ITS EFFECT WILL CHANGE OUR ECONOMIC LANDSCAPE IN FIVE TO TEN YEARS. HERE’S WHAT YOU NEED TO KNOW TO PREPARE FOR THE EXPANSION.
STORY/ JOHN STOMAYOR
The signs of commercial construction are all around us. To the south, a four-unit, 8,000-square-foot medical office building is set for construction on a one-acre commercial lot in Clermont. The largest space will be occupied by Dr. Mahmoud Bakeer, associate director of critical care medicine and vice-chair of medicine at South Lake Hospital, and Dr. Hiba Al-Dabagh, owner of the Heart of Florida Diabetes and Endocrinology Center in Davenport.
To the north, Lady Lake growth management director Thad Carroll reports that a Stein Mart recently opened at Lady Lake Crossing, and an Ulta Beauty, located next door, is also open now. Next to town hall, a Texas Roadhouse is well under way and a standalone Verizon Wireless is across the street. These great new additions are just the beginning (see sidebar).
Local experts agree that while commercial construction growth has been noticeable for the past three years, it’s nothing compared to the next wave preparing to strike. “We’re right in the path of metro growth from the Orlando metropolitan area,” says Robert Chandler, director of the Lake County Economic Development Department.
“Geographically, Lake County is located northwest from metro Orlando. The northeast and southeast are both already highly developed, so natural progression will move toward us.”
STATE OF THE INDUSTRY
Like worker bees in a hive, construction activity is abuzz — a clear sign the recession is over. The state of the commercial construction industry as defined by non-residential areas is improving, and labor statistics show that we’ve reached pre-recession norms.
But if you ask those in the industry, growth still isn’t quite where they want it to be. What they want is an explosion of growth, which may not replicate itself for a very long time. And perhaps that’s for the best, Chandler claims, because once that level is reached, it becomes unsustainable and can lead toward collapse.
“I think [construction] is at a very healthy place right now, that we aren’t over-building,” says Chandler. “I foresee that within the next three years, our commercial construction will grow on the industrial side… because demand will increase.”
In Lake County, there are three different levels of development based on geography, the highest of which is South Lake since it’s in the direct path of the metro Orlando expansion. According to Lake County Economic Development coordinator Adam Sumner, South Lake is out of industrial space but has a great deal of commercial construction options.
The South Lake city most affected by this is, of course, Clermont. It’s roughly five to 10 times ahead of the rest of the county and has seen a great deal of growth over the past five years. However, the Golden Triangle — Mount Dora in particular — could surpass Clermont once the Wekiva Parkway opens.
The parkway will create job opportunities for those who want to work in Orlando but don’t want a long commute. Many young professionals who can’t afford to live in the Orlando urban core may opt to live in places like Mount Dora and commute, lowering the town’s median age. Completion of the Parkway is expected in 2019, one year ahead of schedule.
“You see the true drivers of growth in Clermont and Mount Dora,” Chandler says. “You can look at the maps and see the growth patterns.”
Clermont has expansion coming from Orlando through Winter Garden, while Mount Dora’s comes from Apopka through as far as Sanford.
The slowest-growing portion of the county is North Lake, outside The Villages, particularly in Leesburg and Fruitland Park. Leesburg lacks the middle or top tier franchises needed for further development. The question is: what has Leesburg done, or what can it do, to capitalize on the growth seen in The Villages?
“[Leesburg] is in the process of rekindling the growth it once knew with new leadership, displaying a how-do-we-make-it-happen approach,” says Michael Rankin, assistant city manager for the City of Leesburg.
Current developments in Leesburg are targeted toward industrial commercial growth. “Recently, the citycommission led the way with its first 470 Corporate Center tenant, Coreslab,” Rankin says. “Leesburg is committed to bringing jobs into the community, in addition to enhancing quality of life.”
On the industrial side of commercial growth, companies considering new locations will look at job growth and labor force numbers to indicate potential investment success, and Lake County has favorable numbers. Large retail companies make their location decisions based solely on these numbers, like household income, number of housing units, and drive-time area for their retail demand model.
When an area has enough people residing and making disposable income, the area bumps up to the next level of economic attraction. Areas with mom-and-pop shops attract low-cost chains and strip malls, as currently seen in Leesburg. This, in turn, will lead to more retail commercial construction, attracting larger franchises.
Eventually, a community can achieve sustainable job growth, and residents will use their income in the same neighborhood, creating self-sustainability and attracting outsiders as currently seen in Mount Dora and Clermont. This draws the higher-end retail establishments.
Chandler affectionately refers to the phenomenon of attracting larger national restaurant franchises as “The Chipotle Effect.” The franchise name is subjective, but the effect is universal.
“Once you get a Chipotle in your community, you know you’ve reached critical mass,” Chandler says. In turn, the area will get more people, traffic, congestion — the pitfalls of urban life. Change, however, is not necessarily bad.
“These changes improve the community in a good way,” Chandler explains. “When you have better shopping options, you have nicer houses and the quality of life improves. The community improves its roads, you have gutters and sidewalks and all the things that make a community better.”
And while our commercial construction industry isn’t exploding, he says, there is still potential for development. “I think we’ll be having a very different discussion in two to three years, with all the transportation and development projects coming up.”
“once you get a chipotle in your community, you know you’ve reached critical mass.”
— Robert chandler
PROJECTS UNDER WAY
There are six principle projects currently under way in Lake County that are generating excitement. These ventures will alter the way Lake County looks in terms of landscape and people, as well as how it conducts business.
NO 1: MINNEOLA INTERCHANGE
The biggest story in Lake County’s economy is the Florida Turnpike Interchange at Minneola. It broke ground in December 2015 and is expected to be complete in 18 months. The interchange led to the approval of The Hills of Minneola, an enormous development that will yield 3,971 homes and 3 million square feet of office, warehouse, retail, and medical space on 1,650 acres. It is expected to generate roughly 7,000 jobs; however, it is currently on hold.
According to Chandler, “with the area plan and Wolf Branch Innovation District also nearby, we’re talking about Turnpike access, entitled lots, and non-residential square footage. As soon as this is built, it could potentially be the ‘next big thing’ in metro Orlando.”
Once complete, it will connect Lake County to the Amway Center in downtown Orlando in under 25 minutes. That, he says, is a game changer.
NO 2: WELLNESS WAY AREA PLAN
The mixed use property encompasses 15,481 acres and 27 major landowners. The project is expected to take 20 to 40 years to completely develop.
Lake County Economic Development projects that this plan will help create 25,000 jobs in 40 years — and that’s not just in health care. This is because the area plan requires a housing ratio; for every house built, there must be a tagged number of jobs. Developers must therefore set aside a certain amount of land for commercial use that will create the required number of jobs.
Wellness Way derives its name from the healthy lifestyle and wellness branding associated with South Lake Hospital and the ecosystem of trainers, physical therapists, doctors, and other health professionals attracted by the National Training Center.
Chandler envisions that it will become a “new Lake Nona West type of development.”
NO 3: MINNEOLA BUSINESS PARK
The Minneola Business Park is a 13-plus-acre land development project of commercial vacant property fronting U.S. Highway 27 in Minneola. The fully developed site will consist of three retail or office frontage lots. In addition, an access road serving the back portion of the property will be developed into separate lots to accommodate up to ten 6,000-square-foot office/warehouse buildings.
“When you have better shopping options, you have nicer houses and the quality of life improves. The community improves its roads, you have gutters and sidewalks and all the things that make a community better.”
— Robert chandler
NO 4: FORD COMMERCE PARK
Ford Commerce Park has been located in Groveland for 20 or 30 years; the update is that the 1,000-acre commerce park is now almost completely occupied. Thirty to 40 buildings comprise the commerce park, and boast 90 percent occupancy.
“We only have a few vacant buildings,” says Chandler. “The 720,000-square-foot Circuit City building (built six months before they went under) has partial vacancy. It’s one of the largest indoor, completely climate-controlled buildings in the state.” The building is so spacious, he claims, that “you could fit the fairgrounds inside.”
NO 5: WOLF BRANCH INNOVATION DISTRICT
Progress is well under way for this strictly non-residential district, located on the east side of Mount Dora; Lake-Sumter State College has already signed for 20 acres of space to build a new campus. According to Chandler, people are currently scrambling trying to accumulate space so construction can begin on Wolf Branch at the same time as Wekiva Parkway.
“I envision that Wolf Branch Innovation District will be like Heathrow or Lake Mary North. That kind of office district with some light industrial,” he says. “They hope to put a hospital there. With a college and a hospital, they will have laid a solid foundation.”
According to the City of Mount Dora and Lake County Employment Center Master Plan, the district will consist of 30 percent office use, 50 percent industrial/manufacturing uses, 10 percent retail uses, and 10 percent institutional uses. According to the Lake County EDC, it will occupy 7 million square feet and will create 8,000 to 9,000 jobs.
NO 6: 470 COMMERCE PARK
This 3,000-acre park, owned by the City of Leesburg, will focus on manufacturing, aerospace, and heavy industrial uses like distribution and warehousing — ideal for its proximity to the Florida Turnpike.
Coreslab Structures, a precast/prestressed concrete production company from Ontario, Canada, has already broken ground and will occupy 75 acres. The site will include a 60,000-square-foot building and 55 employees. Completion is slated for January 2017.
What sets 470 Commerce Park apart from other industrial parks is the fact that a site readiness study was done by McCallum Sweeney Consulting, a nationally renowned site selection consultant. McCallum Sweeney has a certification process which informs a relocating businesses whether or not the property is ready to go.
“Developers don’t have to worry about anything. The environmental tests are already done and all of their services and utilities are already there,” states Chandler. “No need to go through the entitlement process because land use and zoning are already confirmed. There’s no worry about wasting time or money.”
Leesburg is in the process of acquiring certification; the EDC estimates it could be done by April or May.
“If they can get it certified, it will become the third certified site in the state,” says Chandler. “If achieved, the site goes up to a very select list.”
The other two certified sites in Florida are in Jacksonville and the panhandle. Nationally, there are fewer than 20 certified sites.
He goes on to say that certification provides the site a major advantage; so does city ownership. A private owner would want market rate to ensure a return on their land. If the city owns it, the return on the land is tax revenue down the road, or jobs or utilities. “In business recruitment and economic development, being certified and city-owned is truly the best-case scenario, and is very attractive to any potential occupant.”
ADVICE TO BUSINESS OWNERS
Now is the time to make sure your business’s foundation is solid, according to Stan Austin, area manager at the Florida Small Business Development Center (FSBDC) at the University of Central Florida.
The continued expansion that connects Lake County with larger metropolitan areas will not only increase your customer base but also increase outside competition for the market base. Be ready in advance; the next 10 years will be highly transformational.
“Customer service and specific business differentiation are the keys to success for small business entrepreneurs,” says Austin. “They are what make small businesses different from large retail establishments and chain restaurants. You must be able to articulate the features of your product or service in terms of benefit and value to your particular target market set.”
It’s also time to learn how to differentiate your company from larger competitors. The FSBDC offers one-on-one consulting, training, and analytics, as well as a Small Business Resource Network, which is an organization that connects small business owners with professionals in banking, accounting, insurance, law, human resources, marketing, and Internet/social media. So have your professional support team lined up; don’t try to do it on your own.
Preparing for the next generation means learning how millennials operate. The demographic makeup of Lake County will soon look very different than it does today. New potential customers will grow and change, so you will need to adjust the way you promote yourself, your product, and your service.
“Embrace the Internet and social media to capture the millennial market,” explains Austin. Also, update your business plan, processes, and procedures to adjust for growth if you plan to seek more working capital to grow your business to compensate for outside growth. “Do a review of your processes and procedures to streamline current operations and incorporate new [and efficient] Internet avenues available for targeting new customers and additional sources of revenue through online shopping carts and market baskets,” he advises.
Your image will set you apart. Having a consistent marketing message is critical to establish and sustain your company’s brand and reputation in a vastly altered marketplace.
A few more of the newest commercial construction projects in Lake County include the following:
• Family Dollar Store
• Dr. Perez
• State Farm Office
• Panda Express
• Don Mealy Chevrolet
• Caporale Auto Service Center (near complete)
• Dunkin’ Donuts (preconstruction)
• Hunt Industrial Park
• Captive Aire
• Riffle’s Air & Heat
• Faith Neighborhood Center (preconstruction)
• Stein Mart
• Ulta Beauty
• Texas Roadhouse
• Verizon Wireless
• Mattress One
• The Village Airport Van
• The Too Your Health Spa (under construction)
• Titan Assisted Living Facility and Memory Care Center (under construction)