Model Case: Great Lakes Boatyard and 75-Ton Travel Lift Expansion, Harrison Township, Macomb County, Michigan, SBA 504 on the Real Estate With a 7(a) on the Lift

A model feasibility case built only from public data. The yard, borrower and expansion are hypothetical; no client file or engagement data is used. The case follows the house format with the changes an expansion of an existing business requires: at a glance, determination, program eligibility with the marina characterization read first, site and regulatory pathway, market analysis, full cost table, operating assumptions, historical cash flow and the lender's DSCR, ten-year pro forma, DSCR by year, break-even, sensitivities, collateral and conditions. Figures are as of October 9, 2026. Part of the marina feasibility study cluster; format detail on the boatyard and service yard feasibility study page, program detail on the SBA 504 feasibility study and SBA 7(a) feasibility study pages and the SBA underwriting and regulatory spine, and the state frame on the Michigan feasibility study page.

The expansion is not supportable as proposed, and the reason is not the arithmetic. On the sponsor's pro forma the single debenture covers 2.94x in year 1 and 4.50x at stabilization, and on the study's revenue it still covers 1.36x and 2.40x. The budget is the problem. It prices a 2004 travel lift at $290,000 where the two 75-ton lifts MARAD funded in FY2026 imply projects of at least $1,000,000 to $1,017,868 at the program's 75 percent cost-share cap; it paves a hardstand without a wash pad, a sump or stormwater diversion, when EGLE's industrial stormwater general permit does not authorize the discharge of wash water and names a closed-loop system, a holding tank, a treatment-plant connection or an individual permit as the only lawful routes; it carries a 5 percent contingency on pier and building work for which no Michigan public bid exists; it blends the lift, a ten-year asset, into a 25-year debenture; it brings 10 percent where marinas sit on SBA's special-purpose list at 15; and it assumes the marina transient rule is a box to tick, when a Great Lakes yard that earns a tenth of its revenue from seasonal wells fails that rule on its face and can be financed under 504 only if SBA reads a repair and storage yard as something other than a marina. The sponsor's structure would fund a compliance liability with a lift that will not lift what the market brings.

The expansion is feasible as restructured, subject to the conditions at the end of this page, and the first condition is SBA's written reading of the characterization. The restructure keeps the building, the well, the hardstand and the site and prices them as the public record prices them: $1,500,000 for the 12,000 SF heated building at $125 per SF, $650,000 for the lift well piers and dredged approach, $500,000 for the hardstand regraded and curbed to divert stormwater, $50,000 for the closed-loop wash system, $200,000 of site work, design at 7 percent and a 10 percent contingency, $3,478,000 before interest and fees, on a 25-year 504 debenture at the 15 percent contribution. It buys the lift new at $1,050,000 on a dealer quote and puts it on a ten-year 7(a) as the equipment it is, described in the mortgage and in a UCC fixture filing because Michigan law on whether a travel lift is a fixture was not found. It funds a $125,000 first-season reserve outside the project. Total cost is $4,845,688, debt $4,068,281 and debt service $422,177, of which $263,196 is the real estate and $158,980 the lift. On five technicians at 1,400 billed hours at $115, with the existing storage and dockage at posted rates, the yard covers 0.96x in year 1 while the big-boat service book builds, 1.34x in year 2, 1.66x in year 3 and 2.04x in year 10, and holds 1.15x down to revenue 10.4 percent below plan.

Two warnings go with the determination. The service book is the case: labor and parts are half of stabilized revenue and the least documented lines in the public record, since no Michigan yard posts a billed rate, and at $100 an hour or 1,200 billed hours the yard covers 1.41x and 1.34x at stabilization but 0.77x and 0.72x in year 1, which is what the reserve and the ramp conditions are for. And the eligibility is a reading, not a rule. SBA Form 2234 asks whether a marina earns 50 percent or more of its gross annual income from transients staying no more than 30 days and says a "No" makes the loan ineligible; the SOP's text says more than 50 percent; neither says what a marina is. The yard's revenue is 50 percent service and parts, 19 percent storage, 17 percent haul and shrink wrap, 11 percent seasonal wells and 1 percent transient. If SBA reads it as a marina the 504 is not available and the conventional or USDA route is the structure; the study models the 504 because that is the sponsor's question, and conditions it on the answer.

USDA Business and Industry does not apply inside the Detroit urbanized area. A conventional equipment loan on the lift at a bank's terms, without the 7(a) fee, was considered and is the fallback for the lift piece if SBA declines the characterization; the real estate piece has no SBA fallback other than a conventional mortgage.

Macomb County reports more than 16,000 boat slips along its waterways, concentrated in Harrison Township, St. Clair Shores, Chesterfield Township and New Baltimore; the county Sheriff's Marine Division counts 26 marinas and ten public access sites on its 85 square miles of Lake St. Clair and more than 30 miles of shoreline; and the Michigan Boating Industries Association ranks Oakland, Wayne and Macomb as the state's top three counties for boat registrations, with many Oakland and Wayne boats kept at Macomb marinas. Michigan's registered fleet is shrinking slowly, from 953,554 in 2003 to 815,317 in 2023 and 795,494 in 2024, while spending rises: NMMA puts Michigan boating at $11.7 billion and 45,000 jobs, up 82 and 45 percent since 2018. The thesis for a service yard is a fixed-to-declining fleet that is aging and growing larger and produces more service hours per boat, not a growing boat count. The Secretary of State does not publish county or length-class counts; the trend by class is a bulk record purchase, flagged.

The model fixes the township and the yard type, not the address: an existing yard on fee land in Harrison Township with a 24,000 SF heated building, 135 wells and a 35-ton lift that cannot haul the 40-foot to 70-foot boats the Lake St. Clair market now keeps. The lift well's two pile-supported piers go onto Great Lakes bottomlands and need a single EGLE and USACE joint permit through MiEnviro, an individual permit at $500 ($2,000 if the piers reach 300 feet or the dredging 10,000 cubic yards) plus $100 for the Corps, with a completeness review of 0 to 45 days, a technical review of up to 90 days and a 20-day public notice, and a separate bottomlands conveyance with an annual fee; the model carries 90 to 180 days and a Detroit District regional condition set that was not retrieved. The hardstand and the wash pad are EGLE's business: the yard files for coverage under the industrial stormwater general permit with a SWPPP and a certified operator, winterizes indoors because outdoor winterizing is exposure while stored winterized boats are not, and routes wash water to the closed-loop system because the permit does not authorize its discharge and fines run to $25,000 a day. Lake levels set the engineering: Lake Michigan-Huron's record low of 576.02 feet in January 2013 and the 1986 high of 582.3 feet, exceeded in May 2020, are 6.28 feet apart and were six years apart, Lake St. Clair averages 10 feet deep, and the June 2026 bulletin had Michigan-Huron at 579.40 and St. Clair at 575.23 feet; the well is designed across the full range and the low-water year is a sensitivity. Property tax is modeled at $55,000 on taxable value at half of true cash value under Harrison Township's millage, with the treatment of the piers and the lift flagged.

The competitive set. Keenan Marina in Harrison Township is the only local yard that posts rates: indoor heated storage at $10.00 per square foot of length by beam, outside at $3.50, 24,000 SF of heated space and 100 slips to 35 feet. Beacon Cove Marina in Harrison Township has 577 wells to 50 feet and 145 indoor racks to 32 feet, rates by inquiry. Lake St. Clair Metropark's marina, a public operator, lists 265 slips. Michigan DNR state harbors post 2026 seasonal slip rates of $770 to $2,420 for a 20-foot slip across ten tiers, $38.50 to $121 per foot. The best posted yard sheets are from West Michigan and Wisconsin: Torresen Marine in Muskegon at $8.95 heated and $6.50 cold per square foot including haul, wash and launch, $8 per foot to haul or launch to 40 feet and $12 over, $2 per foot bottom cleaning; Manitowoc Marina at $10.25 heated and a 1 percent environmental fee. Shrink wrap clusters at $13 to $20 per foot across Outdoor Equipment Co., Aussie Watersports, Spicer's and others. No Michigan yard posts a billed labor rate; the out-of-region record runs $110 at Monterey Bay Boatworks, $120 at Angler Marine, $150 at Barber Marina and $170 at Liberty Landing. Northern yards haul 40 boats a week from mid-September to the end of October at Sunnyside and 8 to 10 a day at Washburn, storage runs from September 1 or 15 to Memorial Day or June 15, and heated bays are what sells winter work.

What the record says. Inside heated storage is priced consistently across the Great Lakes, $8.95 to $10.25 per square foot, and Keenan's $10.00 sits inside the band; that is the most dependable revenue input. Labor and parts are the largest lines and the least documented, which makes them the sensitivity drivers, and the study for a fixed address would finish the competitive set with a dated phone survey of the Lake St. Clair yards for labor rates, package prices and lift capacity, because no public source counts travel lifts or backlog by submarket. The revenue is built by line.

The sponsor's pro forma carries six technicians at 1,500 hours and $140, $1,260,000 of labor and $630,000 of parts, $3,090,136 in all. The ramp is 80 percent of stabilized revenue in year 1, with the lift opening for the spring launch and the big-boat book building over two seasons, 92 percent in year 2 and stabilized from year 3; prices and costs escalate 3 percent a year.

No Michigan public bid for a pre-engineered marine service building, lift-well piers or hardstand paving was found, and the three lines are model assumptions pending a contractor estimate; the lift line is the one public anchor, derived from two federal grants and checked against a dealer quote that is a condition. The sponsor's used-lift budget is a quarter to a third of the new-lift floor and funds a machine with twenty years of fatigue cycles on it.

An expansion is underwritten on the projection, and the historical line says what the lender is betting on: the existing yard, limited to boats its 35-ton lift can haul, earns $290,000 and covers the restructured debt at 0.69x, so the 75-ton lift has to add about $132,000 of EBITDA a year before the project covers at all and about $410,000 before it reaches 1.66x. The projected year 1, at 80 percent of stabilized revenue, is 37 percent above FY2025 and earns $406,064, and that is the year the reserve carries.

Debt service is $156,420 on the bank loan, $106,776 on the debenture and $158,980 on the 7(a); the 7(a) is paid off after year 10 and debt service falls to $263,196. The year-1 shortfall of $16,113 is what the $125,000 reserve is for, with room for a slower hiring season.

The proposed column is the sponsor's pro forma on the sponsor's budget, and both halves are wrong in the same direction: $526,154 more EBITDA in year 3 from a labor rate and a billed-hour count no Michigan yard documents, and $149,360 less debt service from a used lift, an unbudgeted wash system and a 5 percent contingency. The restructured column is the project that can be built and permitted, and it covers.

On the stabilized year-3 statement with all ten streams scaled and the fixed lines held, the restructured yard covers debt service at $2,083,159 of revenue in year-1 dollars (13.5 percent below plan), reaches 1.15x at $2,157,046 (10.4 percent below) and 1.25x at $2,206,303 (8.4 percent below). As proposed, on the sponsor's pro forma, break-even is $1,952,238, 1.15x needs $2,001,069 and 1.25x needs $2,033,623, 34 to 37 percent below the sponsor's plan and 15 to 19 percent below the study's revenue, which is why the sponsor's structure looks unbreakable and is a compliance liability with a used lift. Stated in service hours alone with the other lines held, the restructured yard holds 1.15x down to about 5,400 billed hours a year across the five technicians, against the 7,000 modeled.

All rows start from the restructured base unless labeled otherwise.

The service book decides the case and the structure rows do not: a rate move, a contribution tier, a shorter debenture and a 10 percent cost overrun each leave stabilized coverage above 1.40x, while the labor rate, the billed hours and the hiring each take it to the 1.34x to 1.41x band and together to 1.13x. Year 1 is the exposed year in every row because the ramp and the hiring fall in the same season; a 70 percent ramp halves year-1 coverage and changes nothing at stabilization, which is the argument for the reserve rather than for a smaller project. The low-water row is the lake's: the 2013 record low would keep deep-draft boats out of the well and take a fifth of the haul and service book with them.

The collateral is a yard on fee land with a new 12,000 SF building, a new lift well and a new lift, and its value to a lender is in that order. The building and paving on an owner-occupied waterfront industrial parcel in Harrison Township appraise on the cost and income approaches at or near their $2,250,000 of construction; the $650,000 well is special-purpose and its piers are on state bottomlands under a conveyance; the lift is equipment, worth perhaps $600,000 to $700,000 on the used market in five years against $1,050,000 new, which is why it sits on a ten-year term with a fixture filing rather than inside a 25-year debenture. The bank's first lien of $1,803,389 and the debenture's second lien of $1,262,372 sit on the land, the existing building, the new building and the well; on a going-concern income approach at a 9 to 10 percent capitalization of stabilized EBITDA the yard indicates $7.0 million to $7.8 million, and at the real estate's alternative-use value, a waterfront industrial parcel with 36,000 SF of heated space, the combined 504 liens of $3,065,761 are covered and the 7(a) relies on the lift and the guaranties. No Michigan or Great Lakes boatyard 504 or 7(a) financing is in the public record; TMC Financing's 504 refinance of Alameda Marina in California shows SBA accepting marina real estate as 504 collateral.

Prepared by Michal Mohelsky, J.D., FMVA, Practicing Affiliate of the Appraisal Institute. Model case aligned with SBA SOP 50 10 8.1, under USPAP discipline. MMCG Invest, LLC, 27 Maiden Lane, Suite 625, San Francisco, CA 94108.