Wealth factor boosts Christensen Yachts business

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When Dennis Jones took delivery of his custom 164-foot Christensen, he decided the $34 million he paid for it was equal to the $34 million he’d donated to charity.

Jones, who made his fortune when he sold Jones Pharma, a niche drug company, to King Pharmaceuticals for $3.4 billion in 2000, knows a superyacht is not essential, even for someone in the 0.1 percent. Yet the yacht he purchased helped save Christensen Yachts, a 30-year-old American yacht builder, whose work force shrank to 75 from 500 after the financial collapse.

“The company is up and running better because of us,” Jones told The New York Times. Today, Christensen has a three-year waiting period for one of its yachts.

Jones says he wants to encourage other wealthy people to think about how their opulent lifestyles could provide jobs, just as charity helps people in need.

After 15 years with a 151-foot Delta, which had room for 12 guests and 10 crew members, the Joneses wanted their own superyacht built from scratch. They chose Christensen Yachts, in Vancouver, Wash., because of its reputation for quality.

What Jones didn’t realize in early 2013 was how much Christensen Yachts was struggling from the recession. Jones, who had employed 650 people at Jones Pharma and gave stock options to employees at all levels, liked the idea of his money providing jobs and maybe saving an American company.

Christensen Yachts CEO Joe Foggia says the yacht order was a catalyst for others. “We had finished some boats, but the last one we delivered was in the latter part of 2010,” he said. Business was so slow in 2013 that the company had reorganized itself and branched out into industries like manufacturing wind turbines and making smaller yachts that other companies would sell under their brand.

“When we started laying people off, we were viewed as the rich man’s toy box,” said Foggia.

That changed when the economic impact of hundreds of jobless workers was felt in the businesses around the shipyard.

“Ninety-plus percent of the contract price of $34 million goes into payroll, health care, American-made materials, goods, services, local and federal taxes,” Foggia said. “One boat affects close to 1,000 households nationwide. There are 180 brand-new cars in our yard in the last 18 months.”

Foggia noted that the flow of money keeps going with a boat like D’Natalin IV.

“It costs $170,000 a month in crew, insurance, moorage, fuel and the crew buying all their things for the boat,”he said. “It’s a constant cash flow machine for the local economy whenever one of those things pulls in.”

Jones’s friend and financial adviser, Niall Gannon, said this might sound like trickle-down economics, but he considers it something different. “I’d call it ‘fire hose economics’ because the money left his account that fast,” he said. “It’s out of his account and in the accounts of these 200 people who worked on his yacht.”

The yacht also has a full-time crew of 10. An experienced captain on a ship like this earns $200,000 a year, an engineer about $100,000 and the rest of the crew members can expect to earn from $40,000 to $50,000 —on top of living rent-free on the yacht, said Christian Bakewell, a broker in the superyacht division at Merle Wood & Associates, who oversaw the construction of Jones’s yacht.

“People see the splashy images of Beyoncéstepping on a yacht,” he said. “What they don’t see is how many people go into building that yacht and maintaining that yacht.”

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