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Moreover,
the value of his two-bedroom condominium on the waterfront here is enhanced
by the availability of a dockominium so close by, realtors say. On the
other hand, recent history has shown that in hard times investors may
flee from the marina business.
Half Moon
Bay Marina began converting its 173 slips to dockominiums this spring
after the offering plan was accepted by the state in March. Almost half
of the slips have already been sold. Marissa Piesman, an assistant attorney
general, said that dockominiums fell under the same legal category as
condominiums. Condos, dockominiums, co-ops and homeowners' associations
must be registered with the state attorney general's office in New York.
David Plotkin,
who owns the Half Moon Bay Marina, paid $715,000 for the property —
which includes nine underwater acres and less than an acre of shoreline
— at a Federal Deposit Insurance Corporation auction in 1994. The
property had been owned by James Harvey, the original developer of Half
Moon Bay Condominiums next door. Mr. Harvey defaulted on his mortgages
for the marina and the condos during the recession of the late 1980's
and early 1990's, as did many real estate investors at that time.
The condo
project, a separate business entity that has seen a number of development
proposals in the last decade, is being completed by Spectrum Skanska of
Valhalla as Discovery Cove at Half Moon Bay.
In the late
1990's, as the economy flourished again, the dockominium concept regained
popularity, particularly in Florida, North Carolina and California. But
in New York, the only other dockominium is the Anchorage Yacht Club in
Babylon on Long Island. That one was formed in 1985, along with several
others that subsequently failed, according to the attorney general's office.
Howard G.
Sheldon, a financial specialist in Roanoke, Va., with First Union National
Bank, which handles many mortgage applications for boat slips, predicted
the dockominium concept would take off this time around — "especially
since we're only four or five years away from the baby boom retirement
era."
"Boats
are a great leisure time activity, people need places to keep them, and
demand for slips is beginning to overtake supply," said Mr. Sheldon,
who has received about 20 mortgage applications in the last six weeks
from prospective dock owners at Half Moon Bay, many referred to First
Union by the marina owners.
Another factor
contributing to the growing popularity of dockominiums is the recent repeal
of the federal tax on luxury boats, said Diane DeNardo, an owner of the
Palmer Point Marina in Greenwich, Conn., which is the sales and service
arm for River Club of Greenwich, a dockominium complex. "In the last
two years, boats here started selling like crazy," Ms. DeNardo said.
Palmer Point, which was started in the mid-1980's and struggled in its
early years, has now sold all 110 of its dockominiums.
"For
a while, we couldn't give the slips away," Ms. DeNardo said. "Now
we have waiting lists."
Dockominium
buyers can apply for up to a 10-year mortgage — with the same tax
deductions that a conventional mortgage offers — although interest
rates of dockominium loans have been a bit higher lately than on first
mortgages for houses, running about 7.9 percent in recent weeks, according
to Mr. Sheldon of First Union. Many dockominium buyers like Mr. Shaplow,
who own condos nearby, buy the boat slips to increase the value of their
land-based property, he said.
BUT Mr. Shaplow,
like several others interviewed, paid cash for his two dockominiums.
And while
some use them solely as an investment, others buy them instead of renting
to make sure they have a place to keep their boat — especially as
waiting lists for rentals grow longer. Also, owning a dockominium allows
a condo owner to sell both at the same time to a potential boat owner.
Like a landowners'
condo group, a boat owners' dockominium association can be formed when
15 percent of the slips have been bought. Alan Rothschild, a White Plains
lawyer who wrote the offering plan for Half Moon Bay Marina, said dockominium
buyers owned the water space and the right to use a specific slip to dock
a boat. The dock area, walkway and planks constitute the common area,
much as the internal sidewalks, roadways and parking areas of a condo
do.
"It's
like buying a piece of the Hudson River and land under it, and the dock
comes along with it," Mr. Plotkin said. He said monthly maintenance
ran about $80 and covered insurance, electricity and maintenance, among
other things. Each dockominium includes a hookup for electricity, water,
telephone and cable television.
Dockominium
owners, like condo owners, are responsible for taxes.
But why have
dockominiums been popular elsewhere and so slow to catch on in New York?
According to Ms. Piesman at the attorney general's office, few marina
owners in the state also own the land under the water, and most have only
an easement to the property. It is easier, she said, to become a co-op
marina, with a corporation owning or leasing a strip of land, obtaining
an easement for use of the water and selling shares to use the docks.
Even so, there are only about a dozen of those registered in the state.
But even when
they meet all the criteria to convert to dockominiums or a co-op, not
all marina owners consider that a wise business decision.
Johanna Giacobbe,
who owns the Imperial Yacht Club in New Rochelle, a family-run business
with close to 100 slips, said: "We never wanted to convert because
that would mean giving over control to someone else, to an association.
For now, we're keeping things the way they are."
Also, in at
least one state, the concept of private ownership of an area on a body
of water is illegal. In Wisconsin, state judges halted a proposed dockominium
complex on the basis that is would block public access to the water. The
Public Trust Doctrine, a legal principle dating to the Roman Empire, guarantees
the public access to the water, holding that air, sea and shore belong
not to any one person but to the public at large. Waterfront owners have
a right to use the shoreline and access the water, and to build docks
and piers as long as the structures do not impede navigation of the river
or lake.
MASSACHUSETTS
outlawed the concept of dockominiums in 1990, but the state for now is
allowing members-only marinas, where a boater pays a fixed amount to join
a marina n return for a guaranteed spot to park his boat for 99 years.
No ownership deeds are issued to members. Existing dockominiums have been
grandfathered.
The future
of the dockominium market in New York is difficult to predict, Ms. Piesman
said. Clearly, the ability to create new dockominiums will be limited
somewhat by the requirement that the land under the water be owned by
the individual or company selling the boat slips, she said. "But
anything can happen," she added. "Judging by other creative
developments we've seen, real estate can sometimes enter the realm of
the surreal."
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