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Roundup 4-12-2013

April 12, 2013

On Managing and Leadership

Last week, the Aviation Authority Board approved an amendment to the Director’s contract that gave him additional retirement funds.  While in our view there is no real argument that examining ways to keep the Director was the right thing, there can be disagreements on whether the final contract was optimal.  We are not going to get into the details of that.

More interesting was a comment made by one of the Board members, which really crystallized something we have been saying (we wish we said it this way, frankly):

Hillsborough County Commissioner and Aviation Authority board member Victor Crist . . said he believed Lopano had the skills and drive to go beyond being a “general manager CEO to an entrepreneurial CEO.

“I want to see that performance,” Crist said. “Or I will be the first to show you the door.” 

That was a really good comment, and not just about the Aviation Authority.  The Tampa Bay area has long excelled at having managers.  In our politicians, our Port Directors, the old airport Director, many other positions, we often (though not always) have good managers.  They balanced budgets and maintained the status quo.  (And, yes, they even did a little business development.  Though they usually seemed to have excuses of why they only did a little and could do not more.)  And this all seeped down into the general political culture.  Now, there is something to be said for all that (except the excuses).  You need good managers.

On the other hand, one thing we have not seen much of is entrepreneurial leaders – people who can really sell the area, sell its assets, truly grow its economy. (And too often we have been told that something cannot be done and that we must settle for what is “realistic” while other areas go ahead and do what is claimed to be unrealistic here.)  In other words, we have lacked real leaders with a comprehensive, forward-looking vision and the ability and political will to actually implement it.

And, as an area, we have become conditioned to having managers in leadership positions, leading to lowered expectations because too often we mistake good managers for good leaders.  They are not the same thing.  If we were a leading metropolitan area and international city with companies knocking down the door to relocate here and were a hub of world leading industry, managing would be ok.  If we had a built out transportation system, managing would be ok.  If we were a major hub airport with links across the country and the world and/or with airlines fighting for landing slots, managing would be ok.  If our port were a leading container port of which companies were fighting over to get a berth, managing would be ok.

But that is not the case, and just managing is not ok.  We need to develop and sell our area and our economy.  We need to grow our markets and compete.  We need to understand the global nature of modern markets.  We need to realize that the economy of the 21st century is not the economy of the end of the 20th century.  That is why creating the proper team of leaders with vision who will not settle – and maintaining that team – is so important. (We are getting there, but are not quite there.)  Consequently, we need to pay for entrepreneurial leaders to help lead the change.  While our market is not used to that and has a hard time dealing with the costs (and even the ideas), it is still the case.

As we said, we are not going to opine about whether the Airport Director’s contract was optimal or not.  There is room for argument.  But the measure of the contract is not what a local politician is paid from tax revenue or what other Directors are paid out of tax revenue.  The simple fact is that if (and right now it is “if;” hopefully that will change soon) the airport Director succeeds in attracting a couple more international flights, the economic impact will far exceed anything paid to keep him.  That is the kind of calculation we need to be making.

The Commissioner was right – now it needs to be applied across the board, including with politicians. We don’t need more rhetoric.  We need real vision.  We need real implementation.  We need to see the performance, or people, including politicians, need to see the door.  That is a real change of DNA.

Economic Development – Some Good, Some Reality Check

Somewhat coincidentally, there was news this week of a new trade mission:

Mayor Bob Buckhorn and a delegation of business recruiters leave late Friday for four days of meetings with companies in Germany and Switzerland.

“If we are truly going to be an international destination, then we’ve got to go get the business,” Buckhorn said. “We’ve got to make sure that we plant Tampa’s flag around the globe in areas where we have strategic advantages, where we have existing relationships, where we have companies that are interested in establishing a presence here.”

The delegation includes representatives of the Tampa Hillsborough Economic Development Corp. (EDC), Tampa International Airport, including chief executive officer Joe Lopano, Tampa Bay & Co., Hillsborough County’s tourism development agency, and Norma Henning, the Naples-based honorary consul to the Federal Republic of Germany.

In Munich, Nuremberg and Frankfurt, the group is scheduled to meet with companies that make tools and specialty devices, pharmaceutical equipment, computer hardware, software and applications, and thermal engineering systems, as well as an aerospace and defense technology firm and an Internet service provider.

The EDC spent three months working with an Enterprise Florida staffer based in Germany to schedule appointments with the companies. All are interested in expanding their manufacturing, distribution or sales in the United States. Two have a particular interest in Florida. Another two already have subsidiaries in the Tampa Bay area.

            * * *

Most of the delegation’s meetings are in Germany, but it is flying in and out of Zurich on Edelweiss Air, which began offering direct Tampa-to-Zurich flights last May. The group’s agenda includes discussions aimed at boosting travel from Germany to Tampa via Edelweiss.

Good.  We have no problem with trade missions, provided they are properly targeted.  We wish them success. (It is also notable to see the symbiosis between air [and sea] connections and the ability to market the area.) Of course, in line with the Commissioner’s comment above, the results (over time) will be the key to determining whether it was worthwhile.

In the meantime, we noticed this, related to the Mayor’s “not playing second fiddle to Miami” comment:

South Florida residents are accustomed to hearing Portuguese accents as Brazilian visitors flock to stores and tourist attractions, but they may not be aware of just how popular the Sunshine State is in Brazil.

Mauro Vieira, Brazil’s ambassador to the United States, said Friday that new figures show that of the 1.8 million Brazilians who traveled abroad in 2012, 75 percent came to Florida.

“Florida is a very important state for Brazil,’’ said Vieira, who was a speaker at the 8th Annual Latin American Symposium, which is organized by the University of Miami’s Center for Hemispheric Policy.

Speakers at the day-long event, which was held at the Four Seasons Hotel Miami, addressed everything from the changing political landscape in Latin America and the need for economic reforms to trade and political issues that are driving the U.S.-Latin American relationship. Juan Carlos Pinzón, Colombia’s Minister of Defense, also discussed his country’s strategy for lowering violence levels associated with drug trafficking, guerrilla movements and organized crime.

Brazil, meanwhile, is Florida’s top trading partner with $19.6 billion in trade last year and the second largest source of international visitors. Canada is still tops. But in Miami-Dade County, Brazilians have dethroned Canadians as the top international visitors.

First, it indicates the importance of Brazil to the Florida economy and need to fully develop ties between the Tampa Bay area and Brazil.

The other thing it shows, especially the number of Brazilians coming to Florida and the fact that Brazilians are the biggest foreign visitors to Miami, is how far back the Tampa Bay area, which does not even have a flight to Brazil, is behind Miami in links to Latin America and how much work is needed.  (And don’t forget the annual major conference on Latin America taking place in Miami.  What do we have?)

And all this is ok to note.  Wanting to aggressively pursue the Latin American market (and other markets) is the proper position.  However, the strategy to do that has to be based on a realistic assessment of the present situation and calculating the steps necessary to get to the goal.  How else can you formulate an effective plan?

And in another development, the Business Journal told us this about health care (which we have pointed out a number of times):

Can Tampa Bay be a center of excellence for the health care industry?

Leaders in the field weighed in on that issue, during the Tampa Bay Business Journal’s March 25 CEO Health Care Roundtable.

While this area has a lot of potential, it will take some work to fully realize that potential, many of them said.

“We have a lot of biotech jobs in this community. The problem is we haven’t focused them so they are scattered all throughout the community,” said Jack Kolosky, chief operating officer of Moffitt Cancer Center. What this area lacks, Kolosky said, is the concentration that’s found in places such as Research Triangle Park in North Carolina. That makes it difficult to be recognized as a national leader, despite the presence of powerhouses such as Moffitt, University of South Florida and Draper Laboratory, among others. 

Clearly.  (And lack of clustering does not just inhibit recognition – it harms marketing to new companies and developing a critical mass, which may be why clusters get recognition.)

This area has much potential, but there needs to be vision and political will, as well as coordination.  It also requires not settling.

All this just shows how much entrepreneurial leadership we need.

Port – Where are We

There was an interesting item from the Business Journal this week about the port.   It referred to a Colliers report on ports in the U.S.

Houston is North America’s “most irreplaceable port” and Mobile, Ala., waterfront is the “up-and-comer” to watch, according to “North American Port Analysis: Capex or Capsize,” a white paper released by Colliers International.

Tampa has sought to develop marketing partnerships with Houston and Mobile through a program called the “Gulf Coast Advantage.”

* * *

Tampa gets two mentions in the report: that it has no plans to dredge or raise the Sunshine Skyway bridge to accommodate larger post-Panamax ships, and that it is one of the few ports aligned with a national intermodal rail system.

“Port and inland distribution markets that invest CapEx in their transportation infrastructure will capture the economic opportunities from changing global trade patterns and evolving e-commerce,” the reports says. “Those that don’t invest the needed CapEx risk capsizing their economies.”

Not really great marketing material for Tampa.  So let’s look at what the report says.  The first thing is that Tampa only gets mentions in lists.  First, on page 7, there is a chart of Port Readiness for Post-Panamax ships. Of the 18 ports (including Houston, Mobile, and four in Florida) listed, only 3 were taking no steps to get ready for Post-Panamax ships, and one was due to labor issues.  The other two were New Orleans and Tampa.

There is another chart on page 7: NORTH AMERICAN PORT TEU CONTAINER VOLUME UPDATE.  It lists 18 ports with the number of containers they handle.  Only two listed ports do not have a number given.  Instead the chart lists them as: “N/A – A cruise & bulk cargo port.”  Not surprisingly, these two are New Orleans and Tampa.

In a section (on page 11) trying to determine where industrial real estate will be most in demand the report says:

Differentiating trends are:

Port markets matter more if they…

* * *

…are aligned with the national intermodal rail system; that is, physically connected to one of the seven Class-1 North American railroads. Tampa, Jacksonville, Charleston, Savannah, Philadelphia, Mobile, and New Orleans are examples along the East and Gulf coasts.

In other words, while Tampa’s port/rail connection is a good thing, many of the ports near us have connections, too.

We realize that there is a new Port Director (and he came from Jacksonville, which, based on this report, appears ahead of Tampa in planning for the future).  We also realize that there are constraints in Tampa – the Skyway, the channel.  The question is what is the real vision and plan.  Serving Central Florida is fine, but other ports can do that, too.  And partnering with Mobile and Houston is fine, but both are better prepared for large ships and an increase in traffic.  What will we do to overcome our constraints and lack of preparedness?

MacDill Perimeter

One issue that usually flies under the radar is the encroachment of development on MacDill AFB and the subsequent noise complaints that come with that development.  Not surprisingly, those complaints can grow quite tiresome, particularly because the base has been there far longer than most of the people living nearby (it is not like they did not know there would be noise if they lived near the base).

State Rep. Dana Young said Tuesday that a state task force to which she has just been named should be attentive to a potential encroachment issue that could threaten MacDill Air Force Base’s ranking in the next round of base closures.

Gov. Rick Scott on Monday named Young his designee on the Florida Defense Support Task Force, which he and the Legislature created to protect and enhance Florida’s military installations.

Young, a Tampa Republican, said Florida Rock & Tank Lines owns property on Dale Mabry Highway adjacent to the base that should be acquired because it could be used for residential development incompatible with base operations.

“Military encroachment is one of the big issues all over the country,” Young said. “It would be viewed by BRAC as a very negative thing.”

We are not going to speak to specific parcels of land right now, but this issue really should be addressed.  MacDill is key to this area, and it needs to be protected.

Aquariums for Everyone

We learned this week that the local aquariums are now looking to work together.

These days, the two aquariums have started brainstorming ways to collaborate on marketing and branding.

They’re also thinking about offering a discounted ticket package that would give visitors access to both aquariums plus a third one, St. Petersburg’s Pier Aquarium, which is relocating later this year to expanded quarters at John’s Pass Village in Madeira Beach and will have a new name, Secrets of the Sea.

“We could market the Tampa Bay region as the aquarium capital of the world,” said David Yates, the Clearwater Marine Aquarium’s CEO. “We’ll have three major aquariums, all with different experiences.

“If you look at it as too many aquariums in the area, that’s the glass-half-empty perspective,” added the ever-optimistic Yates. “The glass-half-full perspective is we have an opportunity to grow the market and expand the tourism base. Rather than saying we have to share the pie, we grow the pie.”

It remains to be seen how effective such a strategy would be, but the aquariums may have little choice but to work together. If the Clearwater group is able to follow through on its plans, the Tampa Bay region may soon be testing the limits of how many major aquariums one tourism destination can support.

It is good that the aquariums are working together.  That is much better than working against each other.

On the other hand, while we may be wrong, we have a hard time believing that having numerous smaller aquariums is better than having one major aquarium.  While we like aquariums, we just tend to believe that there are a limited number of people who will visit more than one aquarium on vacation.

If Clearwater is determined to build their own aquarium, it is better that the facilities cooperate, but it still seems counterproductive to us.

Subsidy Update

This week we learned that one of the projects which was used as precedent for the Estuary/Bass Pro Shops deal – Southshore Commons  – still has not broken ground.

Guegold said there is no timetable for the start of construction on Southshore Commons.

“We’ve found that the market has come back in many parts, but is still a bit soft in that part of Florida,” she said.

Guegold said Nationwide is looking for anchor tenants for the project and there is no target date for completion of its first phase.

Really.  That is odd because:

According to U.S. Census Bureau data for South Shore – Apollo Beach, Gibsonton, Riverview, Ruskin, Sun City Center and Wimauma — the area’s population grew from 57,119 to 142,178 between 2000 and 2010, an increase of nearly 150 percent.

The logical next step is giving all those people something to do on a Saturday night.

Southshore Commons, a planned mega mall on the southwest intersection of Big Bend Road near I-75 in Riverview, hopes to fill that void.

“We think the South Shore area is underserved by retail today, with residents in that area having to drive north,” said Tina Guegold, vice president of marketing for Nationwide Realty.

With all that demand, what is the problem?

We have no doubt that something will get built eventually, though it likely will still be the sprawled shopping plaza originally envisioned.

The real question is whether this stalled project really needed or deserved a taxpayer subsidy.

Housing Market – A Mix

There was conflicting news regarding the housing market this week.  First, house sales a way up:

. . . More Tampa Bay homes sold last month than have in nearly seven years, as moneyed investors sparred with rushing homebuyers over a scant for-sale supply, My Florida Regional Multiple Listing Service data show.

* * *

More than 3,100 homes sold in Hillsborough, Pinellas, Pasco and parts of Hernando counties last month, a 7 percent jump over last March and the busiest month since May 2006, MLS data show.

And two-thirds of those homes were sold the old-fashioned way, untarnished by foreclosure. Conventional sales accounted for 20 percent more of all agents’ local sales than they did in March 2011, improving prices and stabilizing a market long shaken by debt and distress.

That is a good thing.  It is not exactly clear from the article how many of those sales are by investors who are going to rent out the houses, but, nevertheless, good.

On the other hand:

In fact, Florida was well represented among metropolitan areas with the highest foreclosure rates. Miami, Orlando and Ocala finished first through third among 209 metro areas across the nation, with Las Vegas in fourth place and Tampa-St. Petersburg-Clearwater in fifth.

Quite a mixed message.

Rays Update

There was an interesting article in the Tribune this week about how some funding sources for a new Rays stadium in Pinellas County may dry up.  You can read the whole thing here.  This really sums it up:

The poll numbers and the scrum to claim a slice of the taxes also could be a clear signal to Rays executives that public funding for a new stadium will be unlikely.

Rays officials declined to comment on the poll but local analysts say the numbers will capture their attention.

“Either you have politicians who fly in the face of strong public sentiment – which is not very likely – or the numbers will tell the Rays there are not any tax dollars for a stadium,” said Darryl Paulson, a political science professor at USF St. Petersburg.

“It means the Rays will do everything they can to get out of Pinellas County,” he said.

Maybe the funding issue (and the fact that he has real opposition in his quest to be reelected)   will finally force the Mayor of St. Pete to deal with reality, which may be happening.

List of the Week

Our list this week is the Business Insider list of Best Urban (ed. loosely applied) Cities to Retire.  Miami is number 1, followed by El Paso, Jacksonville, Tampa, Memphis, OKC, San Antonio, Louisville, Tucson, and Nashville.

Apparently, some things do not change.

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