GAUGING THE IMPACT OF THE ENERGY BILL p. 44, 45

_®INSIDE: A new marina will be part of a $44 million waterfront development project in Bellingham, Wash. The site is an old Georgia Pacific pulp mill. p. 34

THE BOATING BUSINESS NEWSPAPER VOL. XLV, NO. 8 FEBRUARY 2008

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Profits dry up as Lake Lanier level sinks

Drought, diversions depleting the Georgia waterway, where boating is a $5B business

By Lisa Hoogerwerf Knapp

As the water level drops, so do the revenues for marine businesses on Georgia’s Lake Lanier.

The picturesque waterway, 25 miles north of Atlanta, has more than 692 miles of coastline. It is a premier recreation destination with an estimated $5 billion economic impact,

Lazy Days Marina in Buford, Ga., installed a new dock last June, but has not been able to use it since September. Levels will have to rise about seven feet to change that.

according to a 2001 study by the Marine Trades Association of Metropolitan Atlanta.

Lake Lanier was constructed and operated by the Army Corps of Engineers about 50 years ago. The area has been plagued by both severe drought conditions and a tri-state water war among Georgia, Florida and Alabama.

Many marinas and related businesses have shut their doors permanently. In this survival-of-the-fittest atmosphere, other companies are tightening their belts during the slow winter season and bracing themselves for what may be an even tougher spring.

Typically, boat fever soars from April to July, said Kevin Little, national director of marine sales for Mansfield Oil, a supplier of fuel to Lake Lanier marinas. “The real concern is what happens with lake levels this year in season. If we have a warm March and April and lake levels can’t get up to a workable pool, many would find an al-

ternative to boating. The drought creates safety concerns on the lake. We need rain badly.”

Little’s sales to marina fuel docks are down 30 to 40 percent, with a tremendous falloff in fuel demand. While marinas on the lake typically order two million gallons a year, a 30-percent drop in demand equates to 600,000 gallons less this year.

“The supplier only makes a few cents margin per gallon,” Little said. “On the water, that fuel sells for $3.85 a gallon. That’s a $2 million hit/loss for the marinas selling fuel to boaters. Some have fuel docks on land and have to keep moving them. Gas lines aren’t elastic.”

Aqualand Marina, the largest inland marina on Lake Lanier, has been losing $50,000 to $70,000 in revenue each month since August, with about 300 slips that are unusable — some of them totally dry. Since November, Aqualand

continued on Page 30

Florida costs drive Genmar out

Jacobs ends operations in ‘outrageously expensive’ state

By Melanie Winters / Associate Editor

m.winters@tradeonlytoday.com

Add Genmar Holdings Inc. to the growing ranks of marine businesses being driven out of Florida because of the high cost of doing business there.

Edgewater Power Boats faced a similar decision but decided to stay in Florida. p. 27

The manufacturer of Wellcraft, Seaswirl and Hydra-Sports boats plans to phase out all its manufacturing operations in Sarasota over the next six months.

“Everything is outrageously expensive there,” says Genmar chairman and CEO Irwin Jacobs.

He specifically cites “workman’s compensation and everything that’s government controlled. The cost of labor is 25 to 30 percent more because of workman’s comp and other issues.

“Florida’s complete lack of interest in attempting to save these jobs has left Genmar with no other choice than to move such operations out of the state of Florida,” he continues.

Jacobs says he tried to work with the state to keep manufacturing operations there.

“Believe me, we tried,” he says.

He says he approached Gov. Jeb Bush about two

continued on Page 26

Selling in Europe
Learning
the culture
is a key to
success.
p. 20
Eyes of industry
on Miami sales
By Melanie Winters / Associate Editor

m.winters@tradeonlytoday.com

The sellers will be there in the usual numbers; the question surrounding February’s Miami International Boat Show is: Will the buyers show up in a weak economy?

It shouldn’t take long to get a reading, says Phil Keeter, president of the Marine Retailers Association of America.

“I think one thing everybody will be looking for is the attendance. If the attendance stays up I think that will indicate to people things will be up.