Northwest

The Northwest region’s cities and counties, long dependent on defense spending and tourism, have revamped and energized their development strategies to aggressively pursue across-the-board industry diversification. This determined and sustained effort has paid off handsomely, especially in the region’s manufacturing, technology, cybersecurity, life sciences, aerospace and financial services sectors.

 

From Tallahassee to Panama City and Pensacola, Northwest Florida’s economy has long been anchored in the bedrock of federal and state spending and dollars generated by the tourism industry.

Annual Defense Department spending at the region’s six military bases tops

$22 billion annually. Tourism spending annually exceeds $15 billion, accounting for nearly a third of the region’s economy, and is its largest employer.

And state spending in the Tallahassee region produces thousands of civil service and academic jobs that have a major economic impact on Leon and surrounding counties.

While those three sectors continue to form the economic backbone of the 16-county Northwest region, over the past decade its cities and counties — and their respective economic development organizations — have revamped and energized their development strategies to aggressively pursue across-the-board industry diversification.

Strategic Shift

And that strategic shift has paid off in spectacular fashion, especially in the region’s manufacturing, technology, cybersecurity, life sciences, aerospace and financial services sectors.

The list of success stories in recent years is long and varied, but some important milestones deserving mention include Pensacola’s $1 billion Navy Federal Credit Union’s campus with more than 10,000 employees; ST Engineering’s rapidly growing commercial jet aircraft maintenance facilities at Pensacola International Airport; Eastern Shipbuilding, Panama City’s largest civilian employer; and Amazon’s massive distribution center in Tallahassee which opened in 2023.

Manufacturing

The economic sector showing the most robust and continued growth is the 800 large-and-small manufacturers in the region that support some 56,000 jobs.

What’s more, the 16-county region’s workforce is fed by a steady stream of talent coming out of Florida State University, University of West Florida, several state and technical colleges and some 3,000 separating military personnel annually, a trained workforce that transitions easily into aviation and aerospace industry jobs.

Tech / Research / Aviation

The Northwest region also has enjoyed a proliferation of successful IT startups that include software designers Beast Code and Bit-Wizards in Fort Walton Beach.

And there’s the advanced research facilities of the Florida Institute for Human and Machine Cognition in Pensacola, a nationally recognized AI, robotics and human performance think tank with over 200 scientists.

The region’s transportation sector, typically a good barometer of economic health, is booming. Airports in Pensacola, Destin-Fort Walton, Panama City and Tallahassee are seeing year-over-year double-digit growth in passenger counts.

All four airports are embarking on major capital expansions to accommodate passenger growth and new commercial air carriers servicing the Northwest market.

Despite the progress made over the past decade, the Northwest region faces many of the same challenges confronting the Florida Economic Development Council’s seven other regions.

Those issues include keeping up with demand for workforce housing, ensuring a steady pool of talent and aggressive competition from other Southeastern states with more lucrative incentives.

Investment capital

Access to investment capital is another challenge in the Northwest Region.

“We do not have robust venture assets in Northwest Florida,” says Nathan Sparks, executive director of One Okaloosa EDC and FEDC’s Northwest regional director. “I think we’re emerging, is probably the best way to say it. But that is an area that as we continue to mature our ecosystems surrounding technology, defense and manufacturing, certainly we believe that our access to venture assets will grow.”

Triumph Gulf Coast

While not exactly a “venture capital” fund, the enormous economic impact that Triumph Gulf Coast is having on Northwest Florida is a major resource and game changer.

Triumph was created by the Florida Legislature to distribute $1.5 billion in funds recovered by the state from the Deepwater Horizon/BP oil spill that devastated the economies of the region’s eight saltwater counties in 2010.

Triumph’s fund distributions, which average some $200 million annually, are strictly earmarked for support in three key areas: infrastructure such as buildings, roadways, rail spurs, and utilities; workforce development and industry-driven training programs; and research that supports and accelerates manufacturing capabilities.

“Triumph essentially is a venture capital fund that is changing and transforming Northwest Florida in a variety of ways in workforce development via investing in strategic industries,” says Sparks.

Since its first grant award of $10 million in 2018, which funded an expansion of the Port Panama City, Triumph has awarded more than $605 million to 67 projects and counting. The annual distribution of Triumph funds will continue through 2033.

Among the milestones to date are:

More than $254 million in infrastructure investments including expansions of two seaports and a major highway bypass to support military missions.

$295 million in education workforce training, including facilities and faculty for airframe, aircraft maintenance and pilot training; a joint venture with the University of Florida and a local school district for development and delivery of artificial intelligence instruction, and funding for four unmanned systems drone training programs linked to the region’s K-12 school districts.

Funding for an expansive nurse training program that is expected to add 4,000 new nurses to the Northwest health care workforce and provide $315 million of additional household income to the Triumph region within the next 10 years.

Workforce Training

Of all the major initiatives underway, workforce training is seen as the most critical to sustaining the region’s economic growth and pursuit of industry diversity.

And it is an initiative that is showing the most success due in large part to the rapid stand up of training courses and certification programs at the regions’ technical and state colleges.

“I think through Triumph we’ve been able to do a lot related to workforce pipeline,” says Erica Grancagnolo, director of economic development for the City of Pensacola. “Specific to our companies in Pensacola, our colleges and universities have been extraordinarily responsive to the needs of workforce training and development programs. I think one of the first things we do when we talk to companies is to connect them to our colleges and universities.”

For example, when ST Engineering approached the City of Pensacola about establishing a large aircraft maintenance facility on airport property, Pensacola State College (PSC) almost immediately began working closely with the company to stand up workforce training programs.

As a result, PSC quickly established the Career Certificate in Aviation Airframe Mechanics program that prepares students with the skills necessary to inspect, service, repair, and overhaul commercial aircraft.

Northwest Florida State College in Panama City also recently established associate degrees in professional pilot technology, unmanned vehicle systems operations and aviation airframe and powerplant mechanics.

The success of the Northwest region’s determined and targeted investment in workforce training was confirmed recently by an announcement from LIFT, a national advanced materials manufacturer, of plans to build a technology accelerator and talent development showcase facility in the Pensacola community.

The $21 million project, to be located on Pensacola State College’s campus, is made possible through economic development partnerships and collaboration with PSC, Space Florida and Triumph Gulf Coast which awarded LIFT a $6 million grant.

As part of the agreement with Escambia County and the City of Pensacola, LIFT will employ 36 people in the facility over the next five years with an average wage of $113,000 and generate an estimated $32 million in new federal and industry research, says Nigel Francis, CEO and executive director of LIFT.

Affordable Housing

While significant progress is being made in workforce training, conversely, affordable/workforce housing remains a challenge facing the Northwest region.

The legislation creating Triumph does not authorize it to directly fund affordable housing, but it can fund general purpose community infrastructure improvements that can be accessed by affordable housing projects and by extension lower the cost of housing construction.

“Walton County’s biggest problem is the lack of affordable housing. So, anytime we’re looking at these workforce housing projects throughout the region, we can look for and find areas that we can add housing that attaches to Triumph-funded infrastructure expansion,” says Uriah Matthews, executive director, Walton County Economic Development Alliance.

“I think there’s a very good reason that Triumph should be thinking about workforce housing,” he says. “We’re all in the business of creating jobs for our homesteads. We’re employing people here in Walton County that are living in Alabama. And when our workers’ homesteads aren’t in our community, that is a big problem because we’re losing much of the value of that job and not importing that wealth to our community anymore,” Matthews adds.

To tackle that problem the region’s cities are becoming more creative in looking for opportunities to work with workforce housing developers to donate vacant or under-utilized “infill” properties for workforce housing projects.

“From the City of Pensacola’s perspective, we’re working with different entities to form creative partnerships with homeowner associations and the Community Land Trust to donate surplus city properties within the downtown core areas and develop affordable housing,” says Grancagnolo.

The city is also working with Pensacola-based Baptist Health Care to donate their 51-acre property that is the site of their former hospital. That property is targeted for affordable housing developments.

“We’re really working hard to find innovative avenues to address the need for workforce housing and increasing access to affordable housing across all income levels,” says Grancagnolo. “We’re also partnering with an affordable housing developer to go after funding specifically for military housing. So, we’re going about this workforce housing challenge in a lot of different and creative ways.”