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Tuesday, Sep 27, 2022

Rich, Famous Steer Yachts to Marine Group Boat Works

The Marine Group Boat Works built it , the nation’s largest lift for mega yachts , and more of the super-rich who own such vessels are coming to town for refitting.

Among them is Oracle Chief Executive Officer Larry Ellison. High on Forbes’ list of wealthiest Americans, he’s bringing the “smaller” of his two mega yachts, the 192-foot Ronin to the Chula Vista company for some work.

“The boat will be here for 12 weeks, depending on the type of work we’ll be doing,” said Todd Roberts, the Marine Group’s president. “This is not even a full refit, but it’s a sizable refit.”

Another is Howard Leight. Founder of Howard S. Leight Industries, maker of the foam earplug, his 145-foot Leightstar is currently at the yard. Adding to the list, the HMS Surprise, a replica of an 18th century Royal Navy frigate used in the 2003 film “Master & Commander: The Far Side of the World,” is scheduled to arrive in late February.

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Many owners of mega yachts , a term that describes boats exceeding 100 feet in length , insist on anonymity. They don’t want the public to know their comings and goings.

“These are rich folks, but they’re not necessarily famous,” Roberts said. “They’re not rock stars and movie stars like you might imagine. They’re extremely successful businesspeople, like the guy who owns 50 coal mines, but you never read or hear much about him.”

A 228-foot yacht is also due to sail into the boat yard in March, but Roberts declined to give any other details.

“Mum is the word,” he said.

People passing by the waterfront company, formerly known as the South Bay Boat Yard, won’t be able to miss it, though, he added.

Like owners of smaller oceangoing vessels, their modus operandi is spending time fishing, exploring or participating in water sports, only on a different scale and for a lot more money.

There are no hard numbers to go by, but it’s generally assumed that maintaining and operating mega yachts, which are manned by professional crews, costs 10 percent of the value of the boat annually.

Stocking up for departure from port involves purchases of fuel, supplies, copious amounts of luxury food items and liquor, including caviar and champagne and lots of flowers.

“We could make a florist’s year when we finish up a mega yacht and it departs,” Roberts said.

Since nearly all of the furnishings and fixtures used in remodeling or expanding a mega yacht have to be custom-made, nothing comes cheap.

“You don’t go to Home Depot for this stuff,” he said. “We did a granite counter for a boat being remodeled, so we went out to find a granite guy and spent $20,000 on granite work. Nothing is minor.”

Though items such as lumber, sand, paint, plastic shrink-wrap and masking tape used to enclose the boats, are stock, they have to be purchased in bulk.

“We just spent $10,000 on wood for cribbing to support a yacht coming in,” he said.

Art Engle, who co-owns the Marine Group with his brother Herb, said that a key reason for adding the 665-ton lift, which was part of a $6 million renovation completed this month, was to capture more of the mega yacht repair work currently going overseas.

The new lift is 53 feet wide and has an inside clearance of 50 feet. The closest in size in the United States is a 600-ton machine operating in Connecticut, but it is devoted primarily to ferry construction.

The Marine Group isn’t the only local company that works on mega yachts. Others include Knight & Carver Yacht Center in National City and Driscoll Boat Works on Shelter Island.

The big boats aren’t new to the Marine Group either, but the only way it could lift them out of the water previously was to coordinate with the Campbell Shipyard. Then it closed.

“A lot of the owners would prefer to have work done in the U.S. because of the aspect of trust associated with it,” Engle said. “And secondly a lot more mega yachts are now visiting the West Coast because they, like the cruise ship industry, are sailing to Alaska.

“They come up from the Caribbean through the Panama Canal.”

It’s logical to assume that San Diego could be their first U.S. stopping point, he added.

While half of the Marine Group’s business is devoted to working on commercial boats, Engle estimated that refitting mega yachts with the new lift could result in revenues increasing to $12 million this year from $7.8 million last year. Thereafter, he expects revenue to go up by about 25 percent each year. The company serviced more than 400 boats last year when it had a lifting capacity of 100 tons. It currently operates with a staff of 52, and more people are being hired, Roberts said.

A Virtual Tourism Attraction

It’s impossible to project the impact that mega yachts could have on the local economy. Their crews might stay in local hotels while the boats are being worked on, or they may jet to their hometowns and back to meet up with the yacht owners and guests who come in to board for a cruise once the work is finished.

With demand for mega yachts exceeding supply , orders can take up to five years to fill from any of the world’s 100 or so builders , sales and refitting of used vessels are also on the rise.

“Purchasers of used mega yachts always want to redo them, and often they’ll perform maintenance, even if routine maintenance schedules were done,” Roberts said.

In places such as South Florida, the Caribbean and Monte Carlo, looking at mega yachts has become a “virtual tourist attraction” for the not so rich, said John Hawkins, a former chairman of the San Diego Convention & Visitors Bureau who owns Cloud 9 Shuttle.

“If you’re lucky to get onto one of them , I think you have to show your balance sheet , it’s like a home tour in Rancho Santa Fe,” Hawkins said. “Fort Lauderdale has mega yacht row and tourists come out just to look at them. I was in Monte Carlo last summer, and it’s the same thing.”

Citing recent statistics for Florida’s Miami-Dade, Palm Beach and Broward counties, Roberts said mega yacht owners contributed more than $576 million to the economy , roughly a tenth of San Diego’s annual direct tourism spending.

Luring a vast number of mega yachters away from the East Coast, where most live, or from the popular cruising destinations of Florida and the Caribbean, isn’t likely, Hawkins said.

But California and the West Coast are sprouting their own crop of super-rich mega yachters and San Diego’s bay front has the space to accommodate more of the jumbo-sized slips they require, Hawkins added.

At present, local marinas have about a dozen slips where such yachts can dock. More are in the planning stages, including a two-phase marina project Engle and his brother have slated for downtown.

Though financing has not yet been obtained for the 250-room Spinnaker Hotel the pair plan to build directly behind the San Diego Convention Center, work on a marina containing 15 spaces for mega yachts will precede hotel construction and could begin as soon as November, he said.

Plans call for a second phase with 20 mega slips, but a start date for construction is undetermined.

Hawkins suggests that the tuna harbor adjacent to Seaport Village should be transformed into a mega yacht marina.

“Think of the fun people could have walking from the Star of India to Seaport Village,” he said. “It’s fun for us regular mortals to look at the glamorous trappings of the rich and famous. It’s like Hearst Castle. These things are beautiful.”


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