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With passage of tax bill, Savannah Yacht Center to become reality

Rob Demere believes Georgia is poised to become a significant force in the yacht repair and refit business currently dominated by Southeast Florida, where the marine services industry generates an annual economic impact of approximately $1.6 billion.

The president and CEO of Colonial Group is so sure of that potential that he is putting up some $50 million to convert the former Intermarine shipbuilding yard on Lathrop Avenue into a world-class yacht repair and refit facility capable of competing with Florida and possibly even Europe.

The only potential stumbling block – the need for legislation giving yacht owners the same tax incentives they now get in Florida — was eliminated when the Georgia General Assembly passed such legislation on the last day of its 2017 session.

With that regulatory framework in place, Colonial is ready to begin work on the facility, acquired in a bankruptcy sale in 2010, in the hopes that Savannah Yacht Center will be ready to serve its first customers either late this year or early next year.

If that sounds like an ambitious timeline, it’s because much of the center’s basic infrastructure is already there, Demere said, including one of the largest graving docks in the Southeast.

A graving dock is essentially a narrow basin that can be flooded to float ships, then drained to allow the ship to rest on a dry platform. It is used primarily to make the vessel accessible for construction, maintenance and repair work.

The SYC graving dock can accommodate mega-yachts as large as 450-feet long.

SYC is ready to begin letting construction contracts as soon as the bill is signed by Gov. Nathan Deal

At the Savannah Economic Development Authority, SEDA president and CEO Trip Tollison applauded the legislation and the prospects it will bring to the area.

“This measure will allow Georgia — and especially our coastal communities — to be competitive as we pursue marine vessel manufacturing and repair work,” he said. “Now our companies can continue with their plans to hire new employees and invest capital so the work will come to our region.”

An economic impact study conducted for Colonial by Armstrong State University economist Michael Toma found that, when fully operational, the Savannah Yacht Center will support nearly 800 direct and indirect jobs across the state, as well as annual wages of $50 million, tax revenue of $5.5 million and $171 million in economic activity.

The lion’s share of those impacts will be in Chathm County, Toma said.

“Chatham County will account for 85 percent of the jobs, 82 percent of wages and benefits, 84 percent of economic activity and 60 percent of the tax revenue,” Toma said in the executive summary of his report, adding that economic impact results arise from construction expenses, facility operations, paint shop work, major refit operations and crew spending while vessels are in the yard.

The shipyard itself is expected to employ about 130 workers per year. The other jobs are attributed to sub-contractor labor in ancillary activity at the shipyard and the effects of economic multipliers. The state-level employment multiplier is 2.51.

“These are good jobs, most of which pay upwards of $60,000 and there is tremendous potential beyond that, with up to 800 direct and indirect jobs in play,” Tollison said, adding that the project has the added benefit of Colonial Group’s reputation for doing things right.

According to the report, the fiscal impact of the facility and related activity is $5.5 million ($2.1 million to Georgia and $3.1 million to Chatham County) annually upon attaining normal operational level, and $18.6 million over the five-year period from 2017 to 2021.

Of that $18.6 million in five-year tax revenue, Georgia will receive $8.1 million while Chatham County can expect $10.5 million.

Individual and corporate philanthropic activity of the facility’s employees is expected to be notable, given

the current corporate culture of community engagement and participation in community affairs of the

facility’s parent company, Colonial Group.

While noting that philanthropic activity is not easily quantified in terms of economic impact, it clearly would enhance the social and community fabric of Chatham County, Toma said.

A facility ‘second to none’

Demere expects the Savannah Yacht Center to be the East Coast destination of choice for owners of larger yachts and commercial vessels.

When finished, the facility’s graving dock will be able to handle yachts up to 450 feet in length, while a new 3,240-ton ship-lift and rail transfer system will be capable of accommodating more than six very large yachts —approximately 260 feet in length — out of the water simultaneously.

”This facility will be able to handle everything from minor repairs to structural changes and major refitting,” he said, adding that the shipyard is designed around a holistic concept.

“In addition to facilities for repair, refit, and painting, there will also be office space for administration as well as food service and other amenities for crew while work is underway on the yachts,” he said.

The U.S. East Coast lacks comparable dedicated yacht facilities, according to Toma’s research.

There are six facilities in Florida, only one of which has more than 300 feet of dry docking capability, while the median capability is about 230 feet.

This is nearly identical to the 235 feet of capability in facilities in the Bahamas and Portsmouth, Virginia.

“We have a facility that will be second to none on the East Coast,” he said. “Coupled with Savannah’s charm as a destination, it should be a slam-dunk.”

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For more information, including updated job listings, go to www.SavannahYC.com.

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