Leading Question

As one might expect, much of it has to do with cost of living. Companies are moving to or selecting those areas instead of Southwest Florida because they have lower costs for housing and other expenses, including property taxes, insurance and impact fees, explains real estate analyst Mike Timmerman.

"Those things have contributed to other people looking at other places in the Southeast United States [that] are going to be more in tune to their business," he says. "The other states—Tennessee, Georgia, South Carolina, North Carolina—are also trying to capitalize on the fact that the cost to do business in Florida is higher right now, and they’re offering incentives."

He recently worked on a project in South Carolina, where governments and economic development entities were offering such incentives for particular businesses as income tax exemptions for a period of several years.

Incentives can help offset the costs associated with new facilities and compensate for such disadvantages as a high cost of living or tax structure, says Stuart Doyle, director of communications for Enterprise Florida, the state’s economic development arm.

Incentives typically come into play after a business has narrowed its site location options, Doyle says. The state offers them in a few specific circumstances: when Florida faces a competitive disadvantage against another location, when a project would not be economically feasible without incentives, or when they’re needed to tip the scale for Florida against another, equally attractive location.

For the past couple of decades, Florida has been a leader in attracting company relocations, especially in the bigger areas of the state, Timmerman says. Those markets will continue to get their share of business, but the increase in housing costs has put a "huge amount of burden on [employers]. They can’t find employees able to live in the area where they have their businesses."

The high insurance costs and run-up in real estate prices, partly due to the 2004 and 2005 hurricanes, have priced people out of the state, Timmerman says. He believes that economic-development leaders across the state need to focus on how to bring companies back.

"We’re not spending enough time looking at the reason why people are leaving and looking at that as a strategic process in order to become more competitive," he says.

It’s difficult to know exactly why companies aren’t choosing or have left the region. Reasons might be economic conditions due to the market or internal business issues.

Timmerman is optimistic that insurance premiums and property prices will drop, which will help stimulate the economy and interest in Southwest Florida. He adds that the region’s pluses also include a strong education system and growing research environment.

Plus, he says, "You do get that extra sunshine bonus that people like."