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Miami Herald, The (FL)
September 30, 2004
Section: Business
Edition: Final
Page: 1C


Florida's weather - which has drawn untold thousands of companies here through the years - now threatens to sap future economic growth.

The four hurricanes that have slammed ashore this year may scare off companies interested in moving here, economic development officials and corporate relocation specialists say.
``It's always been an issue, but now it's in the boardrooms,'' said John H. Boyd, a prominent New Jersey-based site selector, a professional who advises companies on relocation decisions.

In the past, Boyd said, ``Florida has attracted a good deal of investment in data centers and call centers,'' often from Northern firms wanting both lower costs and an end to such weather-based business interruptions as blizzards and ice storms.

But hurricanes pose a greater threat, he said, because, unlike snowstorms, they can destroy buildings. They also can render a company's workforce homeless or an operations center crippled by a lack of electricity for weeks, not to mention closing airports and roads.

``Historically, companies have been able to ignore natural disasters,'' Boyd said. ``Now it cannot be ignored.''

Short term, development officials from around the state are scrambling to develop outreach efforts that would assuage businesses' fears about Florida.

``We've had brainstorming sessions with marketing and promotion agencies,'' said Erin Heston, a spokeswoman for Enterprise Florida, but ``our budget is limited.'' Also, ``our most primary concern right now is a retention strategy, providing businesses the resources they need to recover.''

Frank Nero, who heads the Beacon Council, Miami-Dade's public-private agency in charge of business recruitment, said he was already sensing at least a temporary lull in people's looking at Florida.

``We have heard from our site selectors that some companies are on hold or that Florida isn't in the mix right now,'' Nero said.

Some firms, he added, particularly foreign ones, are frightened by media images of battered communities and homeless individuals and wonder what that would mean to a company operating here.

``If you were a company from Europe, would you look at moving to Florida right now,'' Nero asked. ``Others are wondering: Do we move part of our operations out of Florida?''

Longer term, companies will expect the state to take concrete steps to ensure that businesses can resume operations quickly after future hurricanes, said James P. ``J.T.'' Tarlton, president of the Broward Alliance, the county's development organization.

``How do we support business,'' Tarlton asked, rhetorically. ``How do we dedicate ourselves to recovery? We need to improve our infrastructure.''

An additional headache is that Florida often competes for facilities with other Sunbelt states like Arizona and Nevada, where windstorms aren't an issue.

``We've been asking consultants, and they've been saying that, very likely, it's going to have a short-term impact, especially with companies already looking to go to Florida,'' said Lisa Bouchey, managing editor of Plants Sites & Parks, an online trade publication of the site-selection industry.

She added: ``If the same exact thing happens next year or if this is a pattern we'll see for 25 years, everywhere in the Southeast is vulnerable.''

Certainly, companies are willing to overlook potential disruptions to operations if other assets of a community outweigh them. California, after all, is by far the most populous state despite occasional earthquakes, more frequent mudslides and wildfires that rake Southern California on an annual basis.

And Florida has many assets that companies find attractive, corporate relocation specialists say. These include a large and growing population, a friendly business climate and world-class status in industries ranging from tourism to international trade.

``If they have a specific reason, they'll be there'' regardless of hurricanes, said Karim Khan, editor in chief of Business Facilities magazine.

An example is Kraft Foods, which moved its Latin American division this year from Rye Brook, N.Y., to Miami.

But when companies don't have a compelling need to be in Florida, ``it's going to look like an unknown quantity,'' Khan said.

The Scripps Research Institute - which is expanding from its San Diego base in Southern California into Palm Beach County - isn't changing plans because of the recent hurricanes.

The institute has said it chose South Florida for reasons that include relatively affordable housing, recreational and leisure opportunities and a proximity to wealthy communities, where potential donors live.

``That comes with the territory,'' Keith McKeown, a spokesman for Scripps, said of the hurricanes. ``Acts of God, there's not much you can do about it.''

Similarly, Jim Rosensteele, a spokesman for Conseco Services, an Indiana-based insurance services firm, said he knew of no plans to reconsider a case-management center that it's opening in Fort Lauderdale.

Still, there's a clear need to aggressively extol the state's attributes in the months ahead, the Broward Alliance's Tarlton said.

``You can't overcommunicate at this point,'' he said. ``We must continue to emphasize that value of the Florida location.''

Rebuilding and relief

Here are some developments affecting businesses in Florida in the aftermath of four hurricanes:

* Enterprise Florida, the state's development agency, has developed a website that includes various types of assistance and disaster relief. Topics include FEMA relief, Small Business Administration programs and bridge loans from the state. The address is

* CitiFinancial, a subsidiary of CitiGroup, plans to rebuild a 50,000-square-foot operations center that had employed 450 people in Pensacola.

* The Scripps Research Institute says the spate of hurricanes has not changed its plans to build a major operation in northern Palm Beach County.

Illustration:color photo: Vero Beach Inn Resort and Matt Ratliff (a)

ALEX BOERNER/AP IMPACT: The Vero Beach Inn Resort was recovering from damage wrought by Hurricane Frances when Hurricane Jeanne hit. Matt Ratliff was left to hit the beach with a metal detector.

Copyright (c) 2004 The Miami Herald