2020 Economic Outlook
Northeast Florida - Jacksonville's downtown, affordable housing, workforce
- Downtown: A recent decision by the First Baptist Church to try to sell most of its property downtown presents both opportunity and risk for Jacksonville’s urban renewal efforts. The church, which owns nearly 14 acres in the Northbank area downtown, will put 12 acres on the market as it consolidates from 10 blocks to one amid declining membership and rising maintenance costs. City officials say the church property could be suitable for a mix of residential, retail, office and educational space, including a college campus or medical innovation hub. What they don’t want is for the property to go unused and add to vacancies in the core of Northbank, where one out of seven buildings across 630 acres lies empty, according to a 2017 study commissioned by the Jessie Ball duPont Fund.
Forecast: FINANCIAL SERVICES
Brian Wolfburg, President / CEO
VyStar Credit Union, Jacksonville
“We’re going to end 2019 having grown our membership by 9% to 10%, our loan portfolio by 15% and our deposits by 17%. It’s going to be more of the same for us in 2020. We’re moving into new parts of the state, and we’re doing mergers and acquisitions. Even if the national economy starts to slow a little bit, I think Northeast Florida will continue to grow at a very nice pace. We have some really great projects that are putting shovels in the ground, businesses that have moved to Northeast Florida and population growth — all very positive things. I can think of five to 10 very large projects that should carry us through the coming years. We have everything from JEA and its potential sale, in addition to what it’s doing around a new headquarters, to the recent announcement by FIS that it will build a new headquarters and create 500 jobs, to GuideWell’s announcement of additional jobs here. There’s also the Lot J development, the redevelopment of the Barnett and Laura Street Trio buildings downtown and redevelopment of the Landing space, as well as what’s going on at the Southbank with Peter Rummell and Mike Munz’s District. You take all that and the potential for some improvements to the infrastructure of our school system and Groundwork Jacksonville’s Emerald Trail and you just have so much economic might moving in one direction, that even if the economy starts to slow a little bit, I think that Northeast Florida will continue at a very nice pace.”
Joe York, President
AT&T Florida, Puerto Rico & U.S. Virgin Islands, Jacksonville
“One highlight for 2020 will be the transformation from LTE to 5G. We already have 5G in a couple spots, but we don’t have many 5G phones yet. When you think about it, you can’t have driverless cars until you get to nearly ubiquitous 5G. Artificial intelligence, virtual reality, augmented mixed reality — all those things will be the most substantial technological transformation we’ve seen, and it has to happen with a baseline of 5G. We’re going to invest heavily to make the switch from LTE to 5G as fast as we possibly can. Right now, we’re deploying it in cities that have good policies, where we can work in a somewhat expedited manner to build this out. We already have 5G in Jacksonville and Orlando, and we’re going to be in several other cities in 2020.”
Forecast: HOME SALES
Christy Budnick, President / CEO
Berkshire Hathaway Homeservices Florida Realty, Jacksonville
“The past year has been what we’d consider a little more normal in terms of price increases for homes. In prior years, we were seeing price appreciation of anywhere from 5% to 10%. This past year, it’s been more along the lines of 3% to 4%. It’s a stable market, and that’s what we’re forecasting into 2020. Our closed sales are up 5.3% over last year. Where we have an issue is inventory. New listings coming on to the market are down by about 0.2%. There isn’t much inventory to choose from. However, one bright spot in our market is builders have really increased their production.
“We draw people from South Florida, which is our No. 1 market for transferees, but we’re also getting a lot more people from New York, Connecticut and New Jersey, where they’ve been negatively impacted by the tax changes. We’re seeing a net increase of 86 new people a day in Northeast Florida.”
Forecast: RESIDENTIAL CONSTRUCTION
Bill Garrison, Executive Officer
Northeast Florida Builders Association, Jacksonville
“For the first 10 months of 2019, the number of permits for new-construction singlefamily homes in Northeast Florida was up 3.7% over the same time period in 2018. In 2011, there were 3,151 permits pulled in our region. 2011 was the bottom, and we’ve slowly rebounded to where we are now, which is about 10,000 permits a year. That’s a healthy number that we can sustain. The chief economist for the National Association of Home Builders was here last summer, and his prediction was that we’re at least 24 months away from any sort of significant correction. I would agree with that, just based on the activity I see and the confidence I hear from builders. We’re pulling more permits than we pulled last year, yet the inventory of available homes is declining. We’re building more homes and still can’t keep up with demand.”
Forecast: HEALTH CARE
Jason Barrett, President / CEO
Flagler Health+, St. Augustine
“You’re going to see continued pressure on health care providers, payers and the pharmaceutical industry to reduce costs and address the affordability crisis. We are committed to value, so much so that we’re publishing the costs of care, not in terms of our costs, but what it means to the payer and ultimately the employer. We should be able to compete on price without compromising quality. When we talk about Medicare for all, I know that 60 million Americans are happy with their employer-sponsored coverage. What they’re concerned about is growing out-of-pocket costs, which have increased by 50% nationally over the last five years, according to Willis Towers Watson. There has to be greater visibility into the costs, and there has to be a greater expectation on health systems to be partners in reducing costs, not monopolies driving up costs. In 2020, you’re going to see us introduce digital offerings to help provide care in a way that people want, meaning convenient, accessible, affordable and personalized.”
Jacksonville / Duval County
- JEA: The city is embroiled in a discussion of whether to privatize its municipally owned electric and water utility. In October, more than a dozen companies submitted bids to buy JEA, including Duke Energy; Emera, which owns Tampa Electric; and FPL parent NextEra Energy. Under the city’s terms, the purchase price would have to be at least $3 billion, wipe out JEA’s debt and some unfunded pension liability, provide $400 million in customer rebates and pay $165 million in employee retention bonuses. JEA says it could have a deal by March, but not everyone thinks JEA should be sold. The city council, which must approve any sale, recently set aside $1.8 million to hire outside legal help to assess the situation. One councilman has called for the resignation of Aaron Zahn, JEA’s managing director and CEO.
- School Funding: Duval’s aging schools need substantial repairs and upgrades, but there’s uncertainty about how local government will pay for them. The school district wants to levy a 15-year, half-cent sales tax to finance nearly $2 billion in improvements, but city council members have been reluctant to put the requested sales-tax referendum to a vote by residents. Among the sticking points is how much of the sales tax revenue would be apportioned to the county’s privately run charter schools.
Gainesville / Alachua County
- Electric Scooters: Last fall, Gainesville officials proposed a one-year pilot program to test the viability of electric scooter sharing citywide. The pilot would allow three scooter-sharing companies to rent out up to 400 scooters each. Scooter riders could go on city streets and sidewalks, and in parts of UF’s campus, but they’d be limited to 15 mph and would have a nightly curfew.
- Though affordable and eco-friendly, scooters also bring concerns over pedestrian safety and rider injuries, as evidenced by the nearly 130 scooter-related accidents recently reported during a six-month period in Fort Lauderdale and Miami.
- “As a college town, we’ve gotten a lot of interest from vendors over the past year,” says Malisa McCreedy, the city’s director of mobility. “We’re trying to ensure we’re putting some parameters around how and where they operate.”
- The pilot is still subject to city council approval. If given the go-ahead, scooters could become part of Gainesville’s transit landscape by the summer.
St. Johns County
- Affordable Housing: As pricey homes proliferate in St. Johns County, cheaper housing options have not kept pace, forcing workers with modest-paying jobs to live farther away. The typical hospitality worker, for example, would have to spend well over half of a paycheck to rent a median-priced apartment in the county, according to data from the Shimberg Center for Housing Studies at the University of Florida.
- “The hardest part is the number of people relocating here to Florida with more resources than the local workforce. They’re pricing us out of our own neighborhoods,” says Bill Lazar, executive director of the St. Johns Housing Partnership, a nonprofit group that helps low-income people find, repair and rent or buy housing.
- The group has a $1-million revolving line of credit to build rental units in St. Johns — where the median household income is $73,640. Once completed, the three-bedroom, one-bath units will be rented out for about $900 a month, substantially less than the county’s median rent of about $1,200, Lazar says.
- Construction Labor: Even the county’s construction workers — relatively well paid, with an average hourly wage of $22.39 — struggle to afford housing. Employers say it’s getting harder to find plumbers, electricians, carpenters and other workers for a growing number of projects. “Subcontractors are having to pay more to attract labor, which drives up the cost of construction, and the inability to find enough labor makes things go slower,” says Bill Garrison, executive officer of the Northeast Florida Builders Association. “What used to take three or four months to build now takes five or six months.” On the bright side, he says, “construction trades are regaining social and financial value” and that plumbers and electricians are “making a lot more money.”
>Ocala / Marion County
- Transportation Planning: After defeating a proposed highway between Tampa and Jacksonville, business and community leaders in Marion County are keeping tabs on the state’s efforts to build three new toll roads in Florida. In 2018, the Ocala/Marion County Chamber and Economic Partnership (CEP) successfully fought the state’s Coastal Connector project because it would have cut through some of Marion’s largest and most prominent horse farms. Marion, which bills itself as the world’s horse capital, has an equine industry valued at more than $1 billion.
- “We understand that we have to be able to move people from point A to point B. But we need to be conscious of where we’re doing that,” says CEP President and CEO Kevin Sheilley. “Let’s not cut off our nose to spite our face.” One of the three proposed new toll roads would be a 30-mile extension of Florida’s Turnpike from where it connects to I-75 near Wildwood, south of Ocala, to an expanded Suncoast Parkway stretching from the Tampa area to the Georgia line.
- Jacksonville-based Fidelity National Information Services will build a larger headquarters downtown and create 500 new jobs under a $29.9-million incentives deal with city and state officials. FIS, which provides technology to the financial services sector, agreed to retain its 1,216-member Jacksonville workforce and create the new jobs by 2029 at an average annual wage of $85,000. It plans to buy a 4½ -acre site, now a Florida Blue parking lot, and begin building the 12-story, $145-million headquarters this year. Construction is to be completed in 2022. To make the deal happen, city leaders worked with GuideWell, Florida Blue’s parent company, to provide land for a parking garage. The city will give GuideWell two acres that now serve as a retention pond and contribute $3.5 million toward the project’s estimated cost of $22.5 million. GuideWell says the 869-space garage will allow it to add 750 contract and full-time employees downtown, increasing its Riverside Avenue workforce to 1,750. The garage will be open to the public on weeknights and during weekends.
- AdventHealth Ocala will spend $8 million to renovate its maternity ward.
- Ascension St. Vincent’s plans to build a second free-standing emergency room in Jacksonville.
- Memorial Hospital of Jacksonville is an official sponsor of University of North Florida athletics.
- Flagler Health+ partnered with Publix to open tele-health clinics at the grocer’s St. Johns County stores.
- The University of North Florida is seeking $12 million in state funds to create a program called MedNEX to prepare students for health care jobs.
- Mark Dawkins will step down as dean of UNF’s Coggin College of Business and return to the school’s faculty at the end of the academic year. A search for a new dean is under way. The University of Florida began selling beer and wine at men’s basketball games.
- Jacksonville University named Christine Sapienza provost, a position she had held on an interim basis since May 2018.
- Wichita, Kansas-based WaterWalk plans to develop a 153-unit extended stay hotel in Jacksonville’s Southside area.
- K9s for Warriors, which pairs service dogs with veterans suffering from PTSD, brain injury or trauma, received a donation of 5½ acres on which it plans to build a larger canine training center near its Nocatee headquarters. DDI President Jed Davis and PARC Group Chairman Roger O’Steen donated the land. The non-profit says the new facility will allow it to take in 400 more dogs a year.
- Christina Parrish Stone, formerly executive director of Hemming Park in Jacksonville, joined the St. Johns Cultural Council as executive director.
- Jacksonville-based ARC Group, the parent company of Dick’s Wings, bought restaurant chain WingHouse Bar & Grill for $18 million. Dick’s Wings has 23 restaurants in Florida and Georgia; WingHouse has 24 restaurants in Florida.
- Jacksonville-based Southeastern Grocers, parent of Bi-Lo and Winn-Dixie, began selling CBD products at 152 stores in Florida and South Carolina.
- Target will install rooftop solar panels at its store in St. Johns Town Center.
- Northwest Jacksonville Community Development is building the second phase of North Point Town Center. Plans call for a grocery store, transit hub and retail.
- Arlington Toyota will overhaul its dealership on Atlantic Boulevard with a new showroom and renovated space for service, parts and online sales.
- Jacksonville developer Curtis Hart plans to launch Anabelle Island, a subdivision with 773 single-family homes on 364 acres in Clay County. Construction is to begin in the first quarter.
- Kozman Realty bought a vacant six-story building that once housed the FBI in Arlington for $1.2 million from Miami-based Bnei Zipora.
- Jacksonville-based Helow Properties is preparing about 2,200 undeveloped acres in northwest St. Johns County for a master-planned community with up to 3,500 homes and 2.5 million square feet of non-residential space.
- D.R. Horton will build a 190-unit townhome development called Rivergate near Regency Square Mall in Jacksonville.
- A subsidiary of Jacksonville-based Chance Partners will develop River City on Main, a 234-unit apartment complex in north Jacksonville.
- Beverage distributor Champion Brands opened a $7-million, 36,000-sq.- ft. headquarters in Jacksonville. The company employs about 320.
Read more in Florida Trend's January issue.
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