BusinessTN

Multiple high ranking sources in Chattanooga area business and political circles have confirmed to Business Tennessee that local multimillionaire Henry Luken is mulling the establishment of a luxury yacht building operation in East Tennessee.

Luken, part owner of Christensen Shipyards in Washington State, which specializes in building “mega-yachts” priced in excess of $20 million, declined to be interviewed. Christensen president Joe Foggia also did not return multiple calls requesting comment.

Industry trade magazine The Yacht Report first pointed to the fact that Christiansen was assessing the feasibility of building another facility in a published interview with Foggia last year. “Although geographic details were very sketchy,” the magazine reported, “there are plans afoot for this to be built out of Washington State, and they have been looking for possible sites over the past few months.”

A decision to site a luxury yacht production facility in East Tennessee would only swell Luken’s already growing public status as a mover and shaker in local business circles. The owner of Covista Communications, Luken recently grabbed headlines when he purchased a portfolio of 36 office and retail buildings from former Chattanooga mayor (and current senatorial candidate) Bob Corker.

Such a decision would also serve as the next domino in an already healthy succession of recent watercraft related economic developments in East Ten- nessee. The area is already home to industry stalwart Brunswick Boat Group and its subsidiary, Sea Ray Boats. And in January, Kansas-based Cobalt Yachts announced plans to begin building 50-foot yachts at a new plant on Tellico Lake, employing about 350 workers. (Sources indicate Luken’s operation likely would also land on Tellico Lake, although, for logistical reasons, an additional production site would be needed closer to Chattanooga.)

Christensen’s expansion plans likely received a boost in May when the company settled an outstanding lawsuit brought against it by world-renowned professional golfer Tiger Woods—and for an amount far less than company officials might have feared. Woods alleged in his 2004 lawsuit that Christensen went afoul of its contract by using the celebrity’s name and photograph to promote the company following his purchase of a 155-foot yacht he named Privacy. A related court action pegged the settlement amount at $1.6 million, far less than the $50 million in compensatory damages Woods’ lawsuit had threatened.

In addition, the current and future market conditions for luxury yacht production appear rosy. According to Showboats International, yacht orders were up 30% in 2005 and are showing continued positive growth in 2006, despite rising fuel costs. It’s clear the purchasing power of multi-millionaires like Woods isn’t adversely affected by market fluctuations. As such, Tennessee can afford to be patient in waiting for this recession-proof industry to make landfall.