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Roundup 2-15-2013

February 15, 2013

Bass Pro Shops – Living In The Past

The Bass Pro Shops saga continued this week.

— 1. The County Votes – But Not On The Subsidy

First, the County Commission:

Hillsborough County commissioners unanimously approved changes to a development plan Tuesday that would enable construction of a controversial Bass Pro Shops store and other retail businesses in Brandon.

* * *

That vote essentially speeds up the timetable for the development group fronted by David Verardo to build on roughly 150 acres across Interstate 75 from the Westfield Brandon mall.

Let’s be clear on one thing: the Bass Pro Shops is not controversial.  What is controversial is the deal where the developer is asking for millions in taxpayer money to cover infrastructure improvements for which the developer should be paying.

We have no problem with the County Commission allowing the developer to speed up construction.  We just do not think the County should agree to give the developer millions in taxpayer money.  That vote will come on February 20.

— 2. We’re The Developer and We Approve This Message

Moving on, it seems that developer’s hired guns got busy this week, including what appears to be obtaining a free ad in the Times masquerading as a news story.   In the “article,” the developer raises some new arguments.

—– a. developer’s new argument part I

The first new argument can be summed up as “Just forget everything we said before.”

“In hindsight, we should have left Bass Pro out of the whole discussion,” said Hagan, speaking of the anchor tenant of the Estuary retail development proposed across Interstate 75 from the Westfield Brandon mall.

It is the prospect of landing Bass Pro, with its reputation as a tourist-drawing shopping destination, that has the county considering offering $6.25 million in incentives to developers of the Estuary in exchange for doing road work they were obligated to do anyway.

Once again, we have no objection to Bass Pro Shops.  The objection is to giving taxpayer money for retail.  Is their argument really that the deal makes more sense if the proponents of the deal just say that some developer wants $8 million or $6 million for some strip store near the Brandon mall?  More importantly, would that have made the County Commission more likely to give the developer the money?  If so, that is incredibly embarrassing.

Second, the article says of the road upgrades in the proposed deal: “they were obligated to do anyway.”  Unfortunately, the article dangles the antecedent of “they.”  If the article means “the developer was obligated to do anyway,” then, yes, we object to paying for the developer’s obligations.  If by “they” the article meant the County is obligated, the article is just wrong.

—– b. developer’s new argument part II

The second part of the developer’s new argument is that the County has given money for retail before, providing two not particularly relevant examples.  The first example:

In June, commissioners approved with no debate paying developers of the planned SouthShore Commons mall in Riverview $3 million of public money in exchange for widening parts of Big Bend Road. As Hillsborough County Commission Chairman Ken Hagan likes to point out, that was with no anchor tenant disclosed.

It appears that the argument is that giving taxpayer money to a developer for a development with no anchor tenant is a good model?  Really?  Does the article shed any light on the SouthShore Commons deal?

In June, commissioners voted unanimously to give $3 million to developer of SouthShore Commons, a development that includes a 1-million-square-foot mall, offices and hotel rooms. The money would come as repayment for the developer widening Big Bend Road from U.S. 301 to Simmons Loop Road, portions of which it had to do under a prior agreement with the county.

The rationale: The road widening is needed for the quickly developing area and it would be a while before the county could widen portions of the road that are its responsibility. County officials believe it will help ease congestion near Westfield Brandon, the closest mall option for residents of southern Hillsborough, while drawing shoppers from Manatee County.

At SouthShore, the money will come from impact fees charged for new development in the area whereas the Estuary would get its money from sales tax reserves.

Once again, the article is confusingly written, but we will try to sort out the main points.

First, there is one major distinction between the Estuary/Bass Pro Shops deal and the SouthShore Commons deal. (One thing they do share is that they are standard big boxes in a sea of parking.)  The SouthShore Commons deal used money from impact fees (we assume transportation impact fees) which are intended to upgrade roads based on the impact of development – which is (maybe) minimally defensible. (Though we would not have done this deal.) The Estuary/Bass Pro Shops deal is using sales tax revenue.

Second, the article is confusing regarding in the reasoning behind the SouthShore Commons deal. The article says that the SouthShore road widening was needed (and should have been paid for by the developer), but the County would not be able to get to it for a “while.”  Therefore, we are told, the County took money that one can only assume was to be dedicated to upgrade other roads that really needed upgrades and gave that money to a developer to upgrade the SouthShore roads.

Maybe it is just the way the article is written, but that makes no sense.  If the County had the money to pay for the road work, it could have done the work.  If the County did not have the money for the road work, why is it giving money to the developer?  And if the developer was supposed to upgrade the roads, why is the County paying for it?  (As the article describes it, the SouthShore deal is not exactly fiscally conservative).

And what about all the other people who are still waiting for the money to fix their roads? (Like these folks.) Maybe if the County stopped giving a few million here and a few million there to developers, it could serve citizens who keep waiting for the County to fix the infrastructure it has continued to neglect.  (Especially in a place the County says it wants to revitalize.)

We will say that at least there is a colorable argument the road upgrades related to SouthShore Commons served the area generally.  In contrast, the roads around the Estuary/Bass Pro Shops to be upgraded are really just roads that help the project – despite what some might say.  They really do not help others.  They do not draw traffic from other areas (another alleged justification for the SouthShore Commons deal).  In other words, they don’t do anything but help the developer and its tenants.

What was the second example?

And in the mid 1990s, Hillsborough commissioners agreed to pay developers nearly 10 times that amount to widen roads near what would become Citrus Park Mall.

We are not even going to get into the Citrus Park example.  We are not in the 1990’s anymore; though, unfortunately, some in local government have not seemed to notice. (But the rest of the world economy has.)

— 3. What Are Others Doing?

Also, we also find it odd, though not surprising, that there is a complete lack of discussion about what Bass Pro Shops is getting in other parts of the state.  For instance, the recently announced Palm Bay store:

For its proposed Palm Bay store, Bass Pro Shops received unspecified incentives from Enterprise Florida, and Brevard Workforce offered a job training grant for qualified employees. By law, Bass Pro Shops’ incentive contract is confidential, so the Enterprise Florida would not release details, said Stuart Doyle, vice president of communications.

In other words, Brevard County is directly helping some people get jobs, though we have no idea what kind of training would be required to work in a Bass Pro Shop or why the company can’t pay for that itself.

More interestingly, in the Brevard example, Enterprise Florida – not the county – is giving incentives.  While we do not want our taxpayer money spent on such a deal through Enterprise Florida, that is better than having the County pay for it. Why has Hillsborough County chosen to negotiate giving its scarce resources rather than get Enterprise Florida to do it?  Once again, the County’s failure to protect taxpayers makes no sense. (Especially when two of the County Commissioners used to be state legislators.)

And others are not so willing to dole out taxpayer money to developers.  For instance, in Port St. Lucie:

Outside of fast-tracking, neither the state nor local governments have promised cash incentives or tax breaks.

“Absolutely not, this stands alone,” Economic Development Council of St. Lucie County President Larry Pelton said. “This stands on their business model and their expectations for the store, so no, there are no incentives being offered.”

Apparently the Tampa Bay area is so much less attractive market than Port St. Lucie that it needs taxpayer money to entice Bass Pro Shops.  Or maybe our local government is just not as sophisticated as Port St. Lucie.

Then there is Pasco County, which Bass Pro Shops was allegedly looking at in the event the Estuary/Bass Pro Shops deal fell through.  What incentives are they dangling?

Gallagher said Bass Pro wouldn’t qualify for economic development incentives in Pasco because it wouldn’t bring in high-paying jobs. “We can’t offer them anything more than the incentives ordinance allows,” he said. “Pasco doesn’t offer any breaks or incentives for retail.”

Commissioners could always make an exception, he said. “We’d have to listen to what they want and it would be up to the commissioners to decide if they want to make an offer,” he said.

In other words, none, and it is generally not their policy to do so.  And, as we said last week, having the store in Pasco is fine with us.

The bottom line is that even by the standards of Florida pork to Bass Pro Shops, this is a poor deal.

— 4. Conclusion

Based on the approach of the developer’s lobbyists, it appears that the best argument in favor of the Estuary/Bass Pro Shops deal that can be made at this point is that the County should spend taxpayer money on retail now because the County has done so before. Or put another way – because you have made mistakes in the past, you must always make mistakes.

As we have said over and over, the Tampa Bay area needs to stop doing things like we did in the 1980’s and 1990’s.  The reliance on retail and real estate was and is a failed model of economic development.  It condemns our area to a perpetual boom and bust cycle. And, due to our reliance on real estate instead of diversifying our economy and creating high paying jobs (see next item), busts are almost always worse than elsewhere, further inhibiting our development and leading politicians to fall back on real estate.  This vicious cycle is why we are not competitive and do not weather downturns well.  Moreover, this flawed economic model maintains a low wage structure and hands part of those wages to developers while not providing for the needs for the taxpayers.  With all we know at this point, it is indefensible.

We go back to a Times editorial from December, because nothing has changed:

Does any commissioner beyond the one championing it think this is a good idea? These are not the jobs Commissioner Mark Sharpe keeps talking about. This is not an example of smart planning that Commissioners Kevin Beckner and Victor Crist have promoted, and it is not a conservative approach toward spending pushed by Commissioners Al Higginbotham and Sandy Murman.

So far the County Commission’s “smart” approach and “fiscal responsibility” is all talk.  It is time for action and to stop caving in to developers and their lobbyists.  Just because our economic development model has been handing taxpayer money to developers does not mean we need to continue doing it.  Every change must start at some point.  This is as good a point as any to change our model of economic development.  Show that you have learned something from the last decade or two.  Reject the deal.

(For more reasons to reject the Estuary/Bass Pro Shops deal, you can read other Tampasphere items herehere, here, and here. There is more here and here but you need to scroll down.)

Economic Development – Lacking Skills and Losing Jobs, and We Don’t Mean Retail

Speaking of problems with our economic model, there was an interesting op-ed in the Times about the need for more skilled IT workers in our area. A key point:

Tampa Bay is facing a major IT workforce skills gap. Companies of all sizes in Hillsborough and Pinellas counties reported more than 4,000 open positions for IT jobs they cannot fill because candidates don’t have the skills they need. Many employers began opening offices in other hot tech markets in a quest to find people who had those badly needed skills. This approach is hardly desirable. It’s expensive and time-consuming for local employers and frustrating for unemployed IT professionals and recent college grads struggling to find work here.

The point here is that there are jobs, and those jobs will breed more.   However, there is a lack of qualified workers.  As the op-ed says, with the lack of workers there is a leaking of jobs to other areas.  This is also all part of the cycle of brain drain, where educated, young professionals leave the area to go to our competitors – which provide a more attractive lifestyle – and the jobs apparent go with them.

What is Hillsborough County doing?  What is it doing to make this area more attractive to young, educated tech workers?  How do we compete to attract and retain the workers and  jobs rather than have people and the jobs go to other cities?   In other words, what is it doing to make us competitive and develop the economy?

Apparently the only thing Hillsborough County can come up with is giving millions to developers to build strip stores.

Where the Money Is

The Washington Post had this very interesting map of wealth distribution. (See here) A quick look makes clear that Hillsborough County is not very rich relative to the rest of the Country.  That is not surprising given the retail, tourism, real estate model of economic development of the last few decades.  Sure, it has made a small number of people wealthy, but it has left the Tampa Bay area uncompetitive.

Pinellas Transit Referendum – Still Moving, and Rationally

In marked contrast to Hillsborough, the Pinellas Transit Referendum project is moving on to the Pinellas County Commission.

The Pinellas County Commission will vote Feb. 26 on whether to place a sales tax increase for major transit changes on the ballot in November 2014.

Though the election is 21 months away, Pinellas County’s transit agency asked the commission to save a spot for the sales tax hike on the ballot, setting a deadline by which it must sell the plan to the public. A majority of commissioners have said they will approve placing the question on the ballot.

Excellent.  21 months is a good amount of time to do things right.  It allows Pinellas to develop a real plan and explain it.  Did Pinellas learn any lessons from the poorly done Hillsborough Referendum in 2010?

Though the board agreed to vote on a resolution approving the budget timing, the final ballot language doesn’t have to be finalized until early August.

* * *

“All you’re doing is setting a deadline,” said Pinellas Suncoast Transit Authority chairman Jeff Danner, a St. Petersburg council member. “If, for whatever reason, the plan isn’t fully vetted, and we haven’t gotten to the public enough, we’ll be the first ones coming to you to ask for a delay.”

Amazing, a voice of responsibility and sanity.  We applaud the concept that there should be forward planning and, if there is a problem, the process will be delayed.  The referendum needs to be done properly. That is in marked contrast to Hillsborough where there was not even a full plan in place on which the people could vote.

Of course, why should the County Commission vote before there is a full plan?

“There is a plan, Commissioner Roche, and you’ve seen it several times since being on the board of the PSTA,” said Commissioner Susan Latvala. “PSTA has spent a lot of money and before spending any more they want to know that at least a majority of the county commission will move this forward.”

One again, amazing.  PSTA does not want to spend more time and money on something that will not move forward.  Completely rational and responsible.

We applaud PSTA for their sensible approach.  If only HART would learn.

Marketing the Port

There was an interesting article in the Times regarding the importation of aircraft parts destined for Melbourne through the port.   You should read the whole thing, but we will highlight something in particular:

But the most important factor was location: Melbourne is only about two hours and 20 minutes away.

“Our big advantage was our proximity to the Central Florida market,” Elliott said. “You’re trucking big pieces from Tampa to Melbourne, as opposed to (transporting) from some ports on the east coast, where it would take quite a bit longer.”

This is key because the Port of Tampa is trying to position itself as the gateway to the vast Central Florida cargo market, which is underserved by Florida ports. Most of Florida’s cargo is delivered to docks in California and Georgia and then sent by rail or truck across the state line. But Tampa port officials want shippers to deliver straight to their docks, selling it as a way to reach Central Florida faster and cheaper.

“We are clearly eager to expand our service to the Central Florida market as the primary exporter and importer for the region,” Elliott said.

This is all true, and we support the efforts to become dominant in Central Florida.  While we would like to see the Port’s market expand beyond Central Florida, it is necessary to be dominant here.

One other thing we would like is for the Port to team with economic development officials to promote the Port’s facilities to bring more manufacturing to the immediate Bay Area.  Why have to ship items to Melbourne when you can do it right near the Port?

Built Environment – Westshore

This week we learned that more retail is coming to the area around Westshore Blvd and Spruce.

The shiny white façade of the soon-to-open Container Store is a sign of a commercial rebirth at an intersection that is an entry into International Plaza and a major gateway for the city of Tampa.

First, it is not a rebirth.  All that was ever there were on this lot were car rental establishments and, as the article says, there is a big mall across the street. So it is either the birth on the lot or a continuation of what is in the immediate vicinity already. But, anyway . . .

The Tampa City Council recently gave developers with Saber Real Estate Advisors approval to build a shopping center – The Corner – adjacent to the Container Store. Potential tenants could be Olive Garden and Longhorn Steakhouse.

* * *

About 35,000 square feet of retail, restaurants, offices and possibly a bank are planned. The former Rainbow Airport Parking, a parking lot at the northwest corner of West Shore and Union Street, will be demolished.

Sure, it is nice to have stores in which to shop (like two malls do not fit the bill), but the article is silent as to whether this will be a run of the mill strip center (with an out parcel or two), which we do not need, especially in Westshore, or something even remotely urban.  From the renderings on the developer’s website   (which we admit are not that clear), it actually appears that the building will be built to the street but the front doors to most (if not all) of the stores/restaurants will be, in classic and bizarre Tampa style, facing the parking lot in the back without an entrance on the street.

What appears to the be the front with no apparent front doors
From Saberfund.com – click on picture for website

The real front – facing the parking lot
From Saberfund.com – click on picture for website

Hardly walkable. Why does it matter?

About 100,000 people work daily in West Shore’s business district, which is the largest office market in Florida. It is bigger than Tampa’s downtown business district, Berman said.

Construction is under way or being planned for about 1,400 new apartments in and around West Shore.

At International Plaza, the three-pronged intersection of Spruce Street, Boy Scout Boulevard and West Shore Boulevard is close to the West Shore Business District, Raymond James Stadium, Tampa International Airport, Hillsborough Community College and George M. Steinbrenner Field.

The boulevard book-ends two upscale, successful malls: International Plaza at West Shore and WestShore Plaza at Kennedy Boulevard. They both are doing well, with high sales per square foot and 99 percent occupancy, Berman said.

In other words, the area is in the heart of Westshore and could help begin to transform the area from a sprawling blob to a real district – or it could help the City government continue to force all those people in Westshore to have to drive everywhere with thousands of other people who also have to drive everywhere with the only place to walk being the two malls.

We hope that it is not business as usual for Tampa and that we will be surprised, but looking at the Container Store, we doubt we will be.  Another wasted opportunity,  Change the code.

Rays – Vision of the Future

This week, another group threw their hat into the Rays mess.

Yet another group is considering ways to help break the stalemate over a new stadium for the Tampa Bay Rays.

The Tampa Bay Regional Planning Council is a collection of Bay area politicians and government appointees best known for economic development and disaster planning, and for studying transportation issues.

It usually stays out of the limelight, but Hillsborough County Commissioner Victor Crist, who also serves on the planning council, is trying to push it into one of the region’s hottest issue, the Rays stadium debate.

At a planning council meeting last week, Crist said the group offers the perfect forum for negotiations among the Rays, St. Petersburg and other stadium players.

Fine, but not particularly relevant.

More interesting is the lack of season tickets purchased by public figures, especially those in Pinellas County – like no Pinellas County Commissioners. (It is interesting is how Tampa companies have Bucs and Lightning tickets but not Rays. It is also interesting that right now the Lightning are drawing basically the same number of fans per game – though the number is limited by the size of the arena – as the Rays did last year.)

But, as always, the real issue remains the obstinate resistance of St. Pete to allowing the Rays to look in Hillsborough as well as Pinellas County. (The Rays are supposed to meet with the Mayor of St. Pete on February 15. We won’t hold our breath for progress.)

The Rays have said the location of the stadium is a major issue.  The Marlins have a new stadium in Miami but also have an utterly feckless ownership group that consistently guts their team, guaranteeing losers.  The Rays, thankfully, have a well run ownership but, without some resolution of the issue, it is questionable whether they will be able to field competitive teams into the future.  If not, they may become like the Marlins, as represented in this picture of the line for single game tickets that went on sale at a recent Marlins fan day:

From Yahoo! – click on picture for article

That will surely help sell St. Pete as a place to do business, Mr. Mayor.

Courthouse Hotel

This week, there was a “groundbreaking” for the renovations of the old Federal courthouse hotel.

The courthouse was closed 15 years ago and was deeded to the city five years after that. Since then it has sat vacant, air-conditioned at a cost of nearly $100,000 a year to keep down the mold.

In 2011, after more than a decade of false starts, the city went out for bids from developers interested in converting it into a high-end hotel.

Five responded. One offered to cut the city in on its profits. But city officials went with DSG, which has done 25 such projects in 16 cities.

Good news.  We are happy this is getting done because the building is a fine building and should be alive with use.  We are not going to engage in the routine hyperbole about every project being the key to downtown, but we are happy that buildings are being reused.  Every step forward is a good thing.

List of the Week I

Our first list of the week is the Best 10 Cities for Job Seekers. They are, in order: Austin, DC, San Francisco, Denver, Houston, Ft. Worth, Dallas, Seattle, San Antonio, and Charlotte.

As you may have noticed, Florida is shut out.  Another sign that, even with some openings in IT, our development model is wrong.

List of the Week II

Our second list is Forbes’ Scorecard For State Business Climateshttp://www.forbes.com/best-states-for-business/ The top ten, in order: Utah, Virginia, North Dakota, North Carolina, Colorado, Nebraska, Texas, Georgia, Oklahoma, and Iowa.

While we are not sure about the adequacy of the criteria, but notably Florida is once again not in the top 10.

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