Consultant: Marion lacks offerings other communities have

By Bill Thompson
Staff writer

Ocala-Marion County has a host of assets that new employers would find attractive, but it is also lacking some significant things that other communities offer, a new study says.

The report suggests that catching up to those competitors in order to avoid losing new job opportunities in the future will require a major and urgent remake of the physical landscape along parts of the Interstate 75 corridor, as well as an overhaul in the thinking and strategies of local policy-makers.

Such were the findings of a consultant hired in May by the Ocala-Marion County Economic Development Corp., or EDC, to evaluate the state of business-park development in the county. The analysis does contain remedies, but it remains to be seen if the policy-makers will accept and act on the recommendations when they are formally presented in the coming weeks.

Marketing strategy
Besides sizing up the progress and plans for local business parks, John Rhodes, senior principal of the Lakewood Ranch-based firm Moran, Stahl & Boyer, was also tasked with developing a marketing strategy for these sites once they come to fruition.

His 51-page report, released Wednesday, emerges as economic development and job creation have achieved front-burner status for local policy-makers confronted with an unemployment rate that persistently hovers around 14 percent.

Rhodes' advice to move the community forward will likely test the resilience of the partnership of the three main local players in economic development — the city, county and EDC.

The relationship between those three has been strained since the County Commission voted last month to hire its own consultants to locate new employment opportunities.

Rhodes considered an unspecified number of counties for his analysis, although he ultimately chose Alachua and Polk counties to compare to Marion.

His summation of the Ocala area's assets was in many ways similar to past studies commissioned by the EDC and local governments over the past decade.

I-75 and rail lines have the community “well positioned” to reach markets within the state and the Southeast, as well as port cities with shipping traffic accessing foreign markets, he wrote.

Being located in a “right-to-work” state makes Ocala appealing to firms seeking to avoid union entanglements.

The community's work force has a variety of skills and comes at a modest price in terms of wages.

And the College of Central Florida is key for its support for local business expansion and training.

Demographics
There were also “challenges” identified by Rhodes.

Marion County's population has a “high average age” — seven years older than the national average — that is driven up by the size of its 65-and-older demographic.

That large, and growing, older population also shrinks the size of the local work force and may send a “red flag” to companies about how many workers are actually available.

Moreover, Rhodes added, the county has a “very low” number of college graduates with four-year degrees, which reflects its agricultural and industrial economic base.

That creates the impression that the community is “lacking technical talent.”

Finally, Marion County has a paucity of industrial or warehouse buildings ready for new companies.

Specifically, Rhodes noted the shortage of facilities that are less than 20 years old, situated within five miles of I-75 and have ceiling heights reaching 20 feet or more.

“There are essentially no existing major sites that are at a high level of readiness with utilities and roads in place,” Rhodes observed.

“This is important because any delay in road or utility installation beyond the building construction period will cause an unsatisfactory situation as perceived by a prospective company.”

“Unless there is a very well-defined plan with hard commitment dates for installation, most prospective companies will view the ability to deliver both road and utilities as over optimism,” he added.

In contrast, Alachua and Polk both have buildings and sites available at a “relatively high level of readiness and would be considered attractive alternatives to Marion County. Competition going forward is going to be very intense and anything that can be done to minimize the gap and real estate availability is critical,” Rhodes wrote.

Cost
Rhodes offered several prescriptions for closing the readiness gap, ideas that he said should be implemented quickly.

Although he didn't put a specific price tag on them, they collectively could cost tens of millions of dollars, testing the will of policy-makers dealing with declining revenues and public demands for curbs on government spending.

Among his major points, the consultant suggested that the Ocala City Council finish its development of the business park at Ocala International Airport and declare it “shovel ready” within nine months.

He also recommended that the city, County Commission and the “team” involved in the development of the 677-acre Magna property at I-75 at U.S. 27 push ahead to create an “inland port,” complete with railroad access and a truck depot.

Making Magna and the airport sites more suitable for truck traffic would also require constructing at least one “wing” of a cloverleaf on the west side of the I-75 interchanges at U.S. 27 and the east side of State Road 40, respectively, as well as reconfiguring their exit ramps, Rhodes indicated.

“Selected” sites at Magna should be “on the market” within nine months, Rhodes wrote.

Rhodes added that local officials must also design a “virtual building” capable of housing manufacturing and warehousing firms that is at least 50,000 square feet to show to prospective companies.

In addition, local officials should also cut a deal with Merillat Corp. to put its now-defunct manufacturing building in Ocala up for sale, in return for the company building in another local business park, if the facility is sold.

That would provide the community with a 200,000-square-foot site that could be immediately marketed, Rhodes noted.

Energy use
Not all of Rhodes' ideas occur on the ground, however.

He called for the city to reduce its electrical rates, which are among the highest in the South and more than 20 percent higher than the national average.

Rhodes maintained the county would be “well served” by pursuing a waste-to-energy plant capable of consuming 100,000 tons of manure, bedding and wood waste a year — a “true win-win situation” that eliminates the intractable problem of ridding the community of horse-farm waste and creating low-cost green energy.

Rhodes said the city's participation in that would invite investors and open up a spigot of federal grant money.

Recruiting certain types of companies — solar energy, medical manufacturing, food science, pharmaceutical — will require a liaison who could help research conducted by the state's major universities evolve into actual economic development initiatives, Rhodes argued.

And the “serious negative,” as far as potential employers are concerned, presented by the community's large senior population might be a “hidden asset,” Rhodes wrote.

“Within all those older folks are years of experience and insights that could be tapped,” Rhodes wrote.

“This means the Ocala area has one of the most experienced and talented work forces.

“In order to tap this talent, there needs to be several actions taken and attitudes changed.”

Making that conversion would require creating policies that provide older workers or retirees flexible schedules that allow them to work past retirement age or that permit them to be mentors to younger workers.

Finally, Rhodes maintained that local officials must draft a better wooing strategy — although he did not detail what the crux of that plan would be.

“There is typically some point of differentiation that is news worthy and catches someone's attention. A marketing effort that focuses on ‘look at me, I'm just like everyone else' is not an effective approach,” the consultant wrote.

Yet it also came back to having something concrete to offer.

“One adage that site selectors learn is: ‘Communities with the basic resources may stay in the game, but it is those that have something unique that allows them to win.' Regardless of the amount or quality of marketing efforts, a community must ultimately be able to provide the specific resources at the required level of readiness for the prospective company's situation.”

Implementation
Overall, as Rhodes summed it up, “The implementation of [the study's] recommendations are critical to the competitiveness of the Ocala/Marion County area.”

“Recent trends have indicated that when companies make a decision to locate their business they want to minimize the facility start-up time. That requires communities to have buildings available and/or provide sites that are at a high level of readiness.”

And in almost every case, he indicates his proposals should be implemented within two years.

The timing aside, what's left out of Rhodes' evaluation — which he is expected to present to the County Commission within a few weeks — is what it might cost to put it all into action.

Pete Tesch, the EDC's president and CEO, couldn't offer an exact figure, but acknowledged it would be expensive.

How expensive?

Some examples might shed some light, if the community's elected leaders pursue even some of what Rhodes advocates.

In February 2009, for instance, the county was in the opening round of discussions with the city about partnering on the development of the Magna site.

Then-County Administrator Pat Howard told the board the county would need to pony up $17 million just for its share of the project's infrastructure.

In 2008, the Florida Thoroughbred Breeders' and Owners' Association teamed up with a Texas-based company to develop a waste-to-energy system to dispose of 100,000 tons of horse manure, bedding and wood waste.

In February 2009, FTBOA announced that it had received a $2.5 million grant to explore the technology more fully.

The plant itself was estimated at about $30 million.

A Florida Department of Transportation report from October 2009 estimated the cost of a partial cloverleaf interchange at more than $40 million.

Tesch urged people to not “freak out” about the potential costs in the short term.

Tesch said what is critical — and fresh, relative to past studies — is Rhodes' narrowing the community discussion of business parks to the airport and Magna sites; his compilation of the existing inventory of buildings, or lack thereof; and his outlining of the resources, collaboration and salesmanship needed to make Ocala-Marion County competitive with places like Alachua and Polk.

“People should understand how exciting this is. We're finally having the conversation about what we need to do to attract businesses,” Tesch said.

Rhodes' study, he added, is about “what economic development looks like in 2011 and going forward, and puts into a clearer perspective what needs to be done — and what challenges we have.”

Contact Bill Thompson at 867-4117.