Investment in Pleasure : Yachts Sail On Though Recession Roils Waters

Bobby Cornelius’ boat is worth about 14 times the value of an average house in Orange County. Just letting it sit at the dock and taking an occasional cruise to Catalina costs $25,000 a month. And the tab for pulling up to the fuel dock and filling the tanks is a cool $15,000.

“I’d say about 75% of my lifestyle revolves around the boat,” says Cornelius, 62, a land developer whose luxurious, 121-foot yacht, Crystal, is tied up alongside his bay-front home. “I enjoy it. I like taking out my friends and family.”

On the seaward side of Coast Highway, down at Newport Harbor, a quiet sort of journey is in vogue. This is where the boat people live, yacht owners who spend their weekends on deck.

Often that is done in a state of opulence. Never mind the lethargic economy; multimillion-dollar vessels still bob regally in the waters of Newport next to multimillion-dollar homes.

More than 10,000 pleasure craft are registered here, making Newport one of the busiest yachting harbors in the world. “It’s a real hotbed for sailors,” says Lisa Gosselin, a senior editor at Yachting Magazine based in New York City. “It’s a place you hear a lot about.”

Yachting and Newport have been synonymous for as long as anyone can remember. With its mild climate and 1.9 square miles of protected waterways, the harbor has been home to some of the world’s most exotic yachts.

For several years the largest boat in the harbor was P’Zazz, a 127-foot pleasure vessel featuring three wet bars and a Jacuzzi, owned by the owner of the Radisson Hotel in Beverly Hills. That yacht recently began an extended stay in Seattle.

Today’s inhabitants range from the Crystal, which sleeps 18 passengers in addition to its six-man crew and recently went on sale for $3.5 million, to modest sailboats with barely enough room for two. In between are a whole slew of vessels designed to fit their owners’ needs. There is the Big D, a 115-foot converted Navy vessel owned by Hollywood producer Stephen J. Cannell. Just up the channel is The Marinatha, once owned by Elizabeth Taylor, now rented out as a $700-an-hour charter.

Harbor residents occasionally get into squabbles over the relative merits of each other’s boats. There’s an oft-repeated story about the guy who successfully sued his neighbor because the neighbor’s boat blocked his harbor view. And the discussions are ongoing over whose boat is the biggest, fastest, nicest or most valuable.

Many of those talks take place at Newport Harbor’s seven private yacht clubs, some of which impose stiff fees for membership. Those fees are nothing, however, compared to the enormous costs of maintaining a large boat. In Newport Harbor, private dock space goes for $10 to $20 per foot per month. Add to that the cost of maintenance, insurance, fuel and crew, and the monthly price tag can range from $1,000 for a 50-foot craft maintained solely by its owner to $40,000 for a 100-foot vessel doing a lot of cruising with a five-man crew.

So why do it?

“It’s the pleasure of enjoying the ocean,” says David Fraser, a yacht broker who’s been selling boats in Newport for 45 years. Oceangoing vessels are not good financial investments; within six years of purchase, he says, most depreciate in value by about 50%. In fact, Fraser said, the only reason to buy a boat is because you love it.

“You get a freedom that you don’t get any other way,” says Fraser, himself a boat owner. “When you leave that breakwater, you’re on your own; you create your own destiny.”

Other yachtsmen and yachts-women echo those sentiments.

Tawnia Cannell, 23, daughter of the Hollywood producer who owns the Big D, remembers looking forward to weekends on the family yacht as a child. “We love taking it out,” she says, adding that the family still takes four or five major cruises a year, including trips to Mexico and Europe. “There’s something about being on the ocean--something about the ocean air and movement--that’s very relaxing. It’s tranquil; dad reads scripts and we get three days when we can see him all day long.”

Speed Fry IV, a custom home builder and owner of a 40-foot powerboat called El Vago, says he likes to fish and scuba dive off his craft. “The ocean is the last frontier,” he says. “There’s not much traffic out there.”

And Bobby Cornelius, Crystal’s owner, says he enjoys the feeling of independence that comes with being the captain of his ship. “It’s like somebody taking a giant anvil off your shoulders,” he says. “You leave your worries behind. There’s nobody out there to tell you” what to do.

To help meet expenses, Cornelius rents out Crystal at $4,000 for three hours on the water. He also frequently makes use of the vessel between cruises by conducting on-board business meetings in its lavish dining room. “It’s a good way to get away from the telephone,” says the developer, who recently met aboard the boat with a group of professional athletes to discuss a project for rebuilding portions of Los Angeles destroyed by the recent riots.

But economic woes have made themselves felt even on the sun-dappled waters of Newport Bay, creating a dark underbelly to an otherwise silver-toned lifestyle. Boats that once cruised every weekend now spend more of their time at the dock. Prices are vastly deflated, cutting the commissions of brokers like Fraser. And all over Newport, people are questioning the future, wondering just how much longer the universe can sustain this way of life that so many love.

Beverly Monigal, for one, thinks it should be sustained forever. Monigal, who owns a flower shop, and her husband, an engineer, have a 43-foot sloop they take out every weekend despite the spiraling costs.

“It’s a wonderful way to get away from the hustle bustle,” she says. “There’s no place to drive in the country anymore, so you’ve got to go out in the ocean. I highly recommend it to anyone.”

Fraser has a simple way of summing it all up. Owning a yacht, he says, “is an investment in pleasure.”