April 24, 2014

Around the State- Northeast- Sept. 2000

Jane Tanner | 9/1/2000
Curing the Tobacco Blues
With mountains of debt and a dim outlook, tobacco farmers search for alternatives.

By Jane Tanner

There's no shortage of anxiety along Florida's tobacco road, where the state's top flue-cured tobacco producers farm along the northern stretch of Interstate 75 that runs through Hamilton, Madison, Suwannee, Columbia, Lafayette and Alachua counties.

Until about three years ago, tobacco companies were urging tobacco farmers to ramp up production, prompting many growers to borrow heavily to increase output. But then beleaguered cigarette makers pulled back, leaving many farmers with heavy debt loads and reduced income.

Some of Florida's 230-plus tobacco farmers, especially those close to retirement, may choose to bow out. Others must find ways to pay off their loans without the same lucrative returns that tobacco provided. One example: Suwannee County farmer Kenneth Dasher devotes only 30 acres of his 500-plus acre farm to tobacco, but that crop accounted for 35% of his revenues. Three years ago, 60 acres of tobacco produced 75% of his sales. A third-generation tobacco farmer, Dasher took steps to create other possibilities for himself: He commuted to the University of Florida to complete a forestry degree and may start selling trees from his 300-acre forest and go into business as a forestry consultant. He's also running for court clerk, a full-time job.

Farmers have undertaken their own search for alternatives to tobacco. At the beginning of the year, some joined in attempts to sell tobacco directly to foreign countries, bypassing U.S. cigarette makers. By midsummer, however, there were no takers. "Farmers realize they may be burning some bridges," says Eddie Hillhouse, head of Suwannee County's Chamber of Commerce, "but they are going down in flames."

Most tobacco farmers grow other crops, including rye, hay and bell peppers. But none is as lucrative as tobacco, where quotas and price controls kept profits high and insurance held down risk.

In an effort to create stable markets for the other crops, some growers banded together to sell vegetables in volume to retail chains. Already, they've secured deals with Wal-Mart and Publix , according to Hillhouse. Few expect much help from the state. Florida hasn't followed the lead of others such as Maryland, which have offered tobacco farmers full buyouts. Last spring, Florida's Legislature appropriated $2.5 million to buy out tobacco equipment from farmers, but the money won't go far -- Dasher alone has $325,000 invested in a curing barn, harvester, transplanter and other tobacco-specific hardware. "It's like they tossed out a bone to get the dog off the porch," Dasher says.

The state has set aside another $2.5 million to investigate revenue alternatives, including some non-farm options such as hunting leases and eco-tourism. UF's Institute of Food and Agricultural Sciences is leading the search for alternatives.

Some fear pristine fields will be carved up for subdivisions. And few expect to find other crops that will pay as well as tobacco. "If there were, many of them would already have gone to it," says Jerry Bennett, UF's chairman of agronomy.

In the News

Clay County -- BellSouth is building an operations center on Fleming Island to support competing local telephone and digital data providers. It will be the largest employer in the county as it completes its five-year plan for 1,000 workers, mostly electronic technicians. In the long run, BellSouth's center should help to boost the county's weak commercial tax revenue base. To lure BellSouth, the county will rebate 75% of the company's property taxes during the first five years of operation and 50% the following five years.

Fernandina Beach -- A residential developer has squared off against environmental and no-growth groups in court over Crane Island in Fernandina Beach near the municipal airport. Vince Graham wants to build a 250-home upscale subdivision but would need an easement for a 60-foot road to the property. Opponents fear it will devastate what is essentially a bird sanctuary adjacent to the saltwater marsh.

Gainesville -- Sunshine State Games, Olympic-style summer competitions for amateurs, brought an economic boost of $6 million by some estimates to the university town during the summer lull. The games, which attract about 6,000 young athletes, rotate throughout the state. Next stop in 2001: Lakeland. Then, in successive years: Orlando, Palm Beach County and Tampa.

Jacksonville -- Two developers are racing to build high-end shopping centers on the city's busy south end. The Goodman Co. of West Palm Beach is planning a 70-acre development with shops, restaurants, offices, apartments and hotels. Meanwhile, Atlanta-based Ben Carter Properties plans a 175-acre project with the same components.

Dr. Network, which sells optometry supplies to eye-care professionals through the Internet, planned to move this month into new offices on the south side from its cramped Jacksonville Beach location. The company, with 55 employees, plans to grow to 120 in the next two years.

The downturn for high-tech companies hit home this summer. Website Pros, a San Francisco firm that builds and hosts websites, laid off 196 designers, customer service reps and technicians at its Jacksonville center. Meanwhile, the Jacksonville office of Nebraska-based InaCom fired 172 employees after it filed for Chapter 11 bankruptcy protection.

Meek Cos. of Jacksonville says it plans to renovate the 1926 Barnett Bank building -- downtown's tallest structure for three decades -- into offices, shops and residences. Meek also plans to renovate three other downtown structures built in 1902, 1909 and 1912. All are eligible for listing on the National Register of Historic Places.

Add rugby to Jacksonville's sports milieu. At least six teams from the European Super League will hold spring training here next year. Local businessman Steve Gormley, who started the fledgling U.S. Rugby League, persuaded one team to hold training camp at Jacksonville University last year, and others are following.

The 353-bed Memorial Hospital Jacksonville is undergoing a $35-million expansion in nearly all key areas of the medical center, including critical care, operating and emergency rooms and laboratories.

Julian LeCraw & Co., one of Atlanta's largest property management and development firms, has been buying up Jacksonville apartment buildings. Among the latest was a 555-unit complex on Hodges Boulevard, a fast-growing area just west of the Beaches. The company says it hopes to acquire as many as 3,000 units in the Jacksonville area.

Pitney Bowes is closing its Jacksonville call center, laying off 108 workers. The mail and messaging management company plans to transfer the work to its other centers in Virginia, New York, Wisconsin and Washington.

Live Oak -- DDJ Development, a new Live Oak company created by three local businessmen, bought 1,250 acres along U.S. 129 from Florida Rock Industries (NYSE-FRK) and plans to create a retail, office, light-industrial and residential development. The land, a mile-long stretch between I-10 and Live Oak, hadn't been mined by Florida Rock since the early 1970s.

Marion County -- Community Bank of Marion County, which opened in the spring of 1998, reported $83 million in assets and is building its fourth branch in the county and plans further expansion. Bank President Hugh Dailey was a senior vice president at SunTrust before heading the community bank startup.

Nassau County -- A new flooring maker and distributor is building a 107,100-sq.-ft. operation near the Fernandina International Tradeplex. Florida Fine Flooring plans to start with 30 employees and ramp up to 140 within five years with an average salary of $50,000, a high wage for the county.

White Springs -- Canada-based Potash Corp. of Saskatchewan has scaled back its White Springs mining operations in response to depressed prices and diminished demand for its fertilizer products. By midsummer, 111 employees were laid off. Meanwhile, several similar operations in central Florida have shut down altogether.

Jacksonville Vote
JACKSONVILLE -- This month residents vote whether to approve a sales tax increase for a $2.2-billion roadworks and new facilities program. Over the summer, a group of private businessmen including Herb Peyton of Gate Petroleum, David Hicks, chairman of Alliance Mortgage Corp., and Tom Petway, minority owner in the Jacksonville Jaguars and chairman of Zurich Insurance Service, raised more than half a million for a publicity blitz to promote the plan.

A mailing sent to 64,000 consistent voters touted projects that were not actually part of the plan. Meanwhile, Mayor John Delaney balked at spending $160,000 for a Florida Tax Watch analysis of the costs of benefits of the initiative and in midsummer was unsure whether he'd approve the analysis before the vote.

Tags: Northeast

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