Buy This Boat: A Yacht Broker's Blog

Market Update: Alerion Express

2010-01-17T21:41:00.007-05:00

The brokerage market has shown an encouraging level of activity over the last 8 weeks - typically one of the quietest periods of the year. This indicates an even more robust selling season between now and May, a period when more buyers enter the market. Nationally, sailboat sales in December were up 42% over the same month for 2008.

The Alerion Express market continues to be one of the bright spots here at McMichael. In addition to the 5 NEW Alerions sold by McMichael in November (see November's Market Update), we have closed deals on 4 brokerage AE-28's since December 1st.

With the Alerion factory booked through to July, the brokerage market should continue to heat up; if you're interested in a brokerage Alerion for this Spring, the time to act is now! Click here to see our listings.

All of the activity has kept me quite busy, working six days a week to keep up with the inbound inquiries, monitor the new boats I have in production, and continue to market my listings aggressively. It's not such a glamorous job in the winter: there's nothing like running around a frozen boatyard to find an aluminum ladder, climbing ten feet up to an icy deck and sitting in a cabin to talk about a boat's merits while you can see your breath!

J/95, J/97, Summit 35 All Win "Boat of the Year" Awards

2009-12-21T16:01:00.006-05:00

Just a quick post to highlight some "Boat of the Year" awards that have just been announced in the sailing press. We're happy to have our lines at the top of the list!

J/95:
SAIL Magazine 2010 Boat of the Year, Performance category
Sailing World 2010 Overall Boat of the Year
Cruising World 2010 Domestic Boat of the Year
Cruising World 2010 Boat of the Year, "Weekender" category

J/97:
Sailing World 2010 Boat of the Year, Club Racer category

Summit 35:
Sailing World "Best IRC Racer" 2010

J/111: Made to Go Fast

2009-12-14T09:26:00.012-05:00

There has been a tremendous amount of buzz surrounding the J/111 since the new design was announced at the Annapolis Boat Show. Many people have noted that some of the styling is a subtle departure from typical J designs, but overall it is pure J/Boat. The development of the 111 was motivated by an owner looking for a new boat for the Sydney-Hobart race - he'll be racing hull #1 in that event in December 2010.

We now have the full specs and pricing for the boat, and I'm really excited about what the team at J/Boats has put together. This is a boat that is going to be fast, versatile, and easy to sail. And did I already say fast?

Unlike the latest crop of IRC-optimized designs that have higher displacement numbers, the 111 is a lightweight boat, made to get up on a plane downwind and hit double-digit speeds. A carbon fiber mast, high sail area to displacement ratio, two-metal keel and low cabin house make this possible. The standing headroom, functional galley and nav station assure broad enough market appeal that a One Design class should take shape. Here are some dimension comparisons that you should find enlightening:

All that power is made manageable with the deck features you expect from a J/Boat - outboard shrouds for a non-overlapping headsail, floor mounted traveler and a retractable sprit. This will be a very easy boat to sail, and it will sail very fast.

The J/111 will be built at CCFC in Bristol RI - same builder as the J/95 and J/100. So far I've been impressed with their work and they have the capacity to ramp up production as needed. With nearly 20 J/111 hulls reserved so far, it might be needed!

J/95 Fixed Keel Renderings

2009-11-21T13:56:00.003-05:00

J/95 #9 molds next week, and the engineering to replace the keel/centerboard with a fixed keel is in place. Comparing the K/CB version side-by-side to the fixed keel version (drawing 5'6") really helps you see the difference in chord length, and I can't wait to see how she sails in comparison to the standard K/CB configuration which performs great!

This stage is really my favorite part of the job - only with a new boat does every option get chosen purely based on how well it serves the client's needs. Finalizing decisions from sails & electronics to more cosmetic items like Awlgrip & upholstery is a detail-rich process, and watching the boat come together is fun too!

Market Update

2009-11-17T21:46:00.009-05:00

Time for a long-overdue look at how the market is bearing up in the last quarter of 2009.

Going into the Newport International Boat Show this year, my biggest question was would we see new boat sales return this Fall (the usual season for ordering new boats for Spring delivery). Remember, the Lehman Brothers collapse came on the last day of 2008's Newport show - an unfortunate bit of timing.

This year's Newport show was considerably smaller (for example, Tartan/C&C had just one boat on display, instead of their usual 5+), but the mood of show-goers was much more positive, with some people ready to move forward on new boats. Their were only a handful of truly new boats at the show, and McMichael was proud to be representing most of them: the Summit 35, the J/95 and J/97, and the MJM 40z.

In the weeks after the show, my big question was answered: I was able to finalize sales on a new J/95 (the first to come to WLIS) and a new Alerion Express 28. The rest of the McMichael team secured a Summit 35 sale (also the first in the area), 3 more Alerion 28's and an Alerion 38. Not bad at all!

The brokerage market continues to be extremely competitive (sellers competing for buyers) and getting a deal done takes more effort than ever. Another reason to have a good broker working for you! We now have some hard data for 2009 that compares units sold and value between 2008 and 2009. Did you buy a boat in the first half of 2009? Then congratulations, you timed the bottom of the market correctly. But values are STILL down over 10%, and some outstanding deals remain available. The good new for sellers is that units sold on a per-month basis have finally returned to 2008 levels. The table below provides some interesting data (click for larger size):

What a Difference a Year Makes

2009-09-21T20:25:00.005-04:00

The 2009 Newport International Boat Show has come and gone, and it was a big change from last year. The mood in 2008 was already cautious, and when Lehman Brothers collapsed on the last day of the show it didn't exactly lift spirits.

Fortunately, this year's show arrived on a rising tide of economic optimism, and attendees were clearly in a better mood. I can't speak for everyone, but I have more prospects for new boat sales this winter than last.

The in-water portion of the show was noticeably smaller than last year, with fewer boats on display. But the McMichael crew was busy with the debut of FOUR brand new models, plus the full fleet of Alerion Express yachts.

The Summit 35 from designer Mark Mills hit the water just in time for the show, and build quality (from Edgewater in Florida) was excellent. Designer Mark Mills was on hand to discuss how owners could further optimize this IRC-rocket for their particular sailing venue. The Summit 35's big sister, the King 40, was at the show as well.

J/Boats has continued their tradition of bringing innovation to a lagging market, with the arrival of the first J/97 racer/cruiser from France, and the J/95 keel/centerboard daysailor. A beautiful Stars & Stripes blue J/100 was also on hand. Since all three boats are between 31 and 33 feet, the most common question at the J booth was "How are these different?" Here's a quick answer:

J/97

A truly dual-purpose boat with the potential for racing at the most competitive level, as well as comfortable cruising for a small family - full galley, enclosed aft cabin, great interior.

J/95

A keel/centerboard daysailor for those that want J-level performance, but the ability to sail or dock the boat in just 3 feet of water. Spacious and ergonomic cockpit with wheel steering and plenty or room to move around.

J/100 - The purist's daysailor: very fast, very simple, with tiller steering and a carbon rig for an optimal sailing experience.

Finally, the MJM booth proudly displayed the new 40z. This one has been out for awhile but was making her first boat show appearance in the Northeast, to rave reviews.

Thanks to everyone who stopped by, especially the ones who mentioned this blog! You know who you are...

First Sail: md35 from Summit Yachts/Mark Mills

2009-08-24T16:36:00.006-04:00

The very sexy md35 has been sitting at our dock for quite awhile now, and I was finally able to sail her recently. She is all about going fast and looking good, with teak decks and an open transom that screams "Wally" to fans of modern design aesthetics. But you never know if the bulb keel and narrow waterline are going to translate into boatspeed until you take her out there.

We sailed the boat in the Thursday night beercan series with a provisional rating of 54and breeze from 3 to 9 kts. The first leg (upwind) had us only slightly off the pace of a Club Swan 42 - impressive! As the breeze picked up they were able to take advantage of the additional waterline to leg-out on us, but in the really light stuff this boat will MOVE.

Judging by the smiles in the back of the boat, she felt great downwind too. I was struggling a bit with launching the big asym kite out of the companionway since there isn't much real estate on the bow. It's not a very typical "pit" set-up but would get easier after a few outings.

For someone that wants a real head-turner that is going to sail circles around just about anything in her size range, this is a great boat, and the price point is significantly less than some of the similar daysailors coming out of Europe. Joe, should I sign you up for one?

Summer Cruise Pictures

2009-08-19T13:42:00.004-04:00

Last week was the first really hot, 90+ degree weather we've had in the Northeast this summer, and of course I was taking the week off to go cruising. We didn't let the weather get us down though, and it was actually a great trip!

After a short sail to Port Washington to raft-up with some friends (and a lot of fenders, thanks to a storm in the middle of the night), it was off to Oyster Bay, Port Jefferson, Huntington, back to PJ, back to Oyster Bay, then home. Some friends joined me at different intervals along the way, and I did two days solo days as well. Very peaceful.

There were quite a few minor equipment failures but I'll save that post for another day - in the meantime, here are some pictures.

J/95 First Sail

2009-08-04T15:42:00.007-04:00

Last week I finally had the opportunity to sail the J/95 here on Long Island Sound, on a beautiful evening with 7-11 kts of breeze.

The sea trial was for the benefit of a J/80 owner who is considering moving up, and we had the whole family onboard - mom, dad and two grown sons. The client currently uses their J/80 as a daysailor, with a very minimal amount of racing. However, they do enjoy using the asymmetric spinnaker and love the excitement it brings.

In short, the J/95 is a perfect fit for the way this family sails. For the first time, the client's wife was able to relax and not feel "in the way" as the rest of the group tacked, hoisted the kite, jibed etc. This is where the ergonomics of the cockpit design really paid off: with the traveller on the cockpit sole and the primary winches well aft, there was plenty of room for "non-sailors" to sit back and enjoy the ride. It's a very functional and comfortable lay-out.

We experimented with the board up and down while going upwind, and in the light breeze we could barely tell a difference. Leeway might have been a bit more board up but in both cases you could trim the sails and simply let go of the wheel. A great feeling!

The only thing about the boat that isn't a fit for this particular client is the keel/centerboard arrangement. His sailing venue has plenty of depth, so a fixed keel drawing 5'6" wouldn't be a problem. J/Boats is considering making this an option, and personally I think it would be a great move.

New Listing: 2008 Beneteau 46

2009-07-29T15:44:00.005-04:00

Referrals are a broker's best friend, and I was very flattered to secure an excellent listing for this 2008 Beneteau 46 through a referral from an existing client.

I'm very familiar with the boat and sail past it all the time, so it was great to finally get onboard and see the interior. Unlike many of the larger Beneteaus, this boat has a traditional mainsail with an electric halyard winch and a "StackPack" for the main - exactly what I described as the ideal set-up in one of my first posts here. Not only does this offer a significant performance boost over in-mast furling, but the StackPack also eliminates the need for sail ties and cumbersome flaking - the main just drops right into the bag. Very civilized, and no anxiety about a furler that could jam at the worst possible moment!

Check out the full listing here.

J/95 Update

2009-07-22T12:06:00.003-04:00

Rod Johnstone's J/95 is arriving at our docks this Sunday, and we've been busy lining up sea trials for the week. I'm eager to sail the boat myself and will of course make a full report here. She recently took first place in the Off-Soundings Spring Series with a PHRF rating of 109, so we're excited to take her out for some Thursday night beercan racing.

Pricing on the J/95 varies with some of the bigger options like a carbon rig, the asym package and interior amenities. The ultimate "sailaway" price is very marketable, based on the versatility and performance the J/95 offers.

Principal Dimensions:

LOA 31.20
LWL 28.40
Beam 10.00
Draft (board up/down) 3.0'/5.5'
Displacement 6,000 lb
Ballast (Fixed Lead Keel) 2,250 lb
Cast Bronze Centerboard 200 lb
100% Sail Area 450
STL 15.34
Dspl/L 117
SA/Dspl 22
Bridge Clearance 44.8
Aux Diesel Engine 14 hp

Newport in Photos

2009-07-11T14:16:00.009-04:00

I rolled into Newport on Wednesday evening just in front of a classic summer squall. Here are some pictures from Newport Shipyard and the Hinckley facility in Portsmouth. Click on any picture for the larger version.

Incoming! Crews were scrambling to put on extra dock lines as this storm cell approached. The cranes in the foreground are on the deck of a private expedition-style motor vessel.
Roger Sturgeon's STP-65 Rosebud, drying out after Block Island Race Week.
I wish there was a better sense of scale here; the radar/satellite dome on the first spreader is about three feet across, if that helps.
Big.
Fast.

Pretty.

Busy Post-4th Week

2009-07-07T15:55:00.005-04:00

Three surveys/sea trials lined-up for this week, including a Hinckley Picnic Boat in Newport on Thursday. Day trips to Newport are getting a little old (8+ hours in the car, round trip) so this time I'm going to spend the night and hopefully go for a ride on Adirondack II.

Let's see - Newport in July (without the weekend crowd), cocktails on an 80' schooner, sea trials in a Hinckley... Tough gig, right?

23 Seconds

2009-06-30T11:08:00.008-04:00

On Saturday I competed in the Stratford Shoals race, sailing double-handed with Todd on his J/92 Thin Man. It's a 45 mile race, with a long delivery at either end to get the boat to the starting area from City Island. I'd been feeling under the weather all week so I was definitely not at full strength when we met at the boat Saturday morning.

Fortunately the adrenaline kicked in, and we knew we had a great boat and all the tools to win the race. After a close study of current models and wind conditions, we made the choice to head to the Long Island side of the Sound. It looked like about 60% of the fleet agreed with us, and the rest headed for Connecticut. We ran down the Sound in 6 to 9 kts of breeze with the jumbo kite up, holding our ground well against the larger boats that started 5 minutes behind us. But as we converged on Stratford Shoals, the Connecticut guys had come out way ahead.

Once we rounded the mark, it was a rhumbline close-hauled/close-reach course to the finish. We kept the boat going as fast as we could, finishing after 10 pm and hoping for the best. Results were posted on Sunday, and we took 2nd place in the double-handed division, only 23 seconds behind an Olson 30! Great news, all things considered, but it's tough to lose by such a slim margin. Thanks to thinmansailing.net for the chartplotter screenshot - click the link for a Todd's race report.

I was back in Brooklyn by 0200 on Sunday, then off to Norwalk at 0830 for a Sabre showing, followed by a daysail with a client and his family on their Mason 44. What a weekend!

The Right People in the Right Boat

2009-06-20T14:33:00.004-04:00

While we seem to be in the middle of monsoon season here, I was able to spend a very career-affirming and sunny day sailing with clients on Friday. I was up at 0530 to drive out to Long Island - in this case WAY out. The first stop was Orient Harbor on the North Fork, where my clients were just getting to know their brand-new Alerion Express 28. The goal was to go for a sail and make sure they're getting the most out of the boat, and also troubleshoot a few minor post-commissioning issues (a wayward lazyjack, among others).

It was calm and foggy when I arrived, but by the time we dropped the mooring we had sunny skies and a perfect 7-12 kt breeze. It was obvious that the boat has been a great addition to the family; everyone was smiling, and with 7 of us aboard - 3 adults and 4 kids - we never felt cramped. It was fantastic to know that I had put the right people in the right boat. After an hour or so of sailing around Orient Harbor (an ideal venue for the AE28) and going over the fine points of sail trim, we practiced picking up the mooring under sail and then headed in.

My next stop was Sag Harbor - two short ferry rides and a culture shift away. This time I was meeting a happy new J/105 owner and his 9 year old son. Again, after a month or so with the boat the client was SO enthusiastic about it. Clearly all his expectations were met and he was having a great time. The breeze was getting lighter but we worked our way upwind along the east side of North Haven. The one thing he hadn't done on the boat yet was fly the spinnaker, so we popped that up (with just the three of us!) and scooted back downwind in about 7 kts of breeze. After a near-perfect douse we went back to the mooring and I reluctantly drove back to Brooklyn.

It was a great day, and seeing how happy my clients were with their new boats was extremely satisfying. Sorry there are no pictures - I was having too much fun.

But I've Been Busy!

2009-05-30T13:26:00.011-04:00

OK, so maybe it's no coincidence that my blogging came to a screeching halt at about the same time that my boat went in the water, but that doesn't mean there's been nothing to report. While some of my fellow bloggers are resorting to lists, I will provide a brief summary of events in my world.

Brokerage sales continue to be strong, with plenty of inventory but few motivated & realistic sellers. Boats that are priced right continue to sell though, and I'm happy to have some great values among my listings.

New boat sales are still extremely sluggish but we're anticipating one significant deal to close next week. As with other downturns, innovation will turn this around. For example:

Hull #7 of the MJM 40z in now in production, proving there is a market for a fast, efficient 40 footer that can easily entertain 12+ on a single level pilothouse - and dock with a crew of one

The J/95 is bringing J performance to thin-water sailors everywhere; hull #5 is available so call for a test sail today

We have delivered 5 highly customized new Alerion Express this spring, and our dealer territory has just been expanded to include New Jersey to Maine

The IRC Owners Group here in Western Long Island Sound - an idea that originated at McMichael - is creating closer racing between more boats, and laying the foundation for new boats like the Summit 35

Most importantly, it's summer, the sun is out and the wind is blowing. I think I'll wrap this up and go sailing!

J/95 Update

2009-04-30T17:06:00.003-04:00

Hull #1 of the new J/95 is now in Florida for demo sails, but the folks from SAIL magazine got in a quick test sail a few weeks ago while the boat was still in Rhode Island. Click on the link for some good video and a short review.

I'm looking forward to sailing hull #2 in Stonington with Rod J in a few weeks - I hope the boat will live up to all the great things I've been hearing!

Robin Knox-Johnston Day

2009-04-21T22:30:00.004-04:00

April 20th marks the 40 year anniversary of Robin Knox-Johnston's victory in the first ever around-the-world singlehanded non-stop sailboat race. What we now call the Vendee Globe traces it roots to the Golden Globe - and that first race captures everything I love about sailing.

What is so interesting about the Golden Globe are the individual stories it holds. Robin Knox-Johnston won the race through quiet perseverence and attrition, and then came back almost 30 years later at the age of 68 to finish 4th in the Velux 5 Oceans race, in a boat that could not have been more radically different than his 32' teak Suhaili.

Chasing RKJ around the Capes was Bernard Moitessier, sailing a steel ketch with telephone poles for masts. Moitessier was ambivalent about the race to say the least, and after rounding Cape Horn and being in a position to easily pass RKJ on the home stretch, he decided to sail halfway around the globe again to Tahiti. Nevermind the prize money, wife or stepchildren that were waiting for him back in France.

And in the midst of all of this, Donald Crowhurst is sailing in circles off of South America, making false position reports and slowly going mad. His boat would eventually be found, including a logbook documenting his unraveling.

Read more about Robin Knox-Johnston at Adam's blog, Messing About in Sailboats - he'll give you the full story and lots of great links. And take it directly from the Horse's Mouth - Joe is a fellow Moitessier fan and offers up some primary source material.

I consider Moitessier's The Long Way, which chronicles his experience of the race, to be required reading. For an excellent narrative on the Golden Globe, see Peter Nichols' A Voyage for Madmen. Pick these up from Bluewater Books/Armchair Sailor and you'll be supporting a great business.

April is J105 Month

2009-04-15T15:42:00.005-04:00

There has been a lot to blog about lately, but I'm in the middle of 5 deals right now - a welcome change of pace. All the buyers are getting great deals that wouldn't have happened a year ago, and all the sellers have been realistic in their asking price and negotiations. However, these aren't "fire sales" - values are off by less than 10% vs. last year.

What I find really interesting is that 4 of these 5 pending deals are on J/105's! I guess people still want a boat that is fun to sail, exciting to race and easy to own!

The Pre-Purchase Marine Survey

2009-04-04T14:21:00.003-04:00

I’ve been busy showing boats and writing contracts over the past 10 days – a refreshing change that has unfortunately slowed down my blogging a bit. Since I’ve been helping some clients set-up surveys, I thought I would share some thoughts on that topic.

Once a buyer and seller have agreed on an asking price and signed a contract, the pre-purchase marine survey is the next hurdle to clear. Similar to a home inspection, the survey is done by an expert working exclusively for the buyer, so that he can provide an objective and technical evaluation of the boat’s condition. Even if the boat you’re buying is less than a year old, your insurance company is going to want to see a survey.

When it comes to choosing the right surveyor, I always advise my clients to seek-out referrals, rather than just choosing blindly from a directory. If you’re working with a broker that you really trust, he can provide you with a list of surveyors that are well-respected in the field. When I do this for my own clients, I include the caveat that they cross-reference the names I give them instead of just “taking my word for it.” Yacht yards, owners, and online owner’s groups are all great places to ask about a particular surveyor’s reputation.

The three criteria to consider when choosing a surveyor:

- has experience with the make of boat that you are purchasing
- accredited by SAMS or NAMS
- is able to communicate clearly, answer your questions, and explain what you should expect from the survey

The best surveyors have first-hand knowledge of the enitre build history for that model or manufacturer, and a technical or engineering background. Expect the survey to report major structural/operational problems with the boat, engine, and related gear. Here are the headings you are likely to see in a surveyor's report:

- inventory of equipment found onboard
- hull composition and structure
- propulsion and machinery
- tankage and plumbing
- rigging
- electrical systems
- electronics/navigation equipment
- head
- deck equipment
- safety equipment
- summary of findings/recommendations

After the Survey

Ideally, the survey report will come back with no major issues, and both parties will proceed to the closing. But sometimes there is a more significant issue that prompts the buyer to ask for a concession – a reduction in purchase price, or repair/replacement of the problem. At this point, the seller can walk away from the deal, or make the concession (a broker can be very useful in helping both parties resolve the issue).

Cost

Here in the Northeast, the top surveyors might charge as much as $20/foot, which includes the out-of-the-water portion of the survey and the sea trial. The process usually takes most of the day, but for complex boats over 45’ it can be a two-day affair. The buyer will be responsible for any yard charges, include a "short-haul" and power wash to facilitate inspection of the bottom.

I have two surveys taking place over the next 6 days - it will be a busy week!

Spring?

2009-03-28T15:15:00.002-04:00

The yard was launching boats this week, and a few of those boats even went sailing. I've been busy with showings, but unfortunately nothing solid is in the works yet. Looking over my records since January, I see that I've written up six offers so far this year, none of which have been accepted (for various reasons). Not a big surprise in this climate.

Luxury Tax Update: Take Action Now

2009-03-19T12:51:00.003-04:00

Governor Paterson's proposed 5% tax on boat sales over $200,000 remains on the table, and if you're a NY state resident, now is the time to contact your state representative (see contact info below).

As I've written here before, this tax is only going to take money out of the state's coffers by discouraging yacht sales. That means less work for boat yards, less work for manufacturers, the list goes on. Here, courtesy of Howard McMichael, are six reasons why the tax is a bad idea:

1. The previous federal luxury tax in the early 1990s of 10% proved people stop buying boats when taxes drive the price beyond what they are willing to pay. It was repealed because it failed miserably.

2. When a buyer adds the luxury tax to the sales tax the effective tax is 12-13.6% depending upon where the buyer lives. Buyers will wait until it is repealed or simply invest their money in competing lifestyle experience.

3. The luxury tax will eliminate sales that would produce sales tax revenue causing sales tax revenue to decrease by more than the amount collected by a luxury tax producing a NET LOSS of taxes.

4. New boat owners spend more money maintaining and upgrading their boats than do people with old boats. This directly affects thousands of employees and hundreds of businesses in the marine service industry thru-out the state.

5. These same businesses have a vested interest in improving water quality for recreational boating and fishing. Investment in their infrastructure and water filtering will be curtailed due to lack of profits from boat sales.

6. Many new boat sales companies have 2007 and 2008 inventory in stock with bank loans running out. This inventory has caused large companies like Brunswick to curtail 2009 manufacturing. If existing inventory has an additional 5% added to the already distressed sale price the inventory will bankrupt many businesses. Sort of like telling General Motors you are taxing car sales to help them move product.

Find your State Assembly person quickly via zipcode:
http://assembly.state.ny.us/mem/

Assemblyman George Latimer (Westchester County):
LatimG@assembly.state.ny.us
518-455-4897 Albany office

Suzi Oppenheimer (37th Senate District)
oppenhei@senate.state.ny.us
(518)455-2031 Albany office

Spring Seminars

2009-03-18T15:48:00.003-04:00

Things have gotten pretty busy here so this will be quick, but I wanted to post a sampling of some of the seminars the local clubs are hosting over the next few weeks. Call or click for details and to confirm dates; note that most of the events require registration.

March 25th 7:30 pm Racing Tactics with Kerry Klingler (UK) City Island YC
April 8th 7:30 pm Marine Diesel and Electronics with Precision Marine City Island YC
April 15th New 2009 Racing Rules with Butch Ulmer (UK) City Island YC
April 16th 7 pm Rules with Paul Beaudin (Doyle Sailmakers) Harlem Yacht Club
April 22nd 7:30 pm Sailboat Rigging with Jeff Lazar (Performance Yacht Mgmt) City Island YC
April 23rd 7:30 pm New 2009 Racing Rules with DAVE PERRY Cedar Point YC
April 23rd 7 pm Trim with Paul Beaudin (Doyle Sailmakers) Harlem Yacht Club

What Can the Bowsprit Do For You?

2009-03-12T12:26:00.004-04:00

Last week I got the chance to hear designer Mark Mills (he drew the King 40 and Summit 35, among others) discuss the relative merits of a bowsprit with asymmetric spinnaker vs. a traditional spinnaker on a pole.

As a J/Boat guy, I’m fully onboard with the advantages of a sprit, specifically the ease of use, lower crew requirements, and increased fun factor. But Mills took a more scientific look at the advantages of either configuration under IRC in specific wind ranges.

A traditional spinnaker can operate like an asym with the pole all the way forward, however the sail by necessity has less area. With a longer luff length, an asym flying from a bowsprit will offer roughly 15% more sail area on the same boat – and IRC is pretty forgiving of this increased downwind sail area.

The final analysis? According to Mills, an asymmetrical kite on a sprit will be at an advantage at or below 12 kts under IRC; above 12 kts, the versatility of a traditional pole comes into its own. As always, individual results may vary; consult your yacht broker/sailmaker/tax advisor before making any changes to your sailing diet.

Now THAT'S a spinnaker! (King 40 at KWRW)

Luxury Tax Update: Not Much to Report

2009-03-03T15:05:00.007-05:00

Governor Paterson's proposed 'luxury tax' is still being debated in the state assembly and there is very little in the way of updates. At this point it seems unlikely that the budget will be passed by April 1. The last recorded action on the bill was on 1/21/09, when the assembly amended and referred it back to the ways & means committee. It would be helpful to know if the luxury tax portion of the bill was amended, so that we could all get on with buying our luxury cars, yachts and planes.

You can keep up-to-date on any specific bill at the website for the state assembly:
http://assembly.state.ny.us/leg/. Enter A00160A for the assembly bill number, S00060A for the senate bill number, and thank your 8th grade civics teacher.

Finally, McMichael's Sales Coordinator and all-around detail guru Tish Fontanella will be in Albany next week, and will have the oportunity to get some clarification on the status.

Some Thoughts on IRC

2009-02-19T15:30:00.008-05:00

Lately we've been spending a lot of time here at McMichael talking about how successful IRC has been for boats in the 40' + range, and contemplating whether that success will find its way to boats in the mid-30' range that are currently racing in PHRF classes. With a flotilla of new IRC optimized designs hitting the water, it's something for us to pay attention to.

The ideal handicap rating system is one that encourages balanced, versatile boats of moderate designs and controllable costs, and IRC has done a great job with this. When a rule catches on and designers try to exploit it, you can end up with boats that only serve that rule, sacrificing form, performance, and sometimes safety. But IRC avoids this pitfall, in part by keeping some elements of the rule confidential.

The IRC rule also does not play favorites with old vs. new designs. At Key West Race Week this year, the IRC-2 division had 13 entries representing 10 different designs from 37 to 46 feet. Included in this spread were designs dating back to the late '80's all the way up to brand new designs, and all were competing on what seemed to be a level playing field. Taking third place for the week was the oldest design of the season, a J/44, while two new Mark Mills designs occupied the top of the podium.

If IRC can gain a foothold in the mid-30' range, I think it will make for some very exciting and close racing, similar to what we saw at Key West this year. Stay tuned for more posts on this topic.

February Activity

2009-02-13T12:33:00.011-05:00

Last week I kept hearing this strange sound in my office: after some investigation I discovered that it was my phone ringing. Also the auspicious chime of emails landing in my inbox. Music to my ears.

It doesn't take much to come up from zero, which is about where inbound inquiries have been for the past few months, but it's great to see that some people are ready to buy boats. They are coming from all walks of life (including Wall Street), and for the most part they are expecting, and getting, great deals. Since the beginning of February I have had clients come to see my J109, J120, Beneteau 36.7 and Beneteau 331 - a pretty broad range of boats in the cruising/racing spectrum.

This is purely anecdotal, and represents only what I'm experiencing with my listings and what I'm observing at the office - I'm not trying to spin this as a rebound. But it is a step in the right direction, and I'm happy to showing boats.

Factory Visits

2009-02-10T13:08:00.005-05:00

I spent most of Thursday in Rhode Island, at Pearson Composites (Alerion Express), CCFC (new J/95 builder for J/Boats), and US Watercraft/Waterline Systems (J/22, J/24, J/105). It is always very rewarding to go to the factory and get some hands-on time with boats that are in production. It is the best way to get first-hand product knowledge, and very enlightening for clients as well.

Most of the time was spent at CCFC where Rod, Al and Jeff Johnstone discussed the new J/95, a keel/centerboard boat will draw only 3' with the board up (5'5" board down). It is another big innovation from J/Boats at a time when innovation is the only thing selling boats, and I think it will be a winner. Now sailors in thin-water venues like Barnegat Bay can enjoy J/Boat performance.

Most of the J/Boat dealers from the eastern US were in attendance, which means I was in a roomful of yacht brokers. As usual, I was about 20 years younger than the average broker.

J/95 cockpit and deck, just out of the mold

J/95 bow - notice the new engineering that will conceal the retractable sprit when not in use

Joe DaPonte from CCFC, new builder for the J/95 (he's holding a rudder)

Centerboard trunk for the J/95

CCFC - a very clean custom-built facility

Jeff Johnstone and the J/95 hull mold

An Alerion Express 33 with furniture being installed.

Alerion Express 28, ready for engine installation

The first person to correctly identify this mold wins a pony!

MJM 40z Debut

2009-02-02T15:01:00.010-05:00

Sometimes you just want to look at a pretty boat - like the new MJM 40z from J/Boats co-founder Bob Johnstone.

Beneath the pretty exterior is some real innovation. Forward-facing Volvo IPS drives with twin counter-rotating props keep vibration and engine noise to a minimum - just 75 decibels in the cockpit while cruising at 25 kts. Fuel economy was 17 gph at 25 kts, and that was with 10 guests onboard.

I'll leave the sales pitch there for now and let the picture do the talking. More info at http://www.mjmyachts.com/.

(click for larger image)

Tax Information, Part II

2009-01-24T14:05:00.005-05:00

Last month, Governor Paterson put forward his plan to overcome the multi-billion dollar budget shortfall that New York State faces over the next few years. The plan grabbed a lot of headlines for the proposed "Obesity Tax" on non-diet sodas, but that isn't the only new tax boaters might have to watch out for: the Governor has also proposed an additional 5% sales tax on boats over $200,000.

This luxury tax (which would also be applied to cars, planes, jewelery and furs over a certain value) has been implemented before on the national level, with a very negative outcome. The non-partisan tax research group Tax Foundation (http://www.taxfoundation.org/) has a succinct analysis:

Generally, luxury taxes are gimmicks that raise little tax revenue (projected at $15 million for FY 2010-11) while appealing to class warfare sentiment. A 10% federal luxury excise tax imposed in 1990 devastated the yacht industry, and employees thereof. Because yacht sales fell sharply after imposition of the tax, revenues were far below projections. Ultimately, Congress responded by repealing the tax.

The lesson of the yacht luxury tax is instructive: narrow-based taxes are more likely to have distortionary effects than broad-based ones, as it is relatively easy for consumers to substitute an untaxed purchase for a taxed one (e.g., by taking fancy vacations instead of buying a yacht, or by purchasing a used yacht made before imposition of the tax.) By contrast, income and general sales taxes must generally be avoided by earning or consuming less, which are more difficult steps to take.

It seems painfully obvious that this is a tax proposal that will only hurt the state, as consumers will spend their money elsewhere. Circumventing the tax would be as simple as forming an out-of-state corporation and registering the boat there (something your broker can advise you on).

The entire proposal is currently being reviewed by the state legislature, so if you are a New York State resident this could be a great time to call or email your senator. The New York Marine Trades Association is also working to lobby against the proposal, and will be unveiling a website to broadcast their concern. Stay tuned for more details.

Tax Information for LIS Boaters

2009-01-21T14:14:00.009-05:00

If you do any boating in NY state waters, there are some important developments in how the state is collecting taxes that could effect you, no matter where your boat is registered.

It is very common for residents of New Jersey and Connecticut to keep their boats in New York, and in this situation owners are expected to report to the NY state DMV and pay the difference between the sales tax they already paid (in, say, Connecticut) and what the sales tax would be in New York. In practice, very few owners did this or were even aware that this was required, and the state made little effort to chase down the extra revenue.

But the massive revenue shortfalls have motivated a crackdown, and the state has begun auditing marinas, yacht clubs and even boatyards. If they find a boat that hasn't paid sales tax in NY state, the owner receives a bill that includes interest and penalties. It's doubtful that they will catch everyone this way, but if they catch you it will be an unwelcome surprise. **Note that owners who have responded proactively to this bill have, in some cases, been able to negotiate down some of the penalties.

Stay tuned for an update on Governor Paterson's additional 5% "luxury tax" on yachts over $200,000.

A New President

2009-01-20T21:00:00.005-05:00

Today is a day that many of us have been anticipating for months, or even years. Politics aside, we have a new leader in place that might be just the kind of figure we need to guide the country through a very difficult period, someone who can lead us as we "begin again the work of remaking America."

If we need a statistic to underscore President Obama's point that our present challenges "will not be met easily or in a short span of time," I would submit that the Dow's 4% fall on this otherwise hopeful day serves that purpose. So the road ahead is looking like a long one.

Fortunately for us, the wind is still free.

Market Paralysis

2009-01-17T14:43:00.008-05:00

Last fall, as the 2008 season was coming to a close, I felt great. My second "season" as a yacht broker was a successful one, and I was happy with what I had been able to do for my clients. The economic slowdown that had been looming over the summer didn't seem to be effecting my clientele yet, and I had some great listings to keep me busy over the winter.

Then, perfectly timed with the Newport Boat Show, Lehman Brothers collapsed, taking the rest of the economy with it, finally catching up with just about everyone. Of all the challenges I was expecting with this job, I never thought I would be dealing with the greatest economic crisis since the Depression.

I am fully prepared to ride this out, and while the frustration does catch up with me occasionally, I mostly just want to adapt and move forward. The frustration comes from the current state of the boat market, which is near-paralysis. Sellers aren't willing to drop their asking prices any further, and buyers think that everything is overvalued and the market is going to reset. In my view, there is some middle ground and it requires buyers to realize that a good deal is not always 50% of the asking price (see earlier post).

I am 'buoyed' (sorry) by a few clients that are realistic and ready to take advantage of the buyer's market, and I'm also lucky to have had some deals come together over the last few months. But I will be very happy when the market - and the water - warms up.

The Donation Option

2009-01-09T15:47:00.008-05:00

With the donation this week of Jim Swartz's STP-65 Moneypenny (at left - stop drooling) to a maritime college here on LIS, yacht donations are suddenly getting a lot of press. When you give away a multi-million dollar boat just 6 months after it is launched, you're going to get some attention.

I handled a J/35 donation for a client two summers ago that was a real win-win, and it is an option I always discuss with my clients that have hard-to-sell boats. To be clear, donation is a last resort, but if we've exploited all of our other options, it is one that can work out well.

For an owner, the tax write-off is the central issue, and this is where you need to be careful (and have a broker representing your interests). Many organizations that solicit boat donations will immediately turn around and sell that boat for a fraction of it's value, usually on sites like eBay. In this scenario, the donor can only legally write-off the selling price of the vessel. Not a positive outcome.

The far better scenario for the donor is to donate the boat to an organization that will use it for a minimum of three years (it's called "significant intervening use" in the tax code). This allows you to deduct the full appraised value of the yacht as determined by an accredited surveyor - a figure which is usually much higher than what you could actually sell the boat for on the real market (think asking price vs. selling price).

Most often the organization is a maritime school that relies on a sailing program to teach skills like seamanship, teamwork and leadership. If you've done major regattas then you've probably raced against donated boats run by midshipmen. As a donor, you get the enjoyment of seeing your old boat out there on the racecourse with a full crew of enthusiastic kids.

So should you still be working with a broker? Absolutely. Good brokers have long-standing relationships with the maritime colleges, and more importantly we can manage the whole process and make sure you have all of the necessary documentation from the school to satisfy the IRS. The school will typically pay a small commission to the brokerage, but that has no effect on your write-off.

Finally, if you are trying to sell your old boat so that you can upgrade, the donation option is especially appealing right now, in that it allows you to take advantage of an extremely strong buyer's market.

If you want to talk specifics or you think this might be right for you, feel free to get in touch.

Warren Miller Sailing Video

2009-01-08T11:00:00.003-05:00

Here is a great short film Warren Miller made on yacht racing in the 1980's in Newport, RI and San Francisco, CA. The boats don't seem quite so "state-of-the-art" now, but many of the competitors are the same.

Part I:

Part II:

Part III:

Furling Mainsails

2009-01-06T14:41:00.014-05:00

Since the dawn of time, Mankind has debated the relative merits and weaknesses of in-mast roller furling mainsails.

Ok, maybe not since the dawn of time, but if you get a few sailors together and ask them to debate this topic, you will likely get some very strong opinions. The system was originally conceived by our sport's Chief Innovator, Ted Hood, and hasn't changed much since. In my days as a Bareboat Cruising instructor for Offshore Sailing School, I taught students to use Selden's version of this system. While it saved us the hassle (is it really a hassle?) of dealing with the mainsail cover and attaching a halyard each time, it was a complicated system to operate correctly. And new sailors that are stepping up to a cruising boat have enough complications to deal with already. But even for experienced sailors, there are some problems to consider.

The most obvious liability is the potential for the sail to jam in the mast. This usually happens when the sail is about half-way out - exposed to the wind but with enough material on the spool to jam. And then what? Well, dropping the halyard is certainly not an option at this point. If it's not too windy and you have some searoom and crew, then you can probably work the furling line and the outhaul for awhile and clear the jam. But usually you're having the problem in the first place because it is already windy.

I had a client that chartered a boat in California to sail out to the Channel Islands a few years ago. On the way back the wind built quickly while they were on a broad reach. When they tried to reef, the sail jammed fast going into the mast, started flogging in the 30 kts of breeze, and quickly tore itself to ribbons. Of course this doesn't happen all the time, and prudent seamanship might have prevented it in this example, but I would say prudent seamanship also means keeping your boat's most vital systems as simple as possible.

Beyond the horror stories, I have a few simple gripes about the system:

they require you to operate two lines (furler and outhaul) at once, as opposed to just a halyard

the larger mast section and spool adds a substantial amount of weight aloft, raising the vertical center of gravity (VCG) and making the boat more tender

limited control over sail shape (especially the draft and leech tension)

On big heavy cruising boats like a Beneteau or Island Packet, the performance sacrifice from the higher VCG and inability to adjust sail shape is negligible. So if that's the kind of boat you're shopping for, then a furling main might make sense for you.

But there are some great alternatives, and if the boat you're thinking about is one that has some performance potential, you owe it to yourself (and the boat) to consider them. I'm working with a client now who is considering, among other options, a Sabre 386. A great boat, and one that would absolutely benefit from a traditional main. But this client often sails short-handed, or with non-sailing friends, or with his young family. Here is how he can set-up the main to get the best of both worlds:

install an electric halyard winch

make sure you have good ball-bearing slides at the mast (this eliminates the friction that makes it hard to drop your main)

install Lazy Jacks or a Dutchman system - these contain the sail as it goes up and down

have a StackPack installed - when you drop the sail, it goes right into a bag/cover that's permanently attached to the boom, then you zip it shut and you're done

Newer, higher-quality boats usually have at least two of the 4 items above - in this case the particular boat we're considering has everything but the StackPack.

Finally, if you want to make it even easier, the latest in-boom furling systems, though expensive and somewhat complicated, have virtually none of the liabilities of in-mast furling and all of the benefits. I've worked with a few clients that had the LeisureFurl in-mast system retrofitted and they've all been pleased with the results.

Firesale? Well, not exactly...

2009-01-02T16:07:00.001-05:00

So we've put 2008 behind us and it's time to look ahead to a New Year - something I think we're all ready to do. There's no doubt that the changes in the world over the past 6 months have had a sizable effect on the sailing community, and the climate for buying and selling boats is dramatically different than it was even 6 months ago.

However, deals are still happening, and there are some exceptional values out there for anyone that is buying. Pricing is determined largely by inventory. If you are selling your boat and there are several other sisterships on the market in your region, you should be prepared to negotiate; otherwise you're just wasting your time. Buyers that are shopping for a mass-market production boat will be able to get some fantastic deals over the coming months.

On the flip side, if you're shopping for a specific model and there are only one or two available in your area, a seller is not going to be motivated to accept the first offer that comes along. If it's a boat with a strong resale value and a good reputation, chances are the owner loves it and is content to hold on for a worthy offer.

So when will the market get back on its feet? I was hoping you could tell me. But it will. If you're reading this blog, then you know what it's like on the water. There is a feeling out there that can be found nowhere else, and the economy can't touch that. As life gets more complicated, the idea of being on the water with family, with friends, or alone is only going to be more appealing.