Government Watch

The beaches are teeming with Northerners this time of year, and the roads leading to the sandy spots are parking lots of people wanting to enjoy the sun and sea while spending vacation bucks.

Along the coastlines of Lee and Collier counties, high-rise condos continue to go up while twin 32-story high-rises are planned for downtown Fort Myers waterfront. Farther inland, roads are widened and development pushes ever eastward and upward along such arteries as Daniels Parkway in Fort Myers and Golden Gate Parkway in Naples. All this is telling the tale of an economic engine of Southwest Florida that is at once vigorously healthy and dangerously unbalanced.

Southwest Florida's economy is built upon two powerful pillars: tourism and construction. And both of those pillars form a rock-solid foundation right now. But they are only two, and related at that. If one sharply declines, the entire economy would be pulled down-something that governments and organizations throughout the region see, and are hoping to avoid.

First, the tourism picture. Lee County reached a milestone last year when more than 2 million people visited for the first time. Tourist spending was up four percent, well over $2 billion for the year. Collier County numbers were up also, although not as much. The completion of the $438 million expansion of Southwest Florida International Airport will likely mean even more tourists.

Painting the construction picture, downtown Fort Myers is finally undergoing a development boom that will radically change its skyline. A 22-story condo is being completed, two 32-story towers are ready for construction and two more 21-story high-rises are planned. But the building boom is really in the housing and retail markets, with new homes flooding the Southwest Florida landscape, filling in the coastline between Naples and Fort Myers and pushing ever eastward.

On the large-development scale, south Lee County will be home to dueling mega-malls: the 1.6-million-square-foot Gulf Coast Town Center is planned for Alico Road and Interstate 75, and the 1.3-million-square-foot Coconut Point Town Center for U.S. 41 south of Corkscrew Road. In addition, Wal-Mart is planning three more super centers in Lee County.

This retail growth is reflected in the job market. The retail industry is the largest employer-30,600 jobs in 2002, an increase of 47 percent since 1990. Meanwhile, the leisure and hospitality industry has become an even larger percentage of the area's economy.

But the very strength of these two economic pillars highlights the weakness in the overall economy-a lack of diversity in the base that can cause grave problems. Collier County is seeing just the first hint of this. New-home construction dropped off last year after making Naples one of the fastest-growing communities in the country during the previous decade. Residential permits in 2003 were down 20 percent from 2002.

The region's unbalanced economic foundation is well known among community leaders, so much so that Lee County leaders created the Lee County Economic Development Office-an organization that aims at diversifying the local economy through expansion of local businesses and recruitment of new ones.

The office actively contacts the companies in industries that it wants to promote to see if they are having any problems or need help with expansion, says Regina Smith, executive director of the Economic Development Office. "Our focus is really on diversification so we are not so dependent in the future on very few industries," she says.

Government can and does play a role in this effort to diversify the economic base. It mostly does it now by pinpointing select industries that leaders want to attract. In Lee County, that focus is on aerospace, information technologies, corporate headquarters and clean manufacturing. The Collier County focus is on information technologies, biomedical, aviation, corporate headquarters and research and development.

The problem with all of this business-targeting is that everyone in the country is aiming at those same types of businesses-even Lee and Collier are competing for many of the same ones. No one wants rust-belt manufacturing and low-paying service jobs. The former jobs are polluting and going offshore, and we already have the latter in abundance. Everyone wants clean, high-paying jobs, and that pie is only so big.

In fact, economic development plans up and down the west coast of Florida aim at luring just those types of companies. These generally include computers, software, information technology, biotech and other high-tech industries. They are what communities from Boston to Fresno want.

Let's face it: Everyone wants to be picky. But there will only be a few real winners in the game. By focusing intently on select industries, the payback may be so small that it will hardly affect the overall nature of Southwest Florida's economy.

Government can make a huge difference, however, simply by making life more attractive for all businesses. That is, creating a business-friendly environment, one where any kind of business can flourish. That is exactly how Tammie Nemecek, executive director of the Economic Development Council of Collier County, sees it. "Making sure our business climate here is good is probably the most important thing we can do to diversify the economy," she says.

Florida already is blessed by not having an income tax and by property taxes that are generally lower than in other parts of the county. The drawback is the high cost of land. Nemecek points out that 80 percent of future job growth will come from existing businesses. The EDC is embarking on a study of high-wage industry clusters-companies interrelated through supplying or manufacturing-in hopes of understanding what will help the business climate.

That is still targeting, but part of it does recognize that government itself can boost the health of the local economy-mostly by not getting in the way of it.

E-mail Rod Thomson at rod@plow.org.