Boatyard closure a sign of the times for struggling industry
Dec 22 2009 in Business of Boating by Deborah Bach
In 2007, business was humming along nicely at Lake Union Yacht Center.
The Seattle company moved to a new location in August, after the property it leased was sold. The new facility was double the size of the old one, and owner Geo Tamblyn knew he would have to increase business by 20 to 30 percent to cover costs at the two-acre site.
But Tamblyn wasn’t overly worried. The company was doing about $3 million of business annually, enough to keep his staff of 40 busy. The new site, at the Le Clerq Marine building on Lake Union, could serve about 30 yachts at a time and included a 30,000-square foot shop and enough dock space for 10 yachts. The full-service operation offered everything from woodworking to electrical services, fiberglass work to varnishing.
“Then,” Tamblyn said, “October ’08 rolled around.”
The economic downturn that has devastated the marine industry locally and nationally hit Lake Union Yacht Center. Business plummeted by 30 percent within a year and continued dropping. By October 2009, business was down 60 percent and Tamblyn’s staff had shrunk by half.
The list of upcoming work, usually five or six pages long, had dwindled to one or two boats. Realizing he could no long cover his payroll costs, Tamblyn reluctantly decided to shut down the company at the end of November. On Dec. 16, the company’s equipment and tools were auctioned off to pay its creditors.
“It’s such a hard decision to make, especially as a sole business owner,” said Tamblyn, who’s 42. “I got hit hard because I’m young and don’t have a big bank account. I’ve been running on cash all these years. I’d spent all my money to buy out my partner, made a little more, spent that to move, and just when we started to do okay, the economy tanked.
“It wasn’t that we sank any boats or pissed anybody off or anything like that,” he said. “It’s the state of our industry. It’s not good news for anybody.”
Lake Union Yacht Center closed on Nov. 30, following a 60 percent drop in business.
The closure of Lake Union Yacht Center is a sobering omen for the region’s other boatyards, many of which have also seen a sharp drop in business. Granville Marine in Anacortes closed in the spring, and others are struggling to stay afloat.
Marina Hench, director of governmental affairs for the Northwest Marine Trade Association, said the boating industry in Washington state has shrunk by an estimated 30 percent over the past two years in both revenues and number of businesses.
“Consumers are holding onto their dollars and they’re procrastinating on a lot of things, including getting work done on their boats,” Hench said. “I don’t think less people are going boating, but I think less people are getting work done and getting new toys put on their vessels. That’s what’s made it difficult for our boatyards.”
Scott Anderson understands that as well as anybody. The owner of CSR Marine, which has two boatyards in Seattle and another in Des Moines, said the closure of Lake Union Yacht Center is “a sign of the times.”
“It’s about economics more than anything,” he said. “You should be able to survive a move. But the work really stopped for everybody. That’s the problem. We’ve all just been hanging on a thread.”
This year is one of very few that the company hasn’t grown in its 30-plus years of operation, Anderson said. CSR’s workforce has shrunk from 60 employees to around 43 in the past couple of years through layoffs and attrition, and Anderson is encouraging staffers to reduce their work weeks to 35 hours.
“It’s worrisome,” he said. “Are we still going to be like this in three or four years? I don’t think we could possibly hang on for three or four more years if it stays like this.”
Business has also been sluggish at Albert Jensen & Sons, Inc. Boatyard and Marina in Friday Harbor. Vice president Mike Ahrenius said the seven-employee company laid off two workers over the past couple of years and has seen business drop by between 20 and 30 percent.
“Last year, we experienced our slowest season that I can remember in the last 20 years,” Ahrenius said. “We had the huge gas prices and the economy was tanking. That was a double shock for a lot of people, and they just stayed off their boats.”
Both Anderson and Ahrenius said their boatyards have been able to survive by focusing on basic maintenance such as bottom painting and cleaning.
“We haven’t elevated ourselves to where all we do is install cool electronics,” Anderson said. “We’ve never stopped doing the basics. Other guys who have made a lot of money doing really cool, specific stuff, that stuff is going. People are getting back to the basics.”
Ahrenius said Jensen & Sons made a strategic decision about a decade ago to scale back its operations, realizing that it couldn’t compete with an increasing number of larger, specialized competitors that were springing up in nearby Anacortes.
“I think that’s been a big help for us,” he said. “It’s kept us focused on what it is we do and what we know how to do best.”
For his part, Tamblyn, who serves on the board of trustees for the Northwest Marine Trade Association, plans to stay in the industry. He started working on boats as a part-time college job and started his own company, Tamblyn Marine Services, after graduating from Colgate University with a political science degree.
In 2000, Tamblyn merged with Costica Marine to launch Lake Union Yacht Center. He bought out his partner a few years later, becoming the company’s sole owner.
“I’m proud of where I went in 15 years, from the back of my truck to a $3 million business,” said Tamblyn. “I just got caught at a bad time.”
Tamblyn hopes to avoid declaring bankruptcy, but that will depend on what his financial situation looks like after creditors are paid off. A high school lacrosse coach, Tamblyn lives in Issaquah with his wife and two sons, aged 8 and 11. His wife is an attorney, which he said helps mitigate the financial worry.
“We have means of recovering,” Tamblyn said. “It’s scary, but we’re a tough family. My family is well and strong.”
While having to close his business was “painful” for the first few weeks, Tamblyn is focused on looking forward.
“I’m definitely going to be fine,” he said. “Life throws curveballs. You either hit ‘em or you strike out. What are you gonna do?”
Blake E. Davis said on December 23, 2009
The writing was on the wall for the Pacific NW a year ago. When one see’s with ones own eyes the striking similarity of the “bubble” that burst on the East Coast two years ago, it was obvious that it was soon to pop there. The many unfinished condo buildings dotting Seattle skyline, the thousands of For Sale signs in yards, the Seattle nightly news announcing thousands of layoffs at Starbucks, Microsoft, and Boeing, ALONG with the permanent closing of GIANT lumber mills- how can that NOT affect a leisure industry? In 08 Olympic Marine Centers went out of business taking 21 locations, Meridian shut down their Everett Washington plant, ETC. I think this is the “trickle down effect” that Ronald Reagan spoke of- now in action. If Americans can’t earn a living wage-what else would one expect? The domino’s they be a falling.