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Home My WebLink AboutJune Meeting BackupMEMBERS PRESENT MEMBERS ABSENT: OTHERS PRESENT CALL TO ORDER Meeting Date: May 16, 2014 Conference Room 3 Ron Knaggs, Chair Dan Kurek, Vice Chair Ed Lounds John Culverhouse Carl Hensley Jane Bachelor William Donovan Richard Pancoast Jay L. McBee Marty Laven Craig Mundt Stephanie Morgan James Clasby Gwen Morris Patrick Campion Dan McIntyre Marie Gouin Laurie Waldie Shane DeWitt Beth Ryder Pete Tesch Kathryn Hensley Erik Melville Guy Medor Robert Bentkofsky Jennifer Hill Tara Raymore Leslie Olson Karen Smith Ben DeVries George MacArthur Mike Adams John Wiatrak Mr. Knaggs called the meeting to order when a quorum was reached at 7:30 a.m. Mr. Knaggs introduced Mr. McIntyre as acting County Administrator. PUBLIC COMMENT No member of the public spoke at the meeting. APPROVAL OF APRIL 11, 2014 MINUTES After a motion by Mr. Laven and a second by Mr. Clasby, the minutes were unanimously approved. Citizens' Budget Committee May 16, 2014 Page 2 EDC PRESENTATION Mr. Tesch introduced himself as the President of the Economic Development Council (EDC). He has been on board since January and looks forward to creating jobs in a partnership mode. He gave a brief overview of the strategic initiatives. The handouts, Economic Development Resource Profile and Target Industry Study, are attached.** The three items in the initial action plan are communication, business intelligence platform and economic development platform. After an explanation, he was available for questions. Mr. McBee asked about medical agriculture. Mr. Tesch mentioned higher education and identifying and interacting with current businesses that are growing. The reports will be online at www.youredc.com. (see links below**) Mr. Lounds asked about the Board of Directors. Currently there are 25 members with an Executive Committee of six. Mr. Tesch told his goals. Mr. Lounds requested more information on assistance for small businesses. Mr. Tesch gave personal history and told his plans for coordinated effort and a coordinated calendar. He suggested a business navigator. Mr. Lounds started discussion on the requested increase in funding, the north/south divide and the agricultural industry. Ms. Morris asked about interaction with the school system. Mr. Tesch acknowledged that education and economic development are intertwined. He is working on the information side first. Ms. Morgan asked about funding from the Cities. Mr. Tesch gave information on the EDC requests. Mr. Laven wanted to know about the maritime academy. Mr. Tesch would like to be a player. Mr. Laven asked about prior experience in getting resources from the State. Mr. Tesch told of experiences in community revitalization. Mr. Lounds inquired about competition. More than regional, statewide and nationwide, we are competing globally. Mr. Knaggs asked about an after action report on businesses that did not choose our area. Mr. Tesch said feedback is a priority in the future. Ms. Morris started discussion on city employees engaged in economic development. Ms. Morris asked about evaluation of the airport. Mr. Tesch and Mr. Wiatrak gave information. Citizens' Budget Committee May 16, 2014 Page 3 Mr. Laven wanted to know the potential of distribution and logistics based on experiences. Mr. Tesch told of past experiences of an inland port and his optimistic outlook for the future. Mr. Culverhouse started discussion on marketing. The website is priority. Target industries are second. It is important for them to impress consultants. Mr. Tesch thanked the group and invited them to share ideas. RESEARCH PARK PRESENTATION Mr. DeVries, Director of Treasure Coast Education, Research & Development Authority (TCERDA), introduced the Board's Chairman, Mike Adams. Mr. DeVries complimented Mr. Tesch. Mr. Adams gave background and introduced Mr. Melville and Ms. Bachelor, Board Members. He told about Ms. Hensley's involvement in creating the Authority. Mr. DeVries spoke of the park as the Innovation Destination and the importance of getting the message out. Agriculture is high priority. He gave information on jobs, labs, pests, facilities, St. Lucie County investment, partnerships, benefits, resources and technology. They are focusing on Food, Energy and Water (FEW). Mr. Adams gave history, funding requests and collaboration for the Sunshine Kitchen Venture. Mr. DeVries continued the presentation with information on the challenges of agriculture, research funding, data and pests. Studies are advancing on value added food and biofuels. Mr. Adams told about water issues, such as moving and storage. Mr. DeVries told about the return on investment and the battle to keep Agriculture (Ag) alive in the State. Ag is a passion of the TCERDA Board. He gave information on the future plans and road map. Mr. Adams informed the Committee about the interest in aquaculture projects and needed resources. Mr. Lounds asked about tenants for the St. Lucie County property. Mr. DeVries explained the focus on people and relationships. He has met with 5,000 people all over the Nation. Mr. Lounds asked about expansion of United States Department of Agriculture (USDA) and University of Florida (UF). Mr. DeVries explained the dependency on the anchor tenants. Ms. Morris asked about a hotel. Mr. DeVries clarified that they need conference Citizens' Budget Committee May 16, 2014 Page 4 facilities. Ms. Morris explained why she is pro ag and asked about a direct effort to help citrus.. She started discussion on agriculture and water. Mr. Knaggs complimented and thanked the gentlemen for the presentation. He expressed the importance of the June meeting. Each member was given a Dollars & Sense Guide to County Finances from the Clerk's office. INFORMAL BOCC MEETING UPDATE Mr. Knaggs reported there were two items of discussion at the last informal meeting. He had information from the sand trap meeting that had been held the previous Tuesday evening. He also had a copy of the Banner Finance System presentation. OTHERISSUES A plaque was given in appreciation, from the Committee, to Ms. Outlaw at her farewell event. Contributions would be appreciated by Mr. Knaggs. Mr. Bentkofsky added that Administration had spent the week reviewing the Departments' budget requests. The Constitutionals' budgets are due June 1st. The preliminary taxable value is due June 1st from the Property Appraiser. They are looking forward to having a local rather than State estimate. Mr. Kurek asked for a 5-year history of the excess fees from the Constitutional Officers in contrast to their actual budgets, including the 2013 amounts returned and the 2014 amounts budgeted. Mr. Lounds brought up the subject of stormwater management: Mr. Knaggs mentioned the Tax Collector's building costs. Mr. Bentkofsky spoke of the impact of the building on the excess fees, normally used for other needs. Discussion will continue. Plans for the next meeting include the FY15 St. Lucie County budget and the millage for stormwater. ADJOURNMENT Mr. Knaggs adjourned the meeting at 9:14 a.m. Respectfully submitted by: Brenda Marlin The next CBC meeting will be held on Friday, June 20, 2014, at 7:30 a.m., in Conference Room 3, at the St. Lucie County Roger Poitras Administration Annex. "The links for the attachments: St. Lucie County Business Profile is http://www.yourede.com/wp-content/uploads/2014/05/St.-Lucie-County-Florida-Community-Resource- Profile-5-5-141.pdf and for the Target Industry. Study http://wvvw.youredc.coni/wp- content/uploads/2014/05/MSB-Target-Industry-Study-for-St-Lucie-County-5-9-2014.pdf LOCATED WITHIN FLORIDA'S RESEARCH COAST TARGET INDUSTRY STUDY TABLE OF CONTENTS SECTION DESCRIPTION PAGE 1 EXECUTIVE SUMMARY 1.1 Introduction 1 1.2 The Basis for Defining Target Industries 1 1.3 Summary of Target Industries Selected 2 1.4 Resource Requirements for Target Industries (Summary) 5 1.5 Target Industry Rollout Strategy and Schedule 6 2 ECONOMIC OPPORTUNITY MODEL 2.1 Overview on the Model 7 2.2 Overall Market Drivers/Trends 8 2.3 Market Drivers and Trends Related to Specific Societal Needs 24 3 INPUT FROM STATE, REGIONAL AND LOCAL STAKEHOLDERS 3.1 Comparison of State of Florida and St. Lucie County Target 48 Industries and Industry Presence 3.2 Input From Local Stakeholders 48 4 RESOURCE REQUIREMENTS FOR EACH TARGET INDUSTRY 4.1 Evaluation of Resource Needs 50 For Further Information on This Report, Contact: John Rhodes, Senior Principal Moran, Stahl & Boyer Business Phone: 941.755.0074 E-mail: john.rhodes@msbconsulting.com St. Lucie County Target Industry Study SECTION I — EXECUTIVE SUMMARY 1.1 Introduction St. Lucie County is located in f ga 0REBID, southeast Florida within the four -county "Research Coast" region. The regional economy has expanded and diversified over the past 50 years and includes the following segments: • Health Care/Retail /Construction (supported by an expanding population of those seeking to retire as well as work/live in a favorable climate that is reasonably affordable). St. • Tourism (includes destination beach/golf resorts, other hotels, some recreation/cultural venues, and a portion of restaurant receipts). • Manufacturing (boats, aviation/aerospace, food processing, fabricated metals, machinery, specialized motor vehicles, computers/electronics and plastics). • Professional and technical services to support government, real estate development and industrial activities. • Agriculture (primarily cattle and citrus). FLORIDA'S RESEARCH COAST Beath f ort Pierco Port SG Lucie �� Stuart x�WestPalm Reach ortlauderdale rho * .., ✓l fami r= • R&D (established/emerging activity in life science, marine, oceanography, and agriculture), County stakeholders, through the Economic Development Council of St. Lucie County, Inc. (EDCSLC) are seeking to expand the local economy by leveraging the available resources and existing industries. EDCSLC retained Moran, Stahl & Boyer (MS&B), a nationally recognized economic development and site selection consulting firm, to perform a thorough evaluation of overall market opportunities and define target industries that the area should focus on for future growth, 1.2 The Basis for Defining Target Industries In the process of defining specific target industries for a local economy, MS&B has integrated the input from four primary sources (see details in Sections 2 through 4 of this report). 1. A macro -level review of economic opportunities and trends that have a favorable and sustainable growth potential, 2. An understanding of state and regional target industries that have strong potential. 3. Feedback from local stakeholders on their needs and inputs. 4. Local/regional industry presence and resources that support economic KEY ELEMENTS OF TARGETED INDUSTRY ANALYSIS 1 St. Lucie County • Target Industry Study growth, such as: • Labor (availability of skills at a competitive cost) • Education and Training (degree and certificate programs) • Transportation access (interstate, rail and air) • R&D activities that support specific industries and processes • Utilities (availability, backup potential and cost) • Sites and buildings (site, expandability, location, cost and level of readiness) • Quality of life attributes to help attract talent when required (e.g., overall cost of living; availability and cost of housing; property taxes; educational resources; health care; cultural, recreational and retail options, etc.) Each of these factors was considered in the selection of target industries for the county with details noted in subsequent sections of this report. 1.3 Summary of Target Industries Selected A summary of target industries and their trends and a discussion are provided below. SUMMARY LISTING OF TARGET INDUSTRIES FOR ST. LUCIE COUNTY WITH COMMENTS AGRICULTURE (THE RESOURCES FOR FOOD PROCESSING) Trend: The consuming public wants quality/nutritious food that can be traced to known sources. Florida has a strong reputation for citrus and needs to leverage that "Florida Quality" image to other products. Opportunity NAICS Code Discussion Dairy Farms 11212 Okeechobee County is one of the largest milk producing counties in the state with over 30,000 cows generating over 60 million gallons of bulk milk annually. Orange/Citrus Groves 11131/11132 The four -county region has over 90,000 acres in citrus production (2011 data) but it is down over 58% from 2002 due primarily to disease (citrus greening) and some development. Vegetables/Melons 1112 There are about 500 acres in vegetable farming in the region which is minimal and expansion of this segment should be considered — particularly organically grown crops. Sugar Beets 111991 Production of "energy beets" to produce alcohol (butanol) Animal Aquaculture 1125 Fish aquaculture is an emerging opportunity that can leverage the techniques being developed at Harbor Branch. The public perception of farm -raised fish is not always positive, particularly from foreign sources. Florida has an oppor- tunity to develop a high quality fish product that is branded and differentiated from other sources. VALUE-ADDED AGRICULTURAL/AQUACULTURE PRODUCTS Trend: There is a strong demand for yogurt (particularly Greek yogurt) and cheese from liquid milk; fresh/organically grown or flash frozen fruits and vegetables from known sources; sources of omega-3 from salmon and other fish from known sources; ongoing demand for specialty drinks; and nutraceuticals (foods with high medicinal value). Opportunity NAICS Code Discussion Fruits/Vegetables 3114 Process a Florida brand of high quality, organically grown fruits and vegetables that are either fresh, flash frozen or dried. Develop a series of nutraceuticals from citrus peel extractions that have flavanoids with multiple medicinal characteristics. Dairy Products/Beverages 3115/3121 Process bulk milk into cheese, yogurt, protein drinks or other value added products with higher margins than liquid milk. Promote a Florida brand. Other Basic Organic 32519 Convert the sugars in sugar beets into high performing butanol as a biofuel Chemical Manufacturing substitute for gasoline. Seafood 3117 Expand fish farm activity and package a high quality Florida brand product. St. Lucie County • Target Industry Study OTHER MANUFACTURING Trends: Manufacturing opportunities can be derived from the following activities and market trends: • Aerospace/aircraft production is expanding in Florida (particularly in Brevard County); • The rebounding of the boat building industry with a flat U.S, market but expanding exports. Florida is the largest (by far) boat building state and the largest market for boat purchases; • Solar panel (for heat and photovoltaics) has a potential strong market in Florida as the price of equipment is drastically reduced and the financing/incentive opportunities are improved; • Manufacturing operations are beginning to return from China due to escalating cost and other factors. Opportunity NAICS Code Discussion Plastic Parts/Components 3261 Polymer parts for boats, aircraft/aviation, etc. Arch./Struc. Metal Fab. 3323 Design/produce specialized solar panel brackets for specific applications. Machine Shops 3327 Metal/alloy parts for boats, aircraft/aerospace, industrial equipment, etc. Electronic Components 3344 Components for medical, marine, industrial and aviation instrumentation. Electronic Instruments 33451 Instruments for medical, marine, industrial and aviation. Aircraft Parts 336413 Parts made from metals, polymers, composites, etc. Boat Building 336612 Construction of fishing and recreation boats. TECHNICAL SERVICES Trends: technical services are a high growth segment in the national economy supporting innovation/R&D, software development with many applications, and other technical services. • Life science R&D has a strong demand for software -related services and data management. • As education becomes more computer and internet based for in -classroom and remote learning, there will be a high demand for software/creative services. • Installation of sophisticated equipment, such as solar panels, will require technical training and certifications. Opportunity NAICS Code Discussion Computer Programming 541511 Support for local R&D and internet-based education modules. Scientific R&D Services 54171 Continue to expand marine, life science and agricultural R&D. Install PV/Heat Solar 23821/23822 Certified solar panel installers (plumbing/electrical contractors). Panels Engineering Services: this segment will expand as the economy grows and the demand for these services is required by the public and private sectors. EDUCATION SERVICES Trends: Education instruction is going to be much more computer -based that will impact how and where education will be delivered, for example: • Books will be available via an Internet download rather than hard copy. Content will be text, photos, video, animation and many other more stimulating techniques. • There will be a merger of entertainment with education to make learning more fun and more central to kids' activities. • Some content will be processed by individuals with routine self -testing (feedback) and immediate supplementary focus on areas of need (for areas of low retention/understanding). • Teachers' roles will be more of a facilitator of discussion and resource than an "instructor." Opportunity I NAICS Code Discussion Education Support Serv. 1 6117 Develop modules for internet-based education activities. St. Lucie County • Target Industry Study WAREHOUSING/DISTRIBUTION Trends: Over time, more products will be sold over the Internet and stores will have smaller footprints, exist to sustain relationships/market identity, and for trying on specific styles to establish actual sizing (always an issue with women's clothing). The need for warehousing will expand with less inventory in the store. There will be a need for more distribution space to serve the southeast Florida region and St. Lucie County is the lower cost destination. Opportunity NAICS Code Discussion Distribution Centers 4931 Support distribution of goods in southeast Florida and the Caribbean. DATA PROCESSING/HOSTING Trends: The demand for data processing and storage will continue to expand over time while the efficiency, speed and capacity (per sq. ft. of space) for data transactions and storage will also increase over time. The need for storage capacity for in-house and third party data centers will continue to increase along with the concern over security. Opportunity NAICS Code Discussion Data Centers 5182 Providing data management services for area R&D and other companies. INTERACTION OF ECONOMIC OPPORTUNITIES There are some critical points of interaction between economic opportunities that are charted below. Segments such as education and R&D not only are the sources of opportunity but also support other segments. ST. LUCIE COUNTY: INTERACTION BETWEEN ECONOMIC OPPORTUNITIES Local employers provide access to career options and technologies for local students. IRSC offers lean mfg. and technical training to local businesses. R&D support of product and process development for food/citrus peel, butanol from beets, medical and marine devices. IRSC offers certification training for certain software platforms. Development of education -related modules for computer -based training. Education and j Software Development Training that ' Support for R&D supports R&D, Prepare Education Modules R&D experiences incorporated into education process. Data Management Software support and data management for R&D activities. 4 St. Lucie County • Target Industry Study 1.4 Resource Requirements for Target Industries Resource requirements for each target industry are summarized below and evaluated in more detail in Section 4 of this report. RESOURCE REQUIREMENTS BY TARGET INDUSTRY TARGET INDUSTRY LOCATION REAL ESTATE LABOR SKILLS UTILITIES Food/Beverage Reasonable access to Existing food grade Equipment operators • Reliable/low cost Processing transportation (truck building or shovel ready and technicians that can electric power and sometimes rail). site (5 to 25+ acres work in a food grade • Some processes Away from sources of depending on size of environment. require natural gas contamination. operation). • High capacity water and sewer Other Manufacturing Within 2-3 miles of Small/mid-size firms Equipment operators Industrial grade. interstate and modest lease buildings that are and technicians with traffic area (for truck expandable (25,000 to technical ability, lean access). Some 100,000 sq. ft.). manufacturing skills, operations will need rail Larger firms and those good communication access — larger plastics needing specialized skills, and can work in molders. space want shovel ready team environment site (5 to 25 acres). Technical and Attractive/unique areas Class A/B office or Software programmers Office grade with access Education Services with access to parking, unique office environ- and engineers to significant computing restaurants and other ment (typically lease power for certain amenities. basis). software developers. Warehousing Locate within 1-2 miles Available building Automation operators Industrial grade. of interstate and low (100,000+ sq. ft. that is and maintenance traffic area for truck expandable) or technicians. access. Shovel ready site (25 to 100 acres). Data Center Away from public view Specialized building Computer operators, High reliability electric for security reasons constructed on shovel software programmers power and telecom at ready site and software/hardware low cost. Some systems engineers need water for cooling. St. Lucie County • Target Industry Study 6 1.5 Target Industry Rollout Strategy and Schedule The target industry list is based on current and projected market opportunities that will take place over the next 5 to 10 years. In addition, there may be some resource development issues (real estate development, training programs or enhancement of utilities) that need to be addressed prior to engaging a particular opportunity. Therefore, the target industry initiative should consider a roll -out strategy and schedule as outlined below. OVERVIEW ON TARGET INDUSTRY ROLLOUT STRATEGY AND SCHEDULE TARGET INDUSTRY SHORT TERM (1-2 YEARS) MID TERM (3-5+ YEARS) Dairy Products Attract (or support the startup of) companies that Build the brand for Florida dairy products. can produce cheese, yogurt or beverages from milk for the Florida/Southeast market. Citrus Peel Derivatives Refine the value of citrus peel as a nutraceutical Attract (or support the startup of) companies that through the life science R&D centers in the area. will produce a nutraceutical from citrus peel. Vegetable Processing Expand the production of organically grown high Attract (or support the startup of) companies that quality vegetables in the region. will process local vegetables. Aquaculture (Fish) Initiate/expand aquaculture operations in the Build the production capacity and branding of region. Florida aquaculture. Other Manufacturing IRSC offers lean manufacturing and tech courses Attract (or support the startup of) companies that for composites, plastic molding and metal will produce medical, aviation, industrial and fabrication. marine -related instruments. Identify buildings and sites appropriate to support Attract (or support the startup of) companies that manufacturing. (Some plastics molders need rail will produce specialty brackets to support the solar access). panel industry in Florida. Build cross -function team to identify commercial opportunities for instrumentation from marine and life science R&D. Market area as competitive destination for aerospace parts production. Technical Services Scientific R&D Services: continue to expand Generate commercial opportunities from R&D presence and leverage ag-related (nutraceutical activities (R&D is primarily grant -driven and not advantages of citrus peel and other local crops) focused on commercial). and medicinal derivatives from the ocean. Support growth in solar panel installation. Education Services Build a cross -functional team to study the Engage in curriculum development and software opportunities of computer/internet-based modules that relate to STEM subjects and expand learning and the potential role of the region. to others over time. Warehousing Identify specific sites that meet the requirements Continue promoting the County as a distribution for distribution centers along the interstate. center that serves southeast Florida. Initiate marketing activities. Data Center Identify specific sites with the locational and Market specific sites for data center operations. utility requirements for operating a data center. Identify sources of labor based on college programs at UCF, FAU, FIT and IRSC and experienced staff to support this segment. Initiate marketing activities. St. Lucie County • Target Industry Study 111 SECTION 2 — ECONOMIC OPPORTUNITY MODEL 2.1 Overview on the Model The Economic Opportunity Model is based on addressing four key questions: 1. What's going on in the world and the marketplace and what impact/opportunity does it provide? 2. What factors/dynamics are impacting our basic needs —like energy, transportation or education? 3. Are there specific economic opportunities coming about due to market/societal changes? 4. What resources/locational conditions are necessary to exist in order to take advantage of the opportunity? ECONOMIC OPPORTUNITY MODEL DERIVED FROM MARKET NEEDS Market Needs Categories (selected list) ... Each Has Its Own Drivers Economic Opportunities Rased on Fulfilling Market Needs Rayv Materlaisr } Manufac�uT�nl; , ,£ ,�,Ga�merc �erUice� �£,� � �R ,art I.,tt�tr�e�f� • Mining Substances/Materials • Transportation • Professional • Construction •Agriculture -Soft Goods • Warehousing • Technical • Utilities • Forestry • Components • Wholesale/Retail • Creative • Fishing • Hardware/Equipment • Financial OEM Resources Required to Support Economic Growth Real Estate tabor EducationjTraming UtIlI es/Computing Power„ Quality of Life Transporxationj ogi tics Rusiness tart Up;Resources; ' Business Environment ,„ Section 2 of this report looks at market drivers and trends as well as impacts on areas of market needs. St. Lucie County • Target Industry Study 2.2 Overall Market Drivers/Trends Global Dynamics: Sustained competitiveness in a global economy is based on how cost effective a country can produce and deliver quality goods to a specific market destination. Key success factors relate to the cost and quality of labor, overall operating costs, ability to protect intellectual property (for high value goods), political stability, and the optimization of logistics. China has been steadily gaining in manufacturing production since 1995 and escalating rapidly since 2005. However, there has been a reversing of the trend more recently due to the following factors: ® Cost of fuel for transporting goods long distances is nearly four times what it was in 1995. • Labor, real estate, energy and other costs in China continue to escalate. A rising middle class in China is demanding higher wages. • The need for a supply chain inventory and the pre -payment requirements for goods as they are produced have added additional costs and cash flow issues that were not considered in the initial outsourcing analysis. • Reduced product life cycles that require smaller runs are not conducive to long distance manufacturing strategies. • As the speed and technology content rises for products, companies tend to want R&D, engineering and production closer together to keep the process agile. 30 25 20 15 10 5 0 1990 1995 2000 2005 Source: Based on World Bank Data TOP MANUFACTURING COUNTRIES AS A PERCENT GLOBAL VALUE -ADD PRODUCTION: 1990 - 2010 -U.S. 2010 China Japan Germany A � %w li'IADE A IN T111+C -US • There has been a marked variation in quality that is unpredictable and ultimately very costly as it impacts a company's brand image in the marketplace. • For companies that have an increased use of technology, China has a reputation for the lack of protection of intellectual property rights, and frequently will produce a "knock -off" version of a product. • For many products, there are significant opportunities for automation applications that inherently reduce labor content and the need to be in low labor cost destinations. • There are emerging strategies to produce goods near the markets being served. All these factors drive the desire to bring a variety of product manufacturing back to the U.S, and will land in locations that have an available and skilled work force, other required resources and incentives to help off -set the cost of re-establishing operations back in North America. The Boston Consulting Group estimates that it could produce 2.5 to 5 million Jobs by 2020. St. Lucie County 9 Target Industry Study si Demographic Shifts: WWII and the Depression reduce birth rates while the rapid economic expansion after WWII of the baby boomers increase population growth that is now reaching retirement. The official boomer birth years are 1946 to 1964, which means in 2014, they are 50 to 68 years old. Also note the dip in population due to lower birth rate with young adults that are having fewer children (frequently later in life) or none at all compared to the baby boomers. The impact of this demographic phenomenon on the economy and workforce includes the following: • As boomers leave the workforce, there are fewer workers available to take their place and the skills required for many of the next -generation jobs are much more complex. By 2020, the U.S. Bureau of Labor Statistics, confirmed by the Boston Consulting Group, estimates a gap of 875,000 machinists, welders, machinery mechanics and industrial engineers in the U.S. • The shock in the size of the aging population will have profound impact on the societal cost of healthcare unless there is a quantum shift in the delivery of healthcare or in sustaining health. • There is a substantial transfer of wealth from one generation to the next, China India USA Indonesia Brazil Russia Japan Mexico Germany Turkey Iran France UK Italy So. Korea Spain Poland Canada Taiwan Australia Note the drop off in the <10 year old age ranges. C 0 COMPARISON OF AGE RANGES AND IMPACT OF BABY BOOMERS: 1990 vs. 2010 <5 5to 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85+ 9 to to to to to to to to to to to to to to to 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 Source: U.S. Census Bureau 2010 1990 COMPARISON OF POPULATION (BILLIONS) 0 200 400 600 800 1000 1200 1400 Source: CIA World Fact Book for 2011 :rease in year old es in 2010 ANNUAL GROWTH RATE OF POPULATION (%) China India USA Indonesia Brazil Russia Japan Mexico Germany Turkey Iran France UK Italy So. Korea Spain Poland Canada Taiwan Australia 0 0.2 0.4 0.6 0.8 1 1.2 1.4 St. Lucie County • Target Industry Study 10 Access to Skilled Workforce: In a time of high unemployment and underemployment, there are 600,000 manufacturing jobs that are not being filled due to a skills gap and another 500,000 projected to meet near -term growth. The factors that fuel this issue include the following: A generation of future workers that are disengaged from manufacturing due to parents/educators convincing students it's a bad career path (based on their experiences with layoffs in the past and that everyone should get a four-year degree to be successful). Employers need talent that can do basic math, have good communication skills, can work in teams, make rapid adjustments to work practices through Lean Manufacturing (and other techniques), exhibit punctuality, and pass a drug test. Process design, problem -solving and maintenance of complex automated machinery requires a multidiscipline approach known as mechatronics that includes electronics, mechanics, pneumatics, hydraulics, controls and computers. • 25% of the total manufacturing work force is age 55 or older and will be retiring in the near future. Communities that can stimulate students to consider manufacturing (which requires many different skills) and get the preparation and culture required to thrive in manufacturing (training/education) will be able to attract/support a variety of manufacturing operations. Government Policies: Policies of the federal and state governments can either stimulate or hinder economic growth and the competitiveness of domestic businesses. Examples of recent and on -going federal policies that have direct impact on the economy and expanded use of innovation include: • Defense spending that is targeted toward new technologies. • Healthcare legislation that has generated a cost unknown for businesses as well as a 2.3% sales tax on medical devices. • 30% tax credit and other financial incentives for installing wind turbines and solar panels. • Investing in research related to medicine, energy and other areas of innovation (although there have been some recent cutbacks). • Investing in civil projects such as road and bridge renovations to improve public safety and create short-term job opportunities. • Investments in upgrading and improving the national power grid. This will ultimately be a joint effort with the private sector. • Providing incentives at the state level to attract certain types of businesses and innovation -related activities. Government policies related to program spending, taxation of companies (large and small) and level of debt will impact the competitiveness of the country and its businesses as well as the stimulation of foreign investment in U.S. markets. Managing the national debt is of critical importance because paying down the principal in the future as well as the interest (which is $250 billion and escalating) will be a drag on the economy far into future generations. St. Lucie County • Target Industry Study 11 U.S. FEDERAL GOVERNMENT REVENUE VS. SPENDING: 1980-2013 ($ BILLIONS) 4,000 3,S00 3,000 2,500 2,000 1,500 1,000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Revenue ®Spending I', :t Periods of recession Source: U.S. Office of Management & Budget The realities that the U.S, faces related to the debt include the following: • If the U.S. credit rating drops further, the interest rate on the nation's debt will rise. • The government will need to both drastically cut program spending while raising taxes. The combination of actions will remove spending power from the economy and slow GDP. How this is executed will determine whether the economy just slows down, reverts to a recession or spirals in a downward trend. • Foreign investments will be reduced as the size of the market is reduced and becomes less attractive. St. Lucie County • Target Industry Study 12 • The Federal Reserve is not printing billions of dollars each day to cover the debt which will contribute to substantial inflation that will creep up overtime. Recovery will be slow and painful but can be achieved if discipline is applied; although little of it has been demonstrated by Congress thus far. Security/Terrorism: The incidence of security breaches and acts of terrorism will continue to escalate with more creative approaches and serious outcomes. Addressing world unrest and the outbreak of terrorism is requiring a substantial investment on many fronts to combat its impact on human life, facilities, computer and network systems (cyber security), vehicles, ports and other transportation destinations and systems, and other target areas. This effort will require a vast array of software, hardware, sensors and more intense use of drones utilizing diverse and complex technologies. The trend in this environment is to optimize cost/value and seek methods of detecting potential situations before they escalate into a disaster. Emerging Energy Sources: The U.S. is currently the world's largest consumer of energy resources at 95 quadrillion BTU's annually or 19.5% of the total world's consumption. China is close behind and expanding rapidly at 90.3 quadrillion BTU's annually or 18.7% of the total. ANNUAL ENERGY CONSUMPTION (QUADRILLION BTU'S) BY THE TOP COUNTRY CONSUMERS United States China Russia India Japan Germany Canada France Brazil So. Korea Iran Energy consumption in the United Kingdom Saudi Arabia U.S. is primarily used as a fuel Italy for transportation (vehicles, Mexico Mama Spain trucks and aviation), power Indonesia generation (see charts on next Australia page) as well as gas utilized South Africa �—=j I for space heating and process 0 10 20 30 40 50 60 70 80 90 100 Source: U.S. Energy Information Administration heating. Within power generation, the use of coal is being reduced by shutting down older plants and focusing more effort on combined cycle gas fired units that are more efficient and less costly fuel due to the expanded supply of gas on the market. St. Lucie County • Target Industry Study ESTIMATED U.S. ENERGY SOURCES, USE AND CONSUMPTION TREND Based on a total annual consumption of 95 quadrillion Btu's Renewables Nuclear (8%) Source: Energy Information Administration 3% Gas 3% Renewables 94% Petroleum 41% Petroleum 40% Gas . 11% Renewables 7%Coal 76% Gas 17%Petroleum 7%Renewables 42% Coal 25% Gas 19% Nuclear 13% Renewables 1%Petroleum 13 Over the past decade, the federal government and the private sector have expanded the installed base of renewable electric power (including hydro at 62,5% of total) generation to 520 billion kWh in 2011. Going forward, there will be a strong emphasis by the federal government to reduce coal, limit the growth of nuclear generation and promote wind and solar— although many of the incentives are expiring. Natural gas will be in demand due to its expanding supply and falling cost. Florida Power & Ught recently built the largest solar farm in North America near Arcadia, FL. The federal government has also backed the Energy Star Program that identifies energy efficient products and practices. Consumers and businesses gain a return from the program by consuming less energy and therefore paying lower energy bills. Products that have the Energy Star designation then gain a premium or preferred status. St. Lucie County • Target Industry Study 14 Natural Gas Gas extraction from shale is facilitated through hydraulic fracturing known as "fracking" or "smart drilling." Wells are drilled up to 10,000' vertically to the shale layer and then horizontally through the shale. A mixture of water and special chemicals are charged into the well under high pressure to further fracture the small cracks (fissures) in the shale to make it more permeable. It is then filled will sand to hold the fissures open. Gas migrates to the fissures and then into the well and brought to the surface for collection and storage. HYDRAULIC FRACTURING FOR ENHANCING NATURAL GAS EXTRACTION Well casing that has abilit to turn and g( laterally. The process has been optimized over the past 20 years has proven to be very effective with substantial improvements that have been signed off by both EPA and the Energy Administration. However, environmentalists are concerned over the potential toxicity of the proprietary fracking chemicals and the disposal of the large quan- tities of waste water that have fracking chemicals as well as a low concentrated radionuclide tracer utilized to track well location along with a naturally occurring radionuclide (radon) in the extracted material. KNOWN/PROSPECTIVE SHALE PLAYS (LOCATIONS) IN NORTH AMERICA Source; Energy Information Adminlstration (2011) St. Lucie County • Target Industry Study 15 North American shale plays (areas of potential fossil fuel deposits) include the Bakken Shale oil field that is located both in Canada as well as in the U.S. (portions of the states of North Dakota and Montana) that may have as much as 4 billion barrels of oil available for extraction. The Marcellus Shale gas field in parts of New York, Pennsylvania, West Virginia and Ohio may have as much as 50 trillion cubic feet of natural gas that is recoverable from the region. There is also strong promise in Alberta's Duvernay Shale deposits in the Rockies. Even at a much lower estimate, the emerging shale gas resources could represent a drastic shift in the cost of energy in North America making the U.S. and Canada desirable manufacturing destinations while providing tens of thousands of direct and indirect jobs within the respective regions. As a commodity, the price of natural gas is sensitive to supply/demand throughout a given year and long term supplies. The supply of natural gas is increasing but so is the demand as power companies convert some of the coal generation facilities to natural gas combined cycle. NATURAL GAS C►TYGATE* PRICE IN $/1,000CF (1990 2012) is 10 a 1990 1992 1994 19k 148 2000 2002 2004 2006 2008 2010 2012 *Cltygate is the price at the end of the transmission line. Renewables: Wind The total electricity production from renewables in 2012 was 494.6 billion kWh, 12.2% of the total production from all fuels. Within the renewables, 56% was from hydro followed by wind with 28.3%, wood and other biomass at 11.6%, and solar at 0.87%. The primary challenge with wind is its availability and dependability as a source due to issues related to wind characteristics and maintenance requirements. Unit availability will vary by location but is estimated to range from 25% to 50% of the time. This then requires a backup system, such as a rapid start-up gas turbine, to be available when the wind is too low to turn the blades. There is substantial R&D still being engaged to maximize turbine output and reliability. St. Lucie County • Target Industry Study 16 Looking at the true economics for wind technology, the balance sheet needs to also include the incremental cost of installing substantial transmission lines and other infrastructure costs. The current economics have not considered that the federal government provides a 30% tax reduction for installing wind farms. Renewables: Solar Current market presence is low but has a significant potential in selected markets. The cost of photovoltaic has historically been an issue but more recently the cost per watt has dropped to below a dollar. Placing the solar units on roofs instead of on land helps to conserve land and places the user next to the source for greater efficiency. As the output per unit surface area increases, the use of solar for large buildings and remote/off-grid applications will continue to increase as an attractive option. �a v, w m Solar panels on Lifeline Data Center in Indianapolis and panels on shopping mall and Wal-Mart distribution center In Arizona DROP IN THE PRICE OF CRYSTALLINE SILICON PHOTOVOLTAIC CELLS OVER 36-YEAR PERIOD fj 1977: $76 67 per watt 2013: $0 74 per watt V 6 Source: Bloomberg New Energy Source The Federal government offers a 30% tax credit for solar installations but the State of Florida currently lacks any state-wide program. They had a $4/watt rebate program from 2006 to 2009 when the funds to support the rebate ran out. There are also some loan programs that help defer the initial investment for the solar system. Florida requires that the excess power generated must be sold to the utility at whole -sale rates and cannot be sold directly to the marketplace at retail rates. This makes major non -utility energy generation for market consumption less economically attractive. As the cost of equipment continues to drop and if the state reinstates its rebates (or some financial reduction program), the demand for solar systems should continue to rise. Some residential builders are installing solar systems into new construction and the solar equipment providers are leasing the system for a 30 year period (to align with lease terms) to reduce the impact of high initial investment St. Lucie County • Target Industry Study 17 costs. This demonstrates the creative approaches that will come about to support the growth of the solar heat and photovoltaic market. Renewables: Biomass (Wood Pellets) Biomass includes wood -based materials, plants and grasses used for producing a fuel. Western Europe is placing a heavy emphasis on wood pellets (made predominantly from softwood) as a fuel source to displace the use of coal and hedge against interruptions of oil/gas from Russian sources. New England as a region will be interested in this approach because they have traditionally relied on heating oil and there are limited gas lines in the GROWTH IN WOOD PELLET CONSUMPTION BY REGION MILLION TONS) more rural areas. 50 The environmentalists are seeking to reduce carbon dioxide (CO2) emissions through the use of the wood pellets since they assume the carbon in the wood was previously sequestered from the air making the emission "carbon neutral." Interest- ingly, CO2 emissions from coal are actually lower (205 vs. 213 lbs. per million btu). Softwood pellets tend to burn cleaner and with a higher heat output (due to the terpene concentration) and ultimately generate less ash. The quality/consistency of the pellet and the moisture content are other factors that impact combustion characteristics. WOOD PELLETIZING PROCESS Chippers & Hammer Mills 45 40 35 30 25 20 15 10 5 0 2010 2015 2020 Source: Bain Consulting (2013) nr+rvirvicn1V1ML (sawdust consistency) to South America Russia LA China ra Eastern Europe ■ western Europe N North America CUULLR EXTRUDER M BAGGER Some pellet plants start their process by putting large pieces of wood through a chipping machine for processing. These are only necessary for mills that accept this non -uniform feed stock. There are many different configurations to pellet manufacturing plants depending on their raw material source. While they all don't have chippers, almost all of them have a hammer mill at the beginning of their milling process. These machines take sawdust and wood chips and break them down into a consistent smaller size making drying and pressing through the pellet die quick and consistent. St. Lucie County • Target Industry Study 18 Chippers & Hammer Mills Some pellet plants start their process by putting large pieces of wood through a chipping machine for processing. These are only necessary for mills that accept this non -uniform feed stock. There are many different configurations to pellet manufacturing plants depending on their raw material source. While they all don't have chippers, almost all of them have a hammer mill at the beginning of their milling process. These machines take sawdust and wood chips and break them down into a consistent smaller size making drying and pressing through the pellet die quick and consistent. Dryers If a pellet mill uses fresh cut raw material, material exposed to the weather or high humidity, or a mix of raw materials that may contain moisture, they have to dry the sawdust to a consistent moisture level. Large dryer drums may use natural gas, propane, sawdust burners, or other fuels to heat the drum, driving off the extra moisture. The Pellet Mill After drying, the sawdust is pressed through dies at high pressure. This process causes the sawdust to heat up and release natural lignins in the wood that bind the sawdust together. The mill also determines the density of the pellet, the diameter, the durability, and the length. All of these characteristics are very important for consistent pellet appliance operation. Cooling and Storage The pellets come out of the mill between 200 and 250 degrees and soft. A cooling tower is used to bring the temperature down and harden the pellets. After cooling, they are usually stored in a large silo to await bagging or bulk distribution. Bagging or Bulk The most common method for distribution in the US is to put the pellets into 40 pound plastic bags and stack them on pallets or skids. These skids may contain anywhere from one to one and a half tons of fuel, depending on the distribution channel. Bagging pellets adds between $25 and $30 per ton in plastic bags, pallet, outer cover bag, shrink wrap, and the labor and equipment to stack and wrap them. These skids are then shipped out and delivered all over the country for consumer pick up at retail locations or home delivery. Biofuel: Liquid Fuels From Multiple Biomass Sources Converting biomass into liquid fuels is derived from multiple sources as summarized below: TYPE OF FUEL SOURCE OF BIOMASS Alcohol (ethanol and butanol) Biological breakdown (fermentation) of corn, sorghum, soybeans, wheat, sugar cane/beet, grasses, wood chips, ag residues, etc. Biodiesel Mechanical pressing/chemical extraction of seeds from canola, soy and other plants to make vegetable oils. There are other sources such as microalgae that have potential and are in the development stage. The most common alcohol biofuel is ethanol derived from corn. This is changing as other biomass materials are developed including emerging production of butanol. ETHANOL BUTANOL C C 0 C C C CO;f Butanol has four carbon atoms in contrast to ethanol with two carbon atoms — both have the hydroxyl radical (oxygen and hydrogen) that make it an alcohol. The favorable characteristics of butanol are: • Butanol can be produced in four different isomers, each one reflects a different position of the hydroxy radical and the alignment of carbon atoms. The alignment above is known as n-butanol or 1-butanol isomer that is the most common. St. Lucie County • Target Industry Study 19 • Butanol has 15% more energy content than ethanol. • Butanol also has a lower vapor pressure than alcohol which means it's easier to handle but also has less vapors present to start an engine in cold weather. • It is less soluble in water than ethanol that makes it easier to handle. • Can be used directly in gasoline engines (up to nearly 100%) without any engine conversion. • It is less corrosive than ethanol. • Ethanol requires special pipelines for shipping, butanol can be shipped in unmodified pipelines. • There are only a few modifications to an ethanol production plant required to produce butanol. • A number of major oil/energy companies are ramping up production of butanol. • A downside to butanol is that its toxicity is higher that ethanol — more like that of gasoline. Energy beets, a special type of sugar beet, are being studied extensively at North Dakota State University due to the substantial sugar beet crop in North Dakota and nearby Minnesota. As a crop, energy beets increase soil health due to a deep tap root which makes it more tolerant to drought and can be planted in alkaline or saline soils. As a feedstock for alcohol production, high yields are a big attraction and there is a high crop weight per acre relative to corn and other biomass sources. St. Lucie County • Target Industry Study Technological Trends: Technology includes any scientific innovation with commercial value that meets a societal need. A constant stream of new innovations is what drives the U.S. economy overtime and is the basis for our competitive advantage, A sampling of current and emerging technologies include: Biodegradable bioplastic packaging from starch -based polymers derived from corn, soy, switchgrass, potatoes, sugarcane, etc. The diversification of weapons platforms utilizing sonar, electromagnetic forces and other sources along with the use of remote operated aircraft, robots and other devices to detect and combat terrorism. The expanded use of LED lamp technology that provides flexible illumination options with less energy and a much longer operating life. Photo of GE combined cycle power station model. The development of new composites (polymers with fiber reinforcement such as carbon, fiberglass and other materials) that result In improved characteristics such as strength and lighter weight. Continuous improvements in batteries and other energy storage devices and techniques. Large scale energy storage will ultimately make wind and solar energy more viable. Shetkastone'rm is a recycled material (55-90% recycled paper) used for countertops and other surfaces. The product is currently produced In Le Center, MN. The use of nanotechnology to increase product performance at the ultra small molecular level to increase detection performance, deliver a drug or radiation to a cell and many other applications. Typical combined cycle gas -fired power station that Integrates a gas turbine and stream turbine to generate electricity. 1. Electric generator 2. Steam turbine 3. Condenser 4. Pump 5. Boiler/heat exchanger 6. Gas turbine 20 St. Lucie County • Target Industry Study A new craze in jewelry Is a baked ceramic coated carbon fiber ring that is strong, light and attrac- tive. It probably will not take on the classic gold ring any time soon. in the fabrication of wind turbine blades. The Audi R8 uses carbon -fiber -reinforced polymer (CFRP) for seat frames and other parts along with magnesium and fiberglass -reinforced polymer (FRP) components to shed hundreds of pounds without sacrificing performance. The vehicle also has ceramic brakes and a titanium exhaust system. This part is constructed of polymer -to -ceramic composites (PTCC) for wear corrosion and wear resistance. Aircraft engines and their "first cousins", the i land -based gas turbine, need high strength w,r and dimensional stability at very high tem- peratures. The use of nickel -based super alloy for the turbine blades along with the use of ceramic matrix composite (CMC) with carbon fiber. Ceramic polymers are also utilized on engine part manufacturing. The use of material micro machining and molding in the manufacturing of drug delivery devices. 21 St. Lucie County • Target Industry Study Sourcing Strategies: Original equipment manufacturers (OEMs) frequently collaborate with their components and parts suppliers on technology innovations as well as seek ways to optimize costs through lean manufacturing and other techniques. ORIGINAL EQUIPMENT MANUFACTURERS AND THEIR CONTRACT PARTS SUPPLIERS and its alloys, copper, brass, punching, shaping (stamping, ding/brazing, coating and Materials: Comprised on multiple materials such as resin with fiberglass, carbon fiber, Kevlar fiber and combinations. There a many other types of composites. Processes: prepare a form, apply fiber then resin Impregnate, allow to harden and trim/finish or make into a fabric. Materials: Plastics, metals, resins, chips, etc. Processes: fabrication of sensors, cables, circuit boards, etc. ��a St. Lucie County • Target Industry Study 23 Concept of Sustainability: The definition varies widely but reflects a desire to assemble a set of best practices that address the ills of misuse of resources and past losses of companies. It's not possible to design away all problems but society can be much better at meeting the needs of its citizens into the future. The outcome of this trend will be communities and companies that embrace best practices and become preferred locations to live. • Spending ... budgets that live within the means of the community at tax rates that keep it competitive (optimizing government, education and health services). • Conservation of resources: water, energy, land (development ... use of brownfield land) • Minimize environmental impact (water, air, land, human exposure) • LEED certification of buildings • Sustained economy (host to companies/industries that continuously adapt to changes in markets) • Communities support business through supporting a culture and environment of entrepreneurship, promoting innovation, celebrating new business activities, and equipping residents for available jobs through effective education and training. • Transportation that promotes efficient/cost effective ways of moving people and goods. • Quality of life that promotes health/wellness, good work ethic, arts/recreation and spiritual growth. Desire for Health and Wellness: To combat the epidemic incidence and related costs of cancer, heart disease, diabetes, obesity, aging, the outbreak of multiple allergies and intolerance to certain foods, and other conditions, there is a strong emphasis on the diagnostic, therapeutic and prevention aspects of medicine along with nutrition. Addressing our needs will take multiple strategies and technologies in a time when financial resources are shrinking. Some of the issues are related to diet (types and quality of foods) and lack of exercise, others are genetic, and still others are derived from basic aging because the average person is living longer. Society is seeking options that help them live longer and more active while enjoying live to the fullest. The federal government is taking strides to assure healthcare is available to everyone and is affordable. How this will be accomplished is still in a state of development. St. Lucie County • Target Industry Study 2.3 Market Drivers and Trends Related to Specific Societal Needs Transportation: R&D and manufacturing of parts/components and final assembly of motor vehicles, aircraft/aerospace vehicles and boats/ships. Trends/Drivers (Motor Vehicles) • Cost of gasoline is driving new options for fuels and vehicle design (electric, natural gas, biofuels, etc.). • Globalization of automobile manufacturing continues to intensify with assembly in local markets. Car as Communications Center by providing access to 4G LTE capability it enhances access to the Internet and cell phone use. Vehicle to Vehicle (V2V) Technology allows vehicles to communicate with each other to avoid collisions. There is also Vehicle to Infrastructure (V21) that allows a vehicle to communicate with signs and other devices. Car side Panels made of polymer fiber and carbon resin that are strong enough to be used in vehicles and pliable enough to be molded into panels with energy storage capability. Augmented Reality Dashboard allows for images to be super -imposed on the windshield to enhance driving safety and directions. VCU Way'm Control U111 Net vellq'slatnIartatuP compact, lohytightOcbrushlass (targai xt nnotot And ransmiss;0tl Wivo train Wolof tlumGit,gruttd ruolcell,tads. ismc0lyz \ /i �.� Hydrogen Fuel Cell concept is still alive among Japanese and other car makers. They feel its efficiency will ultimately drive market demand but there is a huge infrastructure challenge to make the switch. ""P°°'° Fuel call s/ram hoz Ultra cgmitar EM 24 St. Lucie County • Target Industry Study MOTOR VEHICLE MANUFACTURING/ASSEMBLY EMPLOYMENT 25,000 to 50,000 10,000 to 25,000 5,000 to 10,000 <5,000 MOTOR VEHICLE PARTS MANUFACTURING EMPLOYMENT >50,000 25,000 to 50,000 10,000 to 25,000 5,000 to 10,000 <5,000 25 St. Lucie County • Target Industry Study P11 Trends/Drivers (Aircraft/Aerospace) The aerospace and aviation industry is a $220+ billion market that employs in total about 620,000. It is rapidly evolving in response to new challenges and opportunities that relate to the cost of operation, serving expanded markets, new classes of aircraft, advanced materials and electronics, and the need to maintain a strong technical talent base. NIB a P (I r ` A' 5 Light Sport Aircraft: The FAA has defined Light Sport Aircraft (LSA) as a new class of aircraft for recreational and sport use. Many of the craft are built using high technology materials and components that are based on innovative designs. Advanced Avionics: The use of GP5 and other advanced avionics will allow for safer air travel as well as lower fuel consumption by minimizing the stacking requirements around airports. Advanced Materials: Carbon fiber In the fuselage (see photo) along with other composites and advanced alloys are being used to increase strength and reduce overall weight of an aircraft. American Airlines A, DELTA;"' U N I T E D �+ AIR LINES SOUTHVIM Continental �AIRLUM GM� nwa. Airlines ;�'� it TI�i1ll a U�S AIRWAYS Maturing Industry: As the traditional commercial airline industry matures, further consolidations are taking place to reduce operating overhead while gaining access to additional markets. MRO Operations: As the fleet size expands and the technol- ogy broadens, operations are striving to enhance quality and turnaround time. Unmanned Aircraft. There is a rapid expansion of use for unmanned aircraft to military and non-military applications. Supply of Engineering Talent: As the first generation of aerospace engineers retires and the application of technology expands, it has become critical to have access to a supply of aerospace, electronics, industrial, materials, mechanical and systems engineers to support the industry. Expansion of Corporate/Personal Jet Market: Existing aircraft manufacturers as well as new entrants such as HondaJet and Eclipse Aerospace are expanding this segment. According to a recent report by Deloitte Touche Tohmatsu LLC, orders for military -related projects have seen a three-year decline primarily due to decreased spending by the U.S, and European countries, In contrast, orders for commercial aircraft hit record levels in 2012 and are projected to do so again in 2013. Aircraft production in 2013 may hit 1,000 aircraft on a world-wide basis. See chart below. The growth in orders comes from the expansion of airlines in emerging countries, the replacement of older aircraft that have reached their service life, and the increased demand for corporate and personal aircraft to avoid the challenges of business and personal travel with commercial airlines. St. Lucie County • Target Industry Study 27 HISTORIC AND PROJECTED ORDERS VS. PRODUCTION FOR GLOBAL COMMERCIAL AIRCRAFT 3,000 -r 2,500 2,000 CM 1,500 7 Cr 1,000 500 0 �~ W� 4ih �^ 4>�' aY� �i hh �i� o,� o� O� oh o^ O°� �•~ '7k' Year Orders Production 1 » M Seven-year moving average production Aircraft Manufacturing Prime Contractors/Assemblers Companies that coordinate the overall design of the vehicle, fabricate the frame, and provide the final assembly and test functions. Tier 1 Suppliers r �� Provide major components and systems for the vehicle such as; I '_ • Avionics system. • Engine/propulsion system. • Landing gear. r, Tier 2 Suppliers Provide smaller components to Tier 1 suppliers such as: • Machining of parts, 9 .. [ • Manufacturing ofsubassemblies. * �, Tier 3 Suppliers Provide materials to the Tier 2 `~ suppliers. To be a supplier to the aircraft/aerospace industry requires different certifications such as the International Standards Organization (ISO) 9001, Aerospace Standard (AS) 9120 certification for Quality Management System, and the Aviation Suppliers Association ASA-100 Quality System Standard. The Industry is also supported by technical, software, financial and training resources as well as maintenance and repair operations (MROs) around the world. St. Lucie County • Target Industry Study 28 AEROSPACE EQUIPMENT/PARTS MANUFACTURING DIRECT EMPLOYMENT >50,000 25,000to 50,000 1.0,000 to 25,000 3,000 to 10,000 c5,000 Trends/Drivers (Water Craft) • The recreational boat industry represents a wide range of water craft from a kayak to a motor yacht. • Total recreational boat -related product and service sales for 2012 was $35.6 billion comprised of new boat and motor sales, used boat sales, accessories (navigational equipment, covers/tops, safety gear, dockside equipment as well as fishing and watersports gear), operating costs (insurance, docking and storage, marina fees, fuel, maintenance and taxes), and other purchases. • The top state for new powerboat, engine, trailer and accessory purchases is Florida ($1.47 billion)and they also have, by far, the most employment in the boat building industry (over 5,000). • Boat construction utilizes a variety of materials, including, metals (stainless steel, aluminum, etc.), composites (fiberglass, carbon fiber, Kevlar, etc.), different woods and polymer (plastic) components and accessories. Navigation System (GPS, radar, etc.) Trim/Accessories (metal, wood, polymer) Other Components (wheel, windshield, seats, etc.) Wheelhouse/Cabin (fiberglass, wood, etc.) Hull (fiberglass, metal, carbon fiber, Kevlar or wood) GI Nall IC `II IVU0I U, VUIVVdI U, JICI IIUIIVt: FPI VPCIICUj St. Lucie County • Target Industry Study 29 NEW POWERBOAT, ENGINE, TRAILER AND ACCESSORY PURCHASES BY STATE ($MILLIONS) 41,000 >500 to $1,000 �250 to $500 'P100 to $250 c$100 TOP TEN STATES FOR BOAT BUILDING EMPLOYMENT Environmental SustainabilitV: Issues related to the environment have transitioned over the past 40 years from focusing primarily on environmental protection to more recent concerns with land management (smart growth policies), managing water resources and transitioning to renewable energy resources (e.g., solar, wind, biomass, biofuels, etc.). The overriding issue of climate change has undergone several iterations and still drives some carbon emission initiatives. additional "credits" Within the construction industry, the LEED (Leadership in Energy and Environmental Design) certification concept was initially introduced in 1998 by the U.S. Green Building Council. The Council is a group of architects, engineers, builders and other related professionals whose purpose is to develop criteria that supports environmentally sustainable construction. LEED certification standards continue to expand and include new construction, renovation, interior build -outs, and operation of commercial buildings. There are also applications for homes, schools, retail structures and neighborhood developments. A LEED certification is based on a point system focused on six key categories that contain both required "prerequisites" and A summary of the six categories with a general description outlined below. St. Lucie County • Target Industry Study 30 SUMMARY OF REQUIREMENTS FOR LEER CERTIFICATION FOR NEW BUILDING CONSTRUCTION INNOVATION AND DESIGN PROCESS Source: U.S. Green Energy Council Financial Security: Provide society mechanisms for expanding and preserving wealth in very uncertain conditions. Trends/Drivers • Public trust in the financial service sector and Wall Street in general has seriously been eroded. With the economy near the tipping point of expansion, many investors and companies are holding their assets liquid and searching for viable investment options. There is an emerging interest in investing in small businesses that have well defined plans and strong leaders that can be held accountable and influenced by investors — giving the investor some control of the investment. St. Lucie County • Target Industry Study 31 Health and Health Care: Traditional focus on providing society with the services to detect (diagnostics) and effectively treat (therapeutics) diseases to maximize the quality and longevity of life. Delivering these services requires the integration of the following elements: • R&D/manufacturing of pharmaceuticals. • R&D/manufacturing of parts, components and final assembly of medical instruments for diagnostic and therapeutic applications. • Use of bio and gene -related materials (stem cells, gene therapy, bio organ replacements, etc.). • Software applications Trends/Drivers • Prime medical issue areas: ► Diabetes (Type I&II) ► Weight issues/obesity (relates to diabetes) ► ADHD/autism ► Cancer (breast, colon, etc.) ► Age -related (joints (arthritis/replacement), memory, heart, COPD, strokes, and kidney -related) • There is an emerging trend that shifts the focus to preempt disease through genetic analysis and determine actions that can be taken to avoid disease ... focus on "health" rather than "health care." Affordable Care Act - The federal government's attempt at reducing the cost of health care will have several impacts on the health care industry and their ability to survive. If a region is aging rapidly and having an increase in Medicare patients over private insurance patients, the cash flow to support health care services goes down dramatically. In addition, government payouts for Medicare patients will go down in the future as a way to force the reduction in cost, If the productivity to absorb these lower reimbursements is not in place, the operation is in serious jeopardy of shutting down. The law has also placed a 2.5% tax on revenues (not profits) for medical device manufacturers. This will definitely impact the growth and development of the industry, particularly among smaller/emerging companies that have very thin margins. • The aging of the large baby boomer population will place significant stress on medical services delivery but also rapidly expand market opportunities for medical -related products and services. • Use of nanotechnology in targeted drug delivery and size of devices. • The health care industry is undergoing some significant changes that are derived from a confluence of an aging population that depends on more care coupled with the rapid changes in technology and the escalating cost of delivering health care utilizing the traditional approach. Technology is playing a key role in reducing cost and expanding capabilities, such as: St. Lucie County • Target Industry Study 32 Computer -Based Records and Direct Data Entry- An important advance in cuttins health care cost is the use of electronic records that not onl, but also enhance quality through better communications. management of these systems will require additional IT staff and large data centers to retain records. The systems will require substantial upfront costs but will bring a significant return overtime, New Remote Diagnostic Technology - Integrating both sensor and cell phone technology, doctors can remotely patients heart and over conditions. This will mean that remotely located patients and doctors can still engage in meaningful assessments of medical condition. Food/Nutrition: Includes food, beverages and nutraceuticals/functional foods — consumed with an objective of treatment or prevention of disease Industry Trends Due to economic, life style, demographic, cultural factors and events/incidences, there are constant trend shifts in the food and beverage industry related to choice, content, convenience, cost, communications as well as govern- ment mandates. Changes in needs and demand are driving enhancements to traditional foods and brands while stimulating new opportunities as outlined below. Choice (new types and tastes of foods) • Having access to restaurant quality food at home. Prepared gourmet entrees and desserts for home consumption. • Foods that meet medical, personal and religious dietary restrictions (low sugar, gluten -free, lactose -free, vegan ingredients, kosher, halal, probiotics (consist of live microorganisms that promote digestion and other benefits) in yogurt and drinks, etc.) • Niche authentic foods are in demand: Greek yogurt, free range grown meats, ethnic foods, artisan cheeses, special breads, regional and international foods, etc. • Comfort and nostalgic food ... home-made style, back -to -basics recipes. Good basic food that the consumer can manage caloric intake based on portion size. • Access to fresh local produce because of its taste, quality and traceabilty to a known/trusted source. • Better quality of school/institutional food (tastier and healthier) ... putting a chef in the school. • Beer and wine produced from local/regional ingredients with unique taste and qualities. • Energy drinks and flavored water have an established but maturing market base. • Emerging interest in drinks that calm you down rather than hype you up. :Z Content (quality/safety and nutrition) • Rapid growth in organic foods (eliminate pesticides, hormones and other added chemicals from foods); primarily fruits and vegetables with some meats, juices and selected prepared foods. • The push -back against genetically modified (GM or GMO) grains and other food substances based on some limited evidence that they cause increased food allergies, intestinal disturbances and other related issues, and their potential impact on the environment and sustained agriculture. St. Lucie County • Target Industry Study 33 • Improved nutritional value of food to improve personal health (nutraceuticals/functional foods), quality and longevity of life. • Consumption of foods with specific substances (more fiber, omega-3 fatty acids, calcium, vitamins, antioxidants, minerals/trace metals, etc.). A Wisconsin dairy cooperative has developed a feed mix for dairy cows with high Omega 6 to Omega-3 fatty acids that p Y g g g Y produces cheese and meat with higher Omega 3 content. They are marketing it under ER the Omega Valley Farmers brand, • Focus on fresh ... improved nutrition and taste (stimulated the rise of Community Supported Agriculture initiatives throughout the U.S.) • Concern over content and sources of food (quality and safety) ... want traceability to source, includes buying local/regional and known processing source ... at times buy direct from the farmer and an upsurge in home canning. Also want fewer, more understandable ingredients (simple food content). • Address the issue of food contamination from foodborne illnesses in a variety of products (peanut butter, spinach, mangoes, cantaloupe, ground beef, poultry, pet food, poultry, etc.) • Shift in demand from soft drinks (particularly with high sugar content) to hot drinks such as organic coffees and teas. • Bottled water has impacted growth of diet soft drinks but may be leveling off in demand. :D Convenience (access to food and speed of preparation) • Interest in European style daily meal purchases from a local store (predominantly in urban areas). • More men in the kitchen ... life style and necessity with switch in home -based roles. Also more people working in home -based businesses and eat most meals at home. • Less trips to restaurants (to save money) but like to buy prepared gourmet entrees, desserts and baked goods as part of a meal. • Continue developing packaging that enables quality food for the microwave or convection oven (e.g., Birds Eye's Steam Fresh line of vegetables). • Buying pre-cooked meats, ready -to -eat salads and other sides from major grocery chains. Some stores have a "restaurant" area to eat from the store's buffet, :Z Cost (access to food and speed of preparation) • Consumers are buying larger portions at the mega discount centers such as Sam's Club, Costco, BJ's Warehouse, etc. • Popularity of purchasing store brands for certain foods ... based on personal tastes. Stores are combining contract/toll manufacturing with their own production facilities. :) Communications (enhancing information between consumer and provider) • Food -related apps on smart phones ... store coupons, restaurant deals and other specific opportunities. • There will most likely be a new labeling system that uses the QR (Quick Response) code to retrieve information on a food product, such as: Ingredients and nutritional value Processing location and sources of ingredients r St. Lucie County 9 Target Industry Study 34 Other health and content -related information Supplementary information (coupons, recipes, etc.) �Z Congress (federal government mandates) The federal government has been issuing its intentions on some fairly broad reaching mandates as a response to food safety and nutrition issues that have made the national news overthe past five years. Specific mandates and intentions for future legislation include the following. • Food Safety Modernization Act of 2010 (not passed but gives indication of intent) - strengthens food safety programs from domestic and global sources into the U.S. and gives, for the first time, the FDA authority to recall foods. It also adds an additional 2,000 food inspectors into the system and applies $1.4 billion in new cost that will be borne directly by the food and beverage industry. • Dietary Guidelines for Americans - every five years the government issues guidelines on nutrition that over time impact the composition of food produced in the U.S. Issues that have been addressed in the past are the need for fiber, whole grain consumption, probiotics, the reduction in consumption of trans fats, saturated fats and cholesterol levels and the impact on heart health. The current issues are sugar consumption, food additives and nutrition level of food. Trends in Food Production The trends noted below are a compendium of inputs from multiple food industry C) Sustainable Manufacturing: Leveraging the concepts of reduced energy use, energy independence and substantially reduced waste generated, the industry is seeking to cut operating costs while scoring points with consumers. Some plants are seeking to achieve the criteria established under the LEED Certification Program. �D Access to Markets: on -going trend for successful east or west coast companies to place a complementary operation on the opposite coast. �D Process Improvement: In addition to sustainability, companies are constantly seeking methods of reducing operating cost at a rate of 10% per year on average. This not only increases profit margins but also realizes that product life cycles mature and competition is always there to gain market share. :Z Enhance Food Quality/Security: Companies are continuously incorporating new technologies in production and in packaging. This enhances the quality (taste and shelf life) to differentiate their product as well as provide security to protect the consumer and the image of the company. A good example is a technique developed by NC State that subjects a fruit/vegetable puree to a quick/high energy microwave and then it is packed in a Milu'm food pouch. The product has exceptional taste and can last for up to one year on the shelf without refrigeration. St. Lucie County • Target Industry Study Other Background Information on the Food /Beverage Industry FOOD PROCESSING EMPLOYMENT BY STATE ),000+ 3,000 to 49,999 ),000 to 24,999 000 to 9,999 3,000 TOP TEN FOOD PRODUCTION STATES BEVERAGE PROCESSING EMPLOYMENT BY STATE Segment CA TX IL PA WI GA NC OH NY IA Animal/Pet Food X H G H G G G G G H Grain/Milling H G f' G G G G G 6 lrnr J f� Sugar/Confections f r H f` G G G G Fruits/Vegetables ,. 1` ' I i f G �T Dairy Meat/Seafood t J r Baked Goods ki,.'' �.1 G' Other Foods Beverages 25,000+ H 2,500 - 4,999 G j 1,000 - 2,499 35 )00+ JO to 10,000 0 to 4,999 )0 to 2,499 )00 St. Lucie County • Target Industry Study Food and Beverage Industry Cluster Artisan Food Cluster Cluster includes: agriculture, R&D activities, business startups, food processing, business services, packaging services, internet marketing, transportation/distribution and ag/food-related tourism. 1� Agricultural Products New Product/Process Development Center New Product, Process and Business Development (Supported by College/University R&D, Grants and Other Sources) Farmers Markets Internet Marketing • Web Site Design/Maintain • Customer Interface • Order Handling System Business Support Services • Legal • Accounting • Business Mentor!ng/Advice • Marketing, etc. • Packaging Materials • Packaging Production 36 St. Lucie County • Target Industry Study 37 Food and Beverage Industry Opportunities A summary of the food and beverage industry and the growth potential of individual segments is presented below. OVERVIEW OF FOOD SEGMENTS AND THEIR GROWTH PROJECTION Segment Growth Potential Comments on Growth Animal Feed/Pet Food Projections for the near term are growth of 3.5% per year vs. 5-6% that • Pet Food Low to Moderate has been the "normal" growth rate. Grain Milling/Cereal Low to Moderate Pressed oils and grains for cereal substitutes (breakfast bars and snack foods) have highest growth potential. Sugar/Confectionary Moderate America has a "sweet tooth" that won't disappear quickly. Fruits/Vegetables With the new processes and packaging to enhance taste and flavors • Fruits Moderate along with the understanding of their nutritional value, the demand for -Vegetables Moderate fruits and vegetables should improve radically over time. Dairy Products • Milk (as beverage) Decreasing • Demand for milk as a beverage could expand as "functional drink." -Cheese Moderate • Cheese continues to climb, particularly from pizza/Mexican food. -Yogurt High • Yogurt is climbing fast and has not hit a saturation point yet. Fresh Meat/Poultry/Seafood • Beef Decreasing • Fresh beef ("red meat") has been on a slight downward trend. • Pork Steady • Pork needs "rediscovery" to build demand (current uptick in TV ads). • Chicken Moderate to High • Chicken has steady growth with no saturation point in sight. • Fish/Salmon Moderate to High • Demand for salmon strong but tempered by price. Baked Goods Moderate Specialty breads (gluten free), unique crackers and cupcakes have a moderate growth potential. Sandwich shops (e.g., Panera Bread) are helping to introduce new breads. Snack Foods Moderate to High This market has expanded rapidly beyond the traditional chips, popcorn and pretzels to energy bars and other nutrition/performance based offerings. Prepared Foods Moderate to High This is the most dynamic segment in the industry with new concepts constantly coming on the market. There is both high growth and high volatility. New meals with meat (beef, pork, chicken and fish) or non - meat entrees that have great taste and favorable nutrition are gaining momentum. Beverages -Tea Moderate • Green and specialty teas are in demand. -Coffee Low to Moderate • Home brewed and take-out coffees have their niches. -Soft Drinks Decreasing • Pepsi NexP announced with 60% less sugar to countertrend. -Bottled Water Moderate Recent high growth but saturation point in sight. -FruitJuices • High cost... Welch's is promoting the health of grape juice. -Sports Drinks Low • Beginning to mature, need another breakthrough for high growth. -other Functional Drinks Moderate • High potential, heavy caffeine energy drinks getting push back. -Beer High • Overall consumption down but niche craft/micro brews expanding. -Wine Moderate • Local/regional wines are expanding. • Distilled Spirits Moderate • Not a growth segment; trying to expand into mixed drinks with Low lemonade and other flavors. St. Lucie County • Target Industry Study 38 Authentic (Organic) Foods The production of authentic food (grains, fruits, vegetables and meat) essentially without synthetic chemicals and other potentially adverse substances has become a significant global market niche. In the United States, the organic market has grown from $1 billion in 1990 to $26.7 billion in 2010that SALES CHANNELS FOR ORGANicFOODPRODucrs was 7.7% growth over 2009, USDA even in a recessionary ' period. This represents 4% of the overall food and beverage sales and 11% of the fruits and vegetable sales. Natural Regulation of Organic Food Production and Foods Handling Retailers The federal government established (39%) regulations (7 CFR-Agriculture, Part 205: National Organic Program) in 2000 for the organic food industry as a program that can be administered by states or other Internet, Export, Farmers' Markets, etc. t7Ort Land within states that is currently lW7777 committed to organic farming by acres is noted below. Virginia has over 15,000 acres committed to organic agriculture on 120 1___'= farms. It is evident that the Southeast has not aggressively embraced the concept while Southern New England, New Jersey, Delaware and Maryland just do not have the large quantities of available land that the larger states have. Local Authentic Food (see chart on next page) Mainstream Supermarkets, Club/Warehouse Stores and Mass Merchandisers (54%) Acreage in Organic Farming ® 500,000+ 250,000-499,999 IM 100,000—249,999 50,000-99,999 25,000-49,000 <25,000 There is an emerging market for authentic (local -raised food that has maximum taste, freshness and growth within harmful pesticides) fruit and vegetables. The variety of options continues to expand and include many of the crops noted in the chart on the next page. Organic foods are typically offered at Farmers Markets and in some local grocery stores. Global Organics is a major distributor of organic foods sourced from around the world and sold throughout the Southeast. The operation is located in Sarasota and owned by a local organic farmer. St. Lucie County • Target Industry Study 39 SEASON FOR CROPS GROWN IN FLORIDA Yellow highlight is for crops with 6+ months of growing season the Florida. Nutraceuticals/Functional Foods Nutraceuticals and functional foods have the reported ability to deliver health and medical benefits and contribute to the treatment or prevention disease. It follows a progression of understanding between nutrition and medicine over history where society learns what are "good" and "bad" foods for certain types of people in specific conditions. For example, the high calorie fat -based diet may have been fine for those with extreme physical jobs but doesn't work for those in an office sitting most of the day. The study of nutraceuticals is derived from understanding the effect of human health from foods with certain chemical and physical attributes. The impact on health from foods ranges from effective substitutions for adverse foods (high fat, salt, preservatives, etc.) to foods with a positive nutritive value, to foods that actually help to prevent and combat disease. St. Lucie County • Target Industry Study 40 Substitute for Foods With Foods With Positive Foods That Prevent Negative Health Affects Nutritive Value and/or Combat Disease f f� L9 im M M rg [a ra M M M, in im ra w fa rA ri w w, rm w m w Some of the health -related claims that are derived from specific foods and their impact on health are noted below: EXAMPLES OF FOODS WITH SIGNIFICANT HEALTH -RELATED NUTRIENTS (STUDIES ON ACTUAL IMPACT CONTINUES) Food Active Ingredient Health -Related Benefits Flax Seed Oil Omega-3 amino acids + lignin fibers Reduces estrogen -related cancers Tomatoes Lycopene (a primary carotenoid) Reduces cancer -related activity Garlic Produces sulfur -containing compounds Acts as chemopreventive for cancer, an antibiotic and reduces hyper tension Soy Not only high in protein but digestive amino acids Helps in treating cardiovascular disease (CVD), cancer, osteoporosis, and the alleviation of menopausal symptoms Fish (Salmon) Omega-3 amino acids Cancer and CVD Oats Soluble fiber b-glucan Reduces LDL cholesterol Canola Oil Lower triglycerides Lowers cholesterol The list is much longer and continues to expand as science and medicine collaborate on defining the effects from different foods on health. The long-term potential of this market is virtually unlimited and there are major efforts underway in Kannapolis, NC to bring together nine North Carolina research universities to further study the effects of nutraceuticals on human health. The nutraceutical/functional foods initiative will join in lock -step with the organic foods industry to provide complete lines of healthy and safe food with high nutritional value. The current U.S. nutraceuticals market is approaching $90 billion and as long as outcomes and claims can be proven a reality, the market will continue to expand. The market is on average in very early development and initial growth stages that will expand rapidly and trigger acquisitions and merger activity for the larger players to build their portfolio of related companies. There is a good opportunity for branding and building an industry around certain homegrown products supported by local university R&D. St. Lucie County • Target Industry Study 41 Product Derivatives From Citrus Peel (Frozen, dried, chopped, sliced ... many forms) • Patented process to derive pectin/pectocellulosic materials used for thickening agents • Bakery and jam flavorings • Rich source of flavonoids that have positive impacts on health: Strong anti -oxidants Anti-inflammatory agents Improve capillary permeability and help maintain normal blood pressure Anti -allergic agent Anti -microbial agent Some anti -cancer properties Helps protect against diabetes LOCATIONS IN FLORIDATHAT PROCESS CITRUS (MAP OF LOCATIONS ON NEXT PAGE) Company Location Products 1 Blue Lake Citrus Products, LLC Winter Haven Chilled Citrus Juices 2 Citrosuco North America, Inc. Lake Wales Frozen Concentrated Citrus Juices; Dried Citrus Pulp & Pellets; Citrus Oils & Essences 3 The Coca Cola Company Auburndale Juice and juice beverages 4 Florida's Natural Growers, A Lake Wales Frozen Concentrated Citrus Juices; Canned Single Strength Citrus Juices; Chilled Division of Citrus World, Inc. Citrus Juices; Diluted Fruit Juice Beverages; Citrus Beverage Bases; Dried Citrus Pellets; Citrus Molasses; Citrus Oils & Essences 5 Juice Bowl Lakeland Bulk Citrus Concentrates & Toll Processing of Fruit for Others: Hot Pack Single Serve Glass Bottles, PET Bottles & Aluminum Cans for Contract Manufacturing plus our Juice Bowl Brand. 6 Lambeth Groves Juice Company Vero Beach Fresh Squeezed Citrus Juices, Gourmet Pasteurized Citrus Juices, Juice Blends, Bar Mixes. 7 Louis Dreyfus Citrus, Inc. Winter Garden Frozen Concentrated Citrus Juices; Dried Citrus Pulp & Pellets; Citrus Oils & Essences. 8 Ocean Spray Cranberries, Inc. Vero Beach Grapefruit Juice Products. 9 Orchid Island Juice Company Fort Pierce Fresh Squeezed Florida Citrus Juices, Gourmet Pasteurized Florida Citrus Juices, Frozen Fresh Squeezed Florida Citrus Juices, Frozen Gourmet Pasteurized Florida Citrus Juices, Lemon and Lime Juice, Lemonades and Organic Orange Juice. 10 Peace River Citrus Products Vero Beach Frozen Concentrated Citrus Juices; Chilled Citrus Juices; Diluted Fruit Juice Beverages; Dried Citrus Pulp & Pellets; Citrus Molasses; Citrus Oils & Essences. 11 Silver Springs Citrus, Inc. Howley -in -the -Hills Private label packagers of ready to serve NFC (not from concentrate) orange and grapefruit juice; suppliers of bulk concentrate and NFC orange and grapefruit juice from Florida. 12 Southern Gardens Citrus Clewiston Frozen Concentrated Citrus Juices; Chilled Citrus Juices; Dried Citrus pulp & Processing Pellets; Citrus Oils & Essences 13 Tampa Juice Service, Inc. Tampa Orange Concentrate, Frozen Orange Pulp Cells, Citrus Oils and Essences 14 Tropicana (PEPSICO) Bradenton and Fort Juice Products. Pierce St. Lucie County • Target Industry Study Lya LOCATION OF MAJOR CITRUS PROCESSORS IN FLORIDA major locations for citrus processing in the state are in Polk County and on the Research Coast in Vero Beach and Fort Pierce. The main product is fruit juice and related beverages but they also market citrus oils and essence. Currently, the residual orange peels are dried, pelletized and made into cattle feed either internally (see yellow highlights on previous page) or by a third party. In order to remove the flavanoids, a portion of the peel would need to be extracted using a multi -step process that conditions the peel with either an enzyme of solvent and then pressed and concentrated. St. Lucie County • Target Industry Study Farm Raised Fish Due to the global demand for seafood of all types, about 50% of what is consumed is raised on some type of farm — whether in ponds on land or in holding pens suspended in the ocean. The most common varieties of seafood consumed in the U.S. are shrimp, canned tuna, salmon, tilapia and pollack. There is a lot of confusion and mixed messages about the quality of seafood whether it's caught in the wild or farmed. There is particular fear of fish raised in China and other foreign countries as it may be conducted in very unhealthy environments. bu 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 198 43 ANNUAL U.S. MEAT CONSUMPTION (POUNDS/CAPITA) 0 1985 1990 1995 2000 2005 2010 Beef Pork Chicken Turkey Fish/Shellfish The per capita consumption of seafood in the U.S. holds fairly steady at about 15 lbs. per year impacted by the relatively relatively high cost along with the confusing messages about quality. The Florida Atlantic University Harbor Branch Aquacuiture and Stock Enhancement program is engaging in substantial research on many aspects of farm -raised fish techniques and related issues. This operation could very well be the source of best practices to provide consistent high quality production of farm -raised fish. Florida Organic Aquaculture has established an operation in Fellsmere (Indian River County) to produce large shrimp, oysters and other products utilizing a closed loop system. Examples of California Food Companies Establishing East Coast Operations • Shamrock Farms plans to build a $50 million plant in Augusta County, VA that will process extended shelf -life milk, including Shamrock's branded, on -the -go Mmmmilk product and its Rockin' Refuel protein fortified recovery beverage. • California -based Valley Fine Foods, which makes gourmet pasta dishes (some gluten free and organic ingredients) is opening an East Coast manufacturing plant in Forest City, NC, committing to create 305 jobs within three years. St. Lucie County • Target Industry Study Education/Entertainment: These categories are together because the education field is very quickly going to embrace some of the technology platforms that have been predom- inantly used for entertainment and social media. The expansion of telecom bandwidth and access to low cost computers will accelerate this novel approach. Trends • Remote education enhanced by digital textbooks, on-line courses and lectures and the use of social media to interact with student/teacher. • The "Gamification" of education is where instruction is integrated into a fun/entertaining format. • The "flipped classroom" where students listen to a lecture out of class (on the internet) and come to class to discuss the material already presented. • "Learning Analysis" is a technique of tracking an individual's learning pace/process/effectiveness and customizing and enhancing the process in areas of need. This will lead to a more personalized approach to education that may rely more on computer -based learning than a classroom. • The use of virtual reality techniques will ultimately provide extraordinary "experiences" at much less cost of a field trip. The use of 3D printing just might be the "hook" to re-engage a generation back to making things and overcome the negative image of old school manufacturing. It is rapidly taking on an extensive following in education institutions around the world. Communications/Computing: Many of the opportunities noted in the Education/Entertainment topic above are made possible by a quantum improvement in broadband and computation speed backed up by substantial data centers. Trends Related to Data Centers �a�ePf Application htonlrorintt �u CollaEoralton [ j Flnarce Cdntert Cpmmuntatlon Platform ?:_.y. IdenUy �i� Oueua � Ob1crt stari qe (Wnflmc RilaL'bie (( Infrastructure Compute 4� Nc Mott; ,,�, Phones i4 otock 5totape � T ut¢ls Cloud Computing 44 The accumulation, storage and retrieval of information continues to expand at an exponential rate driving an increased demand for data centers. Industries that will have a definite need for substantial growth in data centers are finance and insurance, health care and retail. The demand for additional capacity is further enhanced by the trend of cloud computing— a technique of accessing information "anywhere" via the internet. St. Lucie County • Target Industry Study 45 There are different types of data center ownership and operations arrangements that support the needs of certain size customers with various requiments. • Dedicated data center at a company headquarters, back office or R&D center. • Dedicated/remote data center that has one user but is located away from other operations. This may be operated by a third party company. • Co-located/third-party operated data center. As the cost of operations and constant replacement of equipment escalates, companies are seeking creative alternatives to company ownership and operation of data centers. This is to the chagrin of the IT staff that wants to maintain total control of the systems because reliabiilty is a critical issue. Data centers are also classified by levels of reliability and availability (defined as "tiers") that determine facility design features and utility requirements. A summary of the four tier levels are outlined below. Tier Level Data Center Requirements 1 • Single non -redundant distribution path serving the IT equipment • Non -redundant capacity components • Basic site infrastructure with expected availability of 99.671% • Meets or exceeds all Tier 1 requirements • Redundant site infrastructure capacity components with expected availability of 99.741% 3 Meets or exceeds all Tier 1 and Tier 2 requirements • Multiple independent distribution paths serving the IT equipment • All IT equipment must be dual -powered and fully compatible with the topology of a site's architecture • Concurrently maintainable site infrastructure with expected availability of 99.982% 4 • Meets or exceeds all Tier 1, Tier 2 and Tier 3 requirements • All cooling equipment is independently dual -powered, including chillers and heating, ventilating and air-conditioning (HVAC) systems • Fault -tolerant site infrastructure with electrical power storage and distribution facilities with expected availability of 99.995% Operation of a data center exists between the tension of two key drives: efficiency (cost) and reliability from a perspective of 99.99+ % uptime and the swings in capacity (depending on the use and access). The operating challenges are different for a fairly predictable and controllable inhouse center vs. a Google center that gets hit with a web site that goes viral. Selecting a site for a data center requires an evaluation of specific criteria that maximize performance while minimize any risks. Key parameters include: • Low incidence of natural disasters from tornados, floods, earthquakes, hurricanes, etc. • Adequate capacity and high reliability and low cost of telecom and electric power sources. There is a new strategy to address electric power issues by installing a stand-alone power source that utilizes natural gas or other highly reliable energy source to generate electricity. Bloomenergy has a system that converts natural gas to an enriched (reformed) fuel by passing the gas and air (oxygen) through electrically charged plates (cathodes and anodes) that free up electrons that conduct electricity. The assumption is that the gas lines are more reliable than the electric power system, The system would then eliminate the traditional diesel -based backup system with all the expensive controls. St. Lucie County • Target Industry Study 46 Solid Oxide fuel Cell Technology by Bioomenergy • Located on a site that does not have a lot of exposure to traffic and the public. They do not want to be on an interstate with a logo on the building. • Have access to local and recruited IT, operations and maintenance talent to support the facility. The physical size of the facility will vary and the amount of buffer and expansion land that a prospective company will require will vary by application. The land requirements may range from 5 to 50 acres and typically is in location that has clean ambient air. INTERIOR OF A DATA CENTER WITH RACKS, SERVERS AND TELECOM LARGE SCALE TRADITIONAL DATA CENTER FACILITY Defense/Security: Protection of life and property by governments, organizations, companies and individuals in a hostile global environment. Trends • Multiple approaches to terrorism: electromagnetic pulse (EMP) incidents, small bombs with nuclear material and cyber security issues driving more sophisticated software, equipment and sensor -based systems to detect and defend against a variety of sources and situations. St. Lucie County • Target Industry Study Cfl • The use of drones will continue to P expand for defense, security and a myriad of other applications. This drives`` q 9m x the use of specialty materials (light- Pnd.+ia Rr�onnr tlrt Jere Ua Y ry �1 :? r�• Pxv eml5ua Ir ^'9 dr JJoCrr + RWevm9<ua weight/high strength composites), y. Pyi nm D.tecua electronics for detection, remote vision,�,P delivery systems and other functionality. a • Insecurity of foreign markets and Llm n+'E� J' T d.�zxh material sources impact the strategies lP nuls.nw�rem � tt��ft�m_ of companies and governments., rrrII�• Security systems will be ramped up at i�� fr: iRRliror, E4� :P.rW 3oeA bly tie FiN all levels and drive new markets for= Mh sensors, recognition systems (visual (etf T patterns), processors and actuators IdrCxlF Feeale Pr. ctirr F . F^lm Cr9 - along with support software. icr, Rr; rsu �c4r:r.rr c�.P�, Pi..oun.,> r Energy Utilization: The conversion of different energy sources (sun, wind, moving water, natural gas, nuclear, petroleum, etc.) to useful applications for heat, electricity and mechanical activities. • We have entered an age of highly diverse energy sources that brings multiple options at different costs. • Middle East energy sources are quickly becoming unreliable along with Venezuela while new energy sources are being found in multiple locations throughout North America. • The cost of solar photovoltaic is beginning to reach price levels that make it economical for certain applications; particularly for off -grid residential. • Wind power has been strongly promoted but it needs backup power to be effective which means it requires a rapidly deployed redundancy like gas turbine technology. • Natural gas found in the Marcellus and Bakken plays and more recently found in Alberta's Duvernay Shale deposits represent substantial sources for short and medium term reserves. • The U.S. government needs a balanced approach to energy resources for both transportation and power generation that incorporate fossil fuels and nuclear with renewables on a short, medium and long term basis. They also need to upgrade the grid system to accommodate the pending growth of electric vehicles. St. Lucie County • Target Industry Study 48 11 SECTION 3 — INPUT FROM STATE, REGIONAL AND LOCAL STAKEHOLDERS 3.1 Comparison of State of Florida and St. Lucie County Target Industries and Industry Presence The State of Florida's "target industries" are more a list of existing industry strengths that they want to expand and cover a very broad industry scope. The general list is compared to the St. Lucie County target industry list along with Brevard and Palm Beach Counties. This provides insights as to what is being focused on along the mid and south east coast of Florida. FLORIDA TARGET INDUSTRY ST. LUCIE COUNTY BREVARD COUNTY PALM BEACH COUNTY Aviation and Aerospace Parts manufacturing for Aerospace Aviation, Aerospace and aircraft Engineering Life Sciences R&D for human health, Life Sciences agriculture and marine life Manufacturing • Parts for aircraft and boats Electronics Aerospace • Boat manufacturing Aerospace • Electronic components and instrumentation for multiple applications • Food processing and citrus peel derivatives Defense/Homeland Advanced Security Security Information Technology • Software supporting R&D Communications IT/Telecommunications • Software supporting educational modules • Data Centers Financial and Business and Financial Professional Services Services Logistics and Distribution Warehouse/distribution International Commerce Clean Tech Installation of solar panels and Green Energy fabrication of special brackets Headquarters Corporate Headquarters • Education Services Emerging Technologies • Agribusiness • Scientific R&D Equestrian • Agriculture Creative Industries • Solar Panel Installation Health Care • Marine Industries The comparison emphasizes the desire to support aviation and aerospace as well as life sciences. A point of interest is the lack of or limited focus on manufacturing in Palm Beach and Brevard Counties. 3.2 Input From Local Stakeholders Based on interviews and discussions with local stakeholders, the following input on Target Industries is provided: • Although the R&D activities are certainly an asset, it is important to focus on job opportunities that would employ more of the population with modest levels of education (high school and 2-year college). • Leverage, support and expand the types of industries that already exist in the area (see below). St. Lucie County • Target Industry Study EMPLOYMENT BY ECONOMIC SEGMENT FOR THE THREE -COUNTY AREA Health Care/Social Assist. Retail Trade Hospitality Admin./Waste Services Construction Prof./Technical Services Manufacturing Other services Wholesale Trade Arts/Entertainment/Rec. Finance and Insurance Real Estate -Related Information Transp./Warehousing Educational services 0 5000 10000 15000 20000 25000 30000 Okeechobee ® Indian River County IM St. Lucie County Martin County Major Manufacturing Segments 49 Manufacturers in the area produce a diverse array of products, ranging from complete aircraft and aerospace components to specialty lift trucks, sport fishing yachts, small shallow draft fishing boats, citrus juices, flour for the baking industry, fabricated parts from multiple materials (metals, polymers, fiberglass, carbon fiber, and others), electronic components and other products. These industries require multiple skills including: • Product fabrication from metals, plastics, wood, composites (carbon fiber, fiberglass, KevlarR, etc.) and other materials. • Machine tool operation (CNC, etc.) • Complex assembly • Food processing technologies (handling food grade products) • Processes requiring sustained high quality of the finished product (food and aerospace products) St. Lucie County • Target Industry Study 50 11 SECTION 4 - RESOURCE REQUIREMENTS FOR EACH TARGET INDUSTRY 4.1 Evaluation of Resource Needs Insights into resource requirements for specific industries/opportunities are provided below to serve as a planning tool for developing the required resources to attract business and be competitive. LOCATION NEEDS (WITHIN A COMMUNITY) TARGET INDUSTRY LOCATION REQUIREMENTS MORE DETAILED COMMENTS ON RESOURCE NEEDS Food/Beverage Reasonable access to transportation These operations are typically located in an industrial park Processing (truck and sometimes rail). (with appropriate neighbors) or on a stand-alone site Away from sources of potential air depending on the size. contamination. Other Manufacturing Within 2-3 miles of interstate and Designated industrial parks buffered from residential, retail low traffic area (away from schools, and schools, with roads, utilities and defined parcels are shopping and other higher traffic or ideal for this type of operation. sensitive areas). Technical and Attractive/unique areas with access Being located with access to interstates or primary highways Education Services to parking, restaurants and other for commuters and within a reasonable proximity to amenities. restaurants and retail are favorable amenities. Warehousing Optimum is within 1-2 miles of The closer to the interstate with a right-hand turn onto the interstate and low traffic area. feeder highway is ideal. Data Center Away from public view for security reasons. REAL ESTATE RESOURCE NEEDS TARGET INDUSTRY REAL ESTATE REQUIREMENTS MORE DETAILED COMMENTS ON RESOURCE NEEDS Food/Beverage Existing food grade building or Food processing (smaller scale) may be accomplished in a Processing shovel ready site (5 to 25+ acres standard flex building (adding some storage tanks) but will depending on size of operation). typically customize a larger operation. Other Manufacturing Small/mid-size firms lease building Most companies seeking a small to medium -size building that is expandable (25,000 to (<100,000 sq. ft.) will opt to lease on existing building or 100,000 sq. ft.). engage in a build -to -suit. Larger firms and those needing specialized space want shovel ready site (5 to 25 acres). Technical and Class A office or unique office Space requirements will vary from 5,000 sq. ft. on up to a Education Services environment (typically lease basis). whole floor to an entire building. Having a variety of available space and types of environments is an advantage. Some smaller software firms seek "loft" space in an older commercial or residential building that has been repurposed and is in a work/live urban (downtown) area. Warehousing Available building (100,000+ sq. ft. Land prices are going to need to be low to attract the that is expandable) or warehouse but also be near an interstate. There can be Shovel ready site (25 to 100 acres). intense pressure to market this type of land for retail and set the price very high. Data Center Specialized building constructed on The buildings are customized for the telecom and power shovel ready site. cables as well as the computer operations room. There is typically very limited identification on the building to draw attention to it — this is for security reasons. St. Lucie County • Target Industry Study 51 LABOR SKILL NEEDS TARGET INDUSTRY LABOR SKILLS REQUIREMENTS MORE DETAILED COMMENTS ON RESOURCE NEEDS Food/Beverage Equipment operators and Workers need both the technical skills are well as the Processing technicians that can work in a food mindset for working in a high quality/zero contamination grade environment. environment. This culture exists in the region. Other Manufacturing Equipment operators and Equipment operations must be capable of operation PLC, technicians with technical ability, CNC and other computer -based controls. lean manufacturing skills, good Maintenance staff trained in "Mechatronics" (integrated communication skills, and can work training with pneumatics, mechanics, electronics, in team environment. computers, hydraulics, etc.) is critical to success. Production skills in plastics molding, composites, metal fabrication, electronic components as well as assembly and quality assurance are also critical to success. Technical and Software programmers and Programmers and software engineers will need to be skilled Education Services engineers in specific software and operating system platforms based on company/product requirements. Warehousing Automation operators and The application of automation will vary based on the type of technicians. product and size of operation. Data Center Computer operators, software Data center staff requires relatively few per overall size of programmers and software/ building but the skill level is high and specific. hardware engineers. UTILITY RESOURCE NEEDS TARGET INDUSTRY UTILITIES REQUIREMENTS MORE DETAILED COMMENTS ON RESOURCE NEEDS Food/Beverage • Reliable/low cost electric power. Water and sewer to support the process are critical. Water Processing • Some processes require natural may be used in the product as well as for cleaning equipment gas. each shift. • High capacity water and sewer. Natural gas is utilized to process heating when needed and when electric power costs are relatively high. Other Manufacturing Industrial grade. Machinery is typically operated at 220/440 volts but enter the building at a much higher voltage. Consideration for power factor is important if machines are starting and stopping at one time and throughout the day. Water and sewer use will vary but typically not at high levels compared with food processing. Technical and Office grade with access to If the software developers are engaged in substantial Education Services significant computing power. animation and simulation or high speed data processing, there will be a need for higher broadband capacity. Warehousing Industrial grade. Power consumption will vary by level of automation. Telecom broadband may be needed for interface with customers and other company operating sites. Water and sewer are typically very limited. Data Center High reliability electric power and High power and telecom use is typical and the need for telecom at low cost. Some systems multiple sources (feeds) and backup power are frequently need water for cooling. required. St. Lucie County • Target Industry Study v LOCATED WITHIN FLORIDA`S RESEARCH COAST ECONOMIC DEVELOPMENT RESOURCE PROFILE Table of Contents Description Page Overview of St. Lucie County 1 A Perspective on the Evolving Area Economy 2 Area Economy and Major Employers by Industry 4 Area Demographics and Workforce 8 Major Colleges and Universities and Technical Training 12 Regional R&D Activities 15 Transportation Access 17 Business Services/Amenities 20 Real Estate Options and Utilities 22 State and Local Taxes and Incentives 24 For additional details, contact Economic Development Council of St. Lucie County Peter J. Tesch, President Phone: 772.336.6250 ECONOMIC COUNCIL OFOEVEC OPMNNT E-mail: Ptesch(a-)YourEDC.com This profile was prepared by Moran, Stahl & Boyer, a nationally known site selection and economic development consultant, as an objective overview of area resources available for businesses seeking to locate to the area. Overview of St. Lucie County on the Research Coast St. Lucie County is located in southeastern Florida within the four -county Research Coast — known for its innovation within life sciences, agriculture, marine sciences, oceanography and aerospace. The County is located about 120 miles south of Orlando and 60 miles north of West Palm Beach. The population of the region is over 600,000 with a 30% growth rate from 2000 to 2010. Primary cities and population centers within the region include the cities of Vero Beach, Fort Pierce, Port St. Lucie, Okeechobee and Stuart. Within the City of Port St. Lucie, the emerging community of Tradition is in the process of building out an 8,200 acre mixed use planned development located west of 1-95. Strategic resources in the County/region that N� r° �" 1 .��j1'6��a7 sir' FLORIDA'S RESEARCH COAST may be of Interest to P ft cksonville prospective companies, f �� INDiAN RIVEi;; include: • Manufacturing: strong presence of food processing (primarily citrus) as well as manufacturing O�EEHoE> y of aircraft/components and boats. High quality assurance is f f required in food handling, multiple composite manufacturing and plastics modeling. Melbourne MA)�3iiu Ta • World Class R&D: renowned private, government and St.Petersb°` _,Vero Beach ort Pierce university research related to life sciences, agriculture, marine ` 8" ort St. Lucie Stuart science, oceanography and aerospace. • Transportation Access: direct access to 1-95 and Florida's Turnpike, West Palm Beach rail access, local executive airport and direct global air access through ort Lauderdale multiple international airports. iami • Education and Training: area is supported by Indian River State College that is very business -focused with five locations for easy student access providing selected four-year programs and a variety of two-year and e certificate programs. • Workforce: St. Lucie County has workers with highly specialized skills especially in high-tech manufacturing and the life sciences. A Perspective on the Evolving Area Economy The Atlantic Coast of Florida began to thrive in the 1890's when Standard Oil magnate Henry M. began developing Florida and building the Florida East Coast Railroad. As a result of building the railroad, communities were established along the Elortda East Coast itaiiroad, route and agricultures products had improved , access to more distant markets. Extensive pineapple fields thrived near St. Lucie County until they were threatened by bouts of winter freezes and competition from Cuba. Farmers then turned to citrus and cattle that proved to be more resilient to the swings in winter temperatures of the late 19th and early 20th centuries. In the 1920's the national highway system was established along 1 with the famous U.S. 1 connecting northern Maine to Key West at the southern tip of Florida transforming from a local highway to a major corridor. The General Development Corporation began acquiring and developing large tracts of prime Florida land near waterfront in the 1950's. Lots were marketed for future retirement homes at very affordable prices. In St. Lucie County, they developed a country club community and built homes for future retirees and managed them as seasonal rental properties for the original "snow birds." The rental properties provided an income stream during the intervening years before retirement — a radical idea for the time. Flagler and the Florida East Coast Railroad Early pineapple field and packing house with rail Bud Adams made a strategic contribution to the Florida cattle industry through cross -breeding to produce a cow that could thrive in the Florida climate. General Development Corporation ea4evAod,, Two bedrooms, living roam, dining room, kitchen and bath. 2 The 1950's also ushered in the age of the super highway that included the Federal Interstate and Defense Highway System and other limited access highways. On the east coast of Florida, the Sunshine State Park -way (later know as Florida's Turpike) and 1-95 began construction, both passing through St. Lucie County with multiple interchanges within the county. Manufacturing in the area began to evolve in the 1950's with aircraft companies and boat builders seeking warming Paper© climates. Grumman Aircraft was recruited to Witham Field in Stuart and Piper Aircraft to the Vero Beach Municipal Airport. American Custom Yachts established a large boatyard in Stuart. The citrus juice processing industry came in the 1970's with Tropicana constructing a major east coast Florida orange juice facility in Fort Pierce and Ocean Spray forming a co-op for growing and processing grapefruitjuice in Vero Beach. SO Al - Over the past ten years, TRADITION, a major mixed -use development encompassing over 8,200 acres, has been under construction on the west side of the City of Port St. Lucie. It already has multiple neighborhoods, retail centers with big box and boutique shops, its own hospital, multiple schools and hosts The Tradition Center for Innovation, which includes Torrey Pines Institute for Molecular Studies and the Vaccine and Gene Therapy Institute -Florida. 3 Area Economy, Major Sectors and Major Employers by Industry Area Economy Overview The area economy has evolved into a blend of diverse sectors that include: • Manufacturing (boats, aviation/aerospace, food processing, fabricated metals, machinery, specialized motor vehicles, computers/electronics and plastics) • Agriculture (primarily cattle and citrus) • Tourism (includes destination beach and golf resorts and restaurants) • R&D (established and emerging activity in life science, marine, oceanography, and agriculture) • Professional and technical services • Construction/Health Care/Retail (supported by an expanding population of those seeking to retire as well as work/live in a favorable climate that is reasonably affordable) Major Manufacturing Sectors and Employers Manufacturers in the area produce a diverse array of products, ranging from complete aircraft and aerospace components to specialty lift truck, sport fishing yachts, small shallow draft fishing boats, citrus juices, flour for the baking industry, fabricated parts from multiple materials (metals, polymers, fiberglass, carbon fiber, and others), electronic components and other products. These industries require multiple skills including: • Product fabrication from metals, plastics, wood, carbon fiber, fiberglass and other materials. • Machine tool operation (CNC, etc.) • Complex assembly • Food processing technologies (handling food grade products) • Processes requiring sustained high quality of the finished product (food and aerospace products) Employment within the primary manufacturing sectors along with major employers is listed below. 4 MAJOR MANUFACTURING SECTORS AND EMPLOYERS Manufacturing Sector Employment* Major Employers (Scope of Business) City Transportation Equipment 2,260 Motor Vehicles • Stamm Manufacturing (high lift trucks) Fort Pierce • Phoenix Metal Products (platform lift trucks) Fort Pierce Aerospace • Triumph Aerostructures-Vought (aircraft component parts) Stuart • Piper Aircraft, Inc. (general aviation aircraft) Vero Beach Boats • American Custom Yachts (sport fishing yachts) Stuart • S2 Yachts (sport fishing yachts) Fort Pierce • Maverick Boat Co. (shallow draft fishing boats) Fort Pierce • Dragonfly Boats (yacht tenders, skiffs, paddle boats) Vero Beach Food Manufacturing 886 Tropicana (orange juice operations) Fort Pierce • Indian River Citrus League (15+ companies that pack and Vero Beach distribute grapefruits and related products) • Ocean Spray Cooperative (grapefruit operations) Indian River • Bay State Milling Co. (flour milling and distribution) Indiantown • McArthur Farms (milk manufacturing) Okeechobee • Lykes Ranch (cattle farming) Okeechobee Computers/Electronics 573 EMC Technology & Florida RF Labs (radio frequency and micro- Stuart wave resistive components) • Semi -Conductor Technology Inc. (high voltage N-Channel mosfet Stuart and high voltage NPN/PNP transistors) • Advanced Systems Research Inc. (cryogenic components for Palm City R&D) • Bee Electronics (nylon, leather, etc. cases for electronic Fort Pierce equipment) Fabricated Metal Products 595 Advanced Machine & Tool (contract parts manufacturing) Fort Pierce • CL Technologies (contract parts manufacturing) Port St. Lucie • Paradigm Precision (gas turbine parts for aerospace, marine and Stuart power generation applications) • MA Ford Manufacturing (machine tool cutting tools) Vero Beach • Briggs & Stratton (parts for small engines) Fort Pierce Machinery 405 Profold (Mailing, Folding and Card Finishing Equipment) Sebastian • Parker -Hannifin (industrial hose) Vero Beach • Hi -Tide Boat Lifts (boat lifts) Fort Pierce • Booth Manufacturing (pressure sensitive labeling machinery) Fort Pierce Nonmetallic Mineral 524 Florida Custom Surfaces (granite, marble and quartz surfaces) Palm City Products CEMEX (cement/concrete-related products) Fort Pierce • Airlite Processing Corporation (perlite) Vero Beach Printing -Related 350 Southeastern Printing Company (large commercial printer) Stuart • Stuart Web (newspaper and tabloid printer) Stuart • Kinane Printing (commercial printer) Stuart Plastics/Rubber Products 330 East Coast Plastics (contract plastic molder) Port St. Lucie • CAM Components Co. (plastic sign fabricator) Stuart • Stuart Plastics (plastic sign fabricator) Stuart • T5 Product Development (countertops, cabinets and surfaces) Stuart • Atlantic Precision (contract injection molder) Port St. Lucie • Mueller Plastics (plastic fittings and connectors) Fort Pierce *Employment within Indian River, St. Lucie, Okeechobee and Martin Counties Other Major Sectors and Employers Sector Employment* Major Employers (Scope of Business) City Wholesale, Distribution 7,280 • Wal-Mart Distribution Center (supporting regional Fort Pierce and Logistics Wal-Mart Stores) • CVS Caremark Distribution Center (supporting Vero Beach regional CVS Stores) • Southern Distribution Services (citrus and Stuart gourmet food distribution) • Liberator Medical Holdings (medical supplies Stuart distribution) • Southern Eagle Distribution (regional beer Fort Pierce distribution) • Excel Global Logistics (coordinates freight Palm City transportation) • Walpole Inc. Okeechobee • Cold Air Distributor (automotive parts) Fort Pierce • Remetronix (install, repair and inventory parts for Port St. Lucie medical and other equipment) • Liberty Medical Supply (medical supplies) Port St. Lucie Health Care (Hospitals) 7,730 • Martin Health System Stuart and Port St. Lucie • Lawnwood Regional Medical Center and Heart Institute Fort Pierce • St. Lucie Medical Center Port St. Lucie • Sebastian River Medical Center Sebastian • Indian River Medical Center Vero Beach • Raulerson Hospital Okeechobee • HealthSouth of Treasure Coast Vero Beach Professional/Technical 7,380 • AECOM (consulting engineers) Fort Pierce Services • Kimley-Horn and Associates (consulting engineers) Port St. Lucie • Valley Crest Landscape Development (landscape Fort Pierce planning) • Gunster (legal services) Stuart • MFMI (small business consulting) Stuart • Ecosphere Technologies (water Stuart engineering/environmental services) • Optima Health Solutions (IT solutions) Palm City • Culpepper and Terpening (consulting engineers) Fort Pierce • Underwater Engineering Services (marine Fort Pierce consulting engineers) • G4S (security services and technology integration) Okeechobee Construction 10,260 • Drawdy Brothers Construction (concrete shell Fort Pierce building construction) • Sunshine Land Design (landscapers and site Stuart construction) • Gerelco Electrical Contractors (commercial Port St. Lucie contracting) • Signal Group (specialty electrical contracting) Port St. Lucie • Complete Electric (electrical contracting) Vero Beach • Stryker Electrical Contracting (residential and Palm City commercial contracting) • Entegra Roof Tile (concrete roof tile Okeechobee manufacturing) • Community Asphalt Corporation (paving Vero Beach contractor) • Croom Construction (estate home construction) Vero Beach • Proctor Construction (commercial construction) Fort Pierce • ACI-Century (roofing contractor) Stuart • Royal Concrete Concepts (building components) Okeechobee Education and Training 1,665 • Indian River State College (two and four-year Throughout the region college, not included in employment number) • European Flight Training (aviation academy) Fort Pierce • Flight Safety International (aviation training Vero Beach materials) • Helping People Succeed (prepare training Stuart programs) Admin Support/Call 9,998 • STS AeroStaff (employment agency) Jensen Beach Centers • QVC (call center) Port St. Lucie • Aegis Communication Group (business service Port St. Lucie provider) • Convey Health Solutions (medical -related Fort Pierce customer service support) • Medical Data Systems (medical -related customer Vero Beach service support) • Maximus (call center) Fort Pierce Insurance Carriers 1,330 • Great Florida Insurance Port St. Lucie, Ft. Pierce, Vero Beach and Stuart Retail 28,077 Major retailers include: Wal-Mart/Sam's Club, Publix Located throughout Super Markets, Winn Dixie, JC Penny, Macy's, the region. Dillard's, Bass Pro Shop and Target. *Employment within Indian River, St. Lucie, Okeechobee and Martin Counties Source: U.S. Department of Labor (2013) Area Demographics and Workforce General Demographics The population of St. Lucie County is nearly 285,000 and twice that in the four -county region Research Coast. As in many Florida communities, the high presence of retirees reduces the workforce participation rate and median age, as compared to U.S. average. Population growth rates continue to be strong in the county and region with an influx of both retirees and those seeking employment in an attractive and affordable destination. DEMOGRAPHICS OF ST. LUCIE vs. REGION AND U.S. POPULATION Description of Parameters St. Lucie Co. Research Coast* Florida Average U.S. Average Current Population (2010 census) 277,789 612,630 - - Population Growth (2000 to 2010) 44% 30% 18% 9.7% Size of Workforce 223,619 494,855 - - Participation Rate for Population > age 16 58% 56% 61% 64% Age Cohorts: • 20-34 years 16.1% 15% 18.7% 20.3% • 35-54 years 26.6% 26% 27.6% 27.9% • 55-64 years 12.6% 13% 12.5% 11.8% Median Age 42.4 years 45.5 years 40.7 years 37.3 years Education Attainment for 25+ Years Old: • High School Only 35.4% 30.9% 30.1% 29.0% • Two -Year and Some College 29.9% 31.0% 29.5% 28.1% • Four -Year and Above College 17.9% 22.9% 26% 27.9% Median Household Income $43,923 $45,227 $47,827 $51,900 *Region - Includes Indian River, St. Lucie, Okeechobee and Martin Counties. Source: 2010 Census and 2007-2011 ACS 5-Year Estimate POPULATION GROWTH FOR ST. LUCIE COUNTY: 1950 - 2010 300,000 --- 120 275,000 110 250,000 — 100 225,000 _- 90 200,000 80 v o 0 175,000 70 L Q 150,000 60 0 0 125,000 50 100,000 I 40 v 75,000 30 d 50,000 20 25,000 f 's 10 0 I:r' 10 950 1960 1970 1980 1990 2000 20 - Population Kl Growth Rate Source: U.S. Census Bureau 0 Population Density APopulation growth patterns for east coast Florida have traditionally been greater along the coast (with access to water being the attraction) causing US Highway 1 to be the historic commercial corridor. To the west, land has been predominantly utilized for agriculture with a focus on citrus groves and cattle ranches. Over the past 20 years, growth has expanded out to Florida's Turnpike and the 1-95 corridor. A number of industrial and business parks were built early on near 1-95 due to the initial lower cost of land and access to the interstate for transportation. Source; U.S. Census (2010) 9 Commutation Patterns for County Residents and Employees Over 37,000 residents of St. Lucie County live and work in the county while over 41,000 residents leave the county to work primarily in Martin, Palm Beach and Indian River Counties. The large outflow of commuters is related to two factors: (1) There aren't enough local jobs to meet the skills of the residents and (2) families and individuals have relocated to St. Lucie County because of the lower cost of quality housing and they commute back to counties further south for employment. This reflects the potential opportunity that employers have to attract local talent and offer a job with less commute time. I LOCATIONS WHERE ST. LUCIE COUNTY, RESIDENTS; ARE EMPLOYED I U ® St. ;Lucie County (41.1%) - ra Martin county (16%) =i Indian River County (5.4%) O Palm Beach County (12.8%) ® Broward county (4.7%) ® Miami -Dade County (3.7%) 0 Orange County (2.7%) COUNTY OF RESIDENCE FOR EMPLOYEES WORKING IN ST. LUCIE COUNTY ® St. Lucie County (58.4%) * Martin County (7.5%) oiIndian River County %) ®Palm Beach County (5.35.3%) ® Broward County (2.9%) ® Miami -Dade County (2.6%) Source: Florida Department of Economic Opportunity Comparison of Unemployment Rates The unemployment rate for St. Lucie County tends to be more volatile (lower than national average in a favorable economy and higher than national average in a soft economy) due to the strong tourism, construction and real estate -related sectors. St. Lucie County is seeking to further stabilize its economy through more diversification. Note: Grey bars are periods of economic recession. Source: U.S. Department of Labor AVERAGE ANNUAL UNEMPLOYMENT RATES FOR THE U.S., FLORIDA AND ST. LUCIE COUNTY: 2000-2012 14am 13 z. 12 11 10 9 s 7T 6 4 3 2 1 0 —� 12 )00 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010 2011 20 U.S. Avg. Florida —St. Lucie Co. m Labor Cost Comparison The cost of labor for jobs within selected sectors is listed below and compared with national averages. Overall, the cost of labor is competitive with national levels. COMPARISON OF LABOR COST TO NATIONAL AVERAGE FOR SELECTED JOBS AND INDUSTRY SECTORS Job Description Within the MSA* U.S. Average Wage MSA as % of U.S. Average Quantity Average Wage Manufacturing Front -Line Supervision 340 $56,420 $56,890 99% Industrial Engineer 130 $64,260 $79,840 80% Mechanical Engineer 50 $64,600 $83,550 77% Team Assembler 800 $32,880 $29,740 111% Machinists 100 $36,710 $40,520 91% Welders, Cutters, Solderers 210 $35,080 $37,920 93% Computer Contr. Mach. Tool Oper. NR $34,760 $36,520 95% Headquarters/Shared Services General & Operations Mgrs. 1,130 $103,750 $114,490 91% Marketing Managers 30 $119,470 $126,190 95% Administrative Services Mgrs. 140 $98,470 $86,720 114% Executive Sec. and Admin. Assist. 700 $42,240 $48,120 88% Purchasing Agents 140 $48,880 $61,280 80% Accountant 960 $59,290 $70,130 85% Customer Service Representative 2,540 $27,590 $32,780 84% Heaith`care Physicians/Surgeons, All Other 370 $240,540 $184,650 130% Physicians Assistants 40 $88,250 $89,470 99% Registered Nurses 2,450 $61,090 $69,110 88% Lab Technologists NR $55,220 $58,120 95% Sonogram Technician 40 $55,320 $65,800 84% IT Operations Computer & Info. Systems Mgr. 40 124,070 $125,660 99% Computer Programmer 70 $62,960 $76,010 83% Software Developer 70 $60,210 $92,080 65% Network/Computer Sys. Admin. 140 $83,320 $74,270 112% *MSA-St. Lucie and Martin County Source: US Bureau of Labor Statistics 11 rF� WIN Major Colleges and Universities There are six major educational institutions with over 150,000 students that are accessible to the region and engage in a wide variety of academic programs. w.i University of Central Florida CSC INDIAN RIVER STATE COLLWL Research i Coast FEU FLORIDA ATLANTIC UNIVERSITY _ WW WO FLORIDA INTERNATIONAL. UNIVERSITY UNIVERSITY OF TA I AMI Indian River State College (www.irsc.edu) is located on five campuses throughout the region and offers 150 programs leading to Bachelor's Degrees, Associate Degrees, Technical Certificates and Applied Technology Diplomas. The institution has earned recognition for excellence in education both statewide and nationally and promotes initiatives such as STEM -related education, entrepreneurship, sustainable energy and building construction technologies. Florida State University College of Medicine, located on IRSC's main campus in Fort Pierce, provides third- and fourth- year clinical training through affiliations with local health institutes. Total Enrollment: 17,800 Program/Major AS BS Agriculture 18 Business/Management/Marketing 94 204 IT -Related 38 Education 46 Engineering 89 Registered Nurse 291 41 Liberal Arts and Sciences 1,953 12 The University of Central Florida (UCF) in Orlando has over 59,000 students — the second largest university enrollment in North America. Each year UCF graduates over 1,000 engineers in multiple disciplines, over 3,000 business - related majors, and over 600 biology/biomedical majors. The school has strong ties to the aerospace industry with research in areas such as simulation and training, photonics, lasers and optics, materials and nanotechnology, and biomedical sciences. The Florida Institute of Technology in nearby Melbourne has a primary focus on engineering and selected sciences and supports research in both ocean and aerospace engineering. Florida Atlantic University has 30,000 students with its main campus in Boca Raton. It operates the renowned Harbor Branch Oceanographic Institution in St. Lucie County. The university is engaged in substantial research related to the marine environment, ocean engineering and the resources and benefits that can be derived from the ocean. The University of Miami located in Coral Gables with over 15,000 students has a strong focus on research. U.S. News and World Report have ranked the undergraduate program and Leonard M. Miller School of Medicine in the top 50. The $350 million research and development budget supports many different areas such as marine and atmospheric sciences as well as the stem cell institute. The Florida International University is committed to entrepreneurship, innovation and creativity. The public research university prepares their students for a global career. The research facilities available span to all areas of study such as advanced material engineering, geographic information systems and ecotoxicology. Masters and doctoral programs are available in many different areas allowing for advanced education. St. Lucie County School District Technical Training The St. Lucie County School Board (www.stlucie.1c12.fl.us) offers a wide range of technical education courses to prepare their students for future careers. Some of the programs offered are listed below. Business and Marketing: Information Technology/ Digital Media: • Finance and accounting • 3-D visualization and animation • Entrepreneurship • Communication technology • Administrative assistant • Digital publishing and design • International business • Web design • Travel and tourism • Oracle database/Java programming Engineering: Health and Environmental Science: • Automotive technology • Biotechnology • Carpentry • Allied health assisting • Manufacturing • Marine and oceanographic academy • Aeronautical/ Aviation • Drafting 13 Profiles for Major Universities and Technical Institutes in the General Vicinity of the Research Coast PROFILE OF COLLEGES AND UNIVERSITIES IN THE GENERAL VICINITY OF THE RESEARCH COAST College/University > Central Florida University Florida Institute of Technology Florida Atlantic University University of Miami Florida International University Location > Orlando Melbourne Boca Raton Coral Gables Miami Student Enrollment > 59,600 5,400 30,000 16,100 46,100 R&D Budget > $121 million $15 million $65 million $345 million $102 million Annual Graduates by Program/Major Program/Major BS I MS PhD BS I MS PhD BS MS PhD BS MS PhD BS I MS I PhD Business Accounting 330 70 5 3751 1571 86 37 221 111 Actuarial Science 6 Business Administration 664 266 10 27 165 263 234 11 63 272 3631 7101 14 Finance 442 145 91 4111 81 Mgmt. Info. Systems (MIS) 58d 5 Marketing 413 148 d 92 173 d Architecture/Engineering/Computer Aerospace Engineering 64d 11 60 13 1 14 Architecture 28 92 12 13 1 44 48 Biomedical Engineering 7 26 13 4 31 10 3 Chemical Engineering 12 10 2 Civil Engineering 133 42 9 28 10 2 51 13d 51 22 9 85 30 7 Computer Eng'g (General) 57 24 5 16 1 21 9 d 21 11 50 4 Computer Eng'g (Software) 11 12 Computer/IT 204 65d 16 12 63 66 32d 2 20 2 1 1 194 23 5 Elec./Electronics Engineering 10 50 12 44 41 2 27 8d 2 21 1 7 4 93 1 21 10 Environmental/Health 39 15 1 3 9 12 Industrial Engineering 49 96d 6 1 1 29 16 81 Laser/Optical Engineering 23 11 Materials Engineering 12d 4 4 Mechanical Engineering 196 561 5 40 14 2 26 8 2 34 4 3 53 12 2 Engineering Management 16 6 1 Ocean Engineering 21 3 1 22 17d 3 Operations Research 27 4 Systems Engineering 25 2 Medicine/Health Care Nursing (RN) 538 171 246d 1171 2461 185 5 251 138 Physical Therapy 34 51 Clinical Lab/Medical Tech 24 Physical Therapy Tech 51 45 Radiation Therapist Sciences/Math. Biology/Biomedical 577 34 11 62 32 6 318 41 9 172 1 6 350 3 9 Chemistry 37 15 16 4 9 5 23 1 6 65 5 6 Math 47 33 5 11 8 2 27 16 7 17 5 7 16 16 Physics 12 10 9 8 4 1 3 7 6 7 9 13 5 Arts ; Cinematography/Film/Video 104 58 5 Digital Arts 119 58 Source: U.S. Department of Education, National Center for Education Statistics (academic year 2011/2012. The "d" signifies some of the graduates received the degree on the Distance Learning Program. 14 Innovation Through Extensive Research Activities on the Research Coast There are a number of world -class basic and translational research and development` institutes in St. Lucie County that focus on human health, agriculture and marine/oceanography which will support innovative businesses seeking a research partner. Torrey Pines Institute for Molecular Studies The headquarters of the Institute, a $40 million facility on 20 acres, focuses on a few selected biomedical research areas. For example, a group is working on identifying the specific proteins responsible for causing Alzheimer's disease in order to create a disease modifying therapy further down the road. Many different aspects of cancer are being research such as understanding cancer cell movement, boosting natural immunity and understanding the relationship between obesity and cancer. Developing different therapies and compounds in order to facilitate pain management is another goal of the institute. Torrey Pines institute has utilized an innovative process creating a cost effective and thorough drug discovery program utilizing disruptive technology methods. The organization is engaged in the Florida Drug Discovery Acceleration Program, funded by the state of Florida Department of Health, which allows the institute to share its large collection of compound libraries and expertise with Florida Institutions to accelerate drug discovery and commercialization statewide. They also are partnering with a number of organizations locally, including, Martin Memorial Health System (just completed a new hospital adjacent to the institute) for clinical trial activity as well as Florida Atlantic University and Indian River State College for recruiting talent. Mann Research Center, also a part of the Tradition Center for Innovation, has a 45,000 sq. ft. office building located adjacent to Tradition Medical Center as well as a planned 410,000 square foot premier medical office and life sciences complex. Vaccine and Gene Therapy Institute (VGTI) — Florida Located adjacent to the Torrey Pines Institute for Molecular Studies and Tradition Medical Center, VGTI is an independent non-profit research institution dedicated to the study of the human immune system focused on the development of new vaccines and immune -therapies to boost the immune response to cancer and infectious diseases. Their research is also seeking an understanding of aging immune systems and the opportunities of a personalized medicine approach, incorporating the latest developments in bioinformatics and genomics. The University of Florida's Institute of Food and Agricultural Sciences The institute is housed in a 90,000 sq. ft. facility within the Treasure Coast Research Park that has a combined 800 acres of land for facilities and demonstration/testing fields. Research focuses on: • Water and nutrient management for citrus and flatwood soils • Epidemiology and control of citrus leaf and fruit diseases • Evaluation of citrus and vegetable cultivators in Florida • Micro -irrigation of horticultural crops in humid regions 15 USDA Horticultural Research Laboratory The USDA's research complex is located in the Treasure Coast Research Park, adjacent to the University of Florida's Institute for Food and Agricultural Sciences. Research Focus Areas: • Horticulture and Breeding- Conducting basic research on post harvest problems • Subtropical plant pathology- Developing new varieties with enhanced stress tolerance and improved yield • Subtropical insects- Developing new control methods for insect pests Florida Atlantic University's Harbor Branch Oceanographic Institution The Harbor Branch Oceanographic Institution's campus is in Fort Pierce where they focus on both ecological and technical aspects of marine science and ocean engineeering, including: • Ocean exploration via optics and automation, modeling flow dynamics and the impact on ecosystems. • Coral reef and estuarine systems, marine botany and impacts on marine mammals. • Biomedical derivatives from marine microbes and the optimization of fish aquaculture. Smithsonian Marine Station (SMS) at Fort Pierce This research center specializes in marine biodiversity and ecosystems of Florida, focusing on the Indian River Lagoon and the offshore waters of Florida's east central coast, with comparative studies throughout coastal Florida. Scientists and students from around the world come to the center in order to learn more about the Indian River Lagoon. 16 Transportation Access Destination Distance (Miles) Atlanta 550 Charlotte 620 Jacksonville 235 Memphis 900 Miami 110 Nashville 800 New Orleans 750 Orlando 120 Tampa 160 17 (MCO) Melbourne (MILE) Vero Beach St. Lucie County West Palm Beach (PBI) rt Lauderdale (FLL) ort Everglades !am! (MIA) Air Access The area has executive/general aviation airports (each county) along with access to five regional or international airports (see locations on map on previous page), including: • Miami International Airport (MIA) • Fort Lauderdale International Airport (FLL) • Palm Beach International Airport (PBI) • Melbourne International Airport (MLB) • Orlando International Airport (MCO) Due to the substantial business and tourism travel into the Miami/Fort Lauderdale and Orlando areas, travelers from St. Lucie County have access to air services from an unusually large number of carriers with non-stop flights to a substantial number of domestic and international destinations. Even though the Miami and Orlando airports are about 130 miles away, it still saves time traveling to a hub airport, enduring the layover, and getting another flight to your destination — particularly for international flights. The list of commercial airlines below does not cover the many charter airlines that serve the region. 18 Major Airlines* (Includes airlines that have one of the airports as a hub or serve multiple non- stop destinations): Miami (MIA) Ft. Lauderdale Palm Beach (PBI) Melbourne (MLB) Orlando (MCO) American (FILL) American Airlines Delta Air Lines Delta Air Lines Airlines JetBlue Airways Delta Air Lines US Airways JetBlue Airways Avianca Southwest Airlines Jet Blue Airlines Southwest Airlines TAM Airlines Spirit Airlines *In addition to the list above, there are a significant number of airlines that service both domestic and international destinations that are not listed below. Domestic Non -Stop Flights (Year Round) to Major City Destinations YEAR-ROUND NON-STOP DOMESTIC FLIGHTS TO MAJOR CITY DESTINATIONS Destination Miami (MIA) Ft. Lauderdale (FLL) Palm Beach (PBI) Melbourne (MLB) Orlando (MCO) Atlanta, GA ■ ■ ■ ■ ■ Austin, TX ■ ■ Baltimore, MD ■ ■ ■ Boston, MA ■ ■ ■ ■ Chicago, II ■ ■ IN ■ Cleveland, OH ■ ■ ■ Dallas, TX ■ ■ ■ ■ Denver, CO ■ IN ■ Detroit, MI ■ ■ ■ ■ Hartford, CT ■ ■ ■ ■ Houston, TX ■ ■ IN Indianapolis, IN ■ ■ ■ Kansas City, MO ■ Las Vegas, NV ■ ■ ■ Los Angeles, CA ■ ■ ■ ■ Nashville, TN ■ ■ ■ New Orleans, LA ■ ■ ■ New York City, NY ■ ■ ■ ■ Norfolk, VA ■ ■ Philadelphia, PA ■ ■ ■ ■ Phoenix, AZ ■ ■ ■ Pittsburgh, PA ■ ■ IN ■ Providence, RI ■ ■ ■ Raleigh/Durham, NC ■ ■ ■ Richmond, VA ■ ■ ■ Salt Lake City, UT ■ St. Louis, MO ■ ■ ■ San Antonio, TX ■ San Diego, CA ■ ■ San Francisco, CA ■ ■ ■ Seattle, WA ■ ■ ■ Tallahassee, FL ■ ■ ■ Tulsa, OK ■ Washington, DC ■ ■ ■ ■ Worcester, MA ■ ■ 19 Listed below are some of the International non-stop flight destinations available year round from these airports. Central/South America: Caribbean/ Bahamas/ Bermuda: Europe: Canada/Mexico: Belize City, Belize Aruba Amsterdam, Netherlands Calgary, Canada Bogota, Colombia Bermuda Berlin, Germany Cancun, Mexico Buenos Aires, Argentina Cap-Haitien, Haiti Copenhagen, Denmark Cozumel, Mexico Caracas, Venezuela Grenada, Windward Islands Dublin, Ireland Halifax, Canada Guatemala City, Guatemala Kingston, Jamaica London, England Mexico City, Mexico La Paz, Bolivia Nassau, Bahamas Madrid, Spain Montreal, Canada Lima, Peru Port of Spain, Trinidad and Tobago Oslo, Norway Merida, Mexico Quito, Ecuador Punta Cana, Dom. Republic Paris, France Ottawa, Canada Rio de Janiero, Brazil San Juan, Puerto Rico Rome, Italy Toluca, Mexico San Jose, Costa Rica St. Thomas, Virgin Islands Zurich, Switzerland Toronto, Canada Business Services/Amenities Business Hotels and Meeting Places Noted below are examples of hotel and meeting spaces within St. Lucie County but do not represent all the available options. Club Med Sandpiper Bay is an ideal location for large meetings since they are able to accommodate groups of up to 550 people. The resort offers several dining options along with a tennis academy and a golf academy. The PGA Village is a premier golf resort that also has meeting space for up to 450 people. There is also a Hilton Garden Inn at the PGA Village that has meeting space capacity for up to 80 20 Homewood suites by Hilton at Tradition can accommodate up to 90 people. The all -suite hotel also offers a fitness and business center. Other lodging options in the area include Holiday Inn Express and Suites (Port St. Lucie and Fort Pierce), Residence Inn (Port St. Lucie) and Hampton Inn (St. Lucie West). Port St. Lucie Civic Center has both a large ballroom that seats about 700 and a conference hall that seats 300 in a classroom -style layout. The Havert L. Fenn Center is the perfect venue for large events. The main exhibit hall can accommodate up to 3,200 people theater style. 21 Commercial and Industrial Properties Available sites (brown boxes) and buildings (black boxes) available in St. Lucie County are plotted on the map below and listed on the next page. Industrial or Industrial/Commercial Commercial Sites Buildings Available Interstate/Florida Turnpike with Interchanges 22 Florida East Coast County Airport Railroad rrc Land Available for Industrial, Distribution and Office Space Location Lot Size Use Description Utilities in Place Price/Acre Miles to Interstate 1 Turnpike & 1-95, Ft. Pierce 192 acres Distribution All 0.5 2 Turnpike & 1-95, Ft, Pierce 85 acres Distribution All 0.5 3 3798 Selvitz Rd, Ft. Pierce 217 acres Light and heavy industrial All $30,415 2 4 1-95 exit 118, Tradition PSL 1,300+ acres Commercial, Medical/Office, R&D, Manufacturing, Distribution, Light Industrial All 0 5 Glades Cut Off Rd, Ft. Pierce 464 acres Light and heavy industrial/commercial Nearby 3 6 Kings Hwy, Ft. Pierce 40 acres Industrial Nearby $95,000 1 7 6209 South US 1, Ft. Pierce 20 acres I Commercial Road frontage $430,000 7 Buildings Available for Industrial, Distribution and Office Space Description of Building Size (SF) Use Description Price* Miles to Interstate 1 Tesoro Office Building 30,000 2-story class A office $3,450,000 3 2 Tradition Studio 115,000 Class A office, commercial, industrial 1 3 300 S. 6ch St, Ft. Pierce 27,000 Class A Office $8/SF $950,000 7 4 Florida Nexus Park 90,000 Class B office, industrial $10/SF 0.5 5 360 NW Enterprise Rd 30,000 Warehouse, distribution $4.75/SF 1 6 3434 Industrial 33'd St 13,670 Warehouse, distribution $349,000 8 7 7337 Commercial Cir 28,300 Warehouse, distribution $4/SF 3 8 1650 DiGiorgio Rd 55,000 Distribution, on rail $5.95/SF 5 9 4103 Bandy Blvd 15,000 Office, warehouse, distribution 2 10 8281 Business Park Dr 17,000 Office, warehouse $8/SF 7 *Note total purchase price or lease rate in $/SF Utility Service Providers • Electric: Florida Power and Light (lowest cost power utility in the state) and Fort Pierce Utilities Authority • Water/Sewer: Fort Pierce Utilities Authority, City of Port St. Lucie, St. Lucie West Services District, St. Lucie County • Gas: Florida City Gas, Fort Pierce Utilities Authority • Telecom: Fort Pierce Utilities Authority (fiber optics, high speed Internet), AT&T (DSL/ Internet service provider), Comcast cable/ high speed internet), Hometown Cable (cable/ high speed Internet) 23 State and Local Taxes and Incentives. Tax Summary The State of Florida is ranked 51" best overall in a favorable tax climate by the Tax Foundation. State Personal Income Tax: None State Corporate Income Tax: 5.5% with credits for job growth, R&D and investment. State Sales Tax: 6% with a local additional sales tax of 0.5% Local Property Tax Rate ($/$1,000 assessed value): $20.2523 base with special tax districts that may add up to $5.307. The millage rates are detailed in the table below: Ad Valorem City of Port St. Lucie City of Ft. Pierce County County Parks and Public Transit 0.3582 0.3582 0.3582 Storm Water management and Erosion 0.0925 0.0925 0.4422 Law Enforcement and Judicial System 3.9699 3.9699 4A802 School System 7.2570 7.2570 7.2570 County Revenue Fund 2.9221 2.9221 2.9221 Municipality Specific 5.6289 6.6050 0.4380 Fire District 3.0000 3.0000 3.0000 Water Management and Mosquito Control 0.8175 0.8175 0.8175 FL Inland Navigation and Port Bond 0.5371 0.5371 0.5371 Total Millage 24.5832 25.5593 20.2523 Note: Tangible personal property is assessed at these same rates. Incentives Local Incentives Job Growth Investment Grant: St. Lucie County offers this job -creating grant for new and existing businesses. Grants range from $1500 to $3000 perjob for companies locating or expanding in the county. A minimum of 10 new jobs must be created and hourly wages must be at least 107% of the county's current hourly wage. Ad Valorem Tax Abatement: The exemption is applied to improvements a business makes to its property purchased in connection with relocating or expanding. It can be granted for up to ten years determined by number of jobs created, wage rate, and capital investment. Industrial Development Revenue Bonds: These are securities issued by St. Lucie County for the purpose of financing capital facilities for use by private business and industry. They are considered to be a special obligation of a local government allowing the interest to not be subject to federal income tax. The capital projects that the lender's funds are used to finance are mortgaged to secure repayment of the loan. Impact Fee Mitigation: The mitigation of County imposed impact fees is based on the number of jobs created, average wage and amount of the capital investment. Enterprise Zone Incentives: Florida offers an assortment of tax incentives to business that choose to create employment within an enterprise zone. These include a sales and use tax 24 credit, tax refund for business machinery and equipment, sales tax refund for building materials and sales tax exemption for electrical energy used in the zone. There is an enterprise zone established within the City of Fort Pierce. State of Florida Incentives Qualified Target Industry program (QTI): This tax refund incentive is available for companies that create high wage jobs (at least 10 new ones that pay a minimum of 115% of the county's average wage) in targeted high value added industries. Each new job created will give companies at least $3,000 to use for refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium and certain other taxes. Quick Response Training program (QRT): This workforce training incentive is designed to help new value-added business and existing businesses incur the necessary training for expansion. The company may use local educational facilities such as Indian River State College or outside vendor training programs. Expenses that are reimbursable include instructor wages, curriculum development and textbooks. Economic Development Transportation Fund (EDTF): The "Road Fund" was created to help companies solve transportation problems that impact a specific location. The award amount is dependent on number of new jobs created and the project costs. Waiver of Sales Tax on Power Consumption by Manufacturers: A State program that allows communities (if they choose) to eliminate the State's portion of the sales tax normally charged on power consumption in the manufacturing process. The applicant must commit at least 75% of its physical structure to a manufacturing process and must request the elimination from their power supplier. Capital Improvement Tax Credit (CITC): This annual corporate income tax credit aims to attract capital intensive industries such as clean energy, biomedical technology, financial services, information technology, silicon technology, transportation equipment manufacturing and corporate headquarters. The project must create 100 new jobs and be a capital investment of at least $25 million. Incumbent Worker Training This grant allows existing businesses help their employees stay competitive through skills -upgrade training. Reimbursable expenses include instructor's salary, curriculum development and textbooks. Machinery and Equipment Sales Tax Exemption: Machinery and equipment used in the manufacturing process may be exempt from Florida Sales Tax through a process of pre -applying for an exempt status. Existing industries must demonstrate an increase in production of a minimum of 10%. Program is administered through the Florida Department of Revenue. Qualified Defense and Space Contractor Tax Refund: In order to encourage growth of high technology employment, these industries are given tax refunds of $3,000 for every new job created. High Impact Performance Incentive Grant: These grants are given to firms who create high impact facilities in certain sectors such as clean energy, corporate headquarters, financial services, life sciences, semiconductors and transportation equipment manufacturing. In order to qualify, the project must create at least 50 new jobs and make a cumulative investment of at least $50 million. 25 ECONOMIC COUNCIL OF The Economic Development Council of St. Lucie County, Inc. (EDC) is a private, not -for -profit corporation dedicated to the promotion of economic vitality in our community. Working in concert with local governments and business partners, the EDC's core mission is to attract, expand and retain businesses that create higher -paying jobs, broaden the tax base and improve our "economic quality of life". Whether you are new to St. Lucie County or already established, the Economic Development Council of St. Lucie County stands ready to help you take your business to the next level. The Economic Development Council of St. Lucie County is uniquely positioned to help your business take full advantage and leverage all resources available to you. Our services include help with permitting, incentive funding assistance, workforce development, site selection, and connections to public/private resources. This information and assistance is offered to decision - makers and consultants representing large and small, domestic and international businesses. Let us know if you are interested in seeing for yourself all that St. Lucie County has to offer. The first step is to contact us to arrange a personal site visit. For additional details, contact Economic Development Council of St. Lucie County PeterJ. Tesch, President Phone: 772.336.6250 E-mail: PteschOYourE®C.com 26