EO-Tampa: Packed Pipeline

EO-Tampa: Packed Pipeline

By Janet Leiser

Senior Editor

Downtown St. Petersburg has a jump start on Tampa and Clearwater when it comes to shopping and urban living. That city's core took off long before Tampa and Clearwater.

But its sister cities are catching up: more than a dozen projects, including Trump Tower, are planned for downtown Tampa, and multiple residential towers, along with a movie theater and retail shops, are in the works for downtown Clearwater.

Like most of Florida, the Tampa Bay area's real estate industry set records again in 2005. Construction activity was at an all-time high as builders worked to keep up with demand.

In Hillsborough County, the construction value of residential permits hit $2.2 billion through the first 10 months of 2005, up 36.5% from the same period a year earlier, according to the U.S. Census Bureau. Pinellas, Florida's most densely populated county, hit $605 million in the same period, a 33.7% increase. And in Pasco County, which has become Tampa's newest bedroom community, reached $1.2 billion, up 27.5%.

"This was a phenomenal year," says Terry Aidman, managing partner of Tampa-based Aidman, Piser & Co., one of the 15 fastest growing CPA firms in the country. The company's 25% growth in revenue in 2005 is due in part to the success of the real estate industry, Aidman says. He declined to say what revenue was for the 40-employee firm.

Aidman says he hasn't seen a construction slowdown locally - at least not yet.

"Real estate continues to be a hot commodity," he says. "Downtown Tampa for the first time ever is seeing residential building, and waterfront property seems to have no price limit to it. Tampa Bay is a haven for builders, Realtors, construction companies and developers."

Housing boom

Wachovia economist Mark Vitner says the Tampa-St. Petersburg-Clearwater metropolitan area added 240,00 new residents, or 102,000 households, in the past four years.

In the past, one of the area's attributes for business has been its affordable housing. That's now changing.

Home prices have jumped 98% over the past five years, including a 30% jump in 2005. Builders supplied 120,000 units, while the report estimates market demand at 145,000. Prices are projected to go up another 15% in 2006.

The median price of a home in the area today is $217,400, about 3.3% above the national median. But five years ago, it was $109,600, about 79% of the national median.

Stuart Rogel, president and chief executive officer of the Tampa Bay Partnership, says it's a trend that could be troublesome for the area. "That [affordable housing] has always been a competitive advantage for the Tampa Bay region," he says. "Price increases are OK if incomes also increase. We have to monitor that trend. It could affect our ability to recruit workers."

More growth

Vitner predicts the bay area will grow solidly over the next few years. "Tampa is still an attractive area for corporate relocations and expansions," the report states.

He cites the expansion of a West Marine call center in St. Petersburg, which will add 100 jobs, and a new Humana call center in Tampa, which will add 200 positions.

"Growth in health care, financial services and business and professional services are other notable bright spots for the region. We are expecting 45,000 new jobs to be created this year," Vitner says.

In 2005, Hillsborough County saw a large increase in tourism dollars. The county collected $19,329,6009 in bed taxes, a 22.3% increase over 2004. Pinellas collected $18,239,638, up 6.6% from 2004. Pasco, to the north, doesn't attract as many tourists. That county collected $717,044, up 5.4% from the previous year.

The Tampa Bay Partnership's Rogel says: "Tourism has really picked up. We've finally gotten to the pre 9/11 levels. I don't think the major storms impacted us substantially as a region."

Economist Hank Fishkind of Fishkind & Associates in Orlando expects Florida's economy to remain strong in the first half of next year, but he's more pessimistic about the second half. As interest rates and inflation rise, he expects a slowdown. In response, tourism, which has an estimated annual economic impact of $57 billion on Florida's economy, will level off.

VISIT Florida, however, is more bullish. The group projects tourism to increase 3.2% next year. This year, a record 80 million people visited the state.

Rogel is also optimistic, he says, adding, "I'm not concerned so much about a slowdown. I think the economy was so strong, it's getting back to normal levels."

Bullish CEOs

Dean Akers, chair of the CEO Council of Tampa Bay and CEO of Tampa's Ideal Image Development Corp., a laser hair removal chain with its sights set on national expansion, is outright bullish.

"We're forecasting pretty sizable growth," Akers says. "Next year, we'll have 100 locations open or sold. The economy, for us, looks pretty strong. We look for 2006 to be another big year, short of some kind of disaster."

Dick Lange, who was brought in as CEO/president of Hillsboro Printing Co. last year, is also bullish. "I think the local economy will be robust," says Lange.

If there is an unexpected disaster or housing market crash, he says, his company will continue to grow. "Worst case is you take market share from your competitors," Lange says.

If there is a national economic slowdown, Aidman says, the area will be one of the last to feel the pinch. "My experience is that Tampa Bay feels a down market much later than the rest of the country and comes out of it later than the rest of the country," Aidman says.

Rod Casto, associate vice president of research at the University of South Florida's technology incubator, expects more activity next year.

"From a strategic standpoint, there's a lot of startup activity in the technology field, which means entrepreneurs think investment capital is becoming more available," Casto says.

Habib Skaff, one of the founders of Intezyne Technologies, a bioscience startup that moved to Tampa from Boston in 2004, is optimistic.

"There's been a big push locally in the biosciences," Skaff says. "I think we're in the right place at the right time."

What's Ahead in 2006

• Florida economist Hank Fishkind predicts the national economy will cool off as interest rates and inflation rise in the latter half of 2006. As a result: Tourism will will show moderate gains.

• The labor shortage will continue to constrain companies' ability to expand and operate. Pressure will increase to boost wages.

• Housing prices in the Tampa Bay area are expected to go up 15% in 2006, compared to a 30% rise this year.

• Wachovia Senior Economist Mark Vitner expects the local economy to continue "to grow solidly" in 2006 and over the next two years.

Residential Building Permits

'04 Construction Value '05 Construction Value % Chg.

Hillsborough $1,611,529,066 $2,199,681,965 36.5%

Pasco $953,799,522 $1,216,532,353 27.5%

Pinellas $452,117,563 $604,793,543 33.7%

Source: U.S. Census Bureau. *Latest figures available, through October 2005, compared to same period year earlier. Includes single- and multifamily residential construction.

HOW POPULATION GROWTH COMPARES

2004 2005 2006 2007 2008

Hillsborough 1,108,435 1,131,582 1,155,134 1,179.064 1,202,697

Change 23,147 23,552 23,930 23,633

Percent Change 2% 2% 2% 2%

Pinellas 946,640 949,760 956,027 962,523 968,744

Change 3,120 6,267 6,496 6,227

Percent Change 0.3% 0.6% 0.6% 0.6%

Source: Florida Office of Economic Demographics & Research

WHERE THE JOBS WILL BE

HILLSBOROUGH

FASTEST GROWING OCCUPATIONS TO 2012

Annual '04 Avg.

Rank Occupation Growth Wage

1. Security/fire alarm installers 6.39% $16.96/hr.

2. Home health aides 6.39% $9.62

3. Rolling machine setters/operators 5.63% $8.63

4. Highway maintenance workers 5.60% $11.31

5. Network systems/data communications 5.58% $28

6. Brick masons/block masons 5.42% $15.14

7. Refuse/recyclables collectors 5.26% $8.62

8. Landscaping/groundskeeping 5.25% $9.63

9. Construction laborers 5.19% $10.22

10. Medical records/health info techs 5.11% $11.61

PINELLAS

FASTEST GROWING OCCUPATIONS TO 2012

1. Security/fire alarm installers 6.44 $16.96

2. Home health aides 5.84 $9.62

3. Network systems/data analysts 5.44 $28

4. Packaging/filling machine ops. 5.31% $10.23

5. Refuse/recyclables collectors 5.04% $8.62

6. Medical records/health techs. 5.04% $11.61

7. Medical assistants 4.97% $11.81

8. Public relations 4.81% $24.32

9. Highway maintenace 4.81% $11.31

10. Personal financial advisers 4.79% $59.83

Source: Agency for Florida Workforce Innovation