October 2004 Vol. 1, No. 7
Captains allege unfair dockage rates in hurricanes By Lucy Chabot Reed
For hurricane Frances, Roscioli Yachting Center on the New River took in 125 boats, twice the number it normally docks. PHOTO/LUCY REED
Ft. Lauderdale dodged four bullets in six weeks as a barrage of hurricanes aimed at Florida missed the yachting capital in late August and September. Megayachts and boatyards up the New River, Ft. Lauderdale’s safe harbor from Atlantic storms, reported little to no damage as hurricanes Charley, Frances, Ivan and Jeanne smashed into practically every other part of the state. [See related story on page 13.] Although Ft. Lauderdale missed a direct hit, the city and its yachting community still suffered a severe hurricane-related problem – allegations of price gouging at boatyards. At least two price-gouging complaints against boatyards on the New River were filed with the Florida Attorney General’s Office, which has operated a price-gouging hotline since Hurricane Charley blew into Southwest Florida on Aug. 13. None of the captains interviewed for this story wanted their names
In polite company, yacht brokers and admiralty attorneys call the bill that closed California’s use tax loophole for megayachts “bad legislation.” Among their own at San Diego’s YachtFest in mid-September, however, they called it disastrous to the state’s growing megayacht market. California residents used to be able to avoid paying the state’s 7.75 percent use tax on yachts by keeping their vessels out of state for 90 days. For a $5 million megayacht, that equates to a one-time tax of $387,500. Effective Oct. 1, however, they must keep their megayachts out of state waters for a year to avoid the use tax.
“How can I describe the chaos this bill will create?” said William Dysart, a San Diego admiralty attorney and staff commodore of Southwestern Yacht Club. He spoke to brokers, owners, crew and boatyard operators about the bill’s ramifications at YachtFest.
Expecting an exodus The initial effect of the bill would be to drive California-resident owners who purchase vessels out-of-state to park their yachts in marinas along Mexico’s Baja Peninsula for 12 months, Dysart said, sending repair and tourism dollars ordinarily spent in San Diego to Ensenada, Cabo San Lucas and other Mexican ports.
The 150-foot Trinity Nova Spirit suffers engine room fire. Page 4.
If you missed Athens and the Olympics, read page 26.
See HURRICANES, page 12
Boat shows give captains chance to see, fix things
California tax bill may steer more megayachts to Mexico By Jean Quist
published for fear of retribution from the yards that they must continue to work with. All were known to The Triton to be honorable skippers. Their reports of higher prices did check out, with some yards charging flat rates of up to $750 a day and $25 a foot for three days. For captains accustomed to docking a 150-foot megayacht in a yard for $1 a foot a day, a bill of nearly $4,000 for six days’ dockage during Frances raised eyebrows and ire. “If twice the rate is required, OK,” one captain said. “That may include extra workers, insurance, preparations, etc. But we don’t want to see this yard charge six times its regular rate, regardless of supply-and-demand forces, to make a few dollars once every 10 years.” Several boatyard managers insist they did not make money during Ft. Lauderdale’s trying time. A state investigator who looked into one of
Under California’s new sales and use tax law, more megayachts may fly a foreign flag from places such as the Cayman Islands. PHOTO/JEAN QUIST The impact on captains and crew will be a significant increase in the amount of paperwork required to prove the yacht’s homeport residency and alternate situs, sailing time, and
See CALIFORNIA, page 11
With the world’s largest boat show set to kick off this month in Ft. Lauderdale, we asked eight captains gathered for our monthly Bridge luncheon what they think of boat shows. The answers surprised us. As always, individual comments are not attributed to any one person so as FROM THE BRIDGE LUCY CHABOT REED to encourage frank and open discussion. The attending captains are identified in a photograph on page 5.
See THE BRIDGE, page 5
In Ft. Lauderdale for the boat show? Find out what to do in our visitor’s guide, page 15.