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Roundup 1-25-2013

January 25, 2013

Bass Pro Shops – The Generosity of the Subsidized

In a story that just goes on and on, there was a development in the Bass Pro Shops saga this week.

Developers of a major retail complex that would include a Bass Pro Shops are offering to lower the amount of public money they are seeking by about $2 million.

In exchange, the I-75/Palm River Road LLC is seeking permission to build other parts of its Estuary project off Falkenburg Road in eastern Hillsborough County more quickly than it would be able to currently.

The proposal would lessen the amount of public money put into the project — to reimburse the developer for road work — to about $6.25 million.

So if the developer gets less county money it will make its own money faster.  Why not just help the developer build out its project faster and not give it any money?

“Bass Pro isn’t receiving any subsidies, incentives or up-front money,” said County Commission Chairman Ken Hagan, who confirmed details of the proposal. “It’s just a creative way to try to allow the county to reduce its commitment.”

We have been over this before – either Bass Pro Shops or the developer (or both) is getting a subsidy.  And with all due respect, the easiest way for the County to reduce its commitment is to not make a commitment in the first place.  We have already reviewed the reasons why this deal is not justified. (Please read that analysis here)  Nothing in the justification of providing a subsidy has really changed.  But we now have another reason this is a bad deal.

Hagan confirmed that if the deal does go forward, developers have tentatively reached agreement with another company that would build a large golf driving range and entertainment complex at the 150-acre Estuary. He identified the operator as TopGolf, founded in London, which operates similar venues in fewer than a dozen locations in England and the United States.

TopGolf centers feature three decks of heated and cooled driving bays. Customers not only can work out kinks in their swing but compete with each other using microchipped golf balls to hit targets, drive the ball farthest or participate in other games.

The business also comes with a restaurant, bar and conference center and plays host for events ranging from business meetings to bachelorette parties.

“This is indicative of the level of interest that Bass Pro can create out there,” said Beth Leytham, a spokeswoman for the development group.

Indeed, we agree, Bass Pro Shops can create interest.  For that very reason, the developer stands to make a good return on its investment without taxpayer subsidy.  The more major tenants they sign up, the less the justification for the subsidy because, even without a subsidy, the project makes financial sense for the developer.  Will the developer walk away from a $100+ million major development with guaranteed anchor tenants over $6 million in taxpayer money?  We doubt it but, if it does, there is something wrong with the plan in the first place.

Additionally, the fact that the developer keeps lowering the amount requested from the County makes it clear that the developer does not need public money to make this large project with confirmed major tenants work.  They are just looking for gravy.  We want the project to work, we just do not think taxpayer money should go towards the developer’s bottom line.

–  One Commissioner’s Internal Debate

At least one Commissioner is going back and forth over the Bass Pro proposal.  We appreciate his attempt to work out the issues in a well thought out way. So let’s examine his concerns:

From his office at the Hillsborough County Commission’s chambers, Mark Sharpe was rattling off reasons to oppose using taxpayer money as an incentive for Bass Pro Shops to open a store in Brandon.

“Bass is old-school retail,” he said. “If we were going to give incentives, I wish the money would go to high-tech jobs. Small businesses could be hurt by Bass. I don’t want to support this.

“But yet.”

* * *

“My reason for not supporting it is because the county has limited resources and we should use that to remake our community,” he said. “But I don’t want to look down my nose at retail jobs. Not everyone that comes here is going to be a biotech company.”

Commissioner, no one is looking down their nose at retail.  We want the development and the stores.  However, we oppose this plan because, among other reasons, 1) taxpayer money is limited and 2) the best way to attract and support retail and construction and other lower wage jobs is to attract and create higher paying jobs – not necessarily biotech jobs but necessarily higher paying jobs.  Consequently, the best investment of taxpayer money is to attract higher paying jobs.

Another of the Commissioner’s considerations is the amount of the subsidy.

The $8 million-plus package could be reduced when commissioners tackle this again Feb. 6. They’re still working on it, but at least this is headed in the right direction. It started off as $15 million in taxpayer bait.

“If it’s $8 million, I’m still a no vote,” Sharpe said. “But if it’s $3 million, well, we would spend that much on a traffic study.”

Setting aside the question of whether a traffic study should be $3 million, the fact that other things are expensive does not make the case for using the taxpayer money for lower paying jobs that very well may be generated without any subsidy.  (We remind you that incentives for higher paying jobs are often much less than $3 million dollars.) As we have pointed out numerous times, if the developer wants $3 million then they can pull off this major project with guaranteed anchor tenants without subsidy and the taxpayer money can go to attracting higher paying jobs that provide many people with disposable income that will help support this and other development and the jobs they will create – and add much more to the local tax rolls. That is a win/win.  This deal is not.

And if the developer won’t build this project without a few million in “taxpayer bait” then there is something wrong with this project. (And shouldn’t the “bait” be the money they can make building and renting this development, not taxpayer money.)


“I would love to have them here,” he said. “But using public money, I don’t know. I don’t want to be so pure about this that it gets to the point that the board thinks I never support them on anything. I’m still going around and around about it. It’s just not an easy call.”

We want them here, too.  But by voting against giving taxpayer money to this proposal, you are not telling anyone you will not support them on anything.  You are saying you do not support this proposal.  You are also setting a precedent and establishing parameters for using taxpayer money in economic development. You are helping to move our County into one that behaves like a major County in a top 20 market, rather than a small town.

If you vote for this proposal you simply continue a failed model of economic development that you acknowledge needs to be changed.

–  Conclusion

Once again, we have nothing against the project.  We just don’t think taxpayers should subsidize a retail development (and we note that there are local businesses that are going to compete with the new stores).   If the development makes sense, the developer will build it and make money without taxpayer subsidies.  Retail and real estate are not where economic development money should go.  We need to spend our precious resources on diversifying and increasing our economic base, not behaving like it is 1980.  Our economic development funds should go to attract high paying jobs which attract other high paying jobs and also create demand for goods and services that create lower paying jobs, functioning as multiplier on return on investment.  That is truly serving the taxpayers.

As we said in our previous analysis, which we quote here because nothing material has changed:

This issue highlights the question of what the Tampa Bay area really wants to be going forward – is it just a really big, insecure, “small town” or a modern city that is working to be on the global stage?

For all those reasons, the County Commission should reject the deal.

Brand Tampa Bay

Maybe because many have for so long thought of real estate and retail as economic development and focused on that, the effort to brand the Tampa Bay area are struggling.

When the bigger world considers Florida’s different metro areas, what do they imagine? Orlando’s got Disney and theme parks — though it now wants to be known for more than that. Miami is urban chic, tropical and the Latin gateway.

And Tampa Bay? When researchers at Tampa marketing firm Spark last year started digging deep into what comes to people’s minds for this area, what did they find?

A blank slate.

How about “Sprawl for all?”   Ok, maybe not.

“We do not have a brand,” says James Robbins, Spark’s brand director. And places without a brand end up with consumers conjuring one of their own, he warns, showing an image of a local strip club that too often stands in as Tampa’s identity in the national media.

* * *

“We realized we needed to coalesce our message as to who we are and what this destination is in a succinct way,” says Doug McLain, marketing vice president at Tampa Bay & Co., the Tampa/Hillsborough tourism marketing agency.

Tampa Bay pays representatives to sell this region in places as far flung as Chicago and Washington, D.C., London, Sao Paulo, Brazil, and Buenos Aires, Argentina.

“All of us struggled with how to describe ourselves,” says McLain, who relocated here last year after completing a branding campaign for Kansas City, the Midwest city split between Kansas and Missouri.

This is not a surprise.  What is the Tampa Bay area?  What is its center?  What defines it?  Does anyone really know?

It seems pretty clear to us that the most successful branding plays off and enhances an area’s existing reputation – in other words, its brand. (Think “What happens in Vegas stays in Vegas”)

Setting aside the fine line between reputation and brand, we continue.  For a branding effort to really work, it needs a slogan playing off a quality that is already known or has a basis in fact.  Some examples:

. . . Dallas launched a branding campaign this fall called “Big Things Happen Here.” Nearby, the Texas town of Denison endorsed “Moving Forward Kicking Back.” Kansas City — McLain’s last stop — chose a brand based on the theme “America’s Creative Crossroads.”

The appeal of the Dallas slogan is obvious.  Kansas City, not as much, unless you have been reading up on the Silicon Prairie – but that is still based in fact.  The question remains, what is the Tampa Bay area?  Frankly, the problem is that it is not one thing.  It is a sprawled area with many nodes but no clear center.   Moreover, the regional rivalries serve to hurt any branding. (Think Mayor of St. Pete)  Can’t do pirates or Latin community because Pinellas will get mad.  Can’t do beaches because that excludes Tampa.  Anything that people will embrace will most likely be bland.  So, what are the ideas?

Last week, Spark narrowed four options or “positioning statements” — researchers stress they are not slogans or tag lines — to one likely candidate: “Seize Life Daily.”

One tourism executive thought it sounded too much like the popularized “Carpe Diem” or “seize the day” phrase. Google the phrase “Seize Life Daily” and the first website listed is a South Korean Catholic junior high school ministry.

But “Seize Life Daily” may be fine-tuned in the months to come before a final brand is unveiled in early summer.

Aside from the comments in the article itself, that slogan (despite what they say, it is a slogan) might be useful if there was a pre-existing conception of the area that connected to that slogan, but, because there is none, the slogan is basically meaningless. (or worse, will be used on the Daily Show in a joke about retirees, which is a reputation we do have.)  In other words, it is not a brand.

Despite the difficulties, we applaud this attitude:

In this effort to find the right brand, Spark CEO Tony Miller encourages area business leaders to be bold, to pick a brand that can inspire people to come here.

“Do we want to be what we are now or something more than that?” asks Miller, who came here 30 years ago. “This is an opportunity. Let’s get people excited. Let’s make us stand for something.”

We are all for branding but it needs to have meaning, whether in and of itself or because it references something people already know.  The real problem with branding the Tampa Bay area is that the area doesn’t know what it wants to be.  It is hard to sell ambiguity to others.

Rays Step Out

Speaking of regionalism, the Rays visited the Hillsborough County Commission this week, which unfortunately is actually an achievement.  What did they have to say?

Tampa Bay Rays owner Stuart Sternberg, angling for a new stadium, said Thursday he wants to keep his team in the region, but “Major League Baseball at this point no longer believes in the Tampa Bay area.”

Five years of winning baseball, coupled with poor attendance, have taken a toll on his fellow owners, Sternberg said. Even with a healthy media market, the Rays still drain tens of millions of dollars a year from baseball’s revenue-sharing pot.

“That gap is growing,” Sternberg told the Hillsborough County Commission. “Put yourself in their place. They look at the success, we have an exciting team, and then they see where the gate is. They don’t care whether it’s Clearwater, St. Petersburg or Tampa. They just know this as Tampa Bay.”

Right, it is a regional issue and time is short.  More interestingly there was a little discussion of the demographic facts/challenges of the Trop.

“It’s not a knock on the area,” Kalt said. “It’s not a lack of appreciation of the fans. The fundamental issue is the location of the building.”

Rays officials have focused on Tropicana Field’s downtown St. Petersburg location not falling within the sweet spot of the area’s 30-minute drive time population. One-third of the Ray’s fan base is from Hillsborough County, one-quarter from Pinellas and the remainder from the outlying seven-county region.

That is the crux of the matter -the Trop is a bad location.  Not surprisingly, given that Hillsborough is a bigger market for the Rays and, unlike Pinellas, still a growing population, it makes sense that the Rays to want to look there, not just St. Pete or Pinellas.  It also points out why St. Pete does not want the Rays looking in Hillsborough.  But if this is a regional issue, they should look in Hillsborough as well as Pinellas.

Of course, the Mayor of St. Pete, while being “conciliatory” (not really), provided yet another odd and contradictory explanation for his intransigence in not letting the Rays look in Hillsborough.

Apprised of these comments, Foster took a conciliatory tack. He praised commissioners for restraint because they didn’t discuss specific stadium locations. He also praised Sternberg for candor, saying the Rays’ owner privately told him about baseball’s disenchantment with the entire region — and not just St. Petersburg — two years ago.

“That’s why I have taken the position” of not letting the Rays look for stadium sites outside the city, Foster said. The Trop contract, which runs through 2027, binds the team to the entire region, he said.

Right – he wants the Rays not to look outside St. Pete because the Rays stadium is a regional issue.  Never mind all his previous comments.  He is helping the region by not helping solve the issue.

We are happy the Rays are talking to different groups, but as long as the Mayor of St. Pete maintains his intransigence little of substance will happen.

In a Park Down By the River – Cont.

A few months ago, the Mayor of Tampa started discussing remaking Riverfront Park, including removing the mounds and adding a restaurant.  Well,

. . . in the months since, several West Tampa residents have objected and told the City Council they are suspicious about the city’s intentions for Riverfront Park.

In response, council member Mike Suarez said on Jan. 10 that Buckhorn’s administration has a “public relations problem” with residents worried about the park’s future. The same day, Council member Frank Reddick urged a top city administrator to tell the mayor to stop musing about Riverfront Park.

Well, there is a public relations problem, but we have no problem with musing about the park – the park can be better.  In fact, tossing out ideas is fine – someone needs to start the conversation.  However, because it should be a conversation, deciding on ideas without input isn’t fine.

Anyway, the restaurant idea seems to have gone away for now. (For the record, we don’t have any problem with a riverfront restaurant in theory.  We are not sure it makes sense now, and our position would depend on what the final plan was.)

“I just don’t know that at this point in time it would make sense,” Buckhorn said last week. “What I would like to have there and what is practical are two different things.”

That’s true.  It is also good to get input.  So what are the Mayor’s thoughts now?

First, he wants to re-route Laurel Street, which currently cuts the park in two big pieces, to the edge of the park. That should create a larger, unbroken space that could accommodate sports or other activities, he said.

Second, Buckhorn still wants to get rid of the large mound next to the playground and the grassy swales and humps that block the view of the river from inside the park.

“Right now I need get that park functional, because it’s not really functional,” he said. “It’s a bunch of bumps.”

We have no problem with rerouting Laurel Street.  The park is really quite large, with lots of river access, even with playing fields and mounds.  As for the “bumps”, the park has various “bumps” of various sizes concentrated in one area of the park.  Some of them – the smaller ones – serve no apparent purpose.  One holds the stands for an amphitheater.  We accept that these can be redesigned and, maybe, removed.

However, we think the Mayor is way off regarding the large mound adjacent to the playground. It affords this view – from the Times article:

Looking at Downtown from the top of the big mound at Riverfront Park

The Times article had a picture of basically the same view with a boy riding his bike on the mound. In other words, the boy is enjoying the “bump.” (Maybe someone who did not grow up here cannot appreciate how cool a hill/mound is to kids in a flat city.)

This very well might be one of the best views of downtown, except the line of trees on the walkway (and the paved part of the playground in the foreground) which is oddly oriented perfectly to reduce the view and cutoff views of the river itself.  We can accept that the walkway should be changed to orient the park towards downtown and the river, but the mound is unique in the view it affords and the opportunity to open that vista to people who would otherwise not get such a view (It also has two pretty cool slides). It should be enhanced, not derided. (Though if the Mayor wants to make the mound more organic looking – maybe a ridge, we are ok with that.)

And while the park could be used more, when we visited the park this week, there were people playing tennis, taking walks, playing in the playground and going to the boat house to row.  We do note that portions of the facilities are obviously neglected.

The point is that action is fine and the park can be improved, but it should be well-considered.  And it should be remembered that this park serves, even with redevelopment of the area, a primarily residential area, which is very different from a park like Curtis Hixon Park.  Elements like the large mound can actually draw people to the park and help orient the park towards downtown and the river in addition to giving people something fun and unique.

The park can, and should be, better, but the big mound is cool.  Leave it and make the park better around it.

Transit Referenda – Pinellas Moving Forward

The PSTA board asked the Pinellas County Commission to put a transit referendum on the ballot in 2014.

Pinellas Suncoast Transit Authority board members approved a resolution asking the Pinellas County Commission to put a referendum on the sales tax on the November 2014 ballot.

County officials have not yet scheduled a discussion, but County Commissioner Janet Long, who sits on the PSTA board, said the issue could come up as soon as the commission’s next regular meeting on Jan. 29.

A majority of commissioners seem likely to back a referendum, based on their past comments. The four county commissioners on the PSTA board all voted to move the measure forward.

Let’s review what this tax would do:

The board has long discussed proposing a one-cent sales tax increase, which would raise the sales tax from seven to eight cents and generate about $120 million for the Pinellas Suncoast Transit Authority. It would replace the property tax that currently brings in $32 million in transit funding a year. Long-debated as a way to pay for a commuter light rail system and improved busing, the proposed tax increase has sparked passionate responses from both sides.

* * *

Supporters said the sales tax increase is needed to pay for more bus routes and more frequent stops. Without it, PSTA executive director Brad Miller said, the agency will have to make deep cuts to busing. By 2015, he said, the agency will have an $8 million budget gap. And by 2016, he may have to cut bus service by 30 percent.

Mass transit advocates also championed the tax increase as a way to fund a proposed light rail system — 24 miles of track stretching from downtown Clearwater to the Gateway area, and then south again to St. Petersburg and Tropicana Field — that is still in development.

Now this issue goes to the Pinellas County Commission.  There are many steps ahead, but taking the first step towards getting the question to the voters is a good start.

One speaker summed up the task ahead:

Keith Burnett, president of Suncoast Architecture & Engineering in Clearwater, predicted the referendum will fail if PSTA can’t convince people who aren’t already mass transit users that light rail will benefit them.

“If you want other people’s money to be spent, you’ve got to sell the other people,” he said. “You haven’t done that yet.”

Indeed, not yet. But there are a couple of years to go and lessons that have, hopefully, been learned from Hillsborough’s 2010 referendum.

Transit in the Nation – Hillsborough Left Behind

With PSTA making the request to the Pinellas County Commission, Hillsborough County is now alone in trailing Detroit, and every other major metro area, in moving to a modern transit system (here and here)

Helping clarify this point, we found this interesting interactive map of the US which provides information on what is happening throughout the nation in terms of transit – rail and BRT. One notable fact is that, even in places held out as models of BRT such as Cleveland, there are rail plans in the works.

Economic Development – Venture Capital Drought

One sign of economic development is how much venture capital is attracted by a region.  It is an indication of both promising new companies and the ability of local entrepreneurs to attract financing they need to grow their businesses locally.  It is also an indication of where investors are looking to put their money – a sign of what they think of a region. This week we had confirmation that we are far behind.

Venture capitalists put $26.5 billion in 3,698 U.S. deals in 2012, says the MoneyTree report. Last year, Florida captured just $203 million in 34 deals.

Put another way, Florida was home to less than 1 percent of the deals and dollars invested nationwide. Silicon Valley, venture capital’s ground zero, alone received $10.8 billion in investments in 2012. But Florida was outclassed last year by such states as Colorado ($560 million) and Texas ($924 million) and even by metro areas like metropolitan Washington, D.C. ($725 million) and Philadelphia ($399 million).


According to the survey – based on Thomson Reuters data – states such as Ohio, Maryland and Michigan have now pulled ahead of Florida in the venture capital race. They ranked 12th, 14th and 15th, respectively, for the full year of 2012.

Wow.  We get California, but Michigan and Ohio? Even more importantly to us, where did the money go in Florida?

Of Florida’s 10 biggest 2012 deals funded by venture capitalists, only one landed in the Tampa Bay area. Tower Cloud, a St. Petersburg wireless telecommunications company founded by former Progress Telecom executive Ron Mudry, received commitments topping $17 million from five venture capital firms.

Orlando got the biggest share of Florida VC.

This is not good for the Tampa Bay area no matter what branding is chosen, and certainly a reason to focus on attracting knowledge based industries with incentives rather than subsidizing retail.

List of the Week

Our list this week is Terminix’s List of Cities worst hit with bedbugs. Worst hit is NYC followed by Philadelphia, Detroit, Cincinnati, and Chicago. Out of fifteen cities, the only warm weather location was LA.  Apparently, unlike most insects, bedbugs are not that fond of Florida.

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