Rejected local bidders decry marina money going out of state

Tennessee company gets deal for 25 years with extensions to 45 years

BUFFALO, N.Y. (WIVB) — John Skipper represents Cape Harbor Development, a group of local slip holders and businessmen.

“We were obviously disappointed,” Skipper said.

Rob Smith is the sales manager for Smith Boys Marine Sales — a local company that’s been operating and building marinas throughout Western New York since the 1960s.

Rob Smith
Rob Smith

“It doesn’t sit well,” said Smith, the fourth generation member of the family business.

Both made proposals to operate the small boat harbor on Buffalo’s waterfront, but lost out to Safe Harbor Development, a Tennessee-based company.

Smith and Skipper are not happy that the State of New York chose an out-of-state company over local interests for the marina which has 1,037 slips making it the largest in the state. It’s also the focus of the Buffalo Harbor State Park on lakefront property now under state control.

“We wrongfully assumed Empire State Development was about Western New York and Western New York businessmen and promoting that business,” said Skipper who organized the group to operate the marina.

Rob Smith says his company spent months putting together what he calls a competitive proposal to operate the marina and keep the money local. While their capital outlay was $8 million compared to the winning’s bid’s “approximately $10 million,” Smith said, “We feel we can accomplish more with less money than they can because they have to outsource all of the labor.”

Smith’s bid also included a role for Tucker Curtin, owner of Dug’s Dive, the restaurant now on site. Smith said they had plans for the restaurant to be renovated to include a food delivery service for boaters.

“The money that stays here gets spent here which makes everything better for everybody whether it’s in the marine industry or not,” said Smith.

Under the deal with New York State, Tennessee-based Safe Harbor, which will invest $10 million in capital improvements in the first five years, has the rights to operate and develop the small boat harbor for 25 years with two extension options that would extend it to up to 45 years.

“For the next 25 plus years the money from the slip holders will be filtered to Tennessee,” Skipper said.

John Skipper
John Skipper

But Empire State Development regional president Sam Hoyt says the state held an open competition and thoroughly analyzed each bid before negotiating a lease with Safe Harbor.

“Their experience running municipal and government marinas was greater than all of the rest,” Hoyt said.  “They have a body of work we could review and analyze and compare and contrast and it really is exceptional.”

While he personally would prefer to go with a local developer, there was no opportunity in the analysis to give extra points to locals, he said.

“It was an open competition and we had a review panel that analyzed inside and out all of the pros and the cons of the various proposals and it was unanimously decided that Safe Harbor was head and shoulders above the rest,” said Hoyt.

That’s not to say the others were bad but Safe Harbor’s was so good in terms of their proposal and in terms of their experience.”

Of the four bids, Safe Harbor’s was the only one where all of the parties are from out of state.

Smith Boys Marine Sales owns or operates five marinas with some 1,100 slips in Western New York. Smith Boys, which is based in North Tonawanda, operates the 300-slip marina at Erie Basin.

The fourth bid came in as a joint venture between Westrec Marinas, the nation’s largest marina and Delaware North to take over operation of the Buffalo marina for a fee of $100,000 for 2015. During that time, the companies offered to come up with a plan to reconfigure the marina, streamline operations and finance the improvements.

Westrec, based in Encino, California operates 30 properties including marinas in Chicago and Miami. Delaware North is a Buffalo-based sports, gaming and hospitality industry company.

A spokesman said the firms decided they needed more time to come up with a development plan.

Skipper’s group included members with marina and boating experience but who had never developed a marina. One of its members managed the small boat harbor under the NFTA.

Skipper said he had secured a line of credit from a local bank and would have gotten more financing once they secured a long term lease.

Hoyt said he especially liked that Safe Harbor has done housing and hotel development along with marinas and restaurants. He showed Campbell other opportunities in Buffalo and Niagara Falls.

“We want that outside investment and it was a fair competition,” he added.

While it’s preliminary, Campbell said he was interested in other possibilities. To be on the ground floor of Buffalo’s revival “is about as exciting as anything I’ve been involved in,” Campbell said.

Not only were they not selected to run the marina, but Rob Smith said he doesn’t think his company was given the same consideration as Safe Harbor.

He points to a Facebook message on Feb. 9 when Hoyt praised the selection of Safe Harbor and said he had spent “considerable time with Darby Campbell over the past two days and I can tell you he is extremely excited about being part of the momentum that we are seeing in our region.”

“He never called us or knocked on our door or asked us any questions about our proposal,” said Smith.

When asked by News 4 Investigates,  Hoyt said his meetings with Campbell were after they had been selected. The board of the Erie Canal Harbor Development Corporation approved the selection on Feb. 9.

He said his job includes all economic development and he was anxious to show Campbell opportunities in Buffalo and Niagara Falls.

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