'A Horror Show'

'A Horror Show'

government watch by Mark Gordon | Managing Editor

An Ohio business owner nearly jumped at the chance to move most of his $15 million company to the Gulf Coast. Now he'd jump for just about anything else.

Jim MacMillan smiled with satisfaction one afternoon in November 2005 when he made the decision to relocate the bulk of his growing $15 million, 60-employee rubber products manufacturing company from northwest Ohio to Bradenton.

The move, on paper anyway, made perfect sense: MacMillan was looking for a spot closer to an airport and a seaport, as 40% of the 25-year-old company's inventory has worldwide destinations. Manatee County officials already enticed MacMillan by offering tax breaks after he agreed to hire at least an additional 20 people for the company, Thermodyn, after the move. And Ohio, MacMillan told a Bradenton newspaper at the time, was becoming an increasingly unfriendly place to do business - with a rash of tax hikes and fees being the primary problem.

Finally, MacMillan was living part of the year in Boca Grande, Charlotte County, so a Florida migration was in order.

But that afternoon in November more than three years ago was just about the last time MacMillan smiled when it came to anything related to the move and more specifically, anything related to Manatee County.

What MacMillan calls his horror show of a move included a combination of unfilled promises, unforeseen fees and unconcerned county officials regarding the 25,000-square-foot building he was developing in a Bradenton industrial park. It ended earlier this year when he sold the building for about $2.2 million, taking a slight loss financially and a super-sized loss emotionally on the entire project.

The problems, from spending more than $60,000 in permitting and impact fees over three years to what MacMillan says was shoddy and incomplete work from county permitting crews, were so frustrating that earlier this year MacMillan took the rare step of completely calling off the move. He decided to stay - and expand - his plant by 15,000 square feet in Sylvania, Ohio, a Toledo suburb. And it cost him just $4,641 and five months to get the bulk of the permits and code amendments approved.

Says MacMillan: "I decided I didn't want to bring my employees into a county that doesn't care about businesses."

Adds MacMillan, reflecting on the problems dealing with the Manatee County building and permitting departments during a recent interview: "It was the worst situation I've ever encountered in my life. It was a horror show. It was a total and utter nightmare."

To be sure, MacMillan isn't the first business owner to encounter an Olympic-style obstacle course of issues when dealing with government agencies in Manatee County, or any other Gulf Coast locale for that matter. And the original contractor MacMillan hired to put up the building went out of business one year into the project, so the delays weren't totally connected to the county.

But MacMillan's story is illuminating in that many business owners, executives and entrepreneurs tend to suffer silently when it comes to these issues, not wanting to impact their chances of success. And the fact that MacMillan called off the move during a time of economic difficulty, when a relocation of his size - any size, really - would be considered a major coup, only exacerbates the situation.

Longtime problems

While MacMillan says no one connected to the county, from planning department employees to Chamber of Commerce officials, truly listened to his problems and concerns as they were happening, the message has now been heard, say several top Manatee County officials.

County Commissioner Carol Whitmore, who also sits on the board of the county's Economic Development Council, says she was disappointed both to hear about MacMillan's situation and that she knows his case is far from an isolated occurrence.

Whitmore says she and the other commissioners have heard from several other businesses owners and many complaints stem straight from the county's building departments. "It's like a cancer that has spread," says Whitmore, adding that the department has had difficulty policing itself to make significant changes. "It has been going on for a while."

The commissioners recently hired an outside auditing firm to look into the department, why it has so many problems and what can be done about it. A report is expected by the fall.

"We're not going tolerate customer service like this," says Whitmore. "It's a shame that we had to lose one customer, but our goal is to still bring businesses to Manatee County."

Meanwhile, Manatee County Deputy Administrator Dan Schlandt says economic development, and improving how the county's departments go about it, was a top priority for Ed Hunzeker when he was hired as the county's new administrator in January 2007. Hunzeker has created a development review study to attempt to fix some of the issues. Says Schlandt: "We definitely want to have an atmosphere where people want to come here."

A 'big mistake'

MacMillan says no matter what he decides to do in the future, Manatee County is one place he won't be doing business. He still lives part of the year in Charlotte County and he would relocate there if he ever feels the Florida pull again. But even though Thermoydn continues to grow about 10% a year, that is a big 'if'.

The problems with the building, on 1916 72nd Ave. E., started soon after MacMillan bought the land for it, in a deal arranged by Lisa Anthony, an agent with Wagner Realty. Anthony would later become the alternate project manager for the construction of the building and the liaison with the county while MacMillan was in Ohio, as well as a sounding board for MacMillan as the problems mounted.

MacMillan also now considers Anthony his savior in the project because she was able to find a buyer for the building after he decided to sell it last year. The sale process was complicated, as the market had already softened and the building had specific features where it only made sense for an owner/occupier party to buy it, not an investor. The ultimate buyer, in a deal that closed for $2.18 million in February, was Bradenton-based OE Racing, which sells custom-made tires and wheels overt the Internet.

The sale was the culmination of what MacMillan calls the worst period of his business life. Some problems that stick out for him include:

• MacMillan says several county and chamber officials told him the project would be put in Manatee County's fast track program to facilitate the permitting and zoning process, since he was planning to create much coveted manufacturing jobs. Instead, he and Anthony just sent e-mails to people that were never returned.

• After MacMillan thought the zoning process was finished, a county official told him the building was actually being classified as a warehouse, which would mean an additional $3,000 in impact fees. MacMillan successfully fought that change.

• On the day late in 2007 when MacMillan thought the building was completely done, county officials arrived to say there would be another $25,000 in fire department code fees for him to actually be able to open it.

• County permitting crews checking on water pipes and other water issues accidentally broke off valves and put some of the replacements in the wrong spots.

"I'll never forgive myself for doing this," MacMillan says. "It was the biggest mistake I ever made in my life."

Buckeye State Bait

Jim MacMillan never thought he would hear himself say it was easier to do business in northwest Ohio than Florida's Gulf Coast. The image of Ohio as a high-tax, low-growth state, he says, isn't too far from the truth.

But Ohio is where his rubber products manufacturing company, Thermoydn, will remain. He will not be relocating a bulk of it to Bradenton, as he originally planned to do.

While many of the problems MacMillan encountered stem from the Manatee County building and permitting bureaucracy, the costs - in money and in time - of doing business in Lucas County, Ohio for his company's expansion can induce a business owner used to high fees of the Gulf Coast to drool. For example:

• A zoning change in Lucas County for tearing down an old building and erecting a new 14,500-square-foot structure, according to MacMillan, took one month to get and cost $1,600;

• A new building permit took less than three months and cost $3,021;

• Construction on the new building began just two weeks after the old one was torn down;

• The building, with occupancy permit in hand, took a little more than five months to build and cost a total of $4,641.

REVIEW SUMMARY

Business: Thermodyn, Sylvania, Ohio

Industry. Manufacturing, rubber products

Key. Company executive spent three years building a new plant in Manatee County.