Ft. Lauderdale dodged four bullets in six weeks as a barrage of hurricanes aimed at Florida missed the yachting capital in late August and September.
Megayachts and boatyards up the New River, Ft. Lauderdale’s safe harbor from Atlantic storms, reported little to no damage as hurricanes Charley, Frances, Ivan and Jeanne smashed into practically every other part of the state. [See related story here.]
Although Ft. Lauderdale missed a direct hit, the city and its yachting community still suffered a severe hurricane-related problem – allegations of price gouging at boatyards.
At least two price-gouging complaints against boatyards on the New River were filed with the Florida Attorney General’s Office, which has operated a price-gouging hotline since Hurricane Charley blew into Southwest Florida on Aug. 13.
None of the captains interviewed for this story wanted their names published for fear of retribution from the yards that they must continue to work with. All were known to The Triton to be honorable skippers.
Their reports of higher prices did check out, with some yards charging flat rates of up to $750 a day and $25 a foot for three days.
For captains accustomed to docking a 150-foot megayacht in a yard for $1 a foot a day, a bill of nearly $4,000 for six days’ dockage during Frances raised eyebrows and ire.
“If twice the rate is required, OK,” one captain said. “That may include extra workers, insurance, preparations, etc. But we don’t want to see this yard charge six times its regular rate, regardless of supply-and-demand forces, to make a few dollars once every 10 years.”
Several boatyard managers insist they did not make money during Ft. Lauderdale’s trying time. A state investigator who looked into one of two complaints filed against Roscioli Yachting Center said no gouging existed in that instance.
“Look at the liability we had,” said Bob Roscioli, chief executive officer of Roscioli Yachting Center. “These boats could tear our sheds down” in a storm.
“People don’t realize that our yard was completely shut down for two-and-a-half to three weeks” during Frances, he said. Frances was the largest of the hurricanes and the first of two that threatened Ft. Lauderdale. The complaints of unfair dockage rates began soon after she hit Florida Sept. 5.
“For a storm like Frances, it takes us three to four days to get ready, a week for the storm to pass, and three to four days to get everyone out,” Roscioli said. “We can’t haul out during that time; we’re just a safe harbor. My employees are working 12-15 hours a day but they can’t work on boats. We don’t make any money.”
Roscioli’s sign-in contract states normal dockage of $1 a foot a day, with $2 a foot a day during hurricanes. That rate was charged to regular customers and yachts already in the yard, he said.
For other megayachts that called as the storm approached, Roscioli said his crew verbally advised captains as they entered the yard that dockage in the turning basin would be a flat rate commensurate with their size – $250 a day for boats smaller than 50 feet, $500 a day for yachts from 50 to 100 feet and $750 a day for megayachts larger than 100 feet.
“I’ve been going to Roscioli’s for years,” one captain said. “I just spent $50,000 there a couple months ago. I still got charged the [flat] rate. I was shocked. I don’t want to bash them because they are my shipyard, but it’s wrong.”
The flat rate at Roscioli was not on the sign-in contract, and several captains complained that they were arbitrarily charged a price nearly triple the normal rate. For six days of dockage at Roscioli during Frances, a 150-foot megayacht saw a bill of about $4,500. The $2 rate works out to $1,800.
An investigator with the State Attorney’s Office said Roscioli did not break the law.
“From our experience, the higher-priced contracts are put in place for those people who are not regular customers of the [yard],” she said. “And that’s OK. Any business can charge whatever they want. For the purposes of price gouging, the price cannot change within 30 days of a hurricane.”
On average, the higher hurricane rates Roscioli and other yards charged were about the same and had been in place for years, she said.
The captain of the boat that filed one of the complaints against Roscioli insists the rate is outrageous. He said he was never told he would be charged a flat rate until he was ready to leave.
“They screwed me before, so when I got the contract, I circled the $2 rate and initialed it,” said the captain, who did not want to be identified until his complaint is resolved. “When the girl showed up with the bill, I just told her it was wrong, and she said, that’s what Mr. Roscioli wants.”
“Our rates are more than fair,” Roscioli said. “We’re half the other yards. You have to charge that because it costs money to take all those boats in here.
“We had three weeks of getting boats in and out of here, and no work,” he said. “During the hurricane, we didn’t bill not 10 percent of our normal billing.”
Greg Poulos, general manager at Rolly Marine Service also on the New River, took a similar financial hit during the stretch of hurricanes. An audit of the five active weeks of the hurricane season thus far has Rolly registering $354,000 in unbillable labor for its 55 employees, he said. He has billed about half the number of hours his crew has actually worked, about a quarter the week Frances hit.
“I can bring in $800,000 to $1 million a month at this yard,” Poulos said. “For the last week of August and September, I’ll be lucky to break $350,000. That’s the direct loss, never mind all the ropes and plywood and batteries we supplied to boats that I didn’t charge for.”
For boats already at Rolly, Poulos said no additional charges applied. For yachts that came in just for hurricane dockage, the yard charged $25 a foot for three days. For a 150-foot megayacht, that works out to $3,750, which includes electric as long as it is available.
If the bridges weren’t open after three days, yachts could stay at no additional charge, he said. For Frances, that meant six days of storage for the same price.
“It looks like a big price gouging, but it’s not,” he said. “Our rates are posted on our contract, on our Web site. If they think it’s too rich, they can go someplace else. This is what we do based on a survey of 20 years in this business.”
Once the bridges are open, boats that remain at Rolly are charged $25 a foot a day until they move.
“If anybody in the marine industry has any better ideas how to handle this, I’d be open to them,” he said.
Jones Boat Yard on the Miami River handles hurricane season a little differently, though no cheaper. That yard charges 50 cents a foot a day for the full 183 days of the hurricane season, payable at the beginning of the season. So a 120-foot yacht – the largest the yard can dock in a storm – would pay $10,980 to reserve hurricane space.
Boats that wanted storage but hadn’t paid the contact before the season were charged the same rate, with a portion of it credited to any yard work done within 60 days, said Brad Bean, Jones’ general manager.
“We found it worked to their advantage,” Bean said. “Charley came, and everybody scrambled and came to the yard. Then a few days later Frances came, and they kept their boats there. Now it’s five weeks, and they still have dockage. It’s value for their money.”
At least one shipyard did not implement higher hurricane rates. Fort Lauderdale Shipyard President Rick Roughen said his yard on the New River continued to charge its regular off-season rate of $1 a foot a day, despite the extra work and risk involved. [Read his full comments here.]
The newest yard on the river, Roughen said he doesn’t have the client base of his competitors, but he was worried about something else.
“They’re going to chase these boats out of Ft. Lauderdale,” he said. “These captains want a way out, and we’re giving it to them.”
Roscioli was surprised anyone wouldn’t charge a higher rate, considering the added liability.
“You’re taking in a multimillion-dollar investment and all that involves for a couple hundred dollars?” he said. “It doesn’t make any sense.”
Roscioli acknowledged that he should have had his non-customer hurricane rates in writing, and that he would do so next time. Then he paused, and noted that he likely won’t take so many boats next time.
“I’ve worked too hard for too many years in this industry with top-notch owners and captains,” Roscioli said after Frances. “I guarantee you, if we get another hurricane, it’s going to be a lot different.”
“We’re to the point where we’re not going to stack them up in the basin anymore,” said John Slate, yard manager at Roscioli. “We’ll give them [the yacht that complained] their money back, but I’ve already told my crew, don’t let that boat back in the yard. And it’s not just here. Just like captains talk, boatyards talk.”
As The Triton went to press, Jeanne had just blown ashore about 100 miles north of Ft. Lauderdale, and tropical storm Lisa was still in the Atlantic.
“I’m not dealing with it anymore,” Slate said after Frances. “I’m appalled that I’m even accused of gouging. Let them pay thousands to run away from the hurricane. We lost money by letting people come in here, helping people. Why would we ever do that again?”
Lucy Chabot Reed is editor of The Triton. Comments on this story are welcome below.