Megayacht Marina Holds Promise Of Megabusiness For Miami
By Paola Iuspa
With plans on deck for a new megayacht marina on Watson Island, Miami could lure more of the largest luxury vessels and the accompanying dollars.
A 55-slip megayacht marina for the northern tip of the island is part of a $280 million mixed-use development by Flagstone Properties, an Orlando and Miami-based firm. Amid an international shortage of marinas for yachts 80 feet and longer, Miami’s proposal is good news, said Frank Herhold, executive director of the 800-member Marine Industries Association of South Florida, based in Fort Lauderdale.
"It is a very visionary move," he said. "It will pay off handsomely in the long run."
Part of a mixed-use project approved by city commissioners and then voters in a Nov. 6 referendum, the Watson Island proposal also includes two hotels, high-end retail and gardens. While a key component of the project, the marina requires state and federal approval and is likely to be the last portion to be built, consultants have said.
But, Mr. Herhold said, the marina should be worth the wait.
"Megayachts mean megadollars and megabusiness. These people arrive in planes to go to their vessels. They are here to enjoy our amenities and spend money."
More than 900 megayachts pass through South Florida yearly, he said, each pumping about $500,000 into the local economy. That includes about $236,000 per vessel spent at local boatyards, based on a 1997 report from his organization and the Broward Alliance Inc. And that report didn’t even include typical expenses like fuel, entertainment, flowers, fine wines and other supplies.
Box Saxon, president and CEO of Bob Saxon Association Inc., a megayacht management company, said a typical 150-foot-long vessel with a 13-member crew costs $1 million to $1.5 million a year to operate. Megayachts have up to six staterooms to sleep up to 12 passengers, he said.
Filling up a 60,000-gallon fuel tank could cost $90,000 and an exterior paint job averages $500,000, according to a July report published in "Florida Trend." Cost for the dock space can range from $400 a day for a 100-footer to $1,500 a day for a 400-footer, according to the article.
Karina Befeld, owner of Elite Crew International in Fort Lauderdale, said a 170-foot yacht employs about 15 people, with a $2 million payroll. Although the boat owners may only fly to their yachts for a weekend or a couple of weeks, the crew lives on board the entire year, she said. Often responsible for upkeep and stocking the boat, the crew becomes consumers and tourists in cities with marina facilities.
Mr. Saxon said his clients typically use their yachts about eight weeks a year. The rest of the time, the yachts are chartered out.
He said a 180-foot-long vessel can generate about $150,000 a week when chartered to athletes, movie stars and those who want to test the yachting experience before buying their own, he said.
Steve Hopkins, a megayacht broker for Gene Gammon & Associates Inc., in St Petersburg, said Florida has the largest dollar volume for yacht sales in the country and is seventh in the number of registered yachts. Florida charges only sales tax to state-registered boats.
Now, Miami could benefit from Fort Lauderdale’s nautical popularity.
Known as the megayacht capital of the world, Mr. Herhold said Broward County is running out of dock space for the largest vessels.
There are more than 5,000 megayachts navigating around the world and 507 under construction, Mr. Herhold said, based on information from the "ShowBoats International" magazine. Vessel production takes two to three years, he said.
"The demand for megayachts is high," he said, but they need places to dock. "And they are getting bigger and bigger."
Mr. Saxon, whose company manages 100 megayachts from all over the world, said the absence of places for large yachts to dock is a problem. Yet, he said, boat builders keep designing larger vessels. For example, he said, he is managing a 449-foot-long yacht – 11/2 times the size of a football field.
As a yacht manager, Mr. Saxon said he is in charge of keeping the yacht’s supplies in stock, providing maintenance, supervising the crew, buying insurance, ordering repairs and keeping documents up to date.
Craig Read, with MARINEMAX Yachts & Brokerage in Fort Lauderdale, also said megayacht dockage is hard to find.
The ships are 80 to 400 feet long with price tags of $2 million to $50 million, he said. He said Miami-Dade marinas able to accommodate the large yachts include Miami Beach Marina, Fisher Island, Ocean Reef Club in Key Largo and Grove Island Marina in Coconut Grove.
Bob Christoph, who oversees Miami Beach Marina, with 400 slips and room for 40 vessels that are 80 feet or longer, said much of the Miami area is not able support megayacht facilities because Biscayne Bay is not deep enough. Megayachts, which can be three stories high, need at least 10 feet of water to navigate.
He said Miami Marina, adjacent to Bayside Marketplace off Biscayne Boulevard, has capacity for a few long vessels while Dinner Key, between Miami and Key Biscayne, has none.
Berth capacity, boatyards and skilled craftsmanship helped make Broward the first choice for large yachts, said Steve Hopkins, a megayacht broker for Gene Gammon & Associates Inc. of St. Petersburg.
Ned Bruck, senior yacht broker with the Allied Marine Group in Coconut Grove, referred to Fort Lauderdale as "Miami’s first cousin."
"It is true there are a lot of megayachts in Fort Lauderdale, but there are a lot here too," he said about Miami. "Many of my clients are from Latin America. They feel more comfortable buying their yachts here than up there."
Mr. Bruck said he sells one or two megayachts a year. But the commission he makes, he said, affords him a house in Coral Gables and private schools for his children.
He said economic slowdowns don’t affect the yacht business.
"Megayacht is the strongest market," he said. "Those people are so cushioned by their financial situation that it does not matter how the economy is doing. They are a different breed of people."
Mr. Saxon said many large vessels are owned by a cross-section of the Who’s Who of the corporate world.
"Some megayacht owners are buying waterfront properties just to capture the dockage," he said. "Some yacht brokerage firms are adding real estate agents to their companies to help them find those homes."