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Roundup 7-21-2017

July 21, 2017

Contents

Transportation – Talking Trips

— One More Thing

Economic Development – VC

Is Selling Really the Goal?

Economic Development – Those Car Costs

Economic Development – Making Stuff

Transportation – SkyConnect Arrives

— Just a Little Historical Review

Economic Development – Tourist Tax

Port – Steel

Downtown – Larghissimo 

Downtown – Riverwalk Tower

HART – In Search of Money

Meanwhile, In the Rest of the Country

________________________________

Transportation – Talking Trips

Over the decades, local officials and business people have been fond of going on fact-finding missions to other cities to see how they are doing things. Recently, the Lightning owner, and other business people, took a trip to Charlotte to look at transit.

Jeff Vinik said Friday that it’s local politicians, not the business community, who are holding Tampa Bay back when it comes to transit.

“Our business community is behind it,” said Vinik, a driving force in developing Tampa’s downtown, during a Friday meeting recapping a recent Charlotte visit to learn about transit. “The political community is mixed and not there yet.”

It’s up to the business community and the public to help politicians understand how critical an issue transit is for Tampa Bay, Vinik said.

We are sure the Lightning owner and other business people want transit. As for the last sentence, it is true.  Local officials tend to be followers not leaders.  But that raises the question of who they are (and who have they been) following and why.  In any event,

Vinik was one of about 20 business leaders who spent two days in Charlotte this week to learn how a similar-sized Southern city was able to build transit, including light rail, a streetcar and buses. Friday’s meeting focused on lessons learned and how to apply those tips here in Tampa Bay.

Rhea Law, chairwoman of the Tampa Bay Partnership, which organized the Charlotte trip, said it’s essential that the partnership help politicians understand exactly what’s at stake when it comes to transit. That’s a lot easier to do, she said, when those politicians have the chance to experience rail or express buses or other transit themselves.

“Until you see it, until you touch it and ride it and understand what it is, it’s pretty hard to jump behind a concept that’s got a big dollar figure in front of it,” Law said.

That is also true to some degree, but many (probably most) people who live in this area (and certainly the vast majority of political officials) are from and/or have been to other cities where there is real transit.  And then the next sentence:

Local politicians have made similar trips to Charlotte and other cities over the past decade to evaluate those systems and how something similar can happen in Tampa Bay.

Politicians have seen it. They know what it is. Many probably even would like to have it.  But many just aren’t willing to push for it – or not willing to push enough.  Seeing it is not the issue.

Then there is the other factor – voters rejected proposals.  Part of that is on political officials, part of it is on the plans, and part of it is on the economy, political environment (including the media), and campaigns.

So what did the local officials say?  We heard from one Commissioner:

In response to Vinik’s comments, Crist told the Tampa Bay Times he didn’t think it was a fair assessment to say politicians are the ones who need to get on board for transit to move forward in Tampa Bay. Instead, he said, the business community needs to lead the effort to produce an actual plan — complete with engineering details, ridership projections, costs and revenue projections — before politicians sign off on it.

“Public officials have to answer to the taxpayer,” Crist said Friday. “I have to be able to look at the taxpayer and say, ‘I saw the plan and this is a reasonable expenditure for your tax dollar.’ A vision is not a plan.”  

Setting aside that the Commissioner is basically abdicating responsibility for transportation, yes and no.  We get why the Go Hillsborough concept went down, but that was on local officials for having a gutted plan and, even the part that had real transit (the City), there were no real details or even a clear vision.  And there was a lot of factional political stuff going on for the whole process, which had a lot to do with both the proposal and the collapse. That was also on officials.  They should have done better.  (Not to mention that they have the resources to develop a plan and that is their job.)

The part on the business community groups was to go along with Go Hillsborough (and basically every other plan) rather than push for something better. When you give the impression that you just want something, anything, rather than looking for a real, quality plan, then you are not providing any incentive for politicians to push themselves. Politicians tend to go toward the path of least resistance (and greatest reward).

Then, generally, there are decades of not planning better, not developing transit and transportation, and not delivering real solutions.  While much of that is on politicians, they have constituents and donors who tend to do business.

(And, as an aside, while we think the plan is really the responsibility of government, now that the “business community” has taken such a big piece of TBARTA, it can be argued that, indeed, it is up to them to bring the plan.)

Going back to the Lightning owner, there is this:

The group lauded Charlotte business and government leaders for their cohesion on creating a robust transit network and discussed strategies the Tampa Bay region could employ to establish better options here.

For example, Charlotte leaders used land use plans to encourage transit development, including building urban centers where transit is more successful and limits sprawl.

“When I look at it, I see transit having two purposes, equal purposes,” Vinik said. “One is land use planning and transit as a means of connecting people to jobs, people to the supermarket … people to the Tampa Bay Lightning Games — that was a joke,” he said.

We have long said that transportation and planning are intricately connected.  Not only does bad planning create bad transportation, good planning helps good transportation and draws investment, especially in growing areas. And we have no doubt the Lightning owner and some others want to do so (support for TBX notwithstanding).

So, we are all for the business community pushing for better standards of planning, better transportation, and overall better government.  But here’s the thing: you can’t speak of the business community as a singular thing. It is made of many parts and is quite amorphous.  Someone pushed the sprawl form of development.  And someone profited from it.  And someone focused office development and office leases in non-urban places with non-urban designs.  And without pointing out anyone in particular, many people other than local officials have profited mightily from the sprawl.  And local politics did not develop in a vacuum. Someone donated to (public records, by the way), voted for, and generally supported those same politicians who are being said to hold us back.

Let’s just say, while there are people who played basically no part, the mess was/is a group effort.  It will take a group effort to get out of it.

— One More Thing

Another thing that local politicians should note is the controversy in Charlotte over express lanes.  There was a large project planned.  Some of the work has been done, but there has been a large amount of opposition and now delays as it is reviewed.  For instance, there is even this claim:

DOT has created a new public comment link as part of the review, but North Mecklenburg residents have hardly been silent on the project. Their widespread objections contributed to the defeat in November of former Gov. Pat McCrory, who was Charlotte’s longtime mayor.

(See here and here).  There is even the possibility (though given how government works, probably not) of converting some of the express lanes that have been built to free lanes.

It would behoove FDOT, local politicians, and the business community to avoid the mess and have FDOT really follow through on its pledge to have real input on transportation in this area.

Economic Development – VC

Time to check in with the VC reports.

Nationally, investors deployed $21.78 billion to 1,958 venture-backed companies during the second quarter, marking a significant uptick from the first quarter in capital invested. The number of companies receiving investments held steady.

Eight Tampa Bay companies, including Teewinot, received a total of $24.04 million in venture funding in 2Q 2017, the Pitchbook-NVCA report said.

The number of deals and the total value of deals for Tampa Bay firms was down significantly from the first quarter of 2017, when 12 companies got $45 million in venture backing, but Tarhuni said fluctuations from quarter to quarter are expected.

That is .11% of the nationwide VC.  The Tampa-St Pete-Clearwater metro area is approximately .9% of the US population.  And, just playing with the numbers, if you average the size of the deals, you get $11 million or so. 

Is Selling Really the Goal?

Speaking of VC and growing companies, in the last few weeks, there have been a number of local companies bought by companies from outside our area. Most prominent among them were Tribridge, and, of course, HSN (plus some other targets and Beef O’Bradys getting bought by private equity firm ).  Those deal were surely good for shareholders.  It remains to be seen if they hold any benefit for our area.  We assume that those events prompted a column in the Times:

Imagine a Florida startup that recorded an impressive $26 million in sales during its first full year in business in 2011, logged more than $900 million in sales by 2016, and this year expects to increase revenues to nearly $2 billion with 5,000 employees.

Oh yeah, this Florida startup last month was sold for $3.3 billion — that’s “billion” with a B — making it one of the biggest-ever deals in the Florida world of entrepreneurs.

That’s even bigger than last week’s deal by TV shopping retailer QVC to buy HSN of St. Petersburg.

The company that hit the jackpot is called Chewy, based in Dania Beach, just south of Fort Lauderdale. The buyer: Petsmart, the pet and pet food giant retailer that ranks roughly 50th among the country’s largest privately owned businesses.

Their growth was definitely impressive, and so is the deal.

There’s no reason that type of bonanza deal cannot happen one day in the Tampa Bay startup community.

Startups here just need to keep pushing —growing, raising theirs profile and showing solid results as young companies capable of raising money, building a customer base and boosting sales.

The column is entitled “One day, the Tampa Bay area will land its Chewy.”  We get that startup founders want to cash in on their work and that is it good to be able to show that this area can produce valuable companies that are desired elsewhere.  But, in all honesty, our hope is that the Tampa Bay area will be known more as the home the companies with the money to buy disruptors or home to the disruptors growing themselves to dominate a field.

Economic Development – Those Car Costs

A few weeks ago, we discussed the affordability of this area.  Well,

Hillsborough County ranks fourth for the most expensive car insurance premiums in Florida.

A new study from InsuranceQuotes.com shows Florida as the sixth most expensive state for insurance. Floridians are paying an average of $1,546 a year and depending on where you are, that could be higher or lower.

And the lower incomes, horrible transit, and little walkability does not help affordability. Speaking of which, URBN Tampa Bay had this:

A new report from Bankrate.com highlights an issue we bring attention to often, transportation affordability. We know the bay area has one of the worst ratios in America for income to transportation costs as whole. This report puts a finer point on that by comparing the average cost to buy a new car and insure it, versus the prevailing wage in the country’s 25 most populous metros. Tampa ranks 3rd worst, with Miami the worst and Orlando 4th worst.

The Bankrate article is here.

Economic Development – Making Stuff

And then there was this:

Florida’s manufacturing grades remained the same except for productivity and innovation, according to the latest report on manufacturing and logistics from Ball State University.

The state’s grades for productivity and innovation rose from “D+” to “C.” Remaining the same as last year were manufacturing “D,” logistics “C,” human capital “C,” benefits costs “B,” global positioning “D,” tax climate “A,” diversification “B” and expected fiscal liability gap “B.”

The full report is here. Let’s just say that the D is not a good score.  Sure, business taxes are low and workers don’t get a lot of benefits, but there is more to business success than low costs. (You may want to consider this Economist article about Germany.)  Of course, that does not mean we can’t have some manufacturing developments – see a few items below.

Transportation – SkyConnect Arrives

The new people mover cars for the airport have arrived.

Twelve train cars, which cost $1.9 million each, make up the SkyConnect people-mover shuttle system currently being built as part of the $1 billion phase one renovation at Tampa International Airport. The tram cars arrived at Port Tampa Bay from Mitsubishi’s plant in Japan Monday morning aboard an auto liner ship.

The cars were rolled off the ship and will be installed at the airport by its manufacturer, Mitsubishi, this week. The people-mover shuttle system will connect a new rental car facility and the economy parking garage to the main terminal and will be operational early next year, eliminating the need for passengers to catch a bus.

They were quickly taken to the airport and put on the tracks/guideway.

From Tampa International Airport – click on picture for Facebook page

(You can see a video here). We will be interested to see them go and whether they will eventually be extended to some multi-modal facility in Westshore (and theoretically beyond).

And there was news of new service:

Howard Diamond, general counsel for Frontier Airlines, announced 11 new destinations out of TIA on Tuesday, to bring the total number of routes to 18.

Those cities are:    Buffalo, Colorado Springs, Columbus, Indianapolis, Islip (NY), Kansas City, Milwaukee, Minneapolis, Nashville, Providence, and St. Louis.  That will set up an interesting competition with Southwest.

— Just a Little Historical Review

Finally, going back to the SkyConnect article in the Times, we just had to point this out:

The first phase one of the airport’s master plan renovation, which has been three years in the making, is coming to a close with the arrival of the SkyConnect train cars this year. It was the first major renovation to the airport since the terminal was built in 1971. The improvements — which include adding a slew of new retailers and restaurants to the terminals, building a new rental car facility that’s double in size and adding the new shuttle system — will help the airport accommodate 35 million passengers a year, or double the annual amount recorded in 2013. The project has been slightly delayed through the year, but remains under budget. TIA issued bonds, used passenger facility fee collections and $194 million from Florida Department of Transportation to finance the project.

Depending on what you define as a renovation and what you define as new construction, the present renovation is arguably the biggest in airport history, and its successful completion will be quite an accomplishment. But we are not sure that rebuilding/rearranging all the airsides (though done over time) was not a major renovation.  Plus there was adding short-term parking levels, the long-term garage, the economy garages, redoing the landside terminal interior before (not to mention that the Marriott was not actually built when the new airport opened).

One major reason the airport maintains its high rankings is that, while the original concept was very good, it has constantly been maintained, modernized, renovated, and upgraded.  The present administration is admirably following a long tradition there.

Economic Development – Tourist Tax

Time to check in with the tourist tax numbers.

Nonprofit tourism organization Visit Tampa Bay collected $23.75 million in tourist development tax revenues since Oct. 1, a Thursday release said. The sum exceeds the entirety of such taxes collected during all of the 2014 fiscal year, the Tampa-Hillsborough agency said.

Seven out of nine months for this fiscal reporting period set records for the organization’s bed-tax revenues, Visit Tampa Bay reported.

That’s good, though the 2014 number is a bit arbitrary.

During the 2015-16 fiscal year, which ended Sept. 30, Visit Tampa Bay reported a record $29.6 million in bed taxes. The destination marketing association is closing out its strongest ever calendar year and preparing for new out-of-state and international marketing campaigns to launch in January 2017.

The magic number for the extra percentage point being $30 million.  Doing some quick extrapolation on trends, there is a good chance this year will be over the $30 million mark.

Port – Steel

Checking back in with manufacturing, there was news from the Port:

Last month, Port Tampa Bay’s board of directors approved a 25-year lease with a South Florida company called Steelco Florida for a 35-acre site located at Port Redwing, a port property in southern Hillsborough County near Gibsonton. For the next two years or so, Steelco will be building a brand new facility on the parcel, where the company will import, export and manufacture steel products.

The timing seems right, said Wade Elliot, vice president of marketing and business development at Port Tampa Bay. Just this week, the port was awarded the title of 2017 American Metal Market’s Logistics/Transportation Provider of the Year at the American Metal Market Awards for Steel Excellence ceremony in New York City.

Port Tampa Bay is the state’s largest port for handling steel products, Elliott said. The port has been the host of the Tampa Steel Conference, which draws hundreds of industry professionals, for the past 28 years.

“Steel is our core business. We’ve been at it forever,” he said. “Steelco fits nicely into how we’re trying to develop the south county Redwing area, which is an important element in our strategic master plan.”

And that is cool.  You have to maintain the niches you have while you are trying to expand and diversify.

Steelco will import raw steel materials like scrap, do production at its own facility at the port and export those goods. The bulk of the business will be selling the steel products locally and exporting them, Rodriguez said.

“When you think of the steel industry, you think of big steel mills in Pittsburgh, in Ohio and Michigan. We’re going to be a ‘mini mill’ on a smaller scale,” he said.

Steelco will employ up to 1,000 during the construction of its facility in Tampa and will have up to several hundred employees working at the facility once it opens around 2020.

And manufacturing in the Port is good.  Welcome.

Downtown – Larghissimo 

There was news about Tempo.

Low-income families and renters should already be calling the Tempo at Encore home.

Instead, the troubled $26.5 million apartment tower scheduled to open last fall is still a construction site. And now it’s embroiled in a bitter legal dispute over unpaid work, missing workers and who is to blame for damage from water intrusion.

The dispute turned even uglier last week when the insurance company recently fired from the project asked a federal judge to award it $9.3 million for unpaid work and other expenses. Berkley Surety also filed a $1.6 million lien on the property, which is being developed by the Tampa Housing Authority along with Banc of America Community Development Corp., the development arm of Bank of America.

In its complaint, Berkley says that its construction firm was locked out of the project for five months while storms caused water damage inside the residential tower. It is accusing the developers of deliberately withholding payments and delaying the project, which Berkley says drove up its costs.

So let’s review:

Tempo is part of Encore, a $450 million mixed-income housing development and urban renewal project on the edge of downtown Tampa.

Problems first became apparent in June 2016 when Siltek was fired. At the time, the project was about three-quarters complete.

The building was behind schedule and there was concern about shoddy workmanship and poor management, Housing Authority officials said at the time. Another worry: Siltek founder Rene Sierra was working as project manager even after he had pleaded guilty in a multi-million dollar kickback scheme involving affordable housing in South Florida.

The problems around the project only got more bizarre.

As underwriter, Berkley had the option to complete the project with its own contractor.

That turned out to be Tron Construction, a company established by Siltek owner Ana Silveira-Sierra less than one month after Siltek was terminated from the Tempo project and which operates out of the same Plantation office. Silveira-Sierra declined to comment.

Six months later, Housing Authority and Banc of America officials terminated their contract with Berkley, effectively firing Tron, too. The company had only 30 workers on-site when there should have been about 300, Housing Authority officials said at the time.

We are not going to get into the merits or lack thereof of the lawsuit.  However, this entire building has turned into a complete mess and someone needs to figure out why and how to make sure it does not happen on the North Boulevard Homes rebuild.  This continuing sore, as well as no clear analysis of the chain of events and decisions that led to the problem, do not help build confidence.  But this is one building. North Boulevard Homes is a much more substantial project.

Downtown – Riverwalk Tower

The first steps to setting the stage for construction of the Riverwalk Tower are beginning:

CapTrust Advisors, whose name adorns the CapTrust building at 102 W. Whiting St., has signed a lease for 10,500 square feet in Park Tower.

The ownership of CapTrust building and Park Tower have a mutual partner: Feldman Equities LLC, which owns a stake in both properties.

Feldman Equities is planning the 53-story, mixed-use Riverwalk Tower on the site of the CapTrust building and adjacent vacant lot. In late 2016, Feldman partnered with City Office REIT to buy Park Tower, Tampa’s first skyscraper, and has since unveiled a glitzy, multimillion-dollar renovation plan.

Relocating tenants out of CapTrust building is another sign that Riverwalk Tower — a highly anticipated, first-of-its-kind-in-Tampa project that will transform the city’s skyline — is moving forward.

Hyperbole aside, we are glad that it seems this project is moving forward for now.  We look forward to the promised renderings in a few months.

HART – In Search of Money

The board of the perennially cash-starved HART is taking some very preliminary steps to thinking about maybe raising the millage rate:

After dozens of studies, public meetings, forums, plans and votes, Hillsborough’s transit leaders still don’t know how they’ll raise money for the county’s struggling bus system.

The Hillsborough Area Regional Transit Authority board held a special meeting Monday to consider raising the millage rate that pays for the county’s bus system — something it hasn’t done since 2012. HART’s charter caps the millage rate at .5 mills, where it currently stands.

HART board chair and county commissioner Les Miller asked the board’s attorney to explain what steps would have to be taken place to raise the cap.

“I don’t want anyone falling out of your chairs or passing out,” Miller told the board, which includes at least three of its 13 members who have voted or spoken publicly against raising taxes for transit.

Any additional increase would have to be approved first by the HART board. Then the Hillsborough County Commission and Tampa and Temple Terrace city councils would have to approve it. Only then would it go on the ballot as a county-wide referendum.

Unlikely to happen, but there is nothing wrong with looking at it.  One interesting item was from the Tea Party member of the board:

Commissioner and vice-chair Karen Jaroch asked HART staff to research whether individual cities can have individual millage rates that generate dedicated pots of money within HART. Staff is researching whether Lakeland or other municipalities do something similar.

“It’s so polarized,” Jaroch said. “You have people who really want transit, and you have the other side who, they’re not going to benefit from it and they’re not going to likely to want to see their taxes increased. That could be a solution to maybe meet everybody’s needs.”

Has the Tea Party adopted the City Tax?  Is that dedicated pot of money just going to run buses inside the City limits? Would that actually accomplish HART’s mission, anyway?  As we have pointed out, there are parts of the County much closer to the heart of Tampa than many parts of the City, which much more density than parts of the City (so much so, you probably do not know you are not in the City anymore).  What is HART going to do for them?

Meanwhile, In the Rest of the Country

We noticed this interesting little graphic about “crane counts” in different metro areas as a (very) rough way to see what is booming.  It is exactly what  says it is – counting the number of tower cranes in a city.

From Curbed.com – click on map for article

We’re not sure what the deal is with Miami.  We would have assumed there were more cranes there.  For a while, we have a steady stream of cranes at a relatively low number (and Tampa and St. Pete are probably not counted as the same place). Of course, if we 18-20 cranes in the Lightning owner’s project next year (or so) we’ll be climbing up that list.

 

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One Comment leave one →
  1. B. Wills permalink
    July 21, 2017 7:57 AM

    Commissioner Jaroch’s idea for selective taxation for transit is just more political posturing to avoid true leadership. How about we extend selective payment model to schools, police, and fire protection so that we can further accelerate our race to the bottom? You either want to build a real city or you don’t.

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