Daytona Beach gets high marks for its party atmosphere, cheap prices and beachside games in a February survey by Boston-based travel promoter Student Advantage. Spring Breakers rank "the world's most famous beach" among their four favorite destinations in the survey, published on the Internet.
Ouch! Area tourism officials might prefer to see the city in 40th place, not fourth. For years now, Daytona Beach has struggled to market itself as a getaway for vacationing families, not for rowdy college students. Is it working?
"Absolutely," says hotel industry consultant Evelyn Fine of Mid-Florida Marketing and Research. She's getting several inquiries a week these days; a few years ago, she got one every few months. "Our firm has been doing this for 20 years, and this is the first time I've seen this drastic a turnaround. They've put money behind this, and it's paying off."
Visitor profiles gathered by Fine's firm during 1998 show families and conventioneers beginning to favor Daytona Beach over other central Florida locations. People aren't coming to the region just to see the mouse and watch the stock car races. Other draws: the increasingly popular motorsports entertainment powerhouse Daytona USA and the area's first water park, Adventure Landing, which had its soft opening last fall. Visitors are taking fewer day trips to Walt Disney World, according to Fine's data, and they are doing more things in and around Daytona Beach, including taking part in trendy new ECHO-tourism (Ecological, Cultural, Heritage, Outdoor) activities in the wild wetlands and quaint towns of western Volusia County.
After a disastrous July, when wildfires closed Interstate 95 north to the state line and smoked out NASCAR's Pepsi 400 at Daytona International Speedway, the local tourism industry quickly rebounded. Responsible in no small way for the comeback: the continuing $150 million resort area spruce-up inspired by the massive, $88 million Ocean Walk development. Ocean Walk promises to attract significantly more families and convention business to the core tourist district each year. The development includes new timeshare, hotel, retail and restaurant construction projects as well as the water park, a county-funded parking garage, and a planned $45 million, 310-room expansion of the landmark Adam's Mark Resort.
Fine says that efforts to shoo away Spring Break crowds have paid off in the form of increased hotel occupancy and room rates. And prospective investors, lenders and franchisers are taking notice. Since mid 1997, turnaround experts have been buying and renovating old hotels for resale as condos and timeshares, ridding the city of its cheapest and most dilapidated room inventory in the process. Late last year, Daytona Beach had fewer than 12,000 hotel and motel rooms -- down from 16,250 a few years ago.
Businesses to Watch
Corbin-Pacific, California-based electric vehicle manufacturer, Mike Corbin, president. Promising to revolutionize personal transportation, Corbin's small, sleek, highway-legal Sparrow will be built in Daytona Beach beginning in January 2001. The company's third factory will have a staff of 120 at first and up to 500 later on.
International Speedway Corp., racing promoter and owner of Daytona International Speedway, William C. France, chairman and CEO. In 1998, ISC posted record revenues and profits -- along with a Forbes ranking among America's 200 best small companies. ISC's sixth and seventh tracks are being built in Kansas and Illinois.
People to Watch
Sarah Gurtis, general manager of Daytona USA, is lauded as a serious achiever and a tireless civic leader with a fresh approach to solving problems.
Jerry Fincke, turnaround artist who nursed two debt-crippled Volusia County resorts back to financial health in the past, is the visionary behind Daytona Beach's Ocean Walk tourist complex.
Sanford Miller, CEO, Budget Group [FT, October 1998], keeps a personal office in Daytona Beach but cites cost, culture, the airport and Florida's Sunshine Law as reasons for not relocating the rest of his car rental empire here.
Self-Image
Daytona still relishes its appellation as "The World's Most Famous Beach." Growing from 54,000 residents in 1980 to only 65,000 in 1998, the city has fallen from Florida's 16th largest city to its 26th. Even as the city tries to shed its Spring Break image for something more upscale, residents and merchants are proud of the city's small-town flavor. Preserving that atmosphere is a tricky balancing act for elected officials, however. Events like Bike Week, Race Week and the Black College Reunion bring in big bucks, but also big and sometimes unruly crowds that at times threaten to make Daytona the world's most infamous beach.
Titusville: A Comeback
Since the 1960s, Titusville's fortunes have ebbed and flowed with the tide of spending on the nation's space programs. Situated opposite the Kennedy Space Center on the western bank of the Indian River in northern Brevard County, this city of 42,000 isn't just the best place to view a shuttle launch. It's also one of the best places in the U.S. to see how government downsizing affects the lives of displaced contractors and civil servants. Roughly 10% of the city's labor force depends on the space center for its livelihood. Another 10% to 15% are indirectly dependent. "For the last half dozen years, aerospace in general has had cutbacks," says Walt Johnson, executive director of the Space Coast Development Commission. "Titusville's been in kind of a funk, I guess."
The cuts have run deep. Titusville barely had recovered from the impact of the 1986 shuttle explosion when NASA in 1995 moved to consolidate dozens of shuttle contracts into one. The loss over five years: more than 6,000 jobs. McDonnell Douglas closed its 621,000-sq.-ft. Tomahawk missile plant in 1995, then merged with Boeing, which decided not to use the vacant $20 million factory (recently marked down from $24 million) or any other site in Brevard County for construction of its new Delta IV rockets.
Watching the seat of county government move 20 miles south to Viera, an unincorporated community that sprouted seemingly overnight out of the St. Johns River marsh, has added insult to injury. Economic growth has been static, about 1% per year since 1994. That may be changing. "I think we've reached the bottom of that trough and we're on our way up," Johnson says. "We're diversifying our economy (and) a lot of things happening in Orlando make us look very good."
Suddenly, Johnson's commission is receiving calls from Disney-area companies either wanting to escape the traffic or looking for a deeper, bigger labor pool. Unemployment is as low as 2% in parts of metro Orlando, but slightly higher than 4.5% in Titusville. "They simply can't find the quality and numbers of people they need to build their widgets," says Johnson. "We present a bigger workforce, and probably better-trained, in that people here come right from the space center." The prospects (about half-a-dozen are expected to relocate this year) aren't necessarily aerospace companies. Though hesitant to name names, Johnson describes them as importers, manufacturers and distributors eager to take advantage of Titusville's proximity to Interstate 95, Port Canaveral and central Florida's three international airports. "We're really well positioned for growth," he says.
The city's retail market is getting stronger, too, with big-name merchants and restaurateurs taking another look. Titusville city leaders also see promise in a proposed high-tech monorail that would run from Orlando to Port Canaveral, crossing just south of Titusville. "I see it as a magnet attracting people," says Paul Secor, president of the Titusville Chamber of Commerce. If it does nothing else, he says, it should at least provide needed impetus to update the city's 30-year-old infrastructure.
Businesses to Watch
McCotter Ford, auto dealership, Rick McCotter III, president. A community institution long regarded as a barometer for Titusville's economy, McCotter Ford expanded in a big way last year, moving from a cramped downtown lot to a spacious site near the junction of State Road 50 and I-95.
Maglev 2000 of Florida, John Morena, co-founder. Maglev 2000 broke ground in January for a half-mile track to test magnetic levitation technology for trains of the future. The $8.5 million complex will employ 100 and, if tests are successful, could create a new local industry employing 1,500.
Astrotech Space Operations, payload processing, George Baker, president. Astrotech will more than double the size of its 80,000-sq.-ft. Titusville plant this year to accommodate an anticipated increase in rocket launches from Kennedy Space Center and Cape Canaveral Air Station through 2004.
People to Watch
O. Sam Ackley, Titusville city manager. Ackley's a change agent and the architect of Transformation Titusville, a community improvement project that inspired hundreds of citizens to band together.
Al Koller, Titusville campus provost for Brevard Community College. Koller has spearheaded projects to stimulate commerce, such as the Florida/NASA Small Business Incubation Center. In two years, the incubator achieved a 70% success rate, nurturing 17 high-tech companies and creating 66 jobs.
Self-Image
Maligned and ignored, that's the city of Titusville. "For a long-time, we've been considered the red-headed stepchild of Brevard County, and we're trying to break that image," says Walt Johnson, the north county's economic development chief. What it lacks in population and wealth, it makes up for in civic pride. No fewer than 600 townspeople volunteered for Transformation Titusville, a community improvement project now in its third year. Through the effort, the city is on its way to becoming "ultimately more refined," says transformation coordinator Ron Thorstad. "People are agreeing we can't be a tidewater, sleepy little town any more."
Palm Bay/Melbourne
Palm Bay was just a struggling farm town of about 2,800 in 1959, the year it got its first modern industry. Radiation Inc., now the mega-giant Harris Corp., touched off a population explosion. Today, Palm Bay is one of the Sunshine State's 10 fastest-growing cities and its 19th largest, with 800 miles of streets, 65 square miles of land area and build-out potential for 265,000 people.
"In Brevard County, we're No. 1, No. 1, No. 1. We're approaching 80,000 and looking at 100,000 in the next five years," says Hank Simon, president of the Palm Bay Area Chamber of Commerce. With affordable land, a young -- the median age is only 31.6 -- and highly educated workforce and one of the few commercial "clean rooms" in the eastern U.S., Palm Bay appeals to high-tech manufacturers looking to relocate.
Palm Bay has struggled to manage its rapid growth: The city went to court in the early '90s to wrest control of its utilities from General Development Corp. (GDC), the bankrupt Miami company that owned much of the residential real estate. Today, "our roads are paved and we have water and sewer going throughout the community," Simon says.
Palm Bay's closest neighbor is Melbourne, a 110-year-old city with half the land mass, about 10,000 fewer residents and the No. 24 size ranking statewide. The two are so close together that Palm Bay High School sits inside Melbourne's city limits. They shared a chamber of commerce for a brief period in the late 1980s, around the same time that Palm Bay's population overtook Melbourne's. Now Palm Bay has its own chamber once again, along with an economic development agency independent of the countywide commission. Simon prefers it that way. "We're talking about a major community that needs to have a local chamber dealing with local business issues," he says.
Meanwhile, the Melbourne-based chamber continues to work on Palm Bay's behalf when it can. Lee Bohlmann, Simon's counterpart in Melbourne, downplays the cities' longstanding rivalry. "There are no city lines or divisions when somebody sells to someone else," she says. "We in the chambers need to see things that way, too."
In Palm Bay, commerce has grown to support the burgeoning population. New developments in 1998 included two schools, two major residential subdivisions and an apartment complex, a large Ford dealership, the first phase of Bombardier's electric vehicle research and development facility, three big-name discount outlets and at least nine small high-tech companies. This year, construction will begin on three more subdivisions, more apartments, at least one more car lot, a shopping center and two hotels. The U.S. 1 corridor south of Melbourne will be designated a redevelopment district so tax revenue can be earmarked for waterfront beautification.
The growth in Melbourne is just as noticeable -- and notable, according to Bohlmann: "Last year we did 52 ribbon-cuttings for new businesses. It's a sign of confidence in the local economy."
Business to Watch
Harris Corp., Electronic Systems Division, Jon Wohler, president. Harris is counting on the recently hired Wohler to reverse a four-year sales decline -- from $1.13 billion in 1994 to $953 million last year. Income dropped from $40.2 million to $31.4 million in that period. Harris is Brevard's largest private employer with 8,500 workers; almost two-thirds work at Electronic Systems.
Person to Watch
Korean immigrant Sam Pak, owner and president of retailer Appliance Direct. With stores in Melbourne, Merritt Island and Altamonte Springs, Pak operates a total of 100,000 square feet of retail space. He has plans to open his fourth location by the end of the month in Daytona Beach and 10 more sites in six cities by 2002.
Self-Image
Central Brevard County is a playground. North Brevard? Well, there's nothing much left since county government headed south. That's how business leaders in southern Brevard County size up the economic development competition to the north. "We see ourselves as the high-tech center, the work center," says Lee Bohlmann, president of the Melbourne/Palm Bay Area Chamber of Commerce. "We see Titusville as almost part of the space center. Cocoa is for surfers and tourists, a recreation center. We're the worker bees, down here. We design the plans and do the research and development and work the late hours."
County Prospects
Flagler
Thanks in part to the rebuilding effort after last summer's wildfires, "our construction industry is just going nuts," says Richard Morris, executive director of the Flagler County Chamber of Commerce. More than 80 fires in a two-month period burned 83,000 acres and destroyed 71 homes, most of them in the populous unincorporated community of Palm Coast. Housing starts in 1998 beat records set during the real estate boom in the early 1980s, according to the area's economic developers.
The rapid population growth -- at 4.8% per year, almost three times the statewide average -- is reflected in the increasing number of small business starts. Significant commercial growth is expected in the next two years as the population swells beyond 50,000. "That seems to be somewhat of a benchmark for many of the chain stores and upscale restaurants," Morris says.
Whether government leaders are up to the challenge of promoting growth on undeveloped prime property while preserving Flagler's verdant, village-in-the-pines appeal remains to be seen. New land-clearing laws intended to mitigate fire danger haven't been welcomed. But in the aftermath of the wildfires, amid heated debate about the county's lack of preparedness, the chamber readily accepted the offer of a position on the emergency management team.
County officials learned a costly lesson about adequate transportation infrastructure in July. A countywide fire evacuation order forced residents out of their homes, into their vehicles, and onto the few narrow, smoke-shrouded highways all at once. Confusion reigned. One of the disaster's most notable outcomes: better cooperation among government agencies. University of Central Florida economist Mark Soskin says the new climate of trust may prompt unincorporated Palm Coast finally to take control of its future by putting incorporation to a vote in September. With 75% of the county's residents, Palm Coast has only one representative on the county council. "They lost all the houses," says Soskin. "They're the last city in the area that isn't a city and doesn't have a say over things."
Businesses to Watch
Palm Coast Data, the full-service subscription and product fulfillment subsidiary of St. Louis-based Dimac Direct Marketing Corp., occupies 133,000 square feet, with mail sorters moving into an additional 42,000 square feet in April.
Will bondholders who lent the county $9.7 million to purchase and upgrade Marineland in 1996 be persuaded to restructure the debt? That's the key to unlock the gates of the 61-year-old tourist attraction that defaulted on its bonds and closed in November. Marineland, the "world's first oceanarium," also is one of Florida's smallest cities. Incorporated in 1940, it has 15 residents.
Volusia
Volusia County, a major East Coast distribution center? Don't laugh. Sure, at present not many of the county's 402 manufacturers have distribution facilities. "We've lost locations because we don't have the warehousing capabilities that Lakeland and Jacksonville have," says University of Central Florida economist Mark Soskin. But Sarah Lee Corp. subsidiary PYA Monarch could help change that. Its new, 228,000-sq.-ft. food warehouse in Port Orange already is aiding recruitment efforts. "It validates our theory that you can distribute products out of Volusia County effectively," says Drew Page, executive director of Volusia County Business Development Corp.
The first six months of 1999 promise plenty of expansion and relocation activity, especially by boat builders, customer service call centers and high-performance automotive manufacturers. Look for slower growth later in the year. Smaller projects are the bread and butter of Volusia County's economy, but few of them are in the works. "We're a little bit concerned," says Page.
Business to Watch
Boston Whaler, pleasure boat manufacturer, is in the midst of its fourth expansion in southeastern Volusia County.
Brevard
Along this 72-mile stretch of Atlantic shore, high-tech or space-related pursuits account for some 50,000 jobs. That's about a quarter of the employed labor force. It's no wonder that efforts to keep the space in Space Coast dominate Brevard County's economic development efforts. The county's three major federal installations -- the Kennedy Space Center, Patrick Air Force Base and Cape Canaveral Air Station -- together pumped about $2.1 billion into the local economy in 1998. NASA's contribution to the total, $799 million, accounted for 82.7% of its statewide economic impact. Although NASA spending in Florida declined for a fifth straight year, Brevard County's share was up 4.9%.
Enterprise Florida is coordinating the promotional campaign in which two quasi-public state agencies based in Brevard, the Spaceport Florida Authority and the Technological Research and Development Authority, play key roles. The agencies are helping to fund infrastructure improvements that include a laboratory complex at the space center.
The goal is to help the county compete for commercial space business -- in particular, to guarantee that Cape Canaveral can keep its designation as the world's premier launch site once a new generation of reusable space vehicles takes to the skies.
The most promising of those is Lockheed Martin's commercial VentureStar, regarded as a replacement for the space shuttle. Florida is competing with 17 other states for VentureStar, its 2,000 jobs and its promise of $20 billion in business. In the past 18 months, the state has spent more than $1.6 million on efforts to land the project; California has spent more than five times as much. Brevard's legislative delegation has rallied around a proposal by the chairman of the state Senate commerce committee, George Kirkpatrick Jr., R-Gainesville, to establish a $30 million VentureStar fund. Gov. Jeb Bush answered with $10 million in his proposed budget. Lockheed Martin has postponed a site selection until March 2000 while it works out technical problems with the VentureStar design.
Businesses to Watch
Wuesthoff Health Systems, Bob Carman, CEO. Rockledge-based Wuesthoff is pursuing a $120 million antitrust lawsuit against competitor Health First, which runs three of the county's five hospitals [Florida Trend, March 1999]. The charge: Health First offers discounts to insurers that cut ties with Wuesthoff. Wuesthoff's latest legal strategy: a move from federal court to Brevard County circuit court, where it hopes to find a more sympathetic jury.
Premier Cruises, Bruce Nierenberg, founder and president. Back at the helm after eight years, Nierenberg has a plan to solve the Miami cruise line's money problems by docking Premier's headquarters right back where it started in 1984 -- at Port Canaveral -- this month.
Premier will concentrate on the central Florida tourism market and possibly add another ship. Canaveral already harbors Premier's most profitable ship, the 1,850-passenger Big Red Boat.