Court decision casts shadow over plans for yacht club on former Burger King site

LACONIA — A plan to develop a yacht club on a lot fronting Paugus Bay that once served as a parking lot for Burger King was thrown into limbo when Justice James D. O'Neill, III recently upheld a decision by the New Hampshire Department of Environmental Services (DES) denying the property owner a permit to install a docking system.

The former Burger King along upper Union Avenue property consisted of three lots, one of 1.1-acres where the restaurant stood and two smaller parcels to its south, one of 0.56-acres on the water and another of 0.05-acres on the street, which provided space for the drive-through window and customer parking. The three lots had two owners, both of whom leased to Erin Food Services, Inc., which owned and operated the Burger King franchise.

In 1974, DES granted Erin a permit to install a "seasonal modular floating dock" with 52 boat slips on the two smaller lots, which extended across the waterfront of both parcels.

When the leases held by Erin expired the three lots changed hands. Ownership of the larger of the two lots passed to Legacy Realty Trust while the Mastoran Corporation, a restaurant management firm headquartered in Waltham, Massachusetts, took ownership of the remaining lots.

Plans to redevelop the abutting properties kindled the dispute over docking rights. In 2009 local attorney Paul Bordeau and Bill Contardo, a member of the Planning Board, together doing business as P & B Realty Ventures, LLC proposed building a private yacht club on the Mastoran property, which has 258 feet of shoreline. The project would include a docking system with 52 boat slips, mirroring the original dock installed in 1974.

Two years later Watermark Marine Systems, LLC of Gilford leased the adjacent lot with its 364 feet of shoreline with an option to buy, intending to construct a commercial marina with 14 boat slips.

In 2012 both Watermark and Mastoran applied to DES for permits to install docking systems. The agency granted a permit to Watermark but denied a permit to Mastoran. DES found that Mastoran forfeited its right to the dock by failing "for a period of five years to maintain the existing structure in a condition so that it is functional and intact." Moreover, DES ruled that the dock system approved in 1974 was contingent on including, the shorefront of both lots — altogether 622 feet — in calculating the number of slips permitted.

Mastoran filed suit, asking the court to affirm its right to the docking system approved in 1974 and void DES's approval of the docking system proposed by Watermark to the extent it interferes with that right. In court Mastoran argued that when the governor and Executive Council approved the docking system in 1974 it issued "a grant of right" to Erin, which inhered in the property. Moreover, the firm claimed that the approval was not contingent on the inclusion of the shorefront of the adjoining lot.

Watermark countered that since any authority to install the original or a similar docking system expired with Erin's lease on the abutting parcel since the approval of the dock hinged on the company's control of both properties.

In ruling against Mastoran, O'Neill rejected the contention that Erin was awarded a "grant of right," first because the docking system was a seasonal structure that required no dredge or fill and second because, as a lessee rather than an owner, the company was not entitled to such a grant. O'Neill held that Mastoran cannot rely on the permission granted Erin for authority to install a docking system.

Without authority to install a docking system, the prospect of developing a yacht club on the Mastoran property, which is currently assessed for $204,000, is diminished. Mastoran has appealed DES's denial of a dock permit within the agency where a decision is pending.

Contardo said yesterday that he expects Mastoran will also appeal O'Neill's ruling the New Hampshire Supreme Court, but in the meantime he acknowledged that plans for a yacht club are "in limbo."

Watermark is proceeding with construction of the commercial marina where the renovated and expanded restaurant building will house its corporate offices and a retail store.