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January February 2020 Marina World

The magazine for the marina industry

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MARINA LEASES Channel marinas, such as Saint-Quay Port d’Armor in the northwest of France, are popular with serious sailors. Most marinas in the Brittany region enjoy private-local government collaboration regarding concessions. phenomenon (in the 1960s) and has strengthened even further with the arrival of low cost flights. For northern Europeans it makes sense to fly to the Mediterranean once a month for a three/four-day holiday. The mild southern weather makes it worth flying down even in non perfect weather conditions as it is easy to relax for a couple of days trying the local cuisines and enjoying the laid back culture. Only a few marinas do not permit public access and these tend to berth large yachts, where security has to be maintained to a high standard and insurance companies may even dictate policies regarding access. Why am I telling you about data that is not inherent to government concessions and leases? Easy: it’s highly important to know what the user of a marina needs, how he/she uses a boat and spends money. If the government understands these factors, it will be better able to value the propositions of the private companies aiming to be part of the concession, and the information will be of use every time an improvement, investment or new idea is placed on the table. Or it will create the basis for bidding for a concession with terms that are downto-earth and not sheer imagination. The second best type of concession is a private government concession, with an initial investment by the bidder, and a lease consisting of a fixed amount plus a percentage of the marina turnover. This is good because the lease fee reflects the real occupation/income of the marina. It is very easy to make a business plan when one knows the cost of the overheads and that the rest of the fee is going to be a proportional part of the turnover. The flexible part of the lease can be considered a cost of sales. This type of concession term is normal practice in Croatia. The third and most dangerous type is investment plus fixed lease amount. This does not take account of bad seasons, bad weather or other external factors affecting the arrival of transients. There is a further danger. All countries have official prices for the lease of government land. In the 1970s, concession lengths of 50 years were usual, and 100 years was sometimes even available. In the 1980s many governments realised that the value of the business leases grew much faster than the index of updating the lease price, so they started reducing the maximum concession time to 30/40 years to have the system under control and avoid imbalance of concession value/lease. Business was still possible, but the investment and overheads had to be taken more seriously. In the late 1990s the marina industry in the Med was overwhelmed by longer, larger yachts. Shipyards delivered many more boats a year and set up production lines for 24 to 27m (80 to 90ft) boats. Clients started to demand more services, and fashionable spots like Cannes, Antibes, Porto Cervo and Monaco had waiting lists. Homeport or transient berth prices soared and local government sank their greedy claws into the industry. In 1983, Spain issued a decree invalidating any concession length over 30 years – despite any prior agreements. This clear display of juridical insecurity (now you have it, now you don’t) triggered a few It makes sense for northern Europeans to fly to the Mediterranean for long weekends. Marinas such as Marina Izola in Slovenia are attractive destinations. legal action attempts but without any success. Later on, the government offered concessions to renew the 30- year limit for another 20 to 30 years but assuming further investments and a new, higher lease that sometimes reached 400 times the original. The same thing happened in Italy, where concessions were not modified but leases increased sometimes 100-fold from one year to the next. The most recent unpunished action has been the well-staged apparent open bid for the marinas in Antibes. There was a well-advertised international invitation to bid for 1,000 berth Port Vauban marina. Twelve companies bid and had to swallow hard when the winner was announced as the Antibes Chamber of Commerce in association with two local banks. They do not fulfil any of the conditions to run the concessions (experience, knowledge, technical team) but they had the greed and the last word. And this is happening in the first world. If you feel a cold sweat breaking out while reading this, you can better understand why berth prices in the Mediterranean are so high. The Sheriff of Nottingham is the country administration, not the marina industry. What can the marina industry do about it? A lot, but it is a long and tedious road to success. The only tool we do have is our knowledge and understanding of the marina industry. But in the same way as most government administrations have not made efforts to understand our ‘reality’, we have not made much effort to understand theirs. Marina businesses have mostly begged for better conditions and permits, and - January/February 2020 27

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