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Righting the ship

How a Kentucky houseboat company used a $7,500 grant to make $3 million in sales

A Stardust Cruisers houseboat, made in Kentucky, sits at dock in Dubai, India.
A Stardust Cruisers houseboat, made in Kentucky, sits at dock in Dubai. (Photo courtesy of Stardust Cruisers)

MONTICELLO, Ky. (Aug. 22, 2013) — They glide along the coastlines of cities all over the world, resembling floating palaces, covered in glittering windows, filled with amenities; theater rooms, hot tubs, lush carpet and sparkling hardwood. The ultimate in luxury, houseboats are items of prestige for those who enjoy a top-quality lifestyle, with some of the smaller models starting at $240,000.

These high-priced items generate a lot of money, helping the manufacturers, their employees and the economies of the communities where they are produced. But the smooth sailing product faced a perfect storm, one that nearly brought an end to the entire industry.

Troubled waters

When the world economy took a tumble around 2008, the houseboat industry went down with the ship. The sinking feeling could be felt all over southern Kentucky, which includes Lake Cumberland and the small town of Monticello, population 6,000. The town’s welcome sign says it all: Houseboat Manufacturing Capital of the World.

Stardust Cruisers manufactures houseboats in Monticello.
Stardust Cruisers manufactures houseboats in Monticello, Ky. (Photo courtesy of Stardust Cruisers)

The sign is right. Houseboat magazine said in 2012 the region produced more houseboats than any other area of the country. The industry put anchor in the area in the mid-2000s, with several houseboat companies cranking out thousands of dreamboats. One such company was Stardust Cruisers, which sold houseboats to wealthy water-lovers all over the world, including Europe, the Middle East and Australia.

But heading into 2012, production had all but disappeared. Stardust Cruiser President Terry Aff said the Lake Cumberland area’s houseboat manufacturers, which had numbered about a dozen before the recession, were reduced to four struggling companies. Whereas the industry had supported more than 1,000 direct jobs, fewer than a couple hundred were still clinging to their jobs.

All hands on deck

Stardust Cruisers went from 70 employees to as low as 15 from 2007 to 2009, including Aff and chairman Bruce Chesnut, who both continued working without salaries.

“Those were devastating times,” Chesnut said.

But then, Kentucky’s Cabinet for Economic Development stepped in to help. A $7,500 Kentucky Export Initiative State Trade and Export Promotion (STEP) grant helped company officials travel to Dubai, where luxury houseboats are in high demand. On the trip, Stardust Cruisers made valuable contacts, setting up a distributor list that has resulted in more than $3 million in boat sales. The company now employs more than 50 people and continues to hire more workers.

Full steam ahead

Stardust Cruisers continues to search for new product ideas and is opening communications with other companies in Kentucky to work on projects. One example is Outdoor Venture Corp., from Stearns, Ky., which is building a new structural insulated panel used in houseboats as well as Houseboat to Energy Efficient Residences (HBEER), which are energy-efficient homes designed for affordable housing.

An HBEER home in southern Kentucky. (Photo courtesy of Kentucky Highlands Investment Corp.)
An HBEER home in southern Kentucky. (Photo courtesy of Kentucky Highlands Investment Corp.)

Stardust is building energy efficient houseboats thanks to the experience gained from building HBEER homes, which grew out of a partnership between the UK College of Design, the Center for Applied Energy Research at UK, the Kentucky Highlands Investment Corp. and the Kentucky Housing Corp.. The company has plans to build 13 such homes in conjunction with Whitley County’s HBEER Development Housing Project, set for construction in the small town of Emlyn, Ky.

Overall, Stardust predicted in June 2013 that annual sales would surpass $6 million. This is triple the sales figure from 2009, and company officials credit the Cabinet for Economic Development’s resources for throwing a lifeline to a sinking industry.

“This is an example of how the government can make a difference in the future livelihood of folks here,” Chesnut said.