Karen Schexnayder
Director of Marketing
N C Economic Development Board
June 17, 2016
As part of my job as the director of marketing for the Nassau County Economic Development Board, I follow social media to be in tune with what people’s reactions, comments and thoughts are in regards to economic development, both locally and on a broader scale. Local comments often include “we’re a tourist town”, “we’re a mill town”, “we don’t want the mills” and “why do we need the port?”
Here’s the thing. Nassau County is a tourist town, home to two thriving mills and so much more. The Gilded Age saw an influx of tourists and vacationers from the North to the beautiful beaches of Amelia Island, and we continue to welcome hundreds of thousands of visitors from around the world each year.
We are a mill town in large part due to the long-standing history of Rayonier Advanced Materials and WestRock, and we have played a role in Florida’s logistics since David Yulee started construction of the rail line in 1855. We are an example of how industry and tourism have coexisted for decades.
In my office hangs a picture of the Pittsburgh, Pennsylvania skyline and when I get a visitor, he or she invariably asks why there’s a picture of Pittsburgh hanging in my office instead of a beach scene. First of all, I was born and raised in Pittsburgh, so it will always hold a special place in my heart. Second, it serves as inspiration. As a child growing up in Pittsburgh, I saw the city that I love become decimated as the steel industry moved their operations to the South.
Sadly, Pittsburgh was too dependent on one economy – the steel industry – and it took years for the city to recover. They did not have a diversified economy.
So what is a diversified economy or what is often referred to as a diversified tax base? It simply means that a community or state has a mix of industries or sources from which it receives revenue (taxes). Those sources include local businesses and residents, however, the more industry a community has, the better for residents. A community wants the ratio of industry to residents to favor that of industry.
Industry or businesses typically pay more in taxes than residential, thus keeping taxes low for homeowners. One of the biggest misconceptions is that a diversified tax base means more (or higher) taxes to the residents. A diversified tax base is not an increase in a resident’s property or ad valorem tax or a separate tax.
Why do communities want a diversified tax base? Essentially, communities want to have a diverse tax base, just as individuals want a diversified investment portfolio. Being too reliant on one industry leaves the entire community in jeopardy and susceptible to economic downtowns or shifts, similar to what Pittsburgh experienced with the steel industry.
We can look to our neighbors just north of us, Camden County, Georgia, as an example of a community who experienced hardships when the Durango-Georgia Paper Company mill closed in 2002 and nine hundred workers lost their jobs. When the mill shut down many small businesses were also negatively affected. The devastation experienced by one business ripples through the community.
Communities that have only one major employer or industry, seek more variety. The community (or state) wants to have a healthy mix of retail, commercial and industrial businesses. Communities with diverse industries or economies fare better than those who are reliant upon one core industry, such as construction or tourism. Florida felt the ramifications when both the construction and tourism industries took significant hits during the Great Recession.
Pittsburgh was recently ranked as the “Most Livable City in the Continental United States” by The Economist magazine, something that would have been unheard of back when steel mills and their smoke penetrated the city. City and community leaders realized they needed to expand their horizons and diversify their economy. Today, Pittsburgh is home to a mix thriving manufacturing companies, yet has become known as a hub for health care, information technology and world-class health care.
I see some similarities between Nassau County and Pittsburgh, other than the fact that Pittsburgh doesn’t have a beach. When I cross the Shave Bridge from Yulee onto Amelia Island and see our two mills rising out of the Intracoastal Waterway, I think of Pittsburgh. Just as the mills of Fernandina grace our beautiful waterfront, the steel mills of Pittsburgh laced the three rivers of my hometown.
I think of the countless generations of families who have raised their families because those mills have provided them with a good life and for that, we as a county are fortunate. I see opportunity, too.
Nassau County is a blank slate. We are attracting attention from a myriad of industries who will hopefully one day call Nassau County home.
Karen, a great explanation of the importance of a diversified tax base. I don’t know of anyone that opposes having to pay lower taxes and, as you state, it is a proven fact that commercial entities contribute a greater share than residential properties. Where there is a difference of opinion is what type of commercial entities do we want to attract. The whole of Nassau County is a very diverse area from the rural western part of the County to the almost fully developed Island. The mills and the port with their industrial operations have an important place in the Island’s/County’s history but with the development that has occurred since then, residents are looking for low impact, “clean” business enterprises rather than intensive industrial operations. The economics of an area change over time. Fernandina Beach used to have a strong ship building operation and then the modern day shrimping industry. Much like the steel operations of Pittsburgh, economic engines need constant attention and adjustment to better match the economic needs of a community. As you state, that is why, a diversified economic base is important, but equally important is having the right fit of that diversity for the community area in which it will be immediately located and affect.
Mr. Lott, I’m not sure if there is a difference of opinion. We (NCEDB) are working to recruit industries from various sectors, not just manufacturing. Sure, our current projects are manufacturing based as we have several irons in the fire for the Crawford Diamond Industrial Park in Callahan, and manufacturing has a higher job multiplier, which makes it attractive. Our focus is not just on manufacturing. We are working to attract a data center, health care based companies, logistics firms….the list goes on. We understand the concerns of the residents of Fernandina Beach. Residents throughout the county all have varying levels of concerns.
Having the workforce to attract varying industries is a large factor in what we do (and another article). We must look at the skills of the county’s workforce and analyze what types of businesses will be a fit. We are not going to recruit a biomedical research firm when we do not have a large pool of research scientists, for example. But rest assured, we are working to recruit companies from a wide range of industries.
I certainly agree with your workforce points. Unfortunately, my assessment has been that the education system in Nassau County in the past has been under a one size fits all mentality. Only in recent years have I seen a diversification with technical trades and math/science emphasized along with general studies. I am sure part of your work is looking to the future as to the types of businesses that will thrive and be a good fit for the community and work with the school board to equip our youth with those skills so they are properly prepared and don’t have to go elsewhere to utilize their talents.
….and only in recent years has the Northside of Jacksonville seen such explosive growth; so much so, in fact, that the short commute to Nassau County should definitely be factored into your recruiting profiles.
I take it you’re aware of the brand new [former] medical office building sitting empty at the Fernandina airport. HUGE opportunity for your kind of client wanting to start up fast, willing to retrofit to suit, and ready to negotiate. Massive amount of available parking:
http://www.watsonfernandinabeach.com/Search/SearchResultsBasic.aspx?ID=1dbf40bd-5727-4db9-a904-a2c812e198a8
I certainly agree we need a diversified tax base and economic development. However, when over half of the entire tax base (63%) is placed in a 3 xx 12 mile area on an island that is susceptible to damage from a hurricane, then perhaps the model needs to change for the sake of all of Nassau County. Since all of the major employers (except the school system) are located on Amelia Island (according to the NCEDB website), this should be seriously considered if economic development really cares about job sustainability. Where are the major employers on the mainland? There is a reason why islanders buy flood insurance. Hurricane Dora did happen. It is important to note that Fernandina is to be reevaluated in 2017 by FEMA. An all out evaluation means a visit that requires that Fernandina no longer use the 2008 rating system manual but use an updated 2014 manual . To ask the City to lower its flood insurance rating due to placing projects in easily flooded areas on the island is to ask everyone on the island to raise their flood insurance premiums. If jobs are to be created, placing them in secure areas is desirable for all, especially our workers. Thank you for bringing economic development to all parts of Nassau County.
Ms. Ross, not all large employers are located on the island. The FAA is in Hilliard and employs over 400. Fernandina Beach and thus, Amelia Island, was the original ‘job center’. When I moved here in 2002 there was no Home Depot, Lowe’s, Target, etc. Growth is moving toward the center of the county and with that, so will the jobs. As I mentioned to Mr. Lott we are actively engaged with several potential projects, the majority of which, if we win, will land at the Crawford Diamond Industrial Park in Callahan or the Wildlight Industrial Park.
Thanks for your informative article Karen. I have lived in the Pittsburgh area and agree that it is a great mix of jobs, good environment and life style. Jobs, business, industry and tourism can live together. Let’s work to make our island a better place and find win-win situations with our industrial neighbors who were here before any of us decided to join.