Safe Passage Through Hurricane Season
Every year, marinas located along the Gulf, throughout Florida, the Eastern Seaboard, and the Caribbean are faced with a prevalent threat – hurricanes. As we all know and have likely experienced first-hand, these natural disasters destroy homes, businesses, families and cause all sorts of chaos – most recently seen with Hurricanes Harvey and Irma last year. For the most part the path and strength of a hurricane can be predicted with adequate time to prepare and evacuate, but Irma proved to be a more volatile disaster that kept Floridians guessing where it would make landfall. This resulted in a lack of preparation, postponed evacuations, and additional chaos, until it was too late for many residents to evacuate and boat to safely relocate.
As marina advisors we strive to be a resource for as many marina owners/operators as we can, especially those new to the industry. In addition to our valuation services, we provide information, tips, and ideas based on our experience in the industry so you have another source to help make the most educated and informed decisions for your operation – in this case, when preparing for hurricanes. We not only want each marina and marina owner to be prepared for the worst in the event of a hurricane hitting, but to also help each facility be in a great position to achieve the highest value when the time comes for a disposition. That said, the goal of this article is to provide information and knowledge to all marina owners and operators so when a hurricane hits, you can keep your employees, vessels and property safe.
Let’s jump right into the most obvious implication of these disasters – marina owners and operators returning to the marina faced with months of rebuilding ahead, large cleanups, the reorganization of boats and damage claims. When capital isn’t readily available to start improvements, marinas run the risk of being put out of commission for a length of time. Conversely, marinas with the necessary funding and adequate insurance can start making minor repairs, get larger projects priced and planned and fill up open spaces with boats relocating from damaged facilities. As expected, the damaged facilities see low occupancies, drastic declines in revenue and a significant reduction in cash flow, in addition to expensive capital improvement projects. The marinas accepting the relocating vessels increased their rental rates, grew waiting lists, and maxed out occupancies which translated to higher revenues and increased profit margins. When a supply/demand imbalance like this exists, marina operators find themselves in a unique situation where they can be more selective on the quality of tenant and size of boat that they allow into their marina. This can further be capitalized on by providing better service to boaters and making minor upgrades to improve the curb appeal and functionality of the marina, ultimately retaining those new boaters for future seasons.
MARINA DESIGN, ENGINEERING, AND CONSTRUCTION
When we compare marinas that were destroyed and marinas that weathered the storm (some within miles of each other) the common factor prevalent to each outcome is strong dock design, engineering and construction. These components are crucial to marina redevelopments in preventing future damage while prolonging the useful life of the docks. It’s much better in the long-run to complete improvement projects (i.e. additional docks, boat ramps, on-site facilities) right the first time versus suffering the negative consequences later. To this end, it is well worth the premium for not just the added benefits of a better investment, but for boater safety and marina reputation in the long run. The negative consequences of poor construction (whether from lacking initial development or accumulated deferred maintenance) will be reflected in your daily operations (i.e. occupancy, rental rates, etc.), as well as your cash flow. By analyzing the quality of materials used, age, structural design, and location, an astute marina owner can determine the top strategy for storing your marina’s vessels during a hurricane.
First, let’s focus on dock construction and the risks of high winds and storm surge. Floating docks are one of the best options for withstanding these forces, but can also be one of the worst; it all depends on how they are built. The largest benefit of this type of dock is its ability to handle several feet of storm surge by rising with the water level along the piling. To live up to this advantageous design, however, pilings must be tall enough to accommodate several feet of storm surge, or they run the risk of floating away, carrying every docked boat with it. At the same time, the pilings (especially when dealing with a fixed dock) must be capable of maintaining their structural integrity in the event that the docks are tested. Meaning, thinner pilings of inferior construction are more prone to breaking under the various forces associated with a hurricane than a stronger piling built with these forces in mind. You will also want to understand the tidal ranges in your area and how storm surge has affected your marina in the past. This will give you a good idea of the appropriate piling height, in addition to the expertise of a marina engineer, who can accurately price and design your docks to best suit your location and budget.
Concrete pilings of adequate width and height are a great option, as is the use of steel. We see a lot of new dock upgrades go down these routes as opposed to the more traditional fixed, wooden docks (which is usually the least expensive of the available options). The useful life of the concrete and steel docks are several decades and do not require as much maintenance compared to wood, but they also have a more modern finish that appeals to the majority of boaters when choosing a marina. The “floating” aspect, however, is the key element in the overall design. Because boats will move with the dock, this eliminates the risk of strained dock lines and provides better total movement with waves and wind forces than a fixed dock. By working with a marina engineer and keeping these ideas in mind, your dock layout can be better prepared to withstand waves from daily boat traffic and typical wind conditions. As mentioned earlier, it’s better to do something right the first time than to have to pay for it on the back end, which includes spending the extra money on this long-term investment that will pay dividends in boater satisfaction, vessel security and increased rental rates.
STORING YOUR VESSELS
What if you don’t have floating docks? Fortunately, there are several other options for you to consider depending on what your property will and will not allow (i.e. open land, equipment like forklifts, etc.) and which option can provide the most protection. If a safer location is not available and boats must stay in the fixed docks, consider adding more lines to the vessel so it will float easier with surge, and have a lower likelihood of breaking free. This will also put less stress on the docks which have the potential to be pulled out of the ground (as with ice jacking). Utilize excess uplands, parking lots and other flat areas that are ideally out of reach from strong surges for storing boats on land. There are a number of tools and methods that work best based on what’s feasible and the physical characteristics of your property. Dry land storage can be successful when done correctly (i.e. boat securely strapped down, locked to the ground, masts taken down, etc.), and BoatUS has a number of resources on their website demonstrating various methods.
Marina owners/operators with a marina in a hurricane hole not only have an ideal location, but they are in the position to accommodate boaters seeking a better location during the storm. Therefore, it is important that these operators have a strong plan of action in place to efficiently fill space and minimize chaos as boaters rush to secure their vessel. Given that you have a limited amount of space, it is critical to identify what sized vessels can be accepted, where those vessels will be stored, how much you will charge and when you can expect those vessels to arrive. Having an organized system with these components in mind will create less confusion and less headaches when boats start showing up. Ultimately, this plan will allow you to optimize dock space and excess uplands ahead of time so you don’t run out of room during the process and you can maximize revenues.
Another great option are dry storage facilities. Not only are they increasingly popular for day-to-day storage, but they offer great vessel protection as well. We see a number of these facilities modernizing their physical appearance, automation is starting to be utilized, and forklifts have become so advanced that they not only reach boats in higher racks, but also move on tighter footprints. This reduces the overall square footage a facility needs to operate on. In addition, dry rack rates have a premium in many locations which will further increase revenues as facilities are stabilized and rental rates are increased.
When storing vessels in a dry rack facility, it again comes down to the construction and age of the building, as this is a large determinant in whether the facility will still be standing post-hurricane. Focusing on Florida, there are many dry rack facilities that were built to withstand winds up to 140 mph (i.e. Port Marina in Fort Lauderdale, Sunrise Marina in Port Canaveral, and Port Sanibel Marina in Fort Myers, to name a few), and one of particular focus that can withstand 150 mph winds (Bluepoints Marina). But when the facility is aged and construction is not as strong, considering upgrades is recommended as those facilities run a higher risk of suffering from collapsed racks, losing roofs, or getting completely wiped out with boats inside. To mitigate damage, it’s important to know the age of the structure, the useful life, and any existing damage the facility might have. Knowing this information will enable you to strategize a capital improvement plan to execute on over your hold period, ensuring the safety of your boaters and maintaining a healthy bottom line. Some capital improvement projects, however, are better left to a new owner as a value-add component, especially when the capital investment does not work with your investment strategy. Ultimately, deferred maintenance should always be kept to a minimum, ideally never accumulating over several years; it is best practice to handle maintenance issues as they arise.
At a minimum, every marina owner/operator should have a hurricane plan that outlines the procedures and steps to be taken to secure loose items, safely secure boats, protect the facilities on site, and educate staff and boaters. We recommend avoiding last-minute preparations and start developing a hurricane plan now (including evacuation routes, communications, and recovery steps), if one does not currently exist. It is a good idea to have supplies on site, correct boat owner emergency contact information, preparations to rebuild, and steps outlined to mitigate vessel damage claims against you.
Again, this information is important for you as an owner/operator and your staff, but also for boat owners so they can familiarize themselves with your marina’s procedures and take the necessary steps on their end to assist your preparations. Since insurance premiums tend to escalate after serious storms, like Hurricane Harvey and Hurricane Irma, it’s also encouraged to TAKE PICTURES/VIDEOS BEFORE AND AFTER THE HURRICANE to prove the condition of your property before and after the storm. We’ve provided some resources at the bottom of this article to aid you in developing your own step-by-step plan of action so you are prepared for this, and future, hurricane seasons.
Hurricane Preparedness Resources
- BoatUS: http://www.boatus.com/seaworthy/hurricane/default.asp
- BoatUS: http://www.boatus.com/hurricanes/marina_plans.asp
- BoatUS: http://www.boatus.com/hurricanes/boaterprep.asp
- West Marine: https://www.westmarine.com/WestAdvisor/Hurricane-Preparation
- Boat Safe: http://www.boatsafe.com/nauticalknowhow/61798tip.htm
- Master Planned Communities