Chamber directors in Okaloosa & Walton counties generally agree that the unique factors of having a military oriented community and a convenient drive-to location for tourists have sheltered this area from the economic fallout experienced nationwide. But they are in total agreement that the quality-of-life is second to none – with national awards to back it up.

"We are blessed to have a balanced economy in the Greater Ft. Walton Beach Area. The major contributors of course are the military and tourism," notes Fort Walton Beach Chamber director John Keith (profile July-Aug 2001). However, there were some ripples felt in the area. "The feedback has been mixed," he notes. "We have some businesses affected by more deployed military than normal that aren’t here to frequent their business, particularly if they were located close to a base. Other businesses indicate bookings are good but overall spending is down."

The drop off in military business rated to deployments pales in comparison to the sacrifice the military is making according to Keith. "All the branches of the military, reserves and National Guard are making the ultimate sacrifice, he says. "They have paid the biggest price. So to them should go the greatest praise. Even if times are tough at least we are in Paradise that is business friendly and rated a great place to live. We will continue to do better than most of the nation."

If the military community has help bolster our area’s economy during the rough economic times Wayne Harris, Executive Director of the Crestview Chamber of Commerce, believes his city has the best home for them. "I did notice a "tightening of the belt" affect by a few of the local businesses just as a precautionary response, he notes.  "We are blessed with a vibrant and thriving military community."

Harris points to the availability of land and affordable homes as part of the city’s strong appeal to families and as an economic hub, factors that helped the city receive accolades from Expansion Management magazine and Forbes magazine for its desirability as a business location.

"The cost of land and homes in the Crestview area is considerably less and that is significant to the military folks coming," he notes. He also includes "baby boomers" moving here either to retire or start a business. "We are very proud of the fact that numerous physicians are making their home here and the growth at the North Okaloosa Medical Center has been exponential, one of our largest employers with over 500 employees."

The availability of land and infrastructure is a key factor companies use to assess business relocation options. Harris touts the proximity of I-10, a rail line and the 8500 foot Bob Sikes Airport as representing as an extremely appealing area for new businesses to consider.

Business in The Niceville-Valparaiso area is arguably the most military-centric in the area. With proximity to Eglin Air Force base the military community has continued to support businesses, according to Niceville-Valparaiso Chamber director, Tricia Brunson. However future growth is hampered by the boundaries of the Eglin reservation. "Because we are bordered by water on the south and Eglin property virtually everywhere else, growth for business is somewhat limited to the available land," Brunson noted.

Although Destin and its beach resort lifestyle is less dependent upon the military it certainly offers the finest R&R for our military service members as well as an increasing stream of tourists. "There are pockets of our economy that have not had the same success as others," notes Attorney Lamar Conerly, Destin Chamber President, "but the real estate business as well as the banking, restaurant and retail businesses have all shown significant increases this year." Ray Navitsky, Executive Director of the Destin Chamber of Commerce attributes Destin’s growth to "the ambience of the area" as well as the areas "small town atmosphere." He credits the Tourist Development Council with leading the way by promoting the area’s "drive to" location

He adds that getting Phoenix Air to the area "will give our location a great economic boost." The charter airline is running scheduled flights from the Marietta/Cobb-McCollum Airport near Atlanta directly to the Destin Airport.

Navitsky also notes the chamber’s role in sustaining its vision through government. "Our Citizens for Good Leadership endorsed candidates for City Council and those elected have more than a vision for Destin," he noted. "They are doers and concerned citizens who are making things happen and moving our community forward in a positive direction."

In Walton County the benefits of establishing a vision have been dramatically manifested and play a key role in sustaining the county’s growth. Like many area leaders Keith Howard, CEO of the Howard Group and developer of projects in both counties, dismisses the effects of 9-11 on tourism and credits the tourist development council and managed sustainable growth for ensuring that the area remains appealing to visitors.

Beginning with his company’s inception in 1988 and three employees The Howard Group grew to its present asset base of $250 million based on his managed growth tenets. But he notes that his efforts were also tied to his personal view on the type of community that was suitable for raising a family. "We wanted to develop a neighborhood that we really knew," he notes. "We care about the community we live in."

Howard believes that the future of the area will have to incorporate some diversity in the types of developments as well as adherence to the Scenic Corridor Guidelines of which he is one of the early founders. Responsible land development is the key. "I believe that in 3-5 years we can become a model for coastal communities." He cautions that in order for it to occur the infrastructure will have to keep pace and will require strong leadership in Okaloosa County and in the City of Destin to adopt a forward-looking view of the area’s future. He warns, "If we had plans today, it would take 7-10 years to get implemented."

The vision and guidelines for sustainable growth portend a bright future for Walton County. One of the most dramatic examples of growth has been the Walton County Chamber of Commerce, recipient of a national Award of Excellence and whose membership has grown by 100% in the last three years according to Executive Director Pamela Tedesco.

"Real estate development along the Gulf is the leading force in this countywide growth," notes Ms Tedesco. "New destinations including WaterColor and the Village at Baytowne Wharf add to the wide array of beach communities that continue to evolve. Their combination of accommodations, retail and amenities provide many avenues that contribute to our growing local economy."

Tedesco is excited about the role the chamber has played in this progress. "How exhilarating it is to not only to see the positive attributes of a healthy community," she states, "but also to be part of community that is designing its destiny while it works together toward getting there." She is referring to the involvement of the chamber in a series of public focus groups facilitated by Okaloosa-Walton Community College, articulating the county’s vision for the future.

According to Tedesco the key to the county’s future will be infrastructure improvements for roads, sewer, water as well as recreational amenities to support both tourism and to attract non-tourism export business. "The County and its leaders recognize that now is the time to address the issues of tomorrow while options still exist."

Future growth in a region that is bounded by federal land poses challenges: the Eglin federal reservation sprawls over 725 square miles and is a national asset for providing research and testing of future weapons systems. The communities of Fort Walton Beach, Shalimar, Niceville, Valparaiso, Mary Esther abut the Eglin reservation thus restricting land development. Eglin Air Force Base acknowledges the need for growth and development but at the same time must ensure the Eglin test ranges are not diminished in their capacity to provide state-of-the-art facilities.

Bob Arnold of the 46th Test Wing at Eglin Air Force Base acknowledges the dilemma. "How to grow the private sector and make Northwest Florida a better place to live for all citizens in such a manner as to not lessen the long-term military value of our bases to the nation." He elaborates on the base’s role: "We work hard to support requests for Air Force land from elected officials and other government entities.  Over the past 20+ years we have outgranted/licensed/leased over 10,000 acres of land for schools, parks, utilities, and utilities. Examples include land for the Okaloosa Regional Air Terminal, land for roads, water lines, and utilities, land for schools, and land for parks/recreation."

But not all requests are approved. "Unfortunately, we also receive requests that we are unable to approve because of mission impact.  Included in the category are oil/gas operations in the Gulf of Mexico which would have significantly impacted our current and future military air operations."

According to Arnold the issue of encroachment is very high on the "radar scope" of the Department of Defense, Congress and the State of Florida - many bases have been adversely affected by it. Eglin Air Force Base officials are working actively with planning forums at the local, regional, and State. 

Arnold cites a recent example of these working partnerships. "As part of this year's Infrastructure Grant Program, Okaloosa County received a $250,000 grant to develop a plan for a "Northwest Florida Greenway" stretching from Eglin to Apalachicola.  This grant will be worked in partnership with the Florida Department of Environmental Protection, The Nature Conservancy, and ourselves.  Greenway will provide us with expanded land/air for military operations while simultaneously preserving land for environment purposes."

Arnold summarizes Eglin’s commitment, "Our motivation is clear--to help shape the future of Northwest Florida in a manner that benefits everyone."

With the presence of Eglin, Hurlburt and Duke Field providing a tremendous economic infusion into Okaloosa and Walton Counties we are fortunate to have this partnership. 

In 2001 Florida’s Great Northwest Inc., (FGNW) the 16 county economic partnership, (see article on FGNW in July-August issue) was created to help promote the region, establish a branding identity and increase awareness of the area to companies and site relocation consultants. Our region had been off the radarscope for expansion location as Central and South Florida’s economic might was the gravitational epicenter. Awareness of northwest Florida was abysmal.

Riding on the crest of one of the most robust economic growth periods in history the future appeared bright for FGNW to show the world the opportunities the region represented and in so doing, attain a 5-year goal of creating 10,000 new jobs. But just as FGNW bolted from the starting gate the landscape shifted. Barely had the office been put together and the staff assembled when the economic picture soured after 9/11. Notwithstanding the sting of the economic downturn FGNW is moving forward with key initiatives that are beginning to get international attention.

Al Cook shares the group’s progress and challenges. "We have made great strides from where we have started from," he notes. "We have built award-winning marketing materials for out targeted industry clusters, categorized our inventory of available sites and buildings, and built relationships fostering regionalism. I think we have made strides considering that we haven’t been on their radar screen. The awareness that we have seen when we have gone to visit site consultants and other clients has been very positive. They recognize that Florida’s Great Northwest is on the map. We are starting to see some activity now."

He acknowledges that several factors stemming from 9/11 and the intense focus on corporate accounting responsibility have presented challenges "We were thrown some curve balls over the past year with 9/11, which certainly impacted the economy. Companies that had relocation plans basically shelved them. Companies are rethinking their strategic plans."

Cook also pointed out that the growth in advanced technology companies, a highly desirable industry that fits with our technology clusters, has been stymied by the intense scrutiny they are undergoing. The recent focus on corporate financial accountability in the wake of the Enron and Worldcom financial debacles have put expansion projects on a back burner or under more intense review. "Accounting responsibility is now a higher priority over expansion," Cook acknowledges.

Notwithstanding these obstacles, FGNW is sensing an opportunity to attract the automobile parts industry. Korea’s Hyundai Motors is planning on building a $1 billion dollar manufacturing plant in Montgomery Alabama. According to Cook this puts Northwest Florida within the 150-mile radius that auto parts suppliers find appealing. "The auto industry has been moving south for the last 20 years," he notes. "We feel there is an outstanding opportunity for automobile parts suppliers." Cook met with automobile executives in August to personally deliver the message about opportunities in our region. "They seemed open to the idea of visiting the area."

In addition to the automobile industry FGNW has it sights set on the aviation industry as well as on warehousing and distribution companies.

"Northwest Florida is finally being recognized for its beauty, quality of life and outstanding business climate," notes Larry Sassano, whose county includes 324 defense contractors. "The largely rural character of the region has become an attractive incentive for businesses seeking areas with a strong work ethnic and a workforce who likes to work where they like to live."

As for 9-11 economic aftershocks the effects were minimal. "Economic Development in Northwest Florida continued to progress throughout this past year," Sassano notes. "The momentum prior to 9-11 continued to allow economic developers in Northwest Florida to close deals and establish new projects throughout the year. We did notice a delay in the decision-making process for some industrial clients due largely to their national and/or international client base."

He also acknowledged that some military contractors experienced delays in federal payment procedures, which mostly affected smaller contractors who rely on regular payments for survival.

The engine that keeps Okaloosa’s economic engine under a full head of steam is its workforce according to Sassano. "Undoubtedly our educated and well-trained technical labor pool has been and continues to be our greatest asset. Eglin’s presence has commanded the growth and development of hundreds of contractors ranging from Boeing to true start-up operations that were formed to sub-contract work from the prime contractors." Sassano further cites Manufacturing Technology, Crestview Aerospace, AIC and Tybrin for their ability to successfully tap into the available technical labor pool.

Sassano believes that an Okaloosa County/Eglin Research Park is a necessary infrastructure ingredient to promote the county’s technical character and leadership. Such a facility would fit naturally with the University of Florida’s Graduate Engineering Research Center (GERC). "The park’s tenants would benefit from the GERC’s strengths in engineering and technology research," he notes. "Businesses can also take advantage of the GERC’s offering of masters and doctoral degrees in engineering programs as well as certificate programs and short courses in technological specialties."

Infrastructure improvements will be ongoing. "The greatest challenges we face in the near future deal with our abilities to provide adequate infrastructure for our communities and the businesses that require the water, roads and labor to advance their companies in a competitive market atmosphere. Finding solutions to overcoming these infrastructure needs will require close cooperation with local and state governments and the business community."

Walton County continues its pace of rapid growth, particularly in South Walton south of the Freeport Bridge where 80% of the county’s ad valorem tax base resides. A compellingly beautiful stretch of beaches and natural beauty continues to be a powerful draw to visitors and retirees.

Tom Powell readily acknowledges this area’s attraction but also notes that growth has been spawned by other geographic factors. "Growth from the Fort Walton Beach metropolitan area has leap-frogged over Eglin Air Force Base to surrounding areas like Walton and Santa Rosa Counties."

Powell noted that local businesses have remained strong for the last year and in some cases have expanded their operations. However, he also acknowledges that the slowing of the nation’s economy has resulted in little interest from outside businesses to expand in the area.

But even when the economy improves the lack of full-equipped industrial parks in the county will be an obstacle according to Powell. He is confident though that the county will rectify it. "With the help from the Walton County Commission and the cities of Freeport and

De Funiak Springs, that obstacle will soon be overcome."

On the positive side the county presents one of the most attractive lifestyles available. Nurturing that lifestyle will continue to be a challenge. "I believe the two greatest challenges facing Walton County are to manage extremely rapid growth along the coast while encouraging business growth inland.  The problems facing communities such as Seaside, Santa Rosa Beach, Mossy Head and Paxton are so profoundly different and unique that it will take great ingenuity and determination to address them all."

All three directors acknowledge that the quality of life offered in the region will be one of the primary drivers of our area’s future.

Darrel Jones, Okaloosa County Tourist Development Council Director, is delighted with the results of the last year. "As of July 2002, the tourist development tax collected from the lodging facilities in the South portion of Okaloosa County, has shown a 2.7% increase over last years tax collections," he states. "This is compared to the rest of Florida who show an average as of July of -11%."

Kriss Titus is the Executive Director of the South Walton Tourist Development Council and reports positive results as well. "This past year Walton County Bed Tax Collection from October 2001 through July 2002 is up 8.2%," she notes. "These are excellent numbers considering the rest of the State of Florida other than the Northwest region are posting much lower numbers for Bed Tax Collection to date." As tourism is the economic mainstay of South Walton the revenue it generates is vital to the area’s growth. Titus cites figures compiled by the Haas Center for Business Research and Economic Development that reveal its critical importance. Tourism generates approximately $412 million in total sales and creates 7,243 jobs and annual wages of approximately $135 million. Titus attributes the area’s increasing tourism interest in part to new developments in WaterColor, Sandestin’s Baytowne Wharf, Rosemary Beach and Seacrest Beach.

Although she is pleased with the South Walton’s tourism bed tax collection in wake of the post 9/11 economy, Titus notes that it took some innovative thinking and a partnership with the Walton County Board of County Commissioners to generate a contingency fund $250,000 to restructure the marketing campaign to keep the tourists coming and retarget the "drive markets" in wake of the upheaval in the airline travel industry.

"Our marketing campaign focused on the drive markets from 150 to 500 miles in targeted zip code markets," she states. "We expressed in our marketing that our destination was a safe family place to visit, that we were an exotic domestic beach destination, and that we were a family destination."

The competition for tourists is still fierce so Jones and Titus are sweeping the horizon for a competitive edge to exploit. Air service will be a key tool in both their campaigns. Jones notes, "Air service needs to come back to some recognized level to help compliment the drive-in tourism business." The recent opening of Delta Airlines flight route from Okaloosa County Airport to Dallas is key part of the Okaloosa tourism strategy.

"Texas has, for the last several years always ranked in the top 5-6 regions from which our tourist come," Jones states.   "This will aid in bringing Texas closer." The recent addition of Phoenix Air and its shuttle between Atlanta and Destin Airport has added yet another travel means for those willing to pay a higher fare for the added convenience.

Mike Stange, Vice President and General Manager of Sandestin Golf & Beach Resort, acknowledges that being a "drive to" location cushioned the impact of 9-11 but is delighted with the new air service given the resort’s future plans. The new air service to Dallas prompted Sandestin to hire a sales representative in Dallas to work that market area. According to Stange Sandestin wants to grow its "meeting business" by 100% over the next three to five years as well as increase its appeal as a year-round destination. "The resort’s growth strategy lies in the development of the Baytowne Conference Center, The Grand Sandestin and the Village of Baytowne Wharf, which the resort expects will expand its appeal to groups from the Midwest, Northeast, and other areas outside its surrounding drive-to markets in the South."

Although the Okaloosa and Destin airports service Walton County as well, the Walton County Tourist Development Council will be keeping a keen eye on the relocation of the Panama City airport.

"It will definitely make a difference in our tourism marketing strategies," she emphasizes. "We will be able to look at emerging markets that would include outside our drive market as well as International markets. Although 2006/2007 seems to be years away, in our industry group bookings can be made as much as 2-4 years in advance."

Both counties have hundreds of distinctive campaigns to attract tourism ranging from festivals to entertainment to eco-tourism all in the hope of making the area a year-around destination. But in both counties the primary challenge is to continue to market their respective areas and insure the protection of the tourism industry.

Titus states, "The mission of our TDC is to manage and direct activities that will strengthen the marketing position of Beaches of South Walton in the tourism marketplace." She also emphasized the need to take a leadership role in addressing tourism related issues.

The challenge is perpetual according to Jones. "The ongoing challenge is to continue to keep our destination at the "top of mind" for the traveling public," he says. " This requires continuing marketing of the destination, and continuing to inform our local populous of the importance of tourism to our local economy of over $1,000,000,000.00 per-year. "

"Real estate in Okaloosa County has fared very well since the attack on our country September 11, 2001," states Gloria Frazier, owner of ERA-American Realty in Shalimar. "We had an immediate downturn in sales for a month or two afterwards, but the momentum recovered quickly." She also adds, "Our company has already closed as much this year as we did in all of 2000; 2001 was our best year ever, and 2002 will surpass that."

Realtor Jane Araguel of Remax Southern Realty gushes about the market activity in Destin and South Walton (related article on South Walton). "The Destin Real Estate Market is BOOMING! Never have I seen properties moving this fast!"

Both point to the performance of the stock market, low interest rates and the area’s attractive lifestyle as the main factors fueling the activity.

"Sales are up this year in both new construction and resale homes, due largely to the favorable interest rates and the stable economy of our area," notes Frazier.

Araguel says, "A floundering stock market, low interest rates, an area that has a lot to offer and is still one of the most affordable real estate markets in Florida." She believes the uncertain stock market has prompted more people to shift their investments from stocks to real estate. "A tangible item they can see and touch but also use for their personal enjoyment," she notes.

Araguel also acknowledges that while many are interested in the market for investment purposes and second homes the compelling quality of life offered by the area continues to be the main draw. "I have sold several homes to couples in their 30's and 40's for primary residences - a segment of the population we have not seen in Destin before. Their concerns are not only the size, appearance and price of the property, but also the amenities of the neighborhood, the number of children in the neighborhood and the school district. This has had a tremendous impact on neighborhoods like Kelly Plantation with 22 sales so far this year versus 16 sales in 2001." The investment activity continues unabated. According to Araguel, condominium projects that have the highest rental income return on sales price normally have a turnover of approximately 10% of their units. This year the availability of these so-called "Cash Cows" have been scarce.

Araguel sees the availability of property becoming tighter in the near future. "We have definitely moved into a sellers market in some segments of the market. With the strong sales volume we have experienced this year, the inventory is becoming very limited and we are seeing quality properties sell within 14 days of being listed for sale. As this continues, prices will continue to go up."

Frazier sees a bright future in the face of national opinion suggesting that the real estate "bubble" has seen its days. "National economists have written about a real estate "bubble" that is about to burst," she states. "That may be true for areas in the U.S that have had rampant inflation in their housing markets, but I believe our market will continue to remain steady for the next year. Properties have been increasing from 5-10% per year over the past year or so, making real estate an excellent investment. And, as long as the stock market continues to suffer, investors will be looking to the more stable real estate market to make up losses."

Frazier also states that the real estate market here will prosper as long as sound business practices are followed. "The challenge we face is to not let greed get in the way of good business," she cautions. "That is what causes the real estate market collapses in place like California. I have been in real estate in this area for 25 years, and we have never had a drop in the market due to runaway inflationary pricing. That is what has kept this area such a wonderful place to live and to invest in."

Education

"As one of the few counties in Florida without an "F" school, the system remains strong and vibrant," states Dr. Dianne Barlar, Director of the University of West Florida’s (UWF) Fort Walton Beach Campus and Extension Credit Instruction. "While 9/11 has placed personal concerns on students and their teachers as their loved ones are called to duty and/or deployed, the system, along with family support on the bases have reached out and helped in many ways."

But while the educational community adapted to the personal needs, the challenge of funding persists according to Barlar. "The education community has faced increased growth and a decreasing budget," she notes. "The Okaloosa County School System has faced a 1% increase over the 2001 academic year; Okaloosa Walton Community College is 11% over last year; and the University of West Florida continues to enjoy a 7% increase.  These increases, however, have not been met with comparable state funding.  We have, as a whole, stepped up to do more with less and maintain the value that our students so richly deserve."

But the recession exacerbates the situation as people seek retraining in order to compete for available jobs. "Community Colleges and Universities are always faced with an enrollment increase when poorer economic times are felt," Barlar points out.  "Students unemployed seek additional training and/or education.  Often employed workers and professionals decide they want their value enhanced through higher levels of academic work." 

Dr. James "Bob" Richburg, President of Okaloosa – Walton Community College (OWCC), echoes Barlar’s remarks. "OWCC was called upon to serve more students in a larger number of programs and in areas far beyond our college district during the 2001-2002 academic year," Richburg states. "The recession forced the legislature to reduce the college budget by 6% in mid-year and challenged the college in its mission to serving students."

According to Richburg the college went through a nine month restructuring of its instructional programs and staffing in order to continue to server the students and community. But in spite of the increased enrollment and strain on budgets UWF and OWCC endeavored to keep their instructional curriculum in step with the changing face of the workplace and its enabling technology.

Barlar states, "Growth in Okaloosa County has been the impetus for Microsoft Certified Systems Engineer (MCSE) training at UWF and Cisco training at OWCC." These curriculums were given a boost from the Governor's Operation Paycheck program, which placed many unemployed workers in these successful certification programs. Additional programs created at UWF include an accelerated MBA program, the offering of Public Relations, and the availability of Electrical and Computer Engineering." Barlar adds," This last program calls for a $1 million upgrade in both Fort Walton Beach and Pensacola for UWF." 

Another adaptation to the community’s educational needs has been the expansion of Distance Learning courses at OWCC to accommodate increases in courses and registrations. The college has extended the learning experience to the military personnel of Eglin, Hurlburt, and Duke especially those deployed. According to Richburg the college distance learning program is presently serving 75 different locations, including overseas.

In response to the growing and aging population OWCC has also created health care instruction. Richburg says, "A cooperative registered nursing program is underway with the Fort Walton Beach Medical Center in direct response to staffing needs in the hospital." Additional programs are in the future according to Richburg, "A dental assisting program will begin operation in January, 2003. An Army ROTC program is in its second year on the Niceville Campus with over 40 cadets enrolled."

Both Barlar and Richburg cite the budget as the challenge ahead. Increased enrollments for retraining and the migration of military personnel to deployed locations are applying stress to the system.

Barlar warns, "The single issue that will have the greatest impact on UWF is the budget.  Any drop in Florida sales tax revenues will hurt OWCC and UWF.  While both institutions are perfectly adept at doing more with less, that posture does little for enhancement, new program development or resource growth and development."

Richburg is keeping his eye on the economy and the international situation. "The international situation and the economy will shape this coming year," he cautions. "If personnel are deployed from the bases, our enrollment will be directly impacted. The economy impacts our college in two major ways. First, a weak economy usually means a growth in students as people return for job training and to change careers. It also means declining state revenues and potential budget reductions. So we want a strong economy and an international situation that keeps our nation at peace and our troops at home."

Scott Jackson MindLace Media scott@mindlace.com 850-217-7994

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