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City marina faces challenges

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Boating season has hit full throttle in Sacramento, yet nearly a quarter of the slips at the city’s public marina sit empty.

That’s unusual for the 475-slip Sacramento Marina, which boasted a waiting list of 300 just three years ago. The problem may be about to get worse after rate increases took effect at the marina Thursday.

Slip occupancy levels change throughout the year, with the highest levels during boating season from Memorial Day to Labor Day. In fiscal year 2010/2011, the marina — the largest in the city — is expected to see an average annual occupancy rate of no more than 65 percent. The down economy is largely to blame, with an unfortunately timed renovation playing a role in the situation, said marina officials.

"Generally speaking, the marina industry is hurting along with the rest of the country," said Barbara Bonebrake, director of the city’s Convention, Culture & Leisure Department, which oversees the marina. "It’s very much the same as real estate. In fact, it is real estate — only for boats."

However, some boat owners say new rate increases are pushing them out.

With three out of four boaters earning less than $100,000 annually, the recession has hit hard for many. Reduced income and the cost of gas to fill a boat’s tank were cited by nearly a third of boaters as the reasons they didn’t boat more last year, according to figures compiled by the National Marine Manufacturers Association.

On a recent Friday afternoon, boats motored through the off-river marina, which sits in a quiet basin in Miller Park at the west end of Broadway. Couples, friends and families fueled vessels at the marina’s gas pump before heading out onto the Sacramento River.

“I know a lot of people who are furious about the hike in the rates,” said one boater, who didn’t want to disclose her name.

Like its remote location, the marina operates largely independent of the city. The marina is an enterprise zone, a self-supporting business making money from slip rentals, gas and store sales, and rentals of its newly renovated Captain’s Lounge. Slips range from 25 to 50 feet.

Its annual gross revenue is expected to be $1.5 million for fiscal year 2010. Ten percent of gross revenues are paid to the city each year as a franchise fee for payroll, accounting and attorney services provided by the city, said marina Manager Bud Camper, who had 20 years’ experience managing private marinas in the Sacramento Delta before going to work at the Sacramento Marina.

The marina took shape about 50 years ago after the Miller family donated land to the city. The marina originally had only 200 floating slips. About half were uncovered. About 25 years ago, the city expanded the basin harbor and added new docks with about 275 more covered slips and a marina administration office, which sits on a hill overlooking the basin harbor.

In 2007, just as the economy began tanking, the marina underwent an $11 million renovation to replace the south basin’s original, 50-year-old wooden docks and its 200 slips. Bellingham Marine Industries, the largest dock builder in the country, built floating concrete docks with steel roofs and a new floating fuel station with a tiny general store in the south basin.

The marina supported 370 boats during construction. Many had to be moved daily to make way for the work. But the marina lost about 100 boats before construction started. Most slips became vacant due to normal attrition. However, management had to ask a few owners to remove boats that were not seaworthy or had let insurance lapse, and asked a few of the less-senior boaters to find an alternative dock during construction, Camper said.

"We anticipated we’d fill the marina right back up again. But the economy kept getting in our way," said Camper, who was hired to oversee the renovation. He began one day before the work started.

"We noticed it at the same time we started calling boaters to come back after building the new docks. To our surprise, people were saying no," he said. "Turned out, that was the beginning of it. We never got the marina full again."

Recreational boating sales have fallen throughout the country. The industry generated $30.8 billion in sales and services in 2009, but that was a 9 percent decrease from 2008. Sales of new boats and motors fell by 24 percent, according to the NMMA.

Dealers selling new boats began pulling out of Sacramento in early 2009. Now, there are none selling boats over 25 feet, said Camper, wearing a black captain’s cap, Hawaiian shirt and a tattoo with his wife’s and son’s names on his forearm.

Most marinas enjoyed high occupancy levels and waiting lists for years. Now, occupancy levels are down at many marinas throughout the region and the country.

"It’s the economy," said boater Greg Hatfield, a former city employee. "You look on Craigslist or in the newspaper. It’s just boat after boat after boat for sale."

Slips at urban marinas are more costly than those in the Delta, where rural land is cheaper. There, hundreds of mom-and-pop marinas are able to charge 30 to 40 percent lower than the city’s public marina and other urban marinas like River View Marina and Sherwood Harbor Marina.

People are pulling boats out of the marina because they can’t afford to boat or they’ve found a cheaper place to dock in the Delta. Some didn’t have a choice. About 24 boats were repossessed at the Sacramento Marina in the last year. When they go, few boaters explain the reason for leaving, Camper said.

"Most of the time, they just take out a boat and don’t say anything," he said.

For years, the Sacramento Marina charged $10 a foot for any size slip. In 2006, following industry standards, the marina began calculating rates differently, charging $10 a foot for whichever was longest — the slip or the boat.

In 2008, the marina got City Council approval for five years’ of increased rates to pay for the expansion and to bring their rates in line with other urban marinas, where larger slips cost more per foot because they cost more to build and operate. The increased fees also help pay for marina maintenance and keeping the basin waterway clean.

The most recent rate increases started in fiscal year 2009. Annual increases ranged from 5 to 17 percent, depending on slip size. For fiscal year 2010 only, the marina changed the rate increase to 8 percent across the board. Rates, which took effect Thursday, are now $300 a month for 25-foot covered slips, $406 for 30-foot slips and $770 for 50-foot slips.

The 120-slip Sacramento Yacht Club in West Sacramento is cheaper, charging just over $8 per foot per month for slips that are 30 to 50 feet. Members must volunteer or attend meetings monthly, which keeps costs down. They haven’t had a vacancy in a decade, said Port Captain Chuck Lenert. The atmosphere is different as well, with a location right on the river and club members who know their slip mates.

Another boat owner said his fees have doubled in the last five years. He found another marina where he’ll pay $200 less per month for a slip and gave notice that he’s leaving the marina. Other boaters are about to do the same thing, he said.

“When times are tough, they continue to raise it on the people who are still able to boat, so they’re going to run everybody off,” said the boat owner, who didn’t want to give his name for fear he’d be “blacklisted” in Sacramento.

The rate increase — coupled with the lower occupancies most marinas are facing — may have helped spawn a marina rate war. Nearby River View Marina on Garden Highway is now offering 10- to 20-percent discounts off published rates to boaters who relocate.

"Whatever Sacramento Marina is charging, we’ll charge 20 percent less,” River View Marina co-owner John Maddex said Thursday. “It’s a highly competitive market.”

The public Sacramento Marina can’t engage in a bidding war for customers. Its rates must stay the same for everyone, said Camper, who wasn’t surprised by the competition.

Marinas are like hotels — amenities and quality vary, and no two are alike. The Sacramento Marina may lose boaters because of the rate increase, but in the end, the renovation and rate changes will pay off with a long-term, successful marina, Camper said.

“We think we have a top-notch place to be,” Camper said. “We want to keep it that way.”

 

Photos by Suzanne Hurt, a staff reporter for The Sacramento Press.

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