Making their mark
economic development by Janet Leiser | Senior Editor
EDCs have helped companies relocate or expand along Florida's Gulf Coast. St. Petersburg attracted one of the world's leading research institutes.
After building custom boats for two decades, Revenge Advanced Composites founder Jonathan Sadowsky is constructing a $35 million Clearwater plant to manufacture vessels for the military's Special Operations Command, which oversees the nation's secret commandoes.
Revenge Advanced Composites will grow by more than 600%, from 30 employees to more than 200, when Sadowsky starts production at the seven-acre waterfront facility, which is still in the planning stages. Pinellas County Economic Development officials helped the company qualify for nearly $1 million in tax credits as a defense contractor.
From Naples to New Port Richey on Florida's Gulf Coast, economic development groups collectively receive nearly $12 million annually from government and investors. In turn, they claim credit for many more millions of dollars in economic expansion, including projects such as Sadowsky's.
Several Tampa Bay area companies say that without their help and government funding, they most likely would have gone elsewhere.
Revenge Advanced Composites was the largest capital expansion announced in Pinellas County last year.
Next in capital investment size, is SRI-St. Petersburg, the new marine research division of Silicon Valley-based SRI International, a leading technology development and research institute with 2,000 researchers and 2005 revenue of $400 million. SRI began business in St. Petersburg in January.
Taking it to market
SRI, whose many creations include the computer mouse and Shakey, the first mobile, autonomous robot, began discussions with staff members at the University of South Florida's Center for Ocean Technology in 2004.
They'd met at a conference.
The research institute was interested in expanding its marine research so it talked to the USF group about collaborating on projects.
"It turned out they were going through a transition," says Peter Marcotullio, SRI's director of business development. "They wanted to move out of the academic realm into engineering systems. They'd rather make devices and sell them. We realized they were a good fit."
SRI was started in 1946 by Stanford University, although it later became an independent institution.
Locally, SRI officials talked to economic development officials from St. Petersburg, Pinellas County and the Tampa Bay Partnership, as well as Enterprise Florida, the state agency.
SRI will hire about half of USF's Center for Ocean Technology's 80-member staff, most of which are engineers. Within five years, the company plans to employ 100 people and within a decade it will double that number.
Plus, USF is expected to replace those who join SRI.
In return, St. Petersburg will provide a site for SRI's new 30,000-square-foot facility, as well as design/construct the facility at the Port of St. Petersburg within the Bayboro area, a designated State Enterprise Zone. Eventually, SRI's building is expected to be as large as 100,000 square feet. Florida and Pinellas will each provide $5 million to build the facility.
"I would argue the state got a pretty good deal," says Marcotullio, who contends the area will receive much more than it spends, especially since most of the unit's employees will be highly educated, high-wage earners. Plus, it spins off companies into the private sector as technology goes to market (see sidebar).
SRI chose the Gulf Coast for several reasons, including year round access to the Gulf of Mexico and the area's high quality of life, Marcotullio says, adding: "The economic development package put it over the edge."
Other areas up for consideration were the Northwest, Boston, as well as the mid-Atlantic states.
For the first four years, SRI-St. Petersburg researchers will receive federal grants to focus on marine technology and port security, he says, adding, "We see them doing three-quarters of their work with federal agencies."
Research will expand into other areas as the center grows, he says, adding, "We'll be looking for collaboration with other parts of the university."
In the past, most of SRI's growth has been organic, he says. This is the first time the organization has worked with economic development agencies.
Paris in Pasco
Jean Niel, a 225-year-old family-owned France perfumer, initially looked at Pinellas for its first U.S. location. The company's food division, Niel Aromes, wanted to be near Monin, its largest American customer in Clearwater.
"Then I met the people from Pasco County Economic Development," says Mike Uzan, vice president of marketing and sales.
"They helped us by finding the location," Uzan says. "They also helped us by providing some contacts."
Niel Aromes employs three people, including Uzan, at its new 6,000-square-foot office/plant at the West Pasco Industrial Park. The division makes flavored extracts for foods and beverages, from coffee to liqueur.
He says the company was swayed by the park's proximity to Interstate 75 since Neil Aromes also has customers in Orlando, Tampa, New York City and Chicago. In addition, the office was more affordable than in Pinellas.
The Pasco agency has helped in other ways. It has actually placed some customers in contact with Niel, he says, adding, "They have sent us a lot of information about employment, the rules, the legal aspects."
Out of the cold
Sarah Coventry HPP Inc., the company known for selling costume jewelry through home shows, is relocating to Oldsmar, in Pinellas, from Providence. R.I.
It moved its shipping division, with about 20 employees, to a 7,000-square-foot building in the Brooker Creek business park in January, says Lynn Branham, executive vice president at Sarah Coventry. Over the next several years, the company's other divisions will also move to Oldsmar, resulting in about 100 jobs.
Branham says the company had outgrown its Providence office, which it leased, and it wanted to own its next building.
Oldsmar was considered on the advice of one of Sarah Coventry's principal investors, who lives nearby in Palm Harbor. She declined to identify the investor.
She cited tax incentives, through the state's Qualified Tax Incentive program, as another reason for the move. Sarah Coventry will be reimbursed part of its taxes as it creates jobs.
Topic. Companies helped by Gulf Coast EDCs
Business. A perfumer, custom boat manufacturer, research facility and costume jewelry retailer
Key. Economic development officials played a key role in helping them relocate or expand their presence in the Tampa Bay area.
AT A GLANCE
Gulf Coast Economic Development Councils
County Budget Employees investors Funding sources
Charlotte $775,000 6 30 Charlotte County, Enterprise Charlotte Foundation
Collier $1,300,000 9 265 Collier County, members
Hillsborough $2,000,000 12 200 Hillsborough County, Tampa, investors
Lee $1,816,652 15 n/a Lee County
Manatee $784,000 7 Manatee County, Bradenton, Palmetto, investors
Suncoast Workforce Board and Port Manatee
Pasco $845,000 6 135 Pasco County, members
Pinellas $2,700,000 25 n/a* Pinellas County
Sarasota $1,576,984 11 300 Sarasota County and its cities and investors
Sources: Charlotte Economic Development Office; Economic development Council of Collier County; Tampa Chamber of Commerce, Committee of 100; Lee County Economic Development Office; Economic Development Council, Manatee Chamber of Commerce; Pasco Economic Development Council; Pinellas County Economic Development Office; and Economic Development Corp. of Sarasota County. *Agency is part of county government and has not private funding sources.
SRI International, a leading scientific research center that recently opened a marine technology unit in St. Petersburg, goes far beyond the academics. It takes products to market.
Business Week has called the nonprofit and its subsidiary, Sarnoff Corp., "Spin-Off City."
SRI and Sarnoff spin-offs include:
• Intuitive Surgical Inc. (NASDAQ: ISRG), a leader in the emerging field of robotic-assisted minimally invasive surgery.
• Nuance Communications Inc. (NASDAQ: NUAN), a provider of speech and imaging solutions for businesses.
• Songbird Hearing Inc. created the world's first disposable hearing aid.
• Artificial Muscle Inc., a manufacturer of motion products based on Electroactive Polymer Artificial Muscle (EPAM), which has more than 30 related patents pending.
• Communications Intelligence Corp. (OTC BB: CICI), a supplier of electronic signature solutions for the financial industry and a leader in biometric signature verification.
• Discern Communications, acquired by Spanlink Communications, automates question-answering for customer service centers.
• Locus Phamaceuticals applies computational technology to accelerate discovery and development small molecule drug therapies.
• Orchid CellMark Inc. provides DNA testing services for the human identity and agricultural markets.
• PacketHop delivers instant mobile broadband communications for law enforcement, governmental agencies and others.
• PolyFuel Inc. engineers membranes for fuel cells.
• Princeton Lightwave Inc. specializes in indium phosphide-based optical semiconductor devices, including high-power lasers and avalanche photodetectors, to design/manufacture optical modules and systems.
For information on other spin-offs, visit SRI's Web site at www.sri.com.