Healthcare entrepreneur Hugh Westbrook’s plan was to spend $60 million to create 300 jobs by transforming the Merrill-Stevens boatyard into a megayacht hub.

Five years after buying it, Westbrook has laid off all but 28 employees and has shuttered the business, which has been in continuous operation on the Miami River since 1923.

Westbrook said the economic downturn has been brutal on the boating industry.

In the last two years, Merrill-Stevens has downsized from 160 employees to 28, which includes security and backroom people needed to keep the operation going.

And the financial pain isn’t over yet.

Westbrook said he expects more layoffs. The current plan is to operate the company on a project-by-project basis, generating additional revenue from yacht storage.

But Westbrook hasn’t given up on his dream of remaking 124-year-old Merrill-Stevens for the 21st Century.

He needs $12.5 million and partners to build a scaled down version of the original plan. He may even sell the business, which is located by the Northwest 12th Street Bridge along the Miami River.

“We believe in the project and the investment we have made and we know the value of the brand Merrill-Stevens. A project of this magnitude may require bringing in a buyer,” Westbrook said.

Westbrook, an ordained minister, led VITAS Healthcare Corp. prior to his foray into the marine industry. He sold the hospice company for more than $400 million to Chemed Corp.

When he acquired the landmark boatyard in 2004, Westbrook had ambitious plans. The Merrill expansion project also included construction of a river walk along the Miami River and a historical exhibit. The more than 300 jobs expected as a result of the expansion would have had salaries above the county average. An independent analysis by economist Antonio Villamil of the Washington Economics Group estimated the facility’s annual economic impact at $195 million, according to a Miami River Commission report from 2007.

“We have invested more than $5 million in soft costs,” said Westbrook, who is chairman of Merrill-Stevens. “Just as we were ready to go, the financing opportunity for a project like this dried up and has not come back.”

At the same time it was seeking the necessary government approvals for the expansion, Merrill-Stevens was making moves on and off South Florida shores.

In 2006, it bought yacht brokerage firm Koch, Newton & Partners based in Fort Lauderdale. In September of the following year, Merrill-Stevens announced it was opening an office in Mexico to compliment operations already underway in Mallorca, Spain; San Diego; and Singapore. In addition to running the full-service boatyard, the company’s services included yacht sales, fleet management, charter brokerage and crew placement.

But by the spring of 2008, cracks in the business model began to show. Merrill-Stevens announced it was eliminating its yacht services division in order to focus on yacht sales and the expansion and modernization plans for its shipyard. By November, the company said it was discontinuing its Fort Lauderdale-based yacht sales and charter divisions to focus on its repair and refits.

Fran Bohnsack, executive director of the Miami River Marine Group, a marine industry advocate, said the possible loss of Merrill-Stevens to the local industry would be “devastating.”

“The mood is not optimistic,” she said.

Jose Bared, co-owner of competitor Jones Boat Yard, said in an e-mail that he did not know the specifics of the Merrill-Stevens closing, but he conjectured that the lack of upgrades contributed. Bared, who planned his own expansion for Jones Boat Yard, hoped Merrill’s “truly unfortunate and sad” situation would be a lesson for local leaders.

“The megayacht industry is extremely important to the South Florida economy, employing thousands of people and pumping hundreds of millions of dollars into our economy. Miami happened to have two of the oldest most important and largest service providers in the industry, that being Jones Boat Yard and Merrill-Stevens,” Bared said. “It is important that our local officials take note of its importance and the value that this industry adds to our economy.”

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