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TAMPA BAY: Battling a Misperception

 Tampa Bay

In Tampa Bay, business leaders say the economy remains fairly strong; their biggest challenge is battling the perception that it’s not. Aside from some very real problems associated with the housing slowdown, economic development officials from each of the region’s six counties say Tampa Bay’s economy is diverse and positioned to stay afloat during what could be a difficult year. They point to the growing retail, manufacturing and high-tech sectors as proof.

Sean Belanger
Business View (Clearwater) Sean Belanger
» Sean Belanger, CEO of CSDVRS, which provides communication services to deaf people, is wondering if he made the right decision in moving his company from South Dakota to Clearwater. “The state of Florida has nice incentives for companies to move here, but it has a terrible disincentive for individuals to move here,” he says, referring to the higher property taxes his employees have to pay. [Photo: Mark Wemple]

“We’re still seeing job growth occurring in this region, just not at the torrid pace we saw two, three and four years ago, when all sectors of the economy were running at full speed,” says Stuart Rogel, president and CEO of the Tampa Bay Partnership. “For the Tampa Bay region, the real key will be when we get this residential market back into some sort of balance. Right now, it’s not in balance, and that’s what’s holding the economy back.”

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When Kim Scheeler, president and CEO of the Greater Tampa Chamber of Commerce, meets with business people, he says he hears “an interesting mix” of comments about the economy. “They say, ‘well, our business is still doing pretty well, but we’re a little anxious.’ From time to time, we have to remind people that what they read nationally is not necessarily applying to us here.”

The region and the state still face serious challenges beyond housing. Sean Belanger, a CEO whose high-tech firm recently relocated from South Dakota to Clearwater, says property tax inequities have him second-guessing the move. “The reason we’re not happy with Florida is I’ve moved over 30 people here, and they are finding that their property taxes are higher than their neighbors’,” says Belanger, whose company, CSDVRS, provides communication services to deaf people. “Why should they pay $6,000 or $10,000 a year in property taxes while their neighbor, with the same house, is paying $1,000 or $2,000? It’s really, really making people angry. The state of Florida has nice incentives for companies to move here, but it has a terrible disincentive for individuals to move here.”

POPULATION TREND

Each of Tampa Bay’s counties continues to grow, although four of the six are growing at a slightly slower pace than past years. The region’s most populated counties grew the slowest on a percentage basis, while still taking in more new residents in absolute numbers: Hillsborough was up 2.2%, slightly higher than the state average of 2.07%, and Pinellas just grew .3%. The only counties that grew at a faster pace in 2004-08, compared to 2003-07, were Citrus and Polk.

Matt Silverman
Rays of Hope (St. Petersburg) Matt Silverman
» Tampa Bay Rays baseball team owner Stuart Sternberg writes
the checks, Executive Vice President Andrew Friedman picks the players and Joe Maddon manages the team, but President Matt Silverman has been the local face on the team’s efforts to alter St. Petersburg’s downtown. Silverman is lobbying for a $450-million waterfront ballpark. The Rays have promised $150 million toward the project, with some of the rest of the money coming from the sale of the 85-acre Tropicana Field site to a developer who would replace the dome with homes, stores, restaurants and offices. [Photo: Mark Wemple]

TAMPA / HILLSBOROUGH COUNTY

DOWNTOWN
CONSTRUCTION / TAMPA

2,282 — Number of residential units
under construction
3,336 — Number of residential units proposed
$405 — Average sales price per square foot
$1.30 — Average monthly apartment rental rate per square foot

Source: Tampa Downtown Partnership 2007

For years, Hillsborough economic development officials have preached the value of a diversified economy. This year, they’ll find out if the economy is diversified enough. Kim Scheeler, president and CEO of the Greater Tampa Chamber of Commerce, says the strength of the county’s high-tech and manufacturing sectors are helping offset the weak residential market. “We’ve got a great group of medical-device manufacturers in the area,” Scheeler says. “We still have good businesses in high-level financial services. We still have some call centers.” The housing slowdown might actually be having one positive consequence: “It’s going to bring the affordability back in line a little bit,” he says. “It was getting a little out of whack for a while.”

LEADERS

» Judy Genshaft, president of the University of South Florida and a past chairwoman of the Tampa Bay Partnership, has helped build USF into a major player in high tech and medical research. This year, she’ll have to deal with funding cuts from the state.

» Mayor Pam Iorio will oversee ongoing efforts to reshape downtown Tampa. The city is developing the Curtis Hixon Downtown Waterfront Park along the Hillsborough River. The park, apart from green space, will include the proposed new Tampa Museum of Art and the Glacer Children’s Museum. Iorio is determined to trim the city’s budget without cutting into essential services.

ST. PETERSBURG

David Goodwin, St. Petersburg’s economic development director, sees the city’s rising office vacancy rate as a good thing.

OFFICE SPACE /
ST. PETERSBURG

Year
Downtown vacancy
2005 5.1%
2006 7.8%
2007 11.9%
Source: Colliers Arnold of Tampa Bay

“There used to be a shortage,” he says. “Now, we have some product we can fill, and that’s an opportunity to allow existing companies to expand and new companies to move in and bring some new blood into the economy.” He says the vacancy rate is up mainly due to Progress Energy leaving its old building for a new one a couple of blocks away. Goodwin says the city is weathering the housing/condominium slowdown. The 400 Beach Drive condo project downtown marked its grand opening this year, and the sail-like Signature Place project just blocks away is rising, with 80% of its more than 200 units already sold.
WORKFORCE / ST. PETERSBURG

16% — Percentage of St. Petersburg workers employed in finance, insurance and real estate
12.3 — Percentage of St. Petersburg workers employed in health services
9.5% — Percentage of St. Petersburg workers employed in manufacturing
3.1% — Unemployment rate

Source: Bureau of Labor Statistics

LEADER

» St. Petersburg Mayor Rick Baker keeps championing the city’s economic potential. Midtown will be a focus this year, with construction expected to start on the 166,000-sq.-ft., $31-million Job Corps Center.

Peter Betzer
BRINGING RESEARCH
(St. Petersburg)
Peter Betzer

» Peter Betzer, the one-time dean of the University of South Florida’s College of Marine Science, is the new president of the St. Petersburg Downtown Partnership. Betzer helped bring SRI International to St. Petersburg, and he hopes to play a role this year in attracting other research firms to the city. Another priority, he says, is working with Pinellas County school officials to create affordable housing for teachers. One idea he has is building faculty housing on vacant school district land.
[Photo: Mark Wemple]


LAKELAND / POLK COUNTY

HOUSING TREND /
LAKELAND-WINTER HAVEN

Home sales
(median price)
Condo sales
(median price)
2006 5,160 ($176,200) 272 ($117,900)
2007 3,340 ($168,900) 170 ($126,700)
Source: Florida Association of Realtors and the University of Florida Real Estate Research Center
Industrial development continues to lift Polk County’s economy. In 2007, Eastern Metal Supply moved into a new 160,000-sq.-ft. facility on Drane Field Road. The Pepsi Bottling Group signed a lease for 109,200 square feet in the Interstate Commerce Park. Sun Publications has opened a 37,635-sq.-ft. headquarters and manufacturing facility at FirstPark@Bridgewater.

“Because residential is in the tank, everyone assumes it’s that way across the board, that it’s translating into office, commercial and industrial,” says Claudia Tritton, head of real estate and prospect development at the Lakeland Economic Development Council. “But that hasn’t been the case for us.”

On the housing side, permits are down, from 8,070 in 2005 to 1,991 in 2007, says Tom Patton, executive director of the Central Florida Development Council of Polk County. “That’s huge,” he says. “But while the residential impact has fallen off, our commercial impact continues to grow, and our tourism is up 58% in the last five years.”

LEADERS

» Polk leaders want 2008 to be the year that the state starts allocating money to start construction on the proposed USF-Lakeland campus. Headed up by Marshall Goodman, the “polytechnic” would be a “catalyst for high-tech growth for decades to come,” says Jim DeGennaro, a senior business development representative for the Central Florida Development Council of Polk County. The facility, proposed for the intersection of Interstate 4 and the Polk Parkway, already has $10 million in commitments from Lakeland and Polk County, but it still needs millions more in state funding. State Sen. J.D. Alexander, a Winter Haven Republican, is leading that charge. “That’s our big push this year,” Tritton says. “We’re really focusing on that campus.”

CLEARWATER

The regionwide condominium slowdown hasn’t stopped several major Clearwater projects from going forward. “Water’s Edge by Opus South is under construction and on schedule,” says Geri Campos Lopez, Clearwater’s director of economic development and housing. “Station Square Condos are under construction and on schedule.” The slowdown has actually created opportunity in other areas. Clearwater is working with Miles Development Partners, for example, to build rental housing on a city-owned brownfields site that was once targeted for condos. Enchantment, a $180-million butterfly-shaped condo tower proposed for Clearwater Beach, is moving forward after plans were redesigned.

LEADER

» J. Michael Cheezum, CEO of JMC Communities, has shown confidence in the Clearwater market, opening the Sandpearl Resort and Sandpearl Residences next door. JMC is also building Ovation, a downtown St. Petersburg high-rise expected to be completed next year. “The first thing to remember is the big picture,” Cheezum says. “We’re still blessed with an incredible quality of life in our region. We still believe very strongly in the fundamentals of our area.”

PINELLAS COUNTY

SCHOOL ENROLLMENT /
PINELLAS COUNTY

With the region’s slowest growth, Pinellas was the only county in Tampa Bay that had fewer students enrolled in public schools in 2007-08 than in 2006-07.
Year Enrollment
2006-07 109,292
2007-08 107,163
Source: Florida Department of Education
Other sectors are helping Pinellas County survive the residential down cycle. Manufacturing, for example, is strong, says Mike Meidell, director of Pinellas County Economic Development. “Companies involved in homeland security, medical devices, defense, aviation, they’re looking for workers,” he says. “Even within one sector of the economy, there are parts that are doing well and parts that are not doing well.”

LEADERS

» At the Pinellas Technical Education Centers, new COO Dennis Jauch, a former executive at General Dynamics, is helping to shape programs to ensure that students learn the specific skills that Pinellas County businesses are demanding.

» Pinellas County Commissioner Kenneth Welch is pressing for solutions to what he sees as the county’s affordable-housing crisis. Earlier this year, commissioners approved zoning changes to allow a 55-unit affordable housing complex to be built near Seminole. The county is also working to impose a new ordinance that will require developers to include affordable units in large housing developments.

PASCO COUNTY

As she recruits businesses to Pasco County, Mary Jane Stanley, president and CEO of the Pasco Economic Development Council, keeps hearing company representatives say they want to wait until after the November presidential election before making any major decisions. “They want to see what’s going to happen with the national economy,” she says. Overall, she says, Pasco’s economy is strong. Housing is down, but other sectors are up. “We’ve got three megamalls under construction right now,” she says. “There’s a lot of expansion. There’s a lot of construction still going on.”
Pasco County commissioners have approved plans for a $7.9-million, 5,000-seat Pasco Tennis Stadium to be built near the Saddlebrook Resort in Wesley Chapel.

LEADER

» W. Stewart Gibbons, vice president and general manager of Terrabrook, the real estate firm developing the new town of Connerton in Pasco County, expects challenging times into 2009. He thinks businesses must pay “keen attention” to the fundamentals to thrive. “We’re building a $7-million recreational complex in Connerton that we stated in the fourth quarter of last year, and we plan to open by the middle of this year. That’s a huge commitment in these times.”

HERNANDO COUNTY

Anything housing-related is suffering, but “manufacturing is not in the doldrums,” says Michael McHugh, director Hernando County Office of Business Development. “We had like nine major business expansions last year and nine or 10 relocations.” He thinks the federal economic stimulus plan will help: “Hopefully, it will spur people to invest in their businesses.”

LEADER

» Business growth and expansion is still possible despite the shaky economy, says John Petrick, president of Brooksville’s American Aviation, a growing business that repairs, refurbishes, charters and sells small aircraft. “I know the economy isn’t rosy for a lot of people right now, but I’m not pessimistic.”

CITRUS COUNTY

Randy Welker, the Citrus County Economic Development Council’s executive director, is confident the county will attract high-tech industry and high-paying jobs. It just might not happen this year. “Our economy was built on home building and growth, and there is none,” he says. “The economy is hurting. Now, the other side of it is we have several new projects that are starting that are both governmental and energy-related. If we can get through this next year and a half, we’ll be fine.”

LEADERS

» Terry Atchley, executive vice president of Clear Springs, a development and agribusiness company, says the Bartow-based firm is bringing a new industry to Citrus County: Integrated Alligator Industries will raise the animals, process the hides and create high-end wallets, belts, purses and other products. Set to open in May, the plant will employ 15 with plans for 50 more.

» Jeffrey Lyash, president and CEO of Progress Energy Florida, is overseeing a $1-billion project to install emission-reducing scrubbers at two of Progress’ four Crystal River coal-fired plants. The company is also moving forward on plans to build a nuclear plant just across the border in Levy County.