Friday, October 31, 2014

Failing economics 101

USF appears to be headed down the road to relocate most if not all of the USF medical school from the campus in north Tampa to downtown Tampa, a move that is "bigger than baseball", according to (downtown only) Tampa mayor Bob Buckhorn.
The University of South Florida took the first formal step to build a new medical school downtown as a trustees’ work group voted unanimously Thursday for a project Mayor Bob Buckhorn calls “bigger than baseball.”

Charles Lockwood, dean of the Morsani College of Medicine, unveiled renderings of a 12-story, $157 million structure at Meridian Avenue and Channelside Drive on land donated by Tampa Bay Lightning owner Jeff Vinik.

Rounding out the project are a 10-story medical building and a parking garage for 1,800 vehicles that will be built by Vinik’s development company.
1800 parking spaces?  This looks like car-oriented development - not exactly transit friendly.

As we wrote last week, when this first came to the media,
Removing medical school facilities and jobs from the northern USF campus can only subtract from the north Tampa - USF area economy. Notably, it will be much cheaper to develop the new/improved medical school on or near the USF, and much less disruptive to the faculty, staff, and students.
Building the medical school downtown on an acre or two will be very expensive. The only option will be to build a tower -- building up is much more expensive. Developing downtown will likely take more time than developing on the USF campus. Not to mention other downtown roads and infrastructure that will have to be altered or built to support the project (or any large scale future project for that matter, which we do not uniformly reject).
Also, don't forget the medical school properties themselves will not pay taxes. Any move downtown will take valuable tax generating properties off future tax rolls.
Playing out as expected.

Approximate location of proposed USF medical school relocation
Said Lockwood, “The idea of creating a vibrant university presence to act as a magnet to draw corporate headquarters, to draw additional residential areas, to draw hospitality services and restaurants and so forth, coupled with all the other components of this development project, will have a substantial long-term impact on the city.”
He added, “More importantly from my perspective, it would be transformative for our college of medicine, our college of pharmacy, and our research opportunities at this university because it would be an extraordinarily attractive location for students, for faculty and for researchers.”
Buckhorn was equally effusive, calling the move “the most significant redevelopment opportunity that this city has ever had.”
Perhaps.  But they currently have a $27 million shortfall in funding for the downtown location.  Will they be able to make that up?

I'm looking for any evidence where we've lost corporate HQ relocations because we did not have a medical school downtown.  Besides, the hottest business district in the state of Florida is the Tampa Westshore district, not downtown Tampa.

None of the last several corporate relocations or expansions in the Tampa Bay area have moved to downtown Tampa.

Can we ask why we always have to build something we don't need to attract corporate headquarters? We have all those museums, Straz Performing Arts Center, aquarium, convention center, cruise port, arena, trolley, Channelside, Riverwalk, etc. that were supposed to attract businesses. If we really want more corporate headquarters, why don't we save some of that money by not building things we don't need and spend it on tax breaks or other enticements for the businesses? What's the difference, other than it's probably cheaper to entice a business to relocate with various tax incentives? Not that we necessarily agree with the strategy, but lots of municipalities do it, and it's more effective.

Did you catch that part about the "hospitality services and restaurants"?  Amusing that they cite those relatively low paying jobs in those industries as progress, as if we don't have enough restaurants. Been to the Westshore business restaurant district lately?

But as we've grown to expect, there are no concrete benefits specified.  Just some effusive praise for the "transformative" magic of downtown Tampa, which is on course for more "transformative" apartments renting for $1200 for a studio for about 3000 or so "transformative" new residents downtown.

That's fine if that's the lifestyle they want.  But there's another 1.2 million residents in Hillsborough outside of downtown that are truly supporting Tampa and the county.
USF President Judy Genshaft said the move would free up valuable space in the overcrowded medical sector on the main campus. Vacated space “will be very, very very, readily scooped up and reassigned,” she said. “A lot of the general public might think, ‘Oh-oh, everything is going to be gone.’ No. Not true. It is going to be even more heavily used on the Tampa campus.”
Surely they can redevelop and repurpose some of the property at USF.  Just like they can develop the property downtown for some other purpose (another apartment building with a yoga studio?) that would actually contribute some tax revenues.

Of course, Genshaft did not elaborate on what the replacement plans or the costs would be.

They're missing the big economic picture.

Surely it will cost more and take more time to develop the medical school downtown.

Sure, they may save money being closer to Tampa General and the programs they can offer at TGH.

But it will cost money by being further away from H. Lee Moffit Cancer Center, Byrd Alzhiemer's Institute, the VA, and Florida Hospital.

They'll take more valuable downtown property off the tax roles.

They'll spend more to redevelop the USF campus.

Dig a hole in one part of Tampa, move the dirt to another part of Tampa. Does that make Tampa better economically?

In short, relocating USF medical school from one part of the city to another is not a net economic benefit for the city.  We spend a lot of money to relocate, and end up with much the same.

Isn't real economic growth about getting more for less?  Here we're getting the same costing more.

Seems like we're building the Taj Mahal when a new coat of paint will do.  But its only your tax dollars.

Do they care?

We can only hope its a wash.

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