REGIONAL REPORT : Recession Batters South Coast’s Marina Business : Recreation: Many boat owners sell their crafts or store them on land to save money. Waiting lists for slips are a thing of the past.
For decades, docks from San Diego to Ventura bristled with towering masts and massive motors, until the recession spoiled the seemingly endless summer for many of Southern California’s boat owners and marinas.
Just recently, thousands of boaters waited, sometimes for years, for a coveted slip at a desirable marina. But boat repossessions and desperation sales thinned those lists and left unheard-of vacancies at many marinas. One spot in Marina del Rey is even floating lower prices in hopes of drawing more boaters.
“You walk around marinas today and you can shoot a cannon through the place and not hit anybody,” said Harry Nelson, owner and president of Almar Ltd., which operates marinas in Oxnard, Ventura, San Diego, Alameda, Ft. Bragg and Mexico.
Surely an exaggeration, but Nelson reflects his industry’s growing alarm as vacancies reach 30% in some marinas. Even where vacancy rates are lower, operators are stunned by the exodus of boats in less than a year.
The battered economy has left fewer middle- and upper-middle-class people able to afford the luxury of boating. Those who can afford it are less likely to take the financial risk on such a nonessential item.
Carl Groos, a recently retired plumber from San Clemente, is trying to hold onto the sleek 27-foot boat he keeps at the Oceanside Marina, but it is not getting any easier.
He pays $2,500 a year for slip rental, about $400 for boat maintenance and $300 for insurance. He is considering sacrificing his beloved boat to bad times.
“It’s tight,” he said. “It’s getting to be a little beyond the working man.”
Those who cannot sell their vessels in a glutted market--so much so that buyers are flocking in from other states and countries for bargains--haul their boats from the water to avoid paying slip rent, maintenance costs and insurance.
Vacancies are found almost everywhere in Southern California.
Mark Richter, assistant director of property management for the Port of Los Angeles, which leases land and water rights to 18 marinas offering about 4,800 slips, has seen more boats up to 35 feet long hauled ashore.
Boat owners look at the $8 to $10 per-foot monthly rental and see that parking their vessels in their driveways would mean a fraction of the cost, Richter said.
Joni Anderson, operations supervisor at the Long Beach Marina with nearly 4,000 slips, said “definitely, people are pulling them out and putting them on a trailer or up on blocks.”
The trend has been sudden and dramatic.
“Up until a year ago, we had lists for 80 or 100 people, people waiting four or five years to get into the marina,” Anderson said.
Now, there is a 5% vacancy rate, which might not seem like much except it means $648,000 in lost income this year.
It is the same at the 540-slip Marina Cortez on Harbor Island in San Diego, where dock master Carol Pagliuso saw the economy’s stormy waters arrive last summer, bringing an 11% vacancy rate.
“People come in and say they simply lost their jobs,” she said.
At the 6,000-berth Marina del Rey in Los Angeles, last year’s 5.5% vacancy rate is expected to be double that in April.
Anxious marina operators around the state are offering incentives to keep boats from leaving, either for dry land or cheaper marinas.
“We have had one operator who has lowered his slip rates,” said Kenneth Foreman, senior real property agent for the Los Angeles County Department of Beaches and Harbors, which runs Marina del Rey. “It’s hard for us to tell whether the rest will follow,” he said.
About 90 marinas dot the Southern California coast, 87 of which responded to a survey by the Long Beach Marina. Seventy-seven reported vacancies. Several, including Campland on the Bay Marina in San Diego’s Mission Bay, reported a 30% vacancy rate.
In Orange County, the typical 2 1/2-year wait for 26-foot slips has been whittled to only a few months at Dana Point Marina, while at Newport Dunes Marina, 100 new berths sit without boats--a 25% vacancy rate, according to the Long Beach survey.
Peter’s Landing in Huntington Beach reported an 18% vacancy rate.
And the Ventura Port District, which leases property for four marinas, is witnessing a 10% vacancy rate.
Some marinas never had an opening until recently, such as the 29-year-old Oceanside Marina, where harbor master Don Hadley watched last year’s waiting list of more than 300 shrink to 26.
He partly blames a controversial slip-fee increase, but said the recession is the major culprit.
“There are no new people coming into the industry. They’re sitting on their dollars,” Hadley said. “Or, they don’t have any dollars.”
Brokers agree that boat sales are down but say the explanation goes beyond the recession.
As if boats were not expensive enough, last year the federal government imposed a 10% luxury tax on boats costing more than $100,000. And, effective last August, the Coast Guard began collecting a new fee on boats.
“It has scared potential buyers out of the market,” said Bob Swanson, manager of Cabrillo Isle Marina at San Diego’s Harbor Island. “Mr. and Mrs. Middle America, they’re just out of the market, they can’t afford a boat.”
Most marina officials up and down the coast say the greatest vacancies are for medium-sized boats usually belonging to middle- and upper-middle-income owners.
The classified ads are brimming with boats for sale, leading to a long and discouraging wait for sellers such as Bob Edgar of Oceanside, whose 42-foot, all-wood motor sailer has been on the market since before the recession.
“The recession is keeping me from selling it. Nobody can afford it,” Edgar said. His asking price is $69,000, and he figures the craft is worth much more.
But Edgar shares a common sorrow with thousands of other boat owners who want to get out from under.
“It’s definitely a buyer’s market. Buyers for 40 cents on the dollar for what a boat was worth a year ago,” Nelson said. “You can go out and write your own deal.”
Buyers are coming from everywhere to do just that, picking and choosing and snapping up bargains.
“People know the place to buy a boat is in Southern California. You can get a good price,” said Richard Parsons, general manager of the Ventura Port District. “People are buying them from out of state. A lot are going to Seattle, some are even going to British Columbia.”
Even so, California’s love affair with boating is not over. There were 705,958 boats larger than eight-feet long registered with the state Department of Motor Vehicles as of February.
Of those, 104,159 are in Los Angeles County; 58,541 in Orange County; 49,637 in San Diego County; 19,524 in Ventura County, and 7,907 in Santa Barbara County.
Despite the discouraging trends, some marinas are virtually untroubled.
The Port of Los Angeles, which runs the 1,200-berth Cabrillo Marina, has no vacancies, although the port’s 18 lessees are not so fortunate.
And Julia Hazard, harbor master at the Santa Barbara Marina, reports no vacancies and a long waiting list, although she largely credits slip rentals by commercial fishermen for keeping the marina on an even keel.
“The fishing industry continues to be healthy in Santa Barbara,” she said.
