Tad Sooter, January 16, 2015, Kitsap Sun
SAFE Boats International is staying put.
The manufacturer of defense and law enforcement boats will finalize new leases for its Port of Bremerton properties this month, laying to rest speculation it would consolidate operations in Tacoma.
The new lease agreements will likely include a two-year commitment, with the option for four one-year extensions.
The agreements will come before the port commission for formal approval soon. SAFE Boat’s existing leases were set to expire in June.
The company employs 188 workers at its facilities in Olympic View Industrial Park, across Highway 3 from Bremerton National Airport. CEO Dennis Morris said the desire to stay close to the company’s established workforce played a big role in the decision to maintain its homebase in Kitsap County.
“We have longtime employees here, and they want to stay here,” Morris said.
The new lease is a victory for the Port of Bremerton. SAFE Boats is the port’s largest industrial tenant.
“I think it’s very significant,” port commission President Roger Zabinski said. “It shows we’re able to keep our major tenants.”
SAFE Boats builds its smaller vessels in Bremerton. They range from 25-foot response boats tailored for law enforcement, to 65-foot, jet-driven boats being built for the Tunisian Navy.
The company added a waterfront location at the Port of Tacoma in 2012 to begin work on a series of Mark VI fast patrol boats for the Navy. The 78-foot Mark VI boats were too big to be constructed in SAFE’s Bremerton warehouses. About 100 employees work in the Tacoma plant.
Along with size, the Tacoma property offered another big advantage: water access. SAFE Boat’s Bremerton properties are landlocked, meaning it has to take its boats by trailer to Sinclair Inlet for trials. In Tacoma, SAFE has easy access to a boat lift and ramp for launching.
Morris said moving small boat construction to Tacoma was a very real consideration. Consolidation would have helped the company reduce costs. But uprooting its headquarters from Bremerton after 15 years would have been a disruptive and unpopular move within the company.
Morris said the announcement of the Bremerton lease renewal was met with applause from employees.
“No one likes uncertainty,” he said.
The Port of Bremerton made concessions to keep its flagship tenant in town. The starting base rent is less than SAFE Boats had been paying, but it will step up in successive years. The deal also gives SAFE flexibility to downsize if necessary.
SAFE Boats leases three buildings and a 3.5-acre parcel of land from the port. Its total rent under the expiring lease was about $40,000 a month.
Morris gave the port credit for accommodating SAFE Boat’s needs. “We’ve had a great relationship with the Port of Bremerton,” he said.
LOCAL SUCCESS STORY
SAFE Boats needed only a portion of its Bremerton warehouse when it first leased space from the port. The largest boats it was building were 29 feet long.
“We literally had a tape line on the floor,” co-founder and Chairman Scott Peterson said during a tour of the bustling plant Thursday. “The rest of it was empty.”
Today, the 8,800-square-foot manufacturing plant is overflowing. Added focus on security following the 9/11 terrorist attacks helped buoy business for SAFE Boats, which supplied vessels to the Coast Guard, Customs and other federal agencies. Its boats, known for signature wraparound flotation collars, became ubiquitous around U.S. ports.
SAFE now ships boats to navies and security forces around the globe. Colombia and Mexico have been big clients lately, as has Israel.
SAFE builds its boats from scratch in Bremerton. Sheets of aluminum roll in through one end of the building, where it’s cut and bent into myriad shapes. Welders assemble the hulls and cabins. The boats are outfitted with motors, seats, electronics arrays and flotation collars before rolling out of the yard.
The company got creative to accommodate bigger vessels at the Bremerton facility. Boats like the 65-footers ordered by Tunisia were assembled in temporary hangars outside the main plant.
Demand for small boats ebbs and flow. SAFE Boats laid off more than 15 employees a year ago and shifted some staff to Tacoma, measures Morris attributed to shifting contracts. The company is now hiring again, he said.
While considering a move to Tacoma, SAFE Boats also eyed consolidation in Kitsap. Kitsap Economic Development Alliance helped scour the county for an industrial waterfront site with space for small and large boat manufacturing. The search didn’t turn up any ready solution.
“That’s a tough piece of property to find,” KEDA Executive Director John Powers said.
Powers said it’s encouraging to know SAFE Boats is keeping its roots firmly planted in Bremerton.
“I think they’re strong and growing in both locations,” Powers said. “But I’m really pleased they’re recommitting to their headquarters and their core product.”