Recession Recovery and Beyond
Study Committee Meeting Duval County December 15, 2010
Clanzenetta “Mickee” Brown JCCI Study Planner mickee@jcci.org
In attendance: Meeting Attendees: Elaine Brown (Chair), Mark Alexander, Lindsey Ballas, Sandy Bartow, Daniel Bean, Rosa Beckett, Michael Breen, Sandra Brooks, Gabriell Bryan, Bill Cesery, Cathy Chambers, Bill Clement, David Cohen, Jim Crooks, Aaron Curtis, Lad Daniels, Kelly DeLucia, Janice Donaldson, Jackson Dunlap, Cleveland Ferguson III, Bill Gassett, Mary Goldsmith, Broderick Green, Ken Hamilton, Robert Hawkins, Andre Higgins, Riyan Jackson, David Johnson, Dave Kaufman, Bill Larson, Jerry Mallot, Jack Manilla, Bill Mason, Karen Mathis, Martin McAndrew, Maxine McBride, Paul McElroy, Colleen McFarlane, Julie McNeil, Mike Miller, Tom Patton, Ken Paulk, Tracy Pierce, Stephen Pollan, Granville Reed, Angela Richmond, Jim Robinson, Kathy Sandusky, Beth Slater, Jim Stevenson, Stephen Strum, Michelle Tappouni, and Paul Tutwiler [If your name does not appear, but you were in attendance, please let us know.] Staff Members: Mickee Brown, Katie Ross, and Skip Cramer (meeting facilitator) Meeting Time: 9:30 – 11:30 AM Discussion: Joe Whitaker, Business Recruitment and Retention Coordinator for the Jacksonville Economic Development Commission (JEDC), introduced study chair Elaine Brown and welcomed the meeting participants on behalf of Mayor John Peyton and JEDC Executive Director Ron Barton. Elaine thanked those in attendance for their participation and shared her observation that the site visits in the six other Northeast Florida Counties were well attended by a diverse group of community residents, including elected officials, business owners, and other community leaders. In every county, residents are concerned about jobs, any jobs, and the tools for getting people back to work. Each county has its assets and will need to work together to package and sell what Northeast Florida has to offer to create jobs. Elaine introduced JCCI Director Skip Cramer who stated that the residents of Northeast Florida are optimistic about finding solutions for resolving the area’s economic challenges. He also told the group that the Recession Recovery study is JCCI’s 71st in its 35 year history and its fourth regional study. Jobs and the economy were the top contenders in JCCI’s annual topic selection survey, which is perfectly aligned with the Florida Sunshine Survey, where 54 percent of respondents said jobs and the economy were the most pressing issues in the state. After the self-introductions were completed, Elaine introduced the day’s speakers; Ron Barton, Executive Director, Jacksonville Economic Development Commission; Jerry Mallot, President of Cornerstone and Executive Vice President of the Jacksonville Regional Chamber of Commerce and Lad Daniels, President of the First Coast Manufacturers Association Ron Barton’s Presentation The area’s economic strengths will drive economic recovery and position the community for success. Transportation, logistics, the port, and associated industries: This sector was a differentiator before the recession and will continue to be so when the economy improves. Military and defense contracting: Recognize that 47,000 local employees work for defense contractors, and the great potential for creating jobs related to military home porting an aircraft carrier. Medical and life sciences: Jobs in this sector have grown during the recession.
Page 2 of 6
Financial services: Nationally, this industry caused the recession, but jobs have been created as well. Locally this has been a winning sector.
In 1970, Jacksonville was one of the southeast’s dominant business and commerce centers. The population for Jacksonville/Duval was 528,000 while the populations for Tampa/Hillsborough, Orlando/Orange and even Charlotte/Mecklenburg were both smaller. The populations for Ft. Lauderdale/Broward were a bit larger. All of these communities in the subsequent 40 years have grown much faster than Jacksonville’s 62 percent, in most cases 2 to 3 times faster (i.e. Tampa 143%, Orlando 215%, and Charlotte 185%). Where we were once market dominate leaders in insurance and banking we are now dinosaurs. Can we learn from these past lessons? We have to be willing to compete for jobs, people, and companies. Leadership, particularly from the private sector is needed to improve the economic fortunes of Duval County and the region. Without leadership Jacksonville’s Dames Point, Main Street, and Buckman Bridges would never have been built. To move forward non-political leaders had to have a vision for what these projects would mean to the community and political leaders had to exercise the will to champion these projects even if they were unpopular. Government cannot solve all of the community’s problems, but it is not the enemy. Without direction from the community and the private sector, government is managed to meet the demands of the lowest common denominator. Private investment follows capital investment (i.e. roads, intermodal yards, etc.) and is indicative of what community’s value in terms of quality of life. Capital investment by the City was under-resourced before the recession and that continues to be the case. The Better Jacksonville Plan was just a betterment plan, but we also need a core capital improvement plan. The budget for capital improvements was $428 Million over five years, but after ash clean-up ($284 Million) and debt service payments that leaves an anemic $57 million annually over that five years. Capital markets will be dysfunctional for at least ten years, so state and federal dollars will not be available to fund projects. In a secondary market like Jacksonville, we will need to find ways to invest in our own community via public-private partnerships. A vibrant downtown is also vital to the success of the region; it is our brand and our employment center. Downtown must be supported, despite past failings like the Shipyards. We can not be paralyzed by fear. Public-private, partnerships are one way to spread that risk. Jerry Mallot’s Presentation Duval County makes up half the population in Northeast Florida, but 90 percent of all industrial and commercial buildings are located in Duval County – this is great for Duval, but not for the region. We need nodes of development throughout Northeast Florida. Headquarters are the most valuable opportunity for business relocations because the employees are the best compensated and it is where corporate decisions are made. One-third of the companies that are interested in Jacksonville are international in scope; we are a part of their global strategy. In a recent meeting, Governor Elect Rick Scott shared with local business leaders that Florida has lost its edge and is not seen as a good place to do business. As a result, Jacksonville suffers from being in a state that is not competitive. This could improve with Scott’s plans to address business regulations, the speed of getting businesses up and running, and incentives. Cornerstone does not work alone; essential partners in Duval County include independent agencies and authorities like the Jacksonville Transit Authority and Jacksonville Electric Authority, local colleges and universities, WorkSource, and the Jacksonville Economic Development Commission. 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 3 of 6
Lad Daniels’ Presentation Florida’s economy is going through a fundamental change. Prior to the recession growth had been the chief economic driver as a steady stream of people moving to Florida. The state worked to contain that growth. Now the State has to find ways to embrace those who want to come. We have to become deal makers, not deal breakers. Our local community should also consider what similar cities have done to grow - How did Birmingham go from a steel producer to a medical center? How did Atlanta become an international city? Economically and environmentally we must make a case for port expansion and be prepared to take this case to the voters for funding. Efforts to deepen the port will exceed $1 billion, with correction of the Mile Point problem costing approximately $60 million. This money will probably not come from the state or federal government. According to a survey sponsored by the First Coast Manufacturers Association, business leaders and super voters both support port expansion. However, only 1% of either group believes port expansion to be a major issue over the next five years. Manufacturers, with their international perspective, have much to offer the local community. Efforts to engage this group of business leaders needs to be made. Consolidation is an example of a time when this community’s business and civic leaders came together to engage in the political process to make a difference and it made Jacksonville a better place to live. Questions and Answers Q. What is the role of business incubators in the economic recovery? Lad: Incubators play a role, but success is uncertain. We should recognize that some of these businesses will fail. Jerry: Business incubation in a specific physical space is not the only model. Many businesses need the mentoring and support that is provided in an incubator without the necessity of locating the business in a specific space. We have changed our focus to business development, which includes tools to assist expanding local companies and attracting new ones. Ron: Incubators work better when you bet on a winner. Resources should be directed toward talent and industry segments that make sense for this community. Q. Is capital investment an area where community focus is needed? Do we need a Better Jacksonville Plan for capital investment? Should this be a topic for mayoral candidates to weigh-in on? Ron: Yes to all three questions. The ability to compete is the foundation for economic development. Oklahoma City has passed three Better Jacksonville type initiatives over the past 15 years. The need to improve communities never ends, so the investment efforts must be recurring. Recently Oklahoma City voters agreed to a $770 Million effort to improve public education, including upgrading classroom technology and the community is waiting for the next plan. This is a community willing to pay for what it deems important. When Jake Godbold was Mayor he will tell you that people did not like most of his ideas, but he moved forward. People need leaders to lead, not take an approval poll on every idea. Lad: It is necessary for our leaders to get out front of the issues that are important to this community. Q. What are the community’s priorities with regard to capital investment and other issues and how do we move on those? Why has there been so little done in the past eight years? Why has there been no new Better Jacksonville Plan? Ron: Focusing on target industries is a way for us to bet on what works. Life sciences/health care is an 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 4 of 6
example of an industry that makes sense for Jacksonville because of the viability of local medical institutions and continued job growth in this area. We must consider how we best leverage success in this industry and other winning areas. With respect for the last eight years, the world has changed rapidly over the last eight years and it is a much different place today than it was during the Delaney years. The economic outlook has changed, the debt model is different, state reforms have rolled back revenues, and we are living in a depression – not a recession. With limited dollars, it is important that communities focus on the important priorities. Jerry: It is important that our leaders be engaged and that they have clear ideas about where we want to go as a community. Lad: Change will come from the private sector; government should step aside and let the market determine winners and losers. Q. Should home foreclosures be a part of our discussion regarding economic recovery since Jacksonville is one of the community’s that has been so drastically affected? Lad: They are important and are the end result of the larger problem of lost and reduced income combined with variable mortgage rates and lost home equity. It is worse here because unemployment is so high. Q. How much capital investment is needed in Jacksonville? Ron: The community must prioritize its objectives and then build a capital plan. One perspective is not enough. If we choose dredging the port for example we would need a 15-20 year development plan with cost considerations. We might also look at quality of life issues that affect economic development like septic tanks in the urban core on the river. It takes $350 Million to mitigate the subsequent pollution problems, but it would take $500 Million to fix the overall problem. What we spend money on determines the kind of community we want. What kind of legacy do we want to leave? Q. Do we have a negative self-image here in Jacksonville? Ron: No. There was a period when that was the case. Today, the problem is we do not have a focus or a channeled path. Jerry: Our positivity probably peaked in 2005 during the Super Bowl. It has been very difficult to move forward because of limited investment due to the economic downturn. As a community we are depressed just like the economy. Q. Out-of-state recruiters are advertising jobs to local workers, which depletes our talented workforce. What can be done? Jerry: We need more job opportunities for the talented workers that live in the community. Ron: Whether its capital, residents, or development - our ability to attract these elements depends on the ability to compete with other communities. In terms of quality of life, companies have to consider whether or not their workers are going to be happy if a business relocates or expands. Q. How do we get public and private entities to focus on the same goals? Ron: Elected officials need the private sector to help them understand what is important this requires more caring, and more give and take. When prospects visit a community they want to meet with the Mayor to find out about the community’s priorities. Lad: The Amelia Island Conference, which led to the creation of JCCI, is an example of business, civic, and political leaders coming together to decide community priorities and a means of addressing those 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 5 of 6
issues. The Sunshine State laws make it uncomfortable for public officials to talk to each other. Many of the conversations about important issues are not taking place due to fear of breaking the law. Opportunities - What does Duval have in its “toolkit” to attract, retain, and create jobs (& businesses)? What has not been discussed? Cornerstone and the Cornerstone Business Development Committee Logistics hub - geographic location/position, toad, rail, and airports Waterways for quality of life and commerce purposes Major transportation arteries Low tax rate Quality of life factors – river, ocean, climate, beaches, natural parks Higher education system Diverse economy – military, finance, manufacturing, etc. Relative lost cost of living WorkSource JEDC Chamber and JEDC working together Utilize training centers like WorkSource to train workforce and attract business Largest employer is the medical, health care system Challenges - What is the Duval “toolkit” missing? What needs to happen to fill in the gaps? Public school system Intestinal fortitude on the part of elected officials – “political will” Infrastructure needs – roads, bridges, drainage, septic tanks Retool public-private, partnerships that work (i.e. Team Teal) Educated workforce, talented workers Perception issues, awareness of positives - internal and external positive PR Community and business leadership Build common vision Consistency in government philosophy from administration to administration Political will to move in a focused manner towards a common vision Identify our cheerleaders – Mayor? Jaguars? Young people? Focus on the younger generation Reaching local politicians Funding from the community for projects (i.e. taxes, fees) Increase education level to a point where we can attract businesses Build community’s trust in elected officials and the school board Active involvement of the business community Private sector community leadership Direction - In an effort to get people back to work in the short term and increase economic competitiveness in the long term, where should Duval and/or Northeast Florida focus its efforts: High skill/High wage jobs? Small Business? Large Business? Targeted Industries? What else? Job creation within targeted industries – aviation/aerospace, transportation/intermodal, maintenance/repair (aviation), healthcare/bioscience, financial, insurance, real estate, and manufacturing Seek both high skill/high wage and low wage/low skill jobs - approach from both directions top and bottom - consider what we have available to us in terms of the population’s skills sets Sports venue opportunities Arts destinations 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 6 of 6
Leadership to link together Connect with what is happening in Tallahassee Focus on downtown Determine our brand essence Get people to understand the necessity of making an individual investment in energy, time, and effort
Working Together - What more can be done from a regional perspective (i.e. incentives, workforce development, research, branding, education, business partnerships, etc.) to create jobs and increase economic competitiveness in Duval and all of Northeast Florida? Recalibrate incentives - do not focus as much on the number of jobs created Increase capital investment Greater accountability and benchmarking Broaden efforts to include existing businesses Focus in vocational training Create partnerships to leverage state dollars Focus on the region’s medical and health care industries Elaine asked the group to complete the group process check forms, invited those attending to attend the study committee meetings scheduled to resume in the new year on January 5, 2011, and adjourned today’s meeting at 11:40 PM.
2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org