Sailboats Inc. can provide heated indoor storage for 45 boats each winter.

A medium-size Superior business has earned a large-size reputation within an esoteric but lucrative market that many people know little about.

Sailboat Inc. is best known as manager of city-owned Barker’s Island Marina, which has 420 permanent and 42 transient slips. Since 1980, the marina has stood out as the face of Sailboats Inc. to residents and tourists who drive along the busy U.S. Highway 2 and 53 corridor.

There’s much more to the company than the marina, however. A healthy share of its business occurs in specialties unknown to the public. Beyond dockage, the firm offers outdoor and indoor storage and highly specialized service work.

Heated indoor storage is among the newest services added at Sailboats Inc. In 2005, the city of Superior constructed a 24,000-square-foot building that houses 45 boats.

“It’s kind of a three-dimensional puzzle,” said Joe Radtke, who personally arranges boats to fill 22,500 square feet of the total. The city is paid 54 percent of revenue, which easily exceeds the debt service. Sailboats Inc. retains 46 percent and pays remaining expenses.

“The indoor storage is priced for the market we’re serving. We try to offer a premium service, and it has been terrific,” he said.

For its service business, Sailboat Inc. employs 14 mechanics who are regarded as experts in “repair and refit,” an industry phrase that simply describes the complicated work they perform on small- and medium-sized sail- and motor-power boats.

“We take care of everything from 16-foot runabouts to 60-foot motor or sailing yachts with all the bells and whistles,” said Radtke, who joined the firm in 1980 and served as general manager from 1983 until this January, when he was named president. Mentored by company founder, Jack R. Culley, who died one year ago, he has led the development of a service department that’s one of a kind on Lake Superior.

“Jack was committed to making this a year-round operation that would provide year-round employment opportunities for our skilled technical staff. We have never had a real layoff beyond our seasonal staff,” Radtke explained. “Because of that, we’ve been able to attract and retain the very skilled craftspeople who work for us. Many have come from other industries (such as Cirrus Design) and we’ve helped them to hone their skills and develop them for our own needs.”

Constantly evolving

While still a Pillsbury marketing exec, Culley launched Sailboat’s Inc. as a home-based business.

“Jack started selling small boats, then worked his way into larger boats. He decided if he wanted to sell more big boats, he had to teach people how to sail. He developed a ‘learn to sail’ program that has become a model across the country,” Radtke said. “It gives a person the skills they need to take out a boat on a large body of water such as Lake Superior or the Caribbean. We graduated over 11,000 students from that program. Some of those people went on to become lifelong sailors and some went on to do major cruises and adventures all over the world.”

Culley’s early success was fueled by federal tax policies that allowed accelerated depreciation of large boat investments. When those policies changed in the 1980s, fewer people purchased new boats, prompting Sailboats Inc. to change its business model.

“The company moved more and more into marina management,” Radtke said, providing that expertise for municipally-owned properties in Superior, Manitowoc and Knife River.

The decline in new boat sales led many enthusiasts to purchase used vessels, particularly classic models. That trend prompted Sailboats Inc. to move beyond routine maintenance into much more extensive and complicated work at its 50x120-foot Superior service building.

“A lot of the boats we have here are 10 to 30 years old. At a certain point, systems wear out, hulls fade,” and owners want their investment restored to like-new condition, said Radtke, who first learned about boat service while working summer jobs at Bayfield-area marinas and later at Palmer Johnson, a premier yacht builder in Sturgeon Bay. “Sometimes, they want a hull refinished or a mechanical upgrade. Others want a wholesale upgrade – including engines, cabinets, plumbing, generators and electrical.”

Highly specialized

Unlike auto mechanics, those in the sail and yacht business can’t pick up a Chilton’s repair manual for service instructions.

“Most of the work we do is extremely specialized – you need the skills to do it or the skills to figure out how to do it. It’s not like you can call up the local union and say you need some pipefitters, because there aren’t any for this type of work,” Radtke explained.

For instance, an owner might want to install a particular brand of engine or generator that doesn’t fit through any existing opening. “Sometimes, they’re installed in pieces,” then reassembled, he said.

Electronic upgrades are equally challenging. Typical work involves the replacement of analog gauges with modern radar, GPS and even video monitors.

Some work involves multiple specialties, such as a new installation of bow or stern thrusters, which necessitates both mechanical and fiberglass work.

Ironically, the jobs are performed for $75 an hour, a rate lower than many automobile shops charge, although some jobs may require hundreds of hours of labor.

“In addition to our own mechanics, we can call in technicians from Fabco or Ziegler or Caterpillar. The Twin Ports offers that kind of support. It doesn’t exist in some resort communities,” Radtke said. He believes the service business segment continues to grow because Sailboats Inc. employees have extensive experience on the water.

“Lake Superior is real water – big water. You can’t afford to have your vessel break down. Our people understand what it means to be out there when the going gets rough and how much you depend on the systems. You can’t just call AAA. It can be a matter of life and death. We take that into account when we service boats for someone.”

New marinas proposed in and around the Twin Ports “will definitely put competitive pressure on us,” Radtke said, “but in the end, whatever can be done to enhance the boating infrastructure will be good. We’ve been much more than a sailboat company for 30-plus years.”