Mike Salsbury/The Olympian
Former store manager Nels Honeycutt is the new owner of Skookum Bay Outfitters. He bought the business from Gary Sandgren and will move it to the Swantown Boatworks building. It is set to open Friday and will offer outdoor and boat-related goods.

Joe Nicholson/The Olympian
Brian Sullivan sands the deck of a yacht under repair at Thurston Boat Repair, located in the Swantown Boatworks building on Port of Olympia property.

Swantown Boatworks fully leased

Skookum Bay Outfitters signs five-year deal

SCOTT WYLAND, THE OLYMPIAN

OLYMPIA -- Amid paint fumes and the hiss of spray guns, Ron DeShields wanders through his shop, pausing to peek through a glass wall at the sailboats docked at Swantown Marina.

DeShields, owner of Thurs-ton Boat Repair, is among the occupants at Swantown Boatworks, which recently became fully leased after more than a year when Skookum Bay Outfitters signed on.

Outside, a brisk wind blows across Budd Inlet, and low, gray clouds threaten rain.

A year ago, few boats could be refinished during the winter in South Sound because there were no permanent commercial shops to shelter them while the work was being done.

"We're out of the elements," DeShields said, as he gestures to the two yachts in his shop. "That's what the whole thing is about. When the weather is nasty, bring the boats in here."

Simon Johnson LLC, a Tacoma real estate firm, developed the 21,000-square-foot, $1 million building that now houses five water-related businesses.

Simon Johnson pays the Port of Olympia $1,000 a month to lease the land at the boatyard. It also has options to build two more structures that would total 45,000 square feet.

Finished in 2000, the firm's first building sat empty for most of 2001.

It became officially filled this month after Skookum Bay Outfitters signed a five-year lease.

Skookum Bay, which changed owners recently, will sell outdoor equipment, boating supplies and snack food. The company will move into the space Friday.

Other tenants are Olympic Diesel & Marine, Island Sailing Club and Shurtz Marine Enterprises, a second boat-repair shop. There is also a 3,000-square-foot painting booth.

Tenants pay $1 a square foot for retail space and 55 cents per square foot for warehouse space. The port also receives a portion of the tenants' sales.

The goal was to create a complementary blend of water-related businesses, said Bruce Marshall, port harbor manager.

"It's finally coming to fruition," Marshall said.

A new home

At Skookum Bay's temporary store on Legion Way, merchandise looks sparse.

Kayaks, raincoats, hiking boots and assorted outdoor gear are displayed at one section of a near-empty floor.

This is the aftermath of a liquidation sale.

Nels Honeycutt bought the business in December from Gary Sandgren, who founded Skookum Bay in 1989.

Skookum Bay had struggled financially since a Feb. 28 earthquake inflicted more than $400,000 in damage to the downtown store, which is still unusable.

Sandgren held a going-out-of-business sale. He then met with a liquidator who offered to sell the remaining merchandise at a heavy discount and give him a portion of the revenue.

Honeycutt stepped in and offered to buy the inventory at a price that would allow Sandgren to come away with the same amount of money.

Honeycutt also agreed to pay Sandgren $1,000 for the Skookum name.

Some customers might have noticed that Skookum Bay's inventory has been thin, Honeycutt said. But the selection will increase at the new store.

He saw no point in ordering new products until he moved to the Swantown site, he said. "It wouldn't even get out of the box before we had to pick it up and move it again."

Honeycutt had worked at Skookum Bay since the early 1990s and had managed the downtown store for four years, making his transition to owner easier.

"I've worked here so long, I kinda feel it's my business," Honeycutt said.

Honeycutt co-owns the business with his wife -- who is Sandgren's stepdaughter -- and a silent partner.

He said he will initially employ five or six people.

At Swantown, he will occupy about 6,100 square feet and will pay Simon Johnson about $1 per foot, he said.

He will also give the port 4 percent of his yearly sales after the first $1 million, he said. The reason the fee doesn't kick in until after $1 million in sales is because Skookum Bay has a solid record of making that much each year, he said.

The port offers this threshold to established local businesses as an enticement, said Marshall, the harbor manager.

A company has no reason to leave its current location unless it thinks it can fare better at a port site, Marshall said.

Supply sales

Honeycutt snatched up an extra 1,100 square feet so he also could run a marine-supply and snack store.

"We feel we can be quite competitive with other boat supply places," he said.

That section of the store will carry items such as brushes, varnish, bottom paint, sandpaper, nuts, bolts and paint thinner.

And it will stock ice, soda pop, potato chips and perhaps beer and wine, Honeycutt said.

Right now, boaters must leave the marina to buy food, beverages or marine supplies, he said.

Last year, the port considered setting up its own quick-stop store at a cost of $250,000. But critics attacked the proposal, saying the port was again trying to use public dollars to compete with area businesses.

The port eventually scrapped the plan.

Honeycutt said he aims to build a dock for launching kayaks, something that South Sound lacks.

He would also like to organize kayak tours to marinas and other parts of the sound, he said.

The store has enough space for him to erect a rock-climbing wall, he said, but that will come later.

Honeycutt, who spent eight years in the Army and 15 years as a massage therapist, said he looks forward to running a business in Olympia.

"It's such a personal town," he said.

Working side by side

At the site, DeShields' boat-repair business co-exists with competing Shurtz Marine.

The two businesses go head-to-head on most jobs. However, they refer customers to one another on some orders.

For instance, DeShields will refer clients to Shurtz for rigging jobs, and Shurtz will refer customers to DeShields if they want their boats lengthened.

"As things progress, we find ways to work together more and more," said Russ Shurtz, owner of Shurtz Marine.

Before these shops opened, people had to refinish their boats during the warmer months -- the time when they most wanted to sail, he said.

"If you buy a boat, you want to be out there getting a suntan," Shurtz said.

Shurtz does some engine work, but plans to refer more extensive diesel repairs to his new neighbor, Olympic Diesel.

"We're not competing for the same type of work," Olympic Diesel owner Dave Miller said of Shurtz. "I don't see that much crossover."

Not everyone is enthused about the port filling its Swantown building.

Private marinas point to the boatyard as an example of the port using public money to set up a competing enterprise.

The port's retail venture at the boatyard dovetails with its plans to add 156 boat slips to Swantown Marina, said Neil Falkenburg, manager of West Bay Marina.

A private marina can't afford the time and expense involved in adding docks, Falkenburg said. But the port can subsidize this type of expansion with tax dollars, he said.

Investing in a boat-support center is worthwhile only if you draw more boats to the marina, Falkenburg said.

The question is where these 156 boats will come from, Falkenburg said. He fears many boaters will defect from West Bay, he said, adding that local marinas mainly serve the South Sound market.

"We're not pulling boats out of Tacoma," Falkenburg said. "I don't think that's happening."

West Bay used to offer everything that can be found at Swantown, including engine repair, boat refinishing, boat rentals, marine supplies and fiberglass work, Falkenburg said.

But when Swantown Marina opened in the mid-1980s, it siphoned off 60 percent of West Bay's boating business, leaving West Bay with no choice but to trim services, Falkenburg said.

West Bay has gone from hauling out 500 boats a year to about 200, Falkenburg said.

The port lured away many boaters by offering below-market moorage rates, he said.

But Marshall, the harbor manager, said the latest research shows the port is charging moorage fees that are at least mid-scale within Washington.

That's fair competition, Marshall said. "We offer people a choice here. Some of them come to us, and some of them don't."

There are at least two dozen port-run marinas in the state, Marshall said.

"We're not doing anything out of the normal," he said.

He also insists that creating a vibrant waterfront complex will draw boaters from out of the area.

He agreed that the boating center was conceived with the marina expansion in mind.

Demand is rising for dock space that can accommodate boats longer than 41 feet, Marshall said. The new docks at Swantown will be designed mainly for these larger vessels, he said.

According to a state study, Washington will need to add 460 larger boat slips a year to keep pace with demand.

Right now, few slips of any size are being built in the state, the study said.

The study was commissioned by the state Parks and Recreation Commission, the Department of Licensing and the Interagency Committee for Outdoor Recreation.

Marshall said the marina is one of the port's most profitable ventures.

Cash flow for 2001 has been estimated at $692,889, compared to $597,679 for the previous year, he said.

"We invested for the long haul, and now we're reaping the rewards for it," Marshall said.

Scott Wyland is a business reporter for The Olympian. He can be reached at 360-357-0748.

For related stories go to the Business section.

At the boatworks

The five businesses leasing space at the Swantown Boatworks building are:

-Thurston Boat Repair

-Shurtz Marine Enterprises

-Olympic Diesel & Marine

-Skookum Bay Outfitters

-Island Sailing Club

The Olympian Copyright 2002

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