Selling Southwest Florida

More than two years ago, Source Interlink Cos., a

multimillion-dollar magazine distribution business based in St. Louis, began

eyeing Lee County as a possible site for its new corporate headquarters.

Working with two national real estate firms, Source Interlink was zeroing in on

sites in eight states with several Florida counties on the list.

At the Lee County Economic Development Office in downtown

Fort Myers, executive director Janet Watermeier put her crew on full alert.

This was an opportunity they couldn’t let pass them by. A corporate

headquarters in the desirable technology industry would bring high-wage,

high-skilled jobs to Lee County—it had all the makings of a major coup.

Watermeier and her team used the strategies they employed in

luring companies such as Gartner Inc. and Sony Electronics Inc. to Lee County

in the ’90s. But Source Interlink would be the first company during

Watermeier’s tenure to consolidate all its operations and establish its world

headquarters in Lee County. Regina Smith, the office’s deputy director,

immediately started gathering data. She did side-by-side comparisons with the

other locations under consideration and sent Source Interlink a complete

information packet that included Lee County’s demographics.

When Source Interlink president and chief operating officer

Jim Gillis visited in late 2000, Watermeier’s team was ready with a polished

presentation on the area’s transportation network, telecommunications

infrastructure, workforce, business costs, communities and quality of life. But

Gillis returned to his corporate office without sharing so much as a clue about

how Lee County was faring.

Months went by with no word. Watermeier’s staff prepared

more information packages for Source Interlink’s board of directors and

answered unending questions from the company. Finally, good news came in

August. Source Interlink had chosen Lee County and planned to consolidate its

St. Louis, Long Island, N.Y., and High Point, N.C., operations in Bonita

Springs within the year, bringing up to 500 high-skilled jobs here by summer

2003 along with an estimated $19.1 million impact on the local economy. By the

end of 2001, divisions of Source Interlink, which provides magazine displays,

distribution and product sales analysis to retailers, had moved into temporary

quarters. The company is building a 100,000-square-foot corporate headquarters

in the Riverview Corporate Center on U.S. 41.

Ranked among Fortune magazine’s fastest-growing small

companies, Source Interlink sought a location that could accommodate its

growth. Its four primary needs were a suitable labor force, telecommunications

infrastructure, an airport system and a quality of life that would attract and

retain employees. Gillis, a Palm Beach native, admits that he did not

originally believe Southwest Florida could attract major companies. “I always

thought of the west coast of Florida as the more laid-back side of the state,”

he says.

A new image

In the past five years, the Lee County Economic Development

Office and Collier County’s Economic Development Council have been targeting

what they call knowledge-based industries, such as information tech-style="mso-spacerun: yes"> nology, biomedical technology and research

and development operations. Lee County claims 376 such companies; Collier County

boasts 260. The goal in attracting these businesses is to increase the number

of jobs paying high wages, which are defined as 115 percent above the average.

The annual average wage in both Lee and Collier counties is between $27,000 and

$29,600, lower than both Florida ($30,000) and U.S. ($33,313) averages.

The key word in economic development these days is

diversity, especially in a region traditionally dependent on the low-paying

tourism, agriculture and service industries. “Since 9-11, the entire state of

Florida understands the dynamics of economic diversity,” says Susan Pareigis,

president of Collier County’s Economic Development Council. Plus, adds

Watermeier, the growth of jobs nationwide is in the high-tech sector. As the

country’s economy evolves from manufacturing and services to technology,

Southwest Florida must evolve, too.

It’s not always an easy sell to lure businesses,

particularly those in the coveted tech industry, to Southwest Florida. “The

perception is that this is a great retirement place or tourist destination,”

says Watermeier, sitting in her picturesque third-floor office located in a

bronze-tinted building on West First Street. “It doesn’t occur to people that

this is a good location for business.” And yet, she points out, a growing

number of younger families has skewed the population in favor of an active

workforce. Watermeier’s counterpart in Collier County agrees. “This is not

traditionally viewed as a business destination,” says Pareigis. “But once I get

them to the market, they’re mine.”

These two relatively small organizations—the Lee County

Economic Development Office has a staff of 15, the Collier County Economic

Development Council has seven employees—exert tremendous influence in

determining the economic base of each county. From 1996 through 2001, Lee

County’s organization recruited 45 businesses and facilitated 43 expansions.

That adds up to 4,626 new jobs and an economic impact of $281.4 million,

according to the group’s latest five-year summary. Watermeier joined as

executive director six years ago.

Similarly, relocations and expansions in Collier County have

increased the workforce by 37 percent in the past decade. Pareigis and her

team, who work out of an office in Naples’ Horseshoe Drive business park, have

recruited companies such as Shaw Aero, which created 284 aerospace engineering

jobs in east Naples, and helped smooth the way for the expansion of software

solutions provider ASG, the county’s largest technology company. In the past

couple of years, ASG’s revenues have increased from $49 million to $200 million.

ASG’s staff in Naples has doubled to 250 people, and chief executive officer

Art Allen expects it to double again in the next three to four years.

Worldwide, ASG employs 750.

Allen says the Naples location is a differentiator. He

believes customers in Minnesota will be more receptive to a sales call if it

originates in the land of swaying palm trees. “If you call from Chicago, what

are you going to talk about—how bad the weather is?” he asks.

But it takes more than good weather and golf courses for a

high-tech business to take an area seriously. A skilled workforce, education,

housing, transportation, reasonable business costs, a supportive business

community and, sometimes, financial incentives are needed to get a company’s

attention. Plus, because Southwest Florida is not a metropolitan area, like

Tampa or Orlando, the region often is overlooked by consultants and real estate

agents hired by companies to scout locations. Getting recognized takes

strategy. The economic development teams study the Fortune 500 list to find

companies that are expanding. They work with site consultants. They attend

trade shows in targeted industries, such as Comdex for the computer industry.

Watermeier’s group is authorized to sweeten the pot when

necessary. With Lee County’s annual $1.5 million incentive fund, a company can

receive up to $2,000 for each high-wage job that it brings into the area. While

Pareigis and her staff cannot offer financial incentives, they can promise to

help a company become operational as soon as possible through its fast-track

permitting program. Companies in targeted industries receive priority in the

county’s permit review process.

Pareigis and her team this year are launching a marketing

effort at health technology firms. The direct-mail campaign will focus on

businesses nationwide that have experienced rapid growth over the past five

years.

Pareigis, who has led the economic development council for

seven years, says one of her most valuable assets is the Chairman’s Circle,

made up of past and present corporate officers who advise her on policy and

provide referrals for possible relocations. Executives from companies including

International Paper, Procter & Gamble and Pillsbury use their contacts to

entice companies to Collier County. The economic development council also

targets vacationing executives and has prepared an in-room video in local

hotels to educate visitors. “We are planting the seed,” says Pareigis.

Luring companies to Southwest Florida also means hours of

attending to the interested company’s various needs. The economic development

staff members in both counties work with employees of a relocated company to

find schools, housing and jobs for trailing spouses. They do customized

economic research for clients. They help out-of-state businesses navigate the

Florida tax structure. When Gartner was considering Lee County, economic

development staff members made three trips to Gartner offices in Connecticut,

accompanied by representatives from the school district as well as bankers and

real estate brokers to persuade key players.

The hard work pays off. Source Interlink’s Gillis says the

economic development office played a crucial role in the decision. “We got more

attention from Lee County than any other,” says Gillis. He adds that some

counties wouldn’t meet with Source Interlink representatives while others were

aggressive but didn’t match what Lee County offered.

Allies, not adversaries

Although the economic development organizations may seem to

have adversarial roles, the groups see themselves as serving the Southwest

Florida region and often work together. In the past few years, the groups have

taken on two of Southwest Florida’s biggest challenges as a business

destination: developing a trained workforce and updating infrastructure.

The workforce issue was such a big concern that in 1999 the

two groups spent $175,000 for a workforce study by a national consulting group

and held the first-ever Regional Workforce Summit in Bonita Springs to discuss

the results. As expected, the study found labor shortages across the board and

gave recommendations for correcting the situation.

Now the groups are tackling another challenge:

telecommunications infrastructure. Area businesses frequently grumble about the

local telecommunications system. Depending on where you are, state-of-the-art

fiber optics and high-speed data access may or may not be available. The groups

have hired a consultant and are counting on the study to provide the facts

needed to give them direction in how

to improve.

Two developments in the past decade have improved the

business infrastructure in Southwest Florida. First, Florida Gulf Coast