For reasons beyond our control, this week’s Roundup is being posted on Thursday.
TIA – Willkommen in Tampa
For those who may not know, Tampa used to have flights to Frankfurt on Condor which went away under the previous airport director. (And, at the time, few officials or aspiring officials really pushed hard for international flight. The push came from a vocal few from the outside.) This week, we prepared an item about comments by the Lufthansa CEO that Lufthansa may bring a new, more leisure based product to Tampa (See here and here). Well, happily, we have had to scrap that item because
Mit einer Florida-Verbindung steigt Lufthansa im Herbst 2015 in den touristischen Langstreckenverkehr ein. Tampa wird ab 25. September fünfmal wöchentlich von Frankfurt aus angeflogen, im Winter viermal. Neben Miami und Orlando ist es das dritte Lufthansa-Ziel in Florida. „Großes Interesse und hohe Nachfrage erwarten wir vor allem bei Privatreisenden“, sagt Passagevorstand Karl Ulrich Garnadt.
Die neue Verbindung wird mit einem Airbus A340-300 durchgeführt. 261 Gäste finden in der Economy Class Platz, 19 in der Premium Economy und 18 in der Business Class. Die Preise für Hin- und Rückflug sollen bei 739 Euro beginnen.
Whoops. We meant
That’s because TIA’s latest international route is to Frankfurt Airport, one of the world’s busiest commercial and cargo hubs. Through Frankfurt, the bay area can catch flights to Africa, Asia, Europe, Latin America and the Middle East.
The new Frankfurt service will start on Sept. 25, 2015, and there will be five flights a week. Lufthansa will fly Airbus A340-300s into TIA that will offer about 298 seats. It will be an 11-hour flight between Tampa and Germany.
It is a great addition (especially starting with 5 flights a week). Congratulations to the airport administration on a job well done. Their vision and organization has really lifted the area’s game and expectations (and surely it helps with the issue in the next item).
We have faith the airport administration will be able to get that done in time (San Francisco is especially important for business development).
Economic Development – The Quest for an HQ
There was an article in the Times about the quest to bring an HQ to the Tampa Bay area.
As an adolescent in the 1980s and 1990s, the Tampa Bay business community was delighted to be dubbed the nation’s Call Center Capital. During its latter teen years, the metro area tried on such nicknames as Wall Street South, eager to leverage its ability to attract more sophisticated back office operations of major financial institutions and corporations based elsewhere.
Maybe some business people were delighted with those steps, but not everyone was, especially all the people with talent that left the area in search of better opportunities. The reality is that being “delighted” with such things is just indicative of the culture of diminished expectations (you know – settling) that has long been a feature of the local scene. But, anyway:
Now Tampa Bay’s economic developers want the world to know the economy here has become an adult, capable of recruiting and sustaining corporate headquarters — ones with real name-brand recognition. That’s why the first meeting of a task force devoted to recruiting corporate headquarters was held here this past Tuesday.
Its mission: to start crafting an in-depth strategy to find, woo and relocate the headquarters of better-known companies. Not some A-level name like Apple or Google or Procter & Gamble. The early aim is to target recognizable B-level brands, especially companies based in the more expensive (and colder) metro areas of the Northeast and Midwest.
And there is nothing wrong with that (though getting an A-level company would be better, if very hard). In fact, it is about time. Why the change?
The surprising and successful headquarters relocation in 2013 of Hertz, the rental car giant, from New Jersey to Estero, north of Naples, was a clear wakeup call to Tampa Bay that, under the right circumstances and the right timing, many major corporations might consider a move to warmer and typically far less expensive Florida.
Right, setting aside a unique circumstance around that deal (the CEO had a home in Naples), we got caught napping with our diminished expectations. The question was not about the unique success in Southwest Florida, it is why was Southwest Florida pushing it but not the Tampa Bay area? (Just like the previous airport director not pushing to get international service while other areas pushed hard for it – diminished expectations.)
In any event, so what is the task force doing?
To help identify more likely candidates, the headquarters task force and the Tampa Hillsborough EDC are calling on relocation experts for guidance. Ellen Harpel, the founder of consulting firm Smart Incentives, specializes in helping communities like Tampa Bay evaluate the competitiveness of their incentives offerings when recruiting businesses.
And Barry Quarles, a consultant with Market Enhancement Group in San Diego, has worked with economic developers here for years. Twelve years ago, Quarles surveyed hundreds of CEOs across the country to capture their perceptions of the Tampa Bay business market. Now he is doing it again, polling 50 CEOs based here, 50 CEOs with some kind of regional ties (perhaps a subsidiary operates here) and an additional 250 CEOs with no connections to this area.
CEO attitudes about the Tampa Bay market have changed since 2002. Quarles will share those insights with the headquarters task force later this month. “There’s a lot of good news in there, but also some wakeup calls for us,” Homans says.
Ah, consultants. Setting aside the consultants and why these things have not been determined already, we will be interested to see if the “wake-up calls” are anything new or just what everyone should have known and been dealing with for years, but just chose to ignore.
The EDC already has produced some compelling testimonial videos praising this metro area from such area executives as Bloomin’ Brands CEO (and Manhattan transplant) Liz Smith, Tampa Bay Lightning owner and former Boston hedge fund manager Jeff Vinik, and John and (son) Chuck Sykes talking about their own headquarters relocation of Sykes Enterprises from Charlotte.
That is all fine. We are all for it. It would also be helpful to really look at the issues that lead to our culture of diminished expectations, local government’s failure to address transportation (not just referendums but the prior failure to plan and invest which is what leads to all the referendums in the first place), failure to plan, and the manifold other issues that keep dogging us. That may help us recruit companies. (As we have asked before: Why should we expect companies to invest in us if we do not invest in ourselves?)
At least now we are lucky enough to have some nationally known deep pockets. That should help. Yes, it is a quirk of fate, but so what? Other cities have also had quirks of fate. The point is to take advantage of those quirks of fate and build on them.
We are glad for the push. May it be sustained and successful.
— So, What is Happening?
We thought it would be interesting to do a quick search on what is going on around the country in company relocations. The first few pages of results gave us this:
Bridgestone is America is moving is HQ to downtown Nashville from a more suburban location.
On the other hand, Charlotte has scored a big and small relocation. The big one is Sealed Air Corp., which is bringing 1200 plus jobs and “[t]he jobs will carry an average salary of almost $120,000, Sealed Air says.” The HQ will go near the Charlotte airport. The small one is Velocity, a tech firm. (Not all HQ’s are equal.)
Meanwhile, Boston seems to have some appeal, maybe at Charlotte’s expense. One analyst is driving rumors Bank of America might move its HQ from Charlotte to Boston. (no idea if there is any truth to it.) There are also rumors that Baxter International will move from Chicago to Boston , though that is denied. Schnieder Electric is also moving from Illinois to the Boston area. It seems that all the engineering and biomed talent in Boston is very attractive.
Economy – the Housing Market
There was news last week about the housing market.
Well that explains Naples and Sarasota, but it does not explain the other areas where prices rose while ours fell. Any other explanation?
“Most of the new construction in the last 15 or 20 years is not that type of home, but we still have those homes in our market, which is a good thing for seasonal people or first-time home buyers,” said Charles Richardson, senior regional vice president of Coldwell Banker.
Right, because the rest of Florida doesn’t have any of those. That does not explain why prices fell here. Anyway
Statewide, single-family home sales rose 7.6 percent in the third quarter and the median price of $182,000 was up 4 percent. Sales of townhomes and condos dropped by 4.6 percent, though prices rose almost 7 percent to a median of $139,000.
Overall, “The housing market has settled into a stable pattern of activity that is reminiscent of the market before the craziness of the last few years,” Florida Realtors chief economist John Tuccillo said in a release.
“Sales and prices are up for single-family homes but at sustainable rates. The condo market is reflective of the general declines in new investor purchase in Florida. . . . The good news is that this type of progress in the real estate market is likely to continue.”
That’s fine, but we are concerned about the Tampa Bay area and why we are lagging. It seems the housing market it is in for a sustained period of inconsistency.
Transportation – Some Post Election Thinking
There were a number of articles about what is in store for the future of transit. Because it is so soon after the election, we are not going to get into detail, but we will note a few things.
Hillsborough County tried to pass a transit tax four years ago and failed. Similar efforts in Pinellas and Polk counties crashed even harder last week. Could they try again at the same time and succeed together?
Tuesday’s defeat of the Greenlight Pinellas ballot measure and Polk’s My Ride/My Road referendum sets up a possible scenario in which all three counties try to pass transit taxes two years from now. Hillsborough leaders have been laying the groundwork for a proposed 2016 referendum asking for a 1-cent sales tax increase to pay for a combination of road construction and bus service.
“We’ve got to really think differently and ask ourselves what’s going to make that winning format,” Rogel said. “If it’s a regional solution, with the understanding that we all have the same transportation needs, more or less, and we all need to be connected, then I think we need to explore that as an option.”
Yes. The real obstruction to a regional approach right now is the government entities and officials themselves. (You can search “HART/PSTA” to see our past discussions.) They do not plan together because they have not wanted to. Really, there needs to be a regional plan even if it includes some county specific elements (look to the other Bay area for an outline of the concept), not just coordination, but at least it is a start. And it also should be noted the transit hand up is more of a local issue:
The addition of another penny sales tax on top of Penny for Pinellas made Greenlight an easy target for critics who highlighted that it would saddle the county with the highest sales tax rate in Florida.
The Orlando area’s $1.2 billion SunRail commuter rail system used federal and state funding with the state buying an existing rail line from CSX and agreeing to cover the first seven years of operational costs.
After that, participating counties including Orange, Seminole and Volusia say they plan to pay their share of operating subsidies from general funds. Orlando will pay its share from revenues from a special downtown taxing district.
We agree (long time readers will know that).
There was even a column in the Tribune about how the streetcar could help move people around. There have been ideas floating around to expand it for years. (We have no idea why the column acts as though this, or most of what is going on downtown, is a new idea. Regarding the streetcar, check out the map on page 3 of this old document from 10 years ago – looks like 2004 – which envisions extension to around Waterworks Park and the Arts District and looping around. And don’t forget this article from the last station opening in 2011 when the Congresswoman from Tampa says that it should go to the Arts District and the last mayor says the streetcar should go beyond tourists. ) And, as we have said for a while, the streetcar should be part of a comprehensive transportation system. The idea is not new, but, as the column notes, maybe enough local officials have finally gotten on board and it may be time to do it. (And it is worth noting that the proposed USF med school downtown is caddie-corner to a streetcar stop which could be very useful if the streetcar is actually operated as a real transportation system.)
Reagardless, do not expect hard-core opponents to just go away. Their opposition is to the whole idea of robust public transit and reimagining how our cities are built. (Which many of them think is a UN plot. See “PSTA/HART – Record Ridership For This Bulwark Against the UN,” here, here, and here) And, as this report shows, spruced up sprawl (aka “the American way of life”) is likely most of what Pinellas will be for the foreseeable future.
It is good that people are thinking. We will see if anything real happens. We are still waiting for the results of the punt to consultants in Hillsborough.
Transportation – US19, Almost Done With This Portion
It seems like our roads are always under construction and traffic is beyond capacity. Well, at least it seems that the latest work on US19 will be finished soon.
Earlier this year, Gov. Rick Scott promised an extra $4.8 million to get cars on the main highway by October, which included $3.2 million to hire more workers and a $1.6 million incentive to hit three key deadlines.
Perhaps the most important of these milestones — getting traffic onto two northbound and two southbound lanes — came and went on Oct. 16. That means contractor Hubbard Construction has been losing $41,666 in bonus money with each passing day, officials with the Florida Department of Transportation said.
That means thousands of cars crowding frontage roads along a 2½-mile stretch of the highway between Gulf to Bay Boulevard and Whitney Road finally will be able to zip along the raised roadway with no interruptions.
We are glad. The road should have been fixed long ago.
— Let’s Look at the Numbers
For those who are counting, that is 5 years and $44 million/mile, and would have taken longer without the close election that brought extra money. (We assume that is 2009 – or earlier – dollars. If so, according to the handy inflation calculator, the cost would be $124,270,000 and $49.708 million/mile in today’s dollars.) Of course, that does not count the cost of the fixing the rest of US19 and probably does not include much right of way acquisition since most of the road was already there.
It seems like a good time to look back at our segment on a consultant report produced for the Hillsborough Transportation for Economic Development group:
So what does this say, really? It says that BRT is cheaper than LRT (which is true in many cases, though not all[)], which can be seen from the charts on pg 12 which gives a cost range in millions of dollars for BRT of $30-$168 and Light rail of $48.3-$436.2. Those numbers are drawn from charts on pg 9 (light rail) and pg 7 (BRT). Those charts have some issues. First, the light rail chart does not mention that the Pittsburgh light rail number, which is at the very high-end, involved tunneling under a river, which is quite expensive.
If you take the Pittsburgh outlier off the list, the LRT average is $66.95 while the BRT is $52.6, even if you include the Eugene and Grand Rapids – which is not really true BRT because it just closes lanes in rush hour – numbers which are likely to have no bearing on the cost of going through a decently populated area. Once that is done (and even before, really) there is a decent amount of overlap in the cost range that is not explained. Pg 9 gives a list of four cities where the light rail cost was under the high-end of BRT (Salt Lake City, Minneapolis, Phoenix, and San Diego.) So light rail is not necessarily more expensive right off the bat. The TED group needs to get details – and AECOM should have provided them.
(See “Transportation – More Muddle” ) Compared to $44-49.7 million/mile to just upgrade an existing road.
In the words of a local columnist, just saying.
Downtown – Will Kress Finally Get Renovated?
There was news of something we have been waiting for (other than the Lufthansa flights) – there are new plans for the Kress block.
The historic Kress building in downtown Tampa is on the verge of a transformation from vacant to vibrant, with plans under way to redevelop the building into a hotel, possibly with residential components.
A group of Tampa real estate veterans has teamed up with an Atlanta hotel developer to redevelop the five-story Kress, which was the home of five-and-dime store S.H. Kress & Co. The Tampa team includes father-and-son construction executives Sam and Casey Ellison; Anthony Italiano, a partner with the Ellisons in EWI Construction; and Tampa developer Alex Walter.
Tampa developer Jeannette Jason, who owns the building with her father, Miami-based broker Doran Jason, declined comment. Walter said Jason would play a role in the redevelopment, though he declined to give specifics of the deal structure.
That is a bit of surprise, though not completely a surprise given the on again, off again efforts to redevelop the block over the years and the Oxford Exchange, the Le Meridien, and the Floridan showing that renovation is possible, even in Tampa (not sure why the Tampa Theatre did not give that lesson years ago). So what is the plan?
As proposed, the Kress would remain, along with the old Woolworth and Newbury buildings, but a new 287-foot-tall tower would rise above them with 190 hotel rooms, 58 apartments and 15,200 square feet for restaurants.
The Kress building is on the 800 block of N Franklin Street, south of E Cass Street, between Franklin and N Florida Avenue. Along with the old Kress store, the Woolworth is historically significant as the site of the first sit-in that led to the peaceful desegregation of Tampa’s lunch counters in 1960.
A previous (not very good) proposal for the lot involved demolishing pretty much everything but the Kress façade, which caused a ruckus because the other buildings are also historic. (see here, here, and here) In one of the rare instances of not settling, the City Council objected to it – forcing a wait for a new plan but also allowing something much better to be proposed. This time around, the group is working with one of the better local architecture firms, so it is likely that they will deal a bit more sensitively with that.
Let’s see what they have proposed:
That looks much better, even with the parking garage behind one of the façades. Moreover, if you look at the submitted site plan on the handy accela website, it is clear that most of the ground floor is useful space. It looks like a much better concept (Full opinion is withheld since things can change and we have no idea what the materials being considered are. Regardless, we are thankful that the most recent economic upturn coincides with a growing architectural awareness by many in the area.) In any event,
Construction is scheduled to begin in the second or third quarter of 2015. Walter said the project “definitely has a lot of interest” from capital sources. Historic renovation projects can be difficult to finance because the costs can fluctuate wildly if unforeseen issues surface during construction.
That would be nice, though we shall see. (Though, while we are for striking while the iron is hot, there has to be a bit of a concern about the area supporting all the apartments and hotel rooms announced. Not all proposals get built.)
It would be great to resurrect this block (and the Grant block just north of it where there is also a proposal) after decades of nothing. Not only would it revive one of the nicest old buildings in downtown, it would add depth and connectivity to northern downtown, hopefully leading to the future development of the surface parking.
If it comes off, all the credit goes to the developers who are actually putting up the money and building the concept. It is just too bad that the City settled for allowing the demolition of the Maas Brothers building, which would have been really nice to see renovated, before realizing that historic buildings can be revived. Maybe, we have finally learned.
Rays – Maybe Something
There were a flurry of reports (like this one and this one) that the Rays and St. Pete are near an agreement to let the Rays look outside St. Pete (read: Hillsborough) for a stadium location. We are not going to really get into it because nothing has happened yet, though we will note these two statements:
“If the Rays simply do not want to be here any longer, then they should be given the opportunity to compensate our city in order to look at other locations in the Tampa Bay area,” Kriseman said during last year’s mayoral campaign. “Throughout the negotiating process I will ensure that our taxpayers are protected.”
Right. Unfortunately, that was the case wasted years ago, too. Maybe soon we can all get on with it.
Downtown – Have Drink (From Preapproved Locations), Cont.
The City Council, not surprisingly, approved the plan to let people drink alcohol on the Riverwalk, as long as they buy it from the right place. That does not answer any of the questions raised when we previously wrote about it, (See “Downtown – Have Drink (From Preapproved Locations)”) though we did not expect any answers. That is not the Tampa way.
Downtown – Context
A few weeks ago, there was news that the Tampa City Center office building had been sold for a very large sum.
“It’s got to be in the top five or 10,” said Mike Davis, executive director of Cushman & Wakefield, which represented the seller. “It’s the largest square-footage deal that’s ever happened in downtown Tampa, that’s for sure.”
There is no doubt that rising values for downtown buildings is a positive sign. Yet, it is hard to really get context on the relative size of the sale (such as the price per square foot). Interestingly, there was a recent sale of an office building in downtown Ft. Lauderdale.
In March, a division of Deutsch Bank spent $204 million for the Las Olas Centre, a two-building signature office complex. In July, 200 E. Broward Blvd., a 214,000-square-foot building, sold for $66.4 million.
That is where we are now, though not necessarily where we will be in a decade.
Lessons in Branding
As regular readers will know, the Tampa Bay area is always trying to figure out how to brand itself – some attempts are ok, some not so good. There was an interesting article on Citylab.com about city branding. The article discusses three branding efforts – using Taylor Swift in NYC, an effort in Leeds, and effort in Hamburg, and St. Louis. We are not really interested in NYC because that is unique. (We have no idea why they are even trying branding. Do they really need it?) The Leeds example was amusing because they inadvertently chose a campaign that used the same slogan as Hong Kong.
The interesting examples were Hamburg and St. Louis because they both sound so familiar:
Hamburg, 2009: Things got a bit more heated in Hamburg when residents reacted strongly to an ongoing marketing of the German city as an arts and culture capital and, ultimately, a watering post for the new global and globalized “creative class.” The branding was meant to communicate “stereotype images of Hamburg as ‘city on the waterfront,’ with ‘rich’ and ‘creative’ residents, offering a various range of cultural programs like ‘musicals’ to its visitors,” social scientist Erick Braun and his team wrote in 2010.
St. Louis, 2010: A local economic development group put out a series of videos meant to “raise awareness of the vitality and richness of experience downtown St. Louis provides for those who live, work, and play there.”
Sound familiar? You can read the articles to see what issues arose. The real point is that branding yourself like everyone else is not really creating a brand, it is just adding to the muddling of identity. Before you get an effective brand, you actually have to know who you are. And, while highlighting desirable components of your area is necessary and good, simply reiterating what everyone else says does not create a brand, it creates a muddle.
Just something to consider.
List of the Week
Tampa loves it airport (and we do, too). It is one of the points of pride. So we were interested in this week’s list is Yahoo Travel’s list of best airport food. In it, they rank “every important airport” in the US, a total of 72. We will list the top 30.
Coming in first, is DFW, followed by San Francisco, LAX, JFK, Newark, Portland (OR), San Diego, Denver, Nashville, Atlanta, Minneapolis-St. Paul, O’Hare, Austin, La Guardia, Seattle, Sacramento, Phoenix, Boston-Logan, Philadelphia, Raleigh, San Antonio, Charlotte, Kansas City, Houston-Hobby, Salt Lake City, Miami, Houston-Bush, Pittsburgh, St. Louis, and Chicago-Midway.
Really? Even airport food goes to the usual suspects?
Orlando came in 52nd. TIA was 56th. Ft. Lauderdale was 65th. Apparently, West Palm Beach, SW Florida Regional, and Jacksonville are not important (though, oddly, the list includes include Portland, Maine)
This is what they said about us:
Do yourself a favor: next time you are visiting your cousins who live in Tampa (NOTE: everyone has cousins that live somewhere around Tampa) — it doesn’t matter if you are in any of the other terminals — just go to Airside C, and go to Cigar City Brewing. They make some of the best beer in the country. Drink several of their beers. Then maybe go to Shula’s Bar and Grill, and talk knowingly about Mark Duper.
At least we have the beer (and maybe some wurst) – and more international flights.