Spend a little time on the Ft. Lauderdale water taxi and you’ll soon get a feel for the world of the 1% of the 1%. As you drift along you will see row upon row of mega-yachts – sleek vessels, 80 feet, 120 feet, 200 feet or longer in length. According to the City of Ft. Lauderdale, about 1,500 mega yachts visit annually. There are some 100 marinas housing 42,000 resident yachts.
Among all of the craft that dominate the view, one stands out. It’s 282 feet long. It has a black hull and a huge equipment mast. According to a story in the Ft. Lauderdale Sun-Sentinel,
It boasts luxury amenities for 12 guests, with a crew of 26. There is a large master stateroom with a study and private deck, a helipad, indoor cinema and an infinity pool with a 15-foot glass wall that converts to a movie screen so the director and his guests can take in a film while swimming.
The Seven Seas is the personal toy of Steven Spielberg. The cost? Just $200 million. The flag on its stern? Cayman Islands. Why is that?
The reason so many American yachts fly non-American flags has a whole lot to do with tax and employment laws and United States Coast Guard regulations.
According to Power and Motoryacht MagazineU.S.-registered yachts must be staffed by American citizens who have obtained USCG certification. What’s more, the yacht owners must actually comply with U.S. employment tax laws. Of course, it’s much cheaper for them to register in a friendly country and hire foreign nationals.
Power and Motoryacht Magazine further points out that U.S.-registered yachts also are required to meet USCG regulations for firefighting, safety equipment and staffing. These regulations insure that a yacht is safe for both passengers and crew. All of that boosts the cost of ownership and operation.
Spielberg is not alone. Former New York Mayor Michael Bloomberg’s yacht is registered in the Caymans. So is Larry Ellison’s (CEO of Oracle and ninth richest man in the world). Microsoft co-founder Paul Allen’s yacht Octopus also flies the red Cayman flag. In fact, most U.S.-owned mega-yachts are registered in the Cayman Islands and other tax-friendly countries.
Safety, decent pay, fair taxes? That must be too high of a price for the mega-rich to pay.
Maybe I’m just envious, but I can’t wrap my head around what one might do with a 282-foot, $200-million yacht. Do a little fishing? Enjoy the ocean breezes? Escape from the drudgery of the workaday world? Maybe.
But then again there’s sea level rise waiting at the doorsteps of the ostentatious $10-million mansions that line the Ft. Lauderdale waterways. Perhaps escape is what those yachts are really for after all.
[Editor’s update, February 2016: One billionaire’s mega-yacht recently made news when its anchor destroyed a section of an endangered coral reef in the Cayman Islands. Read about it here.]