Pete Moulton knows that sinking feeling all too well.
Three years after paying $100,000 for four boat slips at the Lighthouse Yacht Club in Canton, Mr. Moulton, along with other slip owners at the Licorice Factory and Lighthouse yacht clubs, says the slips he had hoped to rent out for retirement income one day are slowly sinking into the Patapsco River.
But there's more: The partnership that built the marinas lost the projects to foreclosure, the thrift that foreclosed went broke, and that has left the mess on the laps of the slip owners and Resolution Trust Corp., the federal agency that winds up the affairs of failed S&Ls.;
"It was a long-term investment," said Mr. Moulton, a computer consultant from Columbia. "It looked like they had some good technology. . . . But because of the problems they're not worth a lot."
"The piers are now down on the water and have settled at least 12 to 15 inches," said Ed Wovas, a slip owner who is chairman of an oversight committee that slip owners at the two marinas formed this month to lobby the RTC to fix the piers.
"I don't know why it's sinking. But when something is put together right, and you use the right materials, it shouldn't be."
In this type of marina, a developer puts wood decking on pontoons made of foam that can rise and fall with the tide. The whole thing is attached to pilings driven into the river bottom to hold it in place. But somewhere in the process of building these marinas on the Canton Gold Coast, something went wrong.
The original developer and the main supplier of the foam used at these marinas and the nearby Anchorage marina have already fought over who's to blame in federal court in Texas. Developer Marina Ventures International Ltd. was bested by Polythane Systems Inc. of Spring, Tex., a result the U.S. Court of Appeals for the 5th Circuit upheld in June.
Marina Ventures claimed that PSI's foam was defective because it took on water, causing the piers to sink. It is appealing to the TC Supreme Court because the 5th Circuit did not reverse the decision after finding the trial court improperly admitted hearsay evidence, said Louis R. Koerner Jr., a New Orleans-based attorney for Marina Ventures.
But PSI presented evidence that other Marina Ventures projects that have not used PSI products, including one in Hong Kong, have also had problems with settling piers. PSI blamed bad design by Marina Ventures and said the laminated wood decking had too much oil on it, which cracked the caulk on the Baltimore piers and let excess water seep in.
The appellate court decided PSI's properly admitted evidence was so overwhelming that the trial court's mistake was harmless.
The courts didn't finish with the dispute until after Marina Ventures-controlled partnerships had lost control of the Licorice Factory and the Lighthouse Yacht Club projects on Boston Street to Perpetual Savings Bank in 1991.
But because Perpetual has been taken over by the RTC and is being liquidated, keeping the piers in good working order is the RTC's problem, said John Romeo, an ecologist for the U.S. Army Corps of Engineers in Baltimore, which controls permits for marinas. "The permit holder is required to keep it in good repair," Mr. Romeo said.
The Corps has given Perpetual, which still has a skeleton operation working under RTC supervision, until Dec. 31 to come up with a plan to make repairs and install sewage pumping facilities at Licorice Factory, according to a letter to Perpetual from Donald Roeseke, chief of the Corps' district regulatory branch.
But slip owners like Mr. Wovas and Mr. Moulton want more than just basic repairs. They say the original developers promised the marina would have amenities like conference facilities and showers, which were to be in a dockside building that has never been built.
"Without those amenities, people would probably not have purchased," Mr. Wovas said. "Without the amenities I could have enjoyed the same level of boating by simply renting a slip. They create the social atmosphere for people to enjoy the marina."
Mr. Moulton has been writing to Congress, asking Rep. Helen Delich Bentley, R-Md., and Sen. Barbara Mikulski, D-Md., to prevent the RTC from selling its interest in the marina until the problem is fixed, a tab that could go as high as $2 million. Mr. Wovas said Representative Bentley's office has begun making inquiries on behalf of the slip owners.
Gene Funk, a Baltimore lawyer for the RTC, said the agency wants to help the slip owners, but also wants to avoid making promises it won't be able to keep.
"RTC wants nothing more than to give these people what they paid for to the extent it can," Mr. Funk said.
The options include fixing the project, finding an outside buyer who can do the repairs as part of a deal for the rights to unsold slips and the development rights to expand the marina as the economy recovers, or making a deal in which slip owners take over the project.