Rhode Island and antique ship building = economic boost?

NY Times:

Among the luxury yachts and commercial fishing boats in this city’s famous harbor rests a giant steel hull that officials hope will be an economic engine in troubled times.

As Rhode Island struggles with one of the nation’s highest unemployment rates, city and state officials hope that turning the hull into a tall ship will create jobs, attract tourists and spur interest in the state’s maritime history.

Tall Ships Rhode Island, a nonprofit group based here, bought the hull last year for $339,000 from a group in Canada that could not afford to finish building a replica of an 1812 ship. The tall ship will be named the Oliver Hazard Perry, after the naval hero of the War of 1812 who was born in Rhode Island.

The ship, which is expected to set sail in 2011, will be a reproduction of a square-rigged warship with three masts. At 207 feet long and 13 stories tall, it will be the nation’s largest tall ship besides the Eagle, a Coast Guard bark, said Capt. Richard Bailey, who will command the Oliver Hazard Perry.

Gov. Donald L. Carcieri has been urging Rhode Islanders to consider working in the marine industry, long a staple of the state’s cultural identity and economy. A recent report by the Rhode Island Marine Trade Association showed 450 job vacancies in the field and estimated that the state would need to fill 2,400 maritime jobs in the next 5 to 10 years.

Considering the state’s 10 percent unemployment rate, the vacancies are striking. But such jobs are highly specialized.

“You need a significant amount of technical knowledge,” said Dennis Nixon, a dean of the University of Rhode Island who helped found the International Marina Institute, “because some of the boats built in Rhode Island are among the most sophisticated in world.”

After the design phase, the Oliver Hazard Perry will be transferred to a commercial shipyard to finish construction. The project is expected to cost almost $5 million, said Bart Dunbar, chairman of Tall Ships Rhode Island and president of the Bowen’s Wharf Company, which owns a lot of harborside property.

So far, about a third of the money has been raised through contributions from Bowen’s Wharf, individuals and corporations like Bank Newport, which contributed $25,000.

Mr. Dunbar said he expected that the organization would get up to $2 million in a bank loan, $500,000 in federal grants and donated equipment in exchange for sponsorships. Mr. Dunbar said he hoped the remaining costs would be covered by private gifts.

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I have always liked sailing and have done a good bit of it. If you have ever owned a boat you know it is not a good investment. It is at best a depreciating asset. At worst it is a money pit.

It appears to me these guys got off to a bad start by overpaying for an unfinished product that was of no value to its owners. They will never recoup the cost of purchase much less the cost of finishing the tall ship which will have little to no commercial value. This would be all fine if they were spending the excess of their prosperity, but it looks like they are putting their seed money into something that will not grow.

BTW, one of my favorite lines about sailing--Ocean racing is the functional equivalent of standing in a cold shower tearing up $100 bills.

BTW2, The Rhode Island boat building business has never really recovered from the Democrats "luxury tax" on yachts that put many of the builders out of business.