October 2012 - Association of Marina Industries

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6 Industry News Continued from Page 5 commercial real estate brokerage with a team focused on marinas, according to a news release from the company. For the past 15 years, Grasso has served as president of The Marina Specialists, a company that has been successful in evaluating and selling marinas around the United States, the release said. Grasso will help the Sperry Van Ness organization establish itself as a specialist in that property category with a proprietary formula for assessing the value and appeal of marina listings, and a broad network of broker and buyer contacts. “We are thrilled to add one of the nation’s foremost marina specialists to our growing list of Sperry Van Ness advisors,” said Kevin Maggiacomo, president and CEO of Sperry Van Ness, in the release. “We have a diverse national platform, and marinas are a nice complement to the rest of our services.” Grasso’s work in both real estate and finance has spanned more than four decades. He previously served as marketing director for a mid-Atlantic division of Sperry Van Ness. Under his direction, the region was in the top 5 percent of the company at that time. caliber of tools available to brokers, and it is uniquely qualified to provide exceptional services to marina owners.” Grasso serves on the Charles County Planning Commission and, prior to that, was chairman of the Charles County Economic Development Commission. Newport Beach OKs 447% Rent Increase for Large Marinas By Deepa Bharath, The Orange County Register Owners of large commercial marinas operating in public tidelands will face an increase of more than 400 percent, but not until 2015, the City Council has decided. The Newport Beach City Council voted 4-3 during a special meeting Tuesday afternoon in favor of raising the rental rate per square foot for large marina owners from 36 cents to $1.97. Council members Keith Curry, Nancy Gardner and Leslie Daigle voted against the increase. The vote means that marina owners and operators that pay 3.4 percent of their gross slip revenue under an annual permitting system will, under a new lease agreement, pay 18.5 percent of their gross slip revenue. “Rejoining Sperry Van Ness is an exciting opportunity,” Grasso said. “With this new addition, Sperry Van Ness is the only commercial real estate firm with the quality or the At least 100 people packed council chambers in protest of the significant rent increases. Many who addressed the council Industry News Continued on Page 7 Why PCS? reduce your costs the best in service... PROUD MEMBER OF THE AMI 855.727.3030 | PCSmarinegroup.com 928.752.7259sales@PCSmarinegroup.com WE SPECIALIZE IN PROCESSING CREDIT, DEBIT, AND FLEET CARDS FOR WE OFFER
Industry News Continued from Page 6 said the fee increases are likely to put many operators out of business and could change the character of the harbor. Business owner Russ Fluter said marina owners have no choice but to pass on the rent increases to their customers, who may then go elsewhere. “This is going to hurt property values on the harbor,” he said. “It’s a serious mistake.” The business owners could still opt for an annual permit with the same rental terms as a long-term lease. The increases will become effective in 2015 and will be phased in through 2020. The rent increases come in the wake of the city’s tripling of mooring fees in 2010. City Manager Dave Kiff said this fee raise is necessary to ensure that the city is charging fair market rates for public tideland uses. Tuesday’s vote applies only to large commercial marinas. The council is expected to set the rental rates for other commercial operations such as yacht clubs, shipyards, sport fishing charters, small commercial marinas and nonprofits in future meetings. Jim Mahoney, a 28-year business owner, said a number of small businesses such as restaurants, fuel docks and boat operators that have built their livelihoods around the harbor will suffer because of these increases. Daigle said she did not support the rate increases because she would like to take a comprehensive look at the issue, including more economic studies to assess the effect on area businesses. “I’m concerned by the level of confrontation (this issue) has led to in our city,” she said. Plan Ahead for Your Marina’s Future Funding Needs The topic of replacement cost is a subject I wrote on several years ago; however, I think it’s an important topic for marina owners and one worth revisiting. Whether you’ve recently completed a total rebuild of your marina or are beginning to realize that the life of your current docks is finite, taking a good look at the future replacement cost is an exercise worth doing. It makes good business sense and will help you better plan and prepare for the future of your marina. The question for many marina owners is “what will it cost to replace our docks in ‘x’ number of years and how will we fund it?” Although there are a number of variables that will affect the answer to this question, the heart of the question can be answered by calculating the time value of money and the future cost of a marina rebuild. Here is a list of the variables that you’ll need in order to make a reasonable estimate. 1. Cost to rebuild your marina today: An experienced dock builder such as Bellingham Marine can give you an estimate of the current cost to build the dock system you have envisioned for your marina in the future. For funding purposes, plan to have at least 30% of that cost available for your down payment. Most commercial 20 year loans require 25% to 30% down. 2. Annual increase in cost of construction: while this can never be predicted exactly, an experienced accounting firm in your area should be able to provide a rate at which you can expect the cost of construction to increase each year. This will give you a safe number to work with. Gardner said that although she understands the need for a rent increase, she cannot support such a steep rate rise. Councilman Rush Hill, who proposed the two-year coolingoff period before the increase kicks in, said the city should protect its small businesses during these tough times. “I think this is the right thing to do, but the wrong time to do it,” he said. 7 3. Interest rate of investment account: If you don’t have a feel for this, you may want to consult with your banker or a local investment firm. 4. Useful life of existing dock system: Modern concrete floating docks are estimated to have a useful life of 35 to 50 years. Lightweight dock systems, such as timber, aluminum and steel typically have a life of 20 to 30 years. If you have an existing system and need help estimating its remaining useful life, there are a number of professionals in the marina industry that can help you come up with a reasonable estimate. Industry News Continued on Page 8
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October 2012 - Association of Marina Industries

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