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The yard that changed Newport

Newport, which in its heyday knew something about opulence and nautical name-dropping, may have lost some of its glitter when the New York Yacht Club lost the America’s Cup in 1983. But the tide has changed.

Once it was about mansions; now it is megayachts.

Newport, which in its heyday knew something about opulence and nautical name-dropping, may have lost some of its glitter when the New York Yacht Club lost the America’s Cup in 1983. But the tide has changed.

Read the other stories in this package: The full-service future   Portrait of a modern yard

Once it was about mansions; now it is megayachts. Few municipal waterfronts on the East Coast boast a larger armada of massive maritime toys on a given summer evening than Newport, R.I. These glittering nautical palaces are embraced by a city that, a scant few years ago, seemed hell-bent toward a waterfront homogenized by condos and time shares.

Now, luxurious sailboats and motoryachts more than 100 feet in length crowd like herd animals, their owners paying a big premium to tie up at the bulkheads of Newport Shipyard, where the warmest welcome is extended. You may see Groupama 3, the giant green 105-foot maxitrimaran that this year set a new trans-Atlantic record, or Turmoil, the hulking 210-foot expedition yacht. Nearby could be Meteor, the 169-foot schooner whose dark blue hull was a frequent backdrop to this summer’s America’s Cup racing in Valencia. Certainly the 139-foot ketch Rebecca will be on hand, and maybe the 110-foot Palmer Johnson ketch Keewaydin, the yard’s best customer.

These and the many other big-time boats wouldn’t be here were it not for the phone call that arrived on a more modest, 71-foot yacht a few years back as it sailed north in the Gulf Stream. That phone call unleashed a development dynamo named Charlie Dana, and now the city of Newport, with a revitalized Newport Shipyard, is conspicuously back on the platinum-plated nautical chart.

“It’s helped Newport reclaim that moniker of being America’s sailing capital,” says Keith W. Stokes, a former city councilman who, before he became head of the area chamber of commerce, saw the whole shipyard story unfold. “Charlie Dana deserves the credit; he had the vision. Now we’re reaping the benefits.”

The vision blossomed in 1998 in the dark of night aboard Saint Roque, a 71-foot aluminum ketch sailing off CapeHatteras on a passage from the Bahamas to Newport. Charles A. Dana III was on watch at 3 a.m. when his cell phone rang. His wife, Rose, had bad news from Newport. “They’re at it again,” he recalls her saying. “It” was the conversion of Newport waterfront property into time share developments. This time, developers were preparing to bid at a bankruptcy auction for the shipyard, a dirty industrial property in the heart of the harbor.

The next caller was David Ray, owner of Newport’s Bannister’s Wharf, who Dana says wanted to boast about a sailing trophy he’d won. On board Saint Roque with Dana and sharing the watch was David MacBain, a partner in New England Boatworks, the Rhode Island yard that had built Saint Roque for Dana three years before. “We decided that night … we were going to draw the line there on time share,” says Dana, 58. “The waterfront is disappearing at an alarming rate. Over our dead bodies! We were cranked up.”

Dana, MacBain and Ray recruited Don Glassie, a Newport-based lodging entrepreneur and yachtsman. The four went to the auction with a plan to save the shipyard, which had been in and out of bankruptcy for years. The quartet brought a lawyer whose sole instruction was to raise every bid from the time share bidders by $25,000, ratcheting the price up mechanically.

“They’re going to think we’ll go on forever,” Dana says, describing the strategy. “It was a game, you know. Auctions are that way. They were getting kind of squirmy in their seats. We just had this cool-headed lawyer just barking out the numbers. His instructions were to go to a certain point and dead stop. We ended up getting it a lot cheaper than we thought otherwise.” Still, a bargain had its price. “We inherited a lot of their problems,” he says. “It took us five years to crawl out from under all the stuff we had to pay.”

Dana, no novice in deal-making, had never taken on a shipyard. Nor, for that matter, was he the descendant of yachtsmen — although his father and grandfather, Charles Jr. and Charles, were auto industry tycoons and philanthropists. “I didn’t come from a sailing family,” Dana says. “They always looked at me like I was nuts.”

Although his mother rented a house on Martha’s Vineyard, Mass., he did little sailing there as a child, and when it was time for college he chose the University of Denver, far from significant navigable waterways. He graduated in 1970 and took a job working for Caulkins Oil. His boss, George Caulkins, was a man whose focus was on project development, without regard to the type of project. Oil fields, the Vail resort, a Florida citrus plantation — Dana took notes.

When he was 27, Dana and five friends were loaned a boat and they sailed to Grenada. “That trip crystallized everything I loved about boats,” he says. “When I saw the big boat stuff and the Caribbean, it was like catnip to me. I bought a big boat in ’74, a 56-foot boat.” Alfred Lee Loomis, a pillar of the New York Yacht Club and an Olympic sailing gold medalist, sold Dana his yacht, Northern Light. He also brought Dana into his club and, in 1977, made him part of the Courageous America’s Cup syndicate, supporting Ted Turner’s successful defense.

Dana and his wife sailed Northern Light until their family grew to include four children. In 1984 Dana had a motor yacht built, aboard which the family cruised until 1995 when MacBain finished building Saint Roque. Dana boasts that the family has made many offshore trips to the islands, never with a professional crew. “I still get goose bumps every time I go out in my boat,” Dana says.

Dana had long since moved East. “I would still be working for George [Caulkins] if it wasn’t the fact that he was in Denver, 1,000 miles from the ocean,” Dana says. “George Caulkins always used to go into things he had never done before. He was my mentor, a little bit.” Dana on his own “got involved in much smaller deals than he did,” including the restoration of Newport mansions: Harbour Court for the New York Yacht Club in 1987, the 28,000-square-foot Gray Craig in 1989, and Doris Duke’s Rough Point, a mansion of nearly 40,000 square feet, in 1998. He also owned a restaurant and a vineyard.

Dana says he had looked at the Newport Shipyard once for Elizabeth Meyer, founder of the International Yacht Restoration School in Newport, so he was somewhat familiar with its features. Meyer was interested in locating her school at the yard and sought her friend’s advice. He was aware that the yard had once thrived on Navy contracts and that it had the big equipment to work on commercial vessels. He also knew of the several prior attempts to revive the property that had ended in bankruptcy.

“One of the people who declared bankruptcy there was Fritz Jewett,” Dana notes. “He could probably buy and sell me 100 times. Fritz Jewett decided it [bankruptcy] was the only way out.”

Jewett, an industrialist who backed several America’s Cup campaigns, including some of Dennis Conner’s, says he has tried to block the shipyard from his memory. “We got into Navy contracting, some painting, some cleaning up diesel engines,” Jewett recalls. “We then got into work repairing wooden minesweepers. Then we got into more Navy contracting and also Army engineers. We really broke our pick on that one,” Jewett says. “And it cost a pot-full of money. … It was pretty painful.”

“The shipyard when we got it was kind of a mess,” says Glassie, the lodging entrepreneur, who sails a 1926 Crowninshield schooner named Fortune. “It was losing money badly and in not good shape and had many things wrong with it. It was hard to find the path. It had the ability to do huge commercial work. But it’s tricky to meld that with the yacht work.”

“It was just a dump,” MacBain says flatly. “It was an environmental nightmare, dried up paint and chemicals all over the place.”

Dana points out that what the partners bought was 5 acres or less. “We got 5 acres more by going through permitting. If you had less, it wouldn’t work,” he says. It would be “like running a Hilton with four bedrooms.” There were other problems, as well, but Dana had a business plan. The year before — 1997 — had witnessed what he saw to be the start of the “megayacht revolution.”

“We had to attract the boats. We had to be able to do the work and do top work. If you spend $20 [million] or $30 million on a boat you want yacht-quality care, not rough shipbuilding,” he says. “In the beginning we didn’t have one person in there capable of working on a yacht. We had to build a team, had to teach them you’ve got to be the best in the world. Some of the people did make the trip and some did not. Some of the commercial [boatbuilding] guys are still there today. But many are not. They couldn’t make the shift between the roughness of the commercial work and the precision needed in a megayacht.

“We tried to bend over backward in customer service,” Dana says. “The guard at the gate, his job was to say, ‘Yes,’ not ‘No.’ I didn’t want anybody getting hassled.”

Another element of the plan was use of the shipyard to host “events” for the yachting community. In 2006 those events included the Jimmy Fund Regatta, a salute to the 100th anniversary Bermuda Race, the Newport Yacht Management Charter Show, the Newport Bucket (a regatta for boats at least 80 feet), and the Brokerage Boat Show. This year the big events hosted by Newport Shipyard include the HSH Nordbank Blue Race to Hamburg, Germany, and the Swan American Regatta, as well as the Bucket and the Wall Street Corporate Challenge, a fund-raising event.

The yard’s revival has attracted high-end tenants to the property, among them the North American headquarters of Nautor’s Swan, Oyster Marine USA and the headquarters of Puma Racing Team, an entrant in the next Volvo Ocean Race. The result is that in its ninth year, Dana says, the shipyard has been profitable for three years. It also has earned praise.

“Obviously from an aesthetic point of view when you look at the harbor, since Rhode Island calls ourself the Ocean State, we are proud of our waterfront,” says Mohamad Farzon, a Newport architect. “What makes it good is diversity, not just mansion after mansion.” A working shipyard — albeit one with the wealth of the knockout yachts it attracts — right next to the heart of the city gives the place a “grass roots” feel, he says. “People [tourists] don’t come here to see a replica of a sailor. They come here to see [the real thing].”

“Charlie’s a very wise person about real estate and about businesses,” says Elizabeth Meyer. “I would say that’s pretty clear in the way he runs the shipyard and the way he rescued it. It was sort of like the woman tied to the log, headed to the saw. [Dana] cleaned it up, and he turned it into absolutely the most important, the single greatest big-time nautical asset of Newport.”

“I can’t think of any big resort waterfront towns on the East Coast that have a working shipyard in town,” says Tom Maynard, Swan’s head salesman in Newport. “They’ve got a lift here where we can pull out 150-foot yachts. Very few people can do that on the East Coast.”

Equally important, Maynard says, is that the shipyard pampers the very wealthy with its proximity to the restaurants and shops of Newport. “It [costs] a premium to be in this yard, but they’ll pay to be here,” he says. “The crew can walk off the boat, walk into town. That kind of proximity, nobody but the Newport Shipyard offers that.”

Dana, his wife and their children now own a large majority of the shipyard and are involved in its operation. His son, Eli, is the dockmaster, and the restaurant is named after daughter Belle.

David Ray, one of the original investors, says he is still involved in the shipyard “in a minor way.” While the revival of the yard has “taken a circuitous route, it’s wound up to be something pretty terrific and to his [Dana’s] credit,” he says.

Ray estimates that “anywhere from 50 to 150 of these [megayachts are] coming on line every year, and a certain percentage of them wind up in New England. More and more, they’re basing themselves in Newport because of the facilities. Most have crew of eight to 12. They’re huge,” says the restaurateur whose 65-foot yawl, once the second-largest in Newport Harbor, is now dwarfed.

He says the city’s restaurants, clothing stores, supermarkets, pharmacies and rental car companies all benefit. “It’s a major impact on the economy and a very small drain,” he says. “All they are doing is tying their boats up and buying food and fuel and everything that goes along with it. More and more you see boats that are in New England for the summer basing in Newport, and a majority of them at the shipyard. It’s extraordinary stuff.”