Shifting into Overdrive

Sarasota County embraces strong new growth mode

by Melissa Wells

Joe Long, senior vice president of JCI Jones Chemical Inc., one of eight company executives who relocated to Sarasota this year, says he is impressed with the community.

No matter where you go in Sarasota County, it's busy and getting busier. Two new office towers and the Ritz-Carlton hotel project are soon to start in downtown Sarasota, the business parks at Interstate 75 are filling up with build-to-suits for expanding businesses and there just seems to be no end in sight to the growth.

"Every interchange and the downtowns are hopping," says Frank Tamberrino, executive director of Sarasota County's Committee for Economic Development. "With office space, we have close to 500,000 square feet under development in downtown Sarasota alone, and another 500,000 square feet coming up along the Interstate, including industrial and warehouse space. That easily amounts to 1 million square feet."

As local businesses grow and expand, executives from outside the area are choosing Sarasota for their corporate headquarters, too. And the area is basking in accolades from Entrepreneur magazine as the sixth best medium-sized city in the United States, and from its position on Money magazine's list of the top 100 school systems in the nation.

JCI Jones Chemical Inc., a manufacturer and distributor of chemicals used in the water treatment industry, has spent most of this year shifting its corporate headquarters from Rochester, N.Y., to a 6,000-square-foot office at the Sarasota Quay which not only has impressive water views, but boasts interior decor worthy of the New York Metropolitan Museum of Art. Taking over leadership of a company with annual revenues over $100 million this year, Jeff Jones, chairman, chief executive officer and third generation owner of the company, researched several other cities for a new corporate headquarters.

"In considering the transformation of our company, we sat down and devised a road map for the next millennium," Jones says. "One question was if we would remain in west New York for the next generation. Seattle, Charlotte and Sarasota were our considerations."

Jones selected Sarasota, and seven executives followed him. Their in-house legal counsel also relocated from St. Louis. "That's quite an endorsement for this area," he says. "They have sold their homes in Rochester (and St. Louis) and bought homes here and enrolled their kids in school. We didn't come for the weather, but it probably was in the back of everyone's minds. The Florida sunshine is a special ingredient."

Jones Chemical Inc. was formed 70 years ago. "This company started in a bathtub," he says. "My great grandfather made a high-strength bleach, three times stronger than Clorox."

From that humble beginning, the company has grown to 13 manufacturing facilities and three corporate offices and 450 employees. A customer service center operates in Charlotte, N.C.; the financial, administrative and information technology divisions are still in Rochester.

Business consulting firm Arthur Andersen expects to employ 800 in its sprawling new complex south of Fruitville Road just west of I-75.

The company's flagship product is liquefied chlorine gas used by municipalities for treating water. "These are the chemicals that purify drinking water and are added to effluent wastewater," says Jones. "The United States is in the forefront of assuring the health of its citizens. In third-world countries millions are dying from water-borne bacteria. History has proven chlorine to be the most efficient form of purifying water. We're heavily involved in establishing that infrastructure globally." Jones says that his firm is "the largest manufacturer of industrial-strength bleach in the country and the largest repackager of chlorine gas in the world."

Although Jones has been impressed by the assistance of the committee for Economic Development, the transition to doing business on the west coast of Florida nevertheless has been something of a culture shock. He hasn't seen the commitment to quality and timeliness from local businesses to which he has been accustomed in New York. "We're not finding the business climate in as much of a forward motion," says Jones. "The chemical industry is highly regulated and very conservative. The concern I have is the tendency to be lackadaisical with business in Sarasota. This problem isn't in the work ethic of employees hired locally, but to have the services to take care of our company, this will be a bigger challenge than I envisioned."

Jones was already familiar with the area prior to his decision to relocate to Sarasota. "We've had a home on Casey Key for a long time," he says. "It was our place to get away from things. The seven families that have moved here love it and have taken to the community."

And the Palmer Park of Commerce is building a three-story, 35,000-square- foot speculative office building in an area where 180 acres are earmarked for development and approved for 1.7-million square feet of office space.

Sarasota Deli Provisions will triple its available space with its move into this new 80,000-square-foot building at Lakewood Ranch Corporate Park.

While Venice is noted more for its Italianate architecture and sharkstooth-strewn beaches than its office space, the city is in the midst of significant redevelopment activities. "We have an active tourist economy," says George Hunt, the city manager. "Our downtown is literally five blocks from the beach. We're infusing $1 million into our infrastructure downtown."

Meanwhile, the state plans in April 2001 to spend $68 million on two new bridges at the northern and southern edges of Venice and a renovation of Business U.S. Highway 41. "The net result will be a real opening up of our downtown area," Hunt says.

Rocking the I-75 Corridor

Farther north along the I-75 corridor, Arthur Andersen has recently moved 400 employees into its new 157,000-square-foot office building on the south side of Fruitville Road. "We'll have 800 employees in that one location," says Ellen Wile, the firm's public relations representative. "We'll keep the 67,000 square feet we have in our first building at Arthur Andersen Parkway."

While the firm's Sarasota operation has been growing very quickly -adding 300 people last year -Wile says, "we anticipate continuing to grow but at a much slower pace. We have plenty of room."

More room seemed a good idea for other firms, too.

A new neighbor to Comcast is the Gateway to Sarasota office park with 82.5 acres and plans for 600,000 square feet of Class A office space. The first building with 64,695 square feet is fully leased. Pinnacle Towers Inc. (See Maddux Report, September 1999) plans to occupy 33,000 square feet, moving from its cramped headquarters in a downtown Sarasota office building.

Pinnacle provides tower space for cellular services, paging, wireless data transmission and radio and television broadcasting. "We continue to keep growing," Wolsey says. "The Motorola acquisition, which closed at the end of August, more than doubled the size of our company. By the end of the year we'll have 3,600 owned and managed sites."

The largest single construction project along the I-75 corridor is the FCCI Insurance Group building, a three-story, 230,000-square-foot corporate headquarters due to be occupied in June 2001.

And as the company increases its acquisition of towers, the need for employees grows. "We expect to hire another 20 or 30 people over the next six months," says Wolsey. As the tenants are filling up the first building at Gateway to Sarasota, a second will start construction this month. "It will be a mirror image of the first building, only we'll shrink down the lobby a little," says Nevin Thomas of Commercial Management & Leasing Group. "We have verbal commitments for around 20,000 square feet and occupancy is scheduled for June 2000."

Thomas names several factors as contributing to the success of this project. "For larger companies, this is the place to be, with access to I-75 and larger labor pools, pulling employees from St. Petersburg, Brandon, Bradenton and Port Charlotte," he says. "The cost of land is cheaper and companies save $10 a square foot compared to being downtown. We're at $19.50, that's about the lower end of the scale for a Class A building. he deals I've done so far are from downtown."

Thomas adds that there is a "big build up of demand. In one week I leased this whole thing and it caught us short handed."

The shift of companies from downtown to the I-75 corridor is not a negative to Thomas. "When smaller companies get big, it gets too expensive (downtown)," he says. "The reality is when a company leaves a chunk of space downtown they're creating opportunities for companies that need to be downtown to be able to expand. It's working out well for everybody."

With its move into a new 8,000-square-foot building at Lakewood Ranch, Sarasota Deli Provisions has nearly tripled its space. And Backsoft Corporation will be occupying 12,000 square feet of a new 21,000-square-foot building being built by J & H Development at Lakewood Ranch. Backsoft, with 30 employees, "web enables" SAP software. The software, developed and based in Germany, allows different departments of companies to exchange data instantaneously.

Swier adds that "our company is in hypergrowth mode and on the road to going public. We're looking at buying and taking over the whole building at some point."

The 65,000-square-foot Gateway Professional Center on the north side of Fruitville Road, just west of I-75, is the first of eight buildings planned for the office park.

"This has been a strong market for companies doing build to-suits," Swart says. "These buildings are running from 10,000 square feet up through 30,000 square feet. We have six buildings up or under construction." Meanwhile, Lakewood Ranch is already gearing up for Magnolia Greens Office Park, a 56-acre parcel planned for the next phase of development. "We're permitting now for 500,000 square feet," says Swart. "Eight buildings are in the planning stages and we're talking to developers about that. It should kick off next year sometime as we have demand. And the demand has been great and should continue."

That demand has brought at least three elecommunications companies, five banks, three home builders and several smaller companies into the Corporate Park. And on the north side of University Parkway, in Manatee County, Tropicana Products Inc. is deciding on a developer for its new 125,000-square-foot office building. A Publix shopping center is due to open next month 95 percent leased, and a 130-room, full-service hotel is in early stages of development.

Sprouting up downtown

Several projects are moving from the early stages of development to the construction phase in downtown Sarasota. With a 9.1 percent vacancy rate downtown, according to the October Maddux Report office analysis, developers are moving forward with new office towers. The Wynnton Group, based in Columbus, Ga., is soon to break ground on the Five Points tower, a 14-story, 197,750-square-foot building.

"This is the first Class A office building to be constructed in Sarasota in 13 years," says John Harshman at The Harshman Company. "We have about 65,000 square feet committed by letter of intent and are finalizing lease agreements. We're looking for occupancy around May 2001."

The ground floor will be occupied by a bank and retail shops, floors two through seven are reserved for parking decks, and offices will occupy the remaining floors. "All the offices will have dramatic views," Harshman says. "We'll have a fitness center for tenants and this will be a GTE smart building."

Harshman sees this project as a plus for downtown. "Sarasota has experienced tremendous activity along the I-75 corridor," he says. "This (project) will help to bring a focus from the business perspective to downtown and encourage more businesses to locate downtown.

"Sarasota is a corporate location. CEOs can live on the water and entertain their corporate executives from around the world and enjoy the arts and lifestyle of Sarasota."

Another Wynnton Group project under construction downtown is the 260-unit Renaissance apartment project. This project will also incorporate another 240 condominium units, 25,000 square feet of retail and office space. "We anticipate occupancy November 2000," Harshman says. "This is primarily a residential development. The concept was that downtown Sarasota needed people living in it to make it more active and viable."

Halfacre Construction Co. will occupy this 8,000-square-foot building in the Lakewood Ranch Corporate Park.

And why is the Wynnton Group investing in Sarasota? "Bob Schiffman, the firm's president, went to New College here and has been familiar with Sarasota since the early '70s," Harshman says. "It's a wonderful place to live and truly is a dynamic market, one that gets attention from people all over the world."

Italian developer Pierre Rivolta is adding his continental style in the central financial district with the Sarasota Park Tower, which should start construction early next year. While final details are still being determined, plans are for an 11-story, 161,382-square-foot tower that is "an infusion of traditional Italian architecture with a modern feeling," says Richard Storm, a Rivolta Group spokesman. "It will be a wonderful-looking building. The lower floors are based on a palladian style which gradually transforms
into highly contemporary glass structure. We're talking occupancy third quarter 2001."

A 657-space parking garage will also be constructed. "Our future plan is to replace our existing building, Main Pointe, with a matching tower," Storm says. "The site has been developed in such a way that the parking garage is in the center and will be adequate to serve an additional building. We'll have ample surface parking, too. We're maintaining the park-like atmosphere on the site with our allay of mature oak trees."

Puttin' on the Ritz

Adding to the synergy downtown, Core Development is soon to break ground on a 270-room Ritz-Carlton Hotel at the downtown waterfront. Amenities will include a 20,000-square-foot spa and 18,000 square feet of conference space, including a 12,000-square-foot ballroom. The project includes an adjacent condominium high rise and the creation of a beach club on Lido Key. Project cost is $275 million and the hotel should open in mid 2001.

"We have $400 million in projects coming on line over the next three to four years," says Greg Horwedel, director of neighborhood development with the City of Sarasota. "The chief project is the Ritz-Carlton Hotel. They should be pulling the building permit very shortly."

Paul Thorpe, director of Sarasota's Downtown Improvement Association sets the figure at $600 million. "Our recent activities are gangbusters," he says. "We're not sure what's making this explode the way it is. Sarasota is a great community. It has all the amenities of a business community with arts and cultural. With our vacancy rate, it's time to add more buildings to inventory. Another inspiration is for the first time in 20 years we've built three new condominium towers downtown. People are showing an interest in living downtown. This has become a fun place and good entertainment spot."

One of the city's favorite entertainment spots is in the midst of a renovation. The Van Wezel Performing Arts Hall is "right on schedule," says Bill Mitchell, the center's executive director. "Demolition is 99 percent complete. To see the outline of the new construction, it really is impressive. We're scheduled to have a grand reopening the third week of October 2000. Wonderful things are in the pipeline."

Another project that could be in the pipeline for downtown is Ringling Park from developer Murf Klauber. The scope of the idea is so vast that some consider it more a pipe dream, but Klauber is dedicated to convincing the community and city officials that his proposed redevelopment project -two hotels, a state-of-the-art conference center, retail, office and residential -is just what is needed on 30 acres at the north end of the city.

"The Klauber proposal is in discussion stages," Horwedel says. "He's discussed it with community groups. There's a wait-and-see attitude from the community. Kudos to him for sparking discussion of what downtown Sarasota will look like in 20 to 30 years."

"We've been at 2 percent unemployment for the past eight months and it gets to the point where people are asking where their labor is going to come from tomorrow and six months from now. Fortunately, we have a number of initiatives in place to address those concerns."

That is one of the issues under discussion at the Suncoast Technology Alliance, which has formed in the past year. "We have 97 members in Sarasota and Manatee counties, and our purpose is to provide a forum for technology professionals to share information on how to help each other grow," says Karl Grass, chairman of the Alliance and partner at Arthur Andersen Technology Solutions. "The two issues with growth of the technology industry in the local economy are raising capital and workforce (development)."

Results of a survey sponsored by the Alliance show that the area has 400 to 500 high-tech companies. "The most frequently mentioned categories are software development, information technology, education and training, manufacturing design, and telecommunications," Grass says. "Half of these companies derive 80 percent or more of revenues from outside the area. And half of the companies reported significant growth in the past 18 months. Data suggests that the high-tech companies in this area created 1,100 to 1,200 tech positions in that time and a similar number will be created over the next 18 months. We're surprised at how strong a sector of the local economy it is."

And perhaps will continue to be, as long as a qualified workforce continues to show up in Sarasota County.