March 29, 2024

Space Coast: Regaining Altitude

Beth Dickey | 4/1/1996
In the past two years, just about every major aerospace and defense contractor in the Space Coast region has shed jobs. Lockheed Martin closed its 900-worker facility in Daytona Beach and moved many of the jobs to Orlando. Harris Corp. restructured its Electronic Systems Division in Melbourne in late 1994 and sent 700 workers packing. McDonnell Douglas left 1,254 people unemployed in Titusville last year after losing a contract to manufacture Tomahawk missles.

Still more change is coming. By late summer, the National Aeronautics and Space Administration (NASA) will begin to consolidate space shuttle operations by turning over responsibility to a private joint venture, United Space Alliance. The process is expected to eliminate up to 3,000 jobs at the Kennedy Space Center in Brevard County, perhaps beginning as early as 1997.

Not all the news is bad, though. While downsizing predominates among the defense and aerospace giants on the Space Coast, smaller companies in other industries are growing.

This year, for example, Accudyne Corp. has opened a 120-employee plant in Palm Bay that will manufacture equipment used to produce flat panel displays for such products as electronic pagers and laptop computers. AMRE Inc. is another new arrival in Palm Bay. A leading telemarketer of home improvement products, it chose the city over 29 others as the location for a 250-worker facility that opened in January. In Melbourne, Nationwide Sports Distributing Inc. planned to open its fourth national sales center with 15 workers in March and anticipates adding a 35,000-square-foot manufacturing facility with up to 65 employees by 1998.

Preliminary employment estimates for last year show modest job growth in the region's two largest metropolitan areas. Non-agricultural employment grew by 2% or 2,900 jobs in Daytona Beach, where hundreds of new jobs were created in business services, retail trade and state and local governments. And the 1.8% growth in the Melbourne-Titusville-Palm Bay area came in large part from eating and drinking establishments, health services and business services.

Employment projections for the three-county Space Coast region are encouraging. According to projections by the University of Florida's Bureau of Economic and Business Research, from 1995 to 2000, Space Coast employment will grow 15.2% -- a bit faster than 13.7% job growth statewide.

But job growth isn't the only goal of Space Coast economic development officials. Most are scrambling to attract and retain good jobs that pay above-average wages. But some already see evidence of regional wage erosion in the housing market.

"It's still a buyers' market in Volusia County, as far as home prices are concerned," says Drew Page, president of the Volusia County Business Development Corp. (BDC). "We've not been able to replace those jobs at the pay levels we lost."

Volusia's Welcome Mat
To improve its business-recruiting efficiency, the BDC is targeting certain kinds of businesses, including large distribution operations and specialized tourist attractions. "We tried to be everything to everybody, and we feel like that's not going to work in the future," says Page. "We feel like we have to do a better job with the prospects we have, rather than go out and get a lot more."

Long a mecca for tourists and auto racing enthusiasts, Volusia is trying harder to attract good jobs. In years past, the county's Business Development Corp. basically acted as a business ombudsman, helping companies cut through regulatory red tape.

But now, the county also has an "opportunity fund" that rewards companies for creating well-paid positions. Moreover, some cities have abated taxes and reduced impact fees for new businesses. And this year, municipal governments are working with the county to create a uniform building code and to streamline the permitting process.

Phil Denyes has been pleasantly surprised by the municipal regulatory climate in Daytona Beach. He moved there from Canada to manage the $18 million development of Daytona USA, a tourist attraction with an auto racing theme, scheduled to open this year with a staff of 75. "We were ready to go back to the city planning board a second or third time, but we seemed to have no snags," Denyes says. "It's been absolutely tremendous."

Page sees Volusia County's growth in 1996 coming in "chewable bites" from existing local industries. "We have 13 companies with expansion projects in some level of progress. Obviously, that's the greatest compliment that a local government or development program can have," he says. DeLand's Memtec, a maker of industrial filtration systems, is in the early phase of a major expansion. Recently, Ormond Beach's Florida Production Engineering nearly doubled its work force and expanded its manufacturing area for automotive wheel covers.

Flagler After ITT
While Volusia County tries harder to score points with prospective employers, Flagler County is just getting into the game. Formally organized just last June, Flagler's Committee of 100 is working to identify incentives it can offer and has set its sights on adding one new company and 50 to 75 jobs to the local industrial base by the end of 1996. "That sounds very small, but keep in mind, we're a county with a population of 39,000," says Dick Morris, executive director of the Flagler County Chamber of Commerce.

The creation of the Committee of 100 was triggered by the announcement that ITT Community Development Corp., which developed much of Flagler County's largest community, Palm Coast, will sell off most of its local real estate holdings. When ITT announced its decision, it created a leadership void in local business development.

"By developing Palm Coast they have also developed Flagler. We had come to rely on ITT," says Morris. "On the other hand," he adds, "the change has created an opportunity for the county and community as a whole to aggressively stand on its own two feet and move ahead from an economic development standpoint."

The Committee of 100 will be looking to recruit companies like Sun Coast Chemicals. The nine-worker company moved to Palm Coast two and a half years ago, attracted in large part by easy highway access to seaports; it ships specialized lubricants to customers in 41 countries. "It's a very picturesque location. When you bring in overseas people, it makes a good impression," says Leslie Byrne, vice president of Sun Coast Chemicals. "It's better than bringing them into a congested industrial area."

Boosting Brevard
Brevard County, stretching along 73 miles of Atlantic Ocean coastline, is a study in economic contrasts. Says County Commissioner Truman Scarborough Jr., "If you're out at NASA, it doesn't look good right now. If you're a property owner at the corner of Highway 50 and I-95 [the site of a new Wal-Mart super store in Titusville], the future never looked brighter."

Frank Kinney, a Rockledge resident who works in Titusville as executive director of Florida's Technological Research and Development Authority, likens Brevard County to "three different worlds." He describes south Brevard as "quite prosperous" and central Brevard as "relatively stable," while the northern end "is having some very serious economic problems right now."

Business boosters must work hard to make the county more attractive to small and medium-sized companies. But it won't be easy, in part because competition to attract good jobs from outside the region has intensified, says Lynda Weatherman, president of the Brevard-based Economic Development Commission of East Central Florida.

"You've got to work harder for fewer relocations," Weatherman says. "Part of my job is to get everybody working together."

Sometimes even togetherness isn't enough. In 1994, broadsided by news of the McDonnell Douglas plant closure, county leaders came together to offer the company more than $1.2 million in cash incentives to underbid its competitor and retain the lone missile contract that kept the production lines running. McDonnell Douglas lost the contract and the money -- $250,000 from county coffers, $20,000 from Titusville and the rest from the state.

However, other efforts to boost the county's economy still hold promise. The Spaceport Florida Authority will continue its $8 million remodeling project at two Cape Canaveral launch pads. The authority hopes to lure companies that are designing newer, lightweight rockets to carry smaller and less expensive commercial satellites. One of those companies native to Brevard County is Titusville's E-Prime Aerospace, which is attempting to turn the technology of Peacekeeper missiles into a homegrown family of commercial rockets called Eagles.

Through referendum votes, the citizens of Brevard also have tried to improve the local business climate. When Titusville voted in 1994 to abate ad valorem taxes, and then to abolish commercial and industrial impact fees early last year, the county government followed the city's lead.

But promoters of a school renovation and construction plan failed to generate countywide support for a $350 million bond issue. "That was a major blow to our efforts to promote economic development in the county," says Kinney. "The future looks dimmer, not brighter."

Former state senator Winston "Bud" Gardner, who's promoting the concept of a $250 million space theme park in north Brevard -- also worries about the Space Coast's future.

"I'm not involved in the inner circle anymore," Gardner says, "but I still read the business sections of both newspapers, the Orlando Sentinel and Florida Today, and I read Florida Trend, and I'm not reading about that many successes."

But Weatherman insists the worst of east central Florida's economic woes are over. She contends that the technology sector of the regional economy is on the rebound as more small and medium-sized companies spring up to take advantage of a highly skilled labor pool, which she says is "America's best-kept secret."

"We were at the bottom six months or a year ago," Weatherman says. "The significant changes have occurred. We have programs in place that are responding to those changes, and hopefully we can retain some of the workers that maybe a few years ago we wouldn't have been able to."

Elbow Grease
Forget the slick magazine advertisements. Bring on the elbow grease. That's how Lynda Weatherman is promoting Brevard County, which has been hit hard by layoffs in the defense and aerospace industries. "We're not advertising," says Weatherman, the energetic president of the Economic Development Commission of East Central Florida. "We're doing more phone calling; more following up; getting in touch with the Florida Department of Commerce more than we've done in the past; attacking the industrial trade shows. We have to do more with less."

Weatherman illustrates her point with a comparison. While Polk County's budget for economic development is three times that of Brevard County's, she says Brevard hosted almost twice as many site tours as Polk in 1995. "I've had 38 site tours in a year, and I'm telling you, nobody [else] is doing this," she says. "It's really just hustle." Since August, her Melbourne-based economic development agency has influenced decisions by six companies to relocate to Brevard and bring more than 500 jobs with them.

To beat the competition, Weatherman promotes Brevard's pool of skilled labor, including hundreds of people left jobless by defense and aerospace downsizing, and financial incentives such as abated taxes and impact fees in certain areas of the county.

But Weatherman admits she faces tough competition from other economic development groups with lures that are more lucrative. "In the world of
incentives," she says, "these are modest."

EPCOT East?
Could the launch of a new tourist attraction in north Brevard help lift the county out of the economic doldrums? Winston "Bud" Gardner believes so. The former Florida senator proposes to build a $250 million theme park near the Kennedy Space Center, complete with space shuttle thrill rides and a life-sized mockup of NASA's International Space Station.

The attraction would be styled after Walt Disney World's EPCOT and feature pavilions funded and operated by each of the space station partners -- the United States, Russia, Europe, Canada and Japan.

"This is more than just a theme park. It's really like a mini World's Fair," says Gardner, who works for the engineering firm of Tilden Lobnitz Cooper.

Gardner established the International Space Station Foundation this year to study the theme park's feasibility. The not-for-profit foundation also plans to market an affinity credit card to raise funds for the theme park's development. Gardner says he'll decide by year's end whether it can be built.

Tags: Florida Small Business, Politics & Law, Business Florida

Florida Business News

Florida Trend Video Pick

Bitter-to-swallow cocoa costs force chocolate shops to raise prices
Bitter-to-swallow cocoa costs force chocolate shops to raise prices

Central Floirda chocolate shops are left with a bitter taste as cocoa prices hit an all-time high earlier this week.

Video Picks | Viewpoints@FloridaTrend

Ballot Box

Should Congress ban the popular social media app TikTok in the U.S.?

  • Yes
  • No
  • Need more details
  • What is TikTok?
  • Other (Comment below)

See Results

Florida Trend Media Company
490 1st Ave S
St Petersburg, FL 33701
727.821.5800

© Copyright 2024 Trend Magazines Inc. All rights reserved.