The city of Oak Harbor is going to use a grant earmarked for economic development to purchase a private business and turn it into a public operation.

On Tuesday, Island County commissioners unanimously approved a $675,000 Rural County Economic Development Infrastructure Grant to the city to purchase and redevelop Mariners Haven, a private boatyard with two buildings on three acres adjacent to the Oak Harbor Marina.

The grant program is funded through a rebate of sales tax from the state.

Harbormaster Chris Sublet told the commissioners that the boatyard used to be a thriving repair yard that had “a reputation for some really solid work,” employed close to 20 people and “people came from all over” to have their boats repaired at the facility.

Now it is only used for dry storage of boats.

“We believe there’s a lot of opportunity there,” he said.

This is the second time the city applied for the grant. County commissioners weren’t completely sold on it a year ago and asked for a business plan and an appraisal.

In addition, county officials questioned whether a government taking over a private business would qualify as economic development. The grant program specifically defines one goal as improving the economy by creating and maintaining private-sector jobs.

This time, Sublet stressed the positive impacts the new facilities would have on both government and private employment, as well as the general economy.

The boatyard currently provides storage for 40 boats, but Sublet said the city will be able to double that. In addition, the facility may provide “much-needed repair and maintenance services.”

Sublet said he anticipated the purchase of the business will create two city jobs in the first year and an additional 10 private or public jobs associated with the boatyard will be created in the next four years.

He gave the example of a private mechanic who comes to the boatyard to work on a client’s boat.

The boatyard will increase boat traffic at the marina, Sublet said, which will benefit the city-owned marina and all the jobs associated with it.

“People will come and go from marinas to have their boats worked on in specific yards,” he said.

Sublet explained that the marina supports many small businesses, which he said will “grow in a wide range” with the addition of the boatyard.

The city is providing $75,000 in matching funds, which is 10 percent of the total project cost of $750,000.

According to the city’s grant application, a $400,000 grant the state awarded the city for purchase of the Mariners Haven property last year could not be used since the city could not show the project was fully funded.

City Administrator Blaine Oborn said the purchase price of Mariners Haven hasn’t been determined.

An appraisal set the price of the property at $250,000, but the city still has to negotiate with the owner for the price of the business itself.

In addition, the city hopes to purchase another small piece of adjacent property owned by a different family.

The commissioners said Sublet did a good job of showing how the project will support the local economy.

Commissioner Jill Johnson said the grant was consistent with investments that the county made at the Langley marina and the Coupeville wharf.

Janet St. Clair said she liked the idea of supporting small businesses by providing a place where they can come and do work on boats.