What will the Marina War mean to you?

[BandB]

Now that Suntex is buying Westrec and they and Safe Harbor have both shown they intend to be aggressive, what might that mean to all of us? Just a few thoughts.

Potential Positives

-Improves the quality of marinas. Standards are set, maintenance done, rules enforced.
-Saves marinas which otherwise might not survive as no family to take over and difficult to find a buyer.
-Puts marinas in a stronger position to weather storms, literally or figuratively. The predecessor of Safe Harbor was destroyed by the recession. Now they're part of a public company though.
-Creates a continued niche for the smaller, privately owned marina. They have their place and flourish.

Potential Negatives
-Higher prices for services and no free rides on anything, from trash to docking to pick up friends to docking to eat nearby.
-Financial problems don't impact one marina, but impact a chain of marinas, causing poorer service and higher prices.
-Smaller, individual marinas, can't compete and can't survive.


My feelings.

I have mixed feelings. I hope Hippocampus posts in this thread as well as he's already expressed what I think most feel, a concern anytime a corporate group takes over mom and pop. I'm guilty of doing that as we've acquired many mom and pop businesses. I think we've grown and enhanced them and I know many wouldn't have survived otherwise, but as a consumer it always concerns me and we're not large enough to change things that much.

We're seeing a lot of consolidation in other industries and we go through periods. Then there are some breakups, but those often don't go well. Some do. One of the largest apparel companies, VF, split their jeans business of Wrangler and Lee off into Kontoor Brands.

I've tried to think of something to compare to the marina war. It's not happened to that extent in apartments, but it is to some degree in rental homes where a few companies are going wild. I came up with another possible comparison. The vast majority of independent hardware stores are now either Ace, True Value or Do It Best. There are a couple of others like CNRG which has 139 stores, but the big three have 15,000. The difference is the brand doesn't own them. The store owners can hold the brand accountable. In fact, in the case of Ace, the store owners are the owners of the brand. Still, it's nearly impossible to operate a hardware store today without aligning with one of the three. I think the three do a good job, but still you can't buy well enough to compete, unless you have 139 stores like CNRG.

The unknown future is always scary. We think, "What if the two decided...." We think the worse, both deciding no boats over 2 years old. Both deciding no wooden boats. Both deciding no gas engines. Do they wield enough power to adversely impact us. We cruised last summer in Croatia and ACI dominates there with 22 marinas. Very nice marinas, but not cheap. We loved them, but that leaves a scary thought, do they price some boaters out of the market? Perhaps they have quality and it's worth it, but it leaves some who just can't afford it and no where else for them to go. I hope not, but that's they type thing we all fear.

RV parks are an example of a realm with only a couple of major players. Likely better parks, but more expensive. It leaves some searching and then parking for nights in Walmart parking lots. When we traveled in a Sprinter, I was surprised at the pricing, as much as a cheap motel.

Now, my opinion on this. Both participants are too small to greatly impact the boating universe. I think they will impact certain areas. I do think there are some places, some boaters will have a hard time finding a slip. However, even if they hit 500 marinas before competition or sell offs, they'd still be small. There are 12,000 marinas and 1.1 million slips in the country. I look at them like we look at malls or office buildings and would say then 4000 Class A, 4000 Class B, and 4000 Class C. Now, they're targeting Class A, maybe a few B, but until they hit 1000-1200 marinas, they don't scare me, and I don't think they ever will.

Oh, and while you show concern, don't blame the company acquiring the marinas. It's the marina owner who decided to take the money and run. All free market transactions.

 

[Dwk]

Very interesting, following to learn what other members post. Safe Harbor has acquired two marinas in my homeport area increasing slip, haul out fees and storage fees. We'll see what is next. I always enjoy BandB comments, thanks for your well written posts.

 

[O C Diver]

I think the hotel / motel industry is a better comparison. Go to a place like Lake Champlain where there are countless marinas. Sure, Safe Harbor owns a few, and maybe the other guys own a few. But the reality is that as long as you can't afford to buy and close marinas, they probably aren't going to own 20% of the marinas. The other part to understand is that unlike hardware stores and fast food restaurants, marinas sell almost no merchandise. So the efficiency, availability, and timely delivery of product doesn't exist (no economy of scale). While a small segment of the boating population doesn't care what dockage costs, the vast majority do. If you lack the ability to eliminate your competitors, you are subject to market and economic forces. If we go through another 2009 to 2011 depression, I don't see companies like Safe Harbor being able to pay their bills. Boating is a disposable income recreation. When you go into a recession / depression, people focus on essentials not recreation. I know, I owned a recreational business.

The other part to understand about Safe Harbor is that they consider themselves the destination, not the parking lot to store your boat while you visit the city. To a segment of boaters, they appreciate what Safe Harbor has to offer and will patronize them, until they move on to the next hobby. There's no guarantee that the destination marina is going to survive anymore than the drive in movie.

Currently in South Florida, there seems to be an endless supply of winter snowbird boaters who aren't going to the Bahamas or the Caribbean. It's a supply and demand situation where docking in some marinas in Tampa, St Pete, and Clearwater have reached $40 per foot per month. If your business model is financed on that and the economy tanks or people feel comfortable leaving the USA, you might find yourself with a lot of empty slips. That's one of the nice things about being a small business. When the economy goes into recession, your problems are in the thousands, not the tens of millions.

Ted

 

[twistedtree]

My prediction, not based on any first hand experience with any of these marinas, but based on typical roll-up strategies, is that as much value will be extracted out of these businesses as possible. Prices will go up, and customer demographics will shift more and more towards those who can afford more for boating. The businesses will become more "mechanized" and less personalized. Not my cup of tea, but definitely the way things are moving all over the place.

 

[OldDan1943]

When was the last time a new marina was built on either coast of the US?
marinas are bought and sold, sort of churning existing assets, with some improvements.

 

[FWT]

Its a rare event on the Chesapeake when a new marina is built. I am not an expert but I can think of 2 in the last 10-15 years. One large, one small. Boats are being built, but boat slips are not. Availability of slips is an issue.

 

[BruceK]

When was the last time a new marina was built on either coast of the US?
marinas are bought and sold, sort of churning existing assets, with improvements.

And, corporations have a habit of reviewing investments. Ardent Leisure here owned marinas, sold them, kept the theme amusement park where a badly maintained unsafe raft ride crushed 4 to death in a horror event. Bet they wish they reversed that "sell/retain" decision.
Corporations just change their minds from time to time, for all kinds of reasons. Whether either or both stay in the marina business long term is never certain.

 

[BandB]

. If we go through another 2009 to 2011 depression, I don't see companies like Safe Harbor being able to pay their bills. Boating is a disposable income recreation. When you go into a recession / depression, people focus on essentials not recreation. I know, I owned a recreational business.

...

Currently in South Florida, there seems to be an endless supply of winter snowbird boaters who aren't going to the Bahamas or the Caribbean. It's a supply and demand situation where docking in some marinas in Tampa, St Pete, and Clearwater have reached $40 per foot per month. If your business model is financed on that and the economy tanks or people feel comfortable leaving the USA, you might find yourself with a lot of empty slips. That's one of the nice things about being a small business. When the economy goes into recession, your problems are in the thousands, not the tens of millions.

Ted

Actually the predecessor company to Safe Harbor failed during the time period you mention. Then Safe Harbor was started by acquiring the marinas from the bankruptcy. The difference is Safe Harbor was purchased by Sun Communities and they're a public company in better position to weather a downturn. Suntex is an LLC and has been through several rounds of investment.

Also, should not, the competition comes naturally to them. Safe Harbor is headquarters at 14785 Preston Road, Dallas and Suntex is at 17330 Preston Road, Dallas. 3 miles apart. Is this JR and Bobby fighting?

Right now, even transient slips are difficult to find in South Florida and in Key West. Some in Fort Lauderdale top your $40 per foot during peak season, which we're currently in.

 

[BandB]

Its a rare event on the Chesapeake when a new marina is built. I am not an expert but I can think of 2 in the last 10-15 years. One large, one small. Boats are being built, but boat slips are not. Availability of slips is an issue.

Very few new marinas built anywhere as getting the rights to build, getting clearance, all difficult. Typically you're depending on rights to build on a state's water and, if allowed, you'll be charged very high rental on it. Very little property remaining where the water is also owned and even then, permitting is a major task. I remember Rarity Bay building on Tellico Lake and plans for Nickajack, attached to communities they were building. All a deck of cards which came crashing. Had permission from TVA to build a great marina on Nickajack. I imagine that's all expired plus not needed without the community. Even in Fort Lauderdale, there's a property up New River that has had plans for a Megayacht marina for many years and been through many owners including a couple of banks along the way. Right across from LMC but still no marina and it's all permitted, just no one willing to pay the price.

Another challenge is that most require financing to built marinas, but lenders are not excited about financing docks that can't be adequately insured.

 

[BandB]

My prediction, not based on any first hand experience with any of these marinas, but based on typical roll-up strategies, is that as much value will be extracted out of these businesses as possible. Prices will go up, and customer demographics will shift more and more towards those who can afford more for boating. The businesses will become more "mechanized" and less personalized. Not my cup of tea, but definitely the way things are moving all over the place.

It's a great challenge to develop common rules for operating and still run a multitude of businesses like mom and pop's. We try to do so, but it's centralized accounting and human resource policies as well as operating practices while leaving a lot of power in the unit managers' hands. Even grocers facing this with national chains but the need to do some local buying of meats and produce. Old question after acquisition of how do you fix the problems without destroying any positives.

Even more, who will be making the decisions? How many levels up? How much authority in the marina manager, in the regional, in the group or is everything controlled by two or three people in Dallas who mainly deal with investors and bankers?

Ideally they are all similar behind the scenes, but look nothing alike. Oh the things I've learned. South Florida hardware stores have no land for extra things so you go north and find huge garden centers and even discover a family member who is a Horticulturalist and do you get rid of it? No grow the strength and expand to some others. Then a struggling hardware with a lumber yard. Mid 2021. Lumber was terribly short in inventory. What do you do? Shut the lumber down and make it like other hardware stores? Or order all the lumber you can get even at outrageous prices plus build up the other parts of the store?

I haven't been to a Brewer location in the last couple of years. They had a very unique feel and I liked them. I've heard much of it has been lost. I would consider that a big loss. I know Miami Beach Marina immediately had a different feel after Suntex took over. Some may have been necessary as they were a bit free with allowing some things, but like OC Diver's event at a Safe Harbor where he always docked to eat, you can handle those things more smoothly. At least apologize or bring new rules in gradually with notice. Explain why you must.

I don't care what the business is, if you treat South Florida, Maine, and Oregon the same, you'll have problems. The market, the customers are very different and you must cater to that. All Dallas has is small lakes which are dangerous on weekends and every slip is full. Can't make your decisions based on those.

If marinas have been successful, there are reasons for that, and any buyer who changes things without understanding why the marina was successful before is in for a rude awakening.

I share your concern even as one who likes upscale marinas. It's like the drive for larger slips. That's fine, but shouldn't mean eliminating storage for smaller boats. That's where the big boat owners started. I started at 17'. Had there been no slips for that boat, guess I wouldn't be in boating and need a larger slip today. The industry needs entry level offerings or it will age itself out with no following generation.

 

[O C Diver]

I guess the other question will be if the city of municipal marinas are ultimately happy with Safe Harbor running them. The municipal marina and mooring field at Beaufort SC is now run by Safe Harbor. The moorings have doubled in cost and the slips have gone up substantially. I would guess that the marina is there for the benefit of locals and to attract visitors (tourist revenue to businesses within the city). If fewer visitors come and the locals complain about the cost, does the city renew the contract?

Ted

 

[FF]

With the advances in electric meters that can keep track of use and report totals to the office ,

I think "free" dock electric will be history, even for transients.

 

[BandB]

I guess the other question will be if the city of municipal marinas are ultimately happy with Safe Harbor running them. The municipal marina and mooring field at Beaufort SC is now run by Safe Harbor. The moorings have doubled in cost and the slips have gone up substantially. I would guess that the marina is there for the benefit of locals and to attract visitors (tourist revenue to businesses within the city). If fewer visitors come and the locals complain about the cost, does the city renew the contract?

Ted

Or does the city just look at the revenues they receive from Safe Harbor? We've seen this with Westrec, Suntex and now Safe Harbor, but so far cities just going along with the high bidder.

Cable companies historically get thousands of complaints to cities, but when is the last time you saw a city pull a contract?

 

[O C Diver]

Or does the city just look at the revenues they receive from Safe Harbor? We've seen this with Westrec, Suntex and now Safe Harbor, but so far cities just going along with the high bidder.

Cable companies historically get thousands of complaints to cities, but when is the last time you saw a city pull a contract?

I nearly got into the cable TV installation business with my second cousin. He brought and installed cable systems to smaller counties in the 1980s. Once established, he would sell the companies. Answer to your question is that it depended on how the contract was worded with the county. Who owned the cable and repeaters has a lot to do with it.

Ted

 

[AZ2Loop]

It is interesting to watch. Somewhere along the way in our country adjectives like big, strong, powerful, rich, influential, etc. all started to evoke negative emotions. Why is that? They are not negatives. Big is often better than small. Strong is almost always better than weak. Rich is a better position in which to be rather than poor, and on and on and on.

Even in this thread there is a hint of the "big" company came in and prices went up. No, that is not why prices went up. It is simply supply and demand. In our marina, there is a wait list for dry storage and wet slips that is probably 2 to 5 years long....and growing every day. It would be fiscally irresponsible (not to mention incredibly stupid) to NOT raise prices when there is that kind of imbalance between supply and demand. Capitalism is a beautiful thing and automatically balances supply and demand when left alone. However, along our shorelines, it is definitely NOT being left alone and it is nearly impossible to increase supply (more marinas) due largely to environmentalist and other forces that disrupt economies. This has been the case for decades now, and we are paying the price with a drastic market imbalance. With no ability to increase supply, plus record setting growth in demand, prices must go up to help create that balance. That is an economic force that applies whether mom and pop own the marina or much larger entity.

 

[rslifkin]

At least for the ones I'm familiar with, when Safe Harbor acquired the Brewer yards, they kept most of the people in place. The one I'm most familiar with retained all of the same management, etc. and honestly, other than the Safe Harbor wording added to the sign, not much changed. No new amenities or anything, but that marina has basically no land except parking spaces and a bathroom building, so it would be hard to fancy it up much (already had nice docks).

I'd expect that picture to be a bit different depending on the initial state of a marina at acquisition time. Probably also depending on what other marinas are in a given area and what the typical boating demographic in that area is.

 

[ranger58sb]

The municipal marina and mooring field at Beaufort SC is now run by Safe Harbor. The moorings have doubled in cost and the slips have gone up substantially.

I didn't notice a rate change for slips when we went through there on our last trips...

But I did notice the docks themselves are a bit long in the tooth, and it wouldn't surprise me if the new operators have thought to raise rates in anticipation of significant rehab costs.

I suspect we're not representative of much of the annual ICW traffic, in that we most often select the transient marinas along the way based on distances (todays and tomorrows) and amenities (onsite fuel? restaurant? etc)... with cost being a distant third, usually only a big deal if it's truly exorbitant or if there are roughly equal choices in the same general vicinity.

So it happened that several of the marinas we stayed at were Poof! All of a sudden, Safe Harbors! In many cases we recognized the same employees, and service was pretty much the same.

-Chris

 

[ranger58sb]

Even in this thread there is a hint of the "big" company came in and prices went up. No, that is not why prices went up. It is simply supply and demand.
...
With no ability to increase supply, plus record setting growth in demand, prices must go up to help create that balance. That is an economic force that applies whether mom and pop own the marina or much larger entity.

I suspect the only minor fly in that ointment could have been that individual M&P marinas may not have had (or used) a wider vision that might have suggested to them they could legitimately raise their prices.

Whereas a larger operation, perhaps more oriented toward the area-wide availability of slips (or not), might more readily recognize that the market could stand some price hikes in that given wider area.

Perhaps like the difference in a focus on my slips in XYZ creek, versus a broader recognition of the number of slips in the Chesapeake Bay. And the slightly different supply/demand/price equations at each of those levels.

No "good" or "bad" here, in my mind... just situations...

-Chris

 

[OldDan1943]

This marina charges for the electricity plus a little bit more that goes into the improvement account.
Fresh water is still "free".
A couple of years ago, they changed all the wooden pilings to aluminum. A marked improvement, imo.
We dont have anything else to offer, no washers or dryers or showers. We do have a couple of golf carts to carry passengers etc plus a pump out cart. Free for slip owners and $20 for the non-owners.

 

[twistedtree]

It's a great challenge to develop common rules for operating and still run a multitude of businesses like mom and pop's. We try to do so, but it's centralized accounting and human resource policies as well as operating practices while leaving a lot of power in the unit managers' hands. Even grocers facing this with national chains but the need to do some local buying of meats and produce. Old question after acquisition of how do you fix the problems without destroying any positives.

Even more, who will be making the decisions? How many levels up? How much authority in the marina manager, in the regional, in the group or is everything controlled by two or three people in Dallas who mainly deal with investors and bankers?

Ideally they are all similar behind the scenes, but look nothing alike. Oh the things I've learned. South Florida hardware stores have no land for extra things so you go north and find huge garden centers and even discover a family member who is a Horticulturalist and do you get rid of it? No grow the strength and expand to some others. Then a struggling hardware with a lumber yard. Mid 2021. Lumber was terribly short in inventory. What do you do? Shut the lumber down and make it like other hardware stores? Or order all the lumber you can get even at outrageous prices plus build up the other parts of the store?

I haven't been to a Brewer location in the last couple of years. They had a very unique feel and I liked them. I've heard much of it has been lost. I would consider that a big loss. I know Miami Beach Marina immediately had a different feel after Suntex took over. Some may have been necessary as they were a bit free with allowing some things, but like OC Diver's event at a Safe Harbor where he always docked to eat, you can handle those things more smoothly. At least apologize or bring new rules in gradually with notice. Explain why you must.

I don't care what the business is, if you treat South Florida, Maine, and Oregon the same, you'll have problems. The market, the customers are very different and you must cater to that. All Dallas has is small lakes which are dangerous on weekends and every slip is full. Can't make your decisions based on those.

If marinas have been successful, there are reasons for that, and any buyer who changes things without understanding why the marina was successful before is in for a rude awakening.

I share your concern even as one who likes upscale marinas. It's like the drive for larger slips. That's fine, but shouldn't mean eliminating storage for smaller boats. That's where the big boat owners started. I started at 17'. Had there been no slips for that boat, guess I wouldn't be in boating and need a larger slip today. The industry needs entry level offerings or it will age itself out with no following generation.

You are unique in that your goal is to nurture and grow a business, as a growing and going concern, successfully serving it's customers. What a concept, right But for every roll up done your way, there are 10 that are nothing more than chits on a board, or marbles in a bag. It's actually probably more like 100:1, not 10:1.


When executives talk about how they work for their investors, they've got it all wrong and it's the kiss of death. A company's job is to serve its customers, and if they do that well, they can grow and be profitable. Investors are along for the ride. They are not the objective.


The trouble is that 99% of the time, roll-ups are 100% about making money for investors, and the acquired companies are along for the ride. It's all about buying cheap and creating a package that looks good to some other buyer who wants to put more chits on their board, or more marbles in their bag. It has absolutely nothing to do with the underlying business, and everything to do with the story you can tell to some other investor.


Then the roll up becomes part of a bigger roll up, and becomes a "collection of brands". Then hard times come to the company, or a new CEO comes along and "realigns" and "refocuses" the company. All these "Brands" are just bags of marbles, so you decide which bags to keep and which to sell and dump. Sounds like Raymarine getting ejected from Raytheon, run as a stand alone company, getting into trouble, getting bought by FLIR, then FLIR gets in trouble, or as we now see was grooming itself for Teledyne.


I guess for me, I prefer patronizing a business, not a bag of marbles.

 

[hollywood8118]

All this talk about the cost of marina fees escalating due to supply/demand reminds me of about a year ago some on this forum were talking about the death of our hobby because the younger generations were not getting into boating.


I guess those folks are not speaking because they are all eating crow.
HOLLYWOOD

 

[Retriever]

I wonder why Suntex and Safe Harbor don't have any marinas in Washington or British Columbia. Is there something wrong with the economics, nobody willing to sell, or it's just a matter of time?

 

[twistedtree]

I wonder why Suntex and Safe Harbor don't have any marinas in Washington or British Columbia. Is there something wrong with the economics, nobody willing to sell, or it's just a matter of time?

I don't recall who bought Elliot Bay Marina, but it wasn't Suntex or Safe Harbor.


I think in the PNW a lot more marinas are municipal rather than private, and that of course would impact what's available to purchase.

 

[Njlarry]

I find the comments by twisted are well made. Raymarine, West Marine, Brunswick seem to me to be good examples of merger and aquasition being more about short term profits and bonuses than about building a long term brand. I am not a business person and lack the mba tech savie of most here so appreciate all your thoughts. My limited experience with corporate medicine demonstrated that regional general managers only focus on their bonuses and corporate will only focus on the investors. Startups and small business seem to focus on their customers and building goodwill..maybe Henry Ford. I think Verizon is great example of not providing good customer service.
Yes we often fear the worst so I can be wrong but fewer providers mean fewer choices and choice is a good thing.

 

[ancora]

Marina Del Rey (in Los Angeles) just raised their slip fees 25% for small boats, 90% for big boats. Do not see a mass exodus to other marinas.

 

[ranger58sb]

I just stumbled into a before/after comparison with what is now a Safe Harbor Marina.

Rates in Aug 2018 were $2.50/ft for Friday/Saturday nights, $2.25/ft for Mon-Thurs. A single 30A shorepower connection was $6/night, and twin 30s or a single 50A was $12/night.

Rates for this coming Aug 2022 are now $2.75/night, $7.50/night for single 30A and $15/night for twin 30s or single 50A.

In the grand scheme of things I can say the higher rates are because of the Safe Harbor takeover, other economic factors, or some combination of both.

I know this marina pretty well, and assuming Safe Harbor hasn't hosed it up since we were last there, I think the new prices aren't really out of line. But then I also don't know details about overall availability in the area, competition prices, upkeep requirements, etc.

-Chris

 

[Gdavid]

I think the ski resort industry would be a good comparison. The corporate consolidation of resorts has been going on for decades, it ebbs and flows and is affected very much by the economy and weather. Prices have risen, the demand seems pretty stable. Both industries are recreational and require extensive infrastructure, both are heavily affected by environmental factors and real estate holdings are complex and essential to the core business operations.

One positive I would see on the topic of corporate marina ownership consolidation is the fiscal resources to pursue upgrades that require environmental planning. Deep pockets and the ability to wade through a long approval process before beginning to realize investments are hard to come buy for independent operations.

One minor but impactful negative impact I would expect is the lack of individual character of the mom and pop operations. Little things like loaner cars to run errands for transients or an owner tracking down a mechanic to get a broken down transient up and running.

I would be very interested to know the economic strategy of both Safe Harbor and Suntex with regard to revenue from transients versus annual slip fees. Obviously both are important but is there a over-arching plan to realize gains in either area or perhaps something else?

 

[BandB]

It is interesting to watch. Somewhere along the way in our country adjectives like big, strong, powerful, rich, influential, etc. all started to evoke negative emotions. Why is that? They are not negatives. Big is often better than small. Strong is almost always better than weak. Rich is a better position in which to be rather than poor, and on and on and on.

Even in this thread there is a hint of the "big" company came in and prices went up. No, that is not why prices went up. It is simply supply and demand. In our marina, there is a wait list for dry storage and wet slips that is probably 2 to 5 years long....and growing every day. It would be fiscally irresponsible (not to mention incredibly stupid) to NOT raise prices when there is that kind of imbalance between supply and demand. .

What you're saying is very true in terms of attitudes toward "big business." As a businessman who might be considered to have been and to be in big business, I am bothered by it, just like I'd think lawyers are bothered by the perception of their profession. However, much of that has been by businesses failing to be good citizens. I was taught young that in a business we needed to serve and be responsive to three groups, our customers, our vendors, and our employees. Simple, but uncommon.

Now, I do believe some is just fear of the unknown and some then in buyouts is doing things that need to be done. A simple description of a buyout is that the business is worth more to me, the buyer, than to the seller. Why? Sometimes because previous owners just want out. But often, because I have plans to improve it and be more profitable? You don't buy to do things the same. You buy to improve things. However, the big issues come in the answer to twistedtree.

You are unique in that your goal is to nurture and grow a business, as a growing and going concern, successfully serving it's customers. What a concept, right But for every roll up done your way, there are 10 that are nothing more than chits on a board, or marbles in a bag. It's actually probably more like 100:1, not 10:1.


When executives talk about how they work for their investors, they've got it all wrong and it's the kiss of death. A company's job is to serve its customers, and if they do that well, they can grow and be profitable. Investors are along for the ride. They are not the objective.


The trouble is that 99% of the time, roll-ups are 100% about making money for investors, and the acquired companies are along for the ride. It's all about buying cheap and creating a package that looks good to some other buyer who wants to put more chits on their board, or more marbles in their bag. It has absolutely nothing to do with the underlying business, and everything to do with the story you can tell to some other investor.


Then the roll up becomes part of a bigger roll up, and becomes a "collection of brands". Then hard times come to the company, or a new CEO comes along and "realigns" and "refocuses" the company. All these "Brands" are just bags of marbles, so you decide which bags to keep and which to sell and dump. Sounds like Raymarine getting ejected from Raytheon, run as a stand alone company, getting into trouble, getting bought by FLIR, then FLIR gets in trouble, or as we now see was grooming itself for Teledyne.


I guess for me, I prefer patronizing a business, not a bag of marbles.

Actually the mission of a business is to do what the owners or investors want. That's not the problem. The problem is what the investors want.

When Japanese companies first started doing major business in the US, there were some interesting comparisons made. CEO's served long periods for them and short times for US companies. CEO's for them were not rewarded based on short term accomplishment.

Providing huge bonuses to CEO's and CFO's based on stock prices is a horrible practice. However, that clearly establishes the goals of ownership. Raise the stock value. Nothing to do with customers, vendors, employees, long term, all to do with the trading value of the company.

Compare Warren Buffett and Berkshire Hathaway to all the Venture Capitalists around. They look to build companies, to grow and sustain, not to increase value and flip. When Versa obtained Hatteras from Brunswick, they had one and only one goal. Resell it for a profit. It wasn't a company or business. It was a stock certificate that could be resold and now that has happened. Meanwhile, no Cabo and no Hatteras MY's and the manufacturing facility devoted mostly to Mako and Ranger Saltwater.

I was fortunate to spend my career working in an environment where the owner's philosophies aligned with mine. Now, I got into business upon retirement as a hobby. Our mission is simple, to create and maintain quality jobs for employees. Doesn't require profits, but does require not losing money. However, in the process of pursuing our goals and with some totally out of control CEO's working for us, we're very profitable. As the owners, my wife and I set the mission and others are clear on their goals.

So many companies are so highly leveraged they have no chance of ever succeeding as they are. Look at the Lambert Fiasco of Sears and Kmart. There was never a plan for them succeeding. The plan was for him to take assets and to loan money and succeed personally.

Companies have corporate cultures and far too few cultivate them today. So, their culture turns out to be stock driven and people fall by the wayside. Most of our acquisitions have been small, often single stores, but at the outset we have required sessions in which we teach our human resource philosophies, what we expect, how to treat each other, how to treat customers and how we will treat you. Nearly half the time the previous owners come to work for us, just now they don't have to worry about debt or income. 95% of the time we don't change the name of their store.

A huge question for people is "Why are you in business as a profession?" I hate to think the percentage for whom the answer is strictly "to make money." Horrible reason for any career choice. I love the people aspect and especially seeing others grow and succeed. My mother had a career path in mind for me centered around making money and prestige and when I informed her I wasn't going that route, she made it clear I was on my own. She was outraged. I was so fortunate though to love where I worked and the people I worked with.

So, while I disagree on the job and whether it's to serve the investors or not, if the investors direct the company to provide service to customers, employees and vendors, then they will be able to do so and be profitable as well. They may not see the stock jump outrageously, but they'll see sustainable success.

Big business has a bad connotation? Bad but too often realistic. I could not work for most big businesses. They wouldn't want me and I wouldn't want them. Fortunately there are a few good ones out there. And some others are improving. Companies being forced to treat employees better. I certainly didn't imagine 20 years ago, I'd be praising the improvements in that regard that Walmart has made. A record level of employees changed employers last year. I laugh at the old employers whining they can't keep good people. Perhaps they should look at themselves because someone else is getting their good people. You always lose the best employees first. We had no problem keeping employees.

Back to the specifics of the topic, I've observed the key players in Safe Harbor and Suntex for a number of years. Their backgrounds are solidly in investments, not in marina operation. Can they hire good people to run marinas? Perhaps. Can they not mess things up? Perhaps. My worry remains though that they simply see marinas as cards in their hand, not as the activities they are. I don't know anything about the management of the company, Sun Communities, that now owns Safe Harbor. Now, I don't know any of these persons well enough to know their true passions. Do they have a passion for marinas or just one for investing?

Now, let's say for a moment, their only passion is increasing their personal net worth. That doesn't necessarily present doom and gloom in terms of how the marinas are run. Even with that goal, they still can do the right things and build customer and employee relationships. You can do the right things, even if for what some might call the wrong reasons. Just because the driving force is different, doesn't mean the results must be. One of the best manufacturing men I ever knew was never motivated by doing the right thing, but was always driven by not wanting to look bad. Forced him to do the right thing. So, I'm back like everyone to a wait and see situation. Nothing inherently wrong in their pursuit of money, but how they pursue it will be the question.

 

[BandB]

I just stumbled into a before/after comparison with what is now a Safe Harbor Marina.

Rates in Aug 2018 were $2.50/ft for Friday/Saturday nights, $2.25/ft for Mon-Thurs. A single 30A shorepower connection was $6/night, and twin 30s or a single 50A was $12/night.

Rates for this coming Aug 2022 are now $2.75/night, $7.50/night for single 30A and $15/night for twin 30s or single 50A.

In the grand scheme of things I can say the higher rates are because of the Safe Harbor takeover, other economic factors, or some combination of both.

I know this marina pretty well, and assuming Safe Harbor hasn't hosed it up since we were last there, I think the new prices aren't really out of line. But then I also don't know details about overall availability in the area, competition prices, upkeep requirements, etc.

-Chris

Steaks went up in price in grocery stores. Is that the result of Safe Harbor?

We have to be careful in a period of rising prices in blaming it on Safe Harbor. I'd question marinas that are not increasing prices.

 

[IronZebra]

A concern that may be down the road a bit with the consolidation/take over of Marinas is the big companies need and ability's to lobby for changes to anchoring laws that will force folks into their Marina.

I can see some company like Safe Harbor hiring lobbyist to say anchoring out is "bad" (environmental, safety, sanitation, commercial fishing problems, etc, etc) and boaters must make use of Marinas. And those same lobbyist saying Marinas must meet some made up minimum standard that most independent marinas will not be able afford.

The bigger they get the easier it is to lobby and affect rules/laws away from the marina that will push $$ into their marina.