Government should get out of the marina business

Water Ways
Honolulu Star Bulletin (10/16/99)
By Ray Pendleton

A recent editorial in the morning paper caught my eye. The headline read, "Golf fees must come up much closer to real cost."

It went on to say that even with the $2 increase currently proposed by the City Council, the green fees would still be covering less than half of the cost of running our municipal courses.

"This doesn't make sense," it continued. "In an era of painfully tight city budgets, we cannot afford to offer such a handsome subsidy to golfers.

"Even if green fees had to cover the entire operational cost of the city's links, there would still be a public subsidy because taxpayers have bought and paid for the valuable property upon which they sit."

It occured to me that the logic used in this editorial might also relate to Hawaii's recreational boating facilities. That is, are we also subsidizing boaters in this state?

As someone who has owned and moored boats for many years, I do appreciate how comparatively inexpensive it is to do so in Hawai`i. Boat owners in California pay twice to four times as much for their monthly slip rentals, depending upon location.

Why is there such a disparity between states?

For one thing, the majority of the marinas in California are privately owned and operated, even when they are on municipal, county, or state tide lands.

And those businesses rely on a simple economic principal: to keep a business running, they must remain competitive, but their income must exceed their expenses. Unlike governments, private enterprises cannot look for tax revenues to carry them along.

In Hawai`i, on the other hand, with the exception of a handful of private clubs, the marinas - a.k.a. small boat harbors - are a state monopoly. They do not have to be competitive, or operate on a free market economy of supply and demand. And like our municipal golf courses, the fees charged do not cover the total costs of their operation.

Going back to the newspaper's editorial, it addressed the importance of establishing a reasonable fee schedule by saying that green fees should be somewhat lower than private courses because, "no business, not even one run by government, would consciously price itself out of the market."

The same can be said for our marinas. And it also brings up the larger question: should government be in competition with the private sector in the first place? And, can it be successful?

After decades of running its own golf courses, the city of Long Beach, Calif., finally farmed out the operation to a private nationwide management company. It is reported that the courses now are in much better condition and tee times - at a slightly increased rate - are more equitably available than ever before.

Long Beach still operates its huge 2,000-slip, Alamitos Bay Marina, on the other hand. But, a combination of competitively priced slip fees of $8 to $10 per foot, per month, and a subsidy from offshore oil revenues have kept the operation solvent.

Nevertheless, there are many boat owners there who will point out the general lack of maintenance compared with the private marinas in the area.

Here in Hawai`i, there are no offshore oil revenues and, essentially, the government-run marinas have no competition. Still, there are years-long waiting lists for slips that rent for just $4 to $5 per foot, per month.

Maybe that newspaper editorial could have been addressing our marinas.

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