Gulf Boat Dealers Hit Hard By Spill

PASCAGOULA, Miss. (AP) -- A few days after BP's Deepwater Horizon oil rig exploded April 20, three of boat dealer Keith King's customers came in and canceled their orders, one for a triple-engine Triton saltwater fishing boat with a price tag well over $100,000.

"They said they were not going to make a deposit on a boat they couldn't use in offshore waters," said King, who owns Ocean Marine with locations in Ocean Springs and Gulfport.

As oil continues to gush from the busted well and push toward south Mississippi, much of the Gulf fishing waters are closed, the future is in limbo, and sales of saltwater vessels have dried up, dealers said. They're trying to get assistance from the government and BP, but at least one dealer -- Empress in Moss Point -- is being forced to close its doors.

On Thursday, Empress owner Floyd Seal was at the BP claims office filling out paperwork to see if his employees and landlord could be compensated for their losses. A neon billboard at the business on Mississippi Highway 63 flashed the message "Closing store -- everything must go."

King, meanwhile, said Ocean Marine is ineligible for the U.S. Small Business Administration's Federal Disaster Loan program since gross annual sales were in excess of $7 million.

John Camp, an SBA spokesman, said businesses that do not meet the government's definition of "small," may appeal. King said he plans to do so.

Ocean Marine has been aggressive in pursuing opportunities to sell boats to local governments as part of their oil spill efforts, so far selling two boats and one motor to the city of Pascagoula, a motor to Jackson County and a boat to the city of Biloxi, King said.

The dealership is in final negotiations to sell boats to three other Coast cities, King said, but it "doesn't even come close" to making up for the business lost because of the spill.

Dealers said they make 60 percent or more of their annual sales in the April-July time frame, which has traditionally carried them through the leaner winter months.

At Roughwater Marine in Gautier, owner Ben Spafford estimates sales are down 90 percent compared to last year, which was a terrible year anyway thanks to the economy.

Spafford said he has "zero" confidence the market will recover, and he and fellow dealers have been selling vessels on Craig's List and through trade publications to buyers elsewhere in the country. They've had to lay people off.

"At this point," Spafford said, "we'll deliver to the ends of the earth."

A home equity line of credit is keeping Roughwater afloat for now, Spafford said, and he's filling out paperwork to see if the business qualifies for an SBA loan.

What dealers are describing as a deathblow comes on the heels of what were already tough times.

According to the Chicago-based Marine Manufacturers Association, power boat sales declined 24 percent nationwide in 2008 and 2009, and are expected to remain flat in 2010. The industry expected to sell about 150,000 power boats this year, but the oil spill could change all that, said association spokeswoman Ellen Hopkins.

In Mississippi, powerboat sales were down 15 percent in 2009 to about $136 million, better than the national average. The state is 28th largest in terms of powerboat sales nationwide.

King said thanks to casinos and the military, south Mississippi has been somewhat insulated from national economic downturns, until now.

Ocean Marine sold about 30 boats after boat shows in Biloxi and Mobile in March, he said.

"We were seeing an increase coming out of the spring to the point that we went ahead and forecast something approaching normal sales," King said.

Seal said he's not sure what the future holds for him and his employees, but late Thursday afternoon got a bit of good news.

"A BP contractor let us know that they're hiring one of my vessels and two of my guys for oil spill cleanup," he said. "I'm most happy for my guys, because they're worried to death." 

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