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Roundup 6-27-2014

June 26, 2014

Economic Development – Some Good, But Not As Good As You Think, Cont.

This week the US Conference of Mayors issued their metro area growth report.  So how are we doing?  According to the Times:

Tampa Bay’s economy was the ninth fastest-growing among the 100 largest metros nationwide last year, and that momentum is expected to continue for several years.

The U.S. Conference of Mayors is offering that rosy assessment in a detailed analysis released Friday morning during the kickoff of the group’s annual meeting in Dallas.

At $125.7 billion, Tampa Bay’s economy last year was the 24th largest among all metros.

This year, the bay area economic output is expected to swell 3.6 percent to $131.7 billion, moving it up one notch to No. 23 as it overtakes Pittsburgh.

* * *

Between 2013 and 2020, Tampa Bay’s economy is projected to grow at an annualized rate of 3.4 percent, according to the mayors’ conference report, which would place it in a seven-way tie for 46th best among all 263 metros.

So is it the 9th fastest growing or the 46th? (46th place is not quite “swelling.”) Is it growth in real terms or percentage terms?  Does any of this mean anything useful?

Back in November, we looked at the previous report from the US Conference of Mayors. (See “Economic Development – Some Good, But Not As Good As You Think”  ) We noted that while Tampa-St. Pete was the 18th largest metro area, we were the 24th largest economy.  That has not changed.  We also explained how, while it is interesting to look at gross GMP numbers, a better way to look at how the economy is performing is by looking at the per capita GMP, to wit:

It is good to generate jobs – of course, there is the question on the type of jobs.  It is also important to note that growth, while good, is not a very good measure of our economy as it compares to other areas because growth is relative (a smaller economy might have faster growth than a larger economy even if the actual dollar increase is less).  A better measure of how we compare is per capita GMP.

Instead of doing every metropolitan area, we did a select group from Florida, the usual suspects that are around our size, and some other southern cities. (See here).  Last year, looking at the numbers, we concluded that:

From per capita GMP, which shows the value of economic productivity per person, it is clear that we are way behind, even in Florida.  (In terms of raw numbers statewide, we do a little better:  the Tampa Bay area has 14.7% of the state population (2012 estimates) but 15.4 % of the gross state product. see report page 36 here)

In sum, we are growing, which is good.  Certainly we are not at the low point of the economic cycle.  The problem is that we are chronic underperformers, as seen in both the smaller areas with larger economies and in per capita GMP.  This is mostly because of the structure of our economy and the focus on sprawling real estate, call centers, and tourism.  Until we change that, we may grow, but we will not be anywhere near where we should be.  We likely will be playing catch up for a while.

Now that we have new numbers, it is time to do new calculations and see how we are doing.

Using the same method as last year (the report’s  estimated GMP for this year – 2014 – and the Wikipedia list of the Census latest population estimate, which is for last year – 2013 ) we calculated new per capita gross metropolitan product numbers for this year, with percent change and actual change in brackets. We list last year’s number in parenthesis for comparison purposes.  Salt Lake City is new this year so the comparisons are not available.

Metro Area 2014 per capita GMP 2013 per capita GMP % Change Actual Change
Salt Lake City* 71197.9047 n/a n/a n/a
Minneapolis 68687.4737 66622.5633 3.1% 2064.9104
Denver* 67692.9100 65514.672 3.3% 2178.238
San Diego 59416.0782 57474.4662 3.4% 1941.612
Pittsburgh* 55445.7324 53585.0518 3.5% 1860.6806
Birmingham* 55073.2263 53226.5869 3.5% 1846.6394
Raleigh* 55495.3578 53173.4093 4.4% 2321.9485
Orlando* 51590.8047 49377.7415 4.5% 2213.0632
Miami 51268.0521 49178.1915 4.3% 2089.8606
Little Rock* 50939.7627 48908.5452 4.2% 2031.2175
Jacksonville* 48830.3658 45769.7642 3.4% 1582.8425
Jackson (MS)* 47537.9176 45769.7642 3.9% 1582.8425
Columbia (SC)* 46738.4499 45365.0549 3.0% 1373.395
Tampa Bay  45879.4058 44145.4048 3.9% 1734.001

From the per capita numbers, it is clear we are still way behind generally and lagging in major Florida areas as well.  While our growth rate beats some areas, it is basically average (and trails both Jackson and Little Rock) and, because we start from a lower base, the raw growth figure is one of the lowest on the list- hardly swelling.

Now add to that this:

The Tampa Bay market is hardly better. Hillsborough County’s average weekly wage in the fourth quarter of 2013 hit $960. That’s a paltry gain of only 0.4 percent from a year earlier, and less than an inflation rate that wasn’t all that high in the first place.

People employed in Pinellas also had little to crow about. Their average $900 weekly wage rose just 1 percent in the same period. In Pasco County, the good news is the 1.6 percent wage gain slightly outpaced inflation. The bad news is the average weekly wage in the county was an anemic $695.

Back in 2004, Pinellas workers averaged just $720 in weekly wages. But wages were growing at 4.2 percent back then. Hillsborough’s average wage then of $776 was rising at a brisk 5.4 percent clip.

That was then. Now it’s tough to tout a genuine recovery with rising costs and flattened paychecks.

Not exactly the road to a broad based economic boom.

Once again, the numbers speak for themselves.  We are laggards – and all that hype about it being “our time” and “booming” notwithstanding.

Transportation – Acting Before Planning

To no one’s surprised FDOT picked the location for the Westshore multimodal center, and it is the lot featured in their conceptual drawings for the task force:

From planhillsborough.org – click on picture for website

A string of parcels hugging Interstate 275 in Tampa, including the current sites of the Double Tree hotel and Charley’s Steak House, have been chosen as the recommended location for a new transportation center to serve buses, a people mover connecting to Tampa International Airport and possible future light rail.

The transportation center may also include commercial development. At present, there is no set funding or time frame for the Westshore Regional Multimodal Center, but the Florida Department of Transportation has set an open house for July 17 to get input on what the public would like to see at the new center.

The open house will take place at the Hilton Tampa Airport Westshore, Westshore Room, 2225 N. Lois Ave., Tampa from 5 to 7 p.m. with a formal presentation at 6 p.m.

Ming Gao, FDOT’s Intermodal Systems Development Manager, said the 9-acre site is being recommended because, of the four sites under consideration, it is the one closest to a platform that could accommodate light rail, the median on I-275. The project will involve timing, he said, since there are so many moving parts.

A people mover coming from Tampa International Airport, a possible light rail system connecting to Pinellas County, expanded bus service by the Hillsborough Area Regional Transit Authority, construction of a new north span of the Howard Frankland Bridge and other projects all must be coordinated, he said.

That would be this area.

You can look at this study for the various ideas they went over.  We have to say – the grand sounding “multimodal center” does not look too impressive in that study, regardless of location.  It really just seems to be a parking garage with a walkway to the interstate median and a couple of slots for buses to pick up passengers.

Moreover, at this point- as there is no multimodal plan for real transit in Hillsborough County, we are not sure why they are picking a location for a multimodal center, but whatever.  That is how things are done in Hillsborough.

One interesting thing to note from the map above – this lot really has very little potential to make the area in any way more walkable or urban, especially given that it is bounded on one side by the incredibly sprawl-tastic Jefferson High School. (or is that going to be moved again?)  But why plan to maximize an investment?

Bro Bowl – St. Pete Is Ahead Again?

There was an article in the Tribune about a pop-up skateboard park in the downtown St. Pete.  You can read the whole article here.

The essence of the report was that skateboarding in downtown St. Pete (which is generally banned at the moment) could be a good thing with even ideas of a skate park near the Pier:

Back in the 1990s, long-time skateboarders recall, the city began viewing their presence as a nuisance and menace to public property. A ban was put in place from the waterfront to 16th Street and from Fifth Avenue North to Five Avenue South.

Earlier this year city council members expressed support for lifting that ban, but no votes have been cast.

The council last month also endorsed the concept of a 40,000-square-foot skate park that could go in exactly where Saturday’s event was held along Spa Beach.

The funny thing is that the Mayor of Tampa often points to St. Pete as doing good things downtown, but he still seems to view (he definitely treats) skateboarders like St. Pete did in the 1990’s, which is not a surprise because that is when he started his local political career.  St. Pete is realizing their error and trying to correct it, but that is not how Tampa rolls.

Since the Austin X Games just happened and St. Pete is now looking to change, it is odd that the one location in the area with real skateboarding history – Tampa and the Bro Bowl – is so determined (without explanation) to destroy that history rather than keeping it and building on it.

It would be as if the Old Federal Courthouse (which is now Le Meridien) was torn down so that a replica could be built a few blocks over.  What is the point of that?

Regionalism – Good Talk

Speaking of Tampa and St. Pete, there was this item in the Times regarding the Mayors supporting Greenlight Pinellas:

“The days of us fighting over bridges and artificial lines are over,” Buckhorn told the crowd of several dozen people.

Kriseman said counting Buckhorn as a friend makes it easier to work together. But the reality is parochialism doesn’t pay, especially when it comes to catching the attention of Washington, D.C., and corporate titans, he said.

“Business and the federal government are all looking for more regional cooperation,” Kriseman said.

Kriseman sees better opportunities for Tampa Bay to snag federal dollars if Washington notices Tampa and St. Petersburg speaking with one voice.

“That’s a little different from what you’ve seen in the past,” Kriseman said.

If the cities work together, they’ll be more effective on joint trade missions and luring corporations to relocate to Tampa Bay, the mayors said.

If a company relocates to St. Petersburg, many of its executives will live in South Tampa, Buckhorn said.

“We’re competing against San Diego, Raleigh-Durham, Charlotte and Nashville,” Buckhorn said. “Not each other.”

And that is all good stuff.  We support it (and have said pretty much the same thing for years).  If they had stopped there, it would have been great.  However:

Appearing together publicly and delivering the same message matters, Buckhorn said.

“There’s nobody better to do that than the two mayors. If people see two mayors on the same page, people get a sense of how important this is, we’re not fighting silly parochial battles anymore,” Buckhorn said.

The problem with that is that the two mayors control less than a quarter of the area population.  Moreover, they do not control most of the government money in the area.  By overstating their power, position, and influence, the Mayor of Tampa has done the exact silly sort of thing that led the Hillsborough County Commission to complain about the EDC a few weeks ago.  The reality is that the County Commissions (and through them agencies like HART and PSTA) are the key to regionalism namely because they govern far more territory, population, and money.  And, as the saying goes – in government, if you ain’t got money, you ain’t got . . .

TIA – To Seattle and Beyond

The Alaska Airways flights to Seattle began last week.

Alaska Airlines’ inaugural flight from Seattle — a full flight carrying 162 passengers — was scheduled to land on Tampa soil at 5:30 p.m. today, with a flock of Busch Gardens pink flamingos on hand to greet the arriving passengers. A returning flight to Seattle was set to take off at 6:30 p.m. The daily flights, through August, are as low as $170 one way.

Landing the non-stop flight took three years, multiple meetings and involved lots of cheerleading from local tourism agencies, said Chris Minner, vice president of marketing for Tampa International.

* * *

Even before this flight was introduced, some 320 passengers a day have been flying between Tampa and Seattle on various airlines. It was the third busiest U.S. route not served by a non-stop flight.

The articles were full of comments by tourism officials talking about how they will boost tourism, which is fine, but there was scant mention of expanding business opportunities other than hospitality.  The Tribune had this:

The new daily flights out of Tampa International Airport will take just under six hours, so they could also be a coup for business travelers heading to the tech corridors of the Pacific Northwest, airport officials say.

Which is far more significant in our eyes.  We need these kinds of connections (and the San Francisco Bay area) to develop our economy for the future.

There was also this:

Lopano said American Airlines announced it’s going to begin flying a non-stop route from Tampa to Los Angeles. The CEO said he’s working on getting a non-stop flight to San Francisco next.

Good.  It needs to get done.  Once again, the airport administration is on top of the issue.

And there was also this good news about the Edelweiss flights:

So how have things been going for Edelweiss in Tampa so far?

“Satisfactory,” said a grinning Michael Trestl, the airline’s director of strategy and network development, after a Tuesday evening news conference at TIA.

The airline said that its planes — Edelweiss flies Airbus 330-300s into TIA that seat up to 315 — have been more than 80 percent booked. More than 75,000 passengers have used the flight to travel between Switzerland and the Tampa Bay region, according to Edelweiss.

The route has been so successful for Edelweiss that in March the airline quietly bumped service from once a week to twice, ahead of the usual summer bump to two flights weekly. Flight are Tuesdays and Thursdays.

Edelweiss executives were at TIA to promote the airline’s new business-class “lie flat” seats: bigger, roomier seats that extend so that business-class passengers can sleep during the 10-plus hour flight. More significantly, airline executives reaffirmed their commitment to the Tampa Bay area even though the airport incentive program that helped lure Edelweiss to TIA recently expired. That allayed concern that the route could have gone back to Orlando International.

* * *

Edelweiss chief commercial officer Alain Chisari said the airline has nearly doubled its passenger numbers in the last five years to 1.1 million passengers in 2013 and wants to keep growing. That’s why the airline is committed to Tampa Bay for the long term, he said.

“We are a strategic company,” Chisari said. “We don’t make six-month plans. We want to stay and grow.”

Edelweiss executives said the airline intends to stay at TIA — barring economic and other shocks that roil the airline industry — as part of its strategic plan through 2020.

The more the merrier. It just goes to show that this area can compete when it does things right.

Channelside – Please, Just Walk Away

There was an article in the Times that was very interesting.

A few days ago, the folks running the auction for Channelside Bay Plaza released 1,027 pages explaining the complicated rules for selling the most complicated piece of real estate in Tampa Bay.

But tucked inside is an escape hatch for the Irish bank that has failed to unload downtown Tampa’s beleaguered outdoor mall: If it isn’t sold this time, then the Irish Bank Resolution Corp. asked a judge to let it walk away from Channelside once and for all.

“Given the mounting carry costs, the ongoing litigation, and the relatively small value of (Channelside) … ” the bank’s lawyers told the court, “the abandonment of (Channelside) is in the best interests of IBRC and its creditors.”

The bank wants to abandon Channelside? Is that even possible?

It’s possible, but would be highly unusual.

* * *

The Irish bank’s argument to the court is that if the July 2 auction fails to result in a sale, Channelside is no longer worth its time and effort. The IBRC, which took over Ireland’s failed banks after the worldwide recession, said it has to get rid of nearly $34 billion worth of distressed assets around the world.

Channelside is just one of those assets, and the highest offer on record for downtown Tampa’s failed mall is just $7 million.

* * *

Or as the bank’s lawyers put it: “The time and effort expended … to dispose of (Channelside) is markedly disproportionate to the value” of everything else the bank has to sell off.

So then what would happen?

There are ways municipal governments can take control of abandoned properties. But in this case, McDonaugh said only one government agency would get Channelside: the Tampa Port Authority.

That’s because the port leased the land that Channelside was built on in 2001. The port has an “unsubordinated ground lease” that gives it certain powers over Channelside. The port would be first in line to take over the abandoned property.

“That’s the only way it would happen,” McDonaugh said. “The port is the only one who has rights to the property. If the bank walked away, the property would revert to the port.”

Fine.  Let’s hope the bank walks away so we can move on.  Of course, that still leaves the Port Board – but at least they will then have a chance to prove they can do this thing right.

Port – Master Planning

While Hillsborough County is in advanced discussions about having a local south County-MacDill ferry, there was an article in Tribune regarding a possible ferry to Cuba.

Patrick Allman envisions the day when a Cuban businessman could come to Tampa, purchase 20 cars at auction and on the same day, ship them back to his home country on a ferry docked in the Channel District.

“I could see a shipment of Ruskin tomatoes heading to Cuba,” accompanied by a boat-load of tourists, said Allman, a member of the Tampa Port Authority board.

Should the political winds change and travel and trade between the United States and Cuba resume in a more traditional sense, Port Tampa Bay needs to be prepared, he said. “We’re thinking ahead to future opportunities. We are apolitical, but I don’t think it’s a stretch to say this situation will change in the future.” Cuba’s leaders are aging, he added.

Allman said he has already spoken to the consultants preparing the Channelside Master Plan about earmarking a piece of property near the cruise ship terminals for a future cargo and passenger ferry that could run between here and Cuba.

Of course, this is not the first time this idea comes up (see a 2011 story here and a 2003 story here) –and goes nowhere. It is fine to look into it, but whether it ever happens is another story.

In any event, that was not the interesting part of the article. This was:

Years back, cruise ship growth was a top priority for the Channel District, said Ajamil, of Bermello, Ajamil and Partners Inc., the firm conducting the study. But the newer, larger cruise ships can’t fit under the Sunshine Skyway bridge, so that priority is shifting.

“Now you have a lot more residential and decreased cruise ship traffic (in the future), so that opens a lot of opportunities for adding to the urban living experience,” Ajamil said. “When you have housing, there are needs that must be met, whether it’s open space or coffee shops,” grocery stores or office buildings.

“At the same time, there is a side that wants a working waterfront,” Ajamil said. “That ferry might be one of those things we might fit in there. It can be a multidimensional property.”

Ajamil said only about eight acres of the 45 acres the port owns in the Channel District are already developed. “The bad thing is that there is nothing there,” he said. “The good thing is that there’s nothing there, so we don’t have to be knocking stuff down.

“We are going to be pretty wide open” in listening to ideas from the public during the open house, Ajamil said. “We will share our site analysis, what we see as the attributes of the site. What we want from the public is ideas.”

In other words, a large part of the ideas for the new master plan involve real estate development on Port land downtown. Frankly, some of the land downtown probably should be developed.  However, given the Channelside mess and the Port’s poor choices in urban design and planning (have you seen their mess of parking garage?), we are not sure the Port is the organization to do it.  Has the Port learned any lessons?  Do you really trust the board in land deals and development?

Moreover, it also sounds like the port may be giving up on cruise ships long term, which is an interesting way to deal with the problem of the Skyway, especially since cruise passengers have been such a big part of the Port hype and growth plans for so long.

It all makes one wonder what directions the Port is really looking at and where they plan to make up revenue lost in cruises.  And how will they deal with Port Canaveral positioning itself as the port for Central Florida? (see here)

Downtown Goings On

This week we decided to play with the City’s new online permitting/zoning service.  It is a little clunky at first, but then you get the hang of it – though the little instruction pdf could be a bit clearer.  In any event, while looking at filings, we found a few renderings or massing diagrams in the public filings.

The first is a “massing diagram” for the hotel/condo proposal near Encore.

It is not very clear, so we cannot have an opinion other than thinking it looks like origami gone wrong, but maybe a final, clearer proposal might be better.

The next are renderings for the Related Group proposal for The Manor at Harbour Island.

Click on picture for larger version

Click on picture for a larger version

First, we are glad that the Related Group decided to go vertical.  We have mixed feelings about the apparently, mansard-ish roof  on the ends, especially since it is not consistent across the entire, very long top on the wide façade of the building, but so be it. For what it is, the building is fine. (It is funny that Related is going with such a design for Tampa when most of their other vertical projects – in other words, not Pier House – are much more modern looking.  Maybe that says something about the perception of our market.)

Downtown – Pie In The Sky

We saw a report about a “proposal” for a 72-story mixed-use building downtown that was noted in the Business Journal, with this note:

Based on published information, Ricardes does not appear to have land or funding to build the skyscraper.

In other words, it is just an idea without any real backing or land. (You can see a WTSP report here)  This is the video:

Well, that is pretty.

Before you get too excited, even if there was land money involved, you might also want to consider that there are height limits in downtown Tampa imposed by the FAA because of both Peter O. Knight airport and TIA. (You can see in this old report how that came into play with another unbuilt proposal.)  Any such plan would have to get a waver.

We have nothing against a mixed-use building or anything so tall.  That would be great, but at this point, it just a drawing.

List of the Week

Our list this week is Glassdoor.com’s Employee Satisfaction Report Card.

The top 25 for worker satisfaction were San Jose in first, followed by San Francisco, DC, Norfolk, Salt Lake City, San Diego, Seattle, OKC, San Antonio, Austin, Boston, Raleigh, LA, Baltimore, Memphis, New Orleans, Sacramento, Atlanta, Jacksonville, Minneapolis-St. Paul, Houston, St. Louis, Dallas, Orlando, and Providence.

Miami was 26th.  The Tampa Bay area came in 47th out of 50.

As noted in a Times article, finishing below us were Denver, Las Vegas, and Pittsburgh, which are some of the usual suspects on our lists.

Of course, as we often note – we are not concerned about each individual list because they all have their quirks.  Our concern is the trend.  Even if an area is a usual suspect, there are always going to be some times it ranks poorly in something.  However, you should be a usual suspect, and we are not.

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