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Roundup 3-8-2013

March 8, 2013

Economic Development – Rebranding Comes to The County Center

This week Hillsborough County announced a “new” approach to economic development:

Commissioners have been talking for months about ways the county can promote economic development beyond offering financial incentives to businesses that open, relocate or expand here. They formed a task force largely of building industry representatives who recommended creating designated economic development areas where roads, storm drains and other infrastructure are installed to accommodate businesses.

But the idea of prioritizing transportation projects based on those zones was crystallized by commissioners for the first time during a workshop Tuesday. Commissioners asked Merrill to reach out to the mayors of Hillsborough’s three cities and the heads of the main transit and transportation planning agencies. They want him to see if they’re interested in participating in talks aimed at linking transportation plans to economic development.

Talking to the municipalities is fine, but what exactly are they going to talk about – how best to ignore the needs of the residents of those cities?  The nonexistent plan for real transit? (Yes, a real transit system should serve major employment centers and residential areas – but it should serve what already exists and requires urban development – two things in which the County has showed no interest.  Without openly forswearing its stated love of sprawl, any transit plan coming from the County will be a failure.)

Actually, the “new” approach sounds much more like re-branding the real estate focused concept of economic development highlighted in the Estuary/Bass Pro Shops hearing for the purpose of providing the majority of Commissioners a simple CYA.

County commissioners want to base priorities for road work and transit expansion based on how much the projects contribute to economic development and job creation, rather than what simply fixes the worst clogs.

More specifically, commissioners plan to give top ranking to road and other transportation projects that ease access to specific areas of the county where they want to try to direct economic investment by businesses. Those areas haven’t been identified, though a task force has recommended commissioners concentrate on zones largely along interstates 4 and 75.

So, yes, the Commissioners want a new justification to ignore all the nagging transportation problems of the present residents (and voters) in the County and focus on subsidizing real estate – and if past history is any guide, it will all be in the east County.  The new justification for ignoring the needs of existing residents of the County is “economic development” – which was their justification for subsidizing the Estuary/Bass Pro Shops development.

County Administrator Mike Merrill said that, historically, most governments have based transportation priorities largely on population projections and where roads are most congested. The new strategy would attempt to use transportation investment to attract businesses, particularly those that employ younger, high-tech workers.

“It’s a different framework for how you want to rank transportation,” Merrill said. “The idea is, let’s take charge of what we really want in terms of population growth.”

Well, ignoring existing congestion and population centers certainly is a different framework, probably brought on by the fact that the roads the Commission chose to upgrade in the Estuary/Bass Pro Shops deal were not deemed roads that needed to be fixed any time soon.  Government usually fixes problems that actually exist.  Under this new plan, instead of actually fixing the roads that need to be fixed and working to provide proper transit to the populated parts of the County, the County will just move the transportation priority goalposts so its future subsidies to developers are “justified.”

And while it is nice that the County’s efforts are justified by “economic development,” more important is what kind of economic development is it actually planning?  The answer, in short, is the stated focus of the County’s efforts is the real estate based economic development that was described in the Estuary/Bass Pro Shops hearing.  It is questionable that Commissioners who voted a couple of weeks ago to subsidize a strip mall and told us that was their model of economic development have actually learned anything and now advocate real transit, fixing existing inadequate transportation infrastructure (because the County ignored it in the first place), and favor urban development.

And we still have been given no explanation of how subsidizing sprawl and ignoring congestion and urban development will draw young professionals and high tech workers.  Nor, from what we have seen, are we likely to get one.

The only thing truly new here is that the County has realized that the previously stated justifications for spending taxpayer money on sprawl subsidies while ignoring the needs of the County residents and real economic development are no longer going to fly.  So, they need a new excuse.  We are still waiting for the County to get serious about real infrastructure improvements (including real transit) and real economic development.  Unfortunately, it will likely be a long time before it does (probably not before December 2014, if then).

Economic Development – From the Mouth of a Developer

There was a very interesting article in the Times regarding the redevelopment potential of the Tropicana Field property.  The article discusses a number of issues and is definitely worth a read.  However, we choose to highlight it not because of that or that it points out the flaws in the Mayor of St. Pete’s approach to the Rays.  We choose to highlight it because during the Estuary/Bass Pro Shops debate, we noted on numerous times that while real estate is part of economic development, a proper economic development strategy would, unlike Hillsborough County does, focus on recruiting and developing high paying jobs, which will lead to real estate development.

According to the article, one of the leading personalities in the development community in our area (and one that built many shopping centers to boot) agrees with us:

Former Sembler Co. CEO Craig Sher said St. Petersburg should convene a group of civic and business leaders to plot out Trop development.

“We need to think big,” Sher said. “You could literally reshape the city.”

His vision? Focus first on jobs because residential and retail components will follow. Go after a corporate headquarters — or two, Sher said, creating a little “Carillon South” with parking garages instead of surface lots.

Exactly.

Economic Development – When There Really is a Nexus

Coincidentally, this week gives us on example of real economic development pushing real estate, maybe.  Strangely, while it is theoretically a major happening, we only saw one small article in one paper, the Tribune.

Tampa Electric Co. hopes an offer of discounted electricity will help lure a large manufacturing company to the area.

If successful, the company would immediately become TECO’s largest customer, the utility said Friday. As for the company’s identity, TECO isn’t saying, and state law grants anonymity to private companies negotiating with public agencies.

What little information there is about the offer is included in documents the utility filed Jan. 31 with the state’s Florida Public Service Commission seeking permission to offer a special low rate. The documents indicate the company is scouting other locations in the country, and that the discounted power might persuade it to locate here.

The PSC filings say that the manufacturer will be a “new” customer. The PSC gave preliminary approval to the requested rate.

If (a big if) there is a unique manufacturer bringing a major facility and new, high paying jobs to the area, then it would make sense to also consider other incentives. (Though the terms of the deal are important and unknown at this point).  The key is that a deal would draw new, high-paying, manufacturing jobs, which will spin off more jobs.  (Of course, it would be easier to provide incentives if the County was not giving millions to strip mall developers.)

That would be different from just subsidizing sprawl as the basis of a policy.  And would be very is different from subsidizing strip malls.  In other words, it would be real economic development.

We do note that there are not many details of this deal, so we will just have to see what emerges before getting fully behind this specific deal.  However, as a concept, this is the type of thing on which the area should focus.

TIA – Voguing Isn’t Hip

Last Friday, the Board of the Hillsborough County Aviation Authority held a special meeting to consider whether to renegotiate the Airport Director’s contract in light of the rumors swirling about that he is a prime candidate for the job of director at the Dallas-Fort Worth airport whence he came.

The Hillsborough County Aviation Authority board voted 3-1 Friday to renegotiate its contract with Tampa International Airport CEO Joe Lopano amid speculation he might get snapped up by another airport.

In terms of renegotiation, at what exactly are they looking?

The board voted 3-1 to explore the possibility of inserting a noncompete clause into Lopano’s contract, which doesn’t expire until 2016. The board also directed staff to research the contracts of comparable CEOs and see if there any other perks or benefits they can give him.

So the contract lacks a non-compete (which, depending on how it is written, may or may not be enforceable).  Does that mean the Director just can leave if he gets a better opportunity?

Lopano’s annual base salary in Tampa is $315,000. He received a $50,000 raise in January 2012, one year after he took over Tampa International, and a $15,000 merit raise in October.

* * *

Though the board is considering enhancing Lopano’s contract, board members do not appear to be considering giving him another raise.

* * *

But Lopano’s contract is open-ended, allowing both him and the aviation authority to terminate it on a 90-day notice.

In other words, yes, with 90 days notice.

It seems completely reasonable to examine if there is a way to make the Director’s contract firmer.  It also seems reasonable that the Director would not agree to a non-compete without compensation.  (Why would someone subject to the fickleness of local politicians give up the opportunity to go to a better situation for nothing?  And, as the market for major airport director jobs is limited and the supply of excellent directors is also limited, it is logical to think that most airport directors would not subject themselves to a non-competition clause without receiving compensation for giving up their rights.)

What the Aviation Authority board did was completely proper for an entity trying to ensure that its CEO would remain on the job.  It is also proper to consider how much is getting a non-compete worth,  what the limits of any additional compensation should be, and is the Aviation Authority willing to match any offer or is there a cap?  All that is reasonable to investigate and discuss.

— The Mayor Strikes a Pose

But, this being the Tampa Bay area, instead of having that rational and productive discussion, we got a show.

The only board member to object was Mayor Bob Buckhorn. The airport’s CEO got two raises and two contract extensions last year. When Buckhorn’s fellow board members mulled taking a third look at Lopano’s contract in 14 months, the mayor barely contained his fury.

“I mean it’s a joke,” Buckhorn said. “It’s absolutely a joke. I’m not going to support any motion that comes out of here.”

Now, we understand that there may be a difference of opinion about whether the airport Director’s contract should be renegotiated, but that is the basis for a reasoned discussion after all the facts are in, not “fury” at the simple idea of examining the facts and refusal to support “any” motion without knowing the facts. (What is this, HART?)  And there was more:

“This is ridiculous,” said Buckhorn, who serves on the aviation authority board. “It’s absolutely a joke. I’m not going to go through this dance every time someone calls Mr. Lopano.

“Joe, you are the right person for this job,” he said, but he added Lopano must live up to his contract, which doesn’t expire until Jan. 1, 2016.

And, as quoted by another paper:

“I am not going to go through this dance every time somebody calls Mr. Lopano,” he said. “It’s a joke, an absolute joke.”

The Mayor’s stated position lacks logic.  If there is a non-compete in the renegotiated contract, the Board would not have to go through this dance every time someone calls the Director.  If there is no non-compete, the Director can leave when he wants, and the Board would have to reexamine his contract every time someone came calling. Likewise, if the contract is more attractive to the Director, it is less likely he will consider leaving.

So why did the Mayor react in this way?  First, let’s look at reasons we can eliminate off the bat.  It is not about business because if the Director succeeds in attracting a few more international and/or major domestic market flights (his forte), the economic impact will clearly outweigh a few perks to keep him here.  It also is not about the taxpayer because the Airport Director, unlike, say, the Port Director, is not paid from tax revenue.

So what did the Mayor say was his motivation for his vehement opposition to merely examining the possibilities?

“A contract’s a contract,” Buckhorn said. “I think, and maybe it’s just my own personal ethos, but we’re obligated to live up to our contracts.”

Indeed.  A contract is a contract.  And the Director’s contract allows him to leave on 90 days notice.   That, in fact, is the point.  (And this is not a situation where an athlete under a contract is sitting out and demanding more money.  The Director is performing his job, not sitting at home playing X-box [Though he may enjoy the Halo franchise. Who knows?]  And it does not appear the Director is demanding more money.)

Since the aforementioned explanation did not make sense, maybe there is a better explanation. One of the Times columnists gave us this:

Here’s Buckhorn on the absurdity of renegotiating Tampa Airport CEO Joe Lopano’s contract because Lopano may be in play for jobs elsewhere: “This is akin to every time a woman comes up and wants her picture taken with me, I go home to my wife and try to renegotiate my marriage vows. That’s how pathetic this was.”

Snappy.  And all the worse for it, because, once again, it does not address the facts.  As the contract stands right now, the Director can leave whenever he wants – a no fault divorce.  If there is a non-compete (in the analogy, a type of prenuptial agreement), it makes it LESS likely that the contract will get renegotiated further if someone tries to recruit him.

But, for the sake of argument, let us take the Mayor at his word regarding his personal ethos.  What other principles has he espoused?

“You’ve got to pay for talent,” said Mayor Bob Buckhorn, who serves on the port board. “You don’t want to sell the city on the cheap.”

Indeed, you do not want to sell the city on the cheap.  You have to pay for talent.  Usually, you have to pay market rates.  The TIA Director makes $315,000, which is a good amount.  The retiring DFW Director makes $400,000+, which is a better amount.  The Aviation Authority board wants to see if they can get a firmer contract to keep the Airport Director in Tampa – there is not even a number proposed. (If there were a number, this would be a different discussion – which focused on the number and the potential return.)  However, the Mayor would not even consider the mere idea of examining the idea.  Isn’t that selling the City on the cheap?

Either the Mayor does not understand how contracts actually work or he is posturing.  The Mayor is an intelligent man, so it is unlikely that he does not understand the basics of contracts. The argument about “personal ethos” does not stand up.

Maybe there is an explanation in something else the Mayor said about the Airport Director’s contract.  How about this?

“I think it’s a good contract, it’s a generous contract,” Buckhorn said “I think that contract was about as generous as one can expect working in a quasi-governmental agency.”

Well, as the Mayor well knows, not exactly “as generous as one can expect.”  From the Friday Aviation Authority meeting:

The mayor implied that this was a ploy to surpass other high salaries in the area. Buckhorn may have been referring to newly hired Tampa Port Authority CEO Paul Anderson, whose annual salary of $350,000 makes him the highest-paid port CEO in Florida.

“If this is about someone else who came to town and got more, I’m sorry,” Buckhorn said. “This is about him living up to his contract through 2016.

“This is ridiculous. I’m not going to go through this dance every time someone calls Mr. Lopano.”

Actually, only the Mayor is bringing up other local officials. (Who, for the record, made $320,000 when in Jacksonville.)  For the majority of the Aviation Authority Board it is about making sure the Airport Director stays at his job through his term.

We have seen that the Mayor’s comments do not stem from business concerns, have nothing to do with the taxpayers (once again, the Airport Director is not paid from taxes), and are not about “personal ethos,” unless the Mayor does not understand contracts.  Maybe the explanation lies in the odd comment about other officials.

— It is amazing what you can’t accomplish if you primarily care who gets the credit. (Apologies to President Truman)

Let’s look at the public narrative of the Port Director courting process:

Then Mayor Bob Buckhorn closed the deal.

Don’t think of this place as 21st century Tampa, he told Anderson.

Think of it, instead, as 15th century Italy.

“He told me we’re going to have a Renaissance in Tampa,” Anderson said. “It really captured me.”

* * *

To the mayor, Anderson’s three decades spent in politics, marketing and ports would help propel that Renaissance.

“I think what I tried to do was to let him know what potential exists here,” Buckhorn said, “and to talk to him about my vision, and what a pivotal time this was in this community and how his addition to the lineup was the last missing piece.”

“We were focused on getting Tampa to the next level. … I saw him as a perfect complement to everything else we were doing.”

So, the Mayor takes credit for convincing the Port Director to take the job and thinks the Port Director getting paid a large sum directly (at least partly) from property taxes is ok.  (Please note that we have no objection to the hiring of the Port Director). On the other hand, the Mayor cannot take credit for the hire because he was not on the Aviation Authority Board when the present Director was hired and thinks examining making the Airport Director’s contract firmer by having him getting the same or less as the Port Director (but not from tax money) is not ok.  Makes one wonder.

Even setting the questions raised by the Mayor’s odd comment about other officials aside for a moment, how exactly does the Mayor think we will finish getting to the next level if you keep getting vacancies in the “lineup?”  And if the lineup keeps leaving, there will be nothing to complement.

What was the Mayor’s justification for supporting paying the Port Director much more than he made in Jacksonville, anyway?

“Make no mistake,” the mayor said, “it’s about more than just running ships in and out of the port.”

And the Airport Director does more than just move planes.  The Tampa Bay area needs to look to keep both. (if it can be done reasonably)

— Conclusion

The bottom line is clear.  The Aviation Authority Board took a completely reasonable step to see what can be done to firm up the Director’s contract.  It is not some open ended, blank checkbook stance.  It is a proper and well reasoned examination of options. (And it is not clear the Director would even agree to new provisions in the contract.)

While it is legitimate to make sure the Aviation Authority does not give away the store just to keep the Director (and we do not think it should), it is not legitimate to oppose, especially in the manner the Mayor chose, the mere idea of considering options.  That Mayor’s posturing is most definitely not a change to our DNA.

Moreover, the Mayor is fond of saying things like this:

. . . Buckhorn says. “A large part of my mission is to inspire people to believe that we can be better, that we can do more, that we don’t have to settle for second best.”

The Tampa Bay area doesn’t need any more posturing, we need responsible decision making.  Anything less is truly settling.

So, next time he considers striking a pose rather than maturely examining options, the Mayor should listen to this guy:

“The rhetoric of campaigning is not necessarily the reality of governing,” said Buckhorn, who marks his 100th day in office today. “Governing is a much more methodical, much more deliberative process.”

— Postscript

We want to be clear that, while we understand that a non-compete will likely require some extra compensation, we do not favor giving the Airport Director a huge raise.  On the other hand, the Tampa Bay area does have to pay for talent, especially given that we are playing catch-up with our competitors.  We like the job the Director is doing, but we also think he needs to be judged on his results, and the jury is still out on that.

As we said, there is a reasonable, intelligent discussion to be had about compensation, non-competes, results, etc.  Unfortunately, as with so many politicians on so many issues in the Tampa Bay area, the Mayor chose not to have it.

Clearwater Aquarium – Oh, Fishy, Fishy, Fishy, Fish

Over the last year, aside from the Mayor of St. Pete, we have witnessed Pinellas County show a maturity and regional awareness that is quite unusual in these parts.  However, the last week or so has seen Clearwater backslide completely.

Clearwater leaders voted unanimously Wednesday night to move forward on the Clearwater Marine Aquarium’s ambitious plans to build a new, world-class aquarium in downtown Clearwater.

But the vote came after a testy exchange between Clearwater’s mayor and the chairman of the board of the Florida Aquarium in Tampa — signaling that there could be a cross-bay rivalry between the two attractions.

The $160 million, 200,000-square-foot home for Winter, the movie-star dolphin that learned to swim with a prosthetic tail, would be built on a city-owned site where Clearwater’s City Hall is located, overlooking Clearwater Harbor.

(Yes, we know a dolphin is not a fish) And:

The aquarium projects it will need $35 million to $60 million in government funding from state agencies, county bed tax funds and city tax-increment financing set aside for downtown development.

The city has already planned to move out of the nearly 50-year-old City Hall building; City Manager Bill Horne said costs associated with that should be addressed in a separate discussion.

Cretekos floated the possibility of including a 50 cent surcharge to the future aquarium’s ticket sales to help the city recoup some of its costs.

Another aquarium?  Why would this area spend tens of millions of taxpayer dollars on another aquarium? (Wouldn’t want to fix the infrastructure with that money)

Proponents believe it would be a major attraction that would bring more tourists to the Tampa Bay area and could potentially transform Clearwater’s moribund downtown. . .

* * *

Yates defends the aquarium’s prediction of 2.5 million visitors in the new facility’s first year. Aquarium officials believe an attraction near the beach, combined with the internationally known story of Winter, could draw tourist families who are vacationing in Orlando.

After the release of the movie Dolphin Tale, starring Winter, the current small aquarium on Island Estates near Clearwater Beach drew about 750,000 visitors last year, compared to 200,000 the year before.

So wait, the business plan is based on the draw of one dolphin?  What if something happens to the dolphin?

And, setting that aside, we have seen claims that an aquarium will spark the revival of a downtown before, in Tampa.  It didn’t quite work out, and the Clearwater people know this:

Then Doug Montgomery, the chairman of the board for the Florida Aquarium, stepped up to the podium to throw cold water on the plan. Based on the Tampa aquarium’s tough experiences, he doubted the Clearwater aquarium’s prediction of 2.5 million visitors in its new facility’s first year. When Tampa’s aquarium opened in 1995, it expected 1.8 million visitors but never reached 1 million.

“It’s deja vu all over again,” Montgomery said. “We’ve been there, we’ve done that.”

Yes, we have seen this movie before, and it was not that good.  Attendance projections are likely inflated.  Cost estimates are likely too low.  An aquarium will not revitalize a Clearwater downtown that has a number of issues and does not thrive despite having one of the best natural settings (though some of the poorest infrastructure and accessibility) of a business center in the region.  But this is the Tampa Bay area, so why learn from the past?

Then the mayor shut him down. Clearwater Mayor George Cretekos said they were there to discuss holding a referendum on the plan in November. Voter approval is required because the aquarium hopes to lease the site of City Hall for its new location.

“With all due respect, sir, I would ask you to stick to that same subject,” Cretekos said. The specific numbers in the proposal would be reviewed as the aquarium and the city hash out a business plan in the coming months, he said.

Not only is Clearwater refusing to learn from the Florida Aquarium’s experience, they seemed to revel in the fact that the Florida Aquarium had concerns about their plan.

Restaurateur Frank Chivas, a longtime member of the Clearwater aquarium’s board, told the council: “We’ve gotten the attention of the Tampa aquarium. They’re really nervous when they send their chairman here.” He drew a round of applause from the crowd of about 100 in the council chamber.

Yea, stick it to Tampa.  That surely is the proper motivation for spending tens of millions of taxpayer dollars on a speculative venture focused on one dolphin.

“There’s nothing they’re going to say that we haven’t heard before. We know the history very well,” said aquarium CEO David Yates. “There are major differences between the Florida Aquarium and the Clearwater Marine Aquarium. Any struggles they had in the past don’t translate to us.”

You probably heard it before because it is obvious.  Go on.

Former Clearwater Mayor Frank Hibbard, who’s also on the aquarium’s board of directors, added that aquarium officials are prepared to meet with Clearwater neighborhood and community groups to go over the plan in detail.

“We’re ready and willing to answer any questions,” he said. He also questioned why an official from the Florida Aquarium showed up to speak at a public meeting without first seeking a private meeting with officials from the Clearwater aquarium or the city of Clearwater.

“Nobody has ever called to say, ‘We can give you some advice from lessons learned,’ ” Hibbard said.

Did you call the Florida Aquarium to ask for advice before proposing a very expense project like this?  Probably not, because clearly the point it to set up a competing, not complimentary, facility.

But if you had called, we think the advice would be “Don’t rely on an aquarium to revitalize your downtown and don’t inflate your attendance numbers, blinding yourself to reality.  Finally, why are you spending tens of millions of dollars to compete with an existing aquarium down the road?”  The obviousness of this advice may be the reason that no one from the Florida Aquarium called, not to mention the present Mayor’s complete lack of interest in hearing anything the Florida Aquarium has to say.

The reality is that there is nothing wrong with the Clearwater idea (though not necessarily execution) when viewed in a vacuum. If the Tampa Bay area lacked an aquarium, it would be a decent idea. Unfortunately, Clearwater does not exist in a vacuum, though the City leadership may, and the Tampa Bay area does not lack an aquarium.

Having two aquariums will not help either aquarium or the area as a whole.  More likely, the facilities will cannibalize the other’s potential visitors, splitting the market, and at least one will go the way of the St. Pete Aquatarium. (And this classic Tampa Bay inflation of expectations: “[Former chamber president Robert Lamb] said tourists are attracted more to “major attractions” such as the Aquatarium.”)

The Aquatarium – from lostparks.com – click on picture for website

And what happens when the dolphin is no longer around, are they going to build a robotic imitation?

We don’t know what will happen to this plan, but it just shows the waste that arises from the silly Pinellas-Hillsborough rivalry.  While other metro areas build one, world class facility (say Atlanta’s aquarium), we waste time, money, and potential while fighting each other and stunting our growth.  Unfortunately, in this case, and so many others, that is the Tampa Bay way.

List of the Week

Our list of the week is the Travel Channel’s Best Aquariums in America.

They are not ordered, but they are The Florida Aquarium (Tampa), Audubon Aquarium of the Americas (New Orleans), Ripley’s Aquarium (Gatlinburg, TN), Texas State Aquarium (Corpus Christi, TX), North Carolina Aquarium at Fort Fisher (Kure Beach, NC), National Aquarium (Baltimore), Oregon Coast Aquarium (Newport, OR), Aquarium of the Pacific (Long Beach, CA), Monterrey Bay Aquarium (CA), New England Aquarium (Boston), Shedd Aquarium (Chicago), Georgia Aquarium (Atlanta), Tennessee Aquarium (Chattanooga), Mystic Aquarium (Mystic, CT)

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