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Roundup 10-2-2015

October 2, 2015

Contents

Economy/Economic Development – Where Are We Really?

Economic Development – The Cost of Being Cheap

Downtown/Channel District – The Lightning Owner Gets More Ambitious

Transportation – Go Hillsborough, the Epic Saga

Transportation – Building a Better Bus

Economy – Is There an Apartment Bubble?

Downtown/Hyde Park – Related Improves a Bit

So What Is the Deal with the Bucs?

What Can Six Billion Buy These Days?

List of the Week

_________________________________________________

Economy/Economic Development – Where Are We Really?

As everyone knows, there is a lot of talk of a new boom in the local economy, of going global, etc.  This week, the Tribune had a big piece coinciding with the very welcome Lufthansa flight entitled: “Santiago Corrada: Tampa’s rise as a global city.”  It started with this:

The moment it touched down Friday afternoon at Tampa International Airport, Lufthansa German Airlines Flight 482 confirmed the Tampa Bay area’s status as a world-class destination.

Now, as any regular reader would know, we love the Lufthansa flight and every international flight helps open us to the world.  We think it is great.  However, we think of the terms “global city” (though not so much world-class destination, which has no real definition) as meaning large cities with a well-known amount of pull world-wide: New York, London, Paris, Tokyo, Singapore, etc.  Frankly, we are just not there, which is ok.  You have to walk before you run.  And we are not going to pick apart the details of the piece because it was basically a purpose-written article to promote tourism by the head of the Hillsborough County tourist agency (that is his job).

We also do not need to pick it apart because the Times had a column about the GDP’s of metropolitan areas (also called the gross metropolitan product), which shows where we are economically.  As regular readers will know, these numbers are released every year.

The Tampa-St. Petersburg-Clearwater metro area in 2014 recorded a $118 billion GDP, a measure of economic output, up 2.7 percent from the GDP of 2013. That performance landed Tampa Bay’s GDP growth at No. 11 in Florida — smack dab in the middle of 22 state metro areas. The figures were included in a U.S. Department of Commerce survey of GDP growth in 381 larger metro areas.

Natinally [sic], the metro area GDPs averaged 2.3 percent growth in 2014. Tampa Bay’s above-average expansion ranked 90th in the U.S.

Is that good? Yes. And not so much.

It’s good because being No. 90 among 381 metro areas countrywide places Tampa Bay in the top quarter of GDP growth. And between 2012 through 2014, this metro area’s GDP has barely wavered from a growth rate between 2.6 and 2.7 percent. Many regions of the country would be envious of that steady — and positive — pace.

It’s not so good because Tampa Bay’s 2014 GDP growth trailed behind every other larger metro area in Florida. Miami-Fort Lauderdale, the greater Orlando area and even Jacksonville all posted growth rates higher than Tampa Bay last year, according to the most recent annual data available.

Growth is good (we will get back to that), though it is also relative to the size of the economy actually growing. And being 90th out of 381 is ok, but exceptional.

The real problem is not in growth (which is about the same as most other Florida cities).  The real problem is in the per capita numbers, which as we have said for years, really tell the tale about how the area is doing.  Conveniently, the Bureau of Economic Analysis has a handy website to provide those numbers. Below is a list of some of the usual suspects, Florida cities, and some southern cities to illustrate just how far behind we remain. (We also put the BEA growth numbers, which are a bit different than those in the article because they are for per capita growth, though they may be using a different category from the database.  It is also notable that the numbers are a different from the numbers we have previously used because it appears the BEA uses different methodology. We decided to go with the government numbers this year.  In any event, the story is similar.)

Source: BEA Click on Chart for bigger version

It should be noted that the BEA uses this definition.

What is “Per capita real GDP by metropolitan area (chained 2009 dollars)”?

Per capita real GDP by Metropolitan Area- Real GDP by metropolitan area is an inflation-adjusted measure of each metropolitan area’s gross product that is based on national prices for the goods and services produced within the area. Real GDP by metropolitan area is measured in chained (2009) dollars.

Per capita real GDP by metropolitan area is calculated by dividing the real GDP for a metropolitan area by the resident population of the area. In its calculation, BEA uses the Census Bureau’s annual midyear population estimate.

Per capita real GDP indicates the trend in output as it relates to population. Although it does not indicate whether the rate of growth in real GDP can be sustained, it suggests the ease with which the economy can continue to support its local population. For a complete list of regional statistics, see Regional Definitions.

As you can see from the chart, the only areas lower than the immediate Tampa Bay area the outskirts of the Tampa Bay area.  We trail even the main Florida metros – by a decent amount.

And we can make another comparison – the per capita GDPs of the top 30 metro areas in the US.

Source: BEA Click on chart for bigger version

At least we are not dead last.

Moreover, looking at the Tribune piece, while tourism is great and bring in money and exposure, you may notice the more tourism based economies on the list (Florida cities, Phoenix, etc.) are not particularly high.  (You could blame it on retirees, but we would still be at or near the bottom of major areas). The real power of the Lufthansa flight is not in tourism – it is in the business connections that it may foster by creating greater access to this area and from this area.

The point is that we are growing and there are definitely people doing well in this area, but we are still far behind places like Denver, Austin, Minneapolis, Charlotte, etc. So, when you see the hype and puffery, remember the reality.  Is that acceptable or a cause for celebration?

Yes, we are growing, there is much to recommend this area, we have many assets, and a lot of interesting proposals, but there is also a whole lot of work to do to actually get the point of actually being a global city.

Economic Development – The Cost of Being Cheap

There was an interesting article in the Business Journal about economic development and the quest for high paying jobs.

The next health care focus of the federal government is brain research, with a hefty goal of being able to map the brain within the next five years. It’s looking to invest $35 billion into this research, but Florida likely won’t get any of that capital.

At least that’s what local health care experts think. At Orlando Business Journal‘s Decoding Health Care panel discussion last week, four panelists outlined why Florida isn’t positioned to receive capital for this research — and what needs be done to alter that fate.

Well given out supposed business environment, cheap labor, taxes, and real estate, and all those other things, how can that be?

“Florida is not in the running for brain mapping because we don’t have the tools to research this,” said Scott Faris, founder and CEO of NanoZyne, a nano-therapeutics company. “As we think about our competitiveness, we have to be able to invest the front dollars to create the infrastructure of this research. Unless we have that, in terms of tools and people, we’re not in a position to compete for those dollars and benefit from the economic downstream of that.”

He continued: “The challenge in Florida is we live in this mentality that we need to have the lowest cost of living. That’s not a competitive strategy. You don’t want to be in the lowest-cost state for business, because you often don’t generate the resources you need to be competitive. In some cases, the highest-cost states had the regions with the most resources. We need to find an equilibrium.”

The key is equilibrium.  Just being the cheapest does not mean being the best.  Moreover, if you do not invest in your area – really invest properly to create real resources – you will be left behind.  And we have failed to do that – especially in proper transportation and planning – but also other resources, which shows up in the per capita GDP/GMP number above.

We wonder if those County Commissioners who seem so ready to run away from really fixing transportation are listening – or looking at the economic numbers.

Downtown/Channel District – The Lightning Owner Gets More Ambitious

Speaking of cheap not being everything, when the Lightning owner first announced his vision plan, we said we liked it but wished there was even more.  Well,

Tampa Bay Lightning owner Jeff Vinik’s plans for downtown Tampa have grown significantly since the preliminary vision was unveiled in late 2014.

Originally pegged as a $1 billion development, the project is now estimated at $2 billion, Vinik said Tuesday. The first phase alone will be more than $1 billion and take three to four years to build out.

* * *

“Over the last eight to nine months, working with renowned urban planners Jeff Speck and David Dixon, we’ve evolved the plan, and frankly it’s grown,” Vinik said.

* * *

Here’s what the first phase will include:

“If things are going well” after the first phase, Vinik said, SPP sees potential for another billion-dollar phase, which would likely develop additional residential units and retail space.

We are glad to hear it.  We hope the first phase goes well.  How big would it be after full build out?

In the long run, the project could encompass up to 6 million square feet of commercial, residential, and retail space.

So about double. This is the old rendering:

From the Times – click on picture for article

This is a newer rendering

From the Tribune – click on picture for article

There are some differences, especially in the northern areas, but these are just renderings. (We are not really much for water-color-ish renderings for accuracy but that is what we have.)

Of course, all this will be determined by the market, but this project has some advantages – it will become somewhat its own draw, it can feed off of other downtown developments, and it has firm funding so it has staying power.  Once again, we like the Lightning owner’s ambition, but none of this is cheap.

In another development that shows that cheap is not everything:

Jeff Vinik’s redevelopment of 40 acres around Amalie Arena will become the world’s first health- and wellness-focused city district, dedicated to the well-being of employees, students, residents, tenants and guests expected to live and work in the area.

The announcement that the Vinik project would be a WELL Certified district came at the annual meeting of the Clinton Global Initiative in New York City, where the Tampa Bay Lightning owner, Tampa Mayor Bob Buckhorn, developer Paul Scialla of the New York healthy-building designer Delos, and Robbie Fritz of Vinik’s financial partner Cascade Investment addressed the gathering of global leaders and thinkers.

“More than half of all people in the world now live in cities, and we spend 90 percent of our time indoors,” said Delos founder Scialla. “The built environment — our cities — are human habitat, and we have the knowledge to design them to sustain our health, not to harm it.”

The “well” moniker goes far beyond ordering cigarette smokers to the sidewalk.

Although official site plans have not been released, the Vinik project will feature design and technology strategies including enhanced walkability, abundant green space including low-pollen trees, sound barriers to support acoustic comfort, access to healthy foods, green infrastructure, daily monitoring and reporting of district air quality, and access to the amenities of an urban waterfront.

That is all good.  Of course, there are numerous cities that have districts that promote wellness, though they usually developed organically rather than as the result of a master plan.  Nevertheless, we are glad the Lightning owner is committed to doing so.  Moreover, the designation could have a positive effect on attracting tenants and business.

Once again, none of this is cheap.  It requires dedication to building a quality project and spending the money to do it. On the other hand, when you make such an investment, you can get better returns, which is what we think the Lightning owner understands.  If you really want a quality HQ and quality jobs in a really thriving environment, you cannot do it on the cheap and the Lightning owner is acting accordingly.

When you put these two things together – the size and the dedication to walkability and a real urban environment – it raises an issue.  If you are going to build something this big and give the roads a diet in an area with already constricted access, you have to be able to get people in and out somehow.  Unlike most cities that have natural walkability (or even planned walkability), there is no good transit access to this area.  Even if the streetcar is expanded to Tampa Heights, there still will be limited access.  The Lightning owner’s project is very positive and will do good.  However, as he notes, it is contingent on the market.

To truly reach its potential, this project needs access to real transit, and, for this area to truly reach its potential, it needs to build real transit.  That requires real investment and strong political will and leadership, something this area is not known for.  You can’t do it on the cheap. Which brings us to Go Hillsborough.

Transportation – Go Hillsborough, the Epic Saga

The TED/PLC/Go Hillsborough story just goes on and on – and gets even sillier – every week.  Most of the recent coverage has focused on whether the Parson Brinkerhoff contract was properly given, which is an issue (as is the background to that).  However, that is an issue of process, not substance.  We understand the political or media desire to present issues in simple binary arguments (the Crossfire/cable news effect).  On the other hand, such an approach makes for really bad policy.  It solves nothing.

What is getting ignored in the County Commission’s (and the Tampa City Council, too). scramble for cover from their own policies has been the actual substance of fixing transportation in this area, which is critical to fixing the poor economic performance explained above.  Simply maintaining the present infrastructure (even if you add variable rate toll lanes) will not cut it. While we think there should be a discussion about the whole consultant process, that has nothing to do with the actual transportation problem.  To conflate the two is just to create a muddle.

This muddle strategy was used by ideological opponents of better transportation in Greenlight Pinellas: ignore the real issue and focus on some small process ideas. Now, it is Hillsborough’s turn.

“It’s the same strategy” that undermined the Greenlight Pinellas sales tax referendum last year, Mayor Bob Buckhorn said.

Yes, it is, and everyone involved with the TED/PLC process (before it became Go Hillsborough) should have seen that strategy coming and not done anything to help it along regardless of whether it was technically proper or not.  Instead, they walked right into it. That failure – and the muddle it created – is on those officials.

Then again, the fact is that the opponents of Go Hillsborough are not motivated by the issues they are raising – they just oppose doing anything useful for transportation.  They, and the elected officials who follow their lead, are not concerned if it holds the area back and keep us increasingly uncompetitive.  We still need real transportation solutions.

For our part, we have questioned the need for outside consultants from the beginning – not focusing on the contract, just the need – the County should be in better touch with the electorate and should not rush to spend taxpayer money on such things.  On the other hand, we have never questioned the need to truly fix our woeful transportation system and its complete reliance on roads. The real question is whether the TED/PLC/Go Hillsborough process was ever going to present a rational, coordinated, viable plan.

Having said that, we just thought this little bit from the Times website was timely:

Well, William Fulton and Kyle Shelton at Rice University’s Kinder Institute for Urban Research have. In a piece they wrote for Zócalo Public Square, the two note that light rail is growing in popularity in the most unlikely places.

For those of us stranded in highway traffic here in Tampa Bay, where we’re told repeatedly that light rail just won’t work here, rail’s success in these particular cities might come as a surprise. After all, these cities were developed during the same era that Tampa Bay developed, undermining a main argument by anti-rail activists that this mode of transit can only succeed in cities established before the advent of the automobile.

Yet, as the authors point out, Phoenix voters just approved a tax hike for more light rail. And Dallas has more light rail miles than any other city in the country and wants many, many more. 

Los Angeles has more riders per day than any other city except Boston.

Houston carries more light rail riders per mile than any system except for Boston and San Francisco.

Denver is building a light rail system second-only in size to what L.A.’s system plans to be.

San Diego’s system carries more than 100,000 riders per day. Light rail has also been a surprise hit in Salt Lake City.

Charlotte’s light rail system is now adding a streetcar. 

The cities are using light rail only as one element in transforming their systems, Fulton and Shelton write.

This is nothing new.  We have pointed it out a number of times.  And that does not include Oklahoma City (oh, and Kansas City), which is building a streetcar and looking at intercity rail with Tulsa.  (And feel free to check the per capita GDP for many of these areas listed above.) As the Mayor of OKC says on their streetcar page:

Most cities wait until their highways are at gridlock before they begin taking action. Our city has a history of planning for the future, and now is the time to get started.

Others act. We wait and then we don’t do anything. Yes, Tampa Bay (and its per capita GDP) is exceptional.

Transportation – Building a Better Bus

HART has been discussing its next MetroRapid line.

The Hillsborough Area Regional Transit Authority board on Monday postponed passage of its long-range transit plan until it decides whether to first serve customers by focusing on future growth downtown or with a new rapid-bus route to get them to jobs more quickly.

Neither route is funded, and neither would be built for years. Still, the board wants to look at potential bus ridership and consider which plan should get the next slot for development.

The two contenders: an east-west route that runs generally from Temple Terrace to Tampa International Airport, or a Kennedy Boulevard route that runs from downtown Tampa to the West Shore Business District and, eventually, Tampa International Airport.

The board was set to vote on an update of its transit development plan on Monday night. That vote now is expected to be in November.

The 10-year plan is mandated by the state to consider future improvements and additions for HART routes and buses.

Marco Sandusky, senior manager of equal employment opportunities and community programs for HART, told board members that planning and design work has been completed for a $20 million, 17.7-mile east-west MetroRapid route.

But Hillsborough County Commissioner Sandy Murman, who sits on the HART board, said Kennedy Boulevard should get priority.

“For what we need to develop for all the tourists and the people that work downtown, I feel like we’re missing the boat here,” Murman said. “I just don’t see the interest in the east-west.”

First, we have nothing against MetroRapid.  Apparently it has increased ridership on the USF to Downtown route, even though it is not really drawing from USF and points farther east.  (see Evaluation of HART MetroRapid BRT – Executive Summary, pg. 5 of the pdf)  We do have a problem with saying it is BRT because it is not.  It is a better bus, which is fine.

Second, we are not really sure what the choice should be.  Frankly, all of HART’s bus lines should be improved. Nevertheless, we have some pretty strong doubts that MetroRapid on Kennedy between Downtown and the airport is key to economic development.  Good transit connections that cause people to leave their cars and rely on that transit is key to such development but, per the study referenced above, that has not really happened with MetroRapid.  Sure, it might happen a little more with people going to and from the airport because some of those people have no choice, but to really bring transit oriented development, the line has to be fixed (either real fixed BRT or rail), and MetroRapid is not.  That being said, better bus service from downtown to the airport would be a good thing.

In any event, there is no money right now.  We need solutions sooner rather than later.

So, yes, there should be good transit between downtown and the airport, but, no, MetroRapid is not it.  By all means, build it – the bus service here should be much better overall, but then connect it to the robust transportation system with real transit.

Economy – Is There an Apartment Bubble?

With all the proposed apartment developments in the area, there has been a lingering question of whether the market can support all the units.  This week, the Business Journal had an article about a NAIOP annual confab.  Among a string of very positive sounding discussions, including some saying that there was strong demand for apartments, was this:

On multifamily, cap rates are at all-time lows with values above where they should be, said Randy X. Ferreira, senior partner and owner at Blue Rock Partners. The company has been prolific, developing more than 13,000 apartments. A low-interest rate environment has been the catalyst in its ability to make acquisitions.

“There’s a huge influx of equity and investors in the market and tremendous competition to buy properties and with suppressed cap rates and surpassed values, it’s becoming problematic,” he said. he said. “Everyone is doing a value-add play where they are fixing old apartments up and raising rents and paying high prices.” That means higher rents that are now exceeding the growth rate of income levels for renters.

The bubble question has been hovering around the multifamily market a long time now.

“We are going to have a significant correction in the market, maybe not now with the government’s inability to raise interest rates, but I think we are in for an adjustment in the market. I don’t see an exit strategy for a lot of people,” Ferreira said.

In other words, yes, it is booming, but a bit of caution is in order.

Downtown/Hyde Park – Related Improves a Bit

New renderings and plans for the proposed Related project on the Tampa Tribune site were recently released (Thanks to URBN Tampa Bay for posting them).  They show some improvements, but also some of the same problems.

First, a site plan:

From URBN Tampa Bay – click on picture for Facebook page

So what is better? There is a what appears to be a public riverfront walkway with access to Brorein/Cleveland.  That is a very welcome change.  They are also relocating a tree, though it is going to a courtyard and be hidden.  Finally, from this rendering, it appears the parking garage is a little shorter.

From URBN Tampa Bay – click on picture for Facebook page

On the other hand, the parking garage is still the major feature of the project from the Grand Central/Hyde Park side.  In other words, the pedestrian experience will be dominated by a parking garage.  Moreover, the main entrance to the project is on the corner of Brorein/Cleveland/the Selmon and Parker, which connects the building to nothing in the area.  There is still the inexplicable number of apartments facing the Selmon and complete lack of pedestrian interaction.  And finally, if you look closely on the left of the site plan, you see that Grand Central Avenue terminates into the wall of the parking garage – which does not seem to really help any view corridors from the Grand Central area. If Altis Grand Central did not fit the neighborhood, this does not either.

We are happy they now want put a riverwalk, but there is still much room for improvement.  This is a very good lot.  It is a very good developer. It should be a very good project.  Right now, it isn’t. Tampa deserves better.

So What Is the Deal with the Bucs?

We have written much about the Rays stadium issue.  This week, we stated wondering about the Bucs.

The owners of the Tampa Bay Buccaneers have proposed a deal to pay as much as $75 million toward a $100 million makeover of Raymond James Stadium, but Hillsborough County and Tampa Sports Authority officials are balking at some of the stipulations.

* * *

Some of the improvements are required as part of the agreement to bring the college football title game to Tampa in January 2017.

But others are at the initiative of the Bucs and could boost a bid to bring a fifth Super Bowl to the area.

The team, county and TSA have been working toward a deal since January. Some of the stadium enhancements would include massive high definition scoreboards, a new surround sound system, video board control room and other items.

Hillsborough County Commissioner and TSA board member Ken Hagan said the TSA budgeted for the required stadium improvements three years ago but held off because the Bucs wanted to make additional investments.

So what is the issue?

The Bucs seek the right to play an additional “home” game in another city, which has become a major sticking point, because county officials fear it could be used as leverage in future stadium negotiations.

Well, that is an odd request.  Why do they want to play another home game somewhere else?  Yes, their attendance has sagged (as we suspect the season ticket account may have decreased, as well) but that is most likely a result of on field performance.  There was a time when the Bucs always sold out – they also happened to win a bit more.  What was their stated logic for the odd request?

The Bucs see the ability to move an additional game to an international site such as London or another site within the state as a concession for forgiving the $11.6 million obligation the TSA has to construct a practice facility.

But the county says the practice facility had not been part of the negotiations before last week. The Bucs built One Buc Place with their own funding — estimated as three times what the county had set aside — opening in 2007.

* * *

The Bucs see the right to play an additional “home” game elsewhere as insurance for their $75 million investment.

Seems odd to protect your investment by not playing where you are investing. What did the Sports Authority say?

Under the current lease agreement, which will continue to run through 2028, the Bucs have the ability to play one home game, either regular or preseason, outside of Raymond James Stadium.

The TSA has countered with a stipulation that the Bucs cannot move a second regular season game to the same city as either of the other two games allowed under current the proposal.

We’ll just have to see. (Though this does not seem like anyone is having fun.)  We just hope the Bucs improve so they will get back to the support they previously had.  As the Lightning have shown, at least in Tampa, if you win, people will come.

What Can Six Billion Buy These Days?

As regular readers know, we have been featuring megaprojects to give perspective.  We are always happy when others get in on the act, too.  The effort to build a better area is a community effort.  This week, URBN Tampa Bay had a post on a $6 billion dollar development around the new 49ers stadium in Santa Clara.  You can read their very good commentary here.

We especially like this:

To make a stadium work with redevelopment, two factors are key, Santee says. “Transportation is number one; number two is density.” In Kansas City’s redevelopment around the Sprint Center, completed in 2007 as a home for concerts and sporting events, the residential development in the initial stages could not support the retail businesses, Santee says. “Without density, there was not enough to sustain [retail and restaurants] year in and year out.”

Transportation and density. Hmmm.

Remind us again why our elected officials refuse to address these two glaring, longstanding issues in our local planning?

And that goes not just for stadiums but also for downtown, Westshore, Brandon, everywhere. Simply because an area has a poor use or design does not mean it always have to have a poor use or design. Such redevelopment – and those like the Lightning owner’s project – can work here, but, without proper transportation and proper planning, we will only improve incrementally while others run ahead.

List of the Week

This week’s lists are in the first item.

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