consultants to the trade

Restaurant facilities

In addition, if you have a restaurant at your marina, a facelift may be in order. The best advertising a marina can get is by word-of-mouth, and sometimes it does not come from a boater. Appearance is so important and a nice restaurant can create a pleasant environment that naturally spills over into the marina.

Three musts

There are three things that you should do to promote a positive image of your marina: First, always keep a fresh coat of paint on everything, even if that means touch-up painting during the season. Second, have neat, uniform, and informative signage throughout your property. Third, never have trash on any of the marina grounds or in the water.

Market, market, market

The next thing you want to do is develop a marketing strategy. Most marina owners I’ve met have no marketing plan. You must continually reinforce your marketing niche. The more you tailor an advertising campaign toward the niche market you have carved out, the more effective it will be.

Again, appeal to everyone

The underlying theme of your marketing campaign should be that newer and bigger boats are not the only boats in the marketplace and the owners of older boats are just as proud of their boats as those with new big boats — you know, the ones that won’t fit into your marina.

Never forget that boat owners love their boats, no matter the size or age. You need to make them feel that your marina is there only for them and their boats. Nothing else matters.

Marina Dock Age, November 2003

Is Your Marina Realy Yours?
…and if you are leasing property, should you invest in improvements?
by Dennis P. Kissman

I am currently working with a client who wants to expand his business, but hesitates because his upland marina improvements are built on land leased from the government.

This isn’t the first time I’ve come across this situation, because marinas are often built on waters controlled by the government, utility companies, or irrigation districts. And, in many cases, the waterfront upland is controlled by the same agency that controls the water.

Because these leases start out as government land-leases and the improvements are built and financed by the lessee, this normally does not create a problem. Most of these leases have terms of at least 25 years for the initial period, and lessees are able to secure financing for the improvements. Such leases also afford the marina operator enough time to get a fair return on his or her investment.

Lending beyond the lease

With shorter leases — or as time runs out on an existing lease — it gets increasingly difficult for the lessee to obtain financing to further improve the property and expand the business. Lenders simply will not extend a loan beyond the period you control the property, regardless of the prospects for continued operation of the business.  

This is not an unreasonable position for a lender to take. It doesn’t make any sense to lend someone money and let them have the right to assign the obligation to pay it back to an unknown third party. The bottom line is this: As the end of your lease approaches, you still may be able to borrow money, but the terms may or may not make economic sense.

So where does this leave you, the marina operator? The first conclusion many will come to is that the lease must be extended. Before you start down this road, however, you should read your lease carefully to see who owns the improvements after the lease expires. Most of the time, a lease will be written to have all the lessee’s improvements revert back to the property holder, without compensation.

Unless your lease contains buyout language, you may find yourself at the end of your lease having invested heavily in improvements, but with nothing to show for it. I’ve even seen some concessionaire agreements that stated that the lessee must remove the improvements at the end of the lease — for a marina manager, this is not a practical solution.  

One of my clients encountered an even more frustrating problem. As the marina’s lease was ending, the government agency that was leasing the land offered an extension, but wanted to have the extension written as an entirely new lease. The agency’s intent was to exercise its right to all the improvements. Thus, they would structure the new lease as though they were leasing improved land, and therefore demand a substantially higher rental rate. Essentially, the marina was being asked not only to finance improvements that it ultimately wouldn’t own, but also to pay what amounted to a penalty (in the form of increased rent) for making those improvements.

What should you do?

As your lease begins to mature, your first thought may be that you have no incentive to keep the property up or increase business if it requires any capital investment. Taking this approach, however, can create other problems, because most leases contain language stating that certain maintenance and operating standards must be maintained throughout the term of the lease or it can be cancelled. The last thing you want is a legal battle to prevent the cancellation of your lease, because the only winner in that case will be your attorney.

Those of you who are facing such situations may be saying to yourselves, “I negotiated a good lease, and the government agency shouldn’t be squeezing me for every penny.” Unfortunately those people in office when you entered into your lease most likely will not be the decision-makers when it comes time to renew it. In the meantime there may be many changes in policy that will affect future lease-negotiations.  

The best advice I can give is this: Start looking at all your options right now, regardless of the time left on your lease. Your objective has to be to educate the agency controlling the property that if they remove your incentives to maintain or improve the property, the existing improvements will not be in as good a condition as they currently are when the lease expires. What they have to understand is that any improvement will require some form of capital investment, and, as a prudent businessperson, if you can’t get a fair return on that investment you would not make the investment in the first place. If you aren’t able to make prudent investments, the property will decline to the point where there will be very little value left in it when the lease expires.  

If all this comes to pass, it will be an unfortunate and costly situation for all concerned — and it will deal a real blow to the boating public. This is a situation everyone wants to avoid. Depending on the terms of your lease, though, the threat of such deterioration may be your only bargaining chip. If you use it wisely-and early-you may well be able to get the return on investment you seek.

The second part of the equation is managing the process. It is one thing to assemble and manage a quality staff, but unless you have the means of controlling the businesses and measuring their performance, you still won’t be able to achieve the full economic potential of the marina.

Managing the Process

Managing a process means managing how the goods or services are provided, how they are accounted for, and how the revenues are collected. All this becomes much more complicated when several separate revenue centers fall under the control of one manager or owner.

Let’s assume you decide to operate the various profit centers yourself, rather than leasing them out. Begin by looking at each profit center and identifying its controlling points.

As a case study, let’s look at a fuel dock. Here you have at least four control points: First, you should dip the tanks manually or, if you have electronic tank monitors, read them at the same time each day. (Fuel will expand or contract with temperature: therefore the time of day may make a difference in the quantity recorded). Second, you need to record the beginning-of-the-day and end-of-the-day readings of the dispenser. Third, this amount should be recorded and reconciled to the amount of fuel in the tanks and to the individual sales tickets to verify the sales were recorded. Fourth, the cash and credit card sales tickets have to be reconciled to the bank deposit and the charge sales to the accounts receivable. Until this last step is done, the operation has not made any money.

Once you understand the control points of each profit center in your particular marina, you will be able to pick the right procedure and system to use. If you are considering a computer system to control your operation, be sure each profit center can be managed through the control points that you determined.

No single software program will do everything you want. My philosophy is to look at a system made up of multiple proven software packages developed for specific uses. These should interface and operate as one system with the same look and feel. This is far less expensive than custom-developed software that you have to rely on a single individual to service. In our marina operations we use a management program (Marina Management System, developed by Pacific Softworks) that has the ability to interface with proven point-of-sale, general-ledger, and other business programs such as Microsoft Word, Excel, and Internet Explorer. It’s user friendly because it has the same look and feel as other Microsoft products.

A marina manager, unlike managers in other industries, has to wear many hats and have a broad understanding of a variety of businesses in order to succeed. In order to accomplish this, he must first surround himself with quality personnel and utilize them to help make the right business decisions. The manager that can delegate responsibility while monitoring the processes from a somewhat removed viewpoint will succeed far better than a manager that tries to dominate and control every step of the process.

Marina Dock Age, September/October 2003

Standpipe Systems: In Theory, Useful— In Practice, Unreliable?
by Gene Spinazola, P.E

Before investing in one of these systems, know what you are getting into,
and be prepared to pay a lot for a system you can count on.

At a recent marina fire in South Carolina, the first responders on the scene hooked up a hose to the marina standpipe and charged (pressurized) the system. (A standpipe system consists of piping installed on the docks, designed to supply water to hose stations for the purpose of extinguishing a fire.) The system failed immediately, due in part to the sudden introduction of high-pressure water.

This happens time and again, even when the failed systems have been tested and accepted for service. One problem is that during testing the system is pressurized carefully and gradually—to 200 PSI—while at an actual fire scene the system will be charged rapidly, producing a momentary pressure spike that jars the piping and may cause it to burst or crack.

Beyond that, there are a number of potential complications with standpipe systems at marinas that can result in their failure. Accordingly, these systems are a subject worthy of some scrutiny. We can start with the National Fire Protection Association’s document, NFPA 303! section 4.4, which discusses fire standpipe systems for docks at marinas and boatyards.

(Most of the requirements for fire protection at marinas and boatyards are spelled out in NFPA 303: Fire Protection Standards for Marinas and Boatyards. The latest edition was issued in 2000. Occasionally, in sections of NFPA 303 there will be a reference to other NFPA standards. This may be just another means of getting you to buy more NFPA documents or an effort to refer you to a more detailed section already covered by another NFPA standard. Either way, the material is worth reading.)  

Section 4.4 spells out who needs to install a standpipe system along with some requirements that are specific to the marina industry. The actual design specifications for the system, however, are discussed in NFPA 14: Standard for the Installation of Standpipe and Hose Systems.

Who needs a fire standpipe system, and what does it require?

If the hose-lay distance from the closest possible location a fire truck can be positioned to the end of your dock exceeds 150 feet, technically, you need to install a Class-l standpipe system. The section goes on to say that piping for the system “shall be sized for the minimum flow rate for Class-II systems.”

The flow rate required for a Class-II system, at the most remote outlet, is 100 gallons per minute (GPM) at 100 Pounds per Square Inch (PSI). To meet this flow rate at the most remote outlet, the designer of the system will calculate the line losses due, in part, to the internal friction in the piping, number of bends in the pipe, and the number of fittings, such as elbows, tees, valves, etc.

Thus, to compensate for the friction losses and still meet the flow rate at the end of the dock, the supply pressure from the fire apparatus will need to be higher than 100 PSI. For example, if the friction loss is calculated to be 50 PSI, then the fire apparatus will need to pump 100 GPM at 150 PSI. 

Other Reliability Issues

A major problem with marina fire standpipe systems is the environment they are subject to. Installations on floating docks present more of a challenge than fixed docks, but both kinds of structures leave standpipe systems far more exposed and vulnerable than their shore-side counterparts. This vulnerability is not from exposure to fire, but rather from a host of conditions that are unique to marinas. A standpipe system in a building is not constantly moving up and down and back and forth. It has relatively stable temperatures, is not subject to boat wakes or exposure to ultraviolet rays, freezing temperatures, ice floes, and so on.

Another problem with standpipes is their vulnerability in a work area, either ashore or on the docks. The height of the outlet valve must be at least three feet, but no more than five feet above the floor or dock. This makes standpipe connections easier to use, but also puts them in the most vulnerable range for damage by careless drivers, either in boats in the marina or in their cars in the parking lot.

Considering these special circumstances, NFPA 303 does make several allowances for the installation of marina standpipes. For example, it says, “Flexible connections are permitted on floating docks,” and “Listed nonferrous piping shall be permitted to be used in accordance with its listing.” Unfortunately, at least to my knowledge, there aren’t any nonferrous pipe materials listed for use in above-ground standpipe systems.

Accepted Alternatives

Are there alternatives to standpipes that are acceptable to the Authority Having Jurisdiction (AHJ)? Yes, but not all AHJs are the same. What is approved in one area of the country may not be accepted in another city, county, or state. NFPA allows the AHJ to accept alternatives that are equal to or better than what is required by the NFPA.

An example of substitution for a standpipe system is the use of a portable fire pump. If the pump meets or exceed the flow rate of the standpipe system, you may have a fighting chance at substitution. More often than not, however, the ANJ will at least demand redundancy, so if one pump fails for any reason, there is a back-up pump ready to take its place.

The marina industry lacks specific statistics on the reliability of standpipe systems in marina installations. However, whenever I call a marina that has had a fire, one of the questions that I always ask is, “Do you have a fire standpipe system, and if so, did the fire department successfully use that system?” Only once has the response been, “Yes, we used it and the system did not fail.”

Standpipes are good and can provide excellent fire protection—if they work. The cost to install a standpipe will be significant and needs to be considered during the design stage of your marina. It’s not an accessory that can simply be slapped onto your docks as an afterthought. A four-, five-, or six-inch fire line will add significant weight to your docks and, of course, significant expense.

The system needs to be adequately designed for your specific marina environment. It must use the right materials that have been properly tested and well-maintained. ln short, this is one system in your marina that you are going to get just exactly what you pay for, in the cost of planning, designing, and on the materials themselves.

Management Basics

So how do you manage this simplistic yet complicated business? First, every marina operation should be divided into the two key components previously mentioned: employees and the procedures for controlling the process.

You should look for three things in a marina employee. First, does he have a positive attitude toward his job and the company? Second, does he have the basic fundamental skills to do the job he is asked to perform? Finally, can he multitask? If an employee possesses these attributes, he will always be an asset to your operation. As a manager, you must be able to recognize these qualities and, through your direction and example, cultivate them to continually increase the value of the employee in your organization.

One of the weaknesses in any cottage industry like that of marinas is the owner/ operator with a dominating attitude and closed mind toward how the business should be run. It is easy to profile the management style of a marina by the attitude and work ethics of its staff. A domineering management style will not be able to retain good employees for very long.

The second part of the equation is managing the process of the business. It is one thing to assemble and manage a quality staff, but if you do not have the means of measuring how the business and — in the case of a marina, businesses — are doing financially, you will still not achieve the full economic potential of the site.

From a manager’s point of view, managing the process is probably a more difficult task to accomplish than actually building the organization. This is especially true in today’s world of growing dependence on computers. We have been programmed to let software find solutions to our needs without really understanding what those needs are in the first place.

Keep in mind a marina is usually a group of several independent and distinct businesses operating as one entity. None are large enough on their own to support a proper management structure; therefore, some will suffer economically by default. To depend on someone else to identify what you need to make your business succeed is naive. If you are not willing to learn the intricacies of each particular business and what is needed to improve profitability, you are better to lease it out to a proven operator.

Your first reaction to this is you are giving up control and profits; but you must understand you are also giving up risk. Let’s assume you decide to operate the various profit centers at a marina. Begin by looking at each independently and identify the controlling points. For example, if you have a fuel dock, there are a minimum of four control points: