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South Florida’s Booming Marine Industry Grows with Boat Shows

October 16, 2015 4:37 pm

Every mysterious luxury yacht that floats into South Florida’s marinas carries its own crew and lots of cash.

It’s in constant need of work: A new paint job could cost a million dollars; an engine refit several hundred thousand.

Boat shows bring in a parade of super yachts, pumping wealth into the local marine businesses that provide them with these repairs. These “floating cities” hire mechanics, plumbers, parts manufacturers and provisions companies. Their money flows to the area’s boat financiers, brokers and builders, and swells outside the marine industry, to local restaurants, hotels and stores that hire more workers, too.

“When a yacht comes in to stay for a week, it can spend several hundred thousand dollars getting repairs done, and there are literally thousands of businesses that developed in South Florida in order to handle all of those needs,” said Efrem “Skip” Zimbalist III, president of Show Management, which hosts three boat shows in the tri-county area. “The marine industry here grew along with the show.”

The region’s $11.5 billion recreational boating industry represents about 130,000 jobs and $4 billion in wages, according a study released last year by the Marine Industries Association of South Florida.
Broward County contributes more than three-quarters of the sector’s gross economic impact. It’s also home to what many area marine companies call “the most important show of the year.”

“The Fort Lauderdale International Boat Show grew to become the largest boat show in the world by geography, and one of the most important shows by all measures,” Zimbalist said.

Which boat show is bigger?

The Fort Lauderdale International Boat Show and the Progressive Insurance Miami International Boat Show both bill themselves as the biggest show in the region, and the opinion tends to be divided by the county line.

Miami’s show is made for attracting lots of tourists and Latin American businesses, while the Fort Lauderdale show, which spans more than 3 million square feet, is where more business-to-business transactions are facilitated and local partnerships are built in tandem with yacht sales, Zimbalist said.
The Miami show bills itself as “a one-stop shop for boating enthusiasts and newcomers to see all of the new models, products, and accessories,” said Cathy Rick-Joule, VP of boat shows for the National Marine Manufacturers Association, which owns that show.

The Palm Beach International Boat Show features mostly American businesses, and draws less than half the attendance than each of its regional counterparts.

Show Management hosts the Fort Lauderdale and Palm Beach shows, and the Yacht and Brokerage Show in Miami Beach, which runs the same time as the NMMA’s Progressive Insurance Miami International Boat Show.

While some companies plan their entire fiscal year around the shows, other marine businesses make sure to have a presence at each one.

“I think the Fort Lauderdale show is the most important show in the world,” said Mark Theissen, who heads Telemar’s Fort Lauderdale office. The yacht communications technology company has 19 offices worldwide, including one other U.S. location in Houston.

“Not to say we neglect the shows in Palm Beach or Miami, but we have a reduced presence there,” Theissen said, noting that his company also attends Monaco’s boat show.

Bob Denison, president of Fort Lauderdale-based Denison Yacht Sales, calls the Fort Lauderdale boat show the “Super Bowl” of the region.

“It’s where everyone comes to see the latest technologies and brings checks to actually make a purchase,” he said. “We treat the boat show as a highly important five days for our company.”

Florida Yacht Group, which has offices in Miami and West Palm Beach, is more focused on the Miami show. It made a fifth of its annual sales from the boats it brokered at the 2014 event, according to David Dogen, a broker with the company. He told the Business Journal earlier this year that Florida Yacht Group sold 10 vessels for an average of $300,000 each last year.

Miami’s show is also “the” big event for Mercury Marine, a Wisconsin-based marine engine manufacturing firm with 125 workers across Miramar and St. Cloud.

“The Miami boat show is the biggest show in North America,” company spokesman Lee Gordon said.
For the most recent round of boat shows, Miami had 96,009 visitors, a 1 percent year-over-year increase in attendance. It had about 3,000 boats on display, with most less than 50 feet long. The Fort Lauderdale boat show reported about 100,000 attendees, a 6 percent increase compared to the year before, and showed off 1,500 vessels, with many yachts more than 50 feet long among them. The Palm Beach boat show – the fastest-growing of the three – said it had 40,000 visitors and about 1,000 boats. Attendance rose by 17 percent compared to the year before.

“This, without question, is the best boat show,” said Pat Healy, president and CEO of Viking Yacht Co., at the Palm Beach International Boat Show in March. His company employs 175 people in South Florida. “It’s a no-hassle, big-thrill boat show.”

Reviews are mixed, but the shows’ boon to local businesses is rarely underestimated.

“The economic impact is huge, from Miami to Fort Lauderdale to Palm Beach,” said Denison, whose company employs about 120 people across the world, with the majority in South Florida. “It’s the best place for boating in the world.”

An industry that keeps on growing across the globe, the tide is rising for the marine industry, and it’s lifting all boat businesses. The entire sector was hit hard by the last economic downturn, but has since bounced back and, in many cases, it’s doing better than it was before.

South Florida’s marine companies are opening offices, adding square footage and hiring more workers to accommodate their growth.

The most recent local expansions

  • Dania Beach-based Nautical Ventures Group, a specialty outdoor retailer that sells recreational boats, tenders and kayaks, is opening its second Nautical Marine Ventures Superstore in Palm Beach.
  • In March, Denison Yacht Sales opened its 14th office in St. Thomas, U.S. Virgin Islands.
  • Earlier this year, Venezuelan boat builder Promarine USA relocated to Dania Beach, and has since grown its workforce by 12 indirect jobs.

South Florida’s marinas are trading for unprecedented premiums, and their owners are planning multimillion-dollar facelifts.

In July, the Washington, D.C.-based Carlyle Group acquired Lauderdale Marine Center, the nation’s largest yacht repair facility, for $140 million. The facility will undergo minor renovations and several expansions, the company said.

Another big transaction arrived on the Miami River when Jorge H. Bernstein’s Interterra Investments Group and Intermarine Investments paid $35.5 million for the former Bertram Yachts facility. The developer told the Business Journal in August that there are plans to redevelop the riverfront to bring marine businesses back to the property, while introducing new retail and dining.

PGA Marina on the Intercoastal Waterway was also recently acquired by a company that has plans for improvements. It was sold for $23.87 million in June to South Carolina-based Atlantic Marina Holdings, which wants to build larger boat slips and add an office complex on the property.

One of South Florida’s largest marina redevelopments is being led by Viking Developers, an affiliate of Healy’s Viking Yacht Group, which is pumping $375 million into its Riviera Beach Marina project. It will include new or improved boat slips, shops, restaurants, a boardwalk promenade and a possible hotel. Riviera Beach is counting on the project to boost tourism and job creation in the area.

Many of the redevelopment projects are being led by marine companies, and it means people are buying more boats.

Scott Stampler, principal and senior VP of Atlass Insurance Group in Fort Lauderdale, previously told the Business Journal that South Florida’s marine boom, like its real estate comeback, is being driven by foreign buyers.

Stampler’s company insures about 12,000 vessels and employs about 48 people across four offices. He has observed an upturn in the mega yacht segment, meaning more dollars are floating into the region.
“The mega yacht market is a unique segment, and Fort Lauderdale seems to be the world capital of that market,” he said. “Sales in the used and new boat markets are more active since the recession, [and] there’s also a connection between more recreational boating and lower gas prices … [which] encourages people to use their boats more often.”

With crude oil prices down to $45 a barrel, more frequent boating means more maintenance jobs, and more income for South Florida’s marinas and boat-servicing companies.

Millionaires and billionaires are buying so many boats that Miami Lakes-based BankUnited launched a yacht lending program especially for them about three years ago.

“We’re not looking to be the solution for every buyer. We’re targeted toward the largest yachts,” said Melanie Jolles, a private banker for BankUnited specializing in yacht finance. “Business is good and growing, and we’re seeing increased demand in lending because interest rates have remained substantially below normal levels.”

Florida is the top state for sales and economic development in the boating world, but it’s not the only region reporting major business growth. The Chicago-based NMMA reported in May that the $34.4 billion U.S. recreational boating industry is on the uptick. More boats are being sold, and the majority of them were sold in Florida, the data show. Other states with high sales included Texas, Michigan and Minnesota.

“The marine industry is an interconnected, tight-knit community that boasts over 3,166 businesses in South Florida,” the NMMA’s Rick-Joule said in an email. “All are extremely important, as well as beneficial, to the economy, and all are dependent on one another for the growth and livelihood of their respective businesses.”

Making waves in job creation 

The vast majority of boats being sold in the U.S. are being built in U.S. cities, according to the NMMA.

The trade association said that 94.9 percent of powerboats purchased nationwide last year were made domestically, meaning there’s a high demand for skilled laborers to build and service them in major marine hubs like South Florida.

“The biggest contribution that the marine industry makes is its jobs,” said Jim Naugle, secretary of the Marine Industries Association of South Florida and former mayor of Fort Lauderdale. “I think they are higher-paying jobs than the tourism industry.”

Whether the economy is rocking or receding, skilled marine jobs are always in demand in the tri-county area, Denison said.

“It always seems like there’s a shortage of skilled workers in yachting,” he said. “It’s one of the best places to get a job and one of the easiest places to get a job here.”

The number of jobs that need to be filled is larger than the number of South Florida workers with the knowledge and experience to fill them. So organizations such as Marine Industries Association of Palm Beach County is working to bridge the gap.

Chuck Collins, executive director of MIAPBC, said he is in talks with Palm Beach State College and Keiser University about forming a marine curriculum that will attract and prepare future generations for careers in the marine sector.

“There’s a disconnect, but it’s a tremendous opportunity,” he said. “We want to generate that interest and make kids realize there’s a career path here. After a few years, we could have some high-quality employees to create even more jobs and grow this industry.”

According a 2014 study from the MIASF, Broward County had the most industry jobs in the region, employing 110,470. Palm Beach County followed with 18,220, and Miami-Dade County was said to have 7,776 jobs in the industry.

The numbers grew quickly from just a few years before, the report showed. In 2010, when the study was previously conducted, Palm Beach County had just 8,931 marine jobs. Miami-Dade County had 5,467 jobs in 2010, while Broward County recorded 92,000 recreational boating jobs that year. Cruise lines and sea ports, which consider their jobs part of the travel and logistics sectors, respectively, were not included in the totals.

While the region’s demand for workers grows, its educational facilities grow with it – slowly but surely.
Maritime Professional Training, a Fort Lauderdale-based certification institute for commercial mariners and yachting professionals, is in the process of expanding its facilities by 25,000 square feet.

The training facility enrolls about 10,000 students a year, and may attract more with the building’s new features.

“This facility builds on our current … simulation facility, bringing the latest technology for deck and engine room simulation to the industry,” said Capt. Ted Morley, COO of the school, when it announced it was searching for a general contractor. “It represents some of the most state-of-the-art simulation in the country, and the fact that we are locating it in South Florida is a testament to our commitment to the marine industry here.”

In Davie, Nova Southeastern University’s world-renowned oceanographic institute has been steadily expanding its offerings over the years. Most recently, local businessman Steve Halmos and his wife Madelaine gave an unspecified amount to the school, which was renamed the Halmos College of Natural Sciences and Oceanography. Along with the new name, the school’s curriculum expanded to include a broader range of courses.

The Halmos College will include two campuses, one in Dania Beach for its marine and environmental science classes, another on NSU’s main campus for chemistry, math and biology.

It wasn’t the first time the school received a boatload of money to expand its marine offerings. In 2010, the university received $15 million in federal stimulus money to build the largest coral reef research center in the world.

The Center of Excellence for Coral Reef Ecosystems Research opened in 2012 and created 300 construction jobs at 22 permanent jobs at the university.

What’s holding it back

South Florida’s marine industry, like any other, could see its prospects shrink if the right steps aren’t taken for its future.

The shortage of skilled workers is well known, but what if South Florida’s waterways aren’t dredged deep enough to lure the world’s largest mega yachts to its docks? How many more waterfront condos will be allowed to overtake space that marinas could use?

From easing access to the Intracoastal Waterway to simplifying and expediting building permitting processes, the ideas about how to grow the region’s recreational boating industry run wide and deep.
“This area doesn’t act like a united front,” Telemar’s Theissen said. “In Europe, you’ll see a lot more funding, programs and cooperation between associations and companies. We’re very much on our own here. That’s our downfall.”

Show Management’s Zimbalist agrees that more lawmakers should look out for the industry.
“The state and city and county organizations need to get behind promoting Florida as a boating destination,” he said. “We need a public relations campaign [across continents].”

But the top issue, he says, is digging deeper waterways for a world that’s creating larger yachts every few years.

“Our marinas need to be available for these larger ships, just like the ports are dredging for post-Panamax ships,” he said.

And even though new condo construction means South Florida’s real estate industry is revving its economic engines, encroaching on the boating industry could cause it to dry up.

“What we’ve seen is some prime marine waterfront property being converted into commercial space or condos, which takes it out of the boaters’ use,” Zimbalist said. “Every time that happens, it takes away from the allure of the destination.”

Denison believes the burden lies on boat builders and designers to reel in more business.

“Ultimately, the thing that really matters is making boating easier,” he said, referencing bow and stern controls that are not intimidating to new boat owners.

The issues don’t seem to be dampening South Florida’s marine businesses, so it’s smooth sailing right now.

“Nothing but good things are going to happen as long as we are keeping an eye on this landscape,” MIAPBC’s Collins said. “But we have to help steer our businesses the right way.”

Source: South Florida Business Journal

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