Aundra Wallace, JAX Chamber’s chief economic developer, says that of the 900 people moving daily into Florida, 84 of them are settling in the area he markets – the seven counties of Northeast Florida.
“So for 2022 to 2027-28, this region is going to be growing to about 158,000 additional people,” Wallace, president of JAXUSA Partnership, told a First Horizon Bank breakfast roundtable June 29 at The River Club in Downtown Jacksonville.
“That’s the growth that we’re seeing right now.”
That growth and those new people present challenges and opportunities for the governments, schools and businesses in Baker, Clay, Duval, Flagler, Nassau, Putnam and St. Johns counties, which comprise the partnership.
And that includes commercial real estate players, such as developers, property owners, real estate brokers and site selectors.
The audience comprised a diversity of businesses that are First Horizon clients, including in commercial real estate.
They heard Wallace and Justin Harp, First Horizon Bank managing director and executive vice president of the Derivative Products Group, present the State of the Economy Roundtable.
Harp talked in-depth about the overall economy, but in summary:
“We are running into two major headwinds. One, the consumers running out of gas, and two, the government not continuing to be able to increase spending,” Harp said.
“Over the very near term, we’re going to begin to see a significant slowing in growth,” he said.
Also, “we don’t likely see an accelerating decline in inflation.”
“That could be extremely painful.”
Wallace spoke specifically about Northeast Florida.
Project recruitment
Pre-pandemic, JAX Chamber recruitment comprised 65% office vs. 35% industrial. That has switched to 65%-35% industrial-office.
“And that trend has not stopped,” Wallace said.
For the past two to three years, “we were probably chasing on average 125 projects every year.”
That has fallen to about 80 prospective projects.
“But the advanced manufacturing, transportation, logistics projects continued,” he said.
“The office side is where we’re continuing to see the challenge, and I don’t need to tell any commercial brokers in here about that conversation.”
Wallace said that the 11 projects done this year top $1 billion in capital investment, “and they’ve all been in the advanced manufacturing, transportation, logistics side.”
He said the investments at JaxPort are driving decisions for companies moving their supply chain onshore and seeking accessible port service.
“Norfolk, Charleston, Savannah have nothing but congestion, so that leaves Jacksonville with great opportunities. That leaves also the ability to move product to 98 million people a day from Jacksonville because you can take Interstates 10, 75 and 95. Then we have the CSX as well as Norfolk Southern rail lines here. That opens us up from a logistics standpoint.”
Wallace said Northeast Florida is leading the Southeast U.S. in developing refrigerated cold-storage space.
He said the city continues chasing financial services projects, but the lead time on those is longer than anticipated.
Population movement
Wallace said the population movement into Northeast Florida can be tracked and often that is to Nocatee in St. Johns County and Wildlight in Nassau County.
“It tells you that St. Johns County is the No. 1 school district in the state. It tells you Nassau County is the No. 2 school district in the state,” he said.
He said the completion of the First Coast Expressway phase that links Clay and St. Johns counties will bring more people to Clay, which he said is the No. 10 school district in the state.
“They’ve already permitted housing in and around that loop of the First Coast Expressway,” he said.
“When I moved here 10 years ago, nobody was talking about moving to Green Cove Springs,” he said, which is the Clay County seat and south of Fleming Island along U.S. 17.
“Green Cove Springs is one of the hottest places to live in Northeast Florida right now.”
Labor force
With about 2 million people in the region, about 880,000 are in the labor force, Wallace said.
That definition is the number of people who are working or who are looking for jobs.
“What’s good for us in terms of recruitment is we have two naval installations here. We have great veterans that come out that area already trained, that you can embed them in your company from a culture standpoint,” he said.
Wallace said the school system is a big factor in creating skilled workers.
“We’ve taken great strides to make sure that in K-12, that by 2030, 60% to 70% of the children that graduate come out with some type of credentialing” that would allow them to move into technical training required by area employers.
Wallace said that was why it was important for the University of Florida to create a graduate campus in Jacksonville. He said he was not saying anything negative about the universities already in Jacksonville.
“I’m just telling you that we need more graduates to keep up with what we’re bringing in terms of jobs,” he said.
“The last four years have probably brought in well over 3,500 jobs just in fintech alone,” he said, referring to financial technology and related functions.
He said that looking at the University of Florida and Florida State University, “we get less than 5% of those graduates coming to Jacksonville to start their respective careers.”
Wallace said a UF campus in Jacksonville creates a talent pool.
“Getting them here from a graduate standpoint is what we actually needed to have.”
Wallace said that while Northeast Florida has available workers, “I’m looking at five, 10 years down the line, keeping up with the growth that we have.”
The new population presents options, too.
“We also have to look at the 84 people that move in every day. We have to do an assessment of who they are and what are their talent skills for the extra jobs.”
The area’s unemployment rate is 2.6%, up from 2.2% when the coronavirus pandemic hit in March 2020.
“That means the underemployed and the unemployed, we have to get them to what we call ‘earn up.’ We have to up-skill them for the extra jobs that we have because if I go on certain websites, I’m going to see 3,500 jobs available in the actual marketplace right now in Jacksonville.”
A young population
Northeast Florida is the second-youngest region in the state with an average age of 38-39, Wallace said.
He said Orlando has the lowest age at 35-36, but “they just happen to have 66,000 students at the University of Central Florida” that keeps the average age down.
He said people are deciding as they age that they might not want to live in the established retirement areas in South Florida because of the cost of living.
“So they’re now moving up,” he said.
Flagler County, which is south of St. Johns County and the farthest south in the JAXUSA Partnership region, is gaining more older residents.
“That’s how our average age is increasing,” Wallace said.
The overall age in Florida is 43, so “we’re still relatively young.”
At the same time, the area is seeing Generation Z and younger millennials “looking at the opportunities that they can get from a career standpoint here in Jacksonville and we’re seeing people move in.”
Gen Z is the generation of 9 to 24 years old, and millennials, also known as Gen Y, are 25 to 40.
“We’re also seeing people that have graduated move away and then they’re saying, ‘I’m going to come home.’ That is giving us an opportunity to keep having an average age right at about 39.”
He said Gen Z “is very picky about where they’re going to live. They don’t care about where they work, they care about where they’re going to live. And from a work standpoint, is it meaningful to them? ‘What’s the project I’m working on?’ They could care less about being at a large company, but if the project is meaningful to them, they’re going to take that.”
There’s another factor for keeping Gen Z and millennials in the area.
Wallace found that about 70% of that population age is living paycheck to paycheck, with more than 50% still somewhat financially dependent on their parents.
“They’ll stick around.”
The competition
Asked who Northeast Florida competes with, Wallace said that for financial services, “I’m always going to go head-to-head with Tampa, and I feel like we win way more than they do on that.” Atlanta also is a competitor.
For advanced manufacturing, “Alabama, South Carolina, North Carolina are where we get into a great deal of competition.”
For life sciences, “Tennessee kicks our rear end. I’m just going to be frank about that.” Louisville, Kentucky, is an emerging competitor.
For technology and tech companies, “it’s going to be Miami that we compete against within the state as well as Atlanta.” Louisville also is a competitor.
For aviation and aerospace, “Huntsville (Alabama) is always going to be a competitor for us and for the entire state of Florida, particularly here down to the Space Coast.”
Editor’s note: Karen Brune Mathis moderated the First Horizon panel discussion.