Industry Articles - 2004
Boat & Motor Dealer / Marina Dock Age, December 2004
Florida’s Marine Industry Tackles the Hurricane Recovery Process
by Tim Keogh
The summer of 2004 was no “high season” for Florida’s marina owners and residents. Some, in fact, experienced the lowest of the low. As the 2004 Florida hurricane season mercifully came to an end, Marina Management Services, Inc. (MMS) took the opportunity to talk with marina owners and operators about what helped in their recovery from the storms, and how they plan to move ahead.
The scene
When all the damages and claims are totaled, the four hurricanes that hit Florida within a six-week period this past summer will be the second greatest insurance event in U.S. history behind only the 9/11 terrorist attacks, according to the Florida Insurance Council (www.flains.org) and the Insurance Information Institute. Hurricanes Charley, Frances, Ivan, and Jeanne are among the top eight most expensive hurricanes in U.S. history, with projected insured losses of $22.5 billion coming from more than 2 million claims. Given the geographic scope of the claims and the extent of damages, it is hard to believe that the state is so far along in the recovery process less than one month after the last storm.
Florida’s marine industry, led by local and statewide industry associations, has taken the lead in moving the speedy recovery forward. In reviewing these efforts, MMS spoke specifically with owners and operators of marinas affected by the hurricanes this season to find out the specifics of the recovery process. Although Florida’s marine industry took a beating with the four storms, this industry is showing positive signs of bouncing back.
The most important thing that many of these marina operators felt their colleagues should do in the aftermath of a hurricane is to clean up their property, restore a sense of order, and re-open for business as soon as possible. Restoring a sense of normalcy helps to heal the psychological wounds wrought by the storms. There is also a great benefit in doing this from a damage assessment standpoint. An open business is a secure business, one that is less susceptible to looters and theft than a property that is left vulnerable after a storm.
Proper preparation
One of the easiest ways to recover from a hurricane is proper preparation. This is no great surprise to most marinas in the Atlantic basin that are familiar with hurricane plans and preparing for storms. Although marinas have no control over the weather, they do have control over the amount of damage inflicted by the weather.
There is very little that can be done to fend off damages from a Category 5 Hurricane with a 25-foot storm surge. If Mother Nature comes with a punch like that, she will most certainly win that fight. Nevertheless, the marinas that were on the fringes of the eye of this year’s hurricanes said that planning and preparedness helped protect their properties from extensive damage.
A clearly defined hurricane plan was the one tool that helped most operators we spoke with. During the recent Florida hurricanes, these plans were excellent resources to keep employees focused on the tasks at hand. During preparations, a lot of distractions can take up valuable time, so the better the employees’ focus, the more time the marina manager can spend on details.
One operator that MMS spoke with recommended that marinas pre-arrange with service providers, especially at the beginning of the season, to provide services in the aftermath of a hurricane. A perfect example would be for a trash hauling company to show up the first available time after the storm to remove debris from the property. This would help free up parking lots and walkways from unsafe clutter and will open access to the facility. In one case, the trash hauler carted five large truckloads of debris from the water in one day, ranging from landscaping to floating debris.
Unfortunately, hurricanes attract less than desirable people to do less than desirable things, including lie, cheat and, most commonly, steal. Although human life comes first, marinas must arrange with their security team to stay until the winds hit 40 mph, and to return to the property as soon as possible after the storm. A physical presence sends a message to those driving around looking to take advantage of a disastrous situation.
If a picture is worth a thousand words, then sometimes after a hurricane, a picture can be worth thousands of dollars. Before the storms arrived and after we had secured our property, we took photos of the entire facility, especially the extra work done to protect the property. Even though plywood boards may not stand up to 160 mph wind, we made the attempt to protect our property and the insurance companies look at those types of things. When everything was blown away, the pictures remained, showing the boards and the marina in locked down condition.
One operator that MMS spoke with went as far as to video record the events prior to, during, and after the storm. When it comes time to make an insurance claim, the pictures showed the existing marina, its pre-hurricane condition, and the measures undertaken to secure the business. This action has saved many owners time and money by not having to explain how they prepared the marina and the cause of specific damages.
The next step
The marinas we spoke with had mixed emotions about how, and even if, they were planning to move forward after the destruction. On the one extreme were marinas that expressed outright disgust and a resignation to sell their facilities. On the other side of the coin were marinas that saw the destruction as an opportunity to expand, redevelop, and update their marinas. We will highlight two key examples of each recovery attitude.
One marina on the St. Johns River received extensive damage from high water and winds, which motivated the owner to actively market his property for sale. He was fed up with the condition of his property, charred by fire several years prior and now battered by the effects of Charley, Frances and Jeanne.
MMS visited this marina more than a week after Jeanne had hit, and the parking lot was still flooded due to high water levels. Moreover, water was only beginning to clean itself from the pollution caused by broken sewer lines and excessive run off. Fed up with the troubles and damages the resulted from the hurricanes, this operator decided to move on by moving out.
MMS has been working with a dock master in the Sarasota area who sustained considerable damage to his fixed wooden piers during Jeanne. His recovery plan is to assess the total damage with marina consultants and insurance adjusters, and from that information, organize a plan for future development. The owners are excited about reconfiguration opportunities, wet slip expansion, and the addition of a break wall to provide added protection in the event of future hurricanes.
These are two examples of the opposite reaction from owners and operators to the damage incurred during this year’s hurricane season. There are numerous facilities that fall somewhere in between these two examples, and even more that sustained no damage at all. There was a consensus among owners, however, that regardless of the extent of the damage, the more prepared the facility is, the faster it can recover, and the damage incurred is far less than at a complacent facility.
Effects on the state
There is talk and concern that many boat owners, who usually make the trip South during the winter, will not be coming to Florida this year because they fear there is a lack of marina facilities. There may be some boat owners that will have to travel more than usual to get to their boat, but there are a large number of marinas that received very little damage and those facilities are open and ready for business.
The marine industry in Florida represents a huge financial resource and is a vital piece to the economy, creating thousands of jobs and an atmosphere that attracts people from around the world. The industry took a hit this year, but it was not knocked out, and that is a credit to the resiliency of the people in this industry. Many of the marine facilities in Florida did an excellent job preparing for and recovering from the 2004 hurricane season.
Tim Keogh works with regular columnist Dennis Kissman as the Director of Business Services for Marina Management Services, Inc. an international marina management and consultancy firm based in Boca Raton, Florida. He can be reached for comment at (561) 338-5800 or via e-mail at tkeogh @ marinamanagement.com.
Marina Dock Age, November 2004
Some Ways Marinas can Lessen the Damages from Hurricanes
by Dennis P. Kissman
I am sure everyone reading this column is well aware of the four major hurricanes that used Florida as a target this year. Most marinas in the areas that were affected sustained some form of damage to their facilities. This is especially true where three of those hurricanes passed over the same spot.
The purpose of his column is not to address the damages sustained at these facilities — that is for another article. What I do want to address are the reasons for the extensive damage to some of these marinas, and what could be done to minimize it in the future.
Premise
In my opinion, one of the major contributors to the damage caused to marinas in Florida is statute 327.59 — Marina Evacuation, passed by the state legislature in 1994. It states:
(1) After June 1, 1994, marinas may not adopt, maintain, or enforce policies pertaining to evacuation of vessels, which require vessels to be removed from marinas following the issuance of a hurricane watch or warning, in order to ensure that protecting the lives and safety of vessel owners is placed before interests of protecting property.
(2) Nothing in this section may be construed to restrict the ability of an owner of a vessel or the owner’s authorized representative to remove a vessel voluntarily from a marina at any time or to restrict a marina owner from dictating the kind of cleats, ropes, fenders, and other measures that must be used on vessels as a condition of use of a marina.
Although I understand the reason for the government wanting to protect its citizens, I believe it has done just the opposite for marina owners. A growing number of boat owners are taking the attitude that as long as their boats are in a marina, they are safe and the owners do not have to worry about what happens. As a result, the boat owners take no precautionary measures when a storm is approaching.
On the other hand, most marina owners have accepted this statute based on what they have heard, particularly from boat owners, and have not read the statute in its entirety. The key part of the statute that applies to the marina owner is in the last part of the second section stated as follows: “or to restrict a marina owner from dictating the kind of cleats, ropes, fenders, and other measures that must be used on vessels as a condition of use of a marina.” The key word in this statement of the statute is “dictate,” it does not say recommend or suggest. Too many marina owners subscribe to the philosophy that it is better to have any boat in the marina than no boat at all. This philosophy causes major problems for marina owners during hurricanes, but also to the quality and profitability of the business overall.
Change operations
The question is how one changes a philosophical approach to business and particularly how it applies to Florida Statute 327.59 — Marina Evacuation. Two of the simplest ways are by screening boats before they arrive at your marina’s entrance and doing thorough, comprehensive documentation.
An effective way to screen boats before they arrive is to ask for a recent picture of the boat. Do not be afraid to ask if the picture represents the current condition of the boat and insist on keeping the picture until the boat arrives. In the license agreement that the customer signs, insert a clause that states: “If the picture of the boat that was presented to gain dockage is not a true representation of the condition of the boat, in the opinion of the marina’s management, the agreement is canceled and the boat may not enter the marina.”
I have been presented with pictures that when the boat arrived I could not recognize it as the one in the picture. It is much easier to refuse entry than to try to evict the boat once it is in your marina.
The software that most marinas use to manage their facilities has the ability to insert a digital picture of the boat as part of the customer’s record. This has proven to be a very useful reference to confirm compliance to the marina’s rules and regulations. I recommend that you take pictures and keep them on file even if your management system does not have this capability on file. Do not be afraid to turn a boat away — it most likely will be cheaper in the long run.
The second document is the marina’s Rules and Regulations. This document spells out what is expected from the boat owner when his/her boat is in the marina. This is where you specify what a boat owner needs to provide in the way of equipment and what to do to prepare the boat for severe weather. Spell out the number and size of lines, chaffing gear, and fenders required for the various sizes of boats in your marina. Reiterate that the marina should not be considered a safe harbor in severe weather, even if you believe that your marina is a safe harbor during severe weather or hurricanes. The forces placed on the docks by boats due to wind and wave conditions are impossible to predict.
In Florida, marinas should stipulate the time when preparations must be completed before a named storm is due to strike. Here it is better to err on the side of caution. Also, outline what actions the marina will take if the boat owner does not comply with the rules. Be careful here not to imply that the marina promises to do something to protect the owner’s boat, but rather that you have the right to take whatever precautions necessary to protect your property and charge the boat owner for all costs incurred.
Your marina may not be in Florida and effected by this statute, but the same approach to improving your customer base and having them become more responsible applies everywhere, not just Florida. Take control of your marina before you have no marina to control. Our objective should always be to be up and running as soon as possible after any natural disaster.
Marina Dock Age, July/August 2004
What’s a Dealership Worth to Your Marina?
by Dennis P. Kissman
Is your business considered a boat dealership with a marina or a marina with a boat dealership? If your facility is regarded as more of the latter, it’s important to clarify the value of the dealership component in relation to the overall profitability of your marina. You may ask why this is important. The answer, depending on how you keep records, is that it can make a big difference in the value of your marina.
There are several reasons why a marina operator would want to be in the business of selling boats. If the most important reason is that the retailer wants to be profitable, the marina should understand all the costs associated with selling boats. Boat dealers usually understand these costs, and manage their businesses accordingly. Marinas, however, have a number of profit centers, and the costs often associated with selling boats are absorbed by these other profit centers. This muddles the true costs associated with selling boats at retail.
This article attempts to identify all the costs associated with selling boats to determine the true profitability of a dealership. It’s important that you have an open mind during this process, because it is very easy to say that many of the costs would still exist if you were not a boat dealer. The purpose of this column is to determine whether selling boats is one of best uses of the resources and space you have available.
Rental space
First, we need to start with the premise that a marina is in business to rent or lease space. With this in mind, selling boats requires space to display inventory.
Second, it takes people to effectively sell boats. At a marina, most of these salespeople are on a combined salary and commission structure. Depending on the sales volume, there might also be one or two support staffers who are strictly on salary. Employees present benefit costs as well.
The next cost item is the operating and overhead costs associated with people and space. These include utilities, telephone, office supplies and equipment, and insurance. There are also three significant costs that are often inexplicably buried in the overall operating costs of the marina: marketing, advertising, and floor plan interest cost.
Another area where boat sales usually get a break is in rigging and the sea trials of the boat upon delivery to the customer. Most marinas use their repair service staff to provide these services. Usually, the service employee’s time associated with these tasks is not charged to the sale of the boat. If it is, it is done so at a nominal rate that penalizes the repair service operation by reducing the number of billable hours available.
Dissecting the numbers
As a marina owner, you may be asking yourself, “What’s the difference if I charge the boat sales operation or another cost center? It will not change my bottom line profitability.”
Although this is a true statement, not understanding the distinction will make a big difference in the value of your marina. Lenders and investors in marinas, for example, value your marina based on its proven income stream. These speculators thoroughly dissect the numbers and apply a value to each source of income.
When it comes to boat sales, there is usually little or no value placed on the profits reported on boat sales. Therefore, the more profit reported for the other profit centers will add value to your marina without changing the overall profitability of your marina.
Let’s now put the above example to use with the following assumptions: Your reported profit last year was $400,000, and you did not keep detailed records of costs by profit center. You believe that half your profit came from boat sales and half from marina operations. From a lender or investor’s perspective, they would value your marina based on the marina income of $200,000 using a capitalization rate of 10%. Thus, the value of your marina would be $2,000,000.
Using this same example and assuming your service operation had billed the boat sales operation for rigging new boats using their standard billing rate, we can see how big the advantage can be. If there was $20,000 of additional cost charged to the boat sales operation and reported as profit in the repair operation. the value of your marina would now become $2,200,000 without any additional profit reported on the bottom line.
Basically, what you have done is shifted $20,000 of legitimate profit due the service center and charged it to boat sales. You have not changed your reported tax base, but you have raised the value of your marina.
Overview
You may be thinking, “This does not apply to me because I am not selling or trying to refinance or get a loan on the property.” When the time comes that you do need money or want to sell, that’s not an appropriate time to rue past accounting. By that time, it is too late. With proper planning and accounting, it could put future dollars in your pocket with no current financial impact.
Marina Dock Age, May/June 2004
Do the Homework Before Hanging the “For Sale” Sign
by Dennis P. Kissman
Being involved in the realm of marina sales has occupied a substantial amount of time for our company during the past year or so. Some of the deals closed, but a majority of them did not. A number of things went wrong in those instances where the deal did not come to fruition, and some of those problems are very common and worth a further look, especially before you hang the “for sale” sign in front of your marina.
There are three very important reasons a buyer would kill a deal. The most significant one is if the business lacks any creditable financial statements that cover the last three years. Second, many deals break down when the subject comes to what “is” or “going to be” permitted by the various agencies at the marina. Third, there can often be a misunderstanding when it comes to the monetary value of the marina you are selling, and its perceived worth to the buyer. If top dollar is expected for a marina facility, each of these items must be addressed before it’s decided that the marina should be put up for sale.
Cash vs. Ieveraged money
Anyone looking to buy marina property is going to seek financing. A buyer may have enough cash to buy a marina, but that is not the prudent thing to do, because equity dollars typically are more expensive than leveraged dollars. What does this mean to the seller? Anyone with cash will expect more in return on his or her money than a traditional lending institution will provide.
To illustrate how this works, assume that your marina has an appraised value, and sells for $3.6 million. If a buyer were to pay all cash, the buyer expects a return on that investment of 12%. Therefore, your marina would have to show verifiable annual net operating income of at least $432,000. The key word here is “verifiable.” For this example, we'll assume that the best a marina facility can show after the buyer’s due diligence, and based on your not-so-complete records, is $300,000 of net operating income. If you expect the deal to close with all cash from the buyer, you will have to adjust your sale price downward to $2.5 million, or a decrease in value of $1.1 million if you expect this sale to go through.
Continuing with this example, if the $300,000 of net operating income is correct and can be supported with an income tax return, along with two years of similar returns, what would it take to make this deal go through? A traditional lending institution will look at those returns and accept them as accurate. It will also examine the real estate appraisal of the property and the selling price to determine the amount it will lend.
Assuming the buyer has a good banking relationship, he/she could most likely get an 80% loan to value loan on the property if the appraisal comes in at the value of the asking price. The buyer could most likely borrow $2.88 million, with $720,000 of equity into the deal. In today's market, the buyer should be able to get an interest rate of about 6.75% on a 20-year amortized loan. The annual payments of both principal and interest on a $2.88 million loan would be $262,776.
Add-ons
Another problem that could affect (or even kill) the deal is if the ]ender requires a minimum of debt ratio coverage of 1.25%. This means that the annual net operating income has to be one and one-quarter times greater than the payment on the loan. For example, the net operating income would have to be at least $328,470 of verifiable income. If you expect the deal to go through, the price will have to be adjusted downward to $3.25 million to meet this requirement. Not as much as an all cash deal, but still downward.
What this means is that there are many financial factors involved in trying to buy and sell a marina. And, most of them are out of the control of both the buyer and seller. Because historical financial information is going to be the driving force in any deal, you as a marina owner must think of selling long before you plan to do so.
While doing our due diligence on one property, we had a situation where the seller came up to us and held up $2,400 in cash for dockage and says, “See, this is what your buyer doesn’t understand about this business,” and walks off with the cash in his pocket. What that marina owner did not understand is, in the example just provided, the $2,400 he brandished with such fanfare would be worth $20,000 when he sells.
Permitting problems
The second major obstacle in closing a deal involves permits. On several properties, our investor was prepared to pay a premium based on the ability to expand. In one instance, the seller represented that he had approval to add 30 wet slips to his marina.
Our investor factored the approval into his offer, only to find out in due diligence that there was no approval. While the seller did apply for the permit, the individual failed to mention that the process had to include public hearings — and these had yet to be scheduled. The permit was a long way from being approved, and upon further investigation, it was unlikely that the seller would ever get the necessary approval for the 30 slips.
In another instance, a marina did not have a Corps of Engineers permit to build the marina, and failed to disclose that there was pending enforcement action against the facility. Although there ultimately was a successful resolution to this problem, the seller was still out tens of thousands of dollars and there was a three-plus-month delay until closing.
We later learned that simply following the permit process nine years ago when the problem first arose would have resolved it, along with the cost and inconvenience that resulted. The irony of this problem was that all the necessary studies were done at the time and approved by the other agencies involved. The owner, however, because of a personality clash with the Corps representative, decided to be obstinate and ignore the Corps’ request.
These two examples resulted in a markedly reduced price for the marina facilities. Don’t advertise that something is for sale when, in fact, it really isn’t. In both cases, if the status of these permits were disclosed initially and a solution to resolve the problem was given to the buyer, there would have been little or no change in the original contracted prices.
Be practical
Finally, it’s important to understand the value of your marina in the eyes of a buyer. The best way to do this is to realize that you have an emotional attachment to the property — even if you don’t readily admit it. A buyer, however, is going to be unemotional about the deal, and it will come down to the facts about the business, past and present. Granted, an emotional buyer may walk through your door and offer you a fantastic price, but remember the old saying, “If it is too good to be true, it probably is.” If a situation like that arises, it’s likely all you are going to do is waste a lot of time and money. Remember, if a sale is ultimately going to take place, the more you know about your business means you are in a better position to negotiate a fair price. This will be a price that all parties can agree upon, and will include those outside influences that will eventually determine the outcome of your deal.
Marina World, May/June 2004
The critical ground system
by James D. Shafer
Providing electrical power to yachts moored in a marina presents a unique challenge to the operations staff. Because electricity goes about its task of providing services and comfort, quietly and unobserved, problems that may lead to injury or property damage may not be apparent until it is too late. Fires, fatalities, and damage to underwater metal hardware are all too often the first indication that something has gone seriously wrong somewhere in the power system.
Most of us are aware of the potential hazard of standing in a pool of water while using a power tool with a metal body.
Yet, we think nothing of plugging a yacht into a 125v (or 250v) outlet and then jumping into the water to clean the props!
Or worse, a child falls into the water accidentally, and, along with a would-be rescuer, becomes disabled, and both drown because a low level ground fault on the yacht or dock has energised the water. While a low level fault might not always present a hazard in the water, it still may create a potential point of combustion on the yacht. At the very least it is a waste of energy.
On another level, imagine the sensation in your stomach when your one-year-old runabout is hauled out for maintenance 
and you discover both expensive stern drives have been eaten away and are completely destroyed, simply because you wanted
to enjoy the comforts of shore power.
Often the marina staff does not have the technical knowledge to monitor the power system to prevent these kinds of accidents, nor do they know what initial steps should be taken to resolve an incident.
The problem is greatly complicated in the USA because two different standards are involved. This results in a situation where even a fairly experienced electrician may not fully appreciate the problems that arise from powering in a piece of equipment (the yacht) that is sitting in a pool of water.
The (US) National Electric Code is the standard that applies to the marina, including the power pedestal. From that point on the ABYC (American Boat & Yacht Council) standards apply, including the shore cord and yacht. Two different standards, two different technical certifications, and two different perspectives guide those responsible for installation and repair — and they often do not fully understand the special circumstances involved. The marina staff is caught in the middle.
As a first step toward solving this dilemma let’s look at one of the key elements of the shore power system, which is the interconnection of the dock and all of the yachts through the common grounding system. This common conductor carries both AC and DC current from yacht to yacht, and throughout the marina. AC is responsible for injury, while the DC component is responsible for underwater metal damage.
The most critical component in the power system is the grounding conductor, which is green (US) and more correctly called the bonding conductor. Like the seat belt in your car, it plays no part in the normal operation of the marina power system but it is the only thing that stands between you and a serious injury if it is not in place when a fault (short circuit) occurs. At least you can visually confirm that your seat belt is in place and ready to protect you.
The grounding conductor must connect the chassis of all powered metal objects and return to the service entrance. 
That is where the power meter is located. Metal dock components, transformer housings, pedestals, yacht appliances and underwater hardware on the yacht must all be part of the grounding system. Should a fault occur and energise the metal chassis of a battery charger, for example, the resulting fault current must be routed, without resistance, back to the power source. If the “short circuit” is bad enough, a circuit breaker will disconnect the device before damage or a fire occurs. This concept is very straightforward and easily understood by everyone.
Now the bad news. There are many occasions — more than you may realise where the fault current is too low to trip a circuit breaker. With no warning a low level current flow is established on both the grounding wire and in the water. Now the stage is set for a serious accident. The grounding conductor’s function in this situation is to prevent a voltage rise on the surface of the faulted item. If the grounding wire is damaged or missing, the underwater gear may rise to lethal potentials and lay in wait for the unsuspecting swimmer. This condition produces what I have termed “the hot marina”.
Saltwater tends to perform the function of the grounding wire because it is a good conductor, but in fresh water an “ungrounded” fault is lethal! The underwater gear may rise to nearly line potential. I have listed nearly 50 water electric shock incidents (near misses and fatalities) due to undetected ground faults on yachts and on the dock, all in fresh water.
Periodic testing of the grounding system is required by most codes — particularly by NFPA-303 (Fire Protection Standards for Marinas and Boat Yards) — but is rarely done. Because this test should be done under load it tends to be too complicated for a regular preventive maintenance procedure. However, there may be a relatively easy way to accomplish that test.
A new instrument on the market, the Ideal, SureTest Model #61-154, can perform virtually a complete wiring test under load, requiring just a few minutes at each receptacle. This test may be carried out and logged by marina personnel, for later review by an electrician.
While periodic testing of the grounding system is very important, it provides no guarantee that ground faults combined with poor ground integrity will not set up dangerous conditions in between times.
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One answer may be to continuously monitor the marina power system to detect low-level faults regardless of the condition of the safety ground. Utilising existing ground fault detection technology, applied in mining, hi-rise construction, and industry, we have developed a marina monitor called Marina Guard. This system will continuously monitor the shore power system and trigger an alarm when any fault is detected above a predetermined set point. The unit is located at each substation, or at a feeder as it enters a branch breaker panel. The signal may be monitored at the equipment location or remotely in the dock master’s office. Since a number of pedestals may be monitored at each location, the individual yacht with the fault must be located. Fortunately, this is fairly easy to do by marina staff, with a little training. Using a good quality clamp-on meter the water path portion of the fault will be detected on the shore cord as shown.
Some systems currently installed in marinas have disclosed rather high ambient fault leakages. As the yachts make required repairs, alarm levels have been reduced. It is too early to tell just how “clean” a power system can be made — it depends a lot on the yacht owner’s cooperation. In fresh water, the marina must strive toward “zero tolerance”.
Australia, the EU countries and others, require that a 30ma GFCI (or RCD-residual current device) be located at each pedestal receptacle. While this trip level is not considered low enough for personal safety in some applications, it seems to be workable for marinas. For fatalities on which I have complete data (only a few) the boat fault current levels were probably high enough to trip a 30ma GFCI. However, the accidents caused by dock wiring would not have been prevented. A combination of monitoring at the source as well as individual GFCI’s seems to offer an interesting solution. Also, since auto-trip devices have proven to have questionable reliability because of lightning etc., the monitoring concept provides a back-up warning.
Remember the boater with the ruined stern drives? Because of a good marina ground, his boat becomes part of the large DC galvanic battery the marina represents. All of the underwater gear on all of the yachts is connected together by the grounding wire. Dissimilar metals connected together in a pool of electrolyte create a galvanic battery. Any item, which becomes the anodic component of that battery, will be damaged. To prevent random damage, sacrificial zinc anodes are installed on each yacht to narrow the damage to just that component. For a number of reasons this may not be adequate and a boat owner may still suffer extensive damage because the yacht is part of the marina ground system. Unplugging the yacht is a simple answer but one rarely satisfactory to the owner.
Disconnecting the ground wire as it comes aboard the yacht, as some have done, is never a solution. This is against all codes and will created an unacceptable shock hazard.
With a little training, marina staff can learn to determine the “hull potential” of a yacht, which predicts the possibility of unusual zinc loss or prop damage. Using the pictured reference cell (silver/silver chloride) and a meter, the DC potential of the prop shaft, compared to the cell, is noted with the shore cord in, then out. This information may then be presented to a qualified marine electrician. He will suggest a solution, which may include installing a galvanic isolator, or isolation transformer. Damage being caused by faulty DC wiring on a yacht will also be disclosed by this test (referred to as “stray current”). Remember, disabling the ground system is not a solution!
This has been a brief look at electrical problems involving the ground system that go unnoticed until an incident occurs. A full day seminar on each of the two major elements (AC and DC) involving the ground system would still only scratch the surface. While a complete text that fully explains what we have looked at here may not be available, there are a few books written for the marine industry that will provide some assistance. For those readers who work with other than US standards, the principals are the same — and so are the solutions.
The marina grounding system is your seat belt. Understand it and take care of it.
James D. Shafer, AMS of Harbor Marine Consultants, Inc., can be reached via e-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Reproduced by permission of Marina World Magazine
Marina Dock Age, April 2004
A Marina’s Role in Promoting the Boating Experience
Facilities are Crucial to Growing the Industry
by Dennis P. Kissman
Many of us are beginning to thaw out from a very long winter, and once again are confronted with the challenges of how to make another summer season successful. As with most seasonal businesses, there is only a short window of opportunity that can make or break your season. The way to keep your existing boaters coming back year after year is a direct function of the condition of your marina, your level of service, and your location. The more pressing and difficult question is how you attract new boaters to your marinas and, equally important, how do you introduce non-boaters to the joys of recreational boating?
There are both active and passive ways of introducing non-boaters to the joys of recreational boating. The passive approach is to say that it is the job of the boat manufactures to market new boaters. That approach is short sighted, and may eventually affect your livelihood and, in turn, your lifestyle. We as marina operators have the waterfront facilities with the access to the water. We are on the front lines and understand what our local market does with their boat. So, why is it not at least partly our responsibility to attract new boaters?
If we recognize that marinas are key components to the whole recreational boating experience, then we as marina owners must take an active role in promoting the industry in order for it to expand. The Marina Operators Association of America (MOAA) understands the importance of promoting recreational boating and is doing an excellent job by promoting its National Marina Day, which will be celebrated this year on August 14. The question now is, what are we, as marina owners and operators, doing to promote the expansion of recreational boating, particularly to non-boaters?
Opportunities abound
Through our consulting with marina owners on operational issues and working with potential buyers of marinas, we have an excellent opportunity to learn what is being done at these facilities to promote recreational boating to the non-boating public. Except for marinas with boat dealerships, I would say that very little, if anything, is being done to promote recreational boating to non-boaters. When asked why they don’t do more, there are usually one of two typical responses. First, the marinas say they are full, so why waste time and money. The second response is that most marinas actually do not believe anything they do can make a difference. So again, this group feels that any promotional efforts are a waste of time and money.
It is here that I should interject, the basic economic theory of supply and demand. In simple terms, a large supply with a small demand means depressed pricing. On the other hand, a large demand with a small supply means increased pricing. If we apply this theory to marinas, I think it is fair to say that a rapid increase in the supply is not going to take place. With that thought in mind, our efforts should focus on increasing the demand for our products. How can that be done? By getting more people interested in recreational boating. This should be the ultimate objective of every marina owner.
Baby steps
Because I believe that we should practice what we preach, I wanted to see if we could come up with an idea that makes sense at one of the marinas we recently began to manage. This marina has an RV park and campground on the property. We were told that many of the people who rent in the RV park were non-boaters, but they liked the lake setting that overlooked the marina. The challenge is to get these people interested in boating.
The best way to sell boating is to go boating — so we felt it would be a good idea to get those people out of the RV park and out onto the water. By offering a free “check-out” cruise on one of our rental fleet boats, it would provide a good way of getting these people out on the water. Not only would it give exposure to our fleet of rental boats, but it also would give us a chance to promote safe responsible boating practices.
In looking at the non-boaters, it appeared that one of the biggest barriers to their entry was to destroy the notion that boating is a dangerous or scary activity. We can do this by thoroughly explaining the safety features and security measures that are found on new boats. It’s quite easy to assure people that a three-hour cruise won’t really turn into Gilligan’s Island.
Safety and security are paramount in the minds of non-boaters. To assuage their tears, we need to let them know that in today’s age of cell phones, GPS, and radio communication, the boater is never far from help.
There is no better way to calm a nervous non-boater then by explaining what the Coast Guard Auxiliary and other similar volunteer groups do to educate boaters and help in a time of need. The Coast Guard Auxiliary hosts a number of programs, such as public education and vessel safety checks, as well as safety patrols, search and rescue, maritime security and environmental protection. If we can attract new boaters by explaining safety and responsible operation of boats, we will be educating a new generation of boaters that will be careful and conscientious on the water.
Something for free
When we were thinking this over, we asked what would be the ideal event or type of program that would work. We came up with several suggestions.
If you don’t have a rental boat operation, see if you can contact a local boat dealer or broker and find out if they want to be involved. Team up and help them advertise with you: free boat rides. Or perhaps the two of you could sponsor a cookout and develop a press advertising plan that will get the non-boaters out on the water, through your property, and into the new boat sales department. This can only help you in the long run by creating a larger market for boating in your area. Moreover, by having your facility host the event, you will leave a good taste in their mouths and they will remember this positive experience when they are ready to find a dock for their new boats. In any case, it is a good reason to have a dock party, while catering to the needs of existing boaters. Feed off the ego of existing boaters who will be happy to show off their boats and explain what they have done, including old tales from the water, to someone who does not know much about boating. Everyone likes to be an expert.
These are just some of the ways marinas can promote boating to nonboaters. We know what we need to do, but it is up to you to find new ways of doing it. We would love to hear your ideas, and we can share some of our successes with you as well.
A new generation
Remember this: At the end of the day, the more non-boaters we can get out on the water, the better off we will be as an industry. We have the opportunity to create another generation of active, safe, responsible boaters. The best part is, we don’t need the cooperation of the largest mega-yachts, or big sailboats. People who are new to boating are interested in seeing the benefits of boating that they can attain on their own.
In our promotions, we thought in terms of introducing non-boaters to boats that they would be able to learn to operate with relative ease, and, though it may seem a little self-serving, have them use boats that fit in our marina. Non-boaters are usually interested in the smaller boats anyway, for these are the vessels that a husband would like to enjoy with his family. It gives them the versatility to experience one of the many pleasures of boating, whether it is swimming off the boat in some quiet cove, pulling up to a restaurant dock for lunch, or maybe watching the sunset from a new perspective. If we can show the joys of boating to non-boaters, the popularity of recreational boating will increase, and they will come back next season and want to keep their new boats in your marinas, fueling new demand in the process.
Marina Dock Age, March 2004
Certificates of Insurance Go the Extra Mile in Marina Protection
By Mark Yearn
Responsible business owners take every precaution to protect their property against loss from fire, wind, and flood. They also provide their clientele with a safe environment, minimizing exposure to accidents or injuries. Typically, a business owner holds a policy that provides at least $1 million worth of general liability protection for bodily injury or property damage. Prudent marina managers purchase a marina operator’s legal liability policy to protect any property in his care that belongs to others. In addition, a worker’s compensation policy covers marina employees.
Most business owners stop there, thinking they have purchased all the insurance they need in order to properly protect their businesses. All too often, however, they have completely ignored the independent contractors, subcontractors, vendors, or manufacturers with whom they conduct business. Nor can they forget the boat owners who are leasing the slips.
Business guests on the property
In order to properly protect a business, one should obtain a certificate of insurance from each person, business, or tenant of the facility. This certificate should provide general liability protection, legal liability protection (which involves working on property owned by others), indemnity protection, automobile liability protection – including non-owned and hired car liability – and worker’s compensation protection, for limits equal to what one is purchasing to protect the public.
In addition, the following should be addressed:
- Specific businesses should be added as additional insureds. This is not unreasonable. This covers all liability arising out of the activities, premises, products, etc. of the businesses that are entering one’s property to perform a service.
- The scope of coverage should be outlined, or more importantly, any unusual restrictions of coverage should be described.
- A 30-day notice of cancellation clause should be included on each certificate.
Other specific provisions can be added to a certificate in order to meet particular needs. For example, evidence of pollution insurance with one’s business added as an additional insured may be required for specific jobs being performed.
Certificates of insurance for worker’s compensation coverage
Worker’s compensation laws usually require contractors to also be responsible for compensating the employees of subcontractors. Further, a contractor may have to provide benefits for employees of a subcontractor who may be, for some reason, unable to meet its obligations.
Often, business owners automatically assume that a firm it has just hired to perform a service is covered by worker’s compensation insurance as required by state law. This is a dangerous assumption. First, not all businesses are required, nor can they purchase, worker’s compensation insurance. In Michigan, for example, individuals/sole proprietors cannot purchase worker’s compensation. Secondly, an employer of fewer than three employees is not required to purchase worker’s compensation insurance. Just by employing these uninsured workers, a marina may be held responsible for any injuries incurred while performing a service for the business, whether under contract or not.
This problem is exacerbated if the business is located on federal navigable waters of the United States. These uninsured workers may fall under the protection of the U.S. Longshore and Harbor Workers Act, and if the business is not insured for these claims, the owner of the business may be held personally liable as stated in the provisions of the Act.
It is clear that there is no more important method of protection than by obtaining evidence of worker’s compensation insurance for every person and/or business entering the property to perform a service, no matter whom the service is for.
Boat owners
I am often asked several questions about the certificate of insurance requirements for boat owners who lease a slip from a marina owner. Should a certificate be obtained? Should evidence be required regarding insurance on the hull? Should the marina be added as an additional insured?
The answer to all these questions is “yes.” However, for some marina operators, it may be next to impossible to monitor the insurance for each and every boat owner throughout the year. Therefore, I would suggest that:
- Each boat owner provide the marina owner with a certificate of insurance naming the marina as an additional insured. This certificate should be given to the marina upon signing the leaseholder contract, or before a boat is allowed to dock in the marina.
Keep in mind, this is a situation where a landlord is leasing property owned or controlled by him. No landlord would ever allow a tenant to rent an office or building, without first providing evidence of insurance. As a landlord of a dock or slip space, make sure that your tenants provide you with the same insurance protection you would require if you were leasing an office.
- The marina should include in its slipholder contract or agreement a requirement that each boat owner maintain hull insurance on his boat, that he maintain liability insurance on his boat, and that liability insurance will include the marina as an additional insured. And finally, the boat owner should agree to hold the marina harmless for any and all claims that may arise, except for those claims resulting from negligence. These are important escape clauses should the tenant fail to meet all the requirements of the contract.
Many varieties of slipholder agreements are in use today. Some of the state associations have sample copies available for review. One of the best I have seen thus far comes from California’s Marina Recreation Association. A copy of the slipholder agreement that has been written for their members may be obtained when one joins. Contact them at www.marina.org.
By setting up procedures to obtain and monitor certificates of insurance, one truly enhances a marina facility’s insurance protection. It’s important that these procedures be followed. It’s one thing to spend the time developing these procedures and simply put them in a manual; it’s just as important to act upon them. Make sure to verify that the businesses on the property – whether individuals or a corporation – have the proper insurance and include the primary business as an insured entity. Enforcing policy will offer further protection from exposure to uninsured, or underinsured, claims.
Mark Yearn is a marine insurance specialist exclusive to Marine Insurance Services based in Milford, Mich. He can be reached via e-mail at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Marina Dock Age, March 2004
Is Your Marina Compliant with Federal Security Measures?
by Dennis P. Kissman
As we all know, the government plays a huge role in the day-to-day lives of marina owners and operators across the nation. New legislation makes it necessary for us to sequester ourselves to sort through the “legalese.” and figure out exactly what we need to do in order to remain in compliance. Even though we may question a law’s validity or applicability, we trust that our government has our safety and best interests in mind.
Recently, we dealt with a compliance issue by completing a Facility Security Plan (FSP) for one of our marinas. The new FSP regulation was handed down by the Department of Homeland Security, and is being enforced by the Transportation Security Administration (TSA) and the Coast Guard (USCG). It’s designed to provide all U.S. ports with three flexible security plans that can be adjusted during the three maritime security levels (Green, Orange, and Red). The initiative requires marina managers to develop security plans based on a security assessment, and then implement these measures to identify and deter terrorist activity.
How to find out
We were fortunate enough to have the Marine Industry Association of South Florida (MIASF) stay on top of the regulations. This afforded us enough time to get the proper information submitted. The rest of the nation was not so fortunate. The federal government estimates approximately 5,000 U.S. port facilities (commercial and recreational) meet the requirements to submit a Facility Security Plan, but only 1,100 made the December 31, 2003, deadline.
There was clearly a communication problem with the legislation. At an MIASF meeting in November, out of approximately 50 active industry people attending, only 10 had heard of the regulations. Supposedly, a grass-roots campaign was to inform the public about the need to comply; obviously it was not effective in reaching the target audience (e.g. marinas, boatyards and yacht management companies). In addition, the information that was available did not clarify which facilities needed to comply, or what was involved in compliance. The problem then became that those fortunate enough to have heard about the regulations were confused about compliance procedures. Only after several lengthy question-and-answer sessions with USCG and TSA representatives were we able to determine that a security plan for one of our marinas must be developed.
Who needs to file?
The basis for compliance depends on the size and type of vessels your facility can accommodate. According to the regulations, any vessel over 500 gross tons (documented weight, not actual weight); passenger vessels that have a capacity of more than 150 passengers; and vessels on international voyages, including vessels solely navigating the Great Lakes, must have a Vessel Security Plan (VSP). The regulations add that any facility that accommodates a vessel with a VSP must have a Facility Security Plan (FSP). This is where many questions arise.
What if a facility only sees these types of vessels once a year for transient dockage, or one hour every month for a dinner cruise pick-up? Do these facilities need to comply? The answer from the USCG and the TSA is: Yes. Locally, the Coast Guard is working to create alternatives for facilities that are used for passenger embarking/disembarking on dinner cruises and casino boats. That approach, however, doesn’t address marinas that provide dockage to vessels traveling to foreign ports. For example, a yacht that takes guests from Florida to the Bahamas or through the Great Lakes to Canada once a year may be required to have a VSP. If that vessel stays in your marina, you will need to file an FSP.
What needs to be done?
Once compliance with the new regulations was deemed necessary, we began to assess our facility’s ability to deter a terrorist attack. The assessment was conducted in two parts: The first was a four-hour, on-line questionnaire through a TSA web site. The second was a physical examination of the property. After reviewing our assessment, we identified our weaknesses and started to address them. We began to understand how the regulations would affect our property.
If the suggested measures were to be followed, our manicured, landscaped, tropical marina would look and feel like a maximum-security prison. Recommended security measures included passenger, vehicle, and baggage screening, armed security patrols, dock access restriction, employee and contractor ID cards, and surveillance equipment. The first question raised, to no surprise, had to do with cost.
Next, we wondered what would happen to the appearance of our property — how would our guests react? We had images in our minds of armed guards in full swat gear searching a guest’s beach bag as he or she is walking down the dock.
Since then, we have been working with our local Coast Guard representatives to identify alternatives to such drastic security measures. The process of creating and implementing a VSP or FSP can be very lengthy, costly. and confusing, and may lead some to ask: “What if I don’t comply?” Typically, the federal government says the penalty is “for every day after the December 31, 2003, deadline, a facility or vessel not in compliance is subject to a $25,000 fine per day.” Of even more concern should be the July 31, 2004, deadline when the Coast Guard is required to begin inspections and may start shutting down non-compliant vessels and facilities.
It is our duty as marina owners, operators, and employees to be vigilant and aware of the existing threats. Everyone understands that the nation’s ports need to be secured and we are willing partners in that collective effort. The TSA and the Coast Guard have been working to understand the needs of recreational marinas and to identify acceptable alternatives to the security requirements. The burden is on us to educate them about the unique aspects of our industry. We need to identify and present alternative methods of securing our facilities. As it stands, we are subject to the same regulations as the nation’s largest commercial ports. We are not cargo docks or cruise ship terminals; we are marinas, providing access to one of the nation’s greatest recreational activities – boating.
If you have any questions as to whether or not your marina may be required to submit an FSP to comply with this current regulation, please contact our resident expert on the subject, Tim Keogh, director of business services at (561) 338-5800. I am sure he will be able to help.
Marina Dock Age, January/February 2004
The Dock Walk: Shoring Up Accountability
by Gene Spinazola, P.E
Whether it’s called a dock walk or “sweep,” dockage inventory, or a dock maintenance report, it seems that every marina has a system that requires an employee to physically walk the docks to gather important, operational information. What I found interesting was the varied levels of sophistication of this practice from one marina to another.
One common thread that ties all marinas together is slip inventory. That is, an accounting of rented space, or slips open for rent. There is universal interest in maximizing the percent of occupancy and optimizing the available space.
Who walks the docks at your marina? Is it a new employee, a veteran, or nighttime security person? The answer may depend on your mission. What information do you want to gather, and what are you going to do after you obtain it? If you don’t do anything with the information, having someone walk the dock is just “busy work,” sending a negative message to your employees.
A “dock walk” can be split into several different areas and levels of responsibility. Accountability, security, safety, maintenance and repair, and housekeeping are a few areas to consider and each has a different focus. The employee, who gathers the accountability information and walks the docks counting empty slips, may not be the same person you want gathering maintenance and repair information. As an example, just because the employee has been on your staff for the past six months, it doesn’t mean he or she will recognize a liability item.
If you ask employees to walk the docks, you’ll need to provide them with appropriate guidance so they know exactly what you want them to find. Develop a written list of items that should be checked regularly. Let’s assume you have a nighttime security patrol at your marina. As they walk the docks making their security rounds, you may also want them to be looking at the following items:
- Fire extinguishers: Make sure they are all stationed, and that the pressure gauges are in the green bands. The safety seals should not be broken, and there must be no mud wasps in the nozzles. Any deficiencies should be noted in your shift report.
- Lighting: Ensure that all nighttime automatic walkway lights are working properly. Note any outages.
- “Trip-and-Fall” hazards: Mark any of these in your shift report.
At Camachee Cove Marina in St. Augustine, Florida, Harbormaster Sean McKenna has five different people walking the docks each week (and he is one of them). According to McKenna, all deficiencies are logged into the computer for record-keeping and tracking purposes. When an issue has been resolved, it is removed from the active file. McKenna is confident in all five employees’ abilities, to the point that having all these different people rotate through the routine provides him with better coverage – superior to assigning the same person to the job, day after day.
Extension cords can extend danger
A common oversight in marinas is the misuse of the electrical outlets in power pedestals.
In a recent survey conducted by BoatU.S., 55 percent of all boat fires were traced to electrical failures. Now that’s a number that should get your attention. Yet, every marina I have inspected has extension cords improperly connected to a 30-amp outlet of a power pedestal. Section 3.13.4 of the National Fire Protection Association Standard 303, Fire Protection Standards for Marinas and Boatyards, addresses extension cords as follows:
“Fifteen and 20-ampere, singlephase, 125-volt outdoor receptacles shall be protected by ground-fault circuit interrupters. They shall be permitted to be housed in marine power outlets with the receptacles that provide shore power to boats, provided a marking clearly indicates that they are not to be used to supply power to boats.”
When a 15-ampere extension cord is connected to a 30-ampere power pedestal outlet, the potential exists to draw as much as 30 amperes through the extension cord. The excess electrical draw on the extension cord will cause it to overheat and could pose a great threat of fire aboard the boat. If your staff and customers understand the potential problem associated with extension cords permanently connected to a boat, it will be easier to eliminate their use.
In short, a training program will help your staff be aware of all the issues you see when you perform the routine (but not too tedious) chore of walking the docks. The setting of ground rules for your staff and your customers clearly defines what is acceptable and what is not acceptable, and will go a long way in clearing your docks of any hazards.
Gene Spinazola specializes in marina fire and safety issues, and he welcomes calls: (207) 326-9147. He is president of Gene Spinazola P.E. & Associates Inc., in Casane, Maine. www.marinafires.com
Marina Dock Age, January/February 2004
Escalera Nautica
One Consultant’s Take on Mexico’s Plans to Expand Nautical Tourism
by Dennis P. Kissman
I have been asked on several occasions, by a number of people, to comment on the Mexican government’s proposed “Escalera Nautica” or Nautical Ladder. For those of you not familiar with this plan, it calls for building 27 marinas along the Pacific Coast of Baja California and into the Sea of Cortez to accommodate cruising boats, primarily from California.
I am familiar with the Nautical Ladder because I participated in a three-person consulting group commissioned in 2002 to update the original 1999/2000 plan at the request of the Federal Tourism Promotion Fund (Fonatur). Our assignment was to either confirm the conclusions of the original study and/or correct or update them.
How it all started
For background, Fonatur was responsible for developing tourist destinations such as Cancun, Ixtapa, and Huatulco, but it has been almost 19 years since its last major project. Escalera Nautica was to be the next big economic development scheme, but before any sound market research had been done, minds were made up to pursue it.
Please understand that I am neither defending nor ridiculing the government’s report as has been done by others in the past. Instead, I want to point out what can happen when data representing a portion of a project is used to justify the whole undertaking. People in the marine industry – including me – who read the I999/2000 study wondered where the original group got their information. For example, the study projected that nearly every boat over 30 feet in length registered in California would likely be cruising in Mexican waters!
Phantom ships
Here’s another example of how the original study went astray: Our group realized that the boating statistics gathered from Mexican port captains may have included duplicate numbers for the same vessels arriving and departing. For instance, if a boat cruised 10 times between Cabo San Lucas and La Paz during one season, each time the boat checked in at port, it was counted as a new arrival. As a result, one boat was counted as twenty new arrivals.
Another area of concern in the original study was that the number of boats in Ensenada was used as a basis for the number of boats cruising Mexican waters. I know from personal experience that there are a number of Southern California boaters who will venture as far south as Ensenada, but wouldn’t think of going any farther down the coast.
The disturbing Land Bridge
Another disturbing part of the original study was the so-called “Land Bridge.” To use the Land Bridge, a boater would have to cruise as far as 100 miles south of Ensenada, have the boat hauled out and put on a truck. The truck would drive six to eight hours across Baja Mexico to the Sea of Cortez where the well-traveled boat would be relaunched. The study projected that 4,000 boats a year would be transported in this fashion within 10 years. If this were to come about, I estimate it would take a fleet of 15 semi-trailer trucks working 24 hours a day for six months to move 2,000 boats overland in the autumn and return them in the spring – the typical cruising cycle.
We must bear in mind that the initial research into the U.S. market was sound and, if followed, would have led to different conclusions about the project’s viability. The problem was created when politics began dictating the results of the study. The project was positioned as an economic boost for underdeveloped areas of Mexico. Not only was it to promote nautical tourism, it was to encourage tourism in general. Unfortunately, subsequent research focused only on pleasure boats, ignoring other components. The result was the need to inflate the data to justify moving forward. This was compounded by the fact that no one tested the results as they compared to the actual data in Fonatur’s economic model. If this had been done by anyone familiar with the industry, they would have recognized that there simply weren’t going to be that many boats cruising those waters!
As flawed as the study appears, the idea of promoting nautical tourism should be explored. In updating the study, our group concentrated on ways to promote nautical tourism without politics dictating the outcome of our brainstorming. Following are some highlights of our report:
Tis the season…or not
First, we recognized that the study did not account for boating seasons, or the types of boats that are in Mexican waters during certain times of the year. For example, in the winter there is a large contingent of cruising sailboats, while in the summer most of these boaters who do decide to stay in Mexico remain upland or in a hurricane hole. The majority of the cruising boats return to the states or retreat to Ensenada. This decreases the demand for marinas, yet the study made the assumption that the boating season was year round.
Further, we recognized that a large number of U.S.-registered boats in the upper Sea of Cortez are trailered there, thus requiring launch ramps and different types of facilities not considered in the study.
Tried and true
In Mexico, there are established nautical destinations such as Cabo San Lucas at the southern tip of Baja, and San Carlos and Puerto Peñasco on the mainland, each catering to a different type of boater. We recommended that Fonatur capitalize on these existing destinations as the prime foundations for the expansion of nautical tourism, rather than create new ones that have no existing natural attraction for boaters.
Mind the regulations
Problems everyone acknowledged, yet chose to ignore, are the difficulties and inconsistencies imposed by the Mexican port authorities. I must admit the procedure is a little more uniform today, and the Mexican marina association has done much to inform skippers as to what is required. However, there are still government regulations that must be followed. Our recommendation was to issue annual cruising permits as documentation when traveling in a given area. In the couple of meetings we had with government representatives, they understood the problem but seemed not to have any solution. I think this situation continues to exist, though I haven’t followed up on it.
Privatize!
Another recommendation not well received was that Fonatur shouldn’t compete with private developers and operators. When there is a demand for new or expanded facilities, Fonatur should simply assist private enterprises with navigating the bureaucratic red tape to expedite development. We believe that encouraging private investors would be a major step in the right direction. Who is in a better position to develop these facilities than someone who understands the marine industry and is willing to invest his or her money? It’s my opinion that nautical tourism will continue to expand in Mexico primarily with the help of private developers responding to market demands, not through government programs designed to stimulate the Mexican economy by spending money for the sake of spending.
Plan lands in black hole
Our group submitted our findings and recommendations to Fonatur per our contract early this year, but beyond that, I have no knowledge as to what happened to them. There was to be a peer review of our work, but that didn’t take place, nor do I believe our findings were ever made public. As far as I know, the people in Fonatur who hired our group are no longer working there.
It’s easy to conclude that our findings and recommendations differed from the original study.
at the
Ft Lauderdale Boat Show