Bottom line begs for private ownership

Water Ways
Honolulu Star Bulletin (7/28/01)
By Ray Pendleton

Recreational boaters will be better served by privately managed marinas.

That was the bottom line of a recent explanation by the Board of Land and Natural Resources chairman Gilbert Coloma-Agaran for the state's attempt to find private operators for its Ala Wai and Keehi small boat harbors.

"We expect the primary benefit to harbor users will be the capability of private industry to accomplish needed repairs swiftly and efficiently, unfettered by burdensome government restrictions and with less overhead," he said in a recent letter in response to an editorial in the Honolulu Advertiser.

It brought to mind an e-mailed query I had just received from a local boating couple.

"How is it that the Waikiki Yacht Club can put in 150 new docks, propose to have it done in five months, and for just under $1 million," they asked, "while the state estimates that it will take $14 million, just to upgrade (mind you, that is not new) 600 docks at the Ala Wai?

"It gives a whole new meaning to privatization doesn't it? Maybe we ought to have the yacht club running the harbors."

Now, while I'm sure the members of the WYC can appreciate the complement, I imagine they would be quick to mention that a private club can't be compared with a public facility, even one privately operated.

As an example, they could point out that dozens of WYC members have volunteered hundreds - perhaps thousands - of hours to its year-long dock replacement planning process.

The club has been able to draw on the expertise of architects, mechanical and electrical engineers, and lawyers - among others - who are members and have been willing to help with the project at no cost. Savings like that can be substantial.

Better yet, once the new docks are installed, the WYC's slip fees are likely to be lower than those proposed by the state or currently charged at Hawaii's only resort marina at Ko Olina.

This is partly because it is a not-for-profit operation, but perhaps more significantly, because it has other income producers such as its dues structure, a restaurant, a bar, a dry goods shop and a dry boat storage area.

Other than membership dues, it will be these types of ancillary streams of revenue that should help keep slip fee costs at a reasonable level at the Ala Wai and Keehi marinas, once they become privatized.

"The most successful (marinas elsewhere) derive over 60 percent of their revenues from sources other than slip fees," Coloma-Agaran said. "We intend to lease Ala Wai and Keehi boat harbors to a qualified marina management firm that has not only the corporate assets to accomplish needed improvements, but also the necessary business and marketing expertise to develop these facilities to their maximum potential."

And, after hearing that, if I was anyone with a business I thought could succeed in a marina environment, I'd be checking out the property around those two small boat harbors very soon.

Forecasts like that don't come very often.

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