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County's salesman also chief optimist

After 19 years as an industrial executive, Mike McHugh knows what businesses want in relocating.

© St. Petersburg Times
published February 16, 2003

Mike McHugh calls himself an optimist, which may be the key qualification for his job.

Often, his sentences start, "I'm really excited about . . . ," and end with, "That's a good thing."

He has to be an optimist. He sells Hernando County. And that's not always easy, even in a good economy.

For the past year, McHugh has led Hernando County's economic development office, county government's latest stab at attracting and retaining business.

Most business leaders and county commissioners say he's doing a good job so far.

Although McHugh has yet to score an incredible reputation-sealing coup -- like the move of a big, new company to Hernando -- he has helped usher in several business expansions and has smoothed the relationship between government and the business community.

McHugh has also managed to avoid controversy and spend fewer tax dollars than his predecessor, the privately operated Economic Development Commission, which lost its contract with the county in 2001.

Right now, his biggest challenge is one facing all counties: seeing that Hernando's economic development progresses under the continuing recession and unstable international climate.

"There's kind of a conservative viewpoint in terms of projects, capital expenditures and expansion," McHugh said. "People are not doing the things they would like to do. They're doing the things they have to, because there's an air of uncertainty."

Temporary position turns into permanent post

When McHugh committed to work for the county, he did so cautiously, originally agreeing to only a six-month stint.

One of the reasons for his tentativeness was that the task of drumming up business for the county had been steeped in controversy.

At the time it lost its county contract, the Economic Development Commission was under attack for exaggerated accomplishments, closed-door meetings and a lack of accountability.

Its history was unsettling enough that the county's top choice for the economic development job said no, followed by several other finalists.

The county then approached McHugh, who had also applied for the job.

McHugh had recently retired from his job as vice president of Florida Crushed Stone. He had left the mining industry, where he had spent a 19-year management career, seeking a change of pace and more time with his young family.

McHugh offered to get the office up and running while the county continued its search for a permanent director. But, after six months, McHugh was asked to stick around by County Administrator Richard Radacky, with the support of the commission.

"I think Mike is doing an excellent job. He has a good rapport with the business community," County Commissioner Betty Whitehouse said.

Already, the new Office of Business Development has spent far less than the EDC. McHugh's office was granted the same budget -- $331,000 -- the EDC had in its last year. The development office spent only $160,871 during its 11-month existence last year, according to the county's Office of Management and Budget.

Part of the reason for that is McHugh delayed hiring a full-time employee until November.

"I didn't want to spend money until I knew what I needed," he said. "But we've been able to be cost effective, and I think that's important."

McHugh cut his fiscal 2003 budget by 11 percent, to $293,000. His salary is $71,314 a year.

His prime targets: industrial, distribution

So far, McHugh has spent much of his first year meeting with local businesses and figuring out what existing companies do and what they need. He has also kept tabs on empty properties available for new businesses.

"There's been a lot to learn," he said.

He has also concentrated on wooing the manufacturing, distribution and industrial sectors, the kind of industries that offer higher-paying jobs.

The main reason he is focusing on those areas, he said, is that the county's economy already has a strong retail and service sector, which would exist despite his efforts.

Big retail stores, such as Wal-Mart and Target, as well as restaurant chains plan new locations based on population trends, said Jacqueline Morris, executive director of the Greater Hernando County Chamber of Commerce.

"He's trying to guide the county into recruiting business that's not demographically driven," Morris said.

Economic development is a slow beast, and a year is not enough time to judge such efforts, several business leaders said. And, of late, economic development has proven challenging throughout the nation, given the continued recession.

"Last year is not a good indication, because we were in a slow growth period nationwide," said Len Tria, a former county commissioner who is an independent consultant for development and economic projects. "Business is tight all over, and it's going to take us a while to climb out of this doldrum."

Before McHugh came aboard last year, the Airport Industrial Park lost two major manufacturers: Memphis, Tenn.-based Thomas & Betts Corp., and Westmond, Ill.-based United Plastics Group.

Then in September, Polaris Pools Systems pulled out of a county contract to relocate near Interstate 75 and receive state-backed grants. Polaris cited a rough market and a recent buyout for its change of heart, and the county is now looking for a new company to fulfill its contract, McHugh said.

Despite the slowed national economy, several local firms decided to invest in expansions. Accuform Manufacturing Inc., a sign maker, decided to buy the old Thomas & Betts building. The Wal-Mart Distribution Center, Imex Model Co. and Manzi Metals Inc. have recently completed expansions.

All of those projects were in the works before McHugh's arrival. But he says they taught him a thing or two about Hernando's economic development.

"What I've discovered is the principal area of your economic growth comes from within," said McHugh, whose primary mandate from the County Commission is to retain and promote existing businesses. "A lot of people think the better thing is a new business. But really most of our big growth has been from within."

His office did help bring in Waste Away Systems Inc. and SLP Performance Parts, which opened in existing buildings at the Airport Industrial Park.

Now, the existing buildings in the park are nearly all occupied. Hundreds of acres lie ripe and ready for new buildings and companies.

"At this point, what we really need is more (speculative) buildings," said McHugh, who estimated that 70 percent of prospective companies are looking for a new building and are not interested in assuming such construction costs.

McHugh ready to meet new year's challenge

While most business leaders say McHugh is doing a good job, some believe his office is still lacking in economic development tools.

Morris Porton, a former member of the EDC, said McHugh would benefit from some sort of private-sector organization that would work in tandem with the county to encourage economic development.

"There needs to be a private-sector organization to support Mike McHugh and the county, not as an adversary, but to complement it," said Porton, who is senior vice president of Community National Bank in Spring Hill.

Others say the county's economic development effort needs something more drastic to set Hernando apart from the crowd of counties and cities going after companies.

"We need better bargaining chips," said Gus Guadagnino, past president of the county's manufacturers association, an advocate of tax incentives to attract business.

"You can only sell so much about the beautification of Hernando County," said Guadagnino, president of Joni Industries. "It comes down to what's in it for me; what are the benefits of coming here versus the next county over."

McHugh's view on incentives is that they help, but they are not a primary consideration for companies. He feels a more important enticement is ensuring that the county's workforce meets a company's needs. And the county must be able to offer adequate building space, transportation, wage rates, and a good quality of life for employees.

McHugh believes the county's incentive package is competitive, compared with similar-size counties.

The year 2003 likely will prove just as challenging as 2002 for McHugh, as companies continue their fiscal conservativism. In addition, the state has cut its budget for Enterprise Florida, the state economic development agency that helps market Florida, especially to the international business community.

But, again the optimist, McHugh believes it will be a good year.

He plans to publish a directory of manufacturers and organize an Airport Industrial Park expo, to which he wants to invite the public so residents can get to know the different businesses in the industrial park.

He also has a new marketing agenda. He is going to concentrate on new ways of promoting the county, such as cultivating relationships with private site consultants who look for locations for big projects.

And, he wants to rework Hernando's image.

Previously, the EDC had advertised Hernando as the "Northern Gateway to Tampa Bay." McHugh prefers to refer to Hernando as the "Best Value in Tampa Bay."

He says the slogan gives companies a better reason to come to and stay in Hernando and still links the county with Tampa Bay.

"We're certainly not going to say we're cheap," he said. "But if you want to be in this market, we're a good value."

-- Information from Times files was used in this report.

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