SAN DIEGO — Marine Group Boat Works (MGBW), a family-owned marine construction and repair company operating a shipyard in Chula Vista, California, and managing Fifth Avenue Landing marina in downtown San Diego, has achieved a significant milestone as San Diego’s newest Foreign Trade Zone (FTZ). Notably, this FTZ is the only one in California and the Southwestern United States dedicated specifically to luxury yachts. This development opens new doors for foreign-flagged superyachts, providing them with a prime West Coast location where they can be legally marketed to U.S. buyers without the need to pay hefty import duties upon entry.
Typically, a foreign superyacht owner looking to sell to American buyers must pay about 1.5% of the vessel’s value in import duties and fees upon entering the U.S. For a $50 million yacht, that adds up to a daunting $750,000 even before a sale is guaranteed. However, with the FTZ designation, MGBW offers these yacht owners a cost-effective alternative. “They can now come to San Diego, moor their boat, show it to potential buyers, have maintenance done, and even temporarily leave to attend boat shows, all without facing significant financial burdens upfront,” explained Todd Roberts, President of MGBW. “This is a huge advantage for yacht owners and marks San Diego as a key player in the global superyacht industry.”
The City of San Diego administers Foreign Trade Zone No. 153, which includes 11 operators, all regulated under the supervision of U.S. Customs and Border Protection (CBP). Achieving FTZ status involved a year-long process in collaboration with the City, CBP, and FTZ consultants from J.P. Reynolds Company Inc. The approval grants MGBW the authority to operate two FTZ sub-zones on San Diego Bay: a 15-acre shipyard in Chula Vista and a 12-slip luxury superyacht marina located downtown. According to J.P. Reynolds, the project’s consulting team, “Customs and the City of San Diego have been very supportive, and MGBW has made a significant investment in creating this unique opportunity for the West Coast yachting community.”
Foreign-Trade Zones are secure areas near U.S. Customs and Border Protection ports, where goods — including foreign-flagged vessels — can be imported, stored, and serviced without incurring usual customs duties. The purpose of these zones is to promote international trade and stimulate economic growth by providing duty-free or deferred-tax benefits for foreign goods. In the case of superyachts, FTZs allow owners to bring their vessels to U.S. waters for marketing purposes without the need for immediate import payments, which would otherwise be required if they entered directly.
To legally showcase a foreign-flagged vessel to U.S. buyers, yacht owners generally must either go offshore beyond three miles into international waters or dock at a designated FTZ. Previously, FTZs dedicated to yachts were mostly concentrated in Florida, Rhode Island, and Washington. Now, with MGBW’s FTZ designation, California joins the list, enhancing the West Coast’s appeal as a superyacht destination.
MGBW, known worldwide as a premier West Coast superyacht refit facility, has built a reputation on providing comprehensive services for international clients. With the new FTZ designation, the company can offer yacht owners and brokers an attractive option to market and service yachts in San Diego. Roberts adds, “We now have the ability to meet the unique needs of superyacht owners looking to sell to U.S. buyers. Our facility is strategically located near the marina, downtown San Diego, and the airport. We’re providing a turnkey experience that’s unmatched on the West Coast.”
The global superyacht industry is a significant economic contributor, valued at over $35.9 billion and supporting approximately 260,000 jobs worldwide. While superyachts are large, with lengths ranging from 120 to 200 feet, the industry is supported primarily by small businesses; about 80% of superyacht-related businesses have fewer than 80 employees. The U.S. Superyacht Association reports that a single 180-foot yacht can contribute over $4 million annually to a local economy. This figure includes costs such as $1.4 million in maintenance and repairs, $400,000 for fuel, $350,000 for docking fees, $110,000 for provisions, and additional expenditures by guests and crew that directly benefit local businesses.
Studies in Florida have highlighted the multiplier effect of yacht expenditures: every dollar spent on yacht repairs generates seven dollars for the local economy. Following similar economic models, MGBW estimates its superyacht facility has contributed roughly $1.2 billion to the San Diego economy since its establishment in 2007. The impact is widespread, supporting not only MGBW’s 200 employees, who include ABS-certified welders, shipfitters, mechanics, and electricians, but also bolstering nearby businesses, from hotels and restaurants to marine suppliers.
MGBW is a family-owned maritime construction and repair business with two key locations: one on San Diego Bay and another in Los Cabos, Mexico. The San Diego Bay facility spans a million square feet and is equipped with over 2,000 feet of dockage, an 820-ton boat lift, cranes, and state-of-the-art machine and metal-working shops. The sister facility in San Jose del Cabo, Mexico, covers over 300,000 square feet and includes a 150-ton and a 75-ton Travelift. Across both locations, MGBW employs a highly skilled workforce of over 200 specialists in various fields of boatbuilding and repair.
The addition of MGBW’s FTZ in San Diego bolsters California’s position in the superyacht market and offers an alternative for yacht owners previously limited to FTZs in Florida, Rhode Island, or Washington. With San Diego’s year-round mild climate, its scenic harbor, and the convenience of an FTZ, the area is well-suited to attract superyachts from around the globe. Beyond serving as a convenient location for yacht sales, San Diego also provides an appealing destination for superyacht maintenance, repairs, and refits.
In addition to offering yacht owners a way to avoid hefty import duties, the FTZ also promises to bring more business to local marinas, restaurants, and marine service providers, creating a ripple effect in the local economy. By establishing an FTZ specifically for superyachts, MGBW is setting a new standard for the West Coast, aligning California with other major players in the yachting industry.
The FTZ designation is not only a milestone for MGBW but a boon for the entire San Diego community. As Roberts puts it, “The yachting community will find everything they need here, from marina services to skilled maintenance crews and proximity to the airport. We believe this is going to be an exciting new chapter for superyachts in California.”
In summary, the establishment of an FTZ for superyachts at Marine Group Boat Works is expected to bring a wave of economic benefits to San Diego while positioning the city as a new focal point in the superyacht industry on the West Coast. With world-class facilities, strategic location, and comprehensive services, MGBW is ready to welcome international superyachts and contribute to the economic vitality of the region. For more information, visit www.marinegroupboatworks.com.
