Bad as Florida's economy is these days, the Sunshine State looks like a potential paradise to more and more CEOs.
Despite the gloomy state of affairs -- or, more likely, because of it -- relocation inquiries are on the upswing, says Kelly Smallridge, president of the Business Development Board of Palm Beach County.
These are serious callers -- "A and B prospects," she calls them -- with plans to free their businesses and themselves from the high taxes and crushing congestion of the Northeast Corridor.
"We used to have 10 active projects. Now we're working 40, plus 20 additional prospects in various stages. They're all 12 months to 24 months out," Smallridge said from her West Palm Beach office. She declined to name names.
Like her economic-development colleagues in Broward and Miami-Dade counties, Smallridge notes that a large number of inquiries are coming from CEOs who own second homes in South Florida.
"They're not blindly shopping our market. They know it and they know it's better than what they're seeing in New York, New Jersey, Connecticut and Boston."
By "better," economic-development officers mean substantially reduced prices for commercial and residential property, as well as far lower local wage rates.
Indeed, a glut of real estate inventory is acting as a counter-cyclical magnet for beleaguered Northeast companies that figure they can't afford to stay put.
The Palm Beach office says much of the interest is coming from mid-size corporations looking to relocate their headquarters.
"We're also hearing from a lot of IT (information technology) companies and business/financial services because of the access to wealth here," Smallridge said.
Even 40- and 50-year-old companies with deep international connections are calling.
"With technology, they're saying 'I might as well take a look at the cheaper market,'" said Smallridge, who added that she's become an expert at timing routes to South Florida's three major airports.
While the region's plummeting home prices lower corporate relocation barriers as well as employees' cost of living, wages also are a motivating factor. The average salary in Palm Beach County is $43,000 vs. the $90,000-$100,000 pulled down by employees up North.
Still, Smallridge acknowledges that relocating business "is not a slam dunk." Her "A and B prospects" are still just that -- prospects. And concerns over the quality of Florida public schools linger, especially in comparison to places like Connecticut.
Coincidentally, U.S. Rep. Tom Rooney, whose district covers northern Palm Beach County, said today that "In the last year, Florida has lost nearly 100,000 jobs, and more than 1 million Floridians are still out of work."
Our small-business owners are tired of being hit over the head with new mandates and tax hikes," Rooney, R-Tequesta, said in a statement about his Economic Freedom Act (HR 5029), which, among other things, would eliminate the capital gains tax, provide immediate small-business expensing and halve the payroll tax for 2010 for employers and employees.
Whatever happens in Washington and the Northeast, Smallridge remains bullish about Palm Beach's prospects, as she notes the uptick in corporate inquiries that started six months ago shows no signs of tailing off.
"At least we know we have several opportunities," she said.
--
Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
