CJrouplnc. Cross. Feasibility Study. Market I Economic. Perth Amboy Waterfront Park?roject. Cross Group Inc. Matawan, New Jersey.

Transcription

1 Cross CJrouplnc. Real Estate: Market Feasibility Financial Services Development Consulting Perth Amboy Waterfront Park?roject.. Market I Economic Feasibility Study. Prepared lor: City of Perth Amboy New Jersey Prepared by: With: Cross Group Inc. Matawan, New Jersey Sasaki Associates, Inc. Watertown, Massachusetts July 1982 May 1983 Final Revision P.O. Box Aberdeen Road ~ -Ma-tawan:-New Jersey 0_7747. ~ (201 )_

2 Cross I Group nc. June 11, 1982 Honorable George J. Otlowski Mayor of the City of Perth Amboy City Hall 260 High Street Perth Amboy, New Jersey Dear Mayor Otlowski, We are pleased to submit the attached report containing the results of our analysis of the Perth Amboy Waterfront Park Master Plan portions dealing with the Market/Economic Fiscal Impact and Implementation Plan. The report has been prepared in compliance with the Scope of Services outlined in the contract between Sasaki Associates and the City, dated June 1, The report is to be used in conjunction with the report submitted by Sasaki Associates, dated March, It is to be recognized the recommended Implementation Program will have a long term positive effect on the City despite the near term unfavorable financing climate. This is a first analysis and should be supplemented in the future by additional data as a development plan is formulated, financing conditions improve, and you and the City Council have decided on a course of action. Our plan for the Perth Amboy Waterfront Park is one which we feel is practical and achievable. The waterfront is one of Perth Amboy's finest assets and everything should be done to encourage both public and private investment in this area. We have enjoyed our experience in Perth Amboy and we appreciate the opportunity of continuing to be of service to the City of Perth Amboy. Very truly yours, /-:r-= / /h ~ I~ I Frank M. Cross President P.O. &x Aberdeen Road, Matawan, New Jersey (201) i

3 Cross Group Inc. Perth Amboy Waterfront Park Project Market/Economic Feasibility Study "This acknowledges the financial assistance provided by the Coastal Zone Management Act of 1972, as amended, with funds administered by the National Oceanic and Atrrospheric Administration, Office of Coastal Zone Management. This study was prepared under the su.pe:rvision of the New Jersey Coastal Energy Irrpact Program of the New Jersey Department of Energy. However, any opinions, findings, conclusions or reconmendations expressed herein are those of the author(s} and do not necessarily reflect the views of NOM or NJ OOE. " July 1982 Cross Group Inc., P.O. Box 575, 123 Main Street, Matawan, New Jersey 07747, (201)

4 TABLE OF CONTENTS Executive Summary i Acknowledgements iii Meetings List of Tables... vii Introduction viii Objective Methodology Scope Organization of the Report A. Market Analysis 1.0 North Jersey Economic Conditions/Trends North Jersey Travel Patterns North Jersey Market Area Definition New Jersey Boat Registrations Market Area- Boat Ownership Patterns Market Demand Projections Lack of Marina Expansions Commercial Fishing Potential Public Boat Launching Ramps/Rentals Party and Charter Boats Marina/Boating- Recommendations v B. Financial Analysis - Marina Operations 1. 0 Introduction Recent Trends in Marina Development/Financing Pro-Forma Financial Projection Marina Land Lease Payments c. Armory Building 1. 0 Introduction Museum Uses... 75

5 TABLE OF CONTENTS (Continued) 3. 0 Office Uses Retail Uses Recommended Mix of Uses Financing Plan- summary D. Developable Land- 1 Acre Tract at Front & Gordon Streets 1.0 Introduction Development- New Construction Recreation - Public Uses Recommendations E. Implementation Program 1.0 Development Costs Proposed Financing Plan Fiscal Impact Estimate Employment Generated Bibliography x Appendices (Separate Volume) #1 Regional Marina Survey #2 Marina Financial Analysis #3 Armory Building Financial Analysis #4 Development Costs

6 i EXECUTIVE SUMMARY 1. Boat ownership in the 12 northern New Jersey counties and Richmond Borough, Staten Island is projected to increase at the rate of 972 boat owners per year (4,86~ boat owners over 5 years). (p. 25) 2. There is an unmet market demand for boat slips in the Raritan Bay/Sandy Hook area of 2,222 slips. Perth Amboy must capture 9% of this unmet demand with its proposed 200 slip marina. (p. 29) 3. The Raritan Bay/Sandy Hook region has 6,743 slips and 5,400 winter storage spaces. There are few or no empty slips available to summer rental. (Appendix #1 - Regional Marina Survey) 4. A fully operational 200 slip marina at Perth Amboy is projected to generate $318,275/year gross income with $128,565/year available after operating expenses to pay debt service and/or land lease. (Table #9, p. 71 and Appendix #2) 5. The Armory building rehabilitation is projected to cost $1,500,000, which can be financed with an $890,000 mortgage plus $610,000 of private equity capital. (Appendix # 3) 6. The recommended mix of uses for the Armory building is: Location Use No. of SF (NRA) Ground Floor Marina Support 5,100 Storage + Utilities 2,000 Drill Hall Floor Office 7,000 New Mezzanine Restaurant 2,250 Retail 2,050 Apartment Restaurant 1,600 TOTAL 20,000 SF 7. A museum is not recommended in the Armory building due to lack of funding to pay operating expenses and rent. (p. 86) Cross Group Inc., P.O. Box 575, 123 Main Street, Matawan, New Jersey 07747, (201)

7 ii EXECUTIVE SUMMARY (Continued) 8. The City should retain title Armory Building and lease it own and rehab the building. City is projected at $14,980 (Appendix #3 and p. 111) to the land under the to a developer who would Land lease income to the per year. 9. The one acre tract of land at the foot of Front and Gordon Streets should be used for an open space park. New construction on the site is not feasible due to lack of parking space. 10. IMPLEMENTATION PROGRAM (pp ) A. Total costs of the Perth Amboy Waterfront Plan are projected to be$10,445,000through B. Public capital will be required for $6,651,000 (63.6%) of the total in the following stages: Stage I $1,600,000 Stage II ,637,000 Stage III ,414,000 c. Private capital will be required in Stage II ( ) in the amount of $3,794,000. D. New Jersey Green Acres is projected to fund $3,224,000 of the public costs, with the City's share projected at $2,625,000. E.' If the City finances its entire share through municipal bonds, it is projected to cost $89,000/year for Stage II and $186,000/year for Stage III. F. Income to the City is projected to total $56,830 from real estate taxes and land lease income of the Armory building. G. Annual park maintenance costs will total: $13,070 for Stage I $23,630 for Stage II $15,490 for Stage III H. Net cost to the City is projected at $13,070/year( ); $81,940/year ( ); and $352,300 ( ). I. 188 construction jobs plus 128 operational jobs will be generated. Cross Group Inc., P.O. Box 575, 123 Main Street, Matawan, New Jersey 07747, (201)

8 iii ACKNOWLEDGEMENTS This report has been funded by and prepared in conjunction with the Coastal Energy Impact Program, New Jersey Department of Energy, through the 101 Commerce Street, Newark, N.J. office. Sandra Persichetti and Karen Simnor of the Cross Group, Inc. provided invaluable research assistance and logistical support in the many and varied areas of this study. lbis report was prepared as a part of the overall Master Plan in conjunction with Sasaki Associates, Inc. Watertown,. ~fussachusetts. Cross Group and Sasaki Associates would like to acknowledge the assistance of the various groups and individuals whose active, thoughtful participation greatly facilitated this study. It is, of course, impossible to individually name all who aided in the preparation of this document. Please accept our appreciation of your support. Thank you to: City of Perth Amboy Honorable George J. Otlowski -Mayor of Perth Amboy Michael Keller - Director, Community Development Frederick Mazurek - Director, Economic Development John Dudas - City Historian Barbara Roccici - President, W.A.T.E.R. Robert Treich - Commodore, Raritan Yacht Club Barry Rosengarten - Operator, Harborlight Tavern Jeffry Schein, Jacob Tanzman & Goldfarb Jerry & Robert Bench - E & B Marine Supply Marty Haines - Captain of the Sea Pigeon, berthed at Perth Amboy

9 iv State of New Jersey Barbara Kauffman - Coastal Grants Coordinator N.J. Dept. of Environmental Protection Division of Coastal Resources Bureau of Coastal Planning & Development Darryl Jennus - Robert Rusch Jane Farrell - Luke Caverly - N.J. Dept. of Environmental Protection Division of Coastal Resources Bureau of Coastal Project Review N.J. Green Acres Program N.J. Economic Development Authority Robert Sussman - N.J. Dept. of Environmental Protection Division of Fish, Game, & Shellfisheries Other Contacts: Peter Barrett - Editor of "The Fisherman" Edward Swikart - N.J. Marine Trade Association Neil Roth - Sea Grant Program University of Rhode Island Narragansett, R.I. John Lamont - Director of Marketing National Association of Engine and Boat Manufacturers New York, N.Y. Al Nunes-Vais - Owner and Operator Surfside Marina Sea Bright, N.J.

10 v MEETINGS 1. June 3, Coordination and Start-up Attendees: Perth Amboy Cross Group, Inc. Sasaki Associates, Inc. Michael Keller Martin Langonohl Andrew Kerekgyarto Paul Colabella Frank Cross M. Holland M. Freedman 2. September 29, Presentation of Preliminary Plan for Review and Comment Attendees: - Waterfront Task Force Committee Perth Amboy Community Development W.A.T.E.R. Raritan Yacht Club Perth Amboy Planning Board Perth Amboy Historical Society U.S. Navy Reserve Center Musial and Guerra Cross Group, Inc. Sasaki Associates, Inc. Michael Keller Robert Rokicki John Dyke Robert Treich Ralph Gianfrancesco Jack Dudas Lt. Commander Dunphey James Guerra Frank Cross M. Freedman D. Mittlestadt 3. Tuesday, November 10, Agency Review and Coordination Attendees: Perth Amboy Community Development N.J. Bureau of Coastal Project Review N.J. CEIP Cross Group, Inc. Sasaki Associates, Inc. Michael Keller Barbara Kauffman Geraldine Fenner-McNulty Frank Cross M. Freedman

11 vi 4. Wednesday, November 11, Comments and Coordination Attendees: American Cities Corp. Perth Amboy Economic Development Corp. Perth Amboy Boat Owners Assoc. Musial and Guerra Cross Group, Inc. Sasaki Associates, Inc. Larry Houston Elliot Fink Bill Olafson Steve Margretis James Guerra Frank Cross M. Freedman 5. Tuesday, December 8, Presentation of Revised Plan and Financial Plan Attendees: Perth Amboy Perth Amboy Director of Economic Development Perth Amboy City Business Administration Perth Amboy Community Development Cross Group, Inc. Mayor Otlowski Fred Mazurek George Szetella Michael Keller Frank Cross

12 vil List of Tables 1. Population 2. Total Number of Households 3. Effective Buying Income 4. N.J. Boat Registration Statistics 5. Boat Registrations/FCC Ship-to-Shore Registrations 6. Distribution of Annual Income of Boating Households Boat Launch Ramps survey 8. Party & Charter Boats survey Slip Marina Pro-Forma Financial Projections 10. Museum Survey 11. Perth Amboy Office Building survey 12. Office Space - Rental Comparables 13. Retail Survey 14. Armory Building - Area Requirements 15. Armory Financing Year Waterfront Development Plan 17. Public Costs 18. Private Costs 19. Funding Summary 20. Financing Structure - Public Costs 21. Real Estate Taxes Generated 22. Annual Maintenance Costs 23. Summary - Estimated City Incremental Costs & Income 24. Employment Generated

13 viii INTRODUCTION The Market/Economic Feasibility Study of the Perty Amboy Waterfront Park is to be used in conjunction with the Master Plan portion of the Perth Amboy Waterfront Park, done by Sasaki Associates, Watertown, MA, March, The two portions of the study were done as a team effort and should be viewed as one study. Many of the assumptions, projections, as well as base data, were derived from the Sasaki portion. OBJECTIVE The objective of this study was to determine the market, economic, and financing parameters as a basis to formulate a Master Plan for the Perth Amboy Waterfront Park. The market acceptance and financial pro formas of a 200 slip marina, the adaptive reuse feasibility of the Armory Building, and the development potential of a one acre tract next to the Armory Building were studies. Once a Master Plan was formulated, the funding sources and amounts were outlined and annual cost and fiscal impact projected. The findings of the study are to be used as the basis for New Jersey Green Acres funding and the determination of land lease payments from the marina and Armory Building. SCOPE This study is a general analysis of a Master Plan, not a development program, which will require more detailed future study prior to implementation. Market demand for the 200 slip marina is based on supply of existing slips and vacancy rates and travel patterns and boating preferences of the 13 county North Jersey market area. Financial analysis of a 200 slip marina was done to determine income from a land lease to the City of Perth Amboy. The Armory Building was analyzed for rehabilitation on a general basis to guide the City in seeking developer interest. A specific plan, accurate current costs, and commensurate financial commitments are the private developer's task and are beyond the scope of this analysis.

14 ix METHODOLOGY Marina market and financial data was collected by actual marina surveys and telephone interviews. Marina operating figures are based on actual marina operating results in 1981 in the Raritan Bay based on marina operators' figures as well as University of Rhode Island marina studies. The results of a boater survey, from the Camp study, was used to determine the boater potential in the North Jersey market area. Armory building market and financial projections were based on telephone interviews with developers, brokers, and bank lenders. Cost projections were based on Sasaki Associates, Inc. estimates. Funding sources and amounts were based on recent experience of the consultant team, conferences with N.J. Green Acres personnel and local bank lenders, and officials of the Community Development Office of Perth Amboy. ORGANIZATION OF THE REPORT The report is organized in conformance with the requirements outlined in Task B of the Scope of Services, dated May, 1981, submitted to the N.J. Department of Energy, Coastal Energy Impact Program. It is divided into report and appendix sections in separate volumes. The report volume is divided into five sections. Section A covers Market Analysis; Section B is a Financial Analysis - Marina Operation; Section C addresses the Market and Financial Analysis of the Armory Building; Section D analyzes the developable one acre tract at Front and Gordon Streets; and Section E outlines an Illiplementation Program. Due to the many and varied topics addressed, an Appendix volume was necessary. The Appendix is divided into four sections. Appendix #1 is a Regional Marina Survey; Appendix #2 is a detailed Marina Financial Analysis; Appendix #3 is a financial analysis of the Armory Building; and Appendix #4 is a cost budget estimate of Master Plan Development Costs.

15 Locus Map Source: U.S.G.S., Perth Amboy & South Amboy Quadrangles, 1970 vi Scale 1:24,000 MAP #1 North ~

16 \ \ \ <: ~ ---- \ \ Phas III Base Map Perth Amboy Waterfront \ \ \ \ North --..._ c:...,""_...,_..,_ ~r L L_ I. ---~ _j j --- 'ihfff 'Of r

17 <: ,: Limit of t"mjflcf Arfla ; \ ~ -~\ -~~ ;;;;;;-- - l '\ \ \ \ \ \ \ \\ \ I.;....,- \ \ \ I <Vr...,._ A"THtl" KILL \ I I \ Bosfl Mop L_ I... L_

18 -1- A. MARKET ANALYSIS 1.0 North Jersey- Economic Conditions/Trends 1.1 North Jersey Travel Patterns The travel patterns to sailing areas and vacation spots along the New Jersey Shore are dictated by the roadway pattern of' the northern part of the state. Access to the shore areas via the New Jersey Turnpike, the Garden State Parkway, Interstate 287, Interstates 78 and 80, and Routes 1,9, and 35 clearly show the North Jersey population having a direct, easy access to the shore areas via these roadways. Interviews conducted in the Marina Survey portion of this report with marina operators and boat owners indicated that many of the boat owners using the Jersey Shore area, particularly the Raritan Bay and Sandy Hook marinas, travel from the northern part of New Jersey from areas north of Perth Amboy. The Interstate, Garden State Parkway, and New Jersey Turnpike roadway systems facilitate easy travel to the Jersey Shore, with the most northern parts of New Jersey within one and one-half hour driving time to the Raritan Bay area. Map #4 indicates the roadway pattern to the shore area.

19 MAP #4 Market Area A N Atlantic Ocean Scale In Mile 0 10 r-t_j I 30 ~~--~~ P.O. Box Aberdeen Road, Matawan, New Jersey Oii47 (201)

20 -2- The Perth Amboy location is easily accessible within one hour's driving time of the northern counties in New Jersey, including Union, Essex, Hudson, and Bergen. Travel from the west, from the counties of Hunterdon, Somerset, and Morris, is also within a one hour driving time of the Perth Amboy location. Boat owners who store their boats further to the south of Perth Amboy must travel an additional one hour to reach marinas located in Southern Monmouth County along the Manasquan River and Barnegat Bay areas. The boat owner living south of Perth Amboy in Southern New Jersey or in the Philadelphia metropolitan area has a wide range of choices of marinas and sailing areas along the New Jersey Shore. Second home and vacation housing is clustered along the Jersey Shore south of Manasquan and Sea Girt. Much of the housing north of Manasquan tends to be primary housing within commuting distance of New York City, with housing prices too high to be affordable for second or vacation homes.

21 -3- The potential market population for the marina to be located at Perth Amboy is the Northern New Jersey area north of Perth Amboy. The potential boater living in North Jersey can easily reach Perth Amboy within one to one and one-half hour's traveling time. This boater would come into Perth Amboy for boating since Perth Amboy does not represent a location for a vacation or a second home residence. 1.2 North Jersey Market Area Definition A total of twelve counties in New Jersey and Richmond Borough in Staten Island are considered in this analysis as the population centers with potential market for the Perth Amboy marina. Sussex County was not included in the analysis because the driving time was in excess of one and one-half hours as well as abundant boating activities along the Delaware River and the Pocono Mountains areas in Pennsylvania. (Refer to Map la) Population Between the five years from 1977 to 1981, the population of the North Jersey market decreased to 5,732,600 from a 1977 total of 5,774,500. This represents a less than 1% decrease.

22 -4- Total Population (Thousands) TABLE #4 County % Change '77-'81 Ayg/Yr Bergen Essex Hudson Hunterdon 73.9 Mercer Middlesex Monmouth Morris Passaic Saner set Union Warren 81.1 Richnond,S.I ~8' TOTAL 5, , % -.145% Source: Sales & Marketing Management, Buyers Guide Issue, July Compiled by Cross Group, Inc.

23 -5- Statistics for the period, as evidenced in Table #4, show a declining trend in population of 5% or ~nder for over 50% of the New Jersey counties surveyed within a one hour radius of the Perth Amboy area. Bergen, Essex, and Hudson Counties showed five year losses of 4% each, averaging a 0.8% decrease per year. Neighboring Union County demonstrated almost an identical loss (3%) during this same interval. Somerset and Passaic Counties losses were slightly less, with decreases of 2% and 1% from their respective 1977 totals of 207,900 and 450,000. Further to the west, Mercer County showed the most notable population decrease of the study, losing 5% from its 1977 total of 323,100. Paradoxically, Hunterdon County, which borders Mercer lying directly to the south, showed the greatest population gain during this same period. Hunterdon s 1977 population total of 79,300 increased by 14% to 90,600 in Increases of 5% and 7% were noted for Morris and Warren Counties respectively.

24 -6- Of the four counties most proximal to the Perth Amboy Bay area, i.e., Union, Somerset, Monmouth, and Middlesex, population increases were evidenced only in the latter two, with Middlesex showing a 1% gain and Monmouth a 3% gain over the period Total Number of Households The total number of households in the North Jersey market in 1981 was 2,012,700, which represents a 4.23% increase from the 1977 total of 1,930,900 (Refer to Table #1). While the population was decreasing slightly, the number of households in the market area was increasing. This is due to the nationwide demographic change which has shown smaller size households but a greater number of total households. This has been caused by the trend.of singles living alone, high divorce rate, and empty-nester or senior citizen housing in smaller quarters. During the five year interval, decreases in the number of total households were noted in only the Counties of Essex (2%),

25 -7- Total Number of Households (Thousands) TABLE #2 % CHAN3E COUNTY '77-'81 Avg/Yr Bergen Essex : Hudson Hunterdon Mercer Middlesex Monrrouth Morris Passaic Somerset Union Warren Richnond, s.r 'IOI'AL 1, , % +.85% Source: Sales & Marketing Management, Buyers Guide Issue, July Compiled by Cross Group, Inc.

26 -8- Hudson (2%), Passaic (2%), and Mercer (1%), (See Table #2). Household numbers increased in the remaining eight counties, with the most notable gain made in Hunterdon County, whose total rose by 19% from its 25,100 figure in Appreciable gains were also made in Monmouth, Somerset, and Middlesex Counties of 13%, 11%, and 13% respectively Effective Buying Income Income levels are expressed in terms of Effective Buying Income (EBI) which is the income after payment of all federal, state, and local taxes, as well as Social Security and other deductions. It represents the buying power of consumers or measurement of retail market demand potential. Table #3 summarizes the changes in total EBI for twelve New Jersey counties between 1977 and It can be seen that total EBI has risen over this five year interval by over 25% in each of these counties. Hunterdon County 1 s total rose a remarkable 74% from the 1977 base figure of $517,093.

27 -9- Effective Buying Income ($000) TABLE #3 County Bergen 7,712,434 8, 318,329 9,105,733 9,624,686 10,715,006 Essex 6,177,245 6,656,714 7,054,465 7,716,248 8,360,640 Hudson 3,520,904 3,826,689 4,142,158 4,448,835 4,754,066 Hunterdon ' i I Mercer \ Middlesex M:Jnmouth M:Jrris Passaic Sorrerset l I I I i I I I I I I I \ 517, , ,911 2,299,918 2,532,343 2,758,310 3,953,454 4,386,178 ' 4,791,365 3,230,638 3, 554,648 3,989,970 I 3,022,422 3,375,051 3,745,469 3,042,880 3,406,662 3,722,330 1,649,860 1,803,128 2,018, ,200 2,830,307 5,610,126 4,709,520 4,354,349 3,781,542 2,258, ,753 3,179,853 6,255,147 5,240,073 4,840,406 4,128,752 2,483,479 Union 4,231,796 4,451,222 4,923,838 5,379,911 5,868,169 Warren 503, , , , ,556 Richnond, S. I. 1,864,598 2,017,317 I 2,235,039 2,544,724 2,867,554 Source: Sales & Marketing Management, Buyers Guide Issue, July Compiled by Cross Group, Inc.

28 -10- Monmouth and Morris Counties also showed sizable gains in total EBI of 62% for the former and 60% for the latter. Increases in total EBI were somewhat smaller in the northern counties of the study, with Passaic, Hudson, and Bergen showing 36%, 35%, and 39% gains respectively. Measurement of income and income changes is not used in this analysis as an indicator of the market potential for marina slips at the Perth Amboy location. As will be shown in a later section, there is little or no correlation between the income level of a boat owner and the type or size boat he or she owns. Increases or decreases of population in any market area are a better indicator of the rise or fall in demand for boating activities. The next section addresses the boat ownership patterns in the market area in terms of population, place of residence, and distance and travel times to marina locations.

29 New Jersey Boat Registrations The State of New Jersey had a total of 111,400 boats registered throughout the state in Table #4 outlines the registration statistics for the ten year period of 1970 to N.J. Boat Registration Statistics TABLE #4 % of Year Inboards OUtboards Total 1970 Previous Year ,457 91, , ,052 91, , ,399 94, , ,433 93, , ,050 95, , ,320 79, , , (1975) Year_ Year Change -5.28% +7.63% Avg. No. of Boats/Yr ,580 Source: New Jersey Department of Motor Vehicles, Boat Registrations. Cross Group, Inc.

30 -12- The ten year period between 1970 and 1980 shows a 5.28% decrease in the number of boats registered in the state. This represents an average of 622 boats per year lost in terms of registration statistics. The overall decline of the ten year period shows a reversal and an increase starting in Boat registrations increased to 111,400 in 1980 from a 1975 total of 103,500, which represents a 7.63% increase for this five year period. The decline of boat registrations,which changed to an increase in 1975, represents an average addition of 1,580 boats to be registered in the state between 1975 and A study done in 1977 by the New Jersey Department of Environmental Protection 11 randomly sampled 1,200 registrations of New Jersey motorboats to present the following boating picture: 1. 75% of all motorboat use is in saltwater % of all saltwater motorboating was done in Ocean County bays, with Monmouth County bays next at 11.25%. Middlesex County had only 2.33%. The total for Middlesex County, which includes Perth Amboy, was 2,824 boats Ocean bays are used much more than ocean sailing by the New Jersey motorboater. On a state-wide basis, New Jersey boaters indicated 50.25% used the bays, while only 11.75% use the ocean as a place to use their motorboat There were 354 party and charter boats in the survey. Monmouth County had 119 boats, with Ocean County having 111 boats. These two counties, with a combined total of 230 boats, represented 65% of the 354 party and charter boats in the survey.

31 Ninty-one percent of the owners of all types of pleasure boats registered in the state were New Jersey residents. Out-of-state residents included Pennsylvania, with 7.46%, and the balance being distributed over the surrounding states of New York, Delaware, and Connecticut.

32 Market Area - Boat Ownership Patterns 3.1 Registered Boat Owners The market area, for purposes of determining the market demand for the proposed 200 slip marina in Perth Amboy, are the twelve northern New Jersey counties outlined in Map #4. These counties include Monmouth and Mercer to the~south the New York-New Jersey border. and as far north as Sussex County is not included in the study because of the many other boating opportunities along the Delaware River and in the Pocono area region. In 1975, there were 63,700 boat owners in the twelve counties described in the market area. Table #5 lists the registered boat owners according to the zip code categories that are in conformance with the twelve county area as outlined in Map #4. There were 8,300 FCC Ship-to-Shore registered owners in the twelve county area, which approximate 13.03% of total registered boat owners in the twelve county area. The twelve northern New Jersey counties contain 61.55% of the total boats registered in the State of New Jersey. Boat registration information is not released to the public by many states, including New Jersey.

33 -15- North Jersey Market Area TABLE #5 Boat Registrations Versus FCC Ship-to-Shore Registrations 1975 (4) ( 1) (2) (3) % FCC TO ZIP REGISTERED FCC REGISTERED BOATERS 070, 19,200 2, , , , , ,000 1, , , , , TOTAL 63,700 8, % 1975 Market Area Total Registered 63,700 = Total N.J. Registered 103,500 = 61.55% Source: Coleen Camp, The Regional Supply and Demand for Small Boats and Associated Services, (Hoboken, New Jersey: Center for Municipal Studies & Services at Stevens Institute of Technology, December, 1977) p.98. Compiled by Cross Group, Inc.

34 -16- The last year these statistics were released by zip code designation was in Despite the fact that boat registration information is not released by the state, the comparison to the 1975 boat registration according to zip codes is used in this study in conjunction with the findings of several other studies assessing market demand. A study done in 1977 by the Center for Municipal Studies and Services (CMSS) at Stevens Institute of Technology and a similar study done by the Port Authority of New York and New Jersey, entitled "Market Study: Marina and Boat Basin" done in 1978, are used in conjunction with the boat registration information. Boat registrations in the State of New Jersey provide information only where the registration information is sent to the Department of Motor Vehicles. This may be the boater's permanent place of residence, his summer residence, or the location where he keeps his boat. An analysis of permanent place of residence with location and place of boat berthing provides very little or no correlation in the studies previously cited. The use of boat registration, population, and household information for the twelve county area, however, provides a broad measure of the size of the potential market for boaters for the Perth Amboy location.

35 Per Capita and Household Boat Ownership The rate of growth between 1975 and 1980 of boat ownership per capita in the market area grew at a greater rate than either population or household increases. Overall growth rate in boat ownership in the State of New Jersey between 1975 and 1980 was +7.63% (Refer to Section 2.0). Population, on the other hand, in the twelve county market area decreased.727% to 5,732,600 in 1981 from 5,774,500 in While population was decreasing, the number of households was on the increase. In 1977, there were 1,930,900 households which grew to 2,012,700 in 1981, for a five year growth rate of 4.23%. As population decreased and households increased, the per capita boat ownership statewide increased. This is consistent with the national trend which shows smaller but more households on a national as well as a statewide scale. The fact that boat ownership increased while population decreased shows an increasing boat ownership per capita. As was outlined in Section 2.0, boat ownership increased at an annual rate of 1,580 boats per year between 1975 and 1980 across the State of New Jersey. This trend in New Jersey indicates that despite a population loss, boat ownership per capita actually increased.

36 -18- This was caused generally by more households, be they smaller in size and more diverse, with more households owning boats. In 1975, there were % of the population owning or registering boats in the twelve county market area. During this same year, there were % of the households having registered a boat. Market Area - Per Capita & Per Household Boat ownership Boats Registered Population = 63,700 5,774,500 = % Boats Registered # Households = 63,700 1,930,900 = %

37 Boater Travel Patterns The projection of the number of boat owners in the twelve county northern New Jersey market area is based on New Jersey boat registrations according to their zip code mailings. This section addresses the boater travel patterns in terms of the analysis of primary residence versus where a boat is kept and the distance a boater travels to a marina. The CMSS study, which analyzed the New Jersey boater registrations based on zip code mailings, found that there was no direct correlation that could be made between specific zips of those questionnaires sent out to those returned. Only the aggregate numbers were considered. As was stated earlier in this report, the zip code mailings do not necessarily represent discreet boat owner's main residence, or boat season residence, or boat location, or place of business~ they only represent where the owner registered his boat. The CMSS study analyzed 628 responses to determine alternate residences. Of these, 61% did not have an alternate residence during the boating season; 17% had an alternate residence but the location was not given; and 26% had an identifiable residence. This analysis demonstrates that more than half of boat owners do not have an alternate

38 -20- residence, but travel directly from their place of primary residence to the point at which their boat is located. The fact that 61% of the boaters travel directly from their primary residence to their boat location benefits the Perth Amboy location, since Perth Amboy is directly accessible to northern New Jersey via the Interstate highway, Parkway, and Turnpike roadway systems. It is also not an area of secondary or vacation homes, but rather a highly developed urban area. A well-managed marina providing adequate services at Perth Amboy can then expect to capture a portion of the boat owners who travel from North Jersey via the roadway systems past Perth Amboy to some berth presently located to the south of Perth Amboy in either Monmouth or Ocean County. The CMSS study also demonstrated that the alternate boating season residences occur 44% of the time in the Monmouth and Ocean County areas. This is consistent with the vacation pattern in the shore area where most of the North Jersey population tends to congregate. Of those responding to the CMSS questionnaire, 22.03% indicated that they launch their crafts from the Monmouth County area. The second most common boat location was the Ocean County area.

39 -21- The results of the CMSS study indicate the dominant travel pattern for boaters in New Jersey is from the northern counties to the south to Monmouth and Ocean Counties to launch their boats. The distance a boater must travel to reach his boat is dependent on the adequacy of the road system, the availability of the type of boating he requires, and the services of the marina. The CMSS study analyzed questionnaires from 292respondents to determine the pattern of their travel times. Of these, 29.45% indicated their maximum launching distance was ten miles. The next largest portion of owners, 23.63%, travel beyond 80 miles. The balance of the respondents, roughly 45%, travel between 10 miles to 80 miles to reach their boats. A distance of 79 miles is approximately one and one-half hour's driving time along the northern New Jersey highway system, which puts the entire twelve county market area within an acceptable boat operator driving time to the Perth Amboy location. If a boater decides to go to the shore area, either Monmouth or Ocean counties, an additional one hour driving time would be required. Interviews with marina operators, conducted in the survey in the appendix, indicated many marina operators in the Navesink and Shrewsbury River areas had customers

40 -22- who were attempting to find marina berths farther to the north and closer to home. Several marina operators commented that they recently had customers who had formerly had berths farther south in Ocean County in the Barnegat Bay area and who had recently attempted to move further north to cut down travel time. The only reference made to travel preferences of boaters was found in the study by the American Society of Civil Engineers. It is a time observation, not based on quantified data. The observation follows: A guide might be that no distance penalty would be applied against the harbor use by people living within one hour travel time but that beyond that, a penalty would be applied proportionate to the square of the travel time beyond one hour. It would vary with the locale, travel conveniences, and the availability of other harbors.~

41 Market Demand Projections The projection of the market demand for marina slips at the Perth Amboy location in this analysis is based on 1980 projections of the number of registered New Jersey boat owners in the market area. Actual ownership is used in this analysis rather than a traditional market analysis approach, which emphasizes measuring the retail buying power of an area in order to determine the potential customers who may purchase a boat. The traditional buyerincome approach is not valid in measuring boating demand because there is a wide distribution of household incomes of boat-owning families; so much so, that it may not be possible to demonstrate a statistical relationship between people's incomes and the value of their boats, a relationship that has always been assumed to be firm and clear cut. A study done in Rhode Island, summarized in Table #6, indicates a wide distribution of incomes of boat owners. Distribution of Annual Income of Boating Households by Area, 1973* HOUSEHOLD INCOME Under $10,000- $15,000- Area ~].0,000 ~15,000 ~25,000 Rhode Island* New England** United States** TABLE #6 Over ~25, * Source, URI Sea Grant Study ** Department of Transportation, USCG Report No , Table 38, 1974 Source: Boats and Their People: A Study of Rhode Island Boat Owners, Niels Rorholm, University of Rhode Island, Marine Technical Report 52, p. 3.

42 -24- At the time the study was done in 1973, the income earned by all members of the households owning boats was less than $15,000 for about 55% of Rhode Island boat owners. compared to 58% of New England and 61% of the United States as a whole. This study, though it was done in 1973 and the incomes can be adjusted to current 1982 dollar figures, clearly indicates that there is little or no correlation between the income level of a household and ownership of a boat. The decision to buy and maintain a boat is often not related to a person's income level. Often, many expensive boats are owned by people with relatively modest incomes for very subjective reasons. In many cases, the boat owner provides a great amount of the labor to maintain the boat, substituting for expensive portions in the cost of maintenance. surveys of people who are not already boat owners may be unreliable in that they reflect the survey populatiop's lack of first-hand experience with the subject.&/ Two methods of projecting marina demand are used here as a cross-check. The first method assumes boat registrations in the market area will increase at the same rate as the state overall. The second method is based on multiplying 1980 population and household

43 -25- totals by the 1975 ratios of per capita and per household boat owners. In the first method, it is assumed that the growth rate in boat ownership in the state is the same as the market area. If so, boat registrations should have increased at the rate of 7.63% over the five year period between 1975 and Boat Registration Projection Yr % Increase Registered Boat Owners 63,700 68, % 5 Year Increase= 4,860 boat owners Avg. Yearly Increase = 972 boat owners/year Boat ownership in the market area is projected to increase by 4,860 boats total, with a yearly increase of 972 boat registrations per year. In the second method of market demand projection, the per capita and household boat owning ratios are applied to the 1980 population and number of households under the assumption that these ratios have remained the same despite population and household changes.

44 -26- If the ratios of boat ownership, based on population and household as established in 1975, are projected forward, potential boat ownership for the twelve county market area can be determined Per Capita & Household Boat Ownership Population: 5,732,600 x % = 63,236 Households: 2,012,700 x % = 66,405 The population and household boat ownership ratios indicate a potential market ownership of between 63,236 and 66,405 who have registered in the market area. Comparison of the two methods of projecting 1980 boat registrations in the market area show similar results. Projections based on the state growth rate in registrations indicate 68,560 owners, while population and household ratios indicate between 63,236 and 66,405 owners. For purposes of this analysis, the average figure of 65,000 boat owners in the market area will be used as a conservative assumption.

45 -27- The size of the potential market for the Perth Amboy marina can be determined by comparing the 65,000 potential boat owners to the slip inventory in the Raritan Bay/Sandy Hook area Projected Boat Owners 65,000 less: Slip Inventory-Raritan Bay/Sandy Hook -6,743 Potential Market from Existing Boat Owners 58,257 * The existing slip inventory survey, Appendix #1, of the Raritan Bay/Sandy Hook area shows 6,743 slips available and fully occupied. The potential market of people who already own boats is then 58,257 boaters who have direct access within a maximum driving time of 1~ hours to the Perth Amboy location. Measured against the potential market of existing boaters, the Perth Amboy location must capture approximately three-tenths of one percent of the potential market to fill its 200 slips. 200 slips 58,257 boaters =.0034 =.34% Another measure of the percent of the market which must be captured at the Perth Amboy location can be gauged by estimates of the percentage of boater demand which is unmet in the Raritan Bay/Sandy Hook areas. * Refer to Marina Survey Section-Appendix #1, Table #2.

46 -28- The CMSS study indicated that boater demand is unmet one third of the time based on the waiting lists at marinas surveyed.~ The New York State Office of Parks and Recreation estimated that there is an overuse of marinas in the lower Hudson River area, which includes the Raritan Bay, of approximately 21%. Their projections to 1990 indicate a 51% overuse of the existing marinas in the lower Hudson River.2/ This would indicate that the demand for marina space, based on projections to 1990, is not being met 50% of the time. Bruce Howlett, Inc. in the study of the Hudson River waterway use, indicated approximately 21% growth in the demand f. ~ or mar1na space. The interviews with the local marina operators done in the CMSS study indicated that many unsatisfied boaters exist beyond those appearing on waiting lists. Potential enthusiasts view the situation in this way: "Either I get a slip when I purchase my boat or I won't buy a boat."ll/ The findings of the studies indicated above, as well as the comments of the marina operators surveyed in this report, indicate that there is an unmet demand for boat slips approximately one-third to one-half of the time.

47 -29- This can be expressed as a percentage of the existing inventory of slips in the Raritan Bay/Sandy Hook area as follows: 33% unmet demand x 6,743 existing slips= 2,222 slips The potential demand for slips currently not being met, based on the 33% ratio, is projected at 2,222 slips in the Raritan Bay/Sandy Hook area. If the Perth Amboy location were to capture 200 of these boaters, it represents 9% of the market (200 slips ~ 2,222 = 9.0%). Two methods used to gauge potential market demand for boat slips indicate the Perth Amboy location, with its 200 slips, must capture 0.34% of total demand or 9.0% of unmet demand. This capture rate applies only to the Raritan Bay and Sandy Hook area and does not apply to marinas south of the Shrewsbury River. Certainly, a wellmanaged marina providing the facilities and quality of services consistent with the boaters' preferences at the Perth Amboy location can capture these small percentages of the local market demand. The Perth Amboy location provides immediate access via an excellent road system to the site, combined with open, immediately unobstructed access to bay and ocean sailing for the boaters. These two unique characteristics are present in no other location on the Raritan Bay or in the Sanay Hook area.

48 Lack of Marina Expansion The prior sections of this report have addressed the market demand for boating services in the northern New Jersey area. An important aspect of market demand is the availability of a supply of boat slips and berths for potential boating customers. The survey which was done as part of this study of the Raritan Bay and Sandy Hook area, which is included as Appendix #1, surveyed 83 marinas with a total of 6,743 slips. This telephone survey with marina operators and owners questioned the expansion plans in the future. Very few, if any, of the marina operators expressed plans to expand their facilities in the future. In fact, many indicated that they had lost slips due to siltation of their present areas. Many indicated that they had long waiting lists of boaters who required slips for both summer slip rental as well as w~nter storage. These comments indicated little or no expansion over the past five years of slip capacity in the Raritan Bay and Sandy Hook area nor future plans on the part of the marinas covered in this study survey.

49 -31- According to the Marine Trades Association of New Jersey (MTA), the State of New Jersey s functional marina slip capacity may have decreased up to 50% between 1970 and 198o. 12 ~he decrease is due to siltation in slips; lack of available sites for disposal of spoil from dredging; lack of dredging of harbors, channels, and inlets; increase in time to obtain the necessary environmental permits; and lastly, the high interest rates and unavailability of capital for expansion. The data indicated from the survey done as part of this study, as well as the information contained in prior studies analyzed, indicates that there is little or no marina expansion in the Raritan Bay or Sandy Hook area. This lack of creation of supply of slips and berthing places comes at a time when the market data indicates there is an increasing demand for marina slips within a 1-1~ hour driving time of the North Jersey twelve county market area.

50 Commercial Fishing Potential 6.1 New Jersey Fishing Industry New Jersey is fortunate to have a wide variety of fin fish and shellfish available off its shores. Approximately 150 species of fin fish inhabit New Jersey's coastal waters or migrate through them, 30 of which are important to the fishing industry. Fin fish catches vary with seasonal migration patterns and cyclic or sporadic population changes. Many species migrate northward from continental shelf waters as the ocean water becomes warmer during the spring and summer months. An enormous mass of cool bottom water usually extends from Montauk, Long Island, to just south of the Delaware Bay and is known as the Middle Atlantic Cold Cell. New Jersey's coastal waters also support abundant shellfish. The soft clam is plentiful in the bays and rivers in the northern part of the state, especially in Sandy Hook Bay, the estuaries of the Navesink, Shrewsbury, Shark, Manasquan, and Metedeconk Rivers, and the Forked River in Barnegat Bay. The hard clam, which is more widely distributed, can be found in virtually all bays and rivers throughout the coast, extending from the Raritan and Sandy Hook Bays of the north to Delaware Bay in the south. The American lobster is another important shellfish found along the New Jersey coast from near-shore waters to the 200

51 -33- fathom line. Blue crabs are found in estuaries and nearshore waters along the entire coast. Oyster beds are located in the estuaries of the Navesink, Toms, Mullica, Tuckahoe, and Great Egg Harbors and in the Upper Delaware Bay. Many of the fin fish and shellfish species are. highly dependent upon New Jersey's estuarine environment. This environment is comprised of tidal wetlands and shallow estuary and bay waters. The estuarine zone is important for the linkage of food production, food storage, and food web relationships, all of which support and enhance the fishing industry. Two major groups utilize the fishing resources of New Jersey; the commercial fishermen and the recreational or sports fishermen. New Jersey's commercial fishing fleet consists of approximately 3,200 vessels and boats, employing about 4,500 full and part-time people. Of these 3,200 boats, 86% sail from three coastal counties: Ocean (47%), Atlantic (30%), and Cape May (9%). The balance of the fleet originates in Cumberland, Monmouth, Salem, and Bergen Co~nties. The principal commercial fishing municipalities within each county are Belford and Highlands (Monmouth County); Point Pleasant and Barnegat Light (Ocean County); Atlantic City and Ocean City (Atlantic County); Wildwood and Cape May (Cape May County); and Port Norris and Bivalve (Cumberland County)