first annual economic development summit
november 14, 2011
The Lake County Board of County Commissioners attended a special economic development summit session on Monday, November 14, 2011 at 7:30 a.m., at the Mission Inn Resort & Club, Howey-in-the-Hills, Florida. Commissioners present at the summit were: Jennifer Hill, Chairman; Leslie Campione, Vice Chairman; Sean Parks; Jimmy Conner; and Welton G. Cadwell. Others present were: Darren Gray, County Manager; Sanford A. “Sandy” Minkoff, County Attorney; and Susan Boyajan and Shannon Treen, Deputy Clerks.
welcome and opening address by dr. mojock
Dr. Charles Mojock, President of Lake-Sumter Community College, welcomed everyone to the first annual Economic Development Summit for Lake County, recognized and thanked all of the veterans who were in the room for their service, led the pledge of allegiance, and then recognized the sponsors of the event. He commented that the college certainly had a vested interest in workforce development, since their students would not have good jobs close to home in order to be productive members of their economy and society if they did not have a strong vibrant local economy. He hoped that they could find through their interaction and information learned from the speakers today some ways to continue to develop and grow their economy.
understanding what makes good communities great
Mr. Jay Garner, President of Garner Economics LLC, an economic development and site location consulting firm in Atlanta, Georgia, explained that economic development is wealth building that will enhance the economic wellbeing of the citizens and residents that live in a community through recruitment, entrepreneurial enterprises, and support of existing businesses. He pointed out that attracting investment and jobs is highly competitive, and he advised that being totally prepared and standing out above the crowd creates a competitive advantage. He also opined that leadership was the most important factor for economic success, with other factors being a common vision for the future by the community, a desire to unite for the good of the community and to resolve divisiveness, and the ability to adapt and change strategy based on changes in economic conditions. He commented that the State of Texas, which is the current top ranking destination in North America for jobs, has the best model for economic development in the United States and is based on a decentralized approach using the funds from a one cent sales tax. He emphasized that the site selection process was profit driven, deadline driven, analytical, subjective and competitive, since companies are looking for reasons to exclude a site from the multiple locations available. He related that GIS data and an effective website were extremely important, and he noted that site locations were being evaluated before they were even aware of it by things such as newspaper articles and bloggers’ comments; also having shovel-ready sites and buildings was extremely important. He added that incentives were still a driving force for many companies, but that communities should calculate whether there was return on that investment before offering the incentive. He emphasized that the most important factor and the driving consideration in the site selection process is cost, including things such as tax exemptions, labor costs, land costs, and housing costs; but quality of place factors such as public safety, health care facilities, and the public school system are also considered important. He pointed out some factors that the County could do to improve their economic development potential, including regional collaboration and marketing as well as a local economic development effort. He opined that currently there is nothing that makes Lake County stand out except for their health care, and he advised that the County’s industry targets should be focused on what the County is able to achieve based on its current resources and for its leadership to do what they can to make sure that they differentiate the County from above the crowd. He commented that since the website is the primary marketing tool, the County’s website needed a lot of work and enhancement to provide a business case for why certain industry sectors fit and could profit and grow in the County. He summarized that they need a long term executable strategy and vision, as long as it is fluid and adaptable, and he advocated that they be innovative in everything they do.
regional economic development in central florida
Mr. Rick Weddle, President and CEO of the Metro Orlando Economic Development Commission (EDC) noted that he would discuss the layer of regional context in this very competitive environment. He explained that the EDC’s job is to aggressively attract, retain, and grow jobs for the region consisting of the four counties making up Central Florida. He mentioned that the EDC went through some restructuring to bring their spending on personnel and administrative costs more in line with best practices and to put their focus on job creation activities such as retaining and expanding existing companies, recruiting new companies, supporting start-ups, and working to facilitate film and television production activities, which is a good cottage industry in this region. He opined that the County and the EDC have to find ways to cooperate better to get the message out that they have a product that is saleable in an increasingly competitive market, and organization or infrastructure enables them to execute that plan; however, there should still be clear roles and responsibilities. He presented a list of targeted sectors or clusters that they have in the Metro Orlando Region, which included aerospace/defense, energy/clean tech, hospitality, information technology, and life sciences/biotechnology, as well as four combination sectors where they are hoping to have some success short term in the next couple of years, such as pharma (business and bio services), cyber security (defense and IT), serious games (defense and digital media/simulation), and diagnostic equipment (IT and Bio). He mentioned that there has not been a lot of movement in the corporate and regional headquarters sector in the last year or so and that they have also been struggling in the life sciences and biotechnology sector, which he commented was an emerging sector, although there were a few projects they were currently working on which they thought would close soon, and he believes they would have more opportunities in that field going forward. He related that they were building good baseline data from their economic development delivery system to be able to understand and measure it, and he specified that the fields they would focus on for the 2011-12 job creation goal were aerospace & defense, energy/cleantech, information technology, life sciences, and manufacturing. He briefly discussed a new initiative they had underway called the Regional Economic Development (RED) Team that brings together on a monthly basis an advisory committee of economic development professionals to help drive regional collaboration and improve competitiveness and effectiveness. He concluded that the EDC was all about the business of return on investment and trying to work with the County as a partner to provide new and better jobs, create increased capital investment, expand the tax base, and create opportunities for businesses that export their products out of the region and import capital into the area.
real estate reuse and redevelopment
Mr. Tom Mancuso, owner of the Batavia Industrial Center, a specialist in industrial and office realty who further specializes in adaptive reuse of buildings for economic development, noted that he has worked in many different types of communities with many types of buildings in a lot of different situations and has created thousands of jobs. He commented that every business was in some stage in its lifecycle of leaving a community, which included concept, startup, growth, maturity, renewal, or exit; and economic development was always present as a result of that, taking a lot of shapes and directions in the different communities. He hoped to share some practical ideas of things that they have done as well as things that have worked in other places, and he related that he has learned that buildings were a big part of the solution. He pointed out that it was faster and cheaper to use existing buildings than to build new ones, which were part of the unique fabric of the community, and it was much cheaper to build bigger buildings than small buildings on a per unit cost. He related that the supply and demand of the market regarding industrial properties that are available takes good care of the medium-sized and large businesses rather than the small businesses, which is why intervention is so important for them, and added that 75 percent of all businesses and 80 percent of Lake County businesses have less than ten employees. His firm focuses on anyone who has a decent plan and is willing to commit the resources and energy to be successful, and in order to fix the imbalance in markets, they bolster it on buildings focused on small space. He recommended repurposing or reusing extra big buildings to serve as the small space by breaking them into smaller sections to fill the need on either side and to also use business incubators with training, mentoring, support, accountability for meeting strategic or financial objectives, connection to resources, and shared services to increase the opportunity for success for small businesses. He commented that it was critically important to do things locally such as hire local people and buy from local vendors as much as possible, and he tried to find ways for those businesses to be self-sustaining in order to locally control strategy, have control over what they are trying to accomplish, and to be able to make their own decisions. However, he promotes the concept of cooperative self-reliance with other entities, including state and federal governments and other regions. He recommended that Lake County start their process now, and he opined that the County was uniquely well-positioned for small businesses, since most small business owners want the quality of life that the area offers. He also encouraged the County to make the process for setting up a business as fast and easy as it could be so as not to discourage interested or novice business owners, as well as to think about buildings in the community which are underutilized or empty and share that with another group.
regional economic update and forecast
Mr. Sean Snaith, Director of Institute for Economic Competitiveness at UCF and a nationally-recognized economist in the field of business and economic forecasting, discussed the current economic environment and how the local environment was affected by the global economy. He mentioned that that many economists in 2009 were beginning to think about the end of the great recession which had began in 2007 and what the recovery would look like, since the business cycle had always repeated itself and that every recession was followed by an expansion, but saw a tremendous crater in the economy where there was once a tremendous mound of wealth. He referred to this recession as the “gravy bowl” recession, because recovery was tapered, long, slow, protracted, and gradual, which generally was the history of recoveries and economies worldwide that take place after a recession that has at its core a financial crisis. He commented that GDP growth during the first half of this year was very slow, and there was a growing concern that the country might be slipping back into recession, but growth shown in the next half of the year allayed some fears that they were entering into a double-dip recession. He reported that consumers represented 70 percent of GDP, which represented the output of the US economy, and pointed out that the household sector or consumer is under a battle of two tremendous forces which pushes in one direction to spend more, because of such factors as pent-up demand, but also pushes in the other direction to spend less. He noted that the economy has seen bursts of spending that were short-lived and not sustained, because of the damage that has been done due to the financial crisis and the recession, and that the slow recovery is also due to the past financial transgressions such as the housing boom, questionable loans, and mortgage-backed securities and the fact that too many resources were falsely put into the housing sector spurred by speculation and flipping properties, noting that the demand was not real. He presented data about the financial conditions in the US economy regarding US household wealth, including total assets and net worth, showing that 2009 was the low point of the financial crisis, with a lot of the wealth recouped by 2011. However, home equity had not recovered from a low point, which would result in lingering lost wealth and affect spending behavior for years, and they also were seeing no indication that job creation is accelerating. He related that fiscal and monetary policy resulted in unprecedented action on behalf of the federal government and the central bank trying to get the economy out of this free-fall and into a more robust expansion by actions such as running massive budget deficits, stimulus acts, and bringing down interest rates; however, the flow of credit has not been ramped up, since lending is the missing link in the economy. He commented that consumer sentiment has fallen to levels that have not been seen since 1980, partially due today to the political environment, acrimony, and the recent debt ceiling debacle, although it is somewhat disconnected from actual consumer behavior. He stated that the housing market and the labor market were connected, since high unemployment results in foreclosures which put more supply back into the housing sector and which depresses prices further, and improvement in one of those markets would help the other. He pointed out that government policy has mistakenly been directed at people who already are in default of their mortgage rather than those that are still current in their payment and could be helped successfully, which would free up disposable income in some households that could be spent in other areas of the economy. He predicted that Florida would get back to the type of job growth that they have become accustom to in 2013 – 2014, and he suggested that local leaders focus on things that they can control so that they would be prepared when the economy improves.
Ms. Debra Lyons, Vice President of Community and Economic Development at ACT, commented that she believed workforce development needed leaders from diverse sectors coming together to ensure that the County is an attractive place to do business. She discussed a new workforce development system that aligned the skills employers need to the skills that people have or obtain and provided a clear line of sight for the emerging, transitioning, and current workforce to understand what skills are needed for real success, which would provide data at the County level every month and return on investment. She noted that the recession of 2009 altered the economic landscape and resulted in leaner, more productive, more competitive, and more customer-focused businesses because of the competition to stay afloat; however, the education system also has to become leaner, more competitive, and focused, but the structure of the education system does not lend itself readily to change. She stated that the national workforce skills credentialing system was a different and innovative way to build a bridge between education and industry as well as ensure that educators teach the skills needed to be productive on the job and provide irrefutable proof that the region had the skilled work force for industry. She elaborated that the ACT work readiness system known as Work Keys evaluates what common critical thinking skills are needed for a range of jobs and what skills are actually possessed by the current workforce, and this skills gap needs to be solved or closed. She also explained that there are eight different dimensions that can be assessed in the ACT systems, the most important being applied math, reading for information, and locating information, which are the foundation skills needed for a career readiness certificate and which are found in 85 percent of the jobs nationally to produce a well-rounded graduate, and then layering specific occupational skills on top of those in the workforce. She emphasized that increasing the critical thinking skills of their middle skill jobs is extremely important for economic growth, and the Work Keys tools are designed to help everyone achieve workplace success. She reported that they were making available to states a 12-month executive leadership program for economic-development strategies around community-based workforce development, which was an innovative program that had never been done before and which would ensure the County has the workforce they need to drive their economic growth and provide sustainability in the infrastructure. She presented data showing the success of the Georgia Work Ready program, including the return on investment of $31.7 million in unemployment benefit savings for an initial investment of $7.65 million stemming from the fact that 6,100 unemployed residents used their NCRC to find a job. She mentioned that about 100,000 Floridians have already been credentialed in the state’s existing job-profile system, but she believed ACT could be helpful to Governor Scott to help leverage that money in a way that could better benefit economic development locally.
Mr. Ed Morrison, Staff Member of the Center for Regional Development at Purdue University, had everyone introduce themselves to one other person and stated that he wanted everyone to think of networks in a new and different way as well as the value of coming together, meeting someone new, and civility. He explained that Strategic Doing is designed to assist in doing new, innovative and complex things in open networks. He also commented that economic development is about increasing the flow of good money, which was from companies that trade outside the community, and neutral money, which circulates in the local economy, and decreasing the flow of bad money which flows out of the local economy. He explained that they need to have a portfolio of collaborations in the areas of brainpower, innovation, quality and connected places; as well as new marketing narrative about where the community is going; and he opined that collaboration was now the essential element of leadership. He related that the cycle of strategic doing involves asking the questions of what they could, should, and will do together and what their 30/30 is. He emphasized that a region could create their own future, but advised against waiting for the state and federal government before doing so. He also believed that the market economy needed to help the civic economy, which included government, education, and nonprofits, which in turn would support those businesses and help them to grow, and they also need to foster communication between business and education. He strongly advised against engaging with naysayers or those who are angry and do not want to move beyond old behaviors and a totally outdated system. He commented that building the networks needed for this process takes time and identifiable horizons. He advised against protecting boundaries, since welcoming and being respectful of diverse perspectives will help them learn faster, and they could not do complex thinking together without civility. He recommended that the County set a six-month target about what they would do as a community to move forward on those agendas. He opined that incentives to individual companies do not work, but rather local governments should be investing in themselves, in the new civic infrastructure, and in innovation zones that will award collaboration within their community that they will control themselves.
Mr. Mojock thanked the speakers and summarized important points brought up throughout the day.
The Economic Development Summit was adjourned at 4:40 p.m.
JENNIFER hill, chairman
NEIL KELLY, CLERK