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Roundup 5-23-2014

May 23, 2014

Economic Development – A Success, But Is It A Model?

This week the Times told us the following:

The ink is drying on 11 business expansion deals in Tampa and Hillsborough County and await only final approvals to be made public, while 78 companies from the information technology to life science industries are looking at potential sites across the county, economic development leaders learned Thursday.

Some of the 11 projects involve modest numbers of new jobs, while others will bring hundreds to the area, Tampa Hillsborough Economic Development Corp. CEO Rick Homans told a room of corporate executives at a quarterly leadership meeting. He estimated that 4,300 jobs would be generated this year via business recruitments bringing an investment of close to $500 million to Tampa and Hillsborough.

That sounds promising, though, because we know nothing about any of the potential deals including possible salaries, we will withhold judgment, including whether it is more hype than substance.

Regardless, the Times also had a very interesting column about how business, in this case Bristol-Myers Squibb, decide to expand to Tampa.  We are not going to get into the entire article (you can read it), but there was one factor that caught our interest.

This past week, we got answers. Lee Evans, executive director of Bristol-Myers Squibb’s 4-month-old capability center here explained how his company narrowed its selection to a building on Eisenhower Avenue in Tampa.

His tale is insightful. It sheds light on how big companies go about finding the right place to expand. It confirms that the economic development machinery of Tampa/Hillsborough (with good backup from Pinellas County) is doing its job well. And it offers at least the promise that whatever mix of factors lured Bristol-Myers Squibb to this area will be noticed by other leading life science corporations.

* * *

The search team first gathered at Bristol-Myers Squibb’s already sprawling facility in New Jersey. Office space there is pricey. So are salaries to attract and keep talent. It does not help that an area three-bedroom, two-bath ranch house can easily run $600,000 or more.

* * *

A few details help put Tampa over the top. Most important, Evans says, is the availability and low cost of the available workforce. That’s thanks to the existing life science companies here and the lower pay scale compared to New Jersey. The presence of the University of South Florida and a community with military veterans was attractive. So was the area’s existing cluster of “shared services” similar in job makeup to the planned capability center. A final plus: Florida’s overall affordability.

Then Evans offers a deeper insight, beyond the usual cost-benefit stuff.

He calls it the “first move advantage.” What he means is that Bristol-Myers Squibb sees the Tampa Bay market as a promising one for a big pharma business because so few competitors have arrived yet to grab up local talent or inflate industry wages.

“We saw this as an opportunity for us to gain experience in an area where we could be a life science employer of choice,” Evans says.

It seems that a key item in the decision was a low cost workforce and a lack of competition for employees, which keeps the wages low.  That leads to an interesting question: how do you build a cluster when part of your appeal is that you are not a cluster?  If we attract other big pharma employers, the cost of labor and competition for talent will go up, which eliminates what appears to be a large part of our appeal.

We know the cost of living in Florida is lower than New Jersey, yet, the Bristol-Myers Squibb headquarters is in New Jersey in an area full of big pharma companies, where competition for talent is large.  Apparently that is ok – just like tech in the San Francisco Bay area.  And clusters are more attractive to employees because they are not locked into one employer and have the opportunity to advance their careers by moving to other companies or joining with the large numbers of people in similar fields to start new companies.

So economic development officials have to ask themselves – how long can they market low wages while trying to develop the economy? How do you develop a cluster when the appeal is the lack of a real cluster? And how do you attract and retain talent by telling people they will just be paid much less here and not have the opportunity to advance by moving to other companies?

We are not putting down the Bristol-Myers Squibb deal at all.  It is one of the real successes in local economic development recently.  But this column, while attempting to explain the move, it actually raises more questions than it answers.

— One More Thing

In a related matter, we ran across a Daily Beast article which is almost a year old, but still of interest.  It was written by two advocates of sprawl and opponents of rail, but it does not really deal with those subjects.  The article is discussing how many of the cities with the greatest opportunity are in the south.  What really caught our eye was 1) the lack of Florida cities in the opportunity centers and 2) this chart:

From the Daily Beast – click on chart for article

Which places the Tampa Bay area at the bottom of the “Brain Gain.”  In fact, it indicates that the Tampa Bay area is still losing the educated (and we are not starting from a very highly educated workforce).  Of course, it is a year old so things may have changed, but how radically could they have changed?

That is about as stark an indication of this area’s economic development issues, and failures of the real estate/tourism/call center model, as there can be.

Economic Development – An Incubator in Every Pot

The Hillsborough County commission decided to form another entity which is essentially an incubator:

Hillsborough County commissioners moved forward Wednesday with a plan to create a new business incubator to help entrepreneurs and startups.

* * *

Currently, Hillsborough operates a Small Business Information Center on N 56th Street, east of Tampa, on a roughly $500,000 annual budget.

The new incubator — called the “Entrepreneur Collaborative Center” —- would probably be located in Ybor City and would require the county to double the budget to about $1 million, according to Ron Barton, the county’s economic development chief.

Details like an exact cost and timeline were not included in Wednesday’s presentation by Barton. The center would provide mentoring for local entrepreneurs and would help connect them with small business loans.

Barton suggested county tax dollars could be leveraged into loans to small businesses, a proposal met with skepticism by Commissioner Kevin Beckner. 

That’s all fine with us (and maybe a recognition that the old models really don’t work) but we agree that no tax money should be used for small business loans.  Though, we have to wonder why it is not just part of this:

Go ahead. Scribble on the walls at the new Community Innovation Center at the John F. Germany Library in downtown Tampa. Those scribbles could be the foundation for a thriving business, and for economic development in Tampa Bay.

The CIC is made up of eight distinct spaces for meeting, learning and creating in 10,000 square feet on the library’s third floor overlooking the Hillsborough River. Scheduled to open in mid-June, it’s expected to draw people of all ages, ranging from children who learn science, math and engineering skills while playing with robots to seniors with questions about how to use their smartphones and iPads. It’s envisioned as a petri dish for business growth by providing mentors and free tools such as 3-D printers for making prototypes of products that can launch new companies.

It is unclear why they should be in different location or be separate organizations.  In all truth, while we like incubators, how many do we need?  There are a number already in the area.  Wouldn’t it make sense to consolidate some of them (especially the public ones) to leverage the greater assets rather than keep having small groups doing the same thing?

And then there was the usual:

The new center, Commissioner Sandy Murman said, is an “earth-shaking proposal” to foment economic development.

Hardly.  There are over 1250 incubators in the US.  And in the immediate Tampa Bay area there is no lack.

At least nine incubators — places where entrepreneurs can go to find free or affordable workspace, startup expertise, peer support and sometimes even funding — now populate the greater Tampa Bay market.

Five more are proposed, with a majority likely to open within the next year. Three others that once operated — or at least tried to open their doors here — are gone.

So while it is good to have incubators, they are now a standard part of the business environment, not some groundbreaking innovation.  Maybe they will do some good, though with 1250, we are sure some have not really achieved much.  (Maybe the County should have worked to create a weeklong tech conference like Orlando is doing.)

Yes, developing incubators had to be done, but we are not sure this is the best way to do it (rather than build on what is already there), and it certainly is not worthy of any hype.

Transportation – More Cracks in the Cone of Silence

This week, there was word about the results of a survey by Hillsborough County regarding views on the future of transportation.  The exact questions that were asked were not laid out, but the survey was described thus:

The poll, conducted May 4-8, was light on specifics, and that was by design, said Eric Johnson, the county’s director of strategic planning and grant management. Johnson said the transportation policy group wanted an early indication of whether the public supports the county’s quest to improve transportation on a broad scale. Later polls will get more specific on projects and funding.

In other words, the policy group was still looking for cover for moving forward in solving an obvious problem (which may be why our problems linger so long).  Nevertheless, what did the survey find?

It turns out they want all of the above, according to a recent poll conducted for the county government by Florida Opinion Research. About 1,100 county residents responded to the poll, which has a 3 percent margin of error.

Slightly more than 73 percent of the respondents said they would favor widening roads in areas where there are strong concentrations of employers, even though the survey question included the proviso that such an approach is costly and takes a long time. And 81 percent favored enlarging intersections and improving traffic flow technology in order to reduce congestion.

But the poll showed an even more positive response — 82 percent — in favor of expanding bus routes and more frequent bus pickups. Also strongly favored at 73 percent was increasing transit options to include toll lanes on interstates, a high-speed ferry from southern Hillsborough to MacDill Air Force Base, and a light rail system.

So they have cover to move forward, which is not surprising given that transportation in Hillsborough County is generally poor and has been for years.

Was there any reaction?

Kevin Thurman, director of the pro-transit group, Connect Tampa Bay, used the poll results to question what he called a “heavily road-focused” report County Administrator Mike Merrill presented to the county’s transportation policy group in March. The group, which includes county commissioners and the mayors of Hillsborough’s three cities, is supposed to come up with a transportation improvement plan by November along with ways to fund projects.

“All of this points to the fact that people want options and they want transit,” Thurman said Monday. “But when (the county) presents a plan, it looks nothing like what people are asking for.”

Thurman was referring to a page in Merrill’s report labeled: “Mobility Solutions Proposed to Date.” Under the heading “short term wins,” Merrill listed 55 intersection improvements, but just one bus rapid transit demonstration project.

The pro-transit forces favor adoption of multiple routes across the county for bus rapid transit, which uses dedicated lanes and other features to cut travel times.

Under “long-term wins,” Merrill did add 17 new bus rapid transit routes, plus light rail, the high-speed ferry and a multi-modal transit center in the West Shore area where commuters could switch from one transit mode to another.

Thurman interpreted Merrill’s short-term list as a plan to put any new transportation revenue the county collects toward road projects first, postponing meaningful mass transit improvements for a decade or more.

That is fair enough, if true.  So is it?

Merrill dismissed Thurman’s interpretation, saying the two lists were not indicators of a preference for roads and intersections over fast buses and rail lines. The short-term list, Merrill said, is projects that can be done fairly quickly — two to three years — and relatively cheaply.

Plus, the policy group has yet to come up with new funding to support the countywide projects. Several members of the group said they favor a referendum in November 2016 to raise the county sales tax by a penny and dedicate the money to transportation.

“It’s a recognition that some projects can be done sooner that will have a material effect on congestion,” Merrill said. “Just taking care of those 55 intersections, you get a pretty quick and positive impact on congestion, as well as with intelligent traffic solutions.”

Transit projects, on the other hand, take much longer. The main delay in starting new bus rapid transit routes, Merrill said, is the 18 months it takes between ordering and receiving a new bus. The 17 additional BRT routes could be done in four to five years, Merrill said.

Light rail lines that have been built in other parts of the country have taken 10 years or more, Merrill said. And the high-speed ferry between Apollo Beach and MacDill Air Force Base will probably take two to three years because the ferry company must buy land for a port and get government permits.

That is also a fair response.  Maybe it would help to see what exactly they are discussing.  The presentation can be found here.  The relevant slide is on page six of the pdf and looks like this:

From Mobility Solutions Presentation – click on picture for pdf

The essential problem we see is the vagueness of the slide.  Because it is not clear what is meant by Phase I and Phase II, it is not clear who to believe.  On its face, the slide appears to say what the critic says.  Even if it does not, it is sufficiently vague that it can be interpreted that way by critics.  It could also be interpreted that way by the County government, which basically would leave us with the same failed policy that we have now – roads, and just roads.

As we have said with regard to Greenlight Pinellas and the 2010 Referendum – vagueness kills.  If the Transportation for Economic Development committee is serious, it needs to be much more detailed.  If transit takes some time, tell us when the process will start and what the timeline will be.  Even if it takes 10 years to complete, it should start soon.  That can be explained.  Just saying it will be “Phase II” makes it sound like nothing will happen for years, if ever.

In sum, we do not take a position on the debate because the issue is too vague.  However, if this is the level of specificity that the TED committee is going to have, it will be a failure.  Thankfully, even on their timeline. They have the opportunity to do it right and be specific.

Caution: Walking Can Be Hazardous to Your Health

The Tampa Bay area has long been known as a hazardous place to walk or bike.  It seems nothing has changed:

Tampa, St. Petersburg and Clearwater make up the second-most-dangerous metro area in the nation for pedestrians, particularly if they are older adults, children or minorities, according to a national report released today.

The results come from the National Complete Streets Coalition, which ranked pedestrian safety within major metropolitan areas by assessing each region’s “pedestrian death index” — the rate of pedestrian deaths relative to the number of people who walk to work in the region.

Throughout Florida, the numbers weren’t pretty.

Four metropolitan areas in the state led the survey: Orlando-Kissimmee; Tampa, St. Petersburg and Clearwater; Jacksonville; and Miami, Fort Lauderdale and Pompano Beach. Memphis was the fifth-worst area for pedestrians.

Clearly, Florida has a problem.  What is the State going to do about it?

Across Florida, Hattaway said, the department has located the “hot spots.” Next, it will conduct road safety audits and develop a strategy to improve specific issues in each region, such as increasing lighting at certain intersections or prohibiting dangerous right turns.

That’s all well and good, but we think it ignores the main issue – which is that the state is basically built so that, other than a few placed like Winter Park, you have to drive everywhere and nothing is built to accommodate walking or biking.  It is hardly surprising that, in areas where sprawl is the model of development, walking is dangerous, even if they have limited transit or small walkable areas, which we don’t.  (And, looking at the mobility solutions slide above, there are allegedly 11 miles of bike/walking trails – are they going to be useful for transportation and safety by connecting real destinations or are they just going to be isolated nature walks?)

As long as nothing is built to be walkable, nothing will be walkable.

Downtown – The Lightning Owner Reveals a Plan

The owner of the Lightning filed for rezoning for his first building downtown:

. . . he and his partners filed a rezoning application Thursday with the city to build a proposed 400-room hotel on a parking lot at the corner of S Florida Avenue and Old Water Street just west of the Tampa Bay Times Forum.

* * *

Along with the 400 hotel rooms, preliminary plans call for the new building to have 50 residential units on the top floors and 175,000 square feet of meeting space below.

There will also be 273 parking spots (a parking garage is still an option) and 45,000 square feet of retail space on the ground floor, according to documents filed with the city.

Conceptual drawings depict restaurants, streetside cafes and a covered walkway leading to the Times Forum. Leiweke said the concept of combining an arena and hotel is proving popular around the country.

We assume it will be approved (maybe after some alterations).  We think that is a good place for a hotel. Hopefully the retail will face the street, not be internal.

As for how it would look, the Tribune had this massing rendering:

From the Tribune – click on picture for article

and one from the Times:

From the Times – click on picture for article

Because the renderings are just for massing, we will withhold judgment at this point.  Nevertheless, it is nice to finally see a proposal.

Port – Some Good News

There was some good news about the port:

Port Tampa Bay has taken in higher-than-predicted revenues in the first seven months of the year, with lease revenue up, more money coming in from cruise ships and more people paying their property taxes, Chief Financial Officer Mike Macaluso told the Tampa Port Authority Board on Tuesday.

“We’re having a very good fiscal year,” Macaluso told the board.

“Our lease revenues are a bit higher than expected,” he said after the meeting. “If our lease-holders do well, we do well.” The port, the largest deep-water port in Florida, has taken in about $362,000 over budget projections, Macaluso said.

The port also has spent less than expected on operating expenses by leaving some vacant positions open and deferring non-essential expenses, Macaluso said.

It is good to be in the black.  We are pleased, though we are even more interested in building business. (And we are not buying the “largest deep-water port” sales line simply because other ports have higher value business, which in our mind should be the measure.) To that end:

Port Tampa Bay is scheduled to begin site work on an $18.3 million project to improve its container facilities.

The 19-acre area on Hooker’s Point, which will include a refrigerated warehouse and 17,500 linear feet of railroad, is part of an initiative to dramatically increase container business at the port. Throughout its history, the port has handled mostly bulk cargo such as phosphate, limestone and petroleum products, while lagging in containerized freight such as consumer goods and produce.

The end game for this project, said Wade Elliott, vice president of marketing and business development, is for the port to receive refrigerated products from ships, then load them onto railroad cars bound for Chicago. At the moment, the port deals in limited refrigerated goods, which leave on trucks for mostly local destinations. 

Whether that accomplishes anything is a question, but we are happy they are trying.  It would also be nice if the port started moving more high value goods through containers.  We know they want to, but, the question is, will they?

TIA – Working Out the Markets

It was announced this week that one charter company will stop charter flights from TIA to Cuba.

Citing a saturated market, one of three charter companies offering service from Tampa to Cuba has suspended the service.

“This Wednesday will be our last flight to Cuba from Tampa,” said Bill Hauf, president of Island Travel and Tours, whose company flew the route three times a week. “We will continue to operate our six flights a week to Cuba out of Miami.”

Two charter services still fly from Tampa — ABC Charters and Cuba Travel Services, offering five flights between them. Company representatives could not be reached for comment Monday.

Hauf blamed the arrival of CTS in December 2013 for the suspension of his Cuban flights.

That is too bad, but, as we have said before, the market is new and needs to be worked out.  Nonetheless, people are using the flights:

Overall, passenger totals on flights to Cuba from Tampa International Airport rose last month, from 3,180 in April 2013 to 5,683, said Janet Zink, airport spokeswoman.

From October 2013 to April 2014, 34,358 passengers flew to Cuba from Tampa, up more than 10,000 from the same 23,558 during the same period a year before, Zink said.

So passenger counts are good. Consolidation and reorganization is normal, and fine.

What is also really good is this:

“We are here to stay,” Fernando Fondevila Leyton, a top North American executive for the airline, said Wednesday.

Copa’s happiness with how the route is going so far is a better sign than the airline signing another contract, said Chris Minner, TIA’s vice president of marketing. That’s because airline contracts are made to be broken. Airlines come and go as the market dictates. What’s important is that the market is strong and the airline is committed.

“That speaks volumes,” Minner said. “That’s exactly what we want to hear.”

Copa and TIA officials said that so far the route has been a big success for both. Nearly 15,000 passengers have used Copa to travel between Tampa and Panama City, according to airport data from the route’s Dec. 17 start date to the most recent month on record, April.

Excellent.  How about moving to daily service?

Meanwhile In the Rest of Florida

— They Don’t Need No Stinkin’ Tolls

Miami’s port tunnel is about to be opened.

Directional arrows over the westbound lanes of the PortMiami tunnel shone bright green Friday morning as hundreds of workers put the finishing touches on the $1 billion, under-the-bay facility.

* * *

Federal transportation authorities liked the idea, but it wasn’t until 2000 that they actually issued a statement indicating that the tunnel was feasible. That led ultimately to the formation of a partnership involving the Florida Department of Transportation, Miami-Dade County and the city of Miami to fund the tunnel.

The final public-private partnership that emerged included the Luxenbourg [sic]-based financial firm Meridiam Infrastructure Finance and the French construction firm Bouygues Travaux Publics. Miami Access Tunnel was named concessionaire in charge of the project.

* * *

The tunnel provides the first direct access to the port from area expressways. Currently, cargo trucks meander through downtown streets to get to the port. Their preferred route, after exiting Interstate 395, is Northeast Second Avenue south to Northeast Fifth Street, where they turn east toward Port Boulevard.

Trucks carrying hazardous materials will be barred from the tunnel. These trucks, fewer than 2 percent of the 1.5 million trucks that annually go to the port, will continue to use the downtown route.

Quite the project.  One could say it is comparable to the I-4/Selmon Connector but for three things: it cost a lot more; it is a public/private partnership; and

There will be no tolls.

You read that right – no tolls, though the private company operating the tunnel will get $33 million/year from the State – meaning all of us.   Funny, every road plan in the Tampa Bay area has tolls, Miami gets a State sponsored, toll-free tunnel – not even Lexus lanes.  How does that work?

— When is a Destination Not a Destination?

We have been critical of the subsidizing of the Estuary/Bass Pro Shops projects and the claims that it will become a destination for tourists, especially given that there is already a store 2 hours away in Ft. Myers and 1 ½ hours away in Orlando.  Well, now it is even less likely to be a tourist destination because Bass Pro Shops is coming to Gainesville. (2 hours away), though it will be a smaller store than the Tampa version.

Bass Pro Shops is coming to Gainesville, with plans to open an 80,000-square-foot store in 2016 in the new Celebration Pointe development northwest of Interstate 75 and Archer Road, the company announced Friday afternoon.

Bass Pro Shops sells hunting, fishing, camping, hiking and other outdoor gear, clothing and gifts. Its massive stores include lodge-like exteriors and outdoor-themed interiors complete with aquariums, mounted fish and wildlife. Boat showrooms include Tracker Marine Group fishing boats including Tracker, Nitro, SunTracker, Tahoe, Grizzly and Mako.

The destination store will be the main anchor to the 1 million-square-foot, mixed-use development. The average Bass Pro customer stays 2½ hours and drives 50-plus miles, the company said.

(There is no indication of any incentives in the Gainesville store.) In other words, the Brandon store is local store, period.

Even worse, the Estuary/Bass Pro shops project in Brandon is just a sprawling blob while the Gainesville project (site plan here) actually has some positive design.

Sadly, we are in no way surprised by any of this.

— Metropica

Speaking of a better design plan, things are moving forward with a massive development in Broward County.

Metropica, a $1 billion project with enough square feet to hold 70 football fields, will change the skyline of western Broward with buildings up to 30 stories — the tallest in Sunrise.

Sitting as the city’s Local Planning Agency, commissioners gave unanimous approval Tuesday to a development agreement that sets design guidelines developer Joseph Kavana must follow as the 4-million-square-foot project is built over the next decade.

* * *

The transit-oriented development would encourage residents to get around on foot — or bike — rather than hopping in their cars, said Susan Motley, an attorney for Metropica.

Initial phases call for 1,250 high-rise units, 485,000 square feet of commercial and 150,000 square feet of office space on 28 acres.

When finished, Metropica would have up to 2,500 condos, 300 townhomes, 485,000 square feet of commercial space and 785,000 square feet of office space, plus a 2-acre park that will be deeded to the city.

The height of Metropica’s condo towers have been capped at 300 feet, or 30 stories. If the developer opts to build that high, Metropica would have the tallest buildings in Sunrise. That current distinction belongs to Tao, whose twin condo towers stand 26 stories high and sit east of Sawgrass Mills.

It will look like this. (see also here) And it is to go right next to Sawgrass Mills.  Other areas in Florida clearly have gotten the design message.  The Tampa Bay area is still settling.

— Maglev

In more news that the State is fine with fixed guideway transit everywhere but in the Tampa Bay area:

The Florida Department of Transportation on May 19 awarded Morris’ Georgia firm the opportunity to lease rights of way between Orlando International Airport and the Orange County Convention Center for a fixed-guideway transportation system.

This now clears the way for American Maglev to begin working on the $315 million, 40-mile first phase of its system, which would create 60 high-wage jobs. Subsequent phases of the overall $800 million project would connect to Lake Nona’s Medical City and the Walt Disney World area, which would create hundreds of jobs.

What can you say?

Insecurity Watch, Cont.

We often write about economic development efforts in the Tampa Bay area and the disconnect between rhetoric and reality.  That was brought home to us in a Tribune article on a new Walmart in Wesley Chapel:

Need evidence Florida’s economy has emerged from the recession? Look no farther than the intersection of State Road 54 and Bruce B. Downs Boulevard, where Wal-Mart Stores is building a giant new supercenter slated to open this summer.

Welcome to Mayberry.

List of the Week

Our list this week looks at the US News list of best public high schools, specifically in Florida.  These lists are complicated in their methodology, and people often complain about them, but so be it.

Because of the nature of the list, we are not going to list all the schools.  The number one school is Pineview in Sarasota. (Good for Sarasota.)  The first school in the immediate Tampa Bay area is Robinson at number 26.  The only other ranked Hillsborough School is Tampa Bay Tech at 47.  Pinellas had only one ranked school: Palm Harbor at 28Pasco has three ranked schools, with Land O’Lakes at 40 as the highest.  Miami, Orlando, and Jacksonville do far better.


And please take a moment on Monday to remember what Memorial Day is all about.

One Comment leave one →
  1. Elizabeth Belcher permalink
    May 23, 2014 1:10 PM

    Regarding Bass Pro, Bass Pro and its development arm, The Estuary, created a Community Development District. The announcement for the organization was made in a legal notice, Tampa Bay Times on 9/28/13, page HD 8. Would someone explain what advantage this will give The Estuary/Bass Pro? Call me a cynic but there has to be some advantage for Bass Pro probably at the expense of the taxpayers of Hillsborough County.

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