Marina mogul

World's largest marina company owns 50% of city's boat slips

By JOHN HOWELL
Posted 4/15/21

By JOHN HOWELL Looking to buy a house? Well, that may be easier to do, even in this hot real estate market, than finding a slip to keep your boat. A survey of several of Warwick's 18 marinas and boatyards found no available dock slips. And where there is

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Marina mogul

World's largest marina company owns 50% of city's boat slips

Posted

Looking to buy a house?

Well, that may be easier to do, even in this hot real estate market, than finding a slip to keep your boat.

A survey of several of Warwick’s 18 marinas and boatyards found no available dock slips. And where there is a shortage, predictably, prices have gone up.

That’s of concern to quahoggers and fishermen who make their livelihoods on the bay. It also has some seasoned boaters looking for alternatives to marinas, including joining a yacht club, trailering their boats or finding a mooring.

There’s mounting concern that Safe Harbor – the largest marina owner in the world with more than 100 marinas – is buying up the best properties and is looking to monopolize the higher-end market. Safe Harbor owns 11 Rhode Island marinas, including two in Warwick, Cowesett and Greenwich Bay. Safe Harbor bought the city’s two Brewer Marinas about three years ago, expanding them with the purchase of Wharf, C-Lark and Carlson’s. According to sources, Safe Harbor is expected to close shortly on the purchase of Apponaug Marina, which has been owned by the Dickerson family for decades. City land records show Wharf sold last September for $1.5 million.

According to an inventory of slips, which Harbormaster Jeff Baris believes makes Warwick the largest boating community in the state, Safe Harbor will own 30 percent of the city’s marinas and 1,550, or 50 percent, of the 3,000 slips. Baris’s count does not include an estimated 100 quahogger association-owned slips or slips provided to shellfishermen by buyers.

Baris gave the following breakdown for Warwick Safe Harbor marinas: Safe Harbor Cowesett that is comprised of the former Brewer’s and Masthead, 700 slips; Safe Harbor Greenwich Bay on Warwick Cove, 500 slips; and an additional 350 slips at Apponuag Marina when that sale is finalized.

Baris said Apponaug also owns 30 moorings.

Overall, he said, there are 700 moorings in the city, of which 270 are commercial or rental moorings.

Baris said obtaining an accurate count on slips is difficult since marinas alter configurations to meet demand or attract certain clientele. He cites the former Norton’s Marina, which had more than 200 slips when sold to Prime Marina Group. Prime added a dock and reduced the number of slips to 160 to accommodate larger boats, many of which motor up from Florida to spend the summer in Rhode Island.

Shellfishermen pushed out?

Not all quahoggers are members of associations with dockage.

Rising dockage rates have Jody King, a quahogger and chair of the city’s Harbor Commission, looking for alternate space, although Pleasure Marina in Oakland Beach, where he has kept his boat “Black Gold” for years, is just down the street.

King has followed the acquisition of marinas by Safe Harbor. He said their emphasis on accommodating big boats is pushing out the smaller boats and shellfishermen and propelling dockage and storage rates up across the board by 20 percent and more.

A local operator of Safe Harbor marinas referred inquires to corporate offices. As of Wednesday, the Beacon had not received a response to an email or voice messages directed to home offices in Dallas.

The Safe Harbor website, however, profiles a company that offers a range of services beyond a place to tie up a vessel during the boating season or winter storage. Safe Harbor offers rentals and boating insurance, and it gives its members the option of visiting, tying up and the use of amenities at other Safe Harbor marinas. On-shore amenities at many Safe Harbor marinas include swimming pools, showers and restaurants.

According to news reports and press releases, Safe Harbor Marinas entered into a definitive merger agreement with Sun Communities, Inc. (NYSE: SUI) and one of its subsidiaries in a transaction for cash and SUI equity valued at $2.11 billion last September.

“Safe Harbor will operate independently from Sun’s other businesses, but we will benefit from their tremendous strength. We are committed to continuing the growth of our marina portfolio by harnessing Sun's advantageous cost and form of capital,” Baxter Underwood, CEO of Safe Harbor Marinas said in a release issued by the company on Sept. 29.

In the same release, Gary A. Shiffman, CEO of Sun Communities, said, “We have studied the marina industry and specifically Safe Harbor for a number of years and have gotten to know the team very well. Expanding Sun’s platform to include marinas is a major strategic decision and we could not have chosen a better partner to execute this important growth initiative.”

Safe Harbor Marinas was built in partnership with American Infrastructure Funds, Koch Real Estate Investments, Weatherford Capital and Guggenheim Partners.

Safe Harbor Marinas is the largest owner and operator of marinas in the world. Safe Harbor Marinas LLC is located in Dallas, Texas. It has 1,965 employees across all of its locations and generates $64.05 million in sales. There are 539 companies in the Safe Harbor Marinas LLC corporate family.

King has considered relocating to other marinas in Warwick Cove, but they may have trouble fitting him in. Staying where he is would mean an additional $500, boosting his annual dockage cost to almost $2,000.

“That may not seem like much to most, but that hurts,” he said.

Slips sold out

Joseph McGrady, who bought the former Warwick Cove Marina from John Williams a couple of years ago and has bought the Williams gas dock, has no intention of selling to Safe Harbor.

McGrady, an American Airlines pilot and former jet fighter pilot, relishes a showdown.

“I think their plan is to own everything and jack the prices up,” he said in an interview. “My goal is to compete and beat Safe Harbor. We’re going to be more affordable.”

Fairwinds Marina, the new name to Williams’s former establishment, is not the first of McGrady’s marinas. He has owned Dutch Harbor Marina for years and put it on the market this year. In response to the sale, he said he sent out 30 non-disclosure agreements to interested parties. He has reached a sales agreement for $5.75 million. He didn’t disclose the name of the possible buyer, but assured, “it’s not Safe Harbor.”

As for Fairwinds, McGrady said dockage is sold out for this year.

When the pandemic hit last March, McGrady said he was “incredibly nervous” over the business. But as spring turned to summer, people who had been cooped up for the shutdown and wary of traveling turned to the water to escape and for recreation. Everything to do with boating, from boats to dock space, sold out.

McGrady looks to enhance the “family oriented” aspects of the marina that includes Parkay’s Ice Cream shop. He said Bank Newport has been a “great partner” in the development and expansion of the marina. His plans include hauling services. He already does winter storage.

Fairwinds rates range from $80 to $94 a foot for a slip.

Warwick Harbormaster Baris sees Safe Harbor as changing the culture of Warwick Cove, where people can keep their boats at moderate prices, to a venue with higher prices and improved amenities. As an example he cites Wharf Marina, which was recently acquired by Safe Harbor. Last year, Wharf charged $85 a foot for dockage. It now ranges from $118 to $122. But Safe Harbor is adding all-new docks and giving former Wharf customers use of the pool that it is part of Safe Harbor Greenwich Bay.

“Warwick has always been very affordable, but it’s going the way of the rest of the world,” Baris said.

Peder Schaefer won’t be returning to Wharf this year. He has no use for the pool and least of all the 37 percent rate hike. He has questioned whether the Rhode Island Attorney General is investigating Safe Harbor under the state’s antitrust laws since it has become the state’s major owner of marinas. In a letter dated Nov. 10, 2020, Schaefer cites Rhode Island General Laws dealing with antitrust, saying it “requires an investigation by the Attorney General to determine whether monopolistic practices exist which restrict commerce and/or result in lack of competition or fixed prices.”

A spokeswoman for the Attorney General acknowledged receipt of Schaefer’s letter but could not say whether the department was following up with an investigation or not.

Former Gov. Philip Noel, who put himself through Brown University quahogging, doesn’t see shellfishermen being frozen out. Nor does Noel, who developed the 230-slip Harbor Light Marina with Ted Wheeler and Leo Martin (Noel bought into the business in 1977) as selling out to a goliath like Safe Harbor. His aim and that of his son Joseph, who is running the day-to-day operations, is to make the connecting former Sea View nine-hole golf course and clubhouse a viable enterprise. The venture was headed in that direction in 2020 with a full slate of wedding receptions when COVID pulled the rug from underneath them.

As for the marina, it’s booked tight this season – like just about every marina in Warwick.

marina, boats

Comments

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sclendenin

This is not good for the residents of Warwick specifically and Rhode Island in general. There should be legislation to require some oversight by local government to prevent an out of state ( Texas ) company from slowly creating a pricing monopoly. Local people lose. The article lays out the effect on the fisherman pretty clearly. I am a retiree who lives here because of the water access and I am being priced out also.

I personally had experience with one recent take over and subsequent huge price increase. I had been a customer at Wharf Marina and it was bought this year by Safe Harbors. I went to their office in late December and asked what to expect in the spring regarding prices. I was told that it was being discussed in Texas office and the new contracts would likely go out in March or maybe late February with the new prices. The new contract actually arrived in mid February.

I had already checked with the prices at Safe Harbors other nearby marinas and was finding that they were around $120 per foot. I found it hard to believe that the new prices would be any different. Why would they be? I also found it hard to believe that the company did not know this when I asked about it in December. When the new contract arrived in mid February the price had gone from $ 87 to $120 per foot, which is a huge increase.

I had found a new slip in January when I got the bad feeling about where this was going. However I suspected that if the other former customers did not find out about the price increase until mid February they would not be able to find new slips at that late date and would be stuck with the price increase. As I said, local people lose. I sincerely hope the Attorney General office does pursue anti trust remedies. Going forward the cities and state need to put in place oversight to prevent this.

Thursday, April 22