Big Business

We’ve long championed the unique opportunities for small business owners in our city. Yet without these larger established corporations such ventures may not be possible. They increase our economy, further our developments, and evolve our potential for improvement and growth.  In this issue of The Lakelander, we simply could not overlook the key role big businesses play for the overall health and quality of life for Lakeland, particularly when a Fortune 500 is among us.

In this issue of The Lakelander, we simply could not overlook the key role big businesses play for the overall health and quality of life for Lakeland, particularly when a Fortune 500 is among us. 

The largest employee-owned company in the U.S., Publix landed on the Fortune 500 Companies 2018 list at number 85. Publix also came in at number 47 on Fortune’s Top 100 Companies to Work For, one of only 10 companies to have made the list every year since its inception in 1998. As a major employer, Publix’s relationship with the city has led the way big companies can impact and grow our city, in more ways than one.

ECONOMIC IMPACTS

Regardless of last year’s Hurricane Irma, Polk County’s industrial market continues to move steadily upward. According to a Cushman & Wakefield quarterly report, by the end of 2017, “The county added 5,968 jobs year-over-year, a 2.1% increase in employment. Unemployment dropped 130 basis points (bps) from 5.6% to 4.3%. All industrial employment sectors saw job gains, especially trade, transportation, and utilities, which added 1,100 jobs, a 2.0% increase.”

Great economic impacts and increased job growth are the initial, obvious factors that play into attracting businesses of this magnitude for our city. “Any city that attracts, recruits, and retains large corporations,” says Deese, “leads to a large economic impact. Jobs created, capital investment, and tax revenue feed the economy of Lakeland. Having Geico, Summit, and Lockheed provide jobs with high wages and benefits, presents salary opportunities to the community.”

“Bringing jobs and growing our economic capacity, and growing our population, are all part of what make this city vital,” says Mayor Bill Mutz. “So we are very: A) pro-big business-attracting; and B) to the extent that we can bring it downtown, we want to.”

Currently, with over 30 major employers in our city, with 200 up to 8,000 employees, big businesses are keeping Lakeland’s economy and growth on the uphill. “Big businesses have to pay property taxes and utilities,” says Deese. “Even manufacturers that have a lot of utilities, that’s a good dividend for the city.” It is many of these large companies that not only offer job growth, but that put up a lot up a lot of the money that helps our city continue to grow in high quality of life, increasing our parks, keep our fire department running, and benefit the overall development of the city.

THE RIGHT FIT

“You always want to attract large companies that fit who you are as a community,” says Mutz, “in terms of the jobs they can bring and the incentives they may expect. And that becomes the dicey part. We’re competing with other communities always, in the country. So when big businesses come, they generally do not have to be geographically located here. They can have a preference perhaps because it’s Florida and there may be some tax advantages there, when they’re comparing us to other cities in the Southeast, typically in Georgia and South Carolina.”

Beyond the economic draw to attract large businesses here lies the unique components that make a business and a city right for each other. Which is where the LEDC comes into play. For large businesses to choose to make the move to a new city, the last factors to come to mind are the people-to-people interactions. But it is essentially what it is. “It’s important from the city office,” notes Mutz, “that we can meet with CEOs and give them the confidence, and listen to what it is that they want to do. On the LEDC side, it’s important that we have other large companies here that will participate in those meetings as well.”

Supportive, growing, successful businesses like Publix allow the city to tell their stories. With its momentous growth, Publix, despite already 1,000 employees here in Lakeland, continues to expand what they’re doing at their headquarters two-fold. LEDC and the city can share such stories of success when pitching to potential clients.

“LEDC is our lasso for trying to attract and pull in big businesses,” Mutz says. “They’re the early contact point, and they’re the early incentive addresser.”

It is the LEDC that leads the journey in attracting, communicating with, and essentially bringing new businesses, covering details such as tax abatement, transportation funds, and all the incentives for businesses in the city. Though, beyond attracting companies, the LEDC and the city seek to find the right fit with each new prospect, as each directly impacts the developments throughout the city, particularly downtown.

Another important deciding factor companies look for is location. “It’s why we want commercial aviation here,” Mutz states emphatically, “and we’re going to get that done, by the way. That is a front and center quest of mine. We’ve got to have three to four flights a day, because large companies want to bring a vendor that can come in in the morning and leave in the afternoon.” Prospective businesses weigh a city’s proximity city to an airport, always a key attraction, though location plays a vital role in a variety of ways.

“Any real estate decision is based on location,” Deese says. “One large attraction [to companies moving to Lakeland] is our proximity to I-4. You have 9 million people in a 100-mile radius where warehouses and manufacturers can distribute to a large population. Available workforce is a requirement large businesses are looking for. Businesses want to know there’s a workforce there that will be employable. Also, we have five universities in Polk County which we [at LEDC] highlight when we meet with prospect businesses. We let them know there are 18,000 students within our city limits.”

Recently, Forbes reported the Lakeland-Winter Haven MSA (Metropolitan Statistical Area) as the fastest growing in the country. Even unemployment rates within Lakeland fall lower than a city we may be competing on a project with, which shows there will be more people here ready for jobs.

Though, what major employers can bring to Lakeland matters equally to what the city can offer them. “Businesses have to contribute to the load that they will carry,” Mutz says, “and it depends what that business is. For us downtown that means parking, so we’re going to have to think about a garage that connects with that kind of an initiative. And how much do we share in that process, because we are beneficiaries. At night, for example, downtown parking — if they are downtown for the public, because they’ll be out of those spaces and we can occupy those spaces. But parking spaces are $15,000 a space. Typically, today in a building, if you make the building particularly attractive, maybe $20,000 a space. Big issue. And we don’t have any extra parking. We don’t have enough parking for the people we have downtown right now, so there is going to be a lot of pressure on that. Or if they go into a park, then we have to make sure we have the infrastructure associated on that in terms of roads and water and utility. And that can create a huge economic deterrent if you’re competing against a city that doesn’t want to penalize them for that. We’re believers [at large] as we bring big businesses here, that they need to share in their impact. So you have to negotiate that.”

EDUCATION’S ROLE

For major corporations, the quality of education in our area is one of the key factors in the decision of whether to move here. For Florida as a whole and Polk County in particular, education here has had its challenges, and from an overview perspective for prospects this is likely the only story on Lakeland’s education they hear. For prospects coming from a major market, they may read Polk County’s economic journal articles on the web and may be concerned with Lakeland’s education, although the city’s assets in education, the many academies and programs that stand outside of the normal education route, are our best-kept secrets.

“Think about this,” Mutz says. “You’re moving a company. You’ve got a 13 and 15 year old. You’re not going to move twice in their school lifetime. You want to land your business and your home in a place that’s not going to mess that up. This becomes a huge consideration for them, and it affects who we attract.” For example, LEDC went to Baltimore before Lockheed Martin expanded to Lakeland. There were over 100 employees, and the company was preparing to close an office there. The hardest sell was the idea of education available within Lakeland. “That is probably our biggest deterrent on attracting some big businesses,” Mutz says.

Last year, an LEDC case study discovered several employees working in Lakeland that the city might have attracted as residents, but who instead are currently living in Tampa or Orlando and commuting. “So this is a big void we need to fix,” Mutz says, “because we have much here we need to celebrate in educational opportunities.”

The city is currently working on an initiative of monthly wins so that the government and LEDC can feature and celebrate what is right in Lakeland. “We’re working very hard with Polk County Schools to be able to celebrate the many things we’re doing right,” Mutz says. “It’s interesting, if you go to Tallahassee and talk about education and leadership in different counties, the people in Tallahassee think Polk County has done a great job because we have so many academies. We lead in the state as far as academies and specialized training. We don’t tell people that story well.”

Mutz also suggests that currently there is too much emphasis placed on young people to attend college and not enough emphasis on workforce development. “Approximately 30 percent of students that graduate today need to go to college to obtain their choice of career and can sustain the debt load, even including scholarships. So what do we do with really 70 percent of the population that could be equipped well?” he asks. “Today you can graduate from Polk State College, and two years after you’ve been through the aeronautics school, have a fully paid pilot’s license where you become an avionics mechanic. Pilots and airplane mechanics are two huge needs we have nationally. Those people all get jobs.

“Our academy programs are some of the finest rated in the state of Florida,” Mutz continues, referencing Harrison Academy of Fine Arts, one of two fine arts academies in the state (the second, in Miami). “We have great opportunities here.”

AREAS OF GROWTH

Another issue in bringing in more big business is the city’s master planning. “When you do a master plan for a downtown,” says Mutz, “you have to think in terms of what we want to create versus what opportunities come from the side that we didn’t anticipate. So you have to have both the discipline of design as well as the flexibility of including what can occur. That’s why you have to have footprints that can accommodate these things. We work on lots of iterations at this, and we work with companies that people may not recognize. For example, Publix has a thousand employees downtown right now. They’ve occupied businesses that were empty. The Ledger building is now full of Publix employees and other employees in other buildings throughout downtown. So where we would’ve had an office at a vacancy rate that’s very high, we have almost no vacancy rate.”

Still, Lakeland’s market rates for office space are lower than Tampa or Orlando since it is a secondary-size city, not a primary-size city. “We probably have another $10 a square foot that we need to figure out how to capture in downtown that we don’t have today,” notes Mutz, “and those are parts of what drives parking, or the absence thereof. So you will take a less expensive per square foot space. We also need to walk more in Lakeland. I mean, we want to park right next to everything.”

In recent years the city has had many additions, most of which have not been downtown. “Most of those have been in parks, and they’ve exceeded the growth in most cases of what the incentives provide,” says Mutz, “because we do have very specific incentives based on the number of employees that get hired. Only a couple of them have ever fallen off of those rates. And when that occurs, if we’ve advanced those incentives, incentives get restored. (In other words, they don’t end up costing the taxpayers money.)”

By 2030, Mutz predicts Lakeland will have half a million people. “We have the impact of water that we have to figure out,” he says. “And our city leads in so many great areas, that if businesses are looking for a high-quality life community, one that is flexible enough to figure out how to make things work for them, one where there’s not big traffic issues that exist in some of the other communities, and one where we show leadership, sustainably in terms of even the quality of our water here (which can sound like a silly thing but it’s going to become more and more important in the next two decades, because water quality is being very marginalized, and even how we get rid of that water — the seven wetlands project is a highlight of that), those are things that big businesses like to celebrate. And we lead in many of those little categories.”

THE BIG AND THE SMALL

One of LEDC’s largest contributions to the city has been the establishment of Catapult, a coworking space dedicated to launching the city’s entrepreneurs. The more large businesses the city welcomes, the more it feeds the Catapult entries and idea creators. “We want to grow small businesses dramatically,” says Mutz. “Eighty percent of the job growth in the past decade has come from small businesses, not large. Large businesses have the pressure on them all the time of reducing the employees they have, by systemizing more effectively and outsourcing to some degree. Those are opportunities you have on an outsourcing basis with large businesses around. So you want to keep a mix. It’s very important.”

The more small businesses add to the culture and attraction of downtown, the more it will attract big businesses. And vice versa. “Which is why we’re continuing to grow housing downtown, and we will have a Publix downtown,” Mutz predicts. “We just need some more density to be able to do that. But big businesses give small businesses all sorts of opportunities. We’re talking with several companies right now that many people would be very thrilled to know they’re thinking about coming here, as well as retail outlets. Those are part of what you get when you come along.”

Though Lakeland is not near the density of Orlando or Tampa, it contains a very high quality of life. This year, the Lakeland-Winter Haven MSA landed as the number-one philanthropic per capita city in the state. “There’s a very generous spirit,” Mutz says. “This is a community with a lot of heart. You can think, Well, all communities have a lot of heart. This community has a lot of heart. And it’s different. I’ve lived in several different places. I can promise you, this is just different.”