Roundup 2-22-2013
Bass Pro Shops – Groundbreaking for Our Economic Maginot Line
On Wednesday, the Estuary/Bass Pro Shops deal came up for a vote before the County Commission. We watched the proceedings. There was a lively debate with both sides well represented. Then there was a vote.
– The Vote
Not surprisingly,
The vote was 6-1 with Commissioner Kevin Beckner voting against the plan.
Well, at least we know what the reporter thinks. In any event, it passed.
– The Commission Explains Economic Development
While we wish the vote had been different, we were actually quite pleased with the discussion because it allowed a rare insight into what Commissioners really think. First, two who voted for the plan did not say anything, which is as telling as some of the comments.
One Commissioner, who had previously opposed the Estuary/Bass Pro Shops deal and to which we did not pay much attention because we had already seen the Commission’s meeting agenda for that day (see “The Start-up Smokescreen” below), told a long story of how he came to support the deal through his conversion on the road to Nebraska.
Of the other Commissioners who spoke in favor of the deal, there were a number of interesting nuggets. They were interesting not because of the specifics of the Estuary/Bass Pro Shops deal. They were interesting because the comments stripped away the hollow political rhetoric we usually hear regarding modern economic development and showed the thinking of the Commissioners, their philosophy, and their views of what the County’s economic strategy is and should be going forward. (The quotes below are taken from the text that is provided with the hearing video. We apologize for the all caps, but that is how it is provided.)
One Commissioner, a co-chair of the County’s “Economic Prosperity Stakeholder Committee” who voted for the plan, made the following observation:
Of course, this particular Commissioner did not bother to ask why the budget shrank so much. If he had asked why, he would have discovered that the answer is that ad valorem taxes dropped as property values crashed. The crash was particularly bad in Hillsborough County (and really the Tampa Bay area as a whole) in large part because the for decades the County (and the area) has been obsessed with a real estate based economy and, instead of creating a diverse economy that could better whether economic downturns, it followed a policy of doing exactly what County is doing in the Estuary/Bass Pro Shops deal.
Another Commissioner, the other co-chair of the “Economic Prosperity Stakeholder Committee” who also voted for the Estuary/Bass Pro Shops deal, said the following (and we quote at length because it really explains a lot about the County Commission):
There you have it – the Estuary/Bass Pro Shop deal is the “foundation” of the County’s economic development plan. It is “economic development at its best.” Odd. We were under the impression that getting a major high tech factory or Fortune 100 headquarters was economic development at it best, including the real estate development they would require and sustain. But we stand corrected.
Frankly, we are glad that it has finally been stated publicly that the Commission’s economic development plan focuses on subsidizing real estate development, with the model being to attract strip shopping centers. It was a rare moment of honesty in local politics.
It is now clear that this real estate based economic strategy is the ideal model for the economically sustainable plan by the “Economic Prosperity Stakeholder Committee.” That is the depth of thought and understanding among a majority of the County Commissioners. That is their future vision for Hillsborough County, which is exactly like the past economic vision of Hillsborough County. They plan to fix our economy by doing what messed up our economy.
We have long said that the County’s main economic focus was to have a real estate based economy. Now we have confirmation. Govern yourself and your votes accordingly.
– Planification Stratégique Comme la France dans Les Années 1930
The one Commissioner who opposed the plan did a nice job of pointing out that the Tampa Bay market is very attractive to Bass Pro Shops and that it made no business sense for Bass Pro Shops to walk away from it over $6.25 million dollars. (Unfortunately, his discussion was of such length that it is not practical to post here).
He also pointed out that the County had to have a better policy of giving economic development incentives than just giving subsidies to developers. In response, the main proponent of the Estuary/Bass Pro Shops plan on the Commission stated:
Hillsborough County has been behind the curve in many things – though subsidizing development is not one of them. (Maybe the Commission should spend less time on workshops, retreats, and negotiating with retailers and more time developing other sectors of the economy and fixing the neglected infrastructure where people already live.)
Look, we are all for building where the infrastructure is – but that is an argument for urban infill where people and infrastructure already are and at a greater density than presently exists, not to mention having proper transit. It is not an argument for accelerating and subsidizing sprawl, which is what the Commissioner is promising as the “premise of [the County’s] strategic planning.”
Moreover, let’s look at the concept of strategic planning generally. The key to strategic planning is having a strategy; simply having a strategic plan is neither inherently good nor bad. What makes a strategic plan good or bad is whether the strategy is good or bad – whether it is forward thinking or repeats the mistakes of the past – and the execution of the strategy. For instance, the Maginot Line was a strategic plan (and it was even executed relatively well) – it was just a strategy on fighting the last war, which was clearly bad.
The County Commission’s strategic plan is based not just the last economy, but the one before that – before the first tech boom in the 1990’s. (Ask the buggy whip makers of the early 20th Century how basing your strategic plan on an economy that existed 30 years before works out.) Our competitors will simply avoid our error, and it will be a failure.
Finally, we had to address this bit of rhetoric from the main proponent of the deal on the Commission:
We didn’t know the Commissioner thought he and his supporters were elitists. . . (Maybe one of those workshops should focus on the dangers of using double negatives in hollow rhetoric.)
We do not reject job creation – we just acknowledge actual economic reality and support efficient job creation. The economic reality is that the most efficient job creation for all income levels is to attract high paying jobs because higher wage earners tend to buy more and, thus, provide employment for more people. This creates a multiplier to any money invested for the original high paying job. The lower the wages of the attracted jobs, the smaller the multiplier. (Or put another way, a person that makes $50,000 is going to spend more and, therefore, help support more other jobs than a person who makes $24,000. As such, there is a greater economic impact to the whole economy of the $50,000 job.) Therefore, spending on higher paying jobs is a better investment and more efficient use of public money. A good steward of the public purse would recognize that reality and act on it.
In sum, we are happy that the County has clearly stated that is has adopted a bankrupt vision of economic development focused on real estate. At least, there is no running from it.
– The Start-up Smokescreen
Of course, just because there is no running from it does not mean the Commission did not try. In fact, the Commissioners tried immediately after voting to give $6.25 million to the Estuary/Bass Pro Shops developer. (The Commissioner who voted against the Estuary/Bass Pro Shops deal being the obvious exception.) Not coincidentally, the next agenda item for their public hearing on Wednesday (on page 3) was the following:
10:15 AM F-7 Direct the Economic Development Department to formalize creation of an economic development innovation initiative to drive the growth of technology and innovation startups in Hillsborough County. Direct staff to develop a multi-year, $2 million dollar program (this amount was determined by a year-long analysis and conversation with the disparate startup community) that should include, but not be limited to, the following: 1) Providing services related to incubation, accelerating, mentoring and networking the startup community. 2) Focusing County support of the startup community through event sponsorships. 3) Building in-house resources for program implementation, business intelligence, research, marketing, contract compliance and other needs to kick start the startup community in Hillsborough County. Staff is directed to bring back a program for review and board discussion during the March 20, 2013 BOCC meeting. (Commissioner Sharpe)
It passed unanimously, giving the Commissioners something technology related to point to when someone makes the obvious point that the County’s main economic development focus is real estate.
And let’s look at the start-up spending on which they voted. It is a “multi-year, $2 million dollar program.” The key is that the staff is being directed to “bring back a program for review and board discussion.” In other words, right now there is no program. This came out of thin air – or, more likely, back room dealing. (If it looks like a duck . . .)
So what is the goal of the program?
Based on that description, the “old days” were during the Estuary/Bass Pro Shops vote about half an hour before the vote on this start-up program. And we were just told that the Estuary/Bass Pro Shops deal was the prototype of job creation. Fascinating.
What else?
As a result, they say Tampa Bay suffers from a brain drain, in which people with big ideas leave town at a young age and move to Boston or the Silicon Valley. h
Is this a joke? The Commission just voted for the Estuary/Bass Pro Shops deal where they threw money at a developer and multi-billion dollar retail business. (sounds like fat-cats to us.) Now they tell us that was bad?
Let us be clear: Assuming this undefined plan actually supports start-ups, we are not opposed to it. In fact, we favor it. It should probably be bigger and should have been done long ago. Though it is strange that the Commission forgot to put the start-up idea on the agenda until the Bass Pro Shops vote came up and after the Estuary/Bass Pro Shops deal that had been opposed by the tech community.
Like we said, assuming it helps start-ups, we favor the start-up allocation. However, we do object to using the start-up idea, which is plainly an afterthought, in an attempt to hide the majority of the County Commission’s real policy, which is focusing on real estate. And we are opposed a circumstance where the County spends $6.25 million taxpayer dollars on something they shouldn’t (Estuary/Bass Pro) in order to get agreement to spend $2 million more taxpayer dollars (over multiple years) to start something they should have done long ago. (At least, we think they should have done it. We have to wait for the actual plan.)
And if that is not enough and you doubt that the County’s economic development plan is real estate based and that tech is a minor side item, then find the part of the “Economic Prosperity Stakeholder Committee” report that deals with technology and start-up development (other than a couple of passing references to it as an aspiration) among the sea of discussions about how to make real estate development easier. And find anyone on that Committee from the technology community – or really any industry other than real estate development and related interests (and we include the few environmental activists in the “interests.”). Apparently no one else, including tech and other industries, are stakeholders in the County economy.
The majority of the County Commission plainly fails to grasp that we are in the 21st Century and that their real estate focused business model will simply condemn Hillsborough County to the same brain drain, lack of competitiveness, and low wages that we are dealing with now.
– Economic Development – The Bottom Line
We reiterate that real estate is PART of economic development, but it is only part. The success of real estate is contingent on having tenants and buyers, and, without a properly diverse economy, it will flounder. Without a comprehensive economic strategy, real estate is a dead end.
The reality is that real estate interests will make far more money if there is a diverse, vibrant economy that creates and sustains more demand for office space, more disposable income to be spent at retailers, and more employed people to purchase or rent more expensive homes and apartments. Without such a diverse, vibrant economy, the next crash may very well hurt just as much as the last.
Economic development efforts should focus on recruiting and developing the well paying businesses that create the diverse, vibrant economy. If you do that, real estate will not need subsidies, and development will take care of itself.
It is unfortunate that so many of our leaders are blind – many willfully – to this reality.
Meanwhile at Our Nearest Competitor
While the Hillsborough County Commission was giving away millions for a strip store in the name of infrastructure planning and while promising millions more for developers, our nearest competitor was looking at real infrastructure.
From the Orlando Sentinel – click on map for article
Really, what can you say?
The Hillsborough County Commission still thinks it is the 1980’s (though, to be honest, many of our competitors were already working on rail transit in the 80s, so maybe the Commission is in the 70s.) while our competitors move forward on modern infrastructure.
So what accounts for all the plans in Orlando?
The Tampa Bay area has more people and the same or fewer transit options than Orlando, so that can’t be the full explanation. And, Pinellas County’s positive moves toward transit, the Tampa Bay area is definitely farther behind the times. Of course, the Orlando area works as a region and gets support from both parties in its state and federal delegations. The Tampa Bay area doesn’t do either (for instance, see HART).
When the next boom comes, which area do you think will be better situated to take advantage and grow more – including in the real estate market?
Downtown Tampa – What Workers Want
The Tribune ran an interesting article on how people living in downtown Tampa view the area in which they live:
Nicole Loftus moved to Channelside looking for the kind of city living she enjoyed in South Florida.
The article goes on to discuss various plans and ideas for stitching residential areas of downtown together.
What the article alludes to but does not really discuss is the great, master-planned pedestrian wasteland in the middle of downtown Tampa – the Hillsborough County government district. This includes the County Center, the various courthouses, the school board and other government offices.
The problem with the government district is not that people do not work in the area – they do. The problem is that the government buildings completely ignore the sidewalks and, when the work day is done, the area is a barren wasteland right in the middle of downtown, cutting off the Channel District from the business/”arts” district and cutting off what will become Encore from anything to the south. It is urban planning and design at its worst. Though, to be fair, much of what is there was built decades ago. But, as we have learned, the County continues to live in the past.
Fortunately, the failure of the Hillsborough County Commission to move the County forward and help the City provide an environment, both built and economic, to compete with other metro areas does not mean there is not demand for modern, urban living in the Tampa Bay area.
We are glad to see that there is demand. We wish that there were more opportunities for it and the infrastructure to sustain it.
Retail will follow residents, and residential will come with demand. (Though poor planning and design can hinder both) On the other hand, we doubt that by “transit” they mean “buses.”
This all points out a sad fact: Too often many of the County Commissioners act and have acted as though the County exists only east of the Palm River. As explained above, the County allegedly wants to promote development where infrastructure is already in place – which is an argument for promoting urban infill, especially dense development in places like downtown Tampa. But instead of such promotion, the County promotes sprawl, which is hardly going to attract young professionals and tech companies.
If the County would give more energy to transit, urban infill, and denser development instead of inefficient sprawl, they would increase the tax base at a much lower cost in infrastructure and services than giving away money to developers to build sprawl in the unincorporated county – that would be a truly good business practice. And it would help attract the young professionals that are needed to diversify and develop our economy – in other words real economic development.
Of course, as seen in the first item, you should not hold your breath.
List of the Week
Our list this week is the Worst Cities for College-Educated Women (under 35) Trying to Find a Decent Date. It is based on the percentage by which college educated women under 35 outnumber college educated men under 35.
The worst place was Sarasota followed by Lakeland; Augusta, GA; Stockton, CA; Ft. Myers; Greensboro, NC; Springfield, MA; Memphis; Fresno; and Jackson, MS. Miami was 19th worst. The Tampa Bay area was 21st worst, just after Birmingham at 20th. Orlando was 37th.
Do you see a trend for Florida? Do you see a trend with the Tampa Bay area?
As always…right on the money. I’m getting more and more depressed though..I can see the writing on the wall for Tampa Bay. We are and always will be an also-ran, instead of a dynamic progressive metro area.
No need to get depressed. The process is bringing progress, just too slowly. However, remember engagement is the key, and there are always elections.