Storms unlikely to cloud Florida's business future
By ROBERT TRIGAUX
Published October 3, 2004
Ladies and gentlemen: In this corner, weighing in at Category 3 and 4, are hurricanes Charley, Frances, Ivan and Jeanne.
In the opposing corner, representing heavyweight corporations expanding in Florida, are Citigroup, Fidelity National Financial and Scripps Research Institute.
In the wake of four major storms that caused $20-billion in damage to this state in six short weeks, it comes as no surprise that many companies - big and small - privately gave pause and reconsidered their past and future plans to expand to or relocate in Florida.
As they should. It's smart business for corporate risk assessment teams, boards of directors, CEOs and site selection experts to analyze the financial exposure and basic safety concerns from four hurricanes whose reach stretched from Key West to Pensacola.
The consensus so far? There are some early worries out there. The cost and availability of business and property insurance in Florida may become a concern again, as it did after Hurricane Andrew in 1992. Energy costs will rise to pay for the enormous cleanup of four storms by the electric utilities. Construction will slow as massive repair efforts distract builders. Wood and concrete costs will soar. And time-critical industries that rely on uninterrupted airplane flights - and in the case of Interstate 10, passable interstates - may have second thoughts about setting up shop here.
Will business reconsider Florida? "It's the $64 question we are asking ourselves at this point," acknowledges Bill Habermeyer, CEO of Progress Energy Florida - Central Florida's dominant power provider - and the vice chairman of Enterprise Florida, the state government's public-private economic development organization.
Habermeyer likens Florida's post-hurricane trauma to New York City after the attack of Sept. 11, 2001. "People thought that maybe New York would no longer be a business center, that people would move to Cedar Rapids," he said. "In truth, New York bounced back."
So will Florida, Habermeyer said, because people and businesses are resilient. And Florida's chief economic attributes - low-cost and plentiful labor, location and a friendly business climate - remain largely unaffected by hurricanes.
Citigroup, whose CitiFinancial customer service center near Pensacola was battered by Hurricane Ivan, responded quickly and announced plans last week to stay and rebuild its 400-employee facility (perhaps a bit farther from the coast). Fidelity National is staying in Jacksonville, regardless of the weather, after relocating its headquarters last year from California. And Southern California's Scripps Research Institute said hurricanes have not changed its mind to build a major biotech facility in Palm Beach County.
The bad news is four hurricane blasts in quick succession, and the intense international media attention, undoubtedly planted some small sense of doubt in the U.S. business community.
The doubt is not yet big enough to halt a healthy business migration to Florida. But it might become so if this year's intense hurricane season becomes a destructive template, as some weather experts hint, in the years ahead.
For now, the site selection industry - the people who recommend best expansion and relocation sites to companies - seems unimpressed by Florida's hurricane season.
"I do not see the recent hurricanes in Florida factoring into future site selection decisions in any meaningful way," said Mark Arend, editor of the influential Site Selection magazine.
"In the short run, everybody in the country is glued to the Weather Channel and watching Florida's hurricanes," said Bill King, a former Tampa resident and chief editor in Kansas City of Expansion Management magazine, whose national business readers are CEOs looking for the right spot for their next corporate expansions. But memories of such things are short, he said.
"I have my doubts that a year from now hurricanes will be a big concern - unless you get hammered again. If it happens next year and the year after, then I would change my story," King said.
But not now. Central Florida is on the rise, King said. "It has all the important attributes that businesses are looking for."
One of the Tampa Bay area's biggest business recruiting coups in years, New York's Depository Trust & Clearing Corp.'s decision to locate a 500-employee operations center in Tampa, remains unaffected by the rough hurricane season and on track for opening in the first quarter of 2005.
"There was some initial concern about whether building materials would be slowed by the weather, but that is not a problem," said DTCC spokesman Stuart Goldstein. The company chose to expand here as part of its "business continuity program" after the 9/11 attacks.
At the Tampa Bay Partnership, which markets this region to businesses, four hurricanes have made for plenty of water cooler chatter but no real change in the organization's mission.
"Before (Hurricane) Jeanne, we met with and spoke to quite a few relocation consultants and nobody thought (the impact of three storms) was going to affect our pipeline of leads in any long term or substantial manner," said Partnership marketing chief Chris Steinocher. "What makes Florida attractive for business - low costs and attractive labor - had not changed in their minds."
Still, there are nagging questions about business confidence in Florida's weather. Recent Miami Herald and South Florida Sun-Sentinel stories examining Florida's post-hurricane business climate come across as a bit overexcited. They suggest the state may have a tougher time recruiting businesses, or luring tourists, because of the unprecedented negative coverage of so many hurricanes in such a short period of time.
One story even goes so far as quoting a National Hurricane Center forecaster suggesting Florida's population "could be half of what it is now" in 40 years if the state continues to be battered by hurricanes.
Let's check back in 2044 and see if that came true.
Fortunately, most site selection experts still view Florida hurricanes as they might consider blizzards up north, said Sena Black, Enterprise Florida's senior vice president of marketing and information.
Just to be sure U.S. businesses are not getting skittish, Enterprise Florida plans to survey about 300 executives nationwide this month.
"We want to know how significantly the hurricanes might have dented their perception of us," she said. If there are dents in Florida's tropical allure, Enterprise Florida will respond with reassuring messages in some mix of ads, direct mail and public relations.
None of that will happen without survey results. "We don't want to overreact," Black noted.
But four hurricanes in a month and a half sure feels like somebody's playing a cruel joke on Florida.
"We recognize the frequency is unusual," Black said. "Hopefully, it won't happen again."
