Feature: The Jewel of the Industrial Canal

Wednesday, January 14, 2004

By Larry Pearson

The Industrial Canal in New Orleans is aptly named. Connecting a tributary of Mississippi River with Lake Pontchartrain, it is much like a boulevard of broken dreams. Remnants of old shipyards, coffee-roasting facilities operating at half capacity and areas where the oil boom flourished and died dot the banks of the canal.

However, in the dozens of cream-white buildings once operated by the huge Equitable Shipyards built in the 1940's to produce the famous Higgins Boats and other craft for World War II, stands

Trinity Yachts, that has suddenly become the 800 lb. Gorilla of the megayacht business.

Trinity Yachts was once a part Friede Goldman Halter Company, that corporate experiment that proved you couldn't put an oilrig builder and a boat builder together and get a company that meshes together. Trinity Yachts and was one of the first pieces of the company to be sold off. It was purchased by John Dane III, former president of Friede Goldman Halter for $5 million, less that 1/3 the cost of one of the company's megayachts today.

Beginning in April 2000, Trinity Yachts began building these super boats using a small part of the Equitable facility and 150 employees. "Today, we have over 400 employees building megayachts costing from $17 to 34 million each," said Billy Smith VP of Trinity. Smith was part of a small nucleus of Friede Goldman Halter executives that Dane brought with him to start Trinity.

Trinity builds more big megayachts than any other U.S. builder. Burger Boats builds about three 85-112 ft. vessels a year and companies such as Westport and Hattaras built lots of smaller fiberglass luxury vessels. Palmer Johnson is trying to untangle the web of bankruptcy filings, multiple owners, acquisition and then sale of other shipyards. Right now they have four vessels they are trying to finish, but problems abound.

2003 was another good year for Trinity Yachts beginning with the 124-ft. Anjilis at the beginning of the year, the 150-ft. Seahawk in February, the 142-ft. Chevy Toy in October, and the 150-ft. Mia Elise in November 2003. A boat very similar to the Chevy Toy named Burna was scheduled for 2003 delivery, but interiors purchased by the owner were delayed in delivery pushing the completion of this vessel to early 2004.

In the Trinity indoor outfitting facilities are three vessels, the 155-ft. Wheels, the 156- ft. White Star and the 180-ft. Mia Elise. The 180-ft. vessel has a steel hull and an aluminum superstructure, a combination that Smith thinks will become more common on large yachts.

The just delivered 150-ft. Mia Elise and the 180-ft. Mia Elise scheduled for early 2005 completion point out a common trend among owners of Trinity Yachts. Both are owned by the same person who has come back time and again to Trinity for yacht construction.

"The 180-ft. Mia Elsie will be the fourth such vessel we have built," said Smith. "The owner starts a vessel and sells it for a nice profit, before the vessel delivers," Smith said.

Then the owner "goes to the end of the line" and contracts for another vessel. "We assume the owner of the 150-ft. Mia Elise will sail her until the 180-ft. yacht is complete and then sell one and sail the other," Smith surmises. "The 180-ft. Mia Elise is the largest steel hulled yacht built since the Depression, " Smith said. "We are talking right now to a potential client who wants a 185-ft. yacht that is 37 ft. wide, two feet wider and five feet wider than the Mia Elise, Smith said. "If we sign that contract, we will add a fourth bay to our outfitting facility, large enough to accommodate truly super size yachts," Smith added.

In another part of the huge ex-Equitable facility, Trinity has three other yachts in the aluminum fabrication area. "We now store all of our aluminum under roof, making it more accessible and more quickly identifiable," Smith said.

All three are 156 ft. long. One was started on a spec basis, but was quickly sold. The other two were sold at the Ft. Lauderdale Boat Show.

The 150-160-ft. vessels all come in under the 500 gross tons, easing manning and other requirements that would make the vessels more expensive to operate and maintain. "Maintenance and operation is a major cost consideration on these vessels, running annually about 10-15% of the yacht cost," Smith estimates.

The owners of these vessels don't sail on them as much as they rendezvous with them. "Often an owner will fly on his private jet and meet the vessel in a port close to an airport and spend a few days on the vessel before flying back to his business, Smith said.

Chartering is very common in this business, since the owners are not on the boats 52-weeks a year and keeping the crew busy is a major objective. Prices are "pricey" to say the least. "Lease rates for a week for one of our 150-ft. vessels may run from $135,000 to $150,000. "The owner of Chevy Toy recently turned down a rate of $250,000 for Christmas week, " Smith reported.

"The one thing most of our owners all have in common is they have made, not inherited their wealth," Smith emphasized. They are in their 40's and 50's and operate very successful on going business such as car dealer ships, various business enterprises and we even have a very successful inventor as one of our owners," Smith recalled.

"These multimillionaires have everything they could possibly want but time. That's why many of then buy an almost completed vessel…not wanting to wait 18-24 months for their "dreamboat" to be delivered from scratch," Smith added.

The about to be delivered 142-ft. Burna is a typical Trinity Yachts is you can call any of these super luxury boats typical with completely custom interiors and window sizes and shapes.

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