“I own a marina and I’m getting ready to retire. My family isn’t interested in taking over for me. While I’d like the business I’ve spent most of my life building to continue, the best offer on the table is from a condo developer. What do you recommend?”
Most marina owners hope I’ll begin by pointing out that this choice is yours alone to make and that you can and should choose the disposition of your assets any way you see fit.
While I will lead with that, I’m hopeful that you, and they, will read on. I recommend that you explore an opportunity to realize all of your goals for retirement, including financial stability, while preserving the legacy that is your marina.
You are among a number of marina operators across the country facing this dilemma, and I believe the decisions that you’ll make collectively will greatly influence the recreational boating industry for the foreseeable future.
Let’s list some options for your consideration:
1. There are a growing number of professional marina managers around the world to whom you can confidently turn over the management of your facility while you continue to enjoy the benefits of its increasing profitability. Many of these professionals are CMMs (Certified Marina Managers), a distinction achieved through a commitment to education, experience and accomplishment administered and recognized by the Association of Marina Industries.
2. You can also choose to retain a professional marina management company to transition the management of your facility into the hands of professionals while retaining your property and ownership of your business. Again, you can expect this group to raise your profitability to a level that justifies their fees and continue to bring you the income you have previously enjoyed. It’s also reasonable to anticipate that a professional operator would meet or exceed the expectations of your customers, allowing them to continue to appreciate the benefits of your life’s work.
3. If you don’t want to gamble on the risk of a fluctuating revenue stream, you could lease your business to a professional marina manager for a fixed annual fee and have a more predictable income stream to fund your retirement. In this scenario, you step away more completely from your business but retain ownership of the property in case one day a family member develops an interest in the business or property. This choice also allows you to avoid the capital gains tax or recapture expense associated with conveying the property in a sale. Additionally, if you have an interest in getting your hands on a large lump sum of money, you can actually borrow against this lease income using your retained property as collateral.
4. If you’ve decided that you need some distance from the business and a traditional property sale makes the most sense to you, consider searching out a professional marina owner and manager as the buyer. There are an increasing number of professional marina owners, and it’s likely that their competitive appetites for inventory could help you to realize a higher price than you imagine. The marina buyer’s price may not necessarily approximate the value that a developer places on your land because a marina acquisition specialist will value the marina business, of course, but many will give you some credit for the opportunity landside as well. If none of these folks have come knocking on your door, AMI can help you identify yourself to them.
5. If your goal is to sell your property yet preserve the use as a marina business, you may be able to find a developer that shares that interest. Many waterfront developers have an interest in retaining marinas as amenities to residential or commercial development, and with some encouragement, education and assistance, there may be many more.
6. Finally, if you’ve made up your mind to sell your business and move on, that’s your choice as a property owner. You have to weigh the merits of preserving your life’s work in its present form and preserving that opportunity to sell at a future value against your interest in a “payday” that realizes those efforts in a cash settlement today. It’s your choice, but understand that you have options, all of which should be carefully explored.