Marina Dock Age, May/June 1999

Dockominimums: One Marina Owner’s Dream is Another’s Nightmare
by Dennis P. Kissman

Are you considering selling your marina by condo-ing docks? Though this has recently become a trend among marina owners, before you join in, I strongly suggest you do your homework first and study the examples of marina owners who attempted this concept in the late 1980s. Look beyond the few marinas that were successful in the 1980s if you expect to succeed in today’s market. Your best bet is to learn from past mistakes made by failed marina conversions. The following reasons help explain why the dock-ominium concept didn’t take off.  

• It was perceived that the demand was greater than the available supply of slips. In reality there was no shortage of slips except in a few isolated situations. These few isolated situations were used to promote the dockominium concept nationwide.

• Tax advantages that enticed slip purchasers into buying a slip were discontinued.

• The per-foot monthly maintenance fee assessment was as high, and in some cases higher, than the monthly per-foot dockage rates at competing marinas.

• In the early 1980s when boating became much more affordable, it attracted a less affluent boat owner. This was good for the industry, but these boaters did not have the discretionary income available or the desire to invest in owning slips. This condition still exists today.

In addition to these obstacles, the underlying problem with the dockominium concept is that it is contradictory to the very reason a person buys a boat. It was that way in the 1980s, and it remains so today. Basically the reason a person buys a boat is to have mobility on the water. Granted, in reality boaters rarely venture beyond their local boating area, but you are not dealing with reality. Boaters want their freedom to pick up and go. I would venture to say that anyone who has ever owned a boat has dreamed of cutting the dock lines and sailing off into the sunset. Though very few boaters ever do, the dream lives on as long as they are into boating. Once boaters buy a slip, they obligate themselves to a single location. Slip owners might be better off to buy a cottage on the beach or a cabin in the mountains.

Many marina conversion attempts failed because they just didn’t make economic sense. When the monthly per-foot assessment fee approaches or exceeds slip fees charged at commercial marinas, it is difficult to entice someone to buy a slip. Once this became known, it should have been obvious that the concept was doomed to fail. Looking at the rates a lot of marinas currently charge, I think the same problem exists today that existed in the 1980s. Let’s use this as a wake-up call and get dockage rates up to a level that will give you a decent return on your investment. The dockominium concept will then have a good chance of succeeding on a much broader front. Continue »