ORLANDO – When the housing market crashed in 2008, Florida’s economy went into a tailspin. The inventory of unsold homes soared, foreclosures reached unprecedented levels, and the unemployment rate climbed to double digits as jobs related to the home building industry vanished.
It’s one of the reasons why Florida actually lost more people than gained new residents in 2008, a reversal of historic norms.
Thomas R. Kohler isn’t a believer, though, that Florida’s best days are behind us, or that the current economic difficulties confronting the Sunshine State can’t be overcome.
“We’ve bottomed out,” Kohler said. “How steep the climb back up will be remains to be seen.”
For one thing, he thinks the credit crunch that’s made it virtually impossible for businesses to get the money they need to expand or move forward on local projects will get better this year.
“I think it’s going to ease up incrementally, but we’ll see 2012 as the year when the engine pumps a little harder,” he said.
Kohler knows a thing or two about economic development. He’s now a principal with Real Estate Research Consultants, a downtown Orlando firm that works with communities on developing long term economic development strategies. Prior to joining the firm in 2002, Kohler served as executive director of Orlando’s Downtown Development Board and Community Redevelopment Agency.
His expertise includes public/private ventures, implementation strategies, developing incentive policies, and finding financing options for local projects.
In an interview with Freeline Media Orlando, Kohler said he believes Florida still has great strengths that will benefit the state and region as the economy improves. But it’s critical for communities to lay the groundwork today for economic opportunities of the future.
“RERC will celebrate our 25th anniversary this year,” Kohler said. “We deal with both the public and private sectors. We’re changing our tagline to ‘strategic advisors.’ We look at things strategically.”
It starts with looking at what your assets are, and finding ways they can be converted into economic benefits, he said. As an example, he cited one of RERC’s prime clients: local airports that own far more land than they now use for runway space.
“We’re currently working with a number of airports on their real estate assets that don’t have to do with aviation,” he said. “They have thousands of acres around the airports that provide opportunities for economic generators.”
Some of that land could be leased out to attract new businesses, he said.
“How does the airport become a part of the economic development strategy for the communities,” he asked.
Kohler noted that health care remains one of the top growth industries in the nation, and said communities hosting hospitals and medical centers need to look at ways that those facilities can become engines for future jobs in this field.
“Hospitals are operating 24 hours a day,” he said. “How do they work with the community for economic growth to support their mission? That’s how we’re starting to think in more strategic ways. That industry (health care) is the one hiring at a higher salary level.”
When the housing market was booming between 2004 and 2006, a lot of mixed use commercial projects went into the planning stages. But when the housing market crashed and banks found themselves with a skyrocketing number of foreclosed homes, that precipitated a severe credit crunch that hasn’t eased much, and eliminated easy credit for both residential home buyers and commercial developers alike. That’s put a lot of ambitious local projects on hold.
“There’s just no financing for that now,” Kohler said. “Those projects will come to fruition when the money loosens up.”
How long that’s likely to take will probably depend on consumers’ willingness to spend more in the near future, he said.
“I think each of us as a family unit has reassessed how we spend our money,” Kohler said. “We went from zero savings to 5 percent savings, and 70 percent of our economy is based on consumer spending. But retailers are seeing more use of credit cards so far this year.”
Kohler thinks transportation will become a major asset for the region if Central Florida gets both a high speed train from Orlando to Tampa, and then SunRail, the 61-mile commuter rail line that would run from Volusia County to downtown Orlando, and then to the Poinciana Industrial Park. But he worries that Gov. Rick Scott might refuse to support the projects because of their price tag.
In the meantime, RERC is working with communities to redevelop local roadways and find new ways to revitalize those corridors, including U.S. 17/92 through Seminole County and State Road 50 through Pine Hills.
“We’re doing a study for the Pine Hills corridor from the East-West Expressway to Silver Star Road,” he said. “It didn’t get any of the benefits even when times were good.”
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