A few yacht yards and marinas along the U.S. East Coast hold Foreign Trade Zone (FTZ) status. The Marine Group Boat Works shipyard and Fifth Avenue Landing marina are the first yacht-specific FTZs in California.
An FTZ is a specially designated area in or near a port of entry into which goods can import duty-free. These goods include foreign-flagged yachts, and can additionally remain stored or undergo processing, including sale, without duties or taxes. The idea is to stimulate international commerce and economic growth. It’s especially attractive for marketing foreign-flagged yachts to U.S. buyers in U.S. waters. Otherwise, the builder or broker importing the yacht must pay a duty representing a percentage of the yacht’s value. Duty is due as soon as the yacht enters the country, too.
In fact, Todd Roberts, Marine Group Boat Works’ president, says the total is about 1.5 percent. Although that may sound low, it adds up. “On a $50-million yacht, that’s $750,000 before they even know if they will be able to find a buyer,” he notes. Marine Group Boat Works’ FTZ area allows showing a yacht to interested buyers soon after tying up in the allocated space. Should repairs or maintenance be necessary, craftspeople can conduct that in the same area, tax- and duty-free. “hat’s a huge benefit for owners, but also a boon for San Diego, which has earned a spot for itself in the global superyacht industry,” Roberts says.
Marine Group Boat Works has been working with the city of San Diego and the U.S. Customs and Border Protection for the past 12 months for approval. Its yacht refit and repair facility (top) is in Chula Vista. Presently, the shipyard has a 660-ton lift, to haul megayachts to 220 feet (67 meters). Overall, the yard occupies 1 million square feet (92,903 square meters), plus has about 2,000 feet (610 meters) of dockage. Last year it submitted plans to modernize its facilities for more deep-draft yachts. Marine Group Boat Works further owns Fifth Avenue Landing (above), a 12-slip superyacht-specific marina is in the heart of downtown San Diego.
Marine Group Boat Works joins a growing list of U.S. shipyards serving as FTZs. Others include Derecktor Fort Pierce and Lauderdale Marine Center in Florida, for example. Savannah Yacht Center in Georgia and Newport Shipyard in Rhode Island are other East Coast facilities. As for Fifth Avenue Landing, it joins a superyacht-marina list including Yacht Haven Grande Miami, Bahia Mar, and Bradford Marine, all in Florida.
Being the only yacht-specific FTZ operators in California—and the Southwest—offer big advantages, Roberts says. “When you’re talking about superyachts, which can easily be valued at $200 million or more, and you start looking at the cost of maintenance and repairs, it’s not unusual for owners to do a cost-benefit analysis and consider whether or not to sell,” he explains. “Now, when our international customers inquire about selling, we can offer them the opportunity to market to U.S. buyers from right here in San Diego.”
Fifth Avenue Landing fifthavenuelanding.com
Marine Group Boat Works marinegroupbw.com
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