Safe Harbor Marinas acquired

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BandB

BandB

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Sun Communities Inc., a publicly traded REIT that owns or operates 426 manufactured home and RV communities purchased Safe Harbor Marinas. They are about five times the size of Safe Harbor.
 
They raised prices when safe harbor bought brewers. Expect that to happen again. Now avoid them and try to only use independent mom and pop marinas. Try to bring in off site independent vendors if there’s any work I can’t do and I have any question about marina services. Have had great difficulties resulting in huge expenses as work needed to be redone when using Brewer/ Safe Harbor yards. Same issues as with big box v local hardware stores. As they get larger personal service deteriorates.
 
+++++++
Hippocampus said:
They raised prices when safe harbor bought brewers. Expect that to happen again. Now avoid them and try to only use independent mom and pop marinas. Try to bring in off site independent vendors if there’s any work I can’t do and I have any question about marina services. Have had great difficulties resulting in huge expenses as work needed to be redone when using Brewer/ Safe Harbor yards. Same issues as with big box v local hardware stores. As they get larger personal service deteriorates.
Click to expand...
 
Yup. Got the email yesterday from good ole Baxter Underwood.
 
Hippocampus said:
They raised prices when safe harbor bought brewers. Expect that to happen again. Now avoid them and try to only use independent mom and pop marinas. Try to bring in off site independent vendors if there’s any work I can’t do and I have any question about marina services. Have had great difficulties resulting in huge expenses as work needed to be redone when using Brewer/ Safe Harbor yards. Same issues as with big box v local hardware stores. As they get larger personal service deteriorates.
Click to expand...


I pretty much grew up in a Brewers yard (only half still exists, then Safe Harbor came along). Comparing to things I've seen at other Brewers / Safe Harbor yards, etc. it seems like the quality of work, ease of working with them, etc. varies a decent bit between locations. Some of them just have better managers and more capable employees. Unfortunately, those aren't always the ones with the most service facilities.
 
Most corporate take overs are a little sour. This one is no exception. We are year rounders at a Brewers Yard. Sorry Safe Harbor, Brewers made the marina what it is today, you just came in and changed the name. Removing most of the history around the yard including the color scheme. You promised "more buying power", but why do I care if there is another SH marina 1200 miles away ?? You have taken away reciprocity nights that we once had and nickel and dime us to death on your bills. Charging us for paint brushes and tape ????
 
I'm not close to any of this, but it sounds like yet another private equity roll up of businesses, then sell it to another firm that wants to roll it up further with other stuff. They all took the same classes in business school. I expect the private equity funds did well, but note of it is likely beneficial to anyone else except maybe the original marina owners who were able to cash out.


And of course this is happening across all industries. Auto dealerships being bought up, farm and construction dealerships, etc, etc.
 
twistedtree said:
I'm not close to any of this, but it sounds like yet another private equity roll up of businesses, then sell it to another firm that wants to roll it up further with other stuff. They all took the same classes in business school. I expect the private equity funds did well, but note of it is likely beneficial to anyone else except maybe the original marina owners who were able to cash out.


And of course this is happening across all industries. Auto dealerships being bought up, farm and construction dealerships, etc, etc.
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Safe Harbor was always headed this route. They were investment people, not boating people. They tried before and went bankrupt during the recession. Then they bought that company out of the bankruptcy and formed Safe Harbor. The real dream was an IPO but that market went sour. However, the plan was always to go after the money. In this deal they get the debt absorbed and get cash. Plan is simple, acquire as many marinas as possible, then sell, either to the public or another company. Selling is the only way you get the big money. It's the all too common way of business today to build and sell to monetize what you built.

It comes down to what are you in business for. Most are in business to make as much money as they can. Selling gets you there faster.

I think Brewer was in business to make money but also to provide service and operate great marinas and yards and before Safe Harbor I thought they were overall excellent. I don't think their goal was selling but think they got an offer they didn't feel they could refuse. However, Safe Harbor was never about operating for the long term and always about building value to sell.
 
In the past 6 years I have had two marinas where I kept my boat sold. Fortunately both went to fairly small time operators. In one case prices went up, in the other case it looks like occupancy will go down (we miss the former owner) . The lower occupancy may mean stable prices or may mean an increase. Either was I'll probably be moving on.

pete
 
The customer is no longer the boater. The customer is now the investor. It's all about how much return they can get.

It's a sad thing, to be sure. Brewer yards were never the cheapest, but always had a good, customer-oriented attitude. Times change.

Maybe the economics of a Mom-and-Pop marina just don't work any more. I'm so glad I belong to a club where the members own the facility. I don't think I'd still be a boat owner if I had to put up with the BS at many commercial marinas I've been to.
 
BandB said:
Safe Harbor was always headed this route. They were investment people, not boating people. They tried before and went bankrupt during the recession. Then they bought that company out of the bankruptcy and formed Safe Harbor. The real dream was an IPO but that market went sour. However, the plan was always to go after the money. In this deal they get the debt absorbed and get cash. Plan is simple, acquire as many marinas as possible, then sell, either to the public or another company. Selling is the only way you get the big money. It's the all too common way of business today to build and sell to monetize what you built.

It comes down to what are you in business for. Most are in business to make as much money as they can. Selling gets you there faster.

I think Brewer was in business to make money but also to provide service and operate great marinas and yards and before Safe Harbor I thought they were overall excellent. I don't think their goal was selling but think they got an offer they didn't feel they could refuse. However, Safe Harbor was never about operating for the long term and always about building value to sell.
Click to expand...


This is indeed the fundamental dilemma for any business. The big bucks are in growing and selling. Not many people want to run a business for decades for a salary and a slice of profit.
 
I can attest to at least one marina that is still a family business and is likely to remain so, Hartge Yacht Harbor in Galesville, MD where we live. This marina was established by a Hartge around 1850. Hartge descendants are still the owner/operators and some bear the Hartge name. We like it here and hope the marina stays in the family. There are about 250 slips here and about 10 live aboards whom the owners like having about. We watch over the place. They store a lot of boats on the hard in the winter with the parking lots jammed packed with boats of all kinds. They run a 50 metric ton travel lift and have a large paint building. The slip fees are modest compared to any Annapolis marina. Annapolis is about 10 miles north by water.
CaptTom said:
The customer is no longer the boater. The customer is now the investor. It's all about how much return they can get.

It's a sad thing, to be sure. Brewer yards were never the cheapest, but always had a good, customer-oriented attitude. Times change.

Maybe the economics of a Mom-and-Pop marina just don't work any more. I'm so glad I belong to a club where the members own the facility. I don't think I'd still be a boat owner if I had to put up with the BS at many commercial marinas I've been to.
Click to expand...
 
twistedtree said:
This is indeed the fundamental dilemma for any business. The big bucks are in growing and selling. Not many people want to run a business for decades for a salary and a slice of profit.
Click to expand...

When we started our business it was as a hobby for me. As it grew it's mission became simple and that was to provide good jobs to employees. Servicing customers was part of it as were vendor relationships. However, we do a business plan every year which includes a mission statement. The mission has never included profits or money as part of it.

We've been asked if we'd ever sell and it's a resounding "no." We can't accomplish our goals if we don't own and control it. When younger I thought anything was for sale at a price, but our business isn't, only because it's not about business.

There were and likely are marina owners who got into it because they wanted to be on the water and service boaters and own their own marina. Making money was important only to allow them to fulfill their dream of owning it. However, sometimes the time comes that it's time to move on or an offer overwhelms you. When it's a family business, sometimes the kids would rather have the money than the business. Many businesses don't have a succession plan and selling is the only feasible plan.

I don't know how the sale will turn out for the marinas. Will the buyers be looking to cut costs and reduce service in the process or are they customer centered based on their other businesses? Time will tell us.
 
I think it's become very tough to have a traditional marina in a city. Between land values, taxes, and restrictions on what you can do in the boatyard, its hard to justify not selling your land to a developer.

A lot has changed in the marina business in the 40 years I've been boating. My winter marina is a yacht club where I own a slip. My summer marina is associated with the state of Maryland (otherwise it probably would go out of business). This wasn't what I had planned, but it does seem to offer security from change. Probably half the marinas I've used over the years are now townhouses. I'm just thankful the boatyard I use still prospers. Being out in the middle of nowhere with low land values, probably has a lot to do with it.

Ted
 
Jack,
I second your kind words for the Hartge Yacht Harbor.
It is a ongoing family concern that has maintained a first rate operation established long before the age of corporate facilities.
 
BandB said:
...As it grew it's mission became simple and that was to provide good jobs to employees. Servicing customers was part of it as were vendor relationships. However, we do a business plan every year which includes a mission statement. The mission has never included profits or money as part of it.
Click to expand...

Which, IMHO, is as it should be. So many people don't comprehend that the purpose of a business is NOT simply to enrich stockholders and/or investors. There had to be some basic societal need which was being met. That all seems to get lost when a business reaches a certain size.

BandB said:
...I don't know how the sale will turn out for the marinas. Will the buyers be looking to cut costs and reduce service in the process or are they customer centered based on their other businesses? Time will tell us.
Click to expand...

I think I know how it will turn out. The only metric will be how much can be squeezed out of it this quarter. The best interests of boaters, employees, suppliers and society in general will become irrelevant.

There is something fundamentally wrong with this system, and unfortunately I can't articulate it very well. All I can do, personally, is try to leave the world a better place, rather than simply strive to enrich myself.
 
CaptTom said:
Which, IMHO, is as it should be. So many people don't comprehend that the purpose of a business is NOT simply to enrich stockholders and/or investors. There had to be some basic societal need which was being met. That all seems to get lost when a business reaches a certain size.



I think I know how it will turn out. The only metric will be how much can be squeezed out of it this quarter. The best interests of boaters, employees, suppliers and society in general will become irrelevant.

There is something fundamentally wrong with this system, and unfortunately I can't articulate it very well. All I can do, personally, is try to leave the world a better place, rather than simply strive to enrich myself.
Click to expand...

Let's be fair though. Most of us work for the money. The lucky ones of us work at something we really enjoy and do fulfill other purposes. Interesting part of the mobile home and RV park business and I don't know how much of it Sun has experienced, but some of the greatest profits have been selling to developers and high rise condos or other developments replacing mobile homes.
 
Retired early when I was told I had clients not patients. When I was told I was an outlier because I did everything possible to try to achieve the correct diagnosis and give best care. Yes, the current behavior and financial incentives raises the floor but at the expense of lowering the ceiling. You are disincentivized from doing your absolute best. Think this thinking is now pervasive throughout society. Tolerance of a certain percentage of poor outcomes in order to keep a business profitable. Gradual transformation of the buying (or served) public to accept just acceptable. Go to a particular marina to have access to a particular wrench, electronics guy etc. not because of the name on the sign.
 
BandB said:
When it's a family business, sometimes the kids would rather have the money than the business. Many businesses don't have a succession plan and selling is the only feasible plan.
Click to expand...

A number of years ago, the children, I think there were four, of the owners and founders of King Arthur Flour (Norwich, VT) had no interest in assuming management of the family business from the death estate but they did not want to sell just to anybody. Instead, they sold the business to their employees. It is still an owner-operated business.
 
Marina ownership in many places is a real estate play, the income from the business pays the mortgage and you make your money by cashing out.

I did read that Sun’s stock was down on news of the acquisition.
 
CaptTom said:
Which, IMHO, is as it should be. So many people don't comprehend that the purpose of a business is NOT simply to enrich stockholders and/or investors. There had to be some basic societal need which was being met. That all seems to get lost when a business reaches a certain size.



I think I know how it will turn out. The only metric will be how much can be squeezed out of it this quarter. The best interests of boaters, employees, suppliers and society in general will become irrelevant.

There is something fundamentally wrong with this system, and unfortunately I can't articulate it very well. All I can do, personally, is try to leave the world a better place, rather than simply strive to enrich myself.
Click to expand...

This all goes back to Milton Friedman of the so-called Chicago School of economists who wrote a hugely influential essay and book in the 1970’s where he stated that a business’s highest duty was to increase profits for its owners and shareholders. This was later summarized as “Greed is Good”: the idea was that corporate wealth would trickle down to those not of the ownership class. Time has proven that to be an incorrect assumption, but great damage has been done to our society in the meantime. Never more obvious than today when “essential” workers are paid minimum wage and are facing eviction and repossession while financiers and top level corporate executives are shopping for bigger yachts.
 
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BandB said:
Let's be fair though. Most of us work for the money. The lucky ones of us work at something we really enjoy and do fulfill other purposes. Interesting part of the mobile home and RV park business and I don't know how much of it Sun has experienced, but some of the greatest profits have been selling to developers and high rise condos or other developments replacing mobile homes.
Click to expand...

This is also known as gentrification: expensive condos and apartments replacing affordable housing for the working poor and those on fixed incomes. It is great for the bottom line though if you are the owner.
 
BandB said:
When we started our business it was as a hobby for me. As it grew it's mission became simple and that was to provide good jobs to employees. Servicing customers was part of it as were vendor relationships. However, we do a business plan every year which includes a mission statement. The mission has never included profits or money as part of it.

We've been asked if we'd ever sell and it's a resounding "no." We can't accomplish our goals if we don't own and control it. When younger I thought anything was for sale at a price, but our business isn't, only because it's not about business.

There were and likely are marina owners who got into it because they wanted to be on the water and service boaters and own their own marina. Making money was important only to allow them to fulfill their dream of owning it. However, sometimes the time comes that it's time to move on or an offer overwhelms you. When it's a family business, sometimes the kids would rather have the money than the business. Many businesses don't have a succession plan and selling is the only feasible plan.

I don't know how the sale will turn out for the marinas. Will the buyers be looking to cut costs and reduce service in the process or are they customer centered based on their other businesses? Time will tell us.
Click to expand...

"We've been asked if we'd ever sell and it's a resounding "no.""
What are your thoughts on eventually handing over ownership?
 
Woodland Hills said:
This is also known as gentrification: expensive condos and apartments replacing affordable housing for the working poor and those on fixed incomes.
Click to expand...

Just as an expansion of what you said, another side effect is that service workers can't afford to live in (or even close to) the communities where they work, so they have to bus or drive in great (er and greater) distances (when they can ill afford it).
 
smitty477 said:
"We've been asked if we'd ever sell and it's a resounding "no.""
What are your thoughts on eventually handing over ownership?
Click to expand...

Ownership will likely eventually transfer to our charitable foundation. Our key management is what we call non-equity owners, meaning they get a percentage of profits but don't own stock. Estate tax burdens make handing over ownership extremely difficult and unlikely.

We feel comfortable with the next 30 to 40 years as we feel one or both of us will be alive and, if not, our current management would continue to see things run as we would over that many years. The key is over time finding others whose thoughts align.

I always believed in separating business and personal relationships but we've not done that with our own business. Our key executives are family to us and our closest and best friends far beyond being employees. We share common beliefs and aspirations. As we think of what would happen, we don't feel any worry with them in place. We just need to continue to have succession as they age. However, our four key people today are 37, 36, 31 and 22 years old, so we do feel covered for quite a while still as I turn 50 this month and my wife is now 41.
 
Frosty said:
Just as an expansion of what you said, another side effect is that service workers can't afford to live in (or even close to) the communities where they work, so they have to bus or drive in great (er and greater) distances (when they can ill afford it).
Click to expand...

That is definitely true in many businesses. However, I don't see it the case in the marine industry. They typically can't live waterfront, but most areas do have more affordable communities within a reasonable commute. The exception would be areas of California, but then the pay scale of service workers there is greater too so affordable is relative.
 
BandB said:
Ownership will likely eventually transfer to our charitable foundation. Our key management is what we call non-equity owners, meaning they get a percentage of profits but don't own stock. Estate tax burdens make handing over ownership extremely difficult and unlikely.

We feel comfortable with the next 30 to 40 years as we feel one or both of us will be alive and, if not, our current management would continue to see things run as we would over that many years. The key is over time finding others whose thoughts align.

I always believed in separating business and personal relationships but we've not done that with our own business. Our key executives are family to us and our closest and best friends far beyond being employees. We share common beliefs and aspirations. As we think of what would happen, we don't feel any worry with them in place. We just need to continue to have succession as they age. However, our four key people today are 37, 36, 31 and 22 years old, so we do feel covered for quite a while still as I turn 50 this month and my wife is now 41.
Click to expand...


"The key is over time finding others whose thoughts align." "We share common beliefs and aspirations"

Certainly a great plan and I hope it works out - these situations are very hard to continue once any pieces of the puzzle are missing.
 
Our marina is undergoing a change of ownership as the daughter has taken over. She is starting to take steps to clean up some of the junk boats and working to get docks replaced etc. I think it is a pretext for her to try and sell it in the next year or two.

Many of us on the docks are there because the place is quiet, cheaper than others in the area and they do not nickel and dime us on things. I hope she does not sell to one of the corporate groups who want to make it a resort.
 
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