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November 12, 2024

Article Chula Vista Press Releases San Diego CA

Marine Group Boat Works Activated as San Diego’s Newest Foreign Trade Zone, Only Dedicated FTZ for Luxury Yachts in California

Designation allows foreign-flagged vessels to be marketed to U.S. buyers while moored at local marina and shipyard without paying substantial import duties

SAN DIEGO (November 12, 2024) – Marine Group Boat Works (MGBW), a family-owned marine construction and repair company operating a shipyard in Chula Vista, Calif., and the Fifth Avenue Landing marina in downtown San Diego, has been activated as San Diego’s newest Foreign Trade Zone (FTZ), and the only FTZ dedicated to luxury yachts in California and the Southwestern United States. The new FTZ provides an attractive West Coast location for foreign-flagged vessels to be legally marketed to U.S. buyers without having to pay hefty import duties and other required fees as soon as they enter American waters.

“Typically, if a foreign superyacht owner wants to market to American buyers, they must pay about 1.5% of the value of the vessel in Customs import duties and fees upon entry to the U.S. On a $50 million yacht, that’s $750,000 before they even know if they will be able to find a buyer,” said MGBW President Todd Roberts. “Now, they can come to San Diego, moor their boat, start showing it to potential buyers, have maintenance done, and even leave with it temporarily to attend boat shows, all without having to worry about taking a major financial hit before a sale is made. That’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.”

The City of San Diego is the Grantee/Administrator of Foreign Trade Zone No. 153, which currently includes 11 operators secured under the direct supervision of U.S. Customs and Border Protection (CBP). MGBW worked closely with the City, CBP and FTZ consultants at J.P. Reynolds Company Inc. over the last 12 months to complete the rigorous approval and activation process to operate its two FTZ sub-zones on San Diego Bay, a 15-acre shipbuilding and repair facility in Chula Vista and a 12-slip boutique superyacht marina in the heart of downtown.

“Customs and the City of San Diego have been very enthusiastic in their support of this project,” said Reynolds.  “Marine Group Boat Works has made a substantial investment in creating a unique opportunity for the yachting community on the West Coast.”

 

FTZs for Yachts

Foreign-Trade Zones (FTZs) are secure areas located in or near CBP ports of entry, where goods can be imported, stored, and processed without being subject to the usual customs duties and regulations. The purpose of the FTZ is to encourage international commerce, stimulate economic growth and promote American competitiveness by providing duty and tax benefits, as long as certain conditions are met.

Owners of foreign-flagged vessels are prohibited from engaging in commerce or trade while on U.S. soil or in American waters unless they pay for them to be imported. If they wish to show the boat to a potential U.S. buyer, they must move the boat at least three miles offshore (into international waters) or enter a designated FTZ for yachts to avoid the duties and fees. Until now, these FTZs were primarily in Florida, Rhode Island and Washington.

MGBW is recognized worldwide as the premier superyacht refit facility on the West Coast, with approximately one-third of its business devoted to this sector. Its FTZ designation will allow it to better serve its international customers by providing an additional level of convenience and service, while also opening the door for bringing new business to the region.

“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,” said Roberts. “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. We have everything they need within minutes – the marina, downtown, the shipyard and the airport. Everything is turnkey and convenient. We think the yachting community will be excited to have this new option available in California.”

 

Economic Impact of Superyachts

The global superyacht industry is valued at over $35.9 billion, supporting over 6,000 companies, roughly 260,000 jobs and an economic contribution equivalent to nearly half of the entire cruise line industry. While superyachts are large (generally between 120 and 200 feet long), the businesses they support are mostly small. Approximately 80 percent of superyacht businesses have fewer than 80 employees.

According to the U.S. Superyacht Association, big boats also mean big business for the local economy. Just one 180-foot vessel generates over $4 million in expenditures each year, including $1.4 million in maintenance and repairs, $400,000 in fuel, $350,000 in dockage and port fees, $110,000 in food and beverage provisioning, and $250,000 injected into the local economy by guests and crew.

A 2002 study in Florida found that every $1 in yacht repairs translates into $7 for the local economy. Studies by the Maritime Industries Association of South Florida calculated an economic impact of $12 billion annually for their local economy. Following this same formula, MGBW estimates it has made a $1.2 billion impact on the San Diego economy since openings its superyacht facility in 2007.

 

About Marine Group Boat Works

Marine Group Boat Works is a family-owned, full-service maritime vessel construction and repair company with two waterfront facilities, on San Diego Bay and in Los Cabos, Mexico. Its largest shipyard in Chula Vista, Calif., encompasses one million square feet, with over 2,000 feet of dockage and a new 820-ton variable-width boat lift, rough terrain cranes, a machine shop, metal working equipment and a propeller shop. Its sister boatyard in San Jose del Cabo features over 300,000 square feet of land and water, with a 150-ton and 75-ton variable-width Travelift. Between the two facilities, MGBW employs over 200 ABS-certified welders, shipfitters, pipefitters, mechanics, electricians, painters and other boatbuilding and repair specialists. For more information, visit www.marinegroupboatworks.com.

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