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Who is killing the Miami Marine Industry?


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#1 Mel Miller

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Posted 27 March 2005 - 11:39 AM

Once again, the political and administrative leaders of Miami are being blamed for forgetting that Fort Lauderdale enjoys an $8.8 billion marine industry. However, the events of the last few decades indicate that our leaders understand the vast difference between the marine communities of the two cities.

The issues considered by the Miami Waterfront Advisory Board, Dinnerkey.com, and in the more rare attention paid by the city government and media, are largely claims by supplicants for special treatment. These include free use of the water for the owners of boats in the anchorage, below market use by members of the sailing club and Miami residents in the city owned marinas, and non-marine business uses of the waterfront land owned or controlled by Miami.

All of these are worthy of consideration, and it is not unreasonable for governmental leaders to concentrate on the persuasive arguments of the more articulate supplicants.

Fort Lauderdale also has articulate activists for environmental issues, low cost boating, public access to waterfront, handicapped boating and all of the other issues raised so effectively in Miami. The difference is the nature and the size of the boating business.

The size of the boating business in an area is determined by the value of the boating fleet in that area. Owners of $4 million yachts will spend at least $400,000 annually, much of which is paid to professionals and suppliers. Owners of $40 thousand dollar vessels may spend $4, 000 annually, much of which may in the value of the work performed by the owner operator. The relative sizes of the Miami and Lauderdale fleets are not vastly different, but the values of the fleets are very different.

The value of the Lauderdale fleet continues to increase as the marinas and support structure in Lauderdale continue to evolve to meet the growing size and value of vessels. The value of the Miami fleet has apparently decreased in constant dollars, partially because Miami gives precedence to low cost boating. Thus, the marine business in Lauderdale is on an increasingly positive growth curve, while the business in Miami may already be in a downward spiral.

The failure of the existing Miami marine business community to fight this trend is probably due to the nature of that industry. Recreational marine supplies in Miami are sold primarily by retail stores to owner operators or to individual day workers. The slow reduction in the number of these stores provides a short term benefit to the surviving stores. Recreational marine supplies in Lauderdale are sold primarily by wholesale outlets to professional crew and established marine service providers. Thus, both suppliers and customers in Lauderdale benefit from the continued trend toward larger and more expensive yachts.

It is a curious fact that the non-yachting tax paying residents of Fort Lauderdale are well served by their elitist wholesale marine industry, while the non-boating tax paying residents of Miami are asked continuously to provide support to their boating neighbors.

#2 irieblue

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Posted 30 March 2005 - 09:33 AM

Low cost city marinas? It cost the same at Dinner Key and Bayside (owned by the city) as it does at Monty's or Miami Beach Marina. And I am a city resident. Without that, it actually would be cheaper to be out at Miami Beach!

#3 Mel Miller

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Posted 04 April 2005 - 09:30 PM

It is not surprising that you have found similar slip price points in a market dominated by the number of slips priced by the City. Your comment is consistent with the arguments made by the petitioners for resident discounts during the review of the last price increases. The City clearly intended that the discount produce a below market price for residents, and viewed the discount as an appropriate response to the supplicant political process that dominates waterfront issues in Miami. Your viewpoint is valid and is an excellent example of the difference between the Miami and Fort Lauderdale yachting markets.

#4 Andrew Marshall

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Posted 14 October 2005 - 09:10 PM

Lauderdale's boating industry dwarves Miami's with regards to smaller vessels too.
Nor did Lauderdale happen upon its good fortune by chance. It nurtured and catered to its marine industry for many years though tax breaks, limiting development that otherwise might have displaced its marine industry, and otherwise encouraging job creation and affordable housing for its workforce. Since the 1960’s Lauderdale worked to develop a reputation as the “Boating Capital of the World” - and their efforts were rewarded multifold.

In contrast Miami's City Hall has been afflicted with a long history of graft and theft. Miami politicians have focused the real estate industry, but more on the big development sort of projects than affordable quality housing. Case in point is the millions of dollars in HUD housing funds sat in the bank for years without a single house being built. Miami's approach has increased its tax base, but has done little or nothing for its marine industry.

Quality of life issues also come into play. Aside from Coconut Grove, Ft. Lauderdale is a much more relaxed scenic atmosphere. The tree lined neighborhoods of New River in Lauderdale is a far different boating experience than the toxic appearance and squalor of the Miami River and its surrounding neighborhoods. Millions of dollars in improvement have been funneled into Coconut Grove and downtown Miami, but the rest of the City has been short thrifted and it shows. Admittedly, the sharp division between rich and poor in Miami does provide a kind of "third world" charm, but it isn’t for everyone.

Miami’s marinas also offer less than Lauderdale marinas, which for the same price include swimming pools, tennis courts, restaurants, lounges, a caring responsive staff, and so forth. Community oriented facilities generates business as people meet, have fun, talk, and get to know one another. That's a huge part of what boating is all about.

This is not to say that Grove marinas are not making money. The Dinner Key Marina alone brought in 1.5 million dollars a year in surplus revenue before the City doubled its rates. That's a far cry from the public subsidizing boaters. The marinas are now filled with wealthier clients and newer and more expensive boats, which looks good industry wise - but as dock rates increase and make room for wealthier tenants, it displaces the marine workforce who in great numbers also live on boats. Unaffordable dock rates, combined with harassment at anchorages and the Miami River, has resulted in a workforce exodus in Miami.

Years ago Miami was on a par with Fort Lauderdale. I seriously doubt that Miami has enough professional tradesman left to perform ten mega-yacht refits simultaneously. Compare that to the tens of thousands of high caliber tradesman in Fort Lauderdale. The plain truth is that Lauderdale encouraged the development of a City that is appealing and welcoming to boaters, and their marine industry is living proof. Miami has taken an unwelcoming cash cow approach towards the boating community. It isn’t rocket science.

#5 dinnerkeyadmin

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Posted 16 October 2005 - 11:06 PM

QUOTE
The issues considered by the Miami Waterfront Advisory Board, Dinnerkey.com, and in the more rare attention paid by the city government and media, are largely claims by supplicants for special treatment. These include free use of the water for the owners of boats in the anchorage, below market use by members of the sailing club and Miami residents in the city owned marinas, and non-marine business uses of the waterfront land owned or controlled by Miami.


Mel, your points are well-taken, but the implication that "supplicants" want special treatment is a bit off-key.

First of all, the deed to the bottom lands at Dinner Key states:

". . . that the land be set aside for public use, not excluding municipal use."

If you research the definition of "municipal use" at the time of the drafting of the deed, you'll discover that the idea of a City operating a private enterprise on public lands was not considered. The idea that a municipality can run a business on public property as long as the profit goes into a public fund, is not consistent with the intentions of "not excluding municipal use."

So, those asking for "special treatment" are actually asking for free use of public lands which, if you stop to think about it, could probably not have been been set aside for any public purpose other than anchoring.

You'll also find that people use the land and unrestricted anchorage at Elliot Key for far below its potential Market value for the same reason. It's set aside for public use. I'm sure a developer with a ferry boat at Black point could set up a wonderful, exclusive gated community on Elliot Key, that would be closer to Miami than Ocean Reef, but even if the Government wanted to be the developer and divert the profits into public funds, the land has been set aside for public USE.

I'd be the last to argue against managing a public resource, keeping it clean and making sure that those who use it are not endangering it. The anchorage has made repeated written offers to the City to pay for services (all of which have been declined since 1992 when they were cut off ). Prior to that time, mariners demonstrated that a voluntary service contract would bring in profits to the marina without the need for "anchoring fees" or "floating parking meters" which are of questionable constitutionality, infringe upon public use, and leave the problems of management and enforcement unsolved. The importance of the right to use public lands for free is something you may wish to give due consideration to, even if you like the idea of a house on Elliot Key.

#6 Andrew Marshall

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Posted 17 October 2005 - 02:38 AM

Ha, ha, ha. That's true. Additionally, pursuant to Miami Ordinance 18-542© surplus revenue is from Public Facilities are supposed to be put into a Public Facilities Special Revenue Fund for purposes of maintenance and improvement of Public Facilities.

Last time I checked there was no such fund, and very little maintenance or improvements. Forensic accounting is assuredly in order as last time I checked it was an ongoing problem.

And lets not blame this one on the tragically deceased Commisioner Teele - unless of course evidence turns up in his briefcase. [What's the latest on that briefcase?]

#7 Mel Miller

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Posted 26 October 2005 - 06:14 PM

David
I did not mean to imply that it is improper for citizens or groups of citizens to ask a government for a directed expenditure or a use of governmental assets that benefits the petitioner. Supplicant and special interest are not pejorative terms. I have benefited from such requests, and I have no problem with the concept.

The subject of this discussion is the state of the Marine business in Miami, and I continue to believe that the relative sizes of this business in Miami and Lauderdale are not explained by the differences in intelligence, honesty, or experience of political leaders. Miami politicians and government officials are not perfect, but they are not stupid. They simply pay more attention to very effective advocates.

If effectiveness is defined as the ratio of results to the resources available to the advocate, the anchorage advocacy stands alone. Unfortunately, the very effective argument for free use of public land has had some unfortunate consequences.
Many have noted that unregulated and non-policed free usage can lead to vagrancy and damage to public assets, but an even larger set of problems results from the unfortunate extrapolation from the concept of free, or low cost, use of public waterfront. Please compare the intensity of the arguments on behalf of the anchorage, sailing club, waterfront charities, marina rate discounts, river walk and a host of other causes as compared with the almost silent arguments for improving city owned marine facilities, or allowing waterfront marine businesses to expand.
Lowest cost boating, public access and charities do not build a strong marine business to compete with real estate developers for the use of waterfront property.

#8 Mel Miller

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Posted 26 October 2005 - 09:39 PM

Andrew
I agree that Lauderdale has been more effective than Miami in nurturing its marine industry, often at the expense of real estate developers or public use advocates. I do not agree that this is due to graft or the difference between the Miami and New Rivers.

With the exception of a very few establishments, the marine business in Miami depends primarily upon the maintenance and repair of local boats, most of which are served adequately by the few local retail stores and the individual entrepreneurs who can be seen everyday at Dinner Key. Some of these folks live in the anchorage, some on boats at the docks, and some (like most of the workers in the yards on the Miami and New Rivers) live in houses or apartments. The system works, but it has not produced marine companies with the size or gross profits needed to undertake the public and governmental relations activities needed to compete with the similar activities of real estate developers and public use advocates.

I agree that this is not rocket science. It is rudimentary accounting. The lowest cost marine business practitioners have very low overhead and gross profit margins. In the short run, this is very good for their customers. In the long run, these very small businesses are not capable of helping their customers fight against developers and non-marine public uses.

As you know, politicians do not decide in a vacuum; they listen. The listening process is not as you might wish it to be, but it is predictable. The Miami marine business will eventually change to meet the increased needs of the changing vessel mix that you have noted at Dinner Key. At some point, the size and profitability of the firms will permit them to compete effectively for governmental attention, which will accelerate their conversion to the more successful Lauderdale model. In the interim, this discussion will have very little input except from you, David and me, none of whom are in the marine business.

#9 Andrew Marshall

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Posted 15 November 2005 - 03:35 PM

QUOTE
As you know, politicians do not decide issues in a vacuum; they listen. The listening process is not as you may wish it to be, but it is predictable.”
.

True, and for a politician to listen it helps to have large sums of money to purchase a lobbyist that has fundraising ties to the politician. And if the money circle has not created media connections, public relations firms can be retained to ensure that the media expresses the ageda and drowns out contrasting viewpoints. This may not be indicative of a representative or democratic government, and result in constitutional and human rights violations, but it is predictable.

Political observations aside, it is incredulous for you to dispute that Ft. Lauderdale does not appeal to more boaters and/or wealthier boaters than Miami does, or that consequent to this appeal Lauderdale’s marine industry larger and more influential.

Nor is my perspective that of an outside observer. Before becoming disabled I worked for over fifteen years in the marine industry, the majority of the time in Lauderdale on both mid-size vessel and mega-yacht refits. I also worked professionally in Miami. Based on what customers told me, the workforce is more professional in Lauderdale. My observations of Miami's workforce bears this out, which is not to say that there in no one competent in Miami, but merely that Lauderdale's workforce is far superior overall.

It is consequent to its workforce that Lauderdale gained an international reputation as a destination to refit a vessel, namely, “The Boating Capital of the World.” This reputation was never associated with Lauderdale’s sailing destinations. Lauderdale has none. Lauderdale's reputation is based on its workforce and the ease with which supplies can be obtained. Miami has sailing destinations, but a limited marine industry. Nor can the lack of industry be attributed to Miami's “do-it yourselfers." Lauderdale has a bigger do-your-self marine industry too, as indicated in part by Lauderdale's larger quantity of boatyards and second hand shops that cater to those who work on their own boats.

You also dismissed quality of life issues a little prematurely. The Coconut Grove area is certainly appealing, but it does not have the water depth for most mega-yachts to get in or out of, nor the quantity of mega-yacht slips needed to create an industry. Miami’s alternative to Coconut Grove is Watson Island, which again is limited with regards to the number of slips needed to create an industry, and the Miami River - which lacks appeal to wealthier boaters for reasons of blight and third world charm. Publicly you may disagree with this perspective, but it speaks volumes that your own vessel is berthed at the DKM in Coconut Grove - not the Miami River.

#10 Mel Miller

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Posted 21 November 2005 - 06:15 PM

Andrew
As usual, I respect your opinions and most of the facts that you cite, but I do not reach the same conclusions.
I remember clearly when there were only 200 yachts in the USA over 100', and Miami's boat yards on the river and bay were as busy as any yard in Lauderdale. Merril Sevens continues to service very large yachts, so draft and workforce do not seem to be killer issues, but you are correct that there are reasons for the decline in the Miami yards and other marine businesses and the rearkable growth of those businesses in Lauderdale.
There was very little public outcry when Bahia Mar was converted to megayacht slips and there is no objection heard now to the conversion of another do it yourself yard on the New River to big condo slips. No public outcry was stifled by greedy capitalists and corrupt politicians. No one had to convince the voters or their representatives that the changes were a logical extension of the existance of a superior work force or a nicer place to live or keep a boat. The common wisdom in Lauderdale is that the marine business is good for Lauderdale, and they believed this years ago when the business was not very large.
I respectfully submit that the common wisdom in Miami is that the marine business should not compete against the politically correct claimants for waterfront access and that it should, instead, concentrate on providing affordable materials and yard space for owner operators of modest vessels. This may be laudable, but it is not a successfull business plan givin today's cost of waterfront land.