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Downtown redevelopment remains a priority in Northeast Florida

Forecast | CONSTRUCTION

JIM O’LEARY
President/CEO, Haskell, Jacksonville

“I anticipate a steady economy in 2019, even slight expansion. However, in 2020 things may change. In recent months, President Trump’s cut in the corporate tax rate and regulation reform have contributed to considerable manufacturing expansion. But trade volatility and tariffs between the world’s largest economies will certainly have a cooling effect over time. Nonetheless, we see growth opportunities in the core markets we serve, including food and beverage, water treatment, health care, government and manufacturing. A tight labor market and rising wages remain our greatest concern, but this has us laser-focused on a workforce development plan that supports our vision for growth.”

Forecast | NON-PROFIT

NINA WATERS

President, Community Foundation for Northeast Florida, Jacksonville

“Like other charities, we had a significant pick up in donations in late 2017 with the new tax law. Some people accelerated or bunched their charitable giving at the end of 2017 and then sat out 2018. That means potentially 2019 could be a better year for charitable giving. When the economy is strong, donors have appreciated assets and additional dollars they can give to non-profits. There’s a fair amount of optimism about the economy, but I think it’s balanced by questions about when we might see another recession. It’s equal amounts optimism and pessimism.”

Forecast | RETAIL

DON FOX
CEO, Firehouse Subs, Jacksonville

“We have 1,144 locations in 45 states, Puerto Rico and Canada. In 2019, we expect to develop between 75 and 100 restaurants. The biggest variable is availability of real estate. One of the downsides of a really robust economy is that rents typically go up. Yes, there’s new commercial development, but it can be very high-priced. There are some areas where rents have really gotten prohibitive for a business like ours. Florida historically has been a very strong market for us. In Florida, we’re looking at an 8% increase in same-store sales for 2018. Tourism has been terrific, and it’s been a great business environment. If the overall economy continues to function as it has, I would expect that to continue.”

Forecast | HOME BUILDING

ED BURR
CEO, GreenPointe Holdings, Jacksonville

“We have experienced a slowdown in sales in the last 60 days. I think uncertainty surrounding the elections and interest rate pressure were the cause of that. We’re looking for things to level off and growth to resume in 2019. Throughout Florida, we have 14 different communities that are in some state of development or completion. We’re fairly bullish on Florida. Household formations continue to increase as millennials enter the housing market — and they will enter the market once they get married and have kids. Florida also continues to enjoy growth in retirement housing, and we’re still a strong job-growth state.”

Forecast | FINANCIAL SERVICES

JEFF CAMARDA
CEO, Camarda Wealth, Fleming Island

“I don’t think we’re looking at a recession anytime soon. U.S. stocks, even at today’s levels, are still overvalued by most metrics. Our advice to our clients is not to get out of stocks because there’s really nowhere else to go — bonds also are in a downtrend. We think you should look for deep-value opportunities where you can buy high-quality stocks that already have most of the air let out of the bubble — they’re cheap — and pay nice dividends. The big wild card is China. The administration has made significant progress in improving our trade relations with most of the world, but not with China. I think the China situation will be acceptably resolved — it’s in both countries’ interests to do so — but if it’s not, it could eventually drag the U.S. into a recession. Otherwise, I think we’ll see continued growth in the U.S. economy for the next year and a half.”

Forecast | TRADE

ERIC GREEN
CEO, Jaxport, Jacksonville

“Jaxport has now achieved more than a decade of year-over-year revenue growth. We expect our Asian container business to experience further growth as the project to deepen our harbor to accommodate more cargo aboard the largest ships progresses and the industry continues to recognize the efficiencies and cost-effectiveness of using Jaxport. Because of unsurpassed rail and road connectivity, Jaxport can reach more than 70 million consumers within a one-day truck drive.”

Jacksonville’s Office Market ...

Entering 2019, class A office vacancies remained at historic lows in Jacksonville, even with the addition of 200,000 square feet of class A space in 2018, according to a report from commercial real estate firm Cushman & Wakefield. The firm predicts “solid growth for the overall market” with the tight supply of class A space driving higher demand for class B space this year.

Class A rents have risen an average of 5.4% annually over a three-year period to $22.95 a square foot. Overall, the increases were driven by demand for buildings on the north and south banks of the St. Johns River in the city’s central business district, according to the report. “Office market fundamentals should maintain current trends with further improvement in rental rates on lower availabilities.”

The report, authored by C&W Research Director Chris Owen, noted that the Jacksonville market had added 21,600 jobs in the past year, an annual growth rate of 3.1%.

“Office-using employment, including professional and business services as well as financial activities, grew faster in the metro than statewide over the year. Jacksonville and all of Northeast Florida has remained a magnet for firms looking for an experienced workforce in one of the lower cost markets in the Southeast,” Owen wrote.

Jacksonville / Duval County Issues ...

  • Downtown: In April 2017, the Jacksonville Downtown Investment Authority picked Jaguars owner Shad Khan’s Iguana Investments as master developer of two city-owned, riverfront properties near TIAA Bank Field — the Shipyards and Metropolitan Park. A year later, Khan’s investment company announced that it also will redevelop a large stadium parking lot, called Lot J, into a sports-themed entertainment complex. Khan’s plans for the Shipyards and Met Park include a convention center and hotel, as well as apartments, condos and office space.
    Obstacles remain, including an elevated road that runs parallel to Met Park, connecting the Hart Bridge to downtown. Iguana Investments believes tearing down the elevated ramp is key to creating a seamless development between the stadium and riverfront. While the city has identified another site for an access ramp to the bridge, it must find a way to pay for the $50-million project.
  • Transportation: For years, Jacksonville’s Skyway monorail has been derided as a white elephant — “it goes nowhere; it has low ridership outside of special events; it seems to serve little purpose,” the Jacksonville Business Journal wrote in 2016. Now, the city wants to replace the Skyway’s monorail cars with a new system of self-driving shuttle buses. Plans call for repurposing the Skyway’s infrastructure and building off-ramps to allow autonomous shuttles to run along the monorail route and throughout downtown, with links to TIAA Bank Field and historic neighborhoods. “It will help create an innovation corridor downtown, which will help attract” a talented workforce, says Jax Chamber President Daniel Davis.
  • Schools: The graduation rate for Duval County public high schools has been steadily rising for the past few years, reaching 80.8% in 2017, but that’s still lower than the statewide graduation rate of 82.3%. In July, Diana Greene became Duval’s new school superintendent after three years as the top educator in Manatee County, where she focused, among other things, on boosting low-performing schools.

Gainesville / Alachua County Issues ...

  • Utility Rates: Ten years ago, city-owned Gainesville Regional Utilities made a heavy bet on biomass, signing a 30-year, $2.1-billion supply contract with a biomass power plant in north Gainesville. But the deal proved costly as a U.S. boom in natural gas production drove down energy prices nationwide. In 2017, the city commission voted to spend about $750 million to get out of the contract and buy the biomass plant.
    While some characterized the buyout as the city’s best option in a tough situation, others argued that it showed the need for change in GRU oversight. Last year, state lawmakers placed a referendum on the November ballot seeking to take control of the utility away from the city commission and give it to an independent governance board. Ultimately, Gainesville voters rejected the measure, but the city’s utility will continue to face pressure — especially from those who say electric rates are too high. Last summer, GRU customers, on average, had the sixth-highest residential bill in the state, according to the Florida Municipal Electric Association. GRU’s commercial rates were the highest in Florida.

St. Johns County Issues ...

  • Affordable Housing: The fair market rent for a modest, two-bedroom apartment in St. Johns County is $946 — $282 more a month than what the average renter could afford (using the definition of affordability as rent that is 30% or less of income). According to the National Low Income Housing Coalition, a worker in the county would have to make at least $18.21 an hour to afford even a modest apartment. By comparison, the average renter makes just $12.76 an hour. St. Johns County Continuum of Care, a group focused on ending homelessness, is now looking to stimulate affordable housing development. Last August, it proposed that the county launch a pilot program to lower barriers to affordable housing, such as reducing impact fees and regulations. County commissioners are to take up a detailed proposal this year. “We’re a good place to live, so people like to move here,” says Isabelle Rodriguez Renault, president and CEO of the St. Johns County Chamber of Commerce. “Demand is high, and housing prices are going higher. Finding a two-bedroom apartment for less than $1,400 can be a challenge.”
  • Beach Renourishment: After two straight years of damaging hurricanes (Matthew and Irma), coastal erosion has become a top concern for residents and government officials in St. Johns County — which has 41 miles of coastline. Last fall, the county commission voted 3-2 to have staff members draft an ordinance that would increase the local hotel bed tax from 4% to 5% to help pay for beach renourishment. The tax increase will need a supermajority of four commission votes to pass, however.

Ocala / Marion County

  • Economic Development: In 2009, Ocala-based mortgage lender Taylor, Bean & Whitaker went out of business, eliminating about 2,000 local jobs. A year later, as homes fell into foreclosure and construction stalled, Marion County’s unemployment rate reached a high of 14.5%. Unemployment has since fallen below 5%, and the economy has diversified to include new distribution facilities for AutoZone, Chewy and FedEx, among others. This year, Marion aims to further diversify its economy through development of the Florida Crossroads Commerce Park, a nearly 1,000-acre site near I-75. Targeted tenants include food distributors and advanced manufacturers, says Kevin Sheilley, president and CEO of the Ocala/Marion County Chamber & Economic Partnership. “It will be in position to take off starting in 2019,” Sheilley says of the new business park.

County Business Briefs

BAKER COUNTY — California-based furniture distributor Starsong & Co. purchased a 95,000-sq.-ft. facility that had been vacant since 2007. Starsong plans to use about 53,000 square feet for its own distribution operations and lease the rest to other tenants.

  • The county received $2.3 million from the Florida Job Growth Grant Fund to build an access road at the Woodstock Industrial Park to attract advanced manufacturing and distribution projects.
  • Construction of the Midpoint Parkway is to begin this year to provide access to a new business park.

BRADFORD COUNTY — The county granted a height variance to allow a four-story Holiday Inn Express to be built near Starke. The hotel will have 77 rooms.

CLAY COUNTY — The Florida Department of Transportation completed an initial portion of the First Coast Expressway, a 12-mile toll road that will connect I-10 with I-95. The segment runs from Blanding Boulevard through Clay north to I-10 in Duval County. A second section, due to begin construction this year, will run from Blanding south through Green Cove Springs.

COLUMBIA COUNTY — The county will use $3.1 million from the state’s job growth fund to build a rail spur to the North Florida Mega Industrial Park, a planned, 2,600-acre site owned by Weyerhaeuser.

  • Florida Gateway College in Lake City received $860,000 from the Florida Job Growth Grant Fund to offer a training program for aviation and power plant mechanics and aviation airframe maintenance workers.

FLAGLER COUNTY — CP Performance, an online marine products retailer, plans to consolidate its operations from California to a new 20,000-sq.-ft. facility in Palm Coast’s Hargrove Grade Industrial Park.

  • Marine canvas and upholstery manufacturer Gioia Sails South opened a 30,000-sq.-ft. facility with 75 employees in Palm Coast.

GILCHRIST COUNTY — Since its recessionary peak of 11.6% in January 2010, Gilchrist’s seasonally unadjusted jobless rate has fallen to 3% as of October. That’s still above its prerecessionary low of 2.5% in April 2006.

HAMILTON COUNTY — The town of White Springs received $50,000 from the Florida Recreation Development Assistance Program. The money will be used to renovate a basketball court, baseball field and playground equipment at the Ogburn Recreational Facility.

  • A federally funded widening of CR 152 has begun and is to continue until April.

LEVY COUNTY — The town of Inglis secured money for an engineering study to explore construction of a 65-acre whitewater kayaking venue.

  • Duke Energy selected a 5,400-acre property near Inglis for its site readiness program, part of an effort to attract economic development prospects in targeted industries such as food processing and general manufacturing.

NASSAU COUNTY — University of Florida Health began building a medical outpost in Wildlight, a master-planned community east of I-95. The 40,000-sq.-ft. building will include space for primary and urgent care, imaging, pediatrics, obstetrics and gynecology, mental health services and dentistry. UF Health also plans to build a 35,000-sq.-ft. wellness center with a YMCA branch in Wildlight.

PUTNAM COUNTY — The county received state funds to make road repairs in Palatka to prevent extreme flooding.

  • St. Johns Recovery Place, an addiction treatment center, opened in Crescent City.

SUWANNEE COUNTY — Alvin Jackson resigned as the county’s economic development director to become the city manager in Bunnell. Jimmy Norris, executive director at the Suwannee County Chamber of Commerce, stepped in as interim economic development director.

UNION COUNTY —The county’s seasonally unadjusted jobless rate was 2.8% in October, down from a high of 9.1% in January 2010. Before the recession, in March 2006, unemployment hit a low of 2.2%. 

 

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