There are critical lessons for St. Petersburg (and any city) in its valiant effort to woo young tech businesses to its downtown and then trying to keep them there.
The tale of what happened to a company called GeniusCentral holds three lessons for a city that is itself in the midst of major growth, a construction boom and still in need of deciding what it wants to be in the future.
Lesson One: It is easier to recruit a business with sweetened financial incentives than to hold on to it.
In the spring of 2015, a growing tech firm based in Lakewood Ranch on the Manatee-Sarasota county line announced plans to move its headquarters to downtown St. Petersburg.
GeniusCentral Systems Inc. agreed to add 40 new jobs paying at or above 115 percent of the state average annual wage of what was then $42,446 a year. Those jobs would include some paying as much as $200,000, the company said. In exchange, GeniusCentral would be eligible to get an incentive package of as much as $320,000 from the state, county and city — if it met its jobs commitment.
The news conference that spring was attended by Gov. Rick Scott and St. Petersburg Mayor Rick Kriseman, among others celebrating what appeared to be another economic victory. A 50-employee software developer, GeniusCentral said at the time that in order to sustain its fast growth it needed better access to skilled technology workers. It said it had considered relocating to such tech-laden markets such as Austin, Texas, and Boulder, Colo., far from Florida. But in the end the firm said it found nearby St. Petersburg to be "ideal" for expanding its operations as a leader in website and loyalty marketing programs for the organic grocery industry.
Just not ideal enough.
The company had relocated to a 17,000-square-foot warehouse, bedecked with funky exterior murals and cool-vibe interiors, in the Warehouse Arts District on Fifth Avenue S.
Things soon went wrong. By this fall, GeniusCentral was out of St. Petersburg, relocating to a more run-of-the-mill (and cheaper) building on State Road 70 in Bradenton. That move back to Manatee County will likely nullify the company's incentive package from Pinellas County and prompt a re-evaluation by state economic developers on the remaining part of the deal.
Lesson Two: It's tough to recruit young, cost-sensitive companies to downtown St. Petersburg when employees struggle to find affordable places where they actually want to live.
When GeniusCentral moved to St. Petersburg, CEO John Miles said his company fell in love with St. Pete. "This area that we're in, I think over the next few years, it is going to be one of the best," he said.
But Miles soon left GeniusCentral. Company veteran and founding family member Linda Sheehan, president and chief operating officer, stepped in as interim leader, but declined to comment about what was happening at the time. Other business startups sharing GeniusCentral's building soon left for other quarters in the city.
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The company asked for more time from officials to meet its jobs commitments. A new deadline was set for January 2017, but the incentive package was trimmed to a potential $304,000.
That was not enough to help GeniusCentral. After its move to St. Petersburg, its tech workers found it difficult and surprisingly expensive to find nearby housing. With the company's blessing, a number opted to tele-work from their homes south of Tampa Bay, but over time that left GeniusCentral's warehouse space sparsely populated and a less inspiring place to work. Also, GeniusCentral signed a lease that proved pricey, adding to the financial pressure.
Company leader Sheehan did not respond to a request for comment in time for deadline Friday.
And the warehouse space that's now vacant? It looks like it may become a bourbon distillery.
Lesson three: St. Petersburg is enjoying a boom in apartment and hotel construction, new museums and artist studios, and a lively nightlife from entertainment venues, restaurants and bars. But the city needs more balance. And that means more businesses and good-paying jobs in the downtown area. The city prefers "cool" innovative firms that can pay decent wages and amplify the vibe St. Pete wants to nurture. The challenge: St. Pete may be pricing itself out of the entrepreneurial ecosystem.
There's a familiar pattern to economic development. First, an incentive deal is struck to recruit a business to the area. Second, public officials gush over the perfect fit of the new player coming to town.
That was the scenario in the spring of 2015 when the GeniusCentral recruiting deal was unveiled.
"This is not only the type of business we want in our city, it's the kind of people we want in our city," Mayor Kriseman said.
No less hearty was Gov. Scott's personal welcome, praising GeniusCentral in Florida as an example of how efforts to strengthen the state's workforce continue to work. "Forty jobs here. Forty jobs there. We're adding up," Scott said. "We now have the highest per capita jobs growth rate."
We've heard versions of this before, especially in the hype around the recruitment of New York's IRX Therapeutics, a cancer-fighting biotech firm, that won incentives to relocate to St. Petersburg — but never did.
Stuff happens. Predicting small tech company strategies in a changing economy is tricky. But St. Petersburg should be careful it does not become a punchline as the city that too often gets stood up (or dumped) at the prom.
To the city's credit, other efforts are blossoming to try to lure more innovative businesses downtown. This fall, the St. Petersburg Economic Development Corp., a city and chamber of commerce joint project, was unveiled to recruit companies to the city. Some early steps have also been taken to try to develop an "innovation district." Another demographic plus for the city comes courtesy of the University of South Florida St. Petersburg, a one-time commuter school that is aggressively adding dorms and residential living options on campus. That's swelling the number of college millennials living in the city and enriching the downtown culture.
Some owners of major downtown buildings are also jumping into the pursuit of young tech companies. Downtown's principal officer tower, long known as the Bank of America tower, was rebranded 15 months ago. Priatek Plaza is named for an entrepreneurial tenant, Priatek — arguably a risky move for a large building to put its name in the hands of a still young business. But tower owner Kucera Properties seems eager to try to transform its traditional commercial building into a vertical "tech tower" catering to startups and innovative firms.
A block away at First Central Tower, also known as the BB&T building, the owner is trying to reposition the commercial tower. It's marketing a variety of co-working spaces and meeting rooms available on a flexible basis — business approaches more appealing to young companies and entrepreneurs.
Will all of this spur more innovative jobs to St. Petersburg? It almost worked with GeniusCentral. Maybe the next time is the charm.
Contact Robert Trigaux at email@example.com. Follow @venturetampabay.