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Boaters Get Bumped By Hot Real Estate Market
BoatUS Magazine - March 2006
What Are The Three Biggest Issues Facing Boating Today?

Access. Access. Access.

While that may just sound like a new take on the old real estate industry bromide, "location, location, location," boating's problem actually does have a lot more to do with real estate than it does with boats. Just ask Florida's Diane Fredianni.

"We've had to move our boat three times since last August because of marinas converting to condominium developments," she reported in early January. "And we may have to move again if this keeps up."

Until last summer, Fredianni and her husband Jim had kept a sailboat at Club Continental Marina on the St. Johns River near Jacksonville since moving to the Sunshine State from New Jersey in 1984.

But three years ago, the 82-slip public marina changed hands, along with an adjacent 100-unit apartment complex, and shortly thereafter, word began to spread that the place might "go condo."

Sure enough, marina maintenance began to slide and services dwindled until last July when the Fredianni's got an eviction notice. The owners intended to convert the apartments as well as the slips to condominium ownership, just as had already happened at many other marinas throughout Florida.

"South Florida has been going through this condo conversion thing for a number of years but its finally reached us up here in Jacksonville," Fredianni says. "It's fierce and if you don't have the money to buy your own slip, I just don't know where people with boats are going to go."

Once the conversion and new construction is completed, slips at the Continental Yacht Club and Marina reportedly will sell for $80,000 to $100,000. But that's considered reasonable compared to places like Clearwater in Southwest Florida, where a wet slip can cost $250,000, and Jupiter where one reportedly sold for double that. Even dry-stack storage slots now are being sold - often as "rackominiums" - with South Florida prices for a slot for a 30-foot boat hitting six-figures.

For their part, the Frediannis felt fortunate to find a rental slip for their Hunter 34 a few miles away in a marina on the Ortega River. But no sooner had they settled in than "condo creep" struck again.

"We were there for two weeks when we got this beautiful, two-page letter from a lawyer saying that the marina would be closing and we had to move out," Fredianni says. "That one was going condo, too."

The Big Picture

When Will Rogers said, "Buy land, they ain't making any more of it," he was right, in spades. But when it comes to waterfront, Rogers was right in spades, clubs, diamonds and hearts since developers - in Florida and across the country - have gambled on the public's desire to live by the water by gobbling up ocean, bay, lake and riverfront land at a high-stakes pace.

While many of the stories about marina operators selling out at formerly undreamed of prices to condo developers come from this big boating state, this is by no means solely a Florida phenomenon, according to Dr. Edward Mahoney, director of the Recreational Marine Research Center at Michigan State University.

"It's becoming harder and harder for small marinas to survive," reports Mahoney. "The marina situation is similar to the family farm problem. Marina owners often view their properties as a retirement nest egg and when they sell out, a marina's upland area is often converted to residential uses and the slips to condominium ownership."

The result, Mahoney says, is that not only are rental slips lost, leaving boaters of more modest means high and dry, but fuel docks, haulouts and other service facilities like pumpout stations are going by the wayside as well. His home state of Michigan is losing marinas at a rate of 3-5% percent annually, he says.

In addition, in many marinas, whether condominiums or public rentals, operators are reconfiguring for boats 35 to 40 feet and larger, eliminating less profitable smaller slips. This trend is pushing more people into trailer boating, Mahoney and others in the industry say, taxing ramp capacity and parking facilities in many areas, one more piece of the water access conundrum.

Indeed, whether it's the loss of wetslips to condos, permit delays for new drystack construction, outmoded launching areas, threatened and endangered species restrictions or impasses over dredging recreational marinas and channels, boaters are losing working waterfronts big time, Mahoney says.

In North Carolina, the state's Marine Services Center reports in its TradeWinds newsletter that the trend is hurting efforts to attract marine businesses and related jobs. Says director Mike Bradley, "The resale value of working marinas and yards that provide haul-out and repair services is becoming so high, the only valid decision for the owner is to sell out to high density uses like retirement and second home condominiums and condo slips." Once those service facilities are gone, Bradley says, there's no way to get them back.

The West Coast is by no means immune, either. Residential units going up around Marina del Rey, the 4,000-slip marina owned and operated by Los Angeles County, is cutting into the number of slips and in turn squeezing boaters out of the market, according to Southern California's Boating News.

"If you reduce the number of boat slips, you have more parking spaces for your apartments," charges Emilio Basile who keeps his 47-foot sailboat there. That has led to lawsuits from boater groups at the marina, which has lost over 1,000 slips in the past decade, the newspaper reports.

On the Gulf Coast, natural disaster is the culprit now putting boating access at risk. Last year's back-to-back-to-back hurricanes, Katrina, Rita and Wilma, hung a $1.2 billion price tag on rebuilding the Gulf fishing industry and its infrastructure alone, William Hogarth, head of the National Marine Fisheries Service told the Fisheries Subcommittee of the House Resources Committee in January. That includes lost boats, gear, marinas, seafood landings, charter boat docks and vessel launching areas.

Congress has since approved $62 billion for Gulf Coast restoration but as yet, little has gone to rebuild waterfront infrastructure.

Unless federal, state and local governments do something, Hogarth said, the fishing towns and their historic waterfronts will become attractive real estate targets for condominium and casino developers. "That would be, in my opinion, a very big mistake," he told lawmakers.

Rolling Up the Sleeves

While BoatU.S. and others in the boating industry have grappled with the access issue in its many manifestations for years, last summer the National Marine Manufacturers Association created a Water Access Task Force, putting muscle and money behind it. The 21-member team includes representatives of the boatbuilding and marina industries but also the States Organization for Boating Access, the Recreational Boating and Fishing Foundation and BoatU.S.

The Task Force developed a nine-point plan to, among other things, inventory the scope of the problem nationwide, identify common obstacles to boater access and develop strategies to combat these impediments, and in the end, actually increase access to the water.

"This is a major undertaking for all of us because the access issue is so complex, it usually surfaces as very local problems and it often deals with private property," says BoatU.S. President Jim Ellis.

"The good news is that because of industry efforts in the past few years, local governments in Florida are waking up to just how important recreational boating is to their economies and to the way of life of their constituents," Ellis adds. "At the same time, the Florida State Legislature enacted the landmark Working Waterfront bill in 2005. This is a tool that we want other states to model."

That law requires municipalities on the water to encourage the preservation of recreational and commercial "working waterfronts" in their comprehensive land use plans and it also provides tax relief measures for marine businesses that stay in operation. A second Florida bill, eases permitting requirements for public boat ramps and marinas.

"These are measures that the Water Access Task Force can take on the road to states and communities that are just starting to grapple with this issue," Ellis noted.

Other potential remedies in the Task Force toolbox include:

  • Encourage counties and local governments to create waterfront commissions or citizen task forces to preserve boating access.
  • Pass bond issues allowing local jurisdictions to buy development rights of existing marinas and boatyards, and build new launching ramps with adequate parking.
  • Provide economic impact data on boating and the marina industry that will justify public investment in boating infrastructure.
  • Direct boaters' taxes and fees, like state gasoline and sales taxes and boat registration fees, to programs that preserve and increase access.
Those are potential state or local solutions to the access problem - some already in use, others not yet ready for prime time. There are positive developments at the national level as well. Last year, BoatU.S. and a coalition of organizations convinced Congress to put more money - $55-$60 million over five years - into the Boating Infrastructure Grant program that provides facilities for transient boats. Congress also boosted funding for another federal boating access grant program that by next year will be providing about $54 million annually for states to build, upgrade and maintain launching areas.

 

Furthermore, a bill now in Congress, the Working Waterfront Preservation Act, sponsored by Sen. Susan Collins (R-ME), could direct more federal money into rescuing water access. Collins' bill, S. 1723, would establish a $50 million annual grant program to be administered by state fishery agencies - much as the Boating Infrastructure Grant program is managed - to assist local governments, non-profits, and fishermen's cooperatives in purchasing property and easements, or to maintain commercial facilities.

But many of the same marinas, service yards and on-the-water repair business that cater to commercial fishermen also serve recreational boaters. Thus, there should be justification for amending the bill to include recreational waterfront facilities. S. 1723 was still in committee at press time.

Boaters in Maine who want to help BoatU.S. get the Working Waterfront Preservation Act amended to include recreational boating facilities can send a message to Sen. Collins by going to BoatUS.com/gov/fed/workingwaterfronts.asp

By Ryck Lydecker

©BoatUS Magazine, March 2006

The Maine Event

Sen. Susan Collins' Working Waterfront Preservation Act has its roots deep in a local issue of the Pine Tree State. Like many coastal states, Maine is losing its waterfront to residential development but Down East it's the seafood industry that's suffering, the independent lobsterman, in particular.

“Small owner-operators were getting taxed off their wharves,” reports Robert Snyder of Maine's Island Institute. “At the same time, boatbuilders and others in the marine trades were having a harder and harder time staying on the coast.”

As in Florida, a second-home/retirement home boom is driving up land values and pushing the “working” off Maine's waterfront, Snyder says. To deal with the issue, the Institute joined forces with Maine's Lobstermen's Marine Trades and Fishermen's Wives Associations and Coastal Enterprises, Inc. to form the Maine Working Waterfront Coalition, which has become a significant political force in the state.

To make a three-year-long story short, the coalition, now numbering 100 organizations, worked with the state legislature to pass a tax relief measure – similar to that already enjoyed by farming and forestry – last November. And by a 73% margin, Maine voters also passed a $2 million bond issue the coalition drafted. That money is earmarked to help small fishing and marine businesses purchase waterfront sites for their operations.

In getting its arguments lined up, the coalition commissioned an economic study by the University of Southern Maine which shows that the working waterfront contributes anywhere from $15 million to $168 million more per year to the gross state product than does coastal residential construction. (For more information go to BoatUS.com/gov/fed/workingwaterfronts.asp)

“it's been hard work to bring together so many constituencies,” says Snyder. “But when everyone understands that there is a common threat to their history and economy, you can motivate people who aren't even part of that industry, and who might actually be adversaries in another situation.”

If access to the water is becoming a problem where you boat, consider forming a local or state alliance to preserve your working waterfront. Click on “Get Involved” for how-to information.

By Ryck Lydecker

©BoatUS Magazine, March 2006