Economic Development, One Step Forward, Two Steps Back!

Recently I wrote an article about the Charlotte County’s attempt to purchase the former Impac University building that has lay dormant the past several years after the passing of founder Jim Irwin, and turn it into a business incubator. Proponents see it as a great opportunity to develop businesses that not only would provide jobs within the Port Charlotte and Punta Gorda, but would birth a diversity of new businesses that ultimately would enable the county to weather economic storms with greater stability. With the prolonged downturn in the economy, Charlotte County showed its vulnerability being heavily driven by the real estate and construction industries however, the visionaries behind the Impac purchase see this as an opportunity to create an environment that can develop a variety of new businesses and perhaps fill many of the commercial vacancies that exist throughout the county. Personally I see this as a tremendous opportunity to get the community to think outside the box and look at the potential of businesses that have never been afforded a foothold, as the general public seems more interested in creating more retail and food service businesses. As a former Vice President of Main Street, Punta Gorda who chaired the Economic Development committee, I have always supported the idea of business incubators and even explored the possibility of tax incentives given to those who were willing to allow temporary structures be built on their vacant land throughout the city to give new business, from technology to tele-medicine, a high level of visibility or exposure. Those opposed see just one more example of the county overspending valuable tax dollars on another “great idea” that will never materialize. They see the $2.5 million the county is offering for the Impac building, (along with another projected $500,000 for repair and retrofitting), as just another example of a series of failed investments authorized by the Charlotte County Commissioners to stimulate economic development in Charlotte County. One such opponent went on to list the Murdock Village purchase of $118 million that consisted of 870 acres and costs the taxpayers thousands of dollars of interest per day, and still lays dormant while developers come and go after they can’t generate the support and financial momentum to turn their plans to reality. Another $27 million was spent for the Ryal’s property which was to be turned into a massive development, but with much of this 1,000 acre property being on “sensitive wetlands” future development plans are now on hold. Eight million more was spent on Thornton Key and then several hundred thousand more were spent trying to lure an Australian yacht builder to the area to set up their manufacturing facilities. While the proponents see the purchase of Impac as a prime location that can attract those who want to develop a business in a “real life” setting, or those who find a “virtual” setting to be more beneficial, the naysayers don’t want to see the county earmark almost $3 million for another “great idea.” They would rather see the outstanding balance on Murdock Village paid down. The question becomes, can the county afford to pay down past expenditures for failed development ventures and essentially take themselves out of the running for potential opportunities for economic development, or do we “roll the dice” once more and enroll the wisdom of business visionaries and entrepreneurs who are well versed in creating business opportunities that can result in a better balance of diverse businesses? It seems the tax revenue generated could potentially be used to pay down the current debt while helping defray some of the taxes we as individuals now face. In today’s economy $3 million is not a number to toss around with reckless abandon, but the potential benefits I still feel far outweigh the risks. The common trait each of the aforementioned “great ideas” shared was that they did little to create more businesses. Like so many ideas we keep hearing the same mantra, “let’s create more developments, or more tourism venues.” Why not go out on a limb and try to develop a diversity of more businesses, and in time not only will we have created a more economically stable environment, but the vacancies of existing commercial buildings will also be reduced adding to the vibrancy of the county in which we live. Let us not fall victim to the failed attempts of the past to dictate our economic future, putting us in a “one step forward, two steps back” mindset that forces us to accept our present circumstances as the norm we have to live with.

DOUBLE DIP RECESSION OR LAND OF OPPORTUNITY

Robert Kiyosaki, author of the book “Rich Dad, Poor Dad,” for years has a shared a basic principal to financial wealth that says, “When everyone is buying, that is the time to sell, and when they are selling, that is the time to buy.” When you consider the roller coaster ride the stock market has undergone due to the unemployment rates in the United States and the financial instability in Greece, Spain, Italy and some of the other European nations, there is a renewed urge for many to look once again into the housing market as prices and interest rates have not been this low in many years. European investors and domestic end users alike are looking at the opportunities and lifestyle that Florida affords, and are once again within financial reach. We are seeing the evidence of this upturn, as buyers are now coming back into the market. Interestingly enough, despite the low interest rates, many buyers are paying cash as the volatility of the stock market has paved the way for a more sensible and affordable approach to home ownership, whether it be a primary residence, vacation home or weekend getaway. Rather than lose money in the stock market, real estate now appears to be a more stable investment. Waterfront boating communities have once again become affordable, particularly in areas such as Cape Coral, Fort Myers, Punta Gorda, Port Charlotte and the gulf Islands. In the past three months alone, over 120 homes listed for over $1,000,000 have either sold or are under contract in Sarasota County alone from the Siesta Key beach area through St Armand’s Circle and Longboat Key, a strong signal that despite warnings of a double dip recession there are many consumers who feel the time to buy has never been better. While August, September and early October usually signal the most quiet time in the real estate market, many Realtors are finding the traditional “slow down” during these months has not been quite as severe this year, it is literally becoming more of a “year round” business. Bargain hunters will always search the internet for a deal, but the most encouraging news has been that there have been many more homes that have sold over $500,000 this year than over the past few years. Another sign of a more robust rebound is the number of new home starts. Waterfront vacant land lots in areas such as Cape Coral, Punta Gorda and Port Charlotte, Florida are now more affordable which makes the total expenditure for new home construction more cost effective. Lot prices have dropped “30-60 percent,” stated Punta Gorda Building Official Randy Cole. Mr. Cole went on to say that while there could be a cost differential of $100,000 between buying an older existing home and building new, the person building a new home would avoid higher costs associated with renovation, maintenance, insurance and cooling. New building codes, put into effect in 2002, make homes built today stronger and more energy efficient. Cole continued to say that in 2010 and 2011 the city (Punta Gorda) “saw 38 single-family homes get built. So far this year, 43 have been permitted with the 2012 total to top 50.” City inspectors have “logged 160 inspections” during one week alone this summer up from 90 per week last summer according to Cole. Homes that sold during the peak of the market for $800,000 can now be built new for $450,000-500,000, and construction firms such as Keith Towles of the Towles Corp., Tom Fero of Fero Construction and Arthur Rutenberg homes are all seeing significant upticks in new home construction. Frank Letterie , owner of Rock Hard Homes also points out that waterfront lots are priced well below those from Naples to Sarasota. Despite economic reports that suggest the recession may not be over, if existing home sales and new housing starts are any indication, I believe we may be well on our way to recovery!