.

The council's action completes the local consent portion of the assignment; city staff noted the state Department of Lands had already approved a parallel assignment of the submerged-lands lease.