Marina Slips Vacant Following Rate Increases
By Carl Wagenfohr
CLEARWATER – The recent price increase for slips at the Clearwater Municipal Marina, crown jewel in the city's tourism industry and operated as a profit-making enterprise fund, has created an unheard of phenomenon at that mecca of boating – vacancies.
The marina was to have become more profitable this year via action taken by the City Council in November, 2007, that gradually would eliminate preferential rates for Clearwater residents, and would in several steps bring both resident and non-resident tenants to a “market' rate of $15.50 per foot per month by 2011. In 2007, residents were paying $5.28 per foot, and non-residents $9.20.
The second step of Council-mandated rate increases occurred on October 1, 2008. The resident rate increased by 31.5-percent, from $6.94 to $9.13, and the non-resident rate by 25-percent, from $10.51 to $13.14. The October 1 increase was forecast to grow annual slip rent income from 2007/08's actual $814-thousand to 1.075-million in 2008/09.
The projected $261-thousand increase in revenue would bolster the marina's 2007/08 reported operating profit of $3,575, but a not so funny thing happened on the way to the bank. Starting in August 2008, a number of boaters began vacating their slips. The marina's wait list, which several years ago was 300 boaters deep, provided few new tenants to replace them.
Of the marina's 118 recreational slips, which have had a nearly 100-percent occupancy rate for as long as anyone can remember, 41 are now vacant, an occupancy rate of only 65-percent. For the quarter ended December 31, 2008, the city took in only $209-thousand in recreational/commercial slip revenue, $60-thousand short of its goal.
While the marine industry has not been immune to the nationwide economic slowdown, Clearwater's competitors in the municipal marina business, with one exception, are not experiencing the same high vacancy rate. According to Harbormaster Bill Frantz, the Dunedin municipal marina is 100-percent occupied, with a wait list 90 long and limited to Dunedin residents only. Dunedin's slip rent is in the range of $5.63 to $6.07 per foot per month. Like Clearwater, Dunedin operates its marina to be profit-making.
The City of Gulfport marina reported similar results. According to Larry Shephard, only 10 of the facility's 182 slips are now vacant, a number he described as typical. Non-resident rates range from $8.20 to $8.80 per foot per month.
Tarpon Springs has only 14 slips available for annual rent, with rates of about $9 per foot per month for residents and $11 for non-residents. The slips are fully occupied, and the marina maintains a wait list estimated at four years according to an employee.
The 'old' section of the St. Petersburg marina, totaling 610 slips, is 98.9-percent occupied according to Marina Manager Walt Miller. Slip rental rates for non-residents range from $11.38 to $11.70 per foot per month. St. Petersburg's rate includes two parking passes, which would cost an additional $320 yearly in Clearwater.
Miller has noticed a 15 to 18-percent decline in the size of the wait list, which now numbers 266. He has also observed a more thoughtful response from wait-listers who are called for a slip. “It used to be an immediate 'I'll take it!', but people are now saying 'Let me think about it' before calling back several days later to accept the slip,” Miller said.
But St. Petersburg's 'new' slips are running an occupancy rate similar to Clearwater's, between 60 and 70-percent according to Miller. Rates for the 'new' slips are higher, ranging from $14.28 to $14.40 and also include two parking passes.
Madeira Beach Marina Director Dave Marsicano has noticed a falloff of interest in his 83-slip facility, which is now 90-percent full. “Business is off,” he said noting that his wait list has fallen from about 60 to only a few. Rates at Madeira Beach are the same for residents and non-residents at $10.80 per foot for a non-live aboard and $20 for live aboard, both including tax.
While it's clear that the less expensive area municipal marina's are enjoying higher occupancy, the Gazette polled ten recent refugees from the Clearwater Municipal Marina to discover their reasons for leaving. Nine of the ten cited Clearwater's recent rate increase as the primary motivation for vacating their slips, while one claimed that his age and the rate increase contributed equally to his departure.
If Clearwater's 35-percent vacancy rate continues for the entire 2008/09 fiscal year, slip revenue could fall $240-thousand short of business plan objectives, and the marina operation could show an annual loss rather than the small profit forecast in the Marina's first quarter financial reports.
The boating market's apparent price sensitivity to slip rental rates does not bode well for the soon to be built downtown Clearwater boat slips. That 128-slip facility, scheduled to open in October, starts out with a rate of $15.50 per foot per month, higher than the Municipal Marina's current rates by $5.37 for residents and $2.36 for non-residents.
While more than 700 have expressed interest in the downtown slips, only seven boaters have submitted an application along with the required $500 deposit for entry into a March slip selection lottery. A deadline of January 31 looms for the receipt of those applications and payments.
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