DALLAS – Under a new contract signed by Marinas International and Flagship Marinas, two companies that once were merged are now reunited.
Marinas International Founding Partner Stan Johnson was involved in the deal to purchase Flagship Marinas in the late 1990s. And in an interview this morning, he shared his excitement at being reunited with some of the managers and staff that his company helped developed years ago.
Under the contract, Marinas International will manage the seven marinas – and approximately 6,000 slips – owned by Flagship Marinas. While the two companies initially discussed an acquisition, rather than a management contract, “the climate was not such that Flagship wanted to sell,” explained Johnson, though that doesn’t preclude the companies from reconsidering merger as conditions improve.
In the meantime, the deal fits with Marinas International’s strategy to expand its third party management services to both individuals and investment banks that need help in this area, according to Gregg Kenney, a partner in both companies. This brings the number of marinas that Marinas International owns or manages across the country to 30.
By signing the management contract, Flagship will be able to benefit from economies of scale it could not achieve on its own, achieving savings in areas such as insurance, accounting, operations and management personnel, as well as the services offered by Marinas International’s marina construction business.
“For the last year or two, the management Flagship was relying on to run the company didn’t have as much of a hands-on style as we do,” said Johnson, “nor did they have regional personnel to support the managers in a meaningful way to allow them to maximize their potential. That’s something we’ll be able to bring to them that will make life for the on-site managers and staff much more comfortable.”
Johnson expects this growth in marina management contracts to increase as equity funds and financial institutions take over marina operations from operators who are no longer viable.
“They’ll be looking for management help to maintain and increase the value of those assets until they can find a suitable disposition for them,” said Johnson.
In addition, third-party management may become a popular alternative to selling in the current market for those operators who may want to retire or move onto other businesses, he added.
In the meantime, Marinas International continues to work with its capital partner, CNL Lifestyle Properties, to seek opportunistic acquisitions, Kenney concluded.