The economic forecast for the South End’s largest employer looks good for 2007 and beyond.

Nichols Brothers Boat Builders in Freeland continues to employ a healthy workforce of between 200 and 250 workers. And as it heads into a new year, the company seems to have more than enough work to take it into the future.

Matt Nichols, 59, chief executive officer of the Freeland boatyard, said the company’s workload is set for the next year.

And he said that’s a good place to be.

“We’re pretty much sold out through 2007,” he said.

“We are doing jobs we’re very familiar with tractor tugs and smaller passenger vessels,” he said.

Nichols sat down for an interview in his office overlooking Holmes Harbor. Framed photographs of the many vessels built by Nichols employees at the Freeland yard cover the wall behind his desk.

“There is something romantic about boats,” Nichols said.

“We have a nice nest of work,” he added.

“But we can always use more.”

With the decline of the fishing industry in the early 1980s, the yard diversified by introducing high-speed catamarans to the passenger vessel market.

Since then, they have built 35 high-speed catamarans.

The company’s latest vessel: A car ferry for Pierce County that stretches 216 feet and has a capacity to carry 54 vehicles and 325 passengers.

Another contract that will take Nichols into the new year is an exposition yacht built for ExpoShips in Florida. The Grand Luxe is a 230-foot tour boat that will sail between 34 cities on the East Coast. It will be used to display fine works of art for sale and as a location for charity galas and gourmet dining.

The vessel is set to be delivered in March.

Nichols also has contracts to build three ocean-going tugs.

One contract for the new tug is with Bay/Delta Marine in San Francisco. The vessel is designed with the power and agility to muscle larger ships in and out of San Francisco Bay, and it’s the first of a new series of tugs from designers Jensen Maritime Consultants of Seattle.

And 2007 may be a pivotal year for even more work, however.

Contracts for three of four new state ferries have been awarded to Todd Shipyard in Seattle.

“We hope to be a subcontractor on that project,” Nichols said.

Nichols said the Freeland yard isn’t large enough to build the ferries, but modular sections for the ferries can be built here.

Another possible contract that Nichols would like to see is more work for the Navy.

Nichols built the experimental X-Craft, a high-speed aluminum catamaran designed for nearshore military operations.

Nichols said the Navy will be making its decision this year on whether more of the vessels will be ordered.

Unlike the first X-Craft that was built in its entirety in Freeland, though, any new X-Crafts would be built by a consortium of boatyards.

“The Navy could want as many as 40 or 50 of the vessels,” Nichols said.

The boatyard started here in 1964.

Nichols has been president since 1972, when he and his brother took over running the company from their father. Archie Nichols left the business in the 1990s to pursue other interests.

The business got its start in Oregon. George Mark Nichols started Nichols Boat Works in Hood River, Ore. in 1939, when he left his farm in the Yakima Valley and settled on the Columbia River. He went into business with his son, Frank, and they began building river boats.

In 1964, Matt Nichols’ father, Frank, moved with his wife and their 11 children to Whidbey Island where he purchased the land for the boatyard.

Now the company is in its fourth generation. Matt Nichols’ son, Bryan, works alongside his dad as president of the company.

This year will find the company working with Island County and various state agencies to update the company’s permits for its Freeland operation.

As for the permits, Nichols said they are a work in progress.

Island County, as well as the state departments of Fish and Wildlife and Ecology, have different requirements for the boatyard to meet to address air quality, water discharge and the construction of boatyard facilities.

Nichols said they are working to safeguard the environment as work continues at the boatyard.

“We have worked very hard to satisfy Ecology’s requirements,” he said. “And we will continue to do so.”

The company is also taking a look at changes to a new rail system for launching boats.

Nichols officials held two public meetings last year for input from local residents on the company’s expansion plans. Most were against the proposed rail launch, the addition of large buildings, and a workweek at the boatbuilders that would run 24 hours a day, seven days a week.

The company is taking another look at its earlier plans, and has stepped back from the rail launch.

“We are reviewing it with the agencies involved,” he said.

“We like our existing launch system,” he said.

After 10 years of launching boats by rolling them to the beach on cradles, Nichols Brothers developed a hydraulically driven mover on crawler tracks, which allows the vessels to float out of the cradles as the tides comes in.

The rail system would have stretched 1,400 feet, and would deep into the harbor above eel grass that provides habitat for salmon. Opponents claimed the rail system would be an eyesore and a safety hazard.

The company is also rethinking adding a number of large buildings to its Freeland property.

“We heard what people had to say,” Nichols said.

Gayle Saran can be reached at 221-5300 or gsaran@southwhidbeyrecord.com.