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Business Observer Tuesday, Jan. 11, 2022 2 weeks ago

Polk County embraces red-hot industrial market

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If Florida’s economy is hot, Central Florida is hotter. If Central Florida is hotter, Polk County is hottest. If Polk County is hottest, then Winter Haven is ablaze.
by: John Haughey Contributor

Pinpointing 2021 milestones and projecting 2022 highlights should be easy in Polk County, where the population has increased more than 20% since 2010 and its location straddling Interstate 4 between Tampa and Orlando sustains job-generating growth in manufacturing, distribution and logistics.

But distinguishing between drops in a deluge is easier said than done.

“There’s a lot going on here,” Central Florida Development Council President and CEO Sean Malott says. “That’s the reality across Florida right now. Florida is very attractive for people and businesses but, as you dive into it, a very large portion of people coming to Florida are coming to Central Florida, coast-to-coast.”

The Lakeland-Winter Haven Metropolitan Statistical Area, with nearly 750,000 residents, boasted the nation’s No. 2 MSA growth rate between 2019 and 2020, tied with Boise, Idaho, at 2.7%.

That trend accelerated in 2021 when, for example, Winter Haven saw $1.3 billion in new development investment. Lakeland, meanwhile, saw more than six million square feet in commercial/industrial space built and occupied, creating 3,500 jobs and encouraging similar speculative ventures, especially near Lakeland-Linder International Airport.

“Developers are seeing success in investments in our market,” Lakeland Economic Development Council Vice President for Business Development Ashley Cheek says. “Over the last couple of years, we’ve seen an increase in industrial development and continue to see more speculative development.”

Some 15 miles east of Lakeland lies Winter Haven, where Winter Haven Economic Development Council President Bruce Lyon says growth “is off-the-charts.” He notes Polk County’s fastest-growing city grew by 4% in 2020 “and will be over 5%” in 2021. “It’s the location people are truly seeking out.”

This year

Malott named opening of Nucor Corp’s $240 million steel mill near Frostproof as a top 2021 milestone. The 620,000-square-foot plant will employ 250 people.

“The opening of Nucor has been cited as a reason why other businesses have located in the area,” he says. Nucor’s “location and success in finding a wealth of talent in that location (through a Polk State College program) is generating that message. Activity begets activity. People are aware when they vet sites” of what Polk County did for Nucor.

Another 2021 milestone? Malott and Lyon say Phoenix-based Tratt Properties’ 2021 acquisition of the Central Florida Intermodal Logistics Center (ILC) in Winter Haven, and commitment to build a one million-square-foot warehouse there, proved pivotal in accelerating development of the 932-acre industrial park near I-4, State road 60, U.S. 27 and CSX rail.

“There’s a lot of interest in that particular property,” Malott says, especially after Florida Can Manufacturing announced it would build a $100 million, 350,000-square-foot plant capable of producing 1.6 billion cans annually next to the ILC. That, for one, induced Coca-Cola to announce it was relocating its Lakeland operation to a 400,000-square-foot space in the ILC.

Courtesy. Central Florida Development Council President and CEO Sean Malott

“We see multiple companies looking at that site in 2022,” he says. “It has good bones — a lot of interest because of its size and what can be done there.”

Gov. Ron DeSantis came to Winter Haven in October to announce the ILC will receive $9.4 million for road improvements. State officials estimate the ILC could create up to 5,000 jobs within several years. “Hoping to make an announcement or two in the next few months” about new ILC tenants, Lyon says, adding, “a lot of synergies are coming into play with industrial in Winter Haven.”

Breaking ground on the 740-acre Lakeland Central Park off Old Tampa Highway, near I-4, was among other significant 2021 milestones in Lakeland, where development along Airport and Pipkin roads is fueled by proximity to Lakeland-Linder.

Lakeland Central Park, a project with an estimated investment of some $400 million, will offer five million square feet of industrial space within five years, beginning in January with construction of a 700,000-square-foot warehouse. “We continue to see activity from the logistics industry. The air hub for Amazon in Lakeland puts us further on the map,” Malott says. “Manufacturers look to see where shippers are and they’re here — good proximity to Tampa and Orlando, and Miami is right down U.S. 27.

“We’re seeing dozens of manufacturing companies, new manufacturers, wanting to be in Polk County,” he continues. “Manufacturing is red hot in our market right now. (Manufacturers) are looking where they get their products, their supply chains, and learning Polk is a great location to do business. Companies are looking at that, paying attention, drawing in others.”

“There are 11 million people within a 100-mile radius of Lakeland,” Cheek says. “It’s a great location for industry with access to a lot of amenities.”

Next year

The next 12 months brings more promise — with some long-term obstacles to address.

'I have some concern that we have property positioned for commercial/industrial development now being considered for residential. We don’t want to be a bedroom community for Tampa and Orlando.’ Sean Malott, Central Florida Development Council

Summit Consulting, a Lakeland-based workers’ compensation insurance company, will complete its eight-story, $50 million headquarters on Massachusetts Avenue in the spring, joining the $13 million, 38,000-square-foot ‘Catapult 3.0’ along Lakeland’s Lake Mirror skyline. “That’s a huge win for downtown, bringing those 500 workers” into the city, Cheek says, noting about 7,000 people now work in downtown Lakeland. “We’re seeing a lot of growth in that area.”

Also in 2022, Orlando Health will begin construction of its 80-acre, 136-bed Lakeland Highlands hospital, set to open in 2024 as Lakeland’s first new hospital in 65-plus years.

Lyon says while the ILC generates headlines, “There’s a lot of other things happening in Winter Haven,” especially downtown — where two hotels, totaling $200 million in capital investment, will be built in 2022, including a Marriott.

Massive and rapid growth, of course, comes with challenges. Airport and Pipkin roads in north Lakeland, for example, will continue to thrive as a high-growth corridor, but its rapid development poses issues in balancing commercial with mixed residential development and in ensuring infrastructure keeps pace. “There will be more multifamily development, something Lakeland was behind-the-times in,” Cheek says. “We’ve seen a lot of developers potentially interested in multifamily” projects.

Winter Haven has similar needs, Lyon says. “We’ve added 5,214 new housing starts since 2013 but we need more — it’s not enough. We need multifamily housing, more rentals,” he says, noting two multifamily projects are approved in the city, including one downtown.

It’s difficult to address “what may happen,” he says, when “what really needs to happen is rental housing.”

“We have more people moving here than ever and those people need places to live, not just single-family homes but apartments and rentals, so multifamily housing projects are popping up,” Malott says.

But there’s a flip side to the equation.

Courtesy. Winter Haven Economic Development Council President Bruce Lyon

“We can’t forget people also need places to work,” he says. “I have some concern that we have property positioned for commercial/industrial development now being considered for residential. We don’t want to be a bedroom community for Tampa and Orlando.”

Balancing residential with commercial development benefits employers competing for labor, Malott says, and should not be approved “at the expense” of development that “ultimately supports the residential base and the tax base. We don’t want to overbuild from a residential perspective.”

Among concerns is increasing congestion, especially north of Polk Parkway where projects, some planned for a decade, are moving ahead with little planned in corresponding road improvements. “What we have isn’t enough to meet the growing demands,” Mallot says.

There will be a price to pay for such progress. “We’re going to see growing pains, more traffic on the road, more people out looking” for sites to build homes and businesses, he says.

With other states losing population and in economic decline, Malott also quickly adds: “It’s a high-quality problem to have.”

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