ST. PETERSBURG — What do Caribe Upholstery, Marty Korb Piano Tuning and Publix have in common?
These businesses, along with 12 others, provided services to Tatoosh, a 302-foot yacht, during four visits to the Port of St. Petersburg over the past four years. The mega yacht is owned by Microsoft co-founder Paul Allen.
The city would like to attract more mega yachts and marine research vessels so it could profit from the port instead of subsidizing it by an average of $500,000 a year. That would be much easier if the city's voters pass a charter amendment on the Nov. 8 ballot.
If passed, the amendment would authorize increasing the length of a lease of port property from 10 to 25 years. The city staff believes a longer lease would draw more interest from companies that could amortize the cost of enhancing the port over more time.
Last year the city requested proposals from private companies to share the cost and profit of an enhanced port. The response was lackluster. Companies that did and didn't make proposals said a 10-year lease isn't long enough to recoup costs.
"If we enter into a 25-year lease, the city and private sector would be more inclined to incur costs associated with development," said Dave Metz, the city's director of downtown enterprise facilities.
There are no cost estimates or exact plans for what it would take to attract and accommodate several mega yachts at a time. The port has 1,300 linear feet of wharf space. SRI International is leasing 400 feet of that. Landing the marine technology firm, which employs 71 people with an average salary of $100,000, was a big coup for the city and the port in 2006.
More of a marina
New development at the port would most likely include adding more dock space.
"I think the real potential is mega yachts, research vessels, maybe large fishing boats," said City Council member Jeff Danner. "I think we would turn it more into a marina than a port and build fingers out there where you could fit a dozen (yachts or research vessels). It would involve upgrading the power (source). I'm not sure what that dollar amount would be, but it's certainly more than the city has."
A 1999 master plan estimated suggested upgrades would total $14 million. It called for building a cruise terminal, a pedestrian overpass and retail space. Bulkhead and wharf improvements were estimated at $1 million.
Council member Wengay Newton thinks a 25-year lease compromises the city's control of the port.
"If the voters think they want to give someone control of their waterfront for 25 years that's totally up to them," he said. "My take is that if you want to have control then why give it away."
Even though a lease would have stipulations, Newton is still uneasy.
"The way leases work, we could break it and we could be sued," he said.
If the port can't make more money, does it make sense to subsidize it so Paul Allen and a few other users can stop in now and then?
"I don't think it would be a good idea to close it. I think it's an incredible opportunity having a … port," Danner said.
But as the smallest of the state's 14 ports, it's not big enough for cargo ships. Tampa has more appeal and space for cruise ships. In 2004, St. Petersburg voters rejected a proposal to extend lease time to 25 years when a casino cruise ship was scheduled to begin operations at the port. That ship didn't last long.
But if the port was a hub for mega yachts on their way to Cuba, Mexico or Central America the potential payback is, well, mega.
"The revenue to (the port) is just part of it," Metz said. "And it's not just the three guests that Paul Allen has on his yacht. It's all the services that come to that yacht."
Good for local economy
Thomas Murray, associate director of the Virginia Institute of Marine Science, conducted a study on the economic impact of mega yachts in South Florida during 2006.
He found that each yacht generated more than $480,000 in annual economic impact through boat yard expenditures, brokerage commissions and charter fees. These are ships that get most of their servicing done at the port. He did not have figures for a seven-day or one-month visit but said it would be a significant amount of money.
"The crews spend a lot of money. These are floating businesses that generate a lot of activity," he said. "Where it lands depends on the decision of the owners and the captain. Whether it gets serviced in St. Martin or St. Pete depends on what the port has to offer."
Grand Luxe, a 228-foot-long yacht, paid $78,000 in port fees alone when it was docked in St. Petersburg throughout 2010. Allen's Tatoosh paid an average of $450 a day to dock at the port during four stays in 2009 and 2010.
City subsidizes port
The Port of St. Petersburg took in $183,526 in revenues in the last fiscal year. It spent $124,640 on wages and benefits for a port supervisor and a part-time employee and $106,800 on security personnel and equipment. Administrative costs, utilities, insurance and miscellaneous services totaled $222,779.
Like the Mahaffey Theater and the Pier, the port is subsidized by the city because it brings economic impact or quality of life to the community. For fiscal year 2011, the Pier was subsidized by $1.2 million and the Mahaffey by $1.1 million. The city used to subsidize the city-owned Albert Whitted Airport, too.
"It was losing money. We asked the voters to go to longer leases," Metz said, "and now the airport is flush."
Contact Katherine Snow Smith at (727) 893-8785 or email@example.com