| All Stacked Up Are dry-stack facilities an answer to water access problems and a boon to boat sales? A new breed of developer thinks so. Marine Marketing, Boating World Business Report Tuesday, August 29, 2006 at 12:18PM Last March, one of the world’s most impressive dry-stack facilities opened on a Ft. Lauderdale canal, on the rehabbed site of Everglades Marina, now called Port Marina. What was once a mom-and-pop dry-stack facility has been turned into a high-tech marvel, an eight-story building with 125 racks that accommodate boats from 18 to 52 feet LOA. Instead of using forklifts, the system employs a computer-controlled cable lift system that automatically moves the boats from their cradles to the water. The interior is climate controlled so the boats remain in showroom condition, and the operators flush the engines and clean the boats before they are stored. The hurricane-proof building (built to withstand 140-mph winds) has showers, toilets, and a lounge with plasma TV and gourmet coffee. It looks more like a luxury car showroom than a dry-stack facility. Most of the “rackominiums,” (as opposed to dry-stack storage units which are rented) average about $5,000 per linear foot, and owners pay a monthly maintenance fee as they would on a condominium. But owner Chris Rosenberg says that his Five-Star Rackominium project is geographically well placed and will appeal to multimillion-dollar homeowners who want to keep their boats in perfect condition. “We’ve sold 88 percent of the units,” he told Marine Marketing in early July. “We also have five racks on a lease option to purchase.” Despite six-figure prices, rackominiums are one of the most sought-after boat storage spaces in areas like south Florida, where slip spaces are disappearing as condo projects buy out marinas, and rackominiums provide boat owners a modicum of financial stability (unlike rentals, the prices won’t go up after purchase), even in prime real estate locations like Ft. Lauderdale or Naples. Rosenberg, whose company Vertical Yachts consults on other high-tech rack storage projects in cities like Nashville and another proposed 25-story facility in a “major urban East Coast city,” believes that his computer-controlled dry-stack storage is the “right technology for height-insensitive” metro areas that tend to be vertical. The plans for his 250-foot high facility, for instance, allow yachts up to 80 feet and 120,000 pounds to be stored in the racks. Rosenberg says a second Ft. Lauderdale facility will have the capacity to lift yachts up to 72 feet. “Nobody has ever picked up a boat that big,” he says. While rackominiums are the current rage, both for storing boats and as an investment tool for owners and developers, building storage facilities on dry land in places like south Florida could be one way to stem the loss of water access, though nobody sees it as a panacea. But access is a crucial part of the marine industry’s health in those areas. Brunswick Corp., for instance, has said publicly that 30 percent of new boat sales over 30 feet take place in Broward, Palm Beach and Dade counties. With overcrowding and a net loss of slips, many owners make sure they have a place to keep their boats before they buy. Frank Herhold, executive director of Marine Industries Association of South Florida (MIASF), says that dry-stack facilities could play a role in the health of Broward County’s marine industry, and that the vast majority of permits for slip spaces are for dry-stacks and stackominiums. Herhold says that marina owners and new developers are waiting for permit decisions on 3,266 dry-stack slips in Broward County, as opposed to 250 wet slips. Steeve Knight, owner of a chain of marinas, says the economics of waterfront property in much of coastal Florida make stackominiums a necessity. “The days of the mom-and-pop marinas are past,” said Knight. “I bought a fiveacre site near Sanibel Island a few years ago for about $6 million. Eighteen months later, I paid $27 million for another site in Naples. In Tampa Bay, we paid $42 million for property, and it’s 30 minutes from the Gulf of Mexico.” Knight has created a new spin on his marinas and rackominiums by turning them into yacht clubs (his first project was the Sanibel Harbour Yacht Club) that are owned by the rackominium’s owners/members. “We provide a fivestar concierge service where you call in an hour ahead of time,” he said. “We stock the boat with ice and make sure it’s fueled, and then when you’re done, we wipe it down, flush the engines and put it away.” Members have “reciprocal” privileges at the Knight’s other Yacht Clubs of Americas in Key West, Tampa, Stuart, St. Augustine and Naples. Besides the extra service, Knight says that owners gain financial stability in purchasing the racks at prices that continue to inflate. The dockominiums range in price from $100,000 to $300,000. “Because our entities are condo associations, they will stay as marinas for eternity,” says Knight. “This is the only way we’re going to preserve them as marinas. This arrangement no longer leaves the decision of whether it stays a marina with an individual landowner. Now it’s up to the owners themselves.” Knight says that his clubs are working with boat dealers like MarineMax to find slip spaces for new-boat owners. “The first question people ask before they buy a boat is, ‘Where can I keep it?’” says Knight. “We want MarineMax to point to our new five-star facility as an ideal place.” (Port Marina has developed a similar relationship with local dealers like Cranchi of Ft. Lauderdale and Sundance Marine.) But others say that rackominiums are squeezing out “blue collar” boaters who make up the bulk of boat ownership in Florida. The six-figure purchase price simply leaves most boaters out of the equation. Pat Riley, manager of the Leeward Yacht Club and past president of the Southwest Florida Marine Industries Association, notes that the lack of access to the water has caused dry-storage facilities to go up in cost as wet slips disappear or go private, especially for non-trailerable boats over 30 feet. “If you want to live aboard in this part of Florida, it’s almost impossible to find a slip,” he says. “I know many people who have bought single-family homes for the dock space in front.” The result is a smaller number of larger boats in the rackominiums or dockominiums, as privately owned wet slips are called. But not every marina with dry storage subscribes to the rackominium concept. Raymond Graziotto, president and co-owner of Loggerhead Club and Marina, with nine marinas from Vero Beach down to Miami, says his company has no intention of creating rackominiums. Instead, he leases slip space out to local boaters. “We are trying to create a brand name for our facilities that is more valuable than any one single asset,” he says. “Many developers want to cash out at the highest number. We’re taking a longer-term approach that will provide an income stream that isn’t available for the short-term.” Graziotto wants owners in his marinas to be able to cruise from one to the next up the Florida coast, and eventually into Georgia and the Carolinas as they grow. He says the company plans to increase its marina holdings to 20 over the next five years. Another company with marina holdings has also created a four-story dry-stack facility near Folsom Lake that leases its dry-slips to local owners, rather than selling them as dockominiums. The Gold Key Boathouse is part of Watermark Marina’s multi-state holdings, a 440-slip storage facility that allows boats and trailers to be loaded into the stacks. “Our lake feeds off the American and Sacramento Rivers, and that generates a lot of boat traffic,” says Tracy Campbell, vice president at Watermark. “There is a substantial wait for boat storage — 13 years for wet storage and six years for dry storage. Given that we’re in the storage business out here, we decided to build a new facility.” The 80,000-square-foot Gold Key Boathouse is a quarter mile away from the water in an industrial park, so both boat and trailer are stored together on the racks. Campbell says that the Boathouse’s presence has also helped boost boat sales in the area. “We have found a very welcoming group in the dealer community and partner with a lot of them,” she says. “Dealers can tell owners that they have a place to store boats that they want to sell.” While dry-rack facilities and dockominiums may make sense in high-density areas or along coastal areas where access is an issue, they’re not a cure-all to the nation’s access problem. “We will build them where it makes sense on our holdings,” says Raymond Graziotto of Loggerhead. “But there’s not always space, and the permitting process can take years to get through.” While dockominium owners are touting their relationship with dealers, it’s not clear if the more expensive drystack and dockominium facilities will have a long-term positive or negative impact on boat sales. Although they’re possibly helping sell large yachts in high-end south Florida, the exorbitant costs of dockominiums and even monthly dry-stacks are prohibitive to the greater volume of smaller 30-plus-foot cruisers. “It doesn’t make sense to buy a boat for $150,000 if the storage facility is $200,000,” says Leeward’s Riley. “But if you buy a million-dollar yacht, then it’s easier to justify.” For the moment, the new generation of dry-stacks are helping to solve the access problem that is plaguing parts of Florida and other parts of the country, even if it costs “blue collar” boat buyers. |
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