Earlier this year, the city of Fernandina Beach received five proposals from companies that want to lease or manage the Fernandina Harbor Marina. Oasis, the firm whose offer was rated best by another private firm, gave a presentation about its proposal to the city’s Marina Advisory Board last week. Oasis will also make a presentation to the City Commission in July.
The marina is currently managed by Westrec Marinas, but the City Commission issued the Request For Proposal over concerns about its management.
City Manager Dale Martin said he had professional services company Stantec Inc. review the proposals and rate them, first to last. Martin said Westrec submitted a proposal but the company declined an invitation to present it to the MAB.
The marina was largely inoperable after Hurricane Matthew damaged it in 2016 and has been operating at a loss for years. Those losses have been covered by loans to the marina fund from other city funds, putting the marina millions of dollars in debt. The MAB and the City Commission have been considering how to make the marina self sufficient, if not profitable.
Proposed management fees that would be charged by the five companies that submitted proposals include a base management fee and a percentage of revenue from the marina.
Oasis’ fee, which was a $48,000 base fee plus 1.5% of revenue, is $76,885. The company’s proposal did not indicate if the 1.5% would be taken from gross or net marina revenues. Westrec’s proposal is for a $95,268 base fee and 1% of gross revenues for a total of $102,574, its current rate.
“The Oasis Marina’s proposal offers the lowest total management fee and the projection of the highest operating net income for the city,” the Stantec report said. “If the city accepts all proposals as equivalent and comparable, their proposal clearly offers the best financial terms.”
Brian Arnold, vice president of Business Development at Oasis, told the MAB that Oasis manages more than 20 marinas – from the Great Lakes, to the Eastern Seaboard, to the Gulf of Mexico.
“Our goal is, and always has been, to create an environment for boaters who are looking to explore,” Arnold said. “We want to give people something to really talk about from the minute they arrive to the minute they depart.”
Arnold said Oasis was started by people in the hospitality industry and has grown to include Snag-A-Slip, a service that connects boaters to marinas (similar to hotels.com), and Marinalife magazine. The company brings its experience in hospitality, he said, to the marina business. He said that Snag-A-Slip would allow Oasis to influence boaters to visit the Fernandina Harbor Marina, as would Marinalife magazine. Arnold added that his company has taken marinas from the red into the black, far beyond the expectations of marina owners.
“In 2015 we took over our first marina at Harbor East,” Arnold said. “This is a property that historically lost a quarter million dollars a year. (The owner) said, ‘I really don’t care if it makes money, but I’d like it not to lose money. If we can break even that would be amazing.’ In the first year, we broke even. It was the first time the marina had broke even in 22 years. We are coming up on our fifth anniversary (at that marina), and the budget is on track to make $1.1 million in profit.”
Arnold said Oasis wants to partner with the city, including on financing options. He said that since the city’s marina is largely new due to a construction project to repair hurricane damage as well as improve and expand the marina, funds for major projects would probably not be needed. Still, he said, Oasis is in a position to offer financial options with venture capital and private equity. The company said they have “trauma” plans in place and can prepare for, and respond to, hurricanes and other weather-related problems.
Arnold said about half of the marinas Oasis manages are municipal-owned, such as marinas in Cambridge, Md., Cleveland, Ohio and Annapolis, Md., with some public-private partnerships in Baltimore, Md. and Washington, D.C.
MAB member Allen Mills said the marina is often filled with transient boaters and asked Arnold how Oasis could improve profits.
Arnold said Fernandina Beach could be a “mecca” for transient boaters.
“Dynamic pricing and driving rate,” Arnold said. “From a pricing standpoint, compared to other places in Florida, (the transient slip rate) is a little soft. I think there’s quite a bit of opportunity. In Baltimore, when we took over Harbor East, (slip rental) was about $1.75 per foot. Now, it’s $3.25 a foot. It’s full every weekend, with a waiting list, and the rates close to doubled. In Newport, Rhode Island, they’re full every day in the summer at $8 a foot.” He said Oasis could raise the current rate
of transient boaters from its current 60% to 75% of boats while balancing with businesses that operate out of the marina: “There’s no reason that locals can’t keep a boat like they always did,” he said. “The business person should be able to do what a business person has always done and benefit from that, but remember, the business person is going to benefit when I bring more boats here that want to go on their tours. I don’t want anybody to leave. I want more people to come.”
Arnold said the key is attracting transient boaters, which Oasis can do with its extensive marketing department. “Transient people will pay,” Arnold said. “It’s not a matter of what they pay. It’s a matter of what you’re giving them.” He added that rates could change, depending on demand for dock space.
The rich history of Fernandina Beach is also marketable, with Arnold adding it’s a “best kept secret” among Florida marinas. He compared Fernandina Beach to Annapolis, Md. and Charleston, S.C. “Those are cities where all the downtown is right by the marina,” he said. “When you dock here, you are less than 400 steps from everything. Most of the reason people will want to come are the businesses, whether it be fishing or sailing charters or tours. We want to give them more reasons to want to come. You are talking about people who set out from New England to go to Florida for the summer and fully prepared to spend $25,000 to $30,000, or more, cruising. You should get your fair share of that because you have a lot of offer, as opposed to other towns where there is nothing to do. We need to tell a story, and that will make people want to come here.”
Other marinas that Oasis manages offered positive recommendations.
“Since Oasis took over operations of our facility, we have seen the marina (increase) in both occupancy and profitability,” Christy Alire, general manager of Yards Marina in Washington, D.C., said in a testimonial included in the proposal. “Customer reviews are consistently positive, and their team has the flexibility and skill to work with our dynamic neighborhood and our various events, as well as traffic at nearby Nationals Park.”
Jon McAvoy is vice president and director of Finance at the Wharf, a mile-long waterfront community on the Potomac River that includes commercial and residential properties. Oasis manages their marina.
“Since the beginning of the on boarding process, the Oasis team from executives to dock handlers have integrated very well into our hands-on style of ownership,” McAvoy’s testimonial says. “Their team continues to work together with our asset managers and property managers (apartments, hotels, shops, restaurants, etc.) to create lasting experiences for our guests and patrons. As a result of their efforts, we hosted over 15 super yachts in 2019 many measuring over 130 feet which has never been done before in this market.”
Calls to McAvoy and Alire were not returned to the News-Leader by the press deadline.
The MAB made no determination as to whether members would recommend Oasis to the City Commission, which is set to hear from the company at its July 21 meeting.