SC Meeting Summary 12 01 10 FINAL

Recession Recovery and Beyond

Study Committee Meeting St. Johns County December 1, 2010

Clanzenetta “Mickee” Brown JCCI Study Planner mickee@jcci.org

In attendance: Meeting Attendees: Elaine Brown (Chair), Marc Albert, Donald Anderson, Peter Apol, Ron Avery, Ellen Avery-Smith, David Bearl, Lee Brown,] Dan Butcher, Jerry Cameron, Marge Cirillo, Dave Cobb, John Edwards, Bruce Ferguson, Richard Goldman, Greg Greiner, Bruce Hallett, David Johnson, Matthew Lahti, Bill Larson, Jack Manilla, Mary Marcus, Rob Matthews, Alex McCoy, Chris Park, Victor Raymos, Granville Reed, Clive Ricketts, Cyndi Stevenson, Ed Swift, Randy Swift, Katie Walton, Kirk Wendland, Joe Whitaker, and Jim Zimmerman [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 Time: Noon – 2:00 PM Discussion: Ellen Avery Smith, a Shareholder with Rogers Towers P.A., introduced study chair Elaine Brown, listing her achievements in government, private industry, and charitable organizations. She also mentioned Elaine’s new role as the Chair of the Regional Council of Northeast Florida.

Elaine thanked the group for their participation. She stated that working together to sell the region’s assets (the Northeast Florida product) will attract businesses and create jobs. Cornerstone has set the bar for regional cooperation and is a great model for working together, which saves time and money.

At Elaine’s request, JCCI Director Skip Cramer shared that the Recession Recovery study is JCCI 71st in its 35 year history of bringing people together around important community issues. This is also the fourth regional study, preceded by regional studies on cooperation, transportation, and growth. Skip told the group that JCCI chooses its topics based on what the community deems important. 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. The next highest area of concern garnered 7 percent of the vote. Skip mentioned that the study’s primary sponsor (WorkSource) asked that the project have a regional focus because of the interconnectedness of Northeast Florida’s counties. The boundaries of the study are Cornerstone’s seven county region. This seven partner county site visits will end in two weeks and the study will reconvene in January at the Regional Council in Jacksonville.

After the self-introductions were completed, Elaine introduced the day’s speakers; Ron Avery, Chairman of the Ronco Group and past Chairman of the First Coast Manufacturers Association, Nick Sacia, Executive Director, St. Johns County Chamber of Commerce Economic Development Council, and Ed Swift, Director of Operations for St. Augustine/Savannah, Historic Tours of America.

Nick Sacia’s presentation St. Johns County has 95,347 people in its workforce. The unemployment rate was 9.6 percent as of October 2010. The county is home to 45,501 jobs – 87 percent are service producing jobs, the remaining are goods producing jobs. The primary jobs sectors are Leisure and Hospitality (24 percent) followed by Trade, Transportation and Utilities (23 percent). Both industries are tied directly to tourism which is extremely important to the economy in St. Johns County.

Private sector growth from 2001- 2009 in St. Johns County increased dramatically. The number of new businesses units increased by 73 percent as compared to a 42 percent increase in the other Northeast Florida counties (not including Flagler) and a 30 percent increase for the State of Florida.

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To promote growth St. Johns County has taken steps to make concurrency adjustments by eliminating ghost trips (projected trips per DRIs) and allowed concurrency after zoning which is less costly and less risky for businesses. The St. Johns County economic development toolkit also includes incentives, impact fee deferrals for up to five years, expedited permitting, industry revenue bonds, excellent public schools, an expanding airport, and a barge port.

Ron Avery’s presentation The data indicate that manufacturing is important to Florida’s economy. A Florida Tax Watch study offers the following facts.  In 2009 Florida’s manufacturers made more of an impact on the state’s economy than agriculture (six times the impact).  Florida’s 15,000 manufacturing companies employ 350,000 people at salaries that exceed 125 percent of the average Florida wage.  Because of the manufacturing sector, which represented 93 percent of all exported goods in 2007, Florida is one of only a handful of net exporting states.

Unfortunately, Florida has the reputation of being unfriendly to business. This is proven by the numerous companies who forgo Florida to start or expand businesses in Alabama, the Carolinas, and Georgia. St. Johns County also had the reputation of being unfriendly to business, but the County Commission is doing a good job of combating that image. To move beyond that image and to encourage manufacturing in St. Johns County we need incentives for capital investment, not job creation. Manufacturers are at a disadvantage when economic development offices are looking for direct job creation. For every direct manufacturing job created, 2.5 indirect jobs are created.

It is important to think regionally, but we also have to think nationally and internationally as well. We have to get site selectors interested in St. Johns County.

Solving the jobs crisis does not require another study. With the right five people – a county commissioner, industrial development authority representative, economic development official, political operative, and a sharp business person - in a room we can solve this crisis. With a budget of $50,000 those five people should be able to come up with solutions. If they cannot then they are the wrong five people. We know what the problems are and we can solve those problems – we do not need another study.

Ed Swift’s presentation Historic Tours of America built trolleys here until two years ago when the recession hit, but the factory - that employed 12 people - will be reopened, if possible. Historic Tours sells tickets to almost all of the area’s attractions and tourism appears to be on the rebound. Visitors spend $6,000 annually for every man, women, and child in St. Johns County. We can see recent improvements in tourism due to increases in bed tax revenues and anecdotally, workers are seeing less price resistance for local attractions than a year ago.

We are trying to determine how we can take best advantage of this upswing in tourism. A campaign along I95 to bring tourists to the state can make a difference - 82 percent of people who travel do so by car and 49 percent travel within the state.

The upcoming 2015 450th anniversary of the founding of St. Augustine is a great opportunity to showcase St. Johns and the surrounding counties. This is the superbowl of tourism. We must do a better job of marketing this community – county solidarity is the shortest way to create jobs.

Job creation is related to how well a company is doing. In the tourism industry, an increase in ticket sells indicates that business is doing well and more employees might be needed. Job creation tools like tax credits do not stimulate hiring. A $3,000 tax credit is not an incentive to hire people in the tourism industry if ticket sales are slow. The same is true for manufacturing; if nobody is buying your widgets hiring new employees is not a priority.

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Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469

www.jcci.org

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Questions and Answers with the speakers Q. Why is St. Johns County considered an unfriendly place to do business?

Ron: The permitting process needs to be simpler. In the past no one was paying attention to the cost of doing business in St. Johns County, but that is changing.

Q. What is the state of tourism at the beaches in St. Johns County? What kind of indirect jobs does manufacturing create?

Ron: Manufacturers outsource work as much as possible in areas like building maintenance, product maintenance, and engineering.

Nick: New industries bring money into a community and those worker’s salaries are spent locally which helps to grow the local economy. Tourism is the same in that it brings new money into the community, which is spent in local establishments.

Ed: Growth in tourism is predicted at 6 to 8 percent by the end of 2010 for all of St. Johns County.

According to national data, tourism is up 26 percent from last year this time. Thanksgiving travel was also up 14 percent over last year.

Q. Why is the voice for manufacturing not as loud as other industries?

Ron: The First Coast Manufacturers Association was created to give us a collective voice. We are working hard to get the word out about the importance of manufacturing. Many of us have been concentrating on our work and running our businesses, but now we are more involved in politics and public policy.

Q. What strengths does St. Johns County have?

Ron: We get caught up on quality of life, but businesses could care less about this. They are looking at costs – infrastructure, transportation, and operations. Many of these business owners do not even live locally. We must support the expansion of JaxPort, which will bring more manufacturing jobs to Northeast Florida.

Nick: We take having I-95 access points for granted. Some of the other partner counties would love this type of access (i.e. Clay and Putnam counties). It is important that we protect what industry is looking for from a site selection perspective. Incentives are a strong part of the toolkit because it lets prospects know that this is a business friendly community willing to invest in new projects. Incentives can help overcome deficiencies, but will not make up for a poor overall business climate.

Q. Is there a plan to reach out to retirees?

Nick: St. Johns County’s DRI’s offer an assortment of living choices for local residents. We want diversity in the people who live in the county, but there is not a specific effort to reach out to retirees. We also want diversity in the companies that do business in St. Johns County.

Q. What is the plan for rail travel in St. Johns County?

Nick: A rail stop is being planned for St. Augustine.  Elaine instructed the meeting attendees to break into small groups of 5 to 6 for 30 minutes of small group discussion. The questions and results of the discussions are provided below.

Small group discussion reports Opportunities: What does St. Johns County have in its “toolkit” to attract, retain, and create jobs (& businesses)? What has not been discussed?  Great multimodal capacity  Educated workforce 2434 Atlantic Boulevard

Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469

www.jcci.org

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Strong K-12 system and postsecondary education opportunities Schools academy system Availability of rail for manufacturing concerns Growth in tourism Manufacturing and tourism industries Comprehensive Plan protects property for rail that can be used by manufacturers Change in impact fee payment structure Upcoming 450th year anniversary of the founding of St. Augustine New opportunities for using agricultural products – energy products, chemical/medicinal, and biomaterials Well defined utility system Vast amount of commercial space St. Johns County economic development toolkit

Challenges: What is the St. Johns County “toolkit” missing? What needs to happen to fill in the gaps?  Need to have high school graduates stay local  Need more discussion about rail  Involve Fort Mose in 450th year commemoration [Staff note: Fort Mose (pronounced "Moh-say") was the first free black settlement legally sanctioned in what would become the United States. The community began when Florida was a Spanish territory.]  Unified vision of who we are and what we do  Permitting processes are not streamlined – the community needs a small business ambassador  Understanding demographics of St. Johns County – what types of jobs do 25 - 45 year olds find most appealing?  Define the role of Flagler College in job creation  Role of agriculture in the future of St. Johns County  Business retention jobs in St. Johns County  Tapping into the knowledge base of retired executives and having those former executives open doors that might lead to new business  Impact fees are viewed negatively overall - no matter how low the fees go we are charging people to do business with us  Lack of permitted land for industry – land is tied up in DRIs  Marketing workforce capabilities  Negative community activism stalls or hinders economic development Direction: In an effort to get people back to work in the short term and increase economic competitiveness in the long term, where should St. Johns County and/or Northeast Florida focus its efforts: High skill/High wage jobs? Small Business? Large Business? Targeted Industries? What else?  Focus on small business  “Mega sites” take too long to build - small companies can utilize existing vacant commercial spaces 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 St. Johns County and all of Northeast Florida?  Regional support of JaxPort  Infrastructure development  Coordinated marketing of regional assets  Focus on promoting the “Historic Coast” and the 450th Anniversary of St. Augustine  Opportunity to make agriculture a value added commodity  More partnerships with fewer silos; for example agriculture, manufacturing, education/research, and 2434 Atlantic Boulevard

Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469

www.jcci.org

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banking can all work together to bring products and services to market Must do a better job of integrating key components for job creation and economic development that are already in place

The group offered the comments below in response to Elaine asking the following series of questions. What did you learn today? What was the most important/ interesting/surprising thing you heard? What do you still need to know?  Tourism is strong and that is good news  Public private partnerships are a relic of the 1970’s and are not a sound structure for today’s economic development efforts  Though someone mentioned having a problem with permitting and suggested appointing a key contact for helping businesses – such a person already exists  Residential development can crowd out business development  Concerned that there are too many barriers to doing business - steps to eliminate those barriers must take place  This is the first county that mentioned agriculture as an asset but no one representing agriculture is here today  Not enough focus on agriculture today – discussion was mostly about manufacturing and tourism  No mention of affordable housing  Lack of discussion about which jobs to target – need to focus on attracting substantial jobs into the community  Did not discuss international trade  Not enough discussion about business retention and expansion Elaine invited the group to the next partner meeting in Putnam County on December 8th and adjourned today’s meeting at 2:00 PM.

2434 Atlantic Boulevard

Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469

www.jcci.org