enlarge John Patriquin/Staff Photographer

Workers in the boatyard’s new manufacturing building lift a section of a hull that will be attached to the keel in the background.

enlarge John Patriquin/Staff Photographer

An exterior view of the building, a vast improvement over the two old, undersized bays where workers built boats for decades in difficult conditions.

enlarge John Patriquin/Staff Photographer

A pair of tugboats under construction sit in the yard. The company has seven boats in various stages of completion, and recently was awarded a $2.6 million federal grant to put in a dry dock, which will let it pursue new types of boat projects.

enlarge John Patriquin/Staff Photographer

Welder Penni Barbeau works under a tug.

enlarge Jill Brady/Staff Photographer

East Boothbay firefighters hose down hot spots after a devastating fire at Washburn & Doughty Associates in July 2008.

Watch a short documentary about the fire at Washburn & Doughty Associates.

EAST BOOTHBAY — Massive timbers prop up parts of Hull 95, allowing tradesmen at Washburn & Doughty Associates to work on the bulkheads. One chunk of wood is charred black, shiny in the sun. It's a stark reminder of the fire that destroyed the boatyard last summer.

Hull 95 itself is a reminder of that fire. It was one of two hulls that were inside the yard's bays when the buildings caught fire on July 11, 2008. The other, the Loretta B., is in the water now, nearing completion. Hull 95 wasn't a priority for the customer, so it sat, damaged by fire, until these last few weeks, when the yard resumed work on it.

For a business that never slowed down after disaster, the work on Hull 95 is one more step forward.

"I think we'll all just be so happy when we have the fire, and the evidence of the fire, behind us," said Katie Doughty Maddox, marketing manager for the yard. "We're ready for a clean slate."

Another major advance for the company is pending: Washburn & Doughty just learned that it was the only boatyard in Maine to win a grant under the federal economic stimulus act.

The tugboat maker will get $2.6 million under the Maritime Administration's Small Shipyards Grant Program. It plans to use the money to design and build a dry dock, which will let it modernize and pursue new types of boat projects.

Through last winter and this summer, Washburn & Doughty juggled the rebuilding of its boatyard and the construction of tugboats. It is working on seven boats that are in varying stages of completion.

There are more signs of the yard's future than of its past.

The Sheridan Corp. construction company just signed off on the completion of the boatyard's new 42,000-square-foot manufacturing building, a vast improvement over the two old, undersized bays where workers built boats for decades.

"This building – it's like heaven," said Ken Doak Sr., a master shipfitter who has worked for the company for 17 years.

The old bays were so tight that it took tremendous planning, shuffling and thought to build each boat – the physical constraints just adding to the challenge of building state-of-the-art tugboats.

"You literally had inches of clearance on each side," said Brian Hockridge, shipfitting foreman. "This is going to take away a lot of frustration."

Rebuilding the yard has cost more than $13 million, financed through insurance coverage and bank loans.

The company had planned to tear down the smaller bay and build a new one before the fire, and then to expand. The fire speeded everything up, and made the company act on a larger scale. The fact that it has come so far in just a year is a testament to help from local and state government, a work force that pitched in and contractors who were on the scene immediately, said Doughty Maddox.

"It just happened so fast because nobody said it couldn't happen fast," she said.

The company also got support from Maine's U.S. senators and representatives and Gov. John Baldacci, all of whom wrote to federal officials in support of the stimulus grant, which must be matched by a 25 percent investment by the company.

The company plans to build the dry dock to replace its shipways. Both of the yard's traditional shipways – used to launch boats – were destroyed in the fire. One has been rebuilt.

In total, the project represents a $3.25 million investment by the federal government and the company. Washburn & Doughty may also have to put in new pads for the dry dock, at an estimated cost of $850,000.

The dry dock is a big step forward, Hockridge said, because it will let workers remove boats from the water for work. That means the yard will be able to bid on repair and retrofitting jobs, in addition to construction work, and it could take on larger jobs.

When a boat is ready to be launched, it is put in a dry dock. The dry dock is flooded...