The Year In Review

The year 2002 wasn't the best of times, but it wasn't the worst of times, either.

Executives and business owners began the year anxious to see how 9-11, global economic turmoil and a national recession would impact the local economy. The big question was whether the region's affluent residents and explosive growth would help Southwest Florida do what it had done so many times in the past: buffer tough times.

As the year comes to a close, the crucial tourism industry in Collier and Lee counties is still struggling to rebound. Other industries also suffered some job loss and uncertainty. Several hundred local workers were laid off in 2002, including employees at Baader Corp. and Sims Portex in Fort Myers, which moved their manufacturing operations elsewhere, and at Chico's, which moved its distribution facility from Fort Myers to Georgia. Area economic development officials found companies that had previously been considering expanding or relocating to Southwest Florida halting plans for capital expansion.

Yet some economic sectors performed well. Banks, builders and other businesses got bigger and richer. New houses, especially those priced under $1 million, continued to rise, including east of the interstate. Downtown Fort Myers, Cape Coral and Naples pushed forward with redevelopment plans and attracted new players such as New York-based Homes for America, developers of The Beau Rivage, a high-rise condominium in downtown Fort Myers. And despite fears that they were pulling up stakes, the Minnesota Twins will return for spring training in 2003, adding about $18 million to the local economy.

All in all, it was a very mixed year, with some wins, some losses and some that are still too close to call. Looking at the total picture, here's our list of the 10 best and worst business milestones and trends of the year.

The Best

1. The start of construction to expand Southwest Florida International Airport

The long-awaited and much-needed $386-million Midfield Terminal Complex is now under way. When complete (expected in 2005), the airport will have a 760,000-square-foot addition boasting 28 gates, three concourses and a three-story parking garage. The expansion, which should generate an economic impact of $648 million, is the region's largest public works project. "That probably is one of the most significant things for our local economy," says Janet Watermeier, executive director of the Lee County Economic Development Office. "If you look at the global economy today, getting to your customer is critically important."

The airport's growth has already lured a new airline, Denver-based Frontier Airlines, which started offering service to Southwest Florida International in late October, further opening up the West Coast to business and leisure travelers.

2. Southwest Florida's increased presence on a statewide and national stage

Area firms are drawing more attention to our Gulf-front region. Fort Myers-based FindWhat.com and Chico's, and Health Management Associates and F.N.B. Corp. of Naples, were all recognized in 2002 by national groups for their revenue growth and expansion. WCI Communities put itself into the national spotlight by going public, although its stock dipped in October after the company revealed that it expected to lose all its contracts on condos at its Ventanas community in Naples as a result of alleged improprieties by two sales managers and that it expected several defaults on contracts at its Trieste tower project.

Three local companies (AccuData, J.L. Wallace and Gulfstream Homes) made the University of Florida's list of the 100 fastest-growing companies in the state. Smaller operations were recognized for their success, including residential real-estate agent Denny Grimes, whose branding efforts were profiled in national publications and who ranks among the top 200 realtors in the nation.

Increased exposure should convince more companies that Southwest Florida offers an excellent business environment and that they might do well to relocate here.

3. Regional cooperation

From technology to transportation, Lee, Charlotte and Collier counties are starting to work together on major issues. This year, the counties' economic development groups formed a technology coalition to examine how to draw more high-tech firms (and their high-wage jobs) to the area, and joined together for a series of workshops on all-important workforce issues.

Leading the way in regional cooperation from a public-private partnership is the Southwest Florida Transportation Initiative (SWFTI), which has helped bring more than $770 million in transportation funding to Southwest Florida. The group has served as a model for other regional public-private partnerships such as the Water Enhancement & Restoration Coalition, a new group whose members include the area's economic development offices, government agencies, environmental groups and local businesses in fields including engineering, development and landscape design.

4. Plans for Florida Gulf Coast Technology and Research Park

Alanda Ltd.'s O. J. Buigas, economic development officials and FGCU this year secured the first tenant for the 100-acre park to be built between the university and Southwest Florida International Airport. The goal: To draw large technology and biomedical companies and other businesses that have a research component and can partner with the university, resulting in a diversified economy that has traditionally relied on tourism.

On 20 acres at the center of the park, FGCU will house research efforts as well as its Small Business Development Center and Center for Leadership and Innovation. NeoGenomics, a genetic research lab, is the only non-university tenant to be announced so far. Construction is expected to start next year. "That whole thing is setting the stage for us to go into a whole new area of attracting a new type of business," Watermeier says.

5. Low interest rates and the influx of capital into real estate

Although interest rates reflect national money markets, the local impact of low interest rates has been extraordinary. Low rates have kept buyers enthusiastic about purchasing real estate not only for personal use but as an investment, says Gary Aubuchon, president of Cape Coral-based Aubuchon Homes.

In addition, the volatility of the stock market has driven investors into real estate, particularly commercial real estate. "People are looking to get into investments that they can see and understand rather than ones they heard about in their dentist's waiting room," says Bill Valenti, chief executive officer of Florida Gulf Bank in Fort Myers.

A caveat: Rising home prices have some speculating that a bubble exists in the residential real-estate market. Both Naples and Fort Myers-Cape Coral have been named among the most overpriced residential markets in the country by analysts and publications such as the November issue of Consumer Reports. Builders contend that retirees and baby boomers nearing retirement will continue to sustain the market, but there may be another picture at the end of 2003.

The WORST

1. Continued Infrastructure Woes

Impact fees. water quality concerns. And, of course, failing roads-"the real limiting factor in this market," says commercial real-estate expert Frank D'Alessandro of Grubb & Ellis/VIP-D'Alessandro.

This is nothing new. Lee and Collier are among the fastest-growing counties in the nation- the area's population is expected to swell to 1 million by 2010. New residents have continued to burden the infrastructure that serves the population, and that, many say, is our greatest problem. Harlan Parrish, chief executive officer of Colonial Bank's Southwest Florida Region, which is headquartered in Bonita Springs, admits the next several years will be tough in business hot spots like Bonita, where workers are widening U.S. 41 to accommodate more motorists. He hopes the temporary pain of construction will be worth it down the road.

2. Little Progress on Affordable Housing

In a meeting with members of the Economic Development Council of Collier County, Steve Seibert, secretary of the Florida Department of Community Affairs, declared that the lack of affordable housing "sucks away the ability to have a vibrant economic community. It's not ever really addressed. It gets talked about but not in a meaningful way."

Studies have shown that Lee and Collier already have a shortage of more than 30,000 affordable housing units, a figure that's expected to escalate to 55,000 units by 2010. In Lee alone, the amount in lost wages and economic opportunity caused by the lack of affordable housing totals $249 million. A few efforts- such as Collier commissioner Donna Fiala's support for inclusionary zoning that incorporates affordable housing- are under way to avert a crisis.

3. The Health Care Cost Crisis

Steep malpractice insurance rates- driven up by lawsuits- are driving some doctors out of business and trickling down to employers who are running out of affordable means to provide health insurance.

It's gotten worse in the past year, says Dr. John Snead, who has practiced in Fort Myers since 1983 and is medical practice director of Eye Physicians and Surgeons of Florida. "Not only is the cost of medicine being driven up, but the access to care is being threatened," he says. "Many doctors are moving out of areas where there is high litigation or taking early retirement because they just cannot afford to pay the premiums. They're spending more time giving depositions than prescriptions."

The cost of insurance is going up because the cost of care is up. Firms have seen their premiums jump 30 percent this year.

4. Troubles with Education Funding and School Quality

Education and business go hand in hand. If the school system is performing poorly or in trouble, companies will be less inclined to relocate to an area.