A 40-year lease that Spring Point Marina holds with South Portland for 10 acres of waterfront property and a bustling pier will be renegotiated more than a decade before it is due to expire.

The South Portland City Council expressed strong interest Monday night in reopening the lease to improve the terms for the city, which owns the property, and to respond to a request by Port Harbor Marine – the marina operator – to extend the contract beyond May 2020, when it is scheduled to end.

Although the City Council did not take a formal vote, the seven members each voiced support for updating the public-private partnership with Port Harbor Marine, which has developed and expanded business operations since it signed the city’s lease in 1980.

Councilors Claude Morgan and Linda Boudreau will head a negotiating team to include Waterfront Director Tom Meyers, City Manager Jim Gailey, a member of the tax assessor’s office and support from legal counsel. Port Harbor Marine is owned by the Soucy family – brothers Rob, Mike and Marc – who attended the City Council workshop Monday night, which was held at Spring Point Marina.

The City Council’s interest in renegotiating the 37-page contract underscores its interest in the waterfront property, which has become prime real estate since the original lease was signed. In 28 years, a $500,000 federal grant and investments by Port Harbor Marine turned the abandoned, World War II-era shipyard into a thriving and popular destination for boaters, tourists and diners.

Morgan described the original site as a “sledge heap” that languished after the war until the city developed the idea for a public-private partnership in the 1970s.

Under the terms of the agreement, the Soucy family leases the 10 acres from the city for $1,666.66 per month. The city also receives 1 percent of revenues from boat slip rentals and marine supply sales. The Soucys are responsible for developing and maintaining the site.

Morgan noted that the marina’s business model has changed and grown over the years, but that the city’s contract with the company does not reflect that.

For example, Morgan would like to see the city explore the possibility of receiving a portion of the revenues from boat and yacht sales at the site, as it does from boat slip rentals and marine supply sales. He said the current contract does not address boat sales because that retail operation was not anticipated when the contract originally was drawn up.

Morgan added that by reopening and updating the lease, the city also can put to rest a public perception that the Soucy family received a “sweetheart deal” from the city over the years and that “tax dollars are subsidizing a business.” Morgan said after the meeting that he also is open to increasing the Soucys’ monthly rent.

Added Councilor Tom Blake, “I do hear from people out there that this is a sweet deal for the Soucys. It still can be. But I also am in favor of making the deal as sweet as possible for the taxpayers.”

Blake said he also would like to see the South Portland Fire Department berth a fire-rescue boat at the commercial pier. He said that fire officials are exploring whether they can tap homeland security funds for the purchase.

In addition to operating the 260-slip pier, Spring Point Marina oversees several retail operations located on the site, including Joe’s Boathouse Restaurant, a marine supplies store, a boat and yacht sales business and a dockside function room that is leased for weddings and other celebrations.

Although Joe’s Boathouse Restaurant is a “sub-leasee” and rents space from the Soucys, it pays property taxes to the city of South Portland.

A spreadsheet that Meyers handed out to the councilors showed that the Soucys also have made a sizable investment in Spring Point Marina.

The family estimates it has spent more than $1.6 million in site improvements, which includes replacing worn wooden docks with sturdy concrete. The family also paid more than $500,000 on “tangible assets” directly related to operating the marina.

Those figures are important to councilors because the city would have to reimburse the marina for the investments – minus depreciation – if it ever were to break or end the lease to find a different operator.

In an interview prior to the workshop, Meyers likened the city’s arrangement with the marina to that of a landlord leasing a home. He said that if a tenant were to build a garage at the house, it would be reasonable for the landlord to reimburse the cost – minus depreciation – after the renter moved out.

At Monday’s workshop, Councilor Maxine Beecher said she hopes that the city involves its legal counsel during negotiations. She noted that the City Council has no expertise in leasing property to commercial operations.

“I do think we certainly want an attorney involved at some point,” she said. “It is important we do the best we can for our constituents. There is not anyone in this city that would not say that the Soucys are wonderful stewards of a prime piece of real estate. You make us look good,” said Beecher, gesturing to the Soucy family members, who listened to the discussion. “But I am willing to open up (negotiations) to make sure that we are both covered and taken care of… We need to look at this carefully.”

That care and interest were evident Monday night, as the City Council toured the coastal property, which has commanding views of Casco Bay. The 10 acres is actually made up of two city parcels that the tax assessor values at a total of $4.5 million.

Six of the 10 acres the city owns are under water and hold the network of docks and tieups that recreational boaters lease. Boaters can buy fuel and provisions at the marina. Councilors walked the long pier that extends to deep water, passing by small vessels and luxury yachts with names such as Feeling Free, Silver Bear and Post Grad.

The Soucy brothers and their father, Rob Soucy Sr., who founded the business, led the tour of the site, which is bounded by Southern Maine Community College and Breakwater Condominiums.

He noted improvements he has made to the pier and full-service marina over the years. He said that docks have been rebuilt several times in three decades after severe storms. The pier network also has been rewired three times. Berthing spaces have been redesigned to accommodate larger luxury vessels.

The elder Soucy also noted that a number of charity fishing tournaments are hosted at the marina and that an active community of recreational boaters helps to invigorate the city’s summer economy.

In a memo to the City Council, Meyers noted that the Soucys have wanted to extend their lease to enable them to plan for long-range investments and further development at the site.

Morgan, who sits on a sub-committee that oversees the Spring Point Marina, says he appreciates the interest by the Soucys in reopening the lease with an eye toward future growth and continuing operations there.

“If I were a business, I would be thinking about, how do we naviagate our future” beyond the current lease, Morgan said.

Mayor Jim Soule said that it is “not unreasonable for the family to want to know what the future holds with their business… They want to know the relationship we are willing to have. They have been good stewards” of this site.

Gailey said that the next step is to schedule and prepare for meetings, though there is no proposed timetable. The City Council agreed that it is in no rush to renegotiate the lease and is pleased with how well the marina is maintained and operates.

“There is no better time, when there is no pressing need, to have a rational look at things,” Meyers said. “It is much better when you are not under pressure of an immediate deadline. It affords us the ability to step back and think about what we want to do.”

City seeks new deal with marinaCity seeks new deal with marina