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Ailing marinas struggle to stay afloat as economy sinks, gas prices jump
Robert Snell / The Detroit News
DETROIT -- High gas prices and a rocky economy are threatening to beach Michigan's recreational boating industry this summer, with marinas and other businesses fishing in a smaller pool of customers.
Boat slip rentals at St. Clair Shores' Michigan Harbor have been sluggish, a nearby marina owner is in bankruptcy, the repo man is a common visitor and even cautious people are selling boats in hopes of positioning themselves to survive the struggling economy.
Bad news and boating is not new -- Michigan has fallen from first to third in boat registrations in recent years -- but the water's choppier, experts say, as boaters seize on this weekend's balmy weather to launch their sloops.
"If we thought it was bad last year, it's worse now," said Paula Hines, business manager at Michigan Harbor.
There is an upside. The climate has spawned some good deals as marina operators have slashed prices on slips.
A dip in boating hurts tourism, employment, lodging and other businesses that rely on recreational boaters, said Ed Mahoney, director of the Recreational Marine Research Center at Michigan State University. If people whose livelihoods are tied to the boating industry are making less money or not working, that means less cash to spend, he said.
Every time a boater skips a trip, doesn't rent a slip or skimps on gas, groceries and provisions, it eats into the $992 million generated annually in recreational boating in Michigan, Mahoney said.
David Green might soon join the ranks of former boaters and slip renters. The Commerce Township engineer listed his two-year-old 20-foot Sea Ray boat on craigslist.com earlier this month.
The boat's selling price -- $26,000 -- comes with an incentive. The 36-year-old is throwing in free docking privileges at Club Royale Marina on Elizabeth Lake in Waterford -- a $2,800 value.
Green paid for the slip last fall because the marina was offering to throw in free winter boat storage for customers who paid for slips in advance for the 2007 season.
Since then, Green has mulled a move to Tennessee, where the economic forecast is rosier, and he wants to eliminate nonessential expenses. "The boat has been a toy for me, but it is really an expensive toy," he said.
Marinas offer incentives
Last year, boat slip rentals at the state's 30 marinas dropped 9.6 percent, according to the state Department of Natural Resources.
Fewer slip rentals means less money to maintain and run the public harbors, said Harold Herta, the state's parks and recreation resource management chief.
He, like other marina operators, blames the declining number of boaters on gas prices -- which could reach $3.30 a gallon this year -- and low lake levels.
Marina owners are trying to combat conditions by slashing slip rental fees, discounting gas prices and offering free winter storage. Michigan Harbor cut its per-gallon gas price by 25 cents for boaters who rent slips, which have been discounted $300 for the season.
The harbor, along the Nautical Mile, has rented about 60 percent of its 420 slips, which cost $1,200 to $3,000 for the boating season, and is hoping rentals keep increasing by Memorial Day.
Harbor Heights Marina owner Thomas Gaudette, is emerging from a personal bankruptcy case filed in January, due in part to fewer boat buyers and slip rentals.
His 3-acre marina in Chesterfield Township has 50 slips, but only seven have been rented so far -- down almost 70 percent from last year. Boat sales have plummeted from $4 million in gross sales to a quarter of that amount.
"It's horrible," he said. "I still own the business and marina, but there is no equity in it because of the market conditions."
About nine marinas are clustered along the Nautical Mile, and many have strung banners and sales signs to woo boaters.
"Everybody is cutting prices," Hines said.
Fewer boaters in state
And chasing a dwindling number of boaters.
Coast Guard records show state boat registrations in 2005 fell 5.6 percent from 1 million three years earlier. But the numbers do not include up to 300,000 manually propelled boats shorter than 16 feet, canoes, kayaks and nonmotorized rafts, which do not require registration.
"It's usually smaller boat owners who have stopped renting" slips, said Chip Miller, owner of Miller Marina in St. Clair Shores.
Although until recently boat slip customers were slow in coming, repo men were not.
"I've never seen so many boats repossessed," Hines said.
Instead of renting slips, people are stashing sloops in driveways and backyards. Other boaters are adjusting to the economic conditions by hugging the shore.
"People use their boats like little floating cottages," Miller said.
Water levels have impact
Lower water levels have forced boaters in the East Tawas area in recent years to move their docks farther out into the water, said Derek Goslee of Jerry's Marina.
"It's definitely down," he said.
But it should not discourage people from boating, Miller said.
"The water's fine. Lake levels change year to year, but it's never been where no one can use their boats," Miller said.
Van Snider, president of the Michigan Boating Industries Association, remains optimistic.
"The economic condition cannot go on forever," he said.
Though statewide unemployment rate is 6.5 percent, Craig Stigleman of Aggressive Marine in Commerce Township said he is doing well serving the other 93.5 percent.
He has sold 16 pontoon boats in the past three weeks and sold more and larger boats at the recent Detroit Boat Show. It helps that his average client lives on a lake, makes more than $100,000 a year and is a professional or is self-employed.
Some boaters undeterred
Ted Schatzberg isn't sweating high gas prices. The Detroiter and his wife expect to move next week onto their 40-foot cruiser at Detroit's Harbor Hill Marina. They'll spend all summer on "Salt-n-Pepper III" -- a nod to their interracial relationship -- and take trips to Ohio and Canada. "My life is boating," the 54-year-old electrical controls designer said.
Oddly, the economy is boosting bait sales.
A souring economy and bad salmon fishing in Lake Huron have some anglers shedding 30-foot boats equipped with lots of gear. Instead, they are buying less expensive 18-footers and hunting walleye, said Joel Anderson, who owns Anderson Pro Bait in Port Huron.
His business rose 38 percent last year, thanks to people paying $1.99 for worms instead of pricier salmon gear.
Anticipating a busy weekend, he stockpiled 300 dozen night crawlers. "They'll be gone by Monday," Anderson said.
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