Hopes of expanding Puerto Rico’s boating industry could get a buoyant lift with the planned construction of a new, $10 million marina. It all hinges on the purchase of a property.
Harbormaster Development, the stateside company behind the multi-million project, is currently in the process of purchasing a large property in an undisclosed location of the island where the marina will be based.
The sale is expected to take place in January and the transaction includes tax incentives originally extended to the owner of the property, News Is My Business has learned.
The project is actually divided into three phases. The $10 million covers the first phase.
The marina project has now moved one step closer to reality with the announcement that Harbormaster contracted Florida-based Kali, Inc. (KALY) to take charge of its development. The announcement was made on Wednesday.
Kali is a marketing and development company with bold plans in the marine industry. It recently announced its entry into the $5 billion marina management market with the acquisition of Wave Marine & Yacht Services.
This market is described as fragmented and underserved, thus offering ample opportunities for growth. Although there are a couple of competitors, “there are no big or dominant players,” a Kali spokesperson said.
The management contract that Kali signed with Harbormaster guarantees a $1 million management fee with various performance incentives that could result in more revenue. The agreement also includes an equity participation option for Kali.
The five-year contract covers project management to segue into operational management once the marina is built. Construction should take between 12 and 18 months.
The initial phase of the project, according to the spokesperson, covers such “basics” as some type of headquarters, docks and fueling facilities. He said the location is ideal for the marina because of its deep water; in fact, boats have used it in the past, he said.
In Puerto Rico there are around 20 to 25 marinas although smaller marinas could bring the tally to as many as 60.
A company statement said “Puerto Rico’s overall commitment to economic growth and related incentives have put Puerto Rico on top of Harbormaster Development’s list of locations to build or update marinas in the Caribbean.
“Accordingly, the contract with Kali is anticipated to start in Puerto Rico and potentially expand within Puerto Rico or to other properties outside of Puerto Rico.”
Harbormaster is a Delaware-based special purpose company set up by investors. According to the spokesperson, the company has filed for incorporation in Puerto Rico.