Marina Rates Lowered in Hopes of Profit
By Carl Wagenfohr
CLEARWATER In 2006, it would have been laughable to think that the Clearwater Municipal Marina operation could possibly lose money. With 100-percent occupancy, a waiting list 300 deep, and demand for slips surging, fueled by the rising tide of new boat registrations and a reduction of private marinas, the economic future looked bright for the Clearwater Beach facility.
So bright, in fact, that in 2007 the Clearwater City Council put into effect a Marina business plan that would send slip rental rates soaring toward what was then considered a market rate of $15.50 per foot per month by 2012.
But in October, 2008, the convergence of a sour economy and increases in Marina rates of 31.5-percent for residents and 25-percent for non-Clearwater residents caused what had been unthinkable an exodus of boaters that created a vacancy rate of 35-percent. Despite the increased rates, the Marina lost money last quarter.
The Clearwater City Council took action to fill the slips at their meeting last Thursday, accepting a recommendation from Harbormaster Bill Morris and Finance Director Margie Simmons to lower rates immediately to $8.51 for Clearwater residents, and $10.33 for non-residents. Those rates would be frozen this year and next, then increased by 5-percent annually.
Vice Mayor George Cretekos asked if the new rates would result in a profit or a deficit at the beach Marina. We're hoping that with these rates and cutting back expenses like we did, we'll generate a profit before depreciation, Simmons replied.
But the city might find it challenging to lure enough boaters back for the 75-percent occupancy required for positive cash flow, or the 90-percent necessary to show a profit after depreciation.
Denis Bosi, a Clearwater resident and current marina tenant, asked the Council, Do you really believe that an 85-cent reduction in the residential rates is going to bring a boat-load of people to bring their boats back to our marina? Bosi didn't wait for an answer, providing his own; I can tell you no, he said, claiming that a reduction of only $28 per month for his boat is not going to make people come back to the marina.
Refugees from the Marina's recent rate increase agree with Bosi. The Gazette surveyed those we quoted in the January 29th story Slip Rate Increases Boaters Respond, and of those we were able to contact, none will be returning to the Marina.
Professionals also recognize the weak demand for marine industry products and services. Robert Semmes, VP of Applied Technology and Management, said last week, The State of Florida actually saw a decline in boater registration in 2008.
Should the rate cutting fail to increase occupancy to the point of positive cash flow, Simmons said that Marina expenses would be further reduced by trimming staff, but cautioned, We would be significantly reducing our service levels, so we don't want to do that now. Obviously, we would do that now if we didn't think we were going to impact service levels.
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