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Roundup 2-5-2016

February 5, 2016

Contents

Transportation – Developments

– Streetcar Study

– TBX Getting Attention

Transportation – Clearwater Sky Ride

Economic Development-ish – Real Estate

— Trends-ish

— And The Other Thing

Economic Development – An Interesting Comment

Economic Development/International Trade – A Note on Cuba

Will The Hard Rock Expand?

Transportation – PTC and the Legislature

Coming Out Watch Revisited

Meanwhile, In the Rest of Florida

— What Does A billion Get You These Days?

— The Railroad to the Sky

List of the Week

__________________________

Transportation – Developments

– Streetcar Study

The contract for a study for extending the streetcar has been awarded:

HDR Engineering was awarded the $1.2 million contract to conduct a feasibility study examining the extension and modernization of Tampa’s historic TECO Line Streetcar from the Channel District to Ybor City, a Tampa city spokesperson confirmed Friday.

The subcontractors working on the study with HDR include Kimley-Horn and Associates Inc. and Boothe Transit Consulting LLC.

The study on the 2.7-mile streetcar line is funded primarily with a $1 million grant from the Florida Department of Transportation. HDR, Kimley-Horn and Boothe Transit bring considerable experience on urban streetcar development, in particular, to the study. 

The article is not entirely clear what will be studied.  Previously the discussion has been how to get the streetcar to the Marion Street Transit plaza.  Other discussions have speculated about going to The Heights project.  There has even been vague speculation about the streetcar going to Westshore.  If the study is just for an extension to Marion Street, we agree with URBN Tampa Bay:

Maybe it’s just us, but $1.2 million to do a study of a streetcar extension to the Marion Transit Center that isn’t even a mile long, seems like a lot of money, relatively speaking. Especially considering they also have a whopping 18 months to get the study done.

Hopefully, the study will be for more than that and will go faster than that.  We have wasted far too much time.

– TBX Getting Attention

Which brings us to TBX.

A transportation expert on Thursday told a group of real estate professionals in Tampa that plans to add express lanes to Interstate 275 are nationally regarded as a “boondoggle.”

Gabe Klein, former commissioner of the Chicago Department of Transportation and director of District DOT in Washington, D.C., told Urban Land Institute Tampa Bay that the proposal is the “worst project” he’s seen in his years of traveling the country.

“It’s staggering, actually,” said Klein, author of “Start Up City: Inspiring Private and Public Entrepreneurship, Getting Projects Done, and Having Fun.”

* * *

“Places like Tampa can be successful, but you’ve gotta spend your money on something other than a freeway,” Klein said.

Klein said the expanded interstate will do nothing to relieve congestion or increase the density that business and political leaders have been working to build in Tampa’s urban core.

“If you build lanes, you will fill it. And if you build light rail, you’ll fill light rail. And if you build bike lanes, you’ll fill them,” he said. “It takes time, particularly in a car culture, but if you never make the change, you’ll be stuck holding the bag, and people aren’t going to want to live here.”

If you focus on cars, you will just have more of what you already have.  TBX will not really change anything, and it will not fix anything.  For the money there are better things to be done – and all proposed ideas should be studied together.

Nevertheless, some like, or at least feel they need, TBX:

One of the most vocal advocates of TBX said Friday that in his view, the express lanes are just one piece of the region’s transit puzzle, but a crucial one. Mark Sharpe, executive director of the Tampa Innovation Alliance, said the express lanes would be key to getting people from Tampa International Airport to the University of South Florida.

“To be able to move people in and out of the [USF] area to the businesses there to Westshore and directly into the airport is a high priority,” Sharpe said, “and those lanes can be used for buses.”

Other transit options that would move the same number of people between the airport and the university would require projects as large or larger than the express lanes, Sharpe said.

More than 3 billion?  With no ability to scale it up further?  With no spin-off development?  With destruction of up and coming neighborhoods?  With the complete lack of attraction to Millennials?  And built with the express purpose of limiting capacity and utility and charging prices that most people cannot afford routinely? We understand that the USF area wants a connection to the airport, but TBX is not the way to do it – and it completely lacks innovation.  Yes, we need some more roads, but we also need real alternatives to roads.

One thing we do agree with is this:

That type of initiative would “generate its own level of opposition,” he added. “We’ve reached a point now where no matter what we do, someone’s not going to be happy.”

Yes you will, so you may as well do the right thing and spend a good amount of the money on something that will bring development and investment, is easy to increase capacity, and will actually help attract more talent.

Transportation – Clearwater Sky Ride

This week there were some articles about an idea to deal with traffic to Clearwater Beach.

Imagine soaring over the Intracoastal between downtown and Clearwater Beach in an elevated cable car, all those suckers gridlocked in peak Spring Break traffic on the Causeway bridge beneath your feet. Think Aspen ski slopes style. 

The car you’re flying in even has an endearing name – a gondola.

It’s an idea that’s been tossed around before, not just for Clearwater’s dreaded beach traffic but to connect the Tampa Bay region as a whole.

Just two years ago, St. Petersburg developer Darryl LeClair was shopping his idea for a gondola system around Tampa Bay, peaking the interest of Clearwater officials desperate for traffic solutions, according to Mayor George Cretekos. Nothing ever came of it. 

Now the potential for gondolas may be floating around again. On Monday the Clearwater City Council will discuss traffic solutions at its regular work session (1 p.m. at City Hall, 112 S Osceola Ave, for anyone interested).

Cretekos said the time is now to figure out once and for all how to alleviate gridlock on the beach during peak season – and those solutions could take many forms.

Indeed, the idea was raised before.   As noted by the Times in a more general discussion of gondolas:

Michael McDaniel, a designer who proposed an urban gondola for Austin, Texas, said interest is rising because the technology is cheaper than light rail and subway systems and more efficient than buses for growing communities. But buy-in might be the barrier so far.

“It comes down to politics and familiarity,” McDaniel said. “No one ever wants to be perceived as having a boondoggle on their hands, gambling with taxpayer money. That’s the worst position to be in. … it’s a high-risk situation, but the first city to be brave enough to do it, more will follow.”

That may all be true, and we are fine with people brainstorming for innovative solutions to transportation.  But there is a problem with this idea that is only touched on tangentially:

Gondolas, which are popular in South America and Europe, can run in winds up to 50 mph but typically shut down during lightning or high intensity gusts, said Mike Deiparine, senior project manager for SCJ Alliance, which worked on the Cleveland gondola proposal.

Given that there are months of every year where there is lightning and the possibility of high winds where the system will likely have to be shut down just when people are trying to get off the beach, it seems that maybe this idea is not the best one for the Tampa Bay area.

Economic Development-ish – Real Estate

— Trends-ish

There was a column in the Times that looked at trends driving local real estate.  There were four, so we will take them one at a time.

*Less Parking:

Anthony Everett, partner in Pollack Shores Real Estate Group, predicts new housing developments will require fewer and fewer parking spaces. And Feldman Equities CEO Larry Feldman criticized downtown parking garages for “strangling development.”

Parking spaces will shrink, they say, because of the uptick in ride-sharing, the rise of “autonomous driving” and growing interest in biking and walking to work.

Says PwC’s 2016 outlook on real estate: “Tenants who once required a set number of parking spaces per employee, are reducing their demand as workers expand their use of alternative commuting methods.” (Of course, that works only if the metro area actually has viable alternatives.)

And that last parenthetical says it all.  Parking is just the end stage of one form of transportation.  You need to change transportation and how the cities are built to change parking. Without real alternatives to driving (which also includes making places walkable) – and that does not include TBX – you still need lots and lots of parking for development. (Though we acknowledge that some of the argument is that a decrease in parking induces demand for walkability and other transportation.  We think they need to go together.) In fact, the thing we like least about the Lightning owner’s project is the very large parking garages.  Of course, you cannot eliminate parking.  Even if people use alternatives, they likely will have a car parked at home.  And most people will still drive.  However, in other parts of the country, the trend is away from vast parking (and in the County there is a surplus of parking at most strip malls).  Bottom line: we are dubious this will work here with the present policies, but that is part of our need for comprehensive change in transportation and planning.  We’ll see what happens.

*Building for the Tech Generation:

Feldman (ed. Who is proposing the 52 story building on the former Trump Tower lot) is outfitting his new mixed-use Riverwalk Tower with millennial tastes clearly in mind with exposed ceilings and pre-designed ductwork. The goal, says Feldman, is to make it “architecturally cool,” tech savvy and next-generation enough to be able to charge premium rental rates.

We are all for innovative design.  Hopefully, it gets built and gets filled.  The question is the size of the market for such amenities.

*Hotels:

The past year was the strongest on record for the U.S. hotel industry. A new record in 2016 looks likely. And who’s No. 1 of the top 25 markets? Tampa Bay. The market’s hotels reported the largest increases in occupancy (up 5.6 percent to 71.8 percent) and revenue per available room — that’s average room rate multiplied by occupancy rate (up 13.8 percent to $82.28).

Hotel profits, says Kent Schwarz of Colliers International Hotels, “will be the best they have ever been for the next few years.”

Tourism is booming nationwide.  As for being no. 1, this area did lead in growth of occupancy and revenue which could be the result of a lot of things, including poor previous poor performance.  Nevertheless, it is good.  So there will be some new hotels.  The real question is what kind and what design.  If we have more hotels with big parking lots, that is not very exciting.  (And, just note, while you can lead in growth, you can’t really be the No. 1 hotel market if you don’t have a five star hotel, even if you have hotels selling for large amounts.)

And, finally,

*Filling the Apartments:

It feels like upscale apartment buildings are rising on every urban street corner. But who will fill all those rooms? Everett, who builds moderate-priced apartment buildings, says housing affordability is a big issue. “People are paying 50 percent of their income. That’s not sustainable,” he says, because there are not enough jobs that pay enough to justify all those pricey apartments.

Moderately priced apartments will face heavy demand, he predicts.

In Tampa Bay, the median rent in January was $760, up 7.7 percent from one year ago.

I don’t see wages rising nearly as fast (if at all).

There will probably be a market for the really high end (say the Trump Tower site), but is there enough of a market for all the proposed apartments in the area.  And if there is, how much will that drag on other parts of the economy as people pump a high percentage of their income into housing.

One thing that does concern us is that there appears to be a slow movement back to the bad habit of focusing on real estate to measure the health of the economy.  We still are lagging behind most other areas in purchasing power and income.  Without fixing that, we will stay on the boom/bust cycle (see Two Mack/County Center).  That should be the real focus on real estate trends.

— And The Other Thing

And there was one more real estate trend that was not discussed in the column, but was discussed by the Times elsewhere:

For $399,000, you can buy a house more than 40 years old with less than 1,800 square feet in two of Tampa Bay’s most popular neighborhoods, St. Petersburg’s Snell Isle and Tampa’s Davis Islands.

For $50,000 less, you can get a brand-new home with more than twice the square footage in south Hillsborough County.

Developers and builders are betting it’s an easy choice for thousands of prospective buyers. No other part of the Tampa Bay area is seeing such an explosion of single-family home construction as the vast area of former groves and farm fields south of the Alafia River in Hillsborough. 

That’s right.  Land is cheap and impact fees (if they ever were paid) are now gone.  And the County is more than willing to help subsidize development.  The reality is that, while the County Commission is messing around with the transportation mess they have already created, they are still making it worse.  (So is Pasco). That is probably the biggest real estate trend.

Economic Development – An Interesting Comment

Last week, we discussed venture capital and the EDC’s effort to survey startups to see how to keep them here.  In response, a reader left a comment on our Facebook page last week:

Ken Evans It is perplexing to see the effort to engage millennial’s and foster start-ups lumped into one category. The traditional business community still has this notion that all start-up founders are in their 20’s, fresh out of school and working on the very first job. If they would just take a step back to research the market and look at data from Kauffman and GEM, they would see that a good portion of new start-ups (especially those building real, scalable products) are started by people with significant industry experience. This effort by the EDC strikes me as more window-dressing and not a commitment to truly understand the market or grow the ecosystem.

Serendipitously, there was this report in the Business Journal:

A tech firm in Clearwater focused on security awareness has raised $8 million in a funding round led by a newly launched venture capital firm.

KnowBe4 will use the new capital to fuel expansion, said Stu Sjouwerman, founder and CEO.

And this, from the company’s press release:

A data security expert with more than 30 years in the IT industry, KnowBe4’s Founder and CEO, Stu Sjouwerman, was the co-founder of Sunbelt Software, a multiple award-winning anti-malware software company that was acquired 2010.

It seems the comment was very timely.  And it should be kept in mind.

And, not detracting from that point at all, we still think it is worthwhile asking those people who left, especially the ones who have been successful building careers elsewhere, why they left.

Economic Development/International Trade – A Note on Cuba

It has been well reported and discussed that the Tampa Bay area, with the exception of a few notable elected officials, is working to get a Cuban consulate and lay the groundwork for Cuba trade.  We have pointed out that a lack of unified voice will just allow Miami, which has a leg up anyway, (not to mention other areas) to just go ahead and take advantage of any opening to Cuba at our expense.  To that point, it was interesting to see this quote from the head of the Related Group, the major developers, about Cuba:

Jorge Pérez, a Cuban-American condo tycoon based in Miami, paid a visit to Havana for its art biennale last year. “I wish they would let me be the developer for all of this,” he told Miami newspaper el Nuevo Herald on his return. “I think I could change Havana in 10 or 20 years. If they opened things up and I could build a luxury condominium in Vedado, I would sell them in two hours here in Miami.”

If anyone thinks that there is not a lot of money and talent in Miami waiting to pounce on any opening in Cuba, that quote should disabuse you of the notion. (As should the idea that the Port of Miami has penciled in March as a start date for daily ferry service to Cuba, even if there are some hold-ups from the Cuban side, and cruises from Miami planned are for May.)  Failure to be truly unified in a proactive approach, including at the port, will just lead to a missed opportunity and being left behind.  The business will go somewhere, and, despite our Cuban connections, it does not have to be here.

Will The Hard Rock Expand?

There was news about the Seminole Tribe, the State, and the Hard Rock in Tampa.

Gov. Rick Scott and the Seminole Tribe of Florida sought Monday to increase pressure on state lawmakers to approve a gambling deal with a proposed $1.8 billion expansion they said would create thousands of jobs at its Tampa and Hollywood casinos.

* * *

At Seminole Hard Rock Tampa, a second 500-room hotel tower would be built, as well as a new Japanese restaurant, coffee and lobby bars, and five new retail stores.

The existing Hard Rock Cafe in Tampa would be remodeled with a new banquet and meeting facility built to accommodate 1,500 to 2,000 guests. And a helipad would be added for helicopter landings.

Altogether the expansion at its Tampa and Hollywood locations would create more than 4,800 permanent full-time jobs and more than 14,500 construction jobs, the tribe said.

But Seminole Gaming CEO James Allen said the tribe needs the certainty of the proposed compact to move forward, and noted that the tribe had kept its promises under the previous compact, including paying Florida more than $1 billion.

We totally get that they want protection for their business before they expand, especially when there are other groups that want to bring large casinos to South Florida (though we think if you can build big casinos in Miami, you should be able to build them in Tampa, too.  Any geographic limitation is silly.)  The expansion plans have been around a while.  This is a rendering of the Tampa plans:

From the Tribune – click on picture for article

Which is not that exciting, but preferable in our eyes to the plan for Hollywood:

From the Sun Sentinel – click on picture for article

 

which is unique but not necessarily attractive. (It is also bigger than the hotel expansion planned for Tampa which is odd given that Tampa is no. 1.)

It just all makes one wonder what could have been if the land swap muted by a previous mayor to bring the Hard Rock downtown had gone through. (Really, we wonder if it would have been better or worse.)

Transportation – PTC and the Legislature

There are bills moving around Tallahassee regarding ridesharing.  You can read about them in various news outlets, like this.  We are not going to really get more into it at this point beyond reiterating that there should be a statewide rule because transportation goes beyond the artificial lines of political entities. And, of course, statewide rules would further make the point that the PTC is a superfluous entity.

Coming Out Watch Revisited

It has been a number of years (about 4, actually) since Tampa supposedly had its “Coming Out” party.  So how is that going?

There was an article in the Times about funding movies in the area, which is an issue that just does not get us that exercised, even if it is silly for Savanah in imitate Florida so much.  But hidden in the article was something very interesting that goes to a lot of talk about the perception of the Tampa Bay area.  The article was talking about a Pinellas official trying to sell Pinellas as a movie location.

“When people think of Florida, they think of three things — Disney, Miami and retirees in trailer parks,” Armer said. “A lot of people don’t even know where Tampa or St. Pete is, so a big part of what I do is having to pitch what a great place this is, and share the big movies that have filmed here.”

That is a vastly different tune than most local officials are singing.

It also reminds us of a column in the Times regarding Charlotte:

Though advancing in age, Hugh McColl still stands out among the South’s great business revivalists and as a key builder behind Charlotte’s rise from sleepy North Carolina city to one of the economic leaders of the Southeastern states.

* * *

So it’s notable to read in Tuesday’s Charlotte Observer how McColl, who played a fundamental role in helping bring the Carolina Panthers NFL franchise to his city, views the regional impact of a still young football team. The Panthers, with the best record in the league, are now heading to the Super Bowl.

What does it mean for Charlotte? “We can now drop ‘North Carolina’ off of our address,” McColl told the Observer. “People know where we are, who we are. I think it’s been a tremendous recognition for our city.”

Using the litmus test of the New York Times, the North Carolina still has not been dropped (see here and here), but Charlotte does have wide recognition.  So what does that mean for us?

Can Tampa drop “Florida” off its address? Can St. Petersburg or Clearwater? And what about “Tampa Bay” as the great metrowide brand? Has that earned the absence of “Florida” behind it?

My sense in covering the economy here for 25 years is we are getting close. We’re getting there because this area is getting much more national and international attention than it did few years ago. The Republican National Convention, held in Tampa in 2012, helped a lot. The Bollywood glitz of the Indian Film Academy’s “Oscars,” held for the first time in this country in 2014, was another big plus. Multiple Super Bowls have played major roles. The buzz behind the rebound of downtown St. Petersburg and the promise of the same in Tampa is a factor. Record tourism, too.

So is the year-round barrage of sports news driven by the Bucs, Lightning and Rays — all employing “Tampa Bay” in their names — as well as other sports teams in the area, including Major League Baseball spring training.

People elsewhere watch these sporting events on TV or read about them in sports pages and online as they follow their teams. But they see “Tampa Bay” constantly when their teams play our teams.

Maybe, though Charlotte, while having a smaller population, has more economic power (see here) and bigger brand names (see here and here), and is an airline hub.  (Then again, we don’t really know if Charlotte has more national recognition than Tampa. On the other hand, is that the measure?)

The thing is, we think people know Tampa, but the question is whether it has enough heft.  Just something to keep in mind when talking about where we are in perception management.

In this market, we’re still pursuing that goal and making progress. We’re not quite there.

And, even more importantly, is the gap between those who are there and us growing or shrinking?

Meanwhile, In the Rest of Florida

— What Does A billion Get You These Days?

As regular readers know, we like to check in with what a billion dollars buys these days.   This week, we feature a Related Group project in south Florida:

Giorgio Armani: Fashion legend, global style icon … ultra-luxury condo designer?

Yes, Armani has brought his sleek sophistication to a 60-story condo tower on the oceanfront in Sunny Isles Beach. Units are selling for an average of $3.5 million.

* * *

Total cost? Nearly $1 billion, the most expensive project Related has built, Pérez said.

“We’re not just using the Armani name to sell units,” Pérez said. “The level of detail that these guys get into will drive anyone nuts. They pick every bit of the wallpaper, every fixture … When I went to Italy to meet with Giorgio Armani, he knows everything. He is involved in every drawing and design and finish.”

The sales center itself cost more than $10 million to build. Its centerpiece is a roughly 2,500-square-foot reproduction of a penthouse unit’s kitchen, living room, master bedroom and master bath.

We could go on about how one Related project in Tampa uses dark screens to cover a parking garage on Meridian while a planned project’s main feature to pedestrians is parking garage, but the real point is the difference in the markets.

— The Railroad to the Sky

As most know, there is a private project to connect Orlando to Miami by rail.  As part of that, they are building stations in major cities on the route and more.

Three towers – including a supertall – were approved last week by the FAA to rise above All Aboard Florida’s MiamiCentral project.

One MiamiCentral is now approved for a height of 991 feet above ground, or 1,000 feet above sea level. Construction hasn’t started yet, but it is expected to include 600,000 square feet of office space, along with 250 hotel rooms and 280 residential units.

Two residential towers already under construction were given the green light to be built up to a height of 630 feet above sea level, or about 620 feet above ground. They will include 800 rental units.

Just note that all three are taller than anything in the Tampa Bay area now.   Will this all play out as planned? We have no idea, but it would be nice to be connected to the network.

List of the Week

Our list this week is City Momentum Index (CMI) of innovative cities by Jones Lang LaSalle. It is described this way:

The CMI tracks the speed of change in a city’s economic base and its commercial real estate market. It aims to provide information to help developers choose which cities will see growth and success in the future.

So it is essentially for real estate but takes into account other business factors.

The Top 20:

London, Silicon Valley, Dublin, Bangalore, Boston, Shanghai, NYC, Sydney, Beijing, San Francisco, Nairobi, Shenzhen, Seattle, Tokyo, Nanjing, Austin, Hyderabad, Melbourne, Seoul, and Auckland.

Given the list, it is not surprising that we are not on it, but it is notable that Austin is.

And if you are wondering, yes, they did look at Tampa.  This is the list of North American cities they analyzed:

Vancouver, Calgary, Toronto, Montreal, Washington DC, Baltimore, Philadelphia, New York, Pittsburgh, Boston, Minneapolis, Chicago, St Louis, Detroit, Charlotte, Atlanta, Orlando, Miami, Tampa, Denver, Austin, Dallas, Houston, Las Vegas, Phoenix, Seattle, Portland, San Francisco, Silicon Valley, Los Angeles, San Diego.

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2 Comments leave one →
  1. B. Wills permalink
    February 5, 2016 7:58 AM

    TampaSphere is especially depressing this week for obvious reasons. Hopefully, some people of influence such has Mark Sharpe, the county commissions of Hillsborough & Pinellas, mayors of Tampa, St. Pete, and Clearwater, the city councils of Tampa, St. Pete, and Clearwater, business leaders, etc. are or will soon become readers. Right now, what is being done/not being done in Tampa Bay amounts to herding cats. Thanks for continuing to fight the good fight.

  2. February 12, 2016 8:17 AM

    The transportation efforts are far beyond apathetic. As for high end buildings and their impact on millennial you can look no further than 30 miles south of Tampa. Sarasota has done what Tampa is doing now for the last decade and it has brought a lot more wealth into the community but it has also forced out virtually everyone under the age of 40. They didn’t move too far though as Bradenton has the fastest growing millennial population in the U.S. Maybe that is because they get it and their EDC is led by someone who isn’t in it for the money but to make difference and understands new world economics. They have created affordable housing downtown on the riverwalk, they have bike lanes, free public transportation and all 7 college campuses all accessible by public transit. As for tech and millennials being lumped together that is foolish and further demonstrates the lack of knowledge about either topic. When it comes to tech you have to first understand that IT is not tech, one is a product and the other a service. Both are good and create good jobs but they are not the same and the skills required are vastly different. The government must understand that the majority of millennials have no desire to build a big business. This doesn’t mean they are lazy, but most prefer the freelance economy. That means it isn’t about “jobs” in the traditional sense, it’s about “gigs” which provide diversity and freedom.

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