In 2006 Shilshole Bay Marina was undergoing unprecedented renovations. As with all renovations, this included substational demolition work as well. Despite the barely livable conditions under which we were forced to live, the Port Of Seattle approved, substational moorage rate increases. What follows is the exchange between Gail and the Shilshole Bay Marina management.
Letter to Shilshole Bay Marina, March 24, 2006
To: Ms. Darlene Robertson, Port of Seattle - Shilshole Bay Marina
Dear Ms. Robertson:
I write to express my grave disappointment at the decision to increase moorage rates at Shilshole Bay Marina by 5%, effective May 1, 2006. Ironically, the same letter which informed us of our new moorage rates contained, on the reverse side, an expression of the marina’s gratitude for our understanding and patience during the construction this past year.
Dwight Kruger and I waited for over a year for a liveaboard slip at Shilshole. We moved into Slip A-06 in mid-March 2005, just before construction began. We scheduled a party/cruise for 20 people to celebrate my daughter’s college graduation in June. The week before the party, construction closed general parking in the South lot – eliminating any convenient guest parking. We personally endured minimally-available parking during the entire summer as we competed with seasonal users for the few available spots. We have endured power shut-downs, water shut-downs, loss of telephone/internet service, and various other inconveniences during our first year at Shilshole. These are just the highlights from the past year. We have not yet had to endure demolition work that we will inevitably experience with respect to the Tribal Float and B Dock.
We put up with all that is attendant to living in a construction zone, yet we personally anticipate little or no benefit from the construction. The only "improvements" to our dock will be taking away our telephone service – which provides our internet access – forcing us to use cable as the only available alternative, and the addition of 100 amp, three phase power, which is of no use to us. While the construction will result in a nicer location overall, even the "addition" of a restaurant is an illusory improvement, as Anthony’s is already located down the street. And, while not wanting to complain about A Dock being the underprivileged step-child in the marina, I note that it appears to be the only dock that does not have bicycle storage, yet we are not permitted to store our bicycles on the dock next to our boats.
I am formally requesting identification of the comparator data that was used to determine that a 5% increase was reasonable. It is my strong belief that none of the data relates to a marina undergoing the level of construction underway at Shilshole. Frankly, rather than increasing our moorage rates, the Port of Seattle should, at the very least, hold them at pre-construction levels until we start to see some tangible benefit or, at the very least, until the construction-related nuisances abate.
Please feel free to call me to discuss these matters. I look forward to your response.
Very truly yours,
Gail M. Luhn
Letter From Darlene Robertson, Shilshole Bay Marina, Dated March 29, 2006
March 29, 2006
Dear Ms. Luhn:
Thank you for your e mail letter of March 24, 2006.
I am sorry for the inconveniences you are experiencing as a result of the construction activity at Shilshole, especially after waiting for a slip for over a year. Unfortunately you arrived just before construction began on a major overhaul of the 40-year old marina.
We decided to keep the marina open during the extensive construction of landside and waterside infrastructure and do our best to accommodate customers within the marina, rather than shut down. With the shortage of moorage in the region, we felt that would be a much greater hardship for our customers; this is feedback we also received from boaters. We did create a "coming home" wait list for those that did not want to moor here during construction, and a few people have taken advantage of that list.
We do think that impacts will be reduced this year as the majority of landside construction nears completion, although work in the water will continue through 2008 as we proceed with a 3-phase rebuild of the 23 docks. As you noted, there will be further impacts to your area as we upgrade electrical on your dock and begin the rebuild of B dock, starting approximately late summer. We are communicating in advance as best we can so that our customers can plan around the construction activities as best possible.
You are right that there will not be significant changes to A dock, other than electrical work, since the entire dock and the large public pier/breakwater were rebuilt several years ago. However, I believe you will find the changes to the entire facility to be an improvement. As to your other comments, the owners of the new Anthony’s at Shilshole are planning a different type of venue from the one down the street so that it better matches the needs of the boating community, and unfortunately, you are right in that we will not be installing bicycle storage. There will only be a few bicycle racks on the landside but unfortunately it is not the bicycle storage that exists on docks today.
Finally, you asked about our decision to raise rates and the comparison data with other marinas. The Port’s policy is to set rates at market. We conduct an annual review. There is not a scientific formula we use for determining market. We look at factors such as occupancy, vacancy and rates at the nearby Elliott Bay Marina as well as occupancy and demand at Shilshole. The decision to raise rates was to remain at market and not lag behind and that is why we did not "hold them at pre-construction levels" as you suggested. We have been providing discounts to moorage customers who cannot access or use their vessels or when they are required to raft their vessels due to construction. I would be happy to talk to you in person if you have further questions about rates.
Also, we provide on the Port’s internet site weekly project updates. If you would like to sign up visit: http://www.portseattle.org/. Click on email updates box on left of page then check box for Shilshole Bay Marina Construction. Also, you can contact the project manager, Anne Porter at 728 3133.
Again, I apologize for the inconveniences you have experienced due to the construction activity. Please know that we do appreciate your business and hope that you will continue to be with us well into the future.
Sincerely,
Darlene Robertson, Director, Seaport Harbor Services, Port of Seattle
My Response Dated April 7, 2006
April 7, 2006
Dear Ms. Robertson:
Thank you for your letter of March 29, 2006. Respectfully, I note that your letter fails to provide any specific information or data that was used to decide that Shilshole’s moorage rates would increase by 5% on May 1, 2006. Your letter simply states that it is the Port of Seattle’s policy to set moorage rates "at market," and that you "look at factors such as occupancy, vacancy and rates at the nearby Elliott Bay Marina as well as occupancy and demand at Shilshole." Rather than answering my question, this vague response unfortunately generates even more questions.
It was reported to the Port Commissioners that Shilshole Bay Marina’s occupancy rate was 93% in 2005; exceeding its goal of 90% occupancy. If occupancy rates exceeded goal, shouldn’t that result in lower moorage rates? Has occupancy subsequently declined? If so, how did this affect the decision to raise rates? If occupancy has dropped, has occupancy declined because of the construction (i.e., are people leaving because of the inconveniences or the elimination of 89 slips)? If so, why is the Port not honoring its pledge to not raise moorage rates as the result of the construction? And how is "demand" determined? Is this based on a waiting list and, if so, does this include those on the "coming home" wait list? Or is "demand" measured by the fact that many of us remain, despite the increased moorage rates, the "inconveniences" of construction, and the current poor condition of facilities? I would appreciate information regarding Shilshole’s current and historic occupancy rates (preferably on a month-by-month basis for the past two years) and the same information about wait lists, with those on the "coming home" list clearly differentiated (if they are included as part of the overall wait list).
As to the use of Elliott Bay Marina as a comparator, how was it selected for comparison? I contend that while Elliott Bay has 1,200 slips compared to Shilshole’s 1,500 (to be reduced to 1,411), that is where the comparison ends. In addition to the overall aged condition of Shilshole, it suffers by comparison when services and amenities are considered. For example, Elliott Bay Marina provides: telephone and cable service as part of their monthly moorage fees, concierge services, slip-side pump out, pick-up and disposal of hazardous waste, testing/certification for electrolysis (it is certified as an electrolysis-free marina), a premier restaurant and a casual dining option. http://www.elliottbaymarina.net/amenities.htm In contrast, Shilshole does not offer comparable services and amenities: Shilshole’s telephone service is being eliminated (where it presently exists, the slip occupant pays Qwest directly); cable is not presently available, but when it is installed slip occupants will pay separately for this service as well; while Shilshole’s office staff is always friendly and courteous, their job duties do not include providing concierge services to marina occupants; slip-side pump-out at Shilshole must be arranged through private vendors; the oil disposal station at the south end of the marina is unusable and has been since before the construction began, and I am unaware of any ability to request that hazardous materials be picked up from our slip; Shilshole does not perform electrolysis testing or certify the marina as electrolysis-free (and is reputed to have high levels of stray electrical current); and, finally, we don’t even have vending machines, let alone two on-site restaurants.
Given the disparity in services and amenities between the two marinas (now and as proposed improvements are completed), and the difference in moorage rates and what is included in the moorage fees at each marina, how is it possible to use this data in a reliable manner? Moreover, how does one determine the "occupancy" rates or determine "demand" at a private marina? If you have access to that data and it was used to determine 2006 moorage rates, I would be interested in obtaining that information.
Based on the absence of actual data, I am unable to conclude that the increased moorage rates are the result of any rational analysis. Did the Port ever stop to consider that the increased moorage rates exceeded the rate of inflation and outstripped the growth of the Consumer Price Index ("CPI") over the past year? CPI data may be seen at http://www.bls.gov/cpi/, and it is not difficult to understand. The overall rate of inflation in the past year was only 1.71%. In addition, the CPI rate of increase in the past year (3.6% for all items, including housing, and only 2.1% for all items less food and energy costs) seems to provide a more reliable gauge for evaluating an appropriate level of moorage rate increase than does a subjective comparison with a single, non-comparable marina. Taking the CPI and the rate of inflation into account, it certainly appears that an increase of 5% is excessive. Is there some reason neither the CPI nor the rate of inflation were used as factors in making your decision? If not, shouldn’t this be a consideration?
Finally, please advise whether there is a process to initiate a review of the decision to increase moorage rates and/or the amount of increase. I was unable to find anything in the Port Commission minutes approving these new rates, or to identify who actually approves new rates, making it very difficult to impact the process either at inception or conclusion.
Thank you for your continuing courtesies in this matter, and I look forward to your response. In the interim, please feel free to call me to if you have any questions.
Very truly yours,
Gail M. Luhn
cc: Sharon Briggs, Anne Porter, Giuseppe Alvarado
Darlene Robertson’s Response Dated April 22, 2006
April 22, 2006
Dear Ms. Luhn:
I am enclosing material you requested in your April 7 letter concerning the moorage rate increase at Shilshole Bay Marina. As you can see from the enclosures, our historical occupancy rate has been very high. We expect a drop in occupancy during construction as we hold slips out of service to accommodate boats displaced by the demolition of docks. We continue to have waiting lists for various slip sizes as there continues to be significant demand in the Seattle area for saltwater moorage outside the Locks, particularly at a marina like Shilshole with its ideal location, good maneuverability in and out of slips, variety of services and availability of liveaboard moorage which has become limited.
The Port Commission delegated to marina management the authority to set moorage rates at market, not to the Consumer Price Index. There is no formal Commission action required although Commissioners do review annual rate increases. There is no specific appeal process. As mentioned, demand for moorage remains high throughout the Seattle/Puget Sound area. Despite construction we feel rates need to continue to keep pace with the market.
The 3.5 percent increase for most slip sizes is necessary to keep us near the market, and incidentally, is very close to the Seattle area CPI last year (Oct.). The rate increase for the largest size boats will be 5 percent, reflecting the higher demand for slip of these sizes and less supply. With the new docks we will be building more of the larger size slips in order to meet the changes in the industry and demand for this type of moorage. We do look at moorage rates at Elliott Bay Marina, which are posted on their public web site, as part of our analysis. We feel they are the best comparison in size and location in the market. You might be interested to know that our rates are significantly lower than Elliott Bay Marina for slips the size you require.
We are concerned about the inconveniences you are experiencing during our reconstruction period, but we are looking forward to a real benefit at the end of the construction, and will look for ways to improve our services. We hope you appreciate the difficulty of keeping the marina open during reconstruction, and note that the alternative of closing down during construction would be many times more inconvenient to our customers because of the limited supply of moorage in the area.
I hope this additional information helps you to understand better how we set our rates at Shilshole. If you have additional questions, please call me at 206-728-3229. Thank you.
Sincerely,
Darlene Robertson
Director, Seaport Harbor Services