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Renovation costs sink marina slip rentals
By Kathleen Dayton
Staff Writer
A complete rebuild of Mariner’s Cay Marina at Folly Beach is about 99% complete, and the marina has joined the growing trend of selling slips rather than renting them.
“It’s a new era of development, there’s no doubt about it,” said Shelly Sutton, a real estate agent with Roberts Properties of Columbia, and the listing agent for slip sales at Mariner’s Cay.
There are 30 slips left for sale out of 77 slips at the marina, Sutton said.
“We sold the majority of them in three weeks,” she said.
Suncoast Properties of South Carolina bought the marina a year ago. The developer rebuilt the docks, replaced the gas pumps and pump station and installed new electrical elements. There are plans to renovate the ship’s store this year, completing the total project of nearly $1 million.
Sutton said many locals have bought slips at Mariner’s Cay, including some who don’t own boats but wanted them for investments. Sutton and her husband, who live in Charleston, bought a slip even though they have a boatlift at their residence.
“We expect the slip we bought to increase in value just as any other normal real estate does,” Sutton said.
Some marina industry insiders say renovations and rebuilds simply can’t be done with rental income alone; thus the growing trend toward selling slips.
Bob Pilcher, dock master at Stono Marina, said some marinas have been allowed to fall so far into disrepair that it can cost millions to repair them, and owners often have not put away capital improvement reserves.
“The marina starts to go downhill and the till is dry. Sooner or later, the marina just has to be pulled up and replaced. If they’re having to spend $5 to $6 million to fix a facility, the numbers don’t work for them,” Pilcher said.
Turning a marina into a dockominium sales lot can turn quick profits for marina owners. Privately owned slips sometimes referred to as dockominiums or floating condominiums, have been luring investors up and down the coast for years and more and more marinas in Charleston are beginning to sell slips.
Pilcher refutes concerns that more slip sales will result in a declining number of rental slips available to the average boater who may not be able to afford to purchase a slip.
“I own two slips and both my slips are rented to tenants,” he said.
Suzi Durant, executive director of the S.C. Marina Association, said the dockominium trend is happening all over the southeast and has been popular in Florida.
“There’s always worry that slips are coming off the market, but we’re finding that more and more people buy the slips for investment then put them back on the rental market, so it isn’t having that much adverse affect on the availability of slip rentals for boaters who don’t want to buy their slips,” Durant said.
Pilcher said the cost of leasing slips, whether from a marina or from an owner, will be what the market dictates.
“The market rates are set by the law of supply and demand, and you can’t get more for a slip rental than what the market will bear,” Pilcher said. “I think there will be a number of people that are currently renting that will buy simply to hedge on the increase in costs of rental slips.”
While some weekend boaters may not be able to afford to buy a slip, Larry McNair, a partner in Suncoast Properties, said he believes the dockominium trend in some cases allows plenty of boaters to own a piece of the water.
“A guy can live in Moncks Corner and might not be able to afford a deep-water lot. In Charleston, that’s around a million bucks. But a lot of people can afford $90,000, $100,000 for a dockominium. It makes it a lot more affordable for people to have a piece of the water,” McNair said.
As some marinas go upscale, new owners are cracking down on rules and regulations applying to boat owners. Some area marinas, such as Mariner’s Cay, no longer allow live-aboard boaters. The marina is part of a private condominium development with a homeowners association that sets rules.
Skip Crosby, dock master at Mariner’s Cay, fears that some marinas are regulating live-aboards out of the lifestyle.
“When I moved here, 60 percent of the people were live-aboards,” Crosby said. “It was a great small community. Everybody knew each other, everybody watched out for each other. Now it’s the bigger boats and people who are just down for the weekend.”
At City Marina there is a constant influx of boaters looking for a place to live, said dock office staffer Stacey Latham.
“We currently have a waiting list for annual leases,” Latham said.
Officials at the National Marina Manufacturers Association, an industry trade group based in Washington, D.C., are concerned that public access to the water is disappearing across the country, not because of private slip ownership but because of condominium development.
“Waterfront property in general is being bought up and changed into residential uses,” said Dylan Jones, water access counsel for the association. “Condominium development has had the greatest effect on the loss of access. We’re seeing more and more of that across the country, all up and down the Eastern Seaboard, along the Great Lakes and the Gulf Coast, obviously in Florida, and the two states where we’re seeing it more and more are in South Carolina and North Carolina.
“It seems like those are two states where population growth is increasing in general. Our main concern is that, across the country, ‘Joe Boater’ is not going to find a place to put his boat anymore.”
Jones’ organization does not want to see slip rentals or purchases become price prohibitive for the average boater, he said.
“We’d like to see as wide a diversity of community on the water as possible,” he said.
Matt Grayson, vice president of IBG Partners, which is renovating the Stono and Buzzard’s Roost marinas, said a residential component is planned as part of the newly reconfigured marina. The village concept will include about 400 slips.
IBG recently demolished the Noisy Oyster Restaurant on the property and may build condominiums or town homes at the site, along with a new marina facility including a swimming pool and other amenities.
“We don’t want to be just another marina in Charleston. We want to be the best appointed, the most unique and certainly the most responsible,” Grayson said. “I think it’s our intent right now that we would file for a permit to allow live-aboards. But we’d like to educate our users on how to be responsible in the waterways. The live-aboards that were here in the past made it a very different environment. We had a lot of boaters that were not insured and boats that didn’t run and were in fact an environmental hazard.”
Andonia McKinney, who lives at Mariner’s Cay and will have to move soon because of the “no live-aboards” rule, said there are two issues boaters are dealing with in the area: the dockominium trend and the availability of live-aboard slips.
McKinney, who is also a homeowner but wanted to live aboard a boat while she is writing a book about the live-aboard lifestyle, said the live-aboard boaters she met at Mariner’s Cay when she moved there three years ago were mostly professionals.
“They were all amazing interesting people,” McKinney said. “There was an engineer from England, a psychiatric nurse, another educator teaching in the public school system, an attorney and an architect. It was a very close-knit community. All that community has gone.”
McKinney said she believes compliance with rules and regulations are a good idea and helps set high standards for safety and aesthetics in communities, but she feels Mariner’s Cay is making a mistake by not allowing live-aboards. McKinney also fears that the dockominium trend will price middle-class boaters out of the boating lifestyle.
“With the mandate of purchase, then those people in the middle income bracket can’t afford to pay $100,000-plus dollars for a slip to keep their small boat in, so they are not allowed to have access to the water, which I think is supposed to be public,” McKinney said. “And in Charleston, South Carolina, I think that is a terrible thing. This, after all, is a port city.”
Kathleen Dayton is a staff writer for the Business Journal. E-mail her at kdayton@charlestonbusiness.com.
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