Mike Hill has been around the water since birth. His family, which has owned the Pilot House Marina since 1956, has stuck by its Prince William business near Leesylvania State Park through difficult economic times and in the face of competition with neighboring counties and the District.

It's a good thing the family stuck it out.

"The marina business is very big right now," said Hill, 46, who runs the family business, which consists of the marina and the Pilot House restaurant. His brother, Terry, 38, owns Hampton's Landing--another marina--right next door, along with Potomac Marine, the area's only on-the-water towing company.

Business is increasing dramatically for Prince William-area marinas, prompting expansions and waiting lists for boaters who dock there. The expansion follows the elimination of the personal property tax on boats and boat trailers, the increase of waterfront development in the county and overall waterfront interest.

"That [tax cut] caused some major expansion," said Mike Hill. "We've hired more people, spent more money. Right now we're full, with a waiting list. Several years ago, we've had empty slips."

As a further indication, Pilot House Marina has spent more than $400,000 in renovations and expansion in the last several years, he said.

By eliminating property taxes on boats last year,, the county hoped to attract boat owners who might otherwise dock their boats elsewhere, said Kathy Bentz, county spokeswoman. "And if they dock their boat here, they will likely shop, eat and lodge here," she said. "It was a way to generate economic development."

Marina owners agree. "The average family on a boating day spends about $365," Terry Hill said. Not only do boaters spend that money on fuel, "they have to get beer, food and then go to the crab house."

Carl Sell, president of the Prince William Parkway-95 Partnership, said he hopes that marinas like the one being built at Belmont Bay will attract business to eastern Prince William. "Obviously, the water is a tremendous asset for us."

Sell and his partnership invite business executives, bankers and lawyers who represent businesses for evening cruises along the Prince William waterfront. "We want to make them feel good about Prince William County and the shoreline. As they expand their own business or make recommendations to the people who do, we'll be in the mix," he said.

The waterfront has taken on a large role in county politics lately. When County Executive Bern Ewert first came to Prince William, he was surprised. "I didn't realize that the county had such an extensive waterfront," he said. "We all began paying attention to it."

Two town centers are now in the works along the county's waterfront. The 325-acre Belmont Bay development would center on a 158-slip marina surrounded by a compact Georgian-style village of apartments, town houses, offices and restaurants. Two hotels, a George Mason University marine research facility and an aquarium also are envisioned for the area, which is near the confluence of the Occoquan and Potomac rivers.

To the south on the Cherry Hill Peninsula, meanwhile, Legend Properties Corp., of Woodbridge, is seeking to build a Scandinavian-style town center perched atop a bluff overlooking the Potomac. Both Belmont and Cherry Hill are near a 20-mile scenic drive envisioned by Ewert; voters later rejected the road project in a bond referendum last fall. Officials say the road is not vital to the success of either town center, although the county plans to return to voters with the Potomac River Drive proposal sometime in the next few years.

With the effect of waterfront developments, the boat business will continue to get an extra boost. "We're all for Belmont Bay," Terry Hill said. "If they're buying the bigger boats, then they're spending the money everywhere."

Stephen Caruthers, president of Caruthers Development Corp., which is responsible for Belmont Bay, said he plans to open the developments by spring 2000. "There seems to be a great deal of interest from the people moving here from Fairfax and Alexandria," he said. "They are drawn to water and boats."

The economy is another natural asset for marina owners.

"The economy is very good right now. A lot of people are looking at boating as something they can do with the whole family," Mike Hill said. "They're willing to spend money in the little bit of free time they have."

CAPTION: Brothers Terry and Mike Hill, who own neighboring marinas in Woodbridge, perch on a barge at Hampton's Landing, where a new dock will be built.