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AGENDA

BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND

SEPTEMBER 9, 1997

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Item 1 Brevard County Aquaculture Leases

REQUEST: Approval to (1) use approximately 340 acres of sovereignty submerged lands for shellfish aquaculture activities; (2) issue 37 five-acre aquaculture leases to qualified applicants within four high density lease areas; (3) issue seven additional five-acre aquaculture leases after the applicants have met all legal requirements; and (4) make the remaining acreage in the proposed lease areas available for lease under specific conditions.

COUNTY: Brevard

APPLICANTS: 44 lease applicants

LOCATIONS: All four high density lease areas are located within the Indian River, within the local jurisdiction of Brevard County.

Body A: North of SR 402 between the Atlantic Intracoastal Waterway (AICW) and Black Point (S 10; T 21S; R 35E) (28 40. N / 80 48.W);

North Body C: South of SR 405 between the AICW and Merritt Island (S 9 &16; T 23S; R36E) (28 30. N / 80 44. W);

South Body C: North of SR 528 between the AICW and Merritt Island (S 9 & 10; T 24S; R36E) (28 25. N / 80 43. W); and

Body F: Southeast of Grant Farm Island (S 1; T 30S; R 38E) (27 54. N / 80 29. W).

CONSIDERATION: The lease fee for all of the proposed leases represents (1) a base annual rent of $15.58 per acre or fraction thereof; and (2) an annual surcharge, representing $5 per acre or fraction thereof for deposit in the Marine Resource Conservation Trust Fund. Pursuant to section 370.16(4)(b), F. S., each applicant's lease fee shall be adjusted on January 1, 2000, and every five years thereafter, based upon the five-year average change in the Consumer Price Index.

STAFF REMARKS: The Department of Environmental Protection (DEP) received numerous applications for aquaculture leases in Brevard County from October 15, 1993, to March 11, 1996. Because of the large number of lease applications received in 1995, staff deferred action on the individual applications in order to consolidate the review and approval processes. Staff also wished to allow the Brevard County Board of County Commissioners an opportunity to determine a course of action that would be the most appropriate for the county. It was agreed that consolidating the applications would facilitate the review process so issues related to aquaculture lease applications could be addressed together at one time.

To accommodate all of the applicants and facilitate locating leases in suitable areas, staff identified three new high density lease areas, one each in Body A, Body C, and Body F, and expanded the existing lease area in North Body C. The total proposed lease areas include 340 acres of sovereignty submerged lands; 50 acres in Body A, 40 acres in North Body C, 50 acres in South Body C, and 200 acres in Body F.

Thirty-seven lease applications were noticed and subsequently considered by the Commission in a regular session on April 23, 1996. The Commission adopted a resolution objecting to the 37 applications and advised the DEP that they would be willing to reconsider these applications when additional information was provided regarding subleasing, fees, a surcharge to return revenues to the county, availability of future leases, how leases would be awarded, revocation

Board of Trustees

Agenda - September 9, 1997 Page Two

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Item 1, cont.

of leases for offenses against upland property owners, and the overall goals for managing aquaculture in the county.

Seven additional lease applications were received too late to be placed on the Commission's April 23, 1996 agenda and were not advertised pursuant to section 253.70, F.S. However, subsequent discussions included all 44 lease applications and county staff indicated that these seven leases would be subject to the same terms and conditions as the initial 37 leases. In the event that the initial 37 lease applications are approved and the additional seven leases are also approved, these seven leases would be issued contingent upon the applicants meeting all statutory requirements in chapter 253, F. S.

Discussions continued while DEP staff responded to Brevard County's concerns in public meetings before the Board of County Commissioners on July 16, 1996, January 24, 1997, and July 1, 1997. Throughout these discussions, the majority of the County Commissioners contended that they would not object to the leases if specific conditions could be met. These conditions included (1) increasing lease fees; (2) developing a mechanism that would return a portion of the lease fees (or other fee) to the county; (3) eliminating a successive ten-year lease renewal provision in the standard lease instrument; (4) prohibiting subleasing; and (5) providing that leases should be forfeited if a leaseholder was convicted of a crime against an upland property owner. Since all of these conditions could not be agreed upon by all parties, the majority of the County Commissioners remained firm in their opposition to the lease applications.

Staff provided information to the county to resolve specific leasing issues and to develop the "Brevard County Aquaculture Leasing Plan." On January 14, 1997, the Commission approved a leasing plan for the county and directed its staff to prepare a resolution of no objection to the 44 proposed leases, provided all leases complied with all of the conditions of the plan and included specific conditions regarding competitive bidding, fees, and lease terms. Subsequently, the Commission reversed its decision to approve the lease applications that complied with the county's leasing plan. On July 1, 1997, the original resolution of objection to the 37 lease applications was withdrawn and a second resolution objecting to the 44 leases, including those not yet advertised, was adopted. This resolution of objection specifically identified two conditions in the state's current leasing policy that did not comply with the county's leasing plan: (1) the proposed leases should not exceed ten years or have a condition for renewal for successive terms; and (2) lease fees should reflect and be determined by fair market value.

The Brevard aquaculture leasing plan contains numerous components that DEP staff supports and has included those components in its recommendations to the Board of Trustees. Staff believes that most, but not all, of the components of the leasing plan are acceptable and that the plan will be a valuable tool for managing the development of aquaculture in Brevard County. If these leases are approved, the DEP will strongly consider the specific conditions contained in the county's leasing plan when issuing future leases and making future recommendations to the Board of Trustees concerning aquaculture leases in Brevard County. Specific conditions in the lease plan that will affect future leases include (1) the maximum area available for aquaculture leases will be 520 acres; (2) limiting all leases to high-density lease areas; (3) no future riparian leases; (4) competitive bidding for future leases; and (5) prohibiting subleasing. Staff included a provision in the lease that prohibits subleasing and assigning, but allows leases to be officially transferred.

With the approval of the 340 acres, the total acreage designated for aquacultural use in Brevard County would be 520 acres, this amount corresponds with the acreage limits proposed in the

Board of Trustees

Agenda - September 9, 1997 Page Three

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Item 1, cont.

county's plan. The 44 current lease applicants account for 220 acres and existing aquaculture leases account for 180 acres, leaving 120 acres for future leases. The county's plan contains a formula for leasing available acreage and includes specific conditions for competitive bidding. The plan also designates 40 acres of the remaining 120 acres for a training and demonstration program to assist displaced fishermen.

The DEP does not support all of the conditions in the county's leasing plan, specifically two proposed conditions are inconsistent with current aquaculture leasing policy. Specifically, staff recommends (1) that leases include a provision for renewal for a successive term that is not to exceed ten years; and (2) that lease fees are set at $15.58 per year.

The DEP has recommended fees for these proposed leases that are comparable to aquaculture lease fees statewide. However, staff believes that in general aquaculture lease fees are low and should be restructured. When the DEP reviews the issue of lease fees and has determined a more appropriate method to assess fees for aquacultural activities statewide, the DEP will request authority from the Board of Trustees to amend chapter 18-21, F.A.C.

Section 253.68, F.S., declares that it shall be the policy of the state to foster aquaculture development when the aquaculture activity is consistent with state resource management goals, environmental protection, proprietary interests, and the state aquaculture plan. Section 253.68, F.S., was amended during the 1997 legislative session, removing the provision that the Board of Trustees could not grant an aquaculture lease when a resolution of objection was filed by the county commission. Before the amendment, the approval process was effectively terminated unless the resolution of objection was withdrawn. The statutory amendment became law on May 29, 1997, allowing the review and approval process to continue even when a resolution of objection was filed. The new law still provides an opportunity for a Board of County Commissioners to comment on and object to the issuance of an aquaculture lease.

Each lease applicant's record was reviewed to determine violations associated with marine resources and public health. One applicant, Michael Perrone, was previously denied an aquaculture lease based on his record of marine resource and public health violations (by the Board of Trustees on March 22, 1994). Since 1994, Mr. Perrone has no record of additional violations. None of the other applicants have a record of marine resource or public health violations.

A consideration of the status of any local government comprehensive plans was not made for this item. The DEP has determined that the proposed actions are not subject to the local government planning process.

(See Attachment 1, Pages 1-54)

RECOMMEND APPROVAL (1) TO USE APPROXIMATELY 340 ACRES OF SOVEREIGN SUBMERGED LANDS IN FOUR HIGH-DENSITY LEASE AREAS IN BREVARD COUNTY FOR THE PURPOSE OF CONDUCTING SHELLFISH AQUACULTURE ACTIVITIES; (2) TO ISSUE 37 AQUACULTURE LEASES TO ELIGIBLE APPLICANTS; (3) TO ISSUE SEVEN AQUACULTURE LEASES SUBJECT TO FULFILLING ALL THE REQUIREMENTS OF CHAPTER 253; (4) TO MAKE THE REMAINING ACREAGE IN THE FOUR HIGH-DENSITY LEASE AREAS AVAILABLE FOR LEASE SUBJECT TO SPECIFIC CONDITIONS; AND (5) TO INCLUDE SPECIAL LEASE CONDITIONS.