Austal USA said it received approval to assume the lease of the Marine Group Boat Works

(MGBW) facility in the Port of San Diego, the company said on Tuesday.

Austal USA and Marine Group Boat Works are in a 45-day exclusive period to close the agreement for Austal to assume the lease on the 15-acre site. They entered this period after Austal received approval from the San Diego Port of Commissioners. The deal is expected to close in mid-December.

The company said it will use the site, adjacent to Naval Base San Diego, for ship repair for the Navy, Military Sealift Command and Coast Guard vessels. 

Austal said it will use this facility to establish a full service ship repair capability to provide maintenance and modernization for small surface combatants, autonomous vehicles and other small to medium-size vessels.

Austal plans to build a new dry dock designed to specifically execute availabilities on Littoral Combat Ships (LCSs) and other small surface combatants. Services will include technical and material support, topside work, and dry docking availabilities.

MGBW said it will now move to focus on its growing superyacht industry and continue servicing commercial vessels like high-speed ferries, tugs and barges based out of its Chula Vista shipyard. The company will also continue work in the government craft services.

“We are excited for this opportunity to invest in our organization and increase the capacity of our Chula Vista facility to meet growing industry demands,” MGBW President Todd Roberts said in a statement.

The company said it has experienced 141 percent growth in superyacht services in the last 13 years and has seen a 75 percent increase in commercial vessel revenue since 2018.

“This investment marks a major milestone in Austal’s focus on growing our services business and anchors our commitment to servicing Navy, Military Sealift and Coast Guard ships in the INDO-PACOM region. This facility expands our commitment to our customers to ensure they are receiving the Austal USA brand quality throughout the lifecycle of the ships we deliver,” Austal USA President Rusty Murdaugh said in a separate statement.

Austal Limited CE Paddy Gregg said the Port’s approval of the lease underscores the company’s expansion of the Austal USA service business.