John Manning, vice president and general manager of Genertek International Corp. in Auburndale, has developed new technology using the old workhorse diesel engine of the locomotive industry. Photo by: Tom Berndt

Expansion and development, the common themes at business meetings in Polk County, as elsewhere throughout the Tampa Bay area, does not appear to be slackening even as economists worry about the softening of the growth curve. National developers are beginning to take note of the strategic advantages of locating in the state's geographical center, which boasts a population of seven million people within a 125-mile radius.

Seeking to capitalize on its strengths as a center of distribution, new companies are locating along Polk's major transportation corridors. Meanwhile, dollars from the state's Mobility 2000 initiative are earmarked to hasten substantial improvements to the county's major road networks. Certain to follow on the heel of these enhanced roadways is more development, more industry and more jobs.

Polk shares the fast job-growth trend visible throughout the Tampa Bay area. Last year's figures show the county gained 6,200 jobs to add to the 3,900 gained in 1999. Those new jobs have come despite another significant changing-times trend that Polk has experienced. Manufacturing jobs are going away.

"Last October, five manufacturing companies disclosed they were laying off 800 workers," says Jim DeGennaro, senior vice president of business development of the Central Florida Development Council. "That was offset, however, by the net gain of 6,200 jobs. Polk is becoming more like our neighbors. We're less dependent on mining and manufacturing and gaining more jobs in the service industries."

The jobs that came to Florida's central county are categorized as transportation and distribution, business services, retail, hotels and other lodging, and finance, insurance and real estate.

"We are a county in major transition," acknowledges Bill McDermott, the CFDC's president and CEO. "In the mid-'80s we were fairly rural and dependent on the citrus and phosphate industries. They're still very important industries for Polk, and will continue to be into the foreseeable future, but there has been a significant diversification of the economic base in this county. We're going from a blue-collar workforce to white collar and in the majority of cases a higher paying wage. This creates more disposable income in the Polk economy and everyone's standard of living rises."

Sources of power
Along with job growth come other indicators of a solid economy in Polk. "We're getting tons of attention from merchant power plants that are attracted to our area because of our large reserves of former phosphate mining lands and the population in Florida is moving inland," DeGennaro says. "Tremendous growth continues in Northeast Polk with housing. These are two sure signs that Polk is growing. Wal-Mart is in the process of building six super centers in Polk. The boys in Bentonville [Arkansas, headquarters of Wal-Mart Stores Inc.] rarely miss the mark. They have faith in Polk County. That's a good sign for us."

Along the highways
Much of the considerable development activity under way comes as a result of improvements to the county's road network. The Polk Parkway opened last year and two major projects, Polk Commerce Centre and Saddle Creek, have been announced along the 25-mile, $471-million toll road. The first, a mixed-use development, comprises 3,719 acres on which are planned 15.6 million square feet of office space and 3,400 residential units. Saddle Creek is planned for two million square feet of commercial space and 1.5 million square feet of business park space.

The Mobility 2000 initiative endorsed by Gov. Jeb Bush has allocated funds for an east-west expansion of Interstate 4 from Memorial Boulevard to U.S. Highway 27 and the north-south widening of Highway 27 in the eastern section of the county. "That's the thing we needed," says Ron Morrow, executive director of the East Polk Committee of 100. "U.S. 27 is Main Street in eastern Polk County. "Mobility 2000 accelerates the time frame of construction beginning from 12 years to two years."

In tandem to these projects Polk's board of county commissioners has launched a $43-million program that will resurface an additional 60 miles of roadway and upgrade 70 intersections throughout the county.

"Infrastructure is going in and that's how you build," Morrow says. "Sixty percent of U.S. 27 between I-4 and State Road 60 in Lake Wales now has water and sewer on it. Once you put infrastructure in place things can happen."

First to test the waters is Atlanta-based Robert Pattillo Properties Inc., which last year opened Florida Central Park along U.S. 27 in Davenport. The developer has enjoyed considerable success with its speculative building program at this new industrial center. Nearby, former corporate raider Victor Posner recently purchased Circus World/Baseball City in Haines City and plans to redevelop the site as a residential, retail and entertainment complex.

Indianapolis-based Duke-Weeks Realty Corp., a prominent developer in Hillsborough County, has started its first speculative light industrial project in Lakeland. "Duke-Weeks is a big outfit and we're extremely pleased that they will have a presence here," says Gene Engle of Gene Engle Realtors. "This is indicative of what's happening in Polk when firms of their very good reputation head this way."

Attracting the investments of these national developers can be attributed to several strengths in the county. "A number of reasons companies move to or expand in [this county] include low cost of living, pro-growth government, competitive taxes, rental rates, construction costs, impact fees, available transportation network, available labor, ease in permitting, culture and, of course, location," says Steve Scruggs, executive director of the Lakeland Economic Development Council in a recent issue of The Ruthvens Report.

Factors like those are supporting the growth of technology companies throughout the county, too. Genertek International Corp., in Auburndale, has grown in the past four years to a staff of 65 for the production of power-generating units used by the utility industry and large manufacturers (see accompanying story, page 44).

Tech and high tech
John Manning, the company's general manager, has relocated 40 of these high-tech employees and their families to the area. "These engineers have specific knowledge of this type of equipment," he says. "Many have been involved in the oil drilling business in Texas and Louisiana. They're familiar with our industry and are excited about what we're doing. Now we're working with programs in Polk and the technical schools to attract engineers. We'll add another 40 people by the end of the year."

Manning has also been investigating opportunities with other high-tech companies in the county. "We're looking at teaming with Curry Controls," he says.

It's a natural fit for the two companies, since Curry Controls Inc.'s customers include Florida Power Company and Florida Power and Light Corp. David Curry founded the process controls company in Lakeland 30 years ago (Maddux Report, December 2000). It has since grown to 90 employees operating in a 17,000-square-foot headquarters. "And we've outgrown it," Curry says. "I've bought 100 acres by [Lakeland Linder Regional] airport to expand. Our next building will be 40,000 square feet."

Curry will add another 25 employees, most of them technical staff. "I've recruited engineers from all over the world," he says. "While it's been hard recruiting, once they get here they love it."

So does Ken Black, president at Highlander Engineering Inc., who relocated his software company from Silicon Valley to Lakeland two years ago. The company supplies "middleware" for embedded computers in cellular telephones, telecommunication switches, automobiles and other products. "Lakeland has a very nice, small-town atmosphere, especially for the business we're in, which is extremely high tech," Black says. "Part of our motivation for locating in Lakeland is our engineers want to spend time with their families, not an hour and a half commuting to work. And they want to buy a home with a yard. That's quality of life."

Black is working with local economic development officials to market the Tampa Bay area's high-tech community nationwide. "We need to get the image out that there are high-tech jobs here," he says. "A critical mass exists, but it's well hidden. Highlander was invisible until recently. There are a whole bunch of Highlanders that are invisible."

"These companies have been growing right before our eyes and we didn't even know they were here," says Steve Scruggs at the Lakeland Economic Development Council. "We're brainstorming on how to service that industry and attract more companies here.

"We are starting to get a cluster of high-tech companies here," Scruggs says. "We have some that are home grown. NextGen Technologies Inc. is a computer consulting firm that has grown to 90 employees in downtown Lakeland. Piyuh Patel moved here with Breed. He formed his own company three years ago and is doing very well. He recruits all over the world."

Computer Data Networks Partners Inc., a Lakeland Internet development company, has doubled its offices to 5,000 square feet and expanded its staff to 18. Vanguard Medical Concepts Inc., a processor of medical equipment, recently expanded its Lakeland facility from 35,000 to 60,000 square feet. DoyenMedipharm Inc., a Lakeland company that manufactures packaging for the medical industry, and Highlander Engineering are on the 2000 Tampa Bay Technology Fast 50 list.

"Highlander is a very unusual situation," says Bill McDermott at the CFDC. "Ken Black was originally from Lakeland and he got tired of the California scene. He decided to move back home and his company is doing very well, ranked tenth in the Fast 50 this year. That's a neat story to tell. He's recruiting people from California, India, anywhere he can find software engineers. Hopefully over a period of time we'll be able to say that we have a significant technology sector in place in Polk."

That sector took a harsh hit two years ago when Lakeland-based Breed Technologies Inc., one of the world's largest manufacturers of automotive air bags, found itself in financial difficulties. The company, which employs 15,000 workers worldwide, filed for Chapter 11 protection in September 1999. It recently emerged from bankruptcy protection as a privately held company owned by its former lenders.

The food factor
But for Polk's largest private employer there have been no such problems. Publix Super Markets Inc., headquartered in Lakeland, continues its aggressive expansion program. With annual sales of $13 billion, 646 stores and more than 124,000 employees in four southeastern states, Publix has been ranked as the 50th best place to work in the nation in Fortune magazine's annual list of 100 best companies for employees. Forbes magazine ranks the company as the seventh largest privately owned business in the United States.

The company is starting construction on a new 600,000-square-foot corporate headquarters near Lakeland Linder Regional Airport and is also building 606,000 square feet of additional warehouse space.

Publix finds itself in good company among the food industry in Polk. Mutual Wholesale Co. of Lakeland is the largest Florida-based foodservice distributor and 15th largest in the nation. The 49th largest private company in Florida, the firm has annual sales of $302 million. Specialty baker Pepperidge Farms has added a $5 million flat cracker production line at its Lakeland plant, adding 60 more jobs totaling 270 employees.

And there's more food. H&O Food Sales Inc., a wholesale food distributor, has recently moved to a new 30,000-square-foot facility in Lakeland. The company has 20 employees and annual sales of $7 million. In addition, MKM Industries Inc. has occupied a 96,000-square-foot building in Haines City as a citrus processing facility. It employs 70 people.

In Haines City, another company is planning to expand. Florida Treatt, owned by Treatt PLC of Suffolk, in the United Kingdom, has operated in Polk since 1990. "Florida Treatt produces food flavors," says DeGennaro. "They've received a $5-million industrial revenue bond and plan to buy a 60,000-square-foot building in Lakeland. Another industrial revenue bond for $25 million went to Florida's Natural Growers in Lake Wales to expand their facility that employs 900. The company bought the Sunpack citrus processing plant near Bartow and plans major expansions. Over the next year it expects to put $50 million into the Bartow plant, converting it to produce not-from-concentrate citrus. After Tropicana, it's reportedly the second-largest juice processing plant in Florida. Cutrale in Auburndale would be third. They're based in Brazil and they're also expanding."

Rooms to grow
Although in a different industry, Lakeland's Rooms To Go warehouse knows no limits to growth. The furniture chain has built a 1.5-million-square-foot warehouse near the Lakeland Linder Regional Airport. Roughly equivalent to the size of 26 football fields, some experts believe this is the largest furniture warehouse in existence.

And an Ohio manufacturer has occupied the 136,000-square-foot plant formerly occupied by Cutler Manufacturing Corp. Etura Premier LLC makes countertops and is bringing 200 jobs to Lakeland after a $15-million upgrade to the facility. Also in proximity to the airport is RMC Ewell Inc., which has recently completed its new, 22,000-square-foot paver production plant.

Not too far away, Trammell Crow is developing an 80,000-square-foot call center under construction at Lakeland Interstate Business Park. Houston-based GC Services will employ 800 workers at its customer service center. Meanwhile, insurer GEICO Direct continues to add employees. "GEICO is at 1,800 employees in their new 300,000-square-foot corporate office," says DeGennaro.

At Florida Central Park in Northeast Polk the developers are testing whether bigger really is better. A number of distribution companies have flocked to this new industrial development. Orlando-based CHEP USA Inc. manufactures food-grade pallets in a 283,788-square-foot facility, and United Container manufactures and distributes corrugated boxes and pallets at a similar-sized facility employing 40 people.

Chesterfield, Mo.-based Huttig Build-ing Products Inc., a distributor of doors, windows and flooring, has leased 148,000 square feet and added 83 jobs at the industrial park. Wholesale South Distribution Inc. has leased 90,000 square feet for its retail product distribution center. The most recent new addition at Florida Central Park, which is planned for build-out at 1.75 million square feet, is Atlanta-based RaceTrac Petroleum Inc., building an 84,700-square-foot distribution center.

Revitalizing a Proven Energy Source John Manning, vice president and general manager of Genertek International Corp. in Auburndale, graduated from playing with trains as a boy into a career of enhancing and diversifying the application of locomotive engines for industrial use. Genertek uses this workhorse engine to manufacture power-generating units for industrial manufacturers. While Manning, the innovator of Genertek's technology, worked away for years in South Florida developing his power-generating concepts, technology entrepreneur Dae Y. Shin took an interest in his efforts. Shin, now Genertek's president and CEO, also owns Dayron Inc., a high-tech firm in Orlando, and Balimoy Inc., a munitions technology firm in Tampa. "I'd been working on this technology for 10 years in Pompano Beach," Manning says. "I was seeking a partner and met Mr. Shin. It seemed to be a perfect fit because of his high-tech background." Manning moved his base of operations into Shin's 115,000-square-foot building in Auburndale four years ago. "Central Florida seems to be dedicated to attracting industrial companies. In South Florida industry is more tourist related," he says. "We're pleased with what we've been able to accomplish here to build this company and expand it." Genertek, with annual revenues of $40 million, is "developing projects all over the world," says Manning. "A large portion is exported overseas for base load power plants in remote areas. Our sales have doubled every year." Industrial manufacturers use the equipment as a means of reducing their power bills. "The utility company often charges these companies a premium for power usage during peak demand periods of the day," he explains. "They get charged a load demand charge for the peak point reached during the month and the cost per kilowatt hour goes up to meet the highest demand during that month. They can cut down their power bills by putting in this equipment to curb peak power demand." Another application is emergency standby power generation. "Some companies can't afford to be down if they lose power during a storm or hurricane," says Manning. "They use this equipment to take over the load during those types of outages. It can go from a dead stop to full load in eight seconds. This is a unique thing about our equipment." Utility companies and municipalities use Genertek's equipment to supplement their power programs. "Small municipalities don't self generate," Manning says. "They buy their power and get charged for peak power during the day. They build peaker plants, using our equipment to keep their rates down." Genertek's new technology is based on an old standby in the world of engines. Genertek uses the type of diesel engine used to power locomotives, but retools it with state-of-the-art enhancements. "This engine was used in the locomotive industry because it has proven over the last 40 years to provide extreme reliability in harsh operating conditions," says Manning. "Installed in a stationary application it performs remarkably well. It has the operating efficiencies and characteristics of much larger plants." The engine generates 2.5 to 50 megawatts of power. "We're considered heavy industrial size," Manning says. "We're moving headlong into the power generation industry. It's one of the lowest-cost generators with the most enhanced operating features of any set in its class. Most people are intrigued with what we have to offer." Manning plans to expand the facility and add a rail spur, which will be useful for yet another application under development. "We're talking with the railroad industry in this area," says Manning. "They're impressed with what we've done to increase performance of this engine. We're running our first test with electronic fuel injection. We expect this to increase fuel efficiency and lower emissions on this engine. There will be a lot of retrofit applications for this." Another enhancement is design of a monitoring system that diagnoses operating conditions of the equipment. "This system monitors more operating parameters than ever before," he says. "This prevents premature wear and catastrophic failure. This has not typically been done with this engine before." Genertek clients include Owens Brockway Glass Container Inc., Libbey Inc., Consumers Energy Inc. and U.S. Sugar Corp. "We're working with 60 corporations in Florida to develop load curtailment programs," Manning says. "We're bringing the first-time capital equipment cost into the realm of feasibility." - M.W.

"We have approximately 850,000 square feet leased," says John Atwell, the developer's vice president. "By mid-2002 we'll have built out that park. We're extremely pleased with absorption in that park."

"The tenants are thriving there," says Ron Morrow. "That's becoming quite an employee base with 500 jobs, 300 of which are manufacturing related."

While distribution and the citrus and phosphate industries have been mainstays in the local economy, Polk has diversified into lesser-known revenue-generating industries. The aquaculture industry, consisting mainly of tropical fish and aquatic plants, each year brings more than $10 million into the county and last year Polk County Sports Marketing reports that 140 events contributed $81 million to Polk's economy.

When the game ends
Boosts to the economy are also coming from development dollars by private investors. The most recent transaction brings financier and former corporate raider Victor Posner to Polk. Posner paid $13 million for Circus World/Baseball City on U.S. 27 at I-4. "This is one of our major front doors," says Gene Engle of Gene Engle Realtors. "Posner has done beautiful developments."

Although the entertainment complex has been closed for years, the Kansas City Royals have continued to use the baseball stadium as their spring training camp. That lease expires next year. Speculation is that Posner intends to develop the 400-plus acre site as a residential, retail, and entertainment project. "First the Royals need to complete their lease," says Ron Burchfield of Engineers of Central Florida. "When that takes off, it will have a domino effect. A lot of development will be occurring here."

Much of the development under way in Haines City is spurred by proximity to the Heart of Florida regional medical center. "Four medical buildings have gone up, another six are under construction and 11 more are soon to come out of the ground," Burchfield says. "That's close to 100,000 square feet. The medical center is expanding, too. They're adding a new wing to bring them close to 100 beds. It's getting new doctors every day. That hospital is really taking off."

Where the homes are
The permitting departments throughout the county show that much of the raw land in the northeastern part of the county is being used to satisfy a housing boom. Last year local governments issued 3,183 building permits for single-family homes, up from a record-setting 2,580 the previous year. The majority of these permits were pulled in the northeastern sector. In many cases, international investors are buying these homes and placing the property in the short-term rental market. And this has led to an odd revenue situation.

 

Displacing Workers and Citrus Cars Polk County is one of 10 locations nationwide - and the only Florida county - to receive a federal grant ($89,000) to fund a displaced workers program. This program is seen as particularly helpful as the county loses manufacturing jobs. The influx of jobs in other sectors more than makes up for the loss. "Our annual unemployment rate is 5 percent and we hit a record low 3.8 percent last year," says Jim DeGennaro, senior vice president of business development at the Central Florida Development Council. "In the mid-'80s it was 18 percent. We've gone from a labor problem to a labor problem." In a special Polk County workforce initiative, Florida's School-to-Work and Tech Prep programs partner with local businesses. Cargill Fertilizer Inc. has formed a partnership with the Polk County School Board to assist in the company's recruiting efforts. As many as 2,800 businesses in Polk have participated in these programs. The school board requires all students to engage in 20 hours of work-based career experience prior to graduation. While tapping a new source of manpower, the county is also active in helping welfare recipients enter the workforce. Yet, it discovered a problem in the process. "This is a county in transition and we don't have a lot of public transportation," says William McDermott, president and CEO at the CFDC. That's why the "Citrus Cars" program seemed to spring up from nowhere. "Nancy Thompson, who's in charge of our program, is a very innovative individual," McDermott says. "She will do things and ask questions later. She and Mike Steadham, her board chair who also runs Steadham Ford, created the Citrus Cars program." Essentially, the program allows a worker to lease a car at a nominal fee, make payments for a year, and if still on the job after that time, the rest of the debt is forgiven and the individual owns the car. "Initially this received a lot of criticism because it was so different," McDermott says. "Now that program has been replicated in other places of Florida and the United States." - M.W.

"Revenues produced from the bed tax on short-term rentals in this county for the first time exceeded hotels," says McDermott at the CFDC. "We had no idea how large that market had grown. It has everything to do with the fact that it's sitting right on top of Disney World. Our greatest single asset is our central location."

Trammell Crow Co. is banking on this in its redevelopment of the old Winter Haven Mall into an open-air cluster of stores renamed Winter Haven Citi Centre. It includes a Lowe's Home Improvement Warehouse and Belk department store. Burdines is renovating its 60,000 square feet and adding another 15,000.

In the region, Lake Wales will soon be placing infrastructure in Longleaf Industrial Park. "They have a builder coming in with a couple of spec buildings," Morrow says. "National developers want to build spec buildings and distribution centers. There's big interest in Polk Commerce Centre."

That 2,053-acre commercial site in Auburndale is a unique development of regional impact in that it includes 400 owners of 600 parcels. "It was an ordeal to assemble that many people," says Jim Allen of A&S Real Estate and Development Inc. "It will mostly be a business park center, although we already have some nodes of residential. The overflow of people from west to east is causing this to happen."

"Population growth on the east side of the county has been tremendous," says Morrow. "Lake Alfred has pushed sewer lines and annexed industrial property. Dundee realizes they're on U.S. 27 now and have taken their sewer lines to the highway. Lake Wales has new housing north of the city. This will play very well in the future.

Growing up East
"The east side of the county is maturing," Morrow says. "It is so large and diverse with all these little cities, you don't see it in one spot like you do in Lakeland. We have 13 cities, from Frostproof to Davenport, and a couple of unincorporated little towns. Things are happening everywhere."

That holds true for the west side of the county as well. Lakeland has been listed among the top eight locations in the nation for warehouse positioning, according to a study conducted by Chicago Consulting Co. And companies seem to be taking advantage of that positioning.

The Ruthvens, a family of local developers, have been aggressively developing warehouse space in Lakeland. They currently own and manage 71 buildings totaling more than 2.5-million square feet. Their 200 tenants employ more than 2,000 people in the area. "In the last year we've netted over 350,000 square feet of leases," says Greg Ruthven. "We just completed a 92,800-square-foot spec building at Drane Field Road. That's the third building of that size in the last 12 months."

And thanks to a recent bus tour by members of the National Association of Industrial and Office Parks (NAIOP), Duke-Weeks Realty Corp. is marching into Polk County with the construction of a 166,800-square-foot speculative building at Lakeland Interstate Business Park. "That bus tour opened a lot of eyes and Duke-Weeks happened to be on that tour," McDermott says. "They saw an awful lot of potential and Duke-Weeks acted upon that immediately."

"Lakeland is a significant industrial market," says Moses Salcido, senior vice president at Duke-Weeks. "We feel that with the incubation of businesses in Lakeland, the timing could be right to help those companies expand. We hope to do more at Lakeland Interstate Park."

Meanwhile, considerable activity is occurring at the interchanges along the Polk Parkway. Minneapolis-based Target Stores opened its first 125,000-square-foot retail store in Lakeland at Harden Boulevard. "There's also a Lowe's, Home Depot, Courtyard by Marriott and Residence Inn at the three interchanges," says Steve Scruggs at the Lakeland Economic Development Council. "The Village at Lake Highland is an upscale apartment complex that is pretty pricey for Lakeland. This wouldn't have happened without the parkway."

With all this new development on the west side of the city, Lakeland officials are considering adding a fire station at Lakeland Linder Regional Airport. "This will be a great asset," says Charles Gunter, the airport's executive director. "Our new 27,000-square-foot terminal is under construction and on schedule to open in mid-November. Southern Air Systems is coming from Tampa. They manage 22 corporate jets and turbo props."

Downtown Lakeland joins in the action with the development of the 38,000-square-foot Heritage Plaza. The building is scheduled to open in the fall. Another mixed-use development is beginning in Northeast Lakeland. Bridgewater is a 1,000-acre parcel at I-4 and State Road 33 that will encompass 200 acres for business park use, 575 acres for residential and 120 acres for multi-family, retail and industrial uses.

In Bartow the Old Florida Plantation development has been annexed into the city. "Bartow's about to double in size," Engle says. "The general consensus is a lot of growth is going on and there doesn't seem to be any end to it," McDermott says.