Jobs at forefront as Palm Coast struggles to rebound
PALM COAST, Fla. -- Not long ago, people considered Flagler County one of the nation's most desirable places to live. Now, this county in the state playing host to Republican presidential candidates has one of the nation's highest unemployment rates.
The Palm Coast metro area, between Jacksonville and Daytona Beach, ranks 12th highest on the federal Bureau of Labor Statistics jobless rate list. Slow to rebound from the recession, it's indicative of economic woes in the Sunshine State -- where people would bend the Republican presidential candidates' ears about money and business problems, if they get the chance.
At the least, they want to hear what the frontrunners, former Massachusetts Gov. Mitt Romney or former House Speaker Newt Gingrich, would do to fix things as President Obama's successor.
Niki's Pizzeria in the center of Palm Harbor Shopping Center is one of two businesses owned by Joe Tavolacci, 50, of Palm Coast.
"I am not going to kid you -- the real estate bust hurt business," he said. "When you build an entire town, like they did with Palm Coast, based solely on real estate and real estate falls apart, every one of us suffered."
The Long Island native's other business is real estate. "Yeah, lucky me, right?" he joked. People who may want to buy homes, he said, have trouble getting loans and banks haven't sold foreclosed properties.
"I can't really blame them too much," he said. "The red tape and uncertainty over regulation have make lenders skittish."
Between 2000 and 2005, this north-central Florida coastal area was the fastest-growing in the nation, said economist Sean Snaith of the University of Central Florida. The county wagered its future on developing housing for retiring snowbirds and second-home buyers drawn by the climate, beaches and parks.
"The entire region's fortunes boomed and then busted on the housing bubble," he said.
Today, the evidence of the failed housing boom is obvious in half-constructed developments and "for sale" signs dotting neighborhoods. Twenty-one percent of the county's nearly 50,600 housing units are vacant, according to Enterprise Florida Inc., an economic development organization.
In the decade before the 2010 Census, this area's population soared 92 percent, from 49,832 to 95,696. Largely white (82.7 percent) and older than 25, people here earned a median household income of $46,331 in the latest statistics available from May.
Agriculture is a $400 million a year industry in Flagler County, home of the Florida Agricultural Museum; growers here supply a sizeable portion of the nation's potatoes and cabbages. Most jobs here are in the retail, hospitality or health care sectors, statistics show.
At the Cypress Point shopping complex, cars fill the Goodwill parking lot. Beside the discount store are three vacant storefronts with "For Lease" signs in windows. A half-mile down the road, a newly-built Sleep Inn is vacant and missing its windows and their frames.
Then there is the Palm Coast Resort, which never became a resort. The developer built condominiums, but ran out of money, Tavolacci said.
"The crisis didn't just affect the housing industry -- construction workers, lumber yards and restaurants like mine all took a hit, and we are struggling to get back," he said.
'Very anemic recovery'
Florida simply hasn't regained its footing in the weak economy, said Mark Vitner, managing director and senior economist at Wells Fargo Securities in Charlotte, N.C.
"After suffering its worst recession in decades, the state is still in the midst of a very anemic recovery."
Flagler's unemployment soared to 17.1 percent in spring 2010 and has remained around 14 percent since last November, reports the Florida Department of Economic Opportunity.
"Recovering is not going to be easy," Snaith said. "My back-of-the-envelope calculations show me that if you take an average family of four, earning about $69,000 and saving about 9 percent a year, it would take them about 18 years to recapture the value lost in declining home values."
Though the explanation of how America's housing crisis came about is much more complicated, said Matthew Marlin, chair of Duquesne University's business school, the short answer is this: the Bush administration and Federal Reserve needed to jolt the economy in 2001, so the Fed made money cheap, Wall Street made lending easy, and Congress encouraged government-backed lenders Fannie Mae and Freddie Mac to expand and ease standards for loan-seekers.
"Bush told us all to go shop (and) we did -- we spent money that was the equity in our homes, and no one thought anything of it because home prices kept rising and people felt richer," said Lara Brown, a political science professor at Villanova University.
Romney has attacked Gingrich for his role as an adviser for Freddie Mac, the company Republicans associate with investment in risky mortgages that led to taxpayer bailouts. In response, Gingrich this week reminded voters of Romney's wealth and ties to Goldman Sachs Group Inc., the Wall Street investment bankers he said added to the housing crisis.
Florida's economic problems are compounded because tourism suffers during economic downturns, Snaith said.
Cindy Goodman's fortune depends on tourism. The Oregon native moved here in 2007 to open a coffee shop when she lost her job as a mortgage loan officer.
"My husband is an architect, so when there is no demand for new housing, or buildings or parks, neither of us is working," she said.
The coffee shop business is OK, Goodman said.
"It's coffee, so people almost consider that a necessity, but the little trinket shops and specialty boutiques here have either closed up or are barely making it," she said.
"Quite frankly, it's been devastating to watch. The traffic we get now is people on 'staycations' who just spend a couple of hours and go back home."
Visit Florida, the state's official tourism marketing corporation, ranks tourism as the No. 1 industry: 82.3 million visitors in 2010 spent $62.7 billion, helping to employ 1 million Floridians. After three tough years, "2011 turned out to be a good year for us," said Chris Thompson, Visit Florida president and CEO, though the agency won't have final numbers until mid-February.
"People were kind of sitting on their wallets and making tougher choices with discretionary spending ... but that turned around," Thompson said. "Not only did we get an increase in the number of folks, but the spending was up."
In the third quarter of 2011, the latest statistics available, tourism and its related jobs each increased about 5 percent from the same period a year earlier.
Thompson expects that to continue. Even this week's political focus on Florida and the Republican National Convention scheduled for August in Tampa "will have an economic impact," he said.
Though most visitors to Florida are domestic, the biggest growth in tourists is coming from overseas. Attracting international trade and tourists could help hasten an economic turnaround, said Snaith, who cites a number of Brazilians and Chinese buying condos and homes in Florida.
He sees a glimmer of hope in other signs, noting the state reached a milestone last month when its unemployment dropped below 9.9 percent for the first time since 2008.
"We are in better shape than a year ago," Snaith said. "But most of those job gains are in lower-wage industries such as retail and hospitality."Additional Information:
Cain backs Gingrich
Former Republican presidential hopeful Herman Cain is backing Newt Gingrich's White House bid.
Cain endorsed his fellow Georgian on Saturday night at a GOP fundraiser, where Gingrich was also slated to speak.
Gingrich, a former House speaker, is in a fierce fight with former Massachusetts Gov. Mitt Romney to win Florida's primary on Tuesday.
Cain, a favorite of the Tea Party and former pizza executive, left the race before the first nominating contests. He remains popular, however, and could prove to be a late boost for Gingrich.
• Associated Press