20 August 2013

New ship repair company to replace existing firm at Mare Island:

Mare Island will trade one waterfront marine company for another, the area's developer announced Monday.

Mare Island Shipyard LLC, the company that put two of the former naval shipyard's giant dry docks back into use at the beginning of 2011, has exercised its right to end its lease with developer Lennar Mare Island years early and is due to depart by Nov. 1, the developer's spokesman said.

"LMI (Lennar Mare Island) has made every effort to support and retain MISY (Mare Island Ship Yard) and we regret the new ownership group chose to end their lease early," Lennar Mare Island spokesman Jason Keadjian said Monday.

The new company, called Mare Island Dry Dock, LLC, recently completed a lease for an undetermined time period for Dry Docks 2 and 3 and will occupy the same 16 acres and existing infrastructure as current tenant Mare Island Ship Yard has, Keadjian said. This company will focus immediately on ship repair work, officials say.

"We've got many things to do to be prepared and as they say in the Navy, 'hit the decks running,' " Mare Island Dry Docks Vice President Steven Park said by phone Monday. "We have been looking for a West Coast, and I do mean West Coast location. We've looked for the last nearly two years for a suitable location."

The new company hopes to create as many as 100 jobs in its first year, and up to 300 in a five-year period, and repair and/or maintain up to 20 ships a year, according to a Lennar press release. Park added that it is "fundamental" to meet with and reach out to existing employees.

Financial backing and management for the operation comes from Philadelphia-based investment group Dimeling, Schreiber & Park, which has a history of investing and managing large-scale shipyard operations in Boston, Philadelphia and New York, according to the release.

Mare Island Ship Yard LLC, formerly Allied Defense Recycling, was still formulating a public response to the abrupt announcement Monday and declined to comment beforehand. The company first shared with Lennar its plans to leave in June, setting in motion a search for a replacement tenant, Keadjian said. The Times-Herald's recent inquiries to Mare Island Ship Yard into the company's health, prior to Lennar Mare Island's announcement, were dismissed as inaccurate rumors.

The Mare Island company, which opened for business in February 2011, originally touted plans to seek out federal contracts with the U.S. Maritime Administration, or MARAD, to scrap "mothballed" ships from the nearby Suisun Bay Reserve Fleet, off Benicia's shores.

The shipyard, however, was only able to dismantle two of those ships, the Solon Turman and the Lincoln -- those contracts awarded on a non-competitive basis. Once up against other ship dismantling companies, particularly those based in Texas, Mare Island Ship Yard was unable to secure further dismantling contracts.

In fact, the ship scrapping dynamic altered significantly during Mare Island Ship Yard's first year -- from having the government pay for the recycling work to having companies competing to pay millions purchase the ships outright. Mare Island Ship Yard did, however, begin supplementing its federal hull-cleaning jobs with other smaller ship repair and dismantling work in recent years, ideas originally floated in the months prior to the shipyard's opening.

Mare Island Dry Dock will neighbor historic Dry Dock 1 and Dry Dock 4, recently leased to Jerico Products/Lind Brothers as a company expansion.
Source: Times-Herald. By Jessica A. York. 20 August

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