Photo: Mark Wemple"I would anticipate doing some hiring." - Cathy Swanson, CEO of Freedom Bank
The Year Ahead
What is the outlook for 2017?
Professionals in seven industries across Florida talk about prospects for the year ahead.
“I would anticipate doing some hiring.”
CEO / Freedom Bank St. Petersburg
In our market specifically I’m pretty hopeful about the economy in 2017. We’ve seen a lot of activity. In terms of loan activity, our pipeline is strong. The development activity in south Pinellas County particularly is strong. In downtown St. Petersburg, there’s a lot of building going on, from apartments to condos to museums. We are growing. I would anticipate doing some hiring. With our online banking offerings we have not really put any brick and mortar in our plans. We have found that we can support our growth through technology. We’re just under $200 million in assets. Our niche is small- to mediumsized businesses and professionals in the Tampa Bay market.
COO / Related Group Miami
For both our rental and our affordable division, we’re very bullish. In Related Development, which is our multi-family (rental) arm, we’re going to start 12 deals in Florida in 2017. We’re going to have three in Orlando, three in Tampa Bay — one being the old Tampa Tribune site. We have two in Palm Beach and three in Broward and one in Wynwood (in Miami). Right around 3,200 units. We’ll probably be around 600,000 square feet of retail and $1 billion in development. We’re seeing continued growth in the rental market. We love Tampa. We love Orlando. We love the markets we’re in. We continue to see job growth and demand.
Affordable, we’re going to have a total of eight jobs starting. Six will be in Miami-Dade County. We’ll have a deal in Broward, and, of course, we formed a partnership with the Tampa Housing Authority and we’ll be doing the first phrase of the rehab.
On the condo side, we have one last site we’re doing in southern Hollywood. That will probably be our last condo (started) in this cycle. We’re seeing a big slowdown in sales from Latin America. We’ll be closing (finishing) six jobs in 2017. We’re going to wait to see how the market recovers and absorbs. We’re going to focus on closing out the projects under construction.
Outside of Florida, we’ll have three jobs in Atlanta and then we’ll start our condominium in Argentina and start our condo in Cancun. We have a job in Brazil under construction right now, one in Panama and a job in India under construction.
Director / National Naval Aviation Museum / Naval Air Station, Pensacola
We’re into the 75th of a number of key events in naval aviation history. Pearl Harbor is probably our second- or thirdlargest event of the year. In June we will commemorate the 75th anniversary of the Battle of Midway, which is probably the most consequential battle in the history of naval aviation. We have a number of changes in 2017. We will be in our first full year of our newly renovated theater. It’s fully digital, 4-D and it’s high def, an exceptional venue. We have refurbished a number of exhibits. We’ve refurbished the entrance to the museum. We’re creating a more dynamic museum. We’re changing displays. We’re moving airplanes. Premise being, if you have not been to the museum in six months, you’ve not been to the museum.
One of the things we enjoy as a business model is because we are on a federal reservation and our campus abuts the Naval Air Station Pensacola flight line, we’re home to the Blue Angels demonstration squadron. Not only can people visit the third-largest aviation museum in the world — we’re behind only the Smithsonian in Washington, D.C., and the Air Force in Dayton, Ohio — but also they’re practicing Tuesdays and Wednesdays every week from March until November. That’s a wonderful feature.
CEO / Firehouse of America Jacksonville
We have 1,030 restaurants. It’s exactly 160 restaurants in Florida right now. Florida is our largest state.
I’m kind of bullish, optimistic, about what’s in front of us. It’s great to have the elections behind us. Traffic in the entire industry had been trending down, not only traffic but also comp sales. There was a downward trend as we moved through the back half of the year, and it got worse as we got near the election. Not so much in Florida.
You have this constant reconfiguration of online retailing and brick and mortar. A lot of restaurateurs over the decades have located their restaurants around brick-and-mortar retailers. If it takes people off the road, that generally hurts traffic.
Speaking specifically in Florida, the tourism gains we’ve had have been tremendous. The Visit Florida campaign has been tremendously effective. That’s been a great appropriation of money by the state. Down in south Florida, the Zika situation didn’t help and created a little headwind down there. Hopefully we’ll push through that. Tourism is critical to Florida. What I’m hoping for is a rebounding or accelerating economy that will further promote tourism and hopefully more than offset any challenges.
Our growth continues to go at a really solid pace. We would expect nationally we will certainly develop more than 100 new restaurants (in 2017), as we did (in 2016) . Florida’s a little bit more mature market for us. California is rapidly developing. Our developing in Florida is really dependent upon finding quality real estate. If we could find the right real estate, we could easily develop another 50 to 60 restaurants within the state. Commercial real estate costs have risen disproportionately to their value. If the rent’s too high and it doesn’t fundamentally fit in your business model, you’re taking extraordinary risk. If I’ve got someone who is basically a small-business owner in the form of a franchisee, especially if it’s their first one, with some of the rents being asked for it’s really difficult to take that degree of risk if you haven’t built out your portfolio.
One thing I would generally say about health care is the exorbitant increases in costs to consumers has put a drag on the rest of the economy. That’s one of the reasons the restaurant industry has seen the slowdown it has. Especially the increase in deductibles. Health care expenses now for the average family have risen to 21% of income. You go back to 1960 it was 5%. It’s put incredible pressure on the family budget. Whatever happens in the political economy it will be of great importance to lower the cost for families.
President / Ritchey Autos Daytona Beach
Volusia, Brevard and Flagler are the three main counties we do business in. We have in Daytona Beach, Cadillac, Buick, GMC, Subaru, and in Melbourne we have Subaru and Volvo, and my business partner here in Daytona has Chevy and Hyundai as well. We also have stores in Georgia.
2016’s been a good year. We have tracked trends in the industry. We took a little bit of a dip with Hurricane Matthew as probably everybody in this area of the coast did. It seems to have come back since then.
The economy seems good here. If you look at the prognosticators, they’re still anticipating good industry numbers. We’ll follow suit with that. It should be a solid year.
We have some modifications to our Subaru stores we’re anticipating this year because of growth. Subaru has been good. It’s been largely constrained by the amount of inventory you can get. Service business has been strong just about everywhere.
Managing Director / Orlando Shakespeare Theater Orlando
We are a non-profit, producing theater. We serve the central Florida community by presenting a signature series typically geared toward the adults in the family and a children’s theater series geared toward the entire family.
Our season runs from September through the end of April. I think it should end very well for us. We typically grow by a quarter of a million dollars each year. During the period of 2008 and 2009, things slowed down. I would say since 2012 we’ve been continuing back on that path of growing by a quarter of a million dollars a year.
Right now our advance sales are looking very promising. We have subscribers who tend to book all seven shows in our signature series. That group of subscribers has grown tremendously. That puts us in a good financial position to begin with. We will finish our fiscal ‘16 year, which actually ends in May, doing all right. This fiscal year we will finish at budget goal or just slightly above goal.
Dr. Marvin Dewar
CEO / UF Health Physicians Gainesville
We have just finished our fourth consecutive year in terms of near double-digit growth in physician visits. This year or next we’ll hit 1 million physician visits. We have more people who want to come and see us and receive care than we can take care of. We are oversubscribed. Every year we take care of a patient from every county in the state of Florida and every state in the United States. We’re seeing growth in our local work and our specialty referral work and we’re expanding regional partnerships. Between the hospital and the college of medicine, the two make up UF Health as a health system, we have 14,000 support employees, we have more than 1,000 clinical faculty, 200 research faculty, 780 residents and fellows and 134 medical students. That’s a huge advantage to us.
It’s hard to deal with double-digit growth year after year. In ’17 we’ll be adding 520,000 square feet of inpatient hospital towers. It will add 216 beds, which will bring our total to more than 1,000 beds on this campus. We’ll be breaking ground on 200,000 square feet of ambulatory space.
We’re actually doing fine right now in terms of our issues from payers. There’s a good move from volume to value, the idea that we ought to pay more on the value, the outcomes we get, as opposed to the volume, the number of things we do. That’s a good movement, but right now we’re in the middle of that movement. In the middle, it’s a little unclear how to make investments. We’ve got to move to value while the reimbursement systems are lagging behind in terms of paying for volume. We share that issue with everybody. Sometimes the things that produce the most value are not the things the current payment systems recognize. They recognize us doing things — not necessarily preventing illness. We want to embrace this move to value and in fact we are, but sometimes it requires you to do things that are almost against your self-interest on the reimbursement side. We need the reimbursement systems to catch up with the quality, the direction the UF Health system is going. I think they will.