Building a new marina in an empty basin takes great care and planning. However, rebuilding and redesigning an existing marina takes even more planning. Tenants need to be taken into account, and the ongoing business must be maintained with minimal interruption during the project. Done right, however, a marina can complete a renovation project, can protect its revenue stream during the rebuilding process, and can continue to provide quality services to its customers. The rebuild case For those owners operating an existing marina and looking to renovate it, at what point does it make sense to rebuild? Having worked with many marina operators going through the decision-making process, here are some common reasons to rebuild:
A disproportionate demand for slips: Marinas should take a look at their waiting lists to see if there is a high demand for large slips, and little or no demand for narrow or smaller slips. Today’s boats have gotten bigger, both in length and beam, and operators of marinas built 20 plus years ago are finding that their facilities just don’t meet the needs of today’s market.
• Positive economic conditions: Marina owners and operators can substantially reduce their overall project costs, including financing, by taking advantage of lower interest rates and favorable timing in the financial markets.
• End of useful life: An older marina using outdated structures may present a number of safety hazards, as well as look and feel more antiquated with each passing year. Utilities, especially electrical services, may be underpowered or out of compliance with codes. If this is true, it’s probably time to compare the costs of continuing to operate an outdated marina with the opportunity to increase revenues and asset values by investing in a new one.
• Lease agreements or permit influences: The decision to rebuild may be influenced by external influences, such as lease terms or permitting opportunities. For example, there are many situations where operators are preparing to renegotiate a long-term lease with a city. Presenting the municipality with a rebuilding plan can put the marina in a much better negotiating position and may better align the marina’s business with the city’s vision for the property. Additionally, opportunities for expansion that were once inhibited by permitting restrictions may now be possible. Or, with new restrictions on the horizon, it’s now or never.
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MAGAZINE: Marina World
ISSUE: May/June 2007
