I'm in SH too in western LIS. They were bought by Blackstone, the largest private equity in the world! Prices increasing were a given, that is their business model! Not much we can do other than move to one of the few independent marinas left.

 

Pricing all over the pleasure boating community have been on a steady rise for at least the last 20 years or so, but it seems the community is actually shrinking. So many marinas are disappearing. Late season selling prices on pleasure craft are lower over the last 5 years..
I have a feeling that yachting will once again be affordable for the wealthy, only.

 

Pricing all over the pleasure boating community have been on a steady rise for at least the last 20 years or so, but it seems the community is actually shrinking. So many marinas are disappearing. Late season selling prices on pleasure craft are lower over the last 5 years..
I have a feeling that yachting will once again be affordable for the wealthy, only.

That's what I thought about 15-20 years ago. Since then, especially since the pandemic, it's been different. I can't recall a RI marina that has closed. I can recall many that would sell out, but do now and have waiting lists. If you look at the migration of economic strata in the US, the mass affluent class has expanded. That's not the billionaire class, that's the successful class that has several hundred thousand in their 401k, some savings and own their own home. Maybe some have begun to inherit that wealth from the passing baby boomer generation. The mass affluent is the class that owns most of the boats in the marinas. Not the mega yachts at the Newport Shipyard, which is only a couple of dozen of the 15,000 boats in RI.

 

Private equity owns at least 5 of the marinas in 3 mile harbor where I keep my boat and even expanded capacity at one of them.

 

The guys at Blackstone make so much money they can afford whatever Safe Harbor wants to charge. If others can't, it leaves room for them to bring their boats in. Now might be a good time to form a yacht club that isn't driven by ROI and works to serve its members rather than absent landlords.

 

Now might be a good time to form a yacht club

Sounds good, but not sure it’s possible to create a new marina these days. Buying a current one would be cost prohibitive, when you have players like Safe Harbor bidding. A yacht club has to invest in a way that is sustainable forever. That typically means needing to get acquisition debt behind the members. It’s always future generations that actually benefit. Too often, founding clubs (including golf, tennis, etc) go into restructuring bankruptcy first. Even the prestigious New York Yacht Club had its Manhattan clubhouse donated by JP Morgan. Safe Harbor, on the other hand, can leverage (take on debt) and repay it 5 years later, when they sell or recapitalize. That “terminal value” is what drives the return on their investment, which is not available to private clubs.

This may drive more to join current yacht clubs around here. Although, most around here don’t have much dock space of their own.

Wonder if this will blow your mind.…. REITs, which Sun Communities (owner of Safe Harbor) is, are not subject to federal income taxes. They pass most of their profits to their shareholders, via dividends, who then pay taxes on them. REIT dividends are taxed at a lower rate than ordinary income. So YOU are subsidizing the owners of Safe Harbor, whether you’re a tenant or not.

 

I recall when Jack Brewer sold his marinas to private equity funded Safe Harbor and the Koch fund was involved then. As usual, they flipped it several years later to Sun Communities in 2020. Sun is a public company, which has Black Rock and Vanguard as large shareholders. It operates as a Real Estate Investment Trust, invested in manufactured housing, RV parks and marinas. Big corporate balance sheet. Market cap over $17 billion. It would operate similarly to a private equity firm, but not the same.

Their stock price increased in the year following their purchase of Safe Harbor, but then declined back and has been floundering ever since. CEO just retired and successor is just starting. I smell a fresh batch of stock options and or ebitda incentive goals. Customer loyalty won’t be one of those goals.

 

My inflation rate over the past 33 years, has been 0.7%. Shhhh.

 

I lived in New England for most of my life, before buying our current boat and moving to the southern US. We’ve been refitting her since April, and splash next week.

I pay less here for combined yard and slip fees than I did for a single slip in either Boston, MA or Warwick, RI. The difference is largely, I believe, that the marina down here is privately owned. It’s also significantly nicer than either of the SH marinas we kept our former boat at.

Private equity ruins everything it touches, by design.

 

The model for PE is to leverage to buy hard assets, pass the $$ into the owners’ pockets and have the corp declare bankruptcy. The bank ends up with the marina. It’ll take a few years but that’s what going to happen.

 

One big difference between New England and most of the southern US is property taxes, and maybe labor costs. I belong to a dyi club between two privately owned marina (not SH). My new bill for winter storage is $65 a foot with my poppets and labor. The nearby marinas are $75 and $82 a foot, including their poppets and power washing. It's just hard to pay less, even for non profits.

 

To benchmark, our privately owned marina increases rates maybe 10% - 15% per annum. I suspect a significant driver is the value (taxes) of waterfront, which is skyrocketing. This summer tourist town has seen a huge influx of out-of-town-owned teardowns, rebuilt as multi-million dollar McMansions. On the main drag, virtually all multi-generational cottagers and year-round owners have been forced to sell thanks to taxes driven by the out-of-towners. This seems to be systemic at least in the eastern states.

That said, my main concern is there even being a marina. I can't imagine the value of the property. I expect when the owner passes that the family will sell the property to a condo developer.

It was suggested "form a yacht club" which isn't going to happen anywhere in our area. Existing yacht clubs have either died off, or lost their facility. Our local YC is forever barely above water, a combination of expenses, taxes, and internal politics.

The mega investment companies such as Blackstone and CapRock don't give a darn about the client base, or the good of the country. It's all about money. I'm all for capitalism, though unrestrained we now see what happens.

 

Money doesn't talk it swears, and sadly, we will never learn . The lesson , that unbridled capitalism is an evil thing.

 

What is your proposed alternative?

• Hire government employees to regulate prices?
• Prevent the owners of a business from selling when they no longer want to do the work?
• Owners of a business may only sell to government approved buyers (already partially true with antitrust laws)?
• Don't allow private ownership of marinas and boatyards?

Are any of the above less evil than capitalism?

Fred W

 

There is no social democratic country that isn’t based fundamentally on capitalism. They simply redistribute more of the rewards for productivity. The powerful just end up in government. But this isn’t the point of this thread.

Since posting this, the idea of a near monopoly in RI by Safe Harbor is getting more discussion. They do control most of the popular marinas. I can’t blame them for testing the limit of value, but when they own the alternative, that’s not testing. That’s extorting.

 

Puget Sound area has been 10-15% for who knows how many years. That seems ave increase. Then again, housing is averaging 10-15% with a few years at 20%. A house in 1984 you could get for 120K is now 1.5M. The house I bought for 60 is now 750K 3 bed 1 bath at 750 sq ft with a one car garage! A start house is 400-500K around here.

 

Puget Sound area has been 10-15% for who knows how many years.

Wow, so your slip fees double every 5-7 years? I wonder if we’re starting from the same base. In RI, summer seasonal rates for a six month slip range between $200 and $300 per foot today.

 

The problem, as I see it in my local area (Chesapeake Bay) is not the number of sailors, it is the number of people that want to own a boat ... and then just leave it sit and sit and sit. The marinas are more full, but the number of boats on the water on any day seem about half or less than 30 years ago and less than just a few years ago. The boat is a trophy.

I see the same thing in rock climbing. Gyms are popular, classes are popular (kids and adults) and read all about climbing, but the actual number of climbers on outdoor routes, particularly if the walk from the parking lot is more than 5 minutes, is far less than a decade or a few ago. As a climber, the increase in classes was a pain, but mostly they stay to easy stuff and the fab seems to be passing; the classes have moved to the gyms, where the weather is ... air conditioned. I've actually heard people complain that the holds on the outdoor cliffs aren't labeled.

People want to talk about adventure, but actual exposure to the elements, commitment, or risk are less pleasant than surfing the web (and here I am, but yesterday I was sailing and the day before climbing). In addition to the trophy factor, I'm sure this correlates with people buying bigger and bigger boats, which they soon realize they don't have the skills to singlehand since they never served a small boat apprenticeship. So they sit.

If only there was a way to gently push out boats that don't move. Nearly half of the boats in my marina have not been out this year, and half of those not in 5 years. But they pay the fee. You would think that would motivate them to sell or to store it on the hard, but no.

 

The boat is a trophy.

For some that could be true. However, I think boats are used somewhat more than we observe, unless you actually live at the marina. Some are weekend only, some are weekday only, in my marina. The two never see each other.

More likely is the latter if a couple of friends of ours. They never day sail. They come for a week or two, then leave for a month, then repeat. They probably have at least an average number of days on the water, but it could be easy to miss them all summer and see their boat sit.

I think the real driver is the expansion of the mass affluent class who can afford a toy, more than a trophy. Perhaps a bad financial decision.

 

The other observation is that with probably more than 2000 slips within the 5-mile easily visible radius when sailing, no matter how perfect the day, it is unusual to see more than about 5 boats at one time, and often fewer. Add a few fishing boats. Also, about 1/4 of the boats are often being shuttled to nearby marinas for delivery by paid crews; haul outs and maintenance. They are obvious as boats that take a bee line to the next town, about 3 miles to the south. These really should not be counted. Spring and fall these are often the great majority, since the next town to the south does not have hard storage or travel lifts.

 

Why not count boats going for maintenance? That shows that the owners at least plan to use the boats.

 

except that it ties up a limited resource for people that would actually use it. Sort of like staking out street parking places.

Thats a really good point. Slips and moorings are blocked by non-users. This is driving pricing up, because more active users don’t have options. Block Island only allows property owners to have a mooring. Many pass it down between generations and some have no boat. While the harbor master can rent it overnight, it’s not fair that a local with a boat can’t keep their boat, because the wait list is a generation long. I think they’ve recently passed a rule that you can’t go too long without a boat. I met a guy in town who just bought a junker and tied it up.

no matter how perfect the day, it is unusual to see more than about 5 boats at one time

I get your point, but you’d never see me or many of our friends day sailing near the marina. When we head out, we go somewhere.

 

... I get your point, but you’d never see me or many of our friends day sailing near the marina. When we head out, we go somewhere.

There are >1600 slips within 1/2 mile in the two branches of the creek. I understand you point. Still .... I only see a few, as you say, coming and going, and I would have the whole distance to the horizon to see them. And the places they might go are mostly empty, and certainly far less crowded than a few decades ago. I've been in the same creek for 40 years, and traffic is WAY down, even as the slip count creeps up.

Actually, I like it. Less crowding. Just a funny sign of the times. By a trophy and park it.

I went climbing this morning. What was a popular area is mostly empty, which is also nice. Gyms are air conditioned.

 

I'd rather not worry about what others are doing or aren't doing. I'm getting out on my boat and having a great time.

 

To a lot of folks that boat has been in the family for a long time and knowing it is still there gives people hope and a good feeling not a bad price to pay.

 

I live in a marina during the season in western LIS. At least 50% of the boats, sail and power, rarely go out during the whole season, I'd say 5 times or less. I always wondered why people waste their money, but I think the argument above that "dreams die hard" is a good psychological explanation.
That probably also explains those boats that sit on the hard for years and the owner keeps paying the annual fee on the hope of one day splash her and sail over the horizon. For most, it never happens. Sad but true.

 

We all have dreams , hope is eternal in the human breast !

 

Safe Harbor just announced that they will start changing an additional 3% on all credit card transactions. This is in addition to sales tax and the "Safe Harbor Environmental Fee" of 3% on all transactions.

Because they can...

 

Safe Harbor just announced that they will start changing an additional 3% on all credit card transactions. This is in addition to sales tax and the "Safe Harbor Environmental Fee" of 3% on all transactions.

Because they can...

Yeah, that’s pretty much BS. CC transactions are a convenience to both the merchant and the customer.

 

Most states forbid a credit card transaction fee. NC allows such a fee only for transactions under $20, most merchants have a lower threshold.

Fred W

 

it simply gets rephrased as a cash discount

 

Just a possibility - boats get used less because their users/owners are aging out faster than young people are replacing them. As a 70+, I've had 2 seasons taken away from me in the past 5 for medical reasons. DW has had it even worse, and is too afraid of her lack of mobility to sail with me. Many of the folks my age are experiencing the same.

General Boat - builder (and rebuilder) of the Rhodes 22 - has almost completely shut down due to age of owner and lack of customers. Just 12 miles down the road (or Sound) from me with a boatyard full of hulls awaiting rebuild.

I'm not saying this is the only reason, but one of the reasons.

Fred W

 

We are back to the original premise, that Safe Harbor has a sort of monopoly and charges prices and fees that are too high. The solutions are:

• Do nothing. Pay Safe Harbor their price. Gripe about it on Internet forums.
• If you don't like the Safe Harbor product find or start an alternative.
• Lobby for some sort of govt price controls. May impact other marinas.
• Use govt to make Safe Harbor unprofitable through rules and regulations. May impact other marinas.
• Use antitrust laws to force Safe Harbor to sell some of their properties.

Except for the first two bullets, all the others bring us back to the question of a nanny government running our lives.

Fred W

 

If you don't like the Safe Harbor product find or start an alternative.

In RI, that's not really an option any longer. There are smaller, shallow marinas they don't own, but they've purchase the majority of larger, more desirable marinas.

 

This summer I had my 40 year old furler replaced at the local Safe Harbor yard. I asked if they charged a fee for using a card. Answer was no so I handed them my card and got a fairly nice reward for using it.

 

What would be your fair system?

One where the merchant wasn’t being required to pay your rewards, in order to accept a payment stream. Today it costs the merchant substantially more to accept an electronic payment, which should be infinitely more efficient, than to clear a paper check. That makes no sense.

I think the merchant adding the fee overtly to the tab is more honest and fair, than to raise their prices to everyone to cover only those that use cards and get rewards. Merchants have to pay 2%-5% of the sale to visa/mc, to get your money.

If you can design a better, fairer system, you could probably make a lot of money

We only have this system because of the oligopoly of visa/mc. The rewards are majority of the current cost of clearing credit cards. By comparison, they don’t pay nearly as much to clear a debit card, because their aren’t generally rewards on those.

And many that just price it in as the cost of doing business.

Yes, priced in. All businesses have to cover all costs. You think you’re getting cash back, but you’ve paid roughly that much more to get it. There is no free lunch.

I feel for some of the folks who carry CC debt and have to pay approximately 22% interest. And ridiculous late fees. And help subsidize my rewards .

This we agree on, so why not stop the practice? However, those rates also account for the extraordinary amount of fraud and default that occurs. Less than half of credit card users carry a balance to incur interest charges. One advantage a credit card provides to the merchant is a payment guarantee, if they clear it according to visa/mc rules. Checks can bounce. Visa/mc or the issuing bank eat those fraud and default losses, so there is a built in cost. They recover some via the interest rate, but most via the merchant fee.

In the end, the rewards are a customer acquisition marketing scheme. The customer is always paying for it and, on an whole, are just getting their own money back. Those that carry balances are paying more.