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Central: Beyond Theme Parks
Competition for good jobs is fierce, with cities in the U.S. and around the world competing for big-money expansions. To meet the challenge, Central Florida economic development groups work hand in hand with local governments on financial incentives, rapid permitting and infrastructure improvements in order to convince companies to expand, relocate or just stay put.
The strategy appears to be working. Jobs in Central Florida are projected to grow by 35% from 1995 to 2005, according to the University of Florida's Bureau of Economic and Business Research, compared with 25% statewide.
Economic development in Central Florida is promoted primarily by two regional groups: Polk County's Central Florida Development Council and the Economic Development Commission of Mid-Florida (EDC), which promotes Orange, Osceola, Seminole and Lake counties.
Orlando-based EDC is perhaps the most successful economic development group in the state. With a 1996 budget of almost $3.6 million, it covers the spectrum of corporate relocation and expansion, international business development and promotion of film and television production. The EDC's carefully cultivated regional approach includes putting EDC representatives in Osceola, Lake and Seminole counties to coordinate with local government officials.
With the departure of Tesch, who effectively led the regional organization for seven years, EDC's momentum may suffer. "We have the challenge of keeping our regional approach together," says Tesch, adding, "How do we become a major metropolitan area and keep our small-community attitude?"
In 1994-95, the EDC helped 98 companies expand or relocate to the region, resulting in $796.8 million in capital investment and 6,518 jobs created or saved. AT&T gave Orlando its biggest boost, not only with the expansion of the Microelectronics unit, but also with announcements that 340 sales and marketing jobs and 200 corporate positions in information technology services will be added in Lake Mary by 1998.
A growing number of jobs are being created in film production, one of the fastest-growing industries in metropolitan Orlando. At Universal Studios Florida, two new sound stages were built in 1995, and America's Health Network, a new cable channel scheduled to launch this spring, has built an $11 million production center there.
About $185 million was spent to produce movies, TV shows and commercials in the region last year, up 30% from $142 million in 1994. Currently, a Warner Bros. feature film, "Rosewood," is being shot in Lake County. Also in production at Disney/MGM Studios is "Legend of Mulan," a full-length animated feature due out in 1997.
Scarce Space
In Lake County, a primarily rural, residential area, Marriott International Inc. is opening a 126,500-square-foot food service distribution center this spring that will employ 75. But in other parts of the EDC's territory, not every business can find adequate space.
Real Estate Research Consultants Inc., an independent advisory firm in Orlando, reports a 90% office occupancy rate in the metro Orlando market in the fourth quarter of 1995, with the tightest conditions in Maitland, the Lake Mary/Sanford area and in eastern Orlando near the University of Central Florida. "We're just about rid of the Reagan-era buildings," says Pizzuti Realty broker Trevor W. Hall, Jr.
"There's absolutely no space," says Thomas R. Kohler, executive director of the Downtown Development Board, noting that downtown Orlando doesn't have 25,000 square feet of contiguous space available.
Ground breaking for new office space is unlikely until at least late 1997, when two projects are planned. Only one of them may get out of the ground. Pizzuti Development Inc. plans a project called Orlando City Center, a $200 million, hotel-office complex across the street from the site of the new Orlando County Courthouse, now under construction. If built, the Pizzuti project will have 800,000 square feet of Class A office space in two towers. Feldman Equities, one of three investors in the 357,000-square-foot One Orlando Centre, located just north of downtown Orlando's core, plans to build an adjacent 441,000-square-foot office building.
William H. Owen, president of Real Estate Research Consultants, believes downtown Orlando can support only one of the two projects. Citing the central location and proximity to the courthouse, he says, "I'd have to give the nod to the Pizzuti property."
Meanwhile, local leaders hope that redevelopment of the 2,000-acre Orlando Naval Training Center will create thousands of jobs over the next two decades. The redevelopment plan is on hold until the federal government turns over parts of the property to the city, which is likely to happen in the fall, according to Herb Smetheram, director of federal liaison. Even so, the city's Community Redevelopment Agency is evaluating commercial development proposals for the area.
Cash For Jobs
To provide an edge in the pursuit of corporate relocations and expansions, many parts of Central Florida are turning to financial incentives. "Most companies know Florida's not giving out big incentives. Most are looking for incentives to neutralize impact fees and sewer fees," says the EDC's Tesch.
Seminole and Lake counties have created multimillion-dollar, job-creation incentives which award money to companies based on the number of new jobs, the salary range and capital investment in the area. Osceola County, as well as the cities of Kissimmee and St. Cloud, is considering such incentives. Orange County and the city of Orlando provide them on a case-by-case basis.
"It's part of the game," says Bob Turk, Seminole County's director of economic development. Since 1994, Seminole County has allocated $2.5 million for jobs-growth incentives to AT&T, Cincinnati Bell Information Systems, Dixon Ticonderoga Co., Recoton Corp. and BellSouth Mobility, among others, creating 2,235 jobs.
Seminole County initially offered employment incentives to large and medium-sized new and existing companies. But starting this year, expansions by small businesses also will be eligible. Seminole and Lake counties provide $2,000 to $2,500 on average for each job created, but adjustments are made on a case-by-case basis for each company. The counties' return on investment comes primarily from ad valorem taxes collected on new places of employment. Turk says Seminole County will earn back the incentives within two years.
Money isn't everything, though. In addition to financial incentives, many local governments and private economic development groups in Central Florida promote hassle-free business relocations and expansions, setting up special teams to quickly solve companies' infrastructure problems.
Orange County has a group called "The Miracle Team," organized in 1993 for rapid response and trouble-shooting in commercial development. In conjunction with the EDC, the group helps businesses to deal with issues ranging from health and safety to environmental regulation, permitting, zoning and infrastructure.
In Seminole County, Gino Pala, chairman and CEO of pencil-maker Dixon Ticonderoga Co., praises local government for expediting his company's move into a new $3.5 million building for 85 employees in Heathrow. Dixon had been renting a site in Maitland. "We had to be out of our [old] building by February," asserts the gruff-voiced Pala. "The county has been very supportive and helpful. They hurried up and got the inspections necessary."
The Orlando Downtown Development Board runs a Real Estate Resource Center as a one-stop source of information on available retail and office space and as a liaison with city officials on permitting and planning matters. "Sometimes I'll prep them on how to make their case," says Frank Billingsley, the resource center's business development manager. "Sometimes I'll go with them." In its two years of operation, the resource center has recruited or helped with expansion of 35 businesses accounting for nearly 400 jobs.
Polk County Leadership
Fifty miles down the road in Polk County, the publicly funded Central Florida Development Council (CFDC) has a more modest $750,000 budget. But now, privately supported economic development groups may begin playing a bigger role in the county's future.
The CFDC's work encompasses promotion of industry development, international trade, small and minority business development, motion picture and television production and, using a separate $2 million budget, tourism and sports marketing.
New leadership takes over for retiring James C. Brantley, the CFDC's founding president, who is stepping down after ten years. His departure raises questions about whether the CFDC will defer to the privately funded Lakeland Economic Development Council and East Polk Committee of 100.
"Jim [Brantley] has been able to kick-start economic development in Polk County," says lawyer Snow Martin, Jr., chairman of the Lakeland Economic Development Council. "It's now time to turn it over to the private sector."
Not everyone agrees. The chairman of the CFDC, TECO Energy executive Gene West, believes global competition for good jobs demands a countywide approach to uncover and exploit opportunities. "To think that these leads will just fall into our laps is naive," he says.
Local business expansions and a rejuvenated market for phosphate helped Polk County prosper in 1995. The county's average unemployment rate, which had been in double digits for much of the 1990s, reached a 20-year low last year.
In downtown Lakeland, Watkins Motor Lines moved 400 workers into a renovated former Burdines store, and this year Publix Super Markets Inc. will move 500 employees into a renovated JCPenney facility. But planned moves into downtown Lakeland by the SunTrust banking company and the Holland & Knight law firm have been stymied by parking problems.
"Parking will be the major issue affecting relocation and expansion in downtown Lakeland in the foreseeable future," says Howard Jenkins, chairman and CEO of Publix. Indeed, parking is the stumbling block holding up the renovation of the abandoned, 70-year-old Terrace Hotel. The Lakeland Downtown Development Authority and the city of Lakeland have been trying to sell the Terrace to Mirror Properties Corp., a private investment firm that plans to turn the structure into a first-class, 96-room hotel that would open in 1997.
Outside Lakeland, Polk County's two traditional economic engines, phosphate and citrus, did well in 1995 and should continue to hold their own this year. After nose-diving in the late 1980s, phosphate prices have rebounded. And despite cold weather in January and February, citrus production in Polk County could surpass last year's.
The governments of Polk County and Lakeland have steered clear of formal incentive programs. Jim DeGennaro, vice president for industry development at the CFDC declares, "Our incentives are abundant labor, available land, lower impact fees than our neighbors and a great business climate."
Not all Polk County cities agree. The Winter Haven City Council voted to offer Wal-Mart Stores Inc. $774,000 in incentives to build a $49 million, 780,000-square-foot food distribution center in the city. Wal-Mart will employ 250 when it opens this fall and eventually will increase its work force to 450.
Elsewhere in Polk County, Haines City convinced Ytong Group to build a $35 million concrete products factory there. The city government and the CFDC helped the Munich, Germany, company to get $472,000 in state road improvements and training grants, and the city offered to split the cost of extending water and sewer lines to the site of the concrete factory.
As in Orlando, the cost of economic development in Polk County isn't always measured in dollars spent.
"People kiddingly call me the sewer king of Lakeland," says Steve Scruggs, executive director of the Lakeland Economic Development Commission, who spends much of his time ensuring that area businesses have adequate roads, sewer and water. Scruggs is the facilitator who makes the business-government relationship as painless as possible. "We have a reputation that we can deliver," says Scruggs. "That's what it's all about."
That's Entertainment!
While Central Florida diversifies into high technology, film production, international trade and other industries, the mainstay of the region's economic base continues to be tourism and entertainment, though they're not growing at the pace they did in the '80s.
In 1995, metro Orlando's hotel occupancy rate averaged 74.3% for the year, up 3% from 1994. At the same time, the number of hotel-motel rooms increased to 84,327, up 2.7%. Domestic passenger arrivals and departures at Orlando International Airport in 1995 were up only 0.4% through November, and international traffic was down 4.6% for the same period.
Here are a few developments to watch:
The Orange County Convention Center more than doubles its square footage, to 1.1 million, with the completion of Phases III and IV of a multi-year expansion. Phase III, with 370,000 square feet, opened in January and Phase IV, with 360,000 square feet, opens in August.
In July, Disney will open BoardWalk in Orlando, a lakefront resort designed by noted architect Robert A.M. Stern. It will include the 378-room, deluxe BoardWalk Inn, a 383-unit vacation ownership resort and an entertainment district with a piano bar, 1920s-style dance hall and ESPN World, offering dining along with interactive and virtual-reality sports games.
Universal Studios Florida opens "Terminator 2 3-D," adventure attraction this summer. And after work is completed on a 5-story, 3.5-million-square-foot parking garage, the old parking lot will be torn up and work will begin on Universal City Florida's E-Zone restaurant, nightclub and television-production complex.
Bok Tower Gardens in Lake Wales opens its new $4.5 million visitor center this summer.
This spring, Sea World of Florida opens a new five-acre Key West-themed attraction that includes dolphins and sea turtles.
Church Street West (on the block adjacent to Church Street Station), a $15 million, 140,000-square-foot entertainment restaurant, retail and office complex is scheduled to break ground in the fall if financing can be arranged.
