Entrepreneur's passion sets sail

All Russell Hann wanted was a custom boat for himself. Then the Navy came calling, with cash.

By JODIE TILLMAN, Times Staff Writer
Published October 14, 2007

Russell Hann stands next to the Hann 50 Military under construction at his Dade City boat building facility.
	[Mike Pease | Times]

DADE CITY - Russell Hann made his money running a company that audits telephone bills. But the defining passion of his boyhood remained the one of his adulthood: boating.

"I grew up in Pittsburgh, and there are three rivers in the city," Hann said. "I just lived on the water, kayaking, fishing. As far back as I can remember, I loved it."

Loved it through four years of studying engineering at Carnegie Mellon University, through over a decade of corporate life. Finally, as he neared 40 and started a family, Hann realized he wanted boats to be not only a hobby, but also his livelihood.

Last year, Hann opened a production facility for his Hann Powerboats, a custom-made boat company, at Dade City Business Center. Just a year in business, and with fewer than five projects under his belt, he recently scored two federal contracts, one to build a $400,000 high-speed 50-foot vessel and one to build a $20,000 18-foot flats boat.

The larger boat will be used in U.S. Navy training exercises and the smaller one as an enforcement boat in freshwater lakes at Goodfellow Air Force Base in Texas.

How did he get the government deals? In part, though a circuitous route that taught him how to look for business opportunities in unusual places.

After graduation, for instance, he had read about utility bill auditing - looking through bills to determine whether customers were overcharged - and thought it sounded like a smart idea.

He started Recovered Capital Corp., initially in Ohio before he moved it to Destin. The company made money when it found its clients had been overcharged by telecommunications companies. This was shortly after the 1996 government deregulation, when the telecommunications industry was in flux. His clients, which ranged from Fortune 100 companies to Okaloosa County, got refunds as low as hundreds of dollars and as high as $12-million.

Hann, who still lives with his family in Destin, was doing well enough in 2001 to order a custom-made 50-foot recreational boat from a Fort Myers company called Maximum Thunder Powerboats. He is a licensed captain and was considering doing charter excursions.

The boat became an obsession, and he often dropped by the company's headquarters to check on the boat's progress. But about halfway through construction, work stopped after the company's leader began having legal problems.

Hann, however, wanted the boat badly enough that he worked with the crew to finish the project in 2003. Shortly after, he said, a photograph of his boat somehow ended up on the Internet. A consultant for the Navy saw it and contacted him: It was the sort of fast-moving small boat the Navy was looking for.

Working with the crew left from Maximum Thunder, Hann said, he applied for and won a contract to build a develop a similar model for the Navy. The boat was delivered in 2004.

In the meantime, Hann was still running the auditing company in Destin and had also gotten married. After his first daughter was born in 2004 and his second in 2006, he started thinking about whether he could make money doing what he really loved.

"I thought, 'What do I want to do moving forward?' " he said.

In 2006, he organized a team of about a half-dozen employees and found the space in Dade City. In March of this year, he sold Recovered Capital. He would not disclose the sales price other than to say it was "seven figures" and guaranteed him a cushion to fall on if the boat business doesn't pan out.

The new $400,000 contract is with the Naval Air Warfare Center's Weapons Division, a technical arm of the Navy, in Point Mugu, Calif.

Jeffrey Blume, the division's head of seaborne targets team, said his job is to find fast-moving boats - any size from 18 feet to 260 feet - that can be used to help train the Navy. Such boats are operated by remote to simulate terrorist threats.

Blume said when his division put out its proposal, it had very specific requirements for how fast and how seaworthy the boats needed to be. The division wanted a boat that was fast, but big enough to carry a missile. He declined to say how many competitors there were for the contract, saying only that the Hann 50 met all the requirements and came in at the lowest price.

It is up to the Navy to decide whether it wants to buy more of the boats. Blume said he could not say if that would be the case.

Blume said it is common for the Navy to make contracts with small businesses, rather than larger boat manufacturers, in part because the military is not looking to buy in bulk. And Hann's previous experience with the Navy was a plus.

Hann said he's still working to build up the commercial side of his business. He recently got orders for two more 18-foot boats that cost about $25,000. And, of course, he's going to keep looking for more government contracts.

"I love boats, and I'm an entrepreneur," Hann said. "If I can make money doing it, that's great."

Times researcher Angie Drobnic Holan contributed to this report.

Fast facts

On the Web

www.hannpowerboats.com

[Last modified October 13, 2007, 20:39:13]