First, the good news


  • August 24, 2014
  • /   Shannon Nickinson
  • /   economy,report-pensacola-metro-2014
People relaxing in an outdoor restaurant setting
Patrick Elebash saw something downtown last Christmas that he had never seen before. Shopping bags. Lots and lots of shopping bags. From lots and lots of stores. The 32-year-old is the fourth generation to work in the family’s jewelry store that has been part of downtown Pensacola for 95 years. “We’ve always been a destination shop, but this last Christmas, I saw people with bags from Scout or Belle Amie,” Elebash says, referring to other, newer additions to downtown’s retail landscape. “For the first time it seemed to me that people were coming downtown to knock out multiple gifts for multiple people. “I don’t ever remember seeing it like this.” The renaissance of Palafox Street didn’t happen overnight. Its transformation into one of the 10 “Great Streets in America,” according to the American Planners Association, is a sign of how far Pensacola has come. The vibrancy and excitement about downtown is one of the best stories our community has to tell about our changing fortunes. Other bright spots in the Pensacola metro include:
  • A booming financial services sector, spurred by the $250 million investment that Navy Federal Credit Union is making in Escambia County.
  • A tourism industry that rebounded after the 2010 BP oil spill and is expanding efforts to tap new markets.
  • A bubble of technology- and knowledge-based businesses in Gulf Breeze that includes boutique specialty medical care at the Andrews Institute for Orthopaedics and Sports Medicine; Avalex Technologies, a producer of digital mapping and display; and email provider AppRiver.
  • The region’s potential in niche manufacturing businesses such as Offshore Inland and ST Aerospace, which are linked to industries that are expected to grow over the next 10-15 years.
“We have competitive strength in business services (Navy Federal, also staffing firms such as Landrum), and in entertainment (tourism-related areas),” says economist Rick Harper. “You also can see what we might call ‘areas of opportunity’... which include transportation and logistics, and education services,” he says.

Downtown

Downtown Pensacola never would have opened up if the Community Maritime Park had not been built and the Main Street Wastewater Treatment Plant had not been demolished. “The sewer plant was ugly, it upset people, and it said the leaders in Pensacola don’t care about the waterfront,” says Mayor Ashton Hayward. “Think about what that said to people. Think about how long it took us to clean up the waterfront, and that’s where all the money is.” Demolishing the plant “allowed people who didn’t understand what the potential was, to see the vision,” Hayward said. “Now they can look west and they can see Joe Patti’s. They can see the waterfront. People can see (the lot where the plant used to be) and say, ‘That could be our version of South Street Seaport,’ or ‘That could be another Aragon.’” The other key component of opening downtown to redevelopment was the Maritime Park. The Pensacola Blue Wahoos are wrapping up their third season in the park’s stadium and team owners Quint and Rishy Studer have continued their investment in Pensacola. It now includes buildings and businesses at the Palafox and Main streets intersection and a project that likely will see the former site of the Pensacola News Journal turned into mixed-use development including residential and retail, built next to a proposed $15 million YMCA. “I think when you look at people who are buying spaces, redoing their buildings and going out and getting new tenants, it is a great sign,” Elebash says. “You always hear about the proper mix of residential and retail, bars, restaurants and other businesses. The big missing piece so far has been affordable housing downtown. Now it looks like the PNJ site is going to be that missing piece.” The Studers aren’t the only investors with faith in downtown. Justin Beck’s commercial real estate company, Beck Property Co., will open 151Main — a 24,000-square-foot, three-story building — on the Community Maritime Park property in early 2015. It will include seven retail spaces on the first floor and four residential condos on the third floor. Beck Property offices will take up the entire second floor. Beck says the decision to build on the CMP site was a mix of timing and the realities of a booming downtown and its hot commercial real estate market. Some of the appeal, too, was being able to say in the future that they negotiated a complex lease process successfully — to prove it could be done. For six months or so, he says, he listened to people say “Nobody else but Studer can build anything down there.” Finally, he says, while talking with Clark Merritt, he thought, “I should just figure it out for myself instead of just listening to everybody else. We proved it does work, you can get it financed, and you don’t have to have hundreds of millions of dollars to make a project work over there.”

Navy Federal’s influence

Navy Federal’s sprawling Heritage Oaks campus near Beulah is one of this area’s greatest success stories. It began in 2003 with 11 employees and plans for a 300-seat call center. Since then, Navy Federal has expanded to bring its current total in the region to more than 3,400 employees. The credit union has invested more than $250 million in Pensacola. An expansion announced last April will add two buildings to the campus and create 1,500 more jobs, as well as a central energy plant, auditorium, parking structure and recreation area. The company’s anticipated employment figures are so influential that Escambia County Schools Superintendent Malcolm Thomas wants to build an elementary and middle school near the Beulah campus. “That’s why the half-cent sales tax is so important,” says Thomas. The sales tax expires in 2018 and is on the November ballot for renewal for another 10 years. It would fund construction of three new schools to alleviate crowding and to handle anticipated growth in the Beulah corridor connected to Navy Federal. The tax generates on average $20 million a year and is a major boost to the local construction industry. “It has been for the last 16 years,” Thomas said. “When the economy was at its lowest point back in 2009, most contractors will tell you we were their biggest customers. We kept them able to keep their men employed and hanging on until things started to pick up.”

Expanding tourism markets

While the beach remains the area’s number one tourism draw, recent efforts to broaden the area’s appeal beyond the sun-seeker are paying off. The 2014 Pensacon convention for fans of sci-fi, comic books, fantasy, horror and cosplay drew more than people dressed like Stormtroopers. It pumped $1.4 million into the economy in February and brought 11,000 people over a three-day run from as far away as California, Minnesota and Arizona. The typical Pensacon-goer was a 39-year-old person with a household income of $60,740. And 98 percent of the attendees interviewed by Majority Opinion Research about their experience said they would return. Event chairman Mike Ensley says organizers specifically planned the event for the tourism off-season. “There is a reason that it’s called Pensacon and I want everyone to understand that is something that has been with me since the beginning of doing this. It’s because it is about Pensacola, it’s not just about a comic-con, it’s Pensacon. “This is for this city,” Ensley says. Cultural heritage tourism is a burgeoning industry and the area — with 450 years of history and culture to share — is uniquely positioned to capitalize on it. The University of West Florida Historic Trust manages 29 historic sites in the two-county area. Jerry Maygarden, chairman of the trust, says he believes that with modest expenditures, heritage tourism could be as large as beach tourism.

Manufacturing and tech are growing

There are other promising signs that could prove to be the next chapter in our success story. This area was not immune to the decline in manufacturing jobs that has swept the nation since the 1970s. But we are capitalizing on specialty areas that show promise. Offshore Inland’s lease at the Port of Pensacola would provide 100 jobs with an average wage of $43,680 a year. The company provides engineering support services to ships working offshore in the Gulf of Mexico. The 15-year lease should produce at least $200,000 annually to the port in lease, cargo and vessel fees. Offshore Inland will invest $10 million to $12 million in its facility at the port. A related business, DeepFlex, will bring some $52 million investment at the port and 100 new jobs with an average wage of $45,000. ST Aerospace’s move to Pensacola would bring 300 jobs to the airport. The company maintains, repairs and overhauls aircraft. Plans include locating a satellite operation on 18.6 acres at the Pensacola International Airport Commerce Park with an estimated price tag of $37 million. Funding would come from federal, state, local and private funds. Email and cyber security provider AppRiver has grown into a worldwide leader in its industry with offices in Gulf Breeze and Lupfig, Switzerland. It has appeared on Inc magazine’s list of 5,000 fastest growing private companies annually since 2007.

Believing the vision

In Pensacola, believing has been half the battle and success has come in small steps that built one upon the next. The success of Vinyl Music Hall — and the investment Evan and Harry Levin made in turning the Masonic Temple building into a live music venue that draws artists and crowds from across the region — inspired people like Joe Abston to invest in Hopjacks and the Tin Cow. And that begat more investment in new and existing businesses. “The psychology of people believing we could do all these things is incredibly important,” Hayward says. “People were thirsty for anything but what was. The same 10 people were always getting paid and we were becoming a rest stop off I-10. People don’t like to hear me say that, but that’s what we were doing.” There are 37 square miles in the city limits, which is why, Hayward says, “quality is everything and that’s why density is so important. The more of these little pockets of cool neighborhoods we build, the more people will come to our city. If I put quality on E Street, people will go to E Street.” Building the value of what we do have is a key to the city’s ability to retain and attract talented young professionals and other newcomers, Hayward said. Megan Pratt and her husband, Jerry Pratt, moved to Pensacola in 2002. She is a native, a city councilwoman and director of the MESS Hall science museum on Tarragona Street. He is a senior researcher at the Institute for Human and Machine Cognition working on the Institute’s award-winning robotics team. They could have stayed in their chic Fenway neighborhood in Boston, near the park designed by Frederick Law Olmsted, who also designed New York’s Central Park. They could have stayed within walking distance of some of the finest arts and cultural amenities in the nation. They chose Pensacola, and they are just fine with that. “Here we can walk to the symphony, we can walk to the Little Theatre, we can walk to the baseball park,” she says. “They are not the Boston Museum of Fine Arts, but truthfully, I never went to the Boston Museum of Fine Arts because it was big and fancy.” Pratt pauses and adds: “There are a lot of things in Pensacola that could be more, but first we have to convince ourselves that we are worth it.”
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