Five trends reshaping Tampa Bay economy in 2014

Gasoline prices in the bay area, at $2.39 at this Tampa RaceTrac earlier this month, are about 90 cents less than a year ago. JAMES BORCHUCK   |   Times
Gasoline prices in the bay area, at $2.39 at this Tampa RaceTrac earlier this month, are about 90 cents less than a year ago.JAMES BORCHUCK | Times
Published December 26 2014
Updated December 26 2014

Was it just a year ago that Tampa Bay was obsessing about rising flood insurance rates and Floridians were speculating about the return of "Governor" Charlie Crist?

It has been a year of dramatic changes. Longtime local business leaders moved on. A vision emerged that could dramatically alter downtown Tampa. Gas prices plunged.

Household names were here today — traded tomorrow. (See: Tampa Bay Rays roster.)

Beyond the headlines, however, were some overarching changes in Tampa Bay's economic and business climate. Here's a look at five trends in 2014 that are reshaping the region:

1. Dwindling middle class

Neither falling unemployment nor rising home prices could detract from arguably the biggest thorn in the economic recovery: stagnant income. Tampa Bay ranks dead last in median household income among the 25 biggest U.S. metro areas. A United Way of Florida report in November found that an alarming 45 percent of all households in this state cannot afford basic housing, child care, food, health care and transportation. In the broader seven-county Tampa Bay area alone, that translates to more than 600,000 households unable to consistently afford the cost of living.

The stagnation comes as soaring stock prices and higher productivity are making the wealthy stratosphere even wealthier. The income disparity spotlight shone brighter on Tampa Bay after another analysis showed the ranks of super-rich Floridians — those with net assets of $30 million or more — jumped nearly 12 percent last year, the biggest surge among large states.

Some economists who follow Florida say falling unemployment may finally trigger a rise in wages in the second half of 2015. That had been the hope for 2014.

2. Cheaper staples

If there were any bright lights for cash-strapped Floridians, it was the dual tandem of falling gas prices and cheaper homeowners insurance.

Plummeting gas prices came as a result of several factors. Among them: rising U.S. oil production, which lessened demand on foreign oil; higher refinery production; lower-than-expected demand in Europe and China; and the return of Libyan exports into the market. By mid December, gas prices in Florida had fallen below $2.50 a gallon, about 90 cents cheaper than a year ago. And the U.S. Energy Department expects prices to remain low.

Property insurance — a huge financial drain for many homeowners — got a reprieve thanks to the ninth consecutive hurricane-free season, lower insurance costs and a legislative overhaul that make it much harder to file sinkhole claims.

Even the great flood insurance scare of 2013 was muted — or at least delayed — after Congress passed a measure in January that eliminated the most egregious rate hikes.

Citizens Property Insurance cut its rates for the first time in years and was able to push hundreds of thousands of policies into the private market. By year-end, its surplus was approaching $8 billion. Even State Farm got back into the business of writing Florida homeowners insurance again.

At least until next hurricane season rolls around.

3. Home sweet downtown home

On both sides of the bay, urban dwelling is in vogue.

Downtown St. Petersburg turned into an around-the-clock construction zone with luxury condominiums, upscale apartments and townhomes popping up. Three apartment buildings have recently been completed, four more are in various stages of construction, and six condo projects are under way.

By the time they are finished, more than 2,000 new homes will be within a mile of downtown's waterfront.

St. Petersburg developers have been buoyed by the success of residential projects that helped propel traffic to the Beach Drive dining and entertainment district.

Meanwhile, downtown Tampa is having its own building boom. At least nine major residential towers are going up or on the table. If they all go forward, it would add at least 10,000 urban dwellers, practically doubling the size of the city's downtown residential population of just a few years ago.

That doesn't include Tampa Bay Lightning owner and real estate mogul Jeff Vinik's ambitious $1 billion plan to remake the downtown's southern fringe. Vinik said he's counting on more millennials flocking to live here. About 660,000 square feet of residential space — along with plenty of retail and entertainment options — is part of his plan.

4. Leadership shuffle

Who's on first? Not Joe Maddon. The decision by the Tampa Bay Rays manager to skip town and join the Chicago Cubs was just part of a dizzying changing of the guard that rippled throughout Tampa Bay's leadership.

Tampa Bay Partnership head Stu Rogel and Museum of Science and Industry CEO Wit Ostrenko stepped down from organizations they had run for 20-plus years.

New leaders were picked at Syniverse Holdings, Gerdau Ameristeel, BayCare Health System and WellCare Health Plans, among other companies.

Rick Kriseman took the gavel in January as the new mayor of St. Petersburg and brought in a new management team with him.

MacDill Air Force Base in Tampa also saw a change at the top. Army Gen. Joseph Votel III took over leadership of SOCom, the U.S. Special Operations Command, from Adm. William McRaven.

5. Getting our swagger back

Gone are the days of wallowing in our shortcomings.

Tampa Bay turned boastful, if not downright cocky, as its fortunes turned from land of the housing bust to land of the corporate relocation.

One after another came announcements of job expansions or relocations.

Bristol-Myers Squibb opened a major business/marketing center. IT firm Cognizant added 400 employees, doubling its Tampa operation. New York tech outsourcing firm iQor picked downtown St. Petersburg as its new corporate headquarters. Quest Diagnostics opened a new Tampa hub. Laser Spine Institute broke ground on a new headquarters.

Even Trader Joe's discovered Tampa Bay, opening its first location in March.

A sense of swagger may have its origin in folks like Tampa Mayor and Cheerleader-in-Chief Bob Buckhorn, who has long trumpeted Tampa as America's next great city.

Coming off hosting the 2012 Republican National Convention and, more recently, the International Indian Film Academy Weekend & Awards (a.k.a. the Bollywood Oscars), bay area promoters became more enthused.

Then came the rash of new jobs.

Final word goes to Tampa International Airport CEO Joe Lopano, who this year kicked off a $1 billion airport expansion and renovation. At the Greater Tampa Chamber of Commerce annual luncheon this month, Lopano recalled Tampa as a "moribund" place where nothing was happening when he arrived in 2011.

Now, Lopano told the gathering, it's hard to keep up: "We've gone from the city of 'No We Can't' to the city of 'Watch This.' "

Contact Jeff Harrington at [email protected]om or (813) 226-3434. Follow @JeffMHarrington.

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