Around the State- Northeast- March 2000
A local group helps new companies get started, hoping they'll not only succeed, but stay put.
by Jane Tanner
Al Rossiter's mission as head of Enterprise North Florida Corp. is to identify and nurture promising startup firms that will fuel the region's economy. "You've got to be growing companies, not just supporting what is here," he says. But Rossiter's first big hit, Zassi Medical Evolutions, shows how economic development has evolved: For modern companies, it's often hard to know exactly where home is.
Zassi, a creator of medical devices, has its headquarters in Fernandina Beach, but its research and development labs are in St. Louis. The company recently snagged a deal with giant Bristol-Myers Squibb, but when Zassi is ready to manufacture its first product within two years, it will make components at sites around the U.S. "We're very much a virtual company; we're spread out everywhere," says Peter von Dyck, 31, founder and president.
Economic development types like Rossiter say companies like Zassi are becoming more common: The recruiters realize they may not land all the components of a new business. The trick, they say, is to link up with firms when they're on the cusp of commercial success so that at least a few roots stay planted in Florida.
Von Dyck was living in St. Louis when he invented a silver-dollar-size device that replaces ostomy bags and restores control over bodily functions. A search for capital in 1997 brought him to Florida, where a Fernandina Beach family provided $400,000. He bought a house on Amelia Island, but kept his contacts in St. Louis, where he'd won a spot at a medical equipment business incubator associated with the University of Washington. He was already using St. Louis attorneys to build an intellectual property rights barricade around his design.
He now has investors in St. Louis and Florida. This winter, von Dyck was installing video-conferencing equipment at both sites so visitors to headquarters in Florida could tour the St. Louis lab via television monitors. "We'll see surgeries, we'll see bench-testing," he says.
His business plan generally uses existing infrastructure. Rather than spend several million dollars to build a lab, Zassi pays about $1,300 a month to lease lab space (a special incubator-level rent). To produce the ostomy system, he's likely to use contract manufacturers rather than build his own factory. "New companies are being valued on their relationships, on their strategic alliances, on their intellectual property, not on their bricks and mortar," he says.
So far, he has taken the same approach to management. That's where Enterprise North Florida comes in, with expertise in finance, accounting, legal issues and other areas. While Enterprise North Florida has fee-for-service arrangements with about 200 young companies, it selects a handful to support intensely. Zassi's staff of four is on the phone or in meetings with Enterprise North Florida daily, von Dyck says, without paying a cent. When Zassi starts generating revenues, Enterprise North Florida will get a small percentage and have some equity options. With enough hits, Rossiter hopes his non-profit can become financially self-sufficient. Now, it covers about a quarter of its budget; the rest comes from corporate contributors, state and city funding, and grants.
Rossiter hopes his corporate progeny, such as Zassi, will stay in Florida, but concedes there's no guarantee. "We just try to keep the decision-makers in Florida and keep the wealth in Florida," he says.
In the News
Clay County -- As residential growth booms at Fleming Island, retailers are moving in. Wal-Mart purchased 30 acres for a Wal-Mart supercenter that will open next spring.
A plastic-pipe maker in Green Cove Springs plans to close its 100-worker plant by April. New Jersey-based J-M Manufacturing said electrical outages hurt operations and raised costs. Green Cove Springs runs its own electric utility.
Jacksonville -- Winn-Dixie Stores (NYSE-WIN) is restructuring operations to bring down costs. The grocery giant is centralizing key purchasing operations and will move 100 jobs from regional divisions to corporate headquarters here.
Football fans experienced only short withdrawal after the NFL season. A new Arena Football 2 minor league team, the Tomcats, begins play next month. Majority owner David Berkman expects local passion for football will translate into profits for this indoor variation. An Atlanta developer, Berkman's other Jacksonville investments include majority ownership of a minor league ice hockey team and developing downtown apartments and townhouses.
Bacardi Bottling Corp., formerly Castleton Beverage, is upgrading and expanding its north Jacksonville operations -- a rum bottling plant and new-product laboratory -- to the tune of $12.5 million.
A three-time Olympic gold medalist is among a group pushing for a $20-million downtown swimming complex for public use and national competitions. Nancy Hogshead, local attorney and former Olympian, and Rogers Tiger Holmes, a college swimmer and former owner of Holmes Lumber Co., are key proponents of the project, which calls for public and private funding.
Telephone-service competition has heated up. Alltel Corp., with its giant mortgage data operation downtown and namesake of the city's football stadium, is going head-to-head with Bell South for residential and business customers. Alltel officials say by year's end they'll have 85% of the city and outlying communities wired to accommodate its wireless, local and long distance phone service. Meanwhile, AT&T, which is purchasing area cable provider MediaOne, planned to enter the fray as well.
Miami-based Flight Star Aircraft Services, which provides heavy maintenance for commercial and charter planes, planned to move its 100-employee operation to Jacksonville International Airport this month. Company President Jerry Hernandez says the firm needed more hangar space.
St. John & Partners Advertising and Public Relations purchased rival firm Bottary & Partners Public Relations, creating one of the largest such firms in northeast Florida. Leo Bottary, who was at William Cook before starting his own company in 1995, will serve as vice president and director of public relations at St. John.
Livingston, N.J.-based commercial finance company CIT Group chose Jacksonville for its Technology Financing Services business unit. CIT plans to move about 30 staffers to offices on the south end of the city and hire 200 new employees.
Jacksonville Beach -- eMedSoft.com, providing Internet-based healthcare management software to physicians, practices, clinics and insurers, has undergone explosive growth in its short history. Founded in 1998 with a handful of employees, it had 150 at the beginning of 2000 and plans to double its staff by the end of the year.
Baptist/St. Vincent's Beaches Medical Center is investing $4.6 million to expand its emergency room and obstetrics unit this spring as admissions at the 82-bed community hospital continue to grow.
Nassau County -- A 284-worker paper bag plant in Yulee expects to shut down by May. Chicago-based S&G Packaging says grocery shopper preference for plastic bags prompted the decision to close.
St. Johns County -- Developer Signature-Marsgold Inc. plans to complete the first phase of an office park at World Golf Village this month. The finished complex, designed for small professional offices, will be about 100,000 square feet.
The Jacksonville Jaguars missed their shot at playing in the Super Bowl this year with their loss in the AFC championship, but the city is rushing ahead in its attempt to host the big one in 2004. One roadblock to a Jacksonville bid for the Super Bowl is an insufficient number of area hotel rooms to handle the huge crowds attending the game. But city and business leaders have come up with a clever plan: Dock a half-dozen or so cruise ships on the St. Johns River near Alltel Stadium. Insiders say the plan was presented earlier this year and NFL officials gave it a warm response. A key player supporting the plan is the Walt Disney Co., which owns and operates several large cruise ships. Among those in Jacksonville promoting the plan is former Disney executive Peter Rummell, now chairman and chief executive officer of real estate company St. Joe Co. Moreover, the network scheduled to air the 2004 Super Bowl is ABC, a unit of -- you guessed it -- Disney.