Economic Development. An official publication of the Volusia County Economic Development Division Fourth quarter 2011

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1 Fourth quarter Quarterly Economic Development An official publication of the Volusia County Economic Development Division Cover story Bob s Space Racers masters the business of fun Page 6 Performance Designs hits its mark in skydiving Page 3 Trails provide recreation, economic opportunity Page 8

2 Welcome to Economic Development Quarterly, a publication brought to you by the Volusia County Economic Development Division. This publication is produced for people who have an interest in the area s business, economic development and real estate market. Our goal is to use this publication as an economic development tool, to keep you informed and to provide information and statistics that have meaning to your business. This publication is owned by Volusia County Government and is produced and sold by the Volusia/Flagler Business Report through contract. Content is solely the responsibility of the Volusia County Economic Development Division. We re interested in your comments and story ideas. Please contact David Byron, community information director, at , or dbyron@co.volusia.fl.us. If you d like to become an advertiser, please contact Lois Duncan at the Volusia/Flagler Business Report at Economic Development Quarterly is produced and mailed quarterly to a minimum of 10,000 area businesses by the Volusia County Economic Development Division. It is offered free to readers, including real estate professionals, leaders of business, industry, education, government and selected organizations. If you are interested in receiving this publication, please contact the Volusia/Flagler Business Report at Advertising Volusia/Flagler Business Report Publisher Volusia County Council/ Economic Development Division floridabusiness.org Volusia County Council Pictured, left to right, back row: Patricia Northey, vice chair, District 5, and Andy Kelly, District 1. Front row: Joshua J. Wagner, District 2; Joie Alexander, District 3; Frank T. Bruno, Volusia County chair; Joyce M. Cusack, at large, and Carl G. Persis, District 4.

3 Performance Designs hits its mark in skydiving This free-spirited skydiver struts his stuff from the air. His colorful parachute was made in DeLand with cutting-edge technology Performance Designs Inc. is a world-class parachute manufacturer founded by a young skydiving enthusiast more than 20 years ago. Bill Coe has never wavered from his commitment to improving and advancing his sport. Today, skydivers around the world respect the research and development as well as the design and manufacturing of this DeLand company. The executives of Performance Designs appreciate the company s humble beginnings and remain committed to meeting the needs of their customers, said Jayne Fifer, president and CEO of the Volusia Manufacturers Association, of which Performance Designs was named the 2010 Manufacturer of the Year. It is a company that has commanded the respect of the industry and is revered among skydivers all around the world. The company s plant is across the street from the DeLand Municipal Airport. Its products are shipped globally and the company has helped make DeLand synonymous with skydiving. Today skydiving students, enthusiasts and competitors from around the world make their way to DeLand and the air over the city s airport. Performance Designs distinctive tandem canopies have been an industry favorite from the company s early days, permitting hundreds of thousands of people to make their first jump with a parachute built for two. Higher performance models continue to be flown by teams and individuals such as Arizona Airspeed, the Golden Knights, DeLand Majik, Alchemy, and the company s own Factory Canopy Piloting Team. We are committed to the development of products that set the standard for performance, said John LeBlanc, the company s vice president. Of course, the true testament is the legions of skydivers that have been flying Performance Designs main and reserve canopies for years, and their unmatched enthusiasm for the quality of our products and our commitment to customer service. Coe enlisted the aid of LeBlanc in 1984, when the company was barely two years old. The two met while studying aeronautics at Embry-Riddle Aeronautical University. Improving the performance of ram air canopies, or wing-type gliding parachutes, has been a primary goal of Performance Designs throughout its history. The company has introduced leading edge concepts and materials to the parachute industry and helped revolutionize parachute design. By continually elevating standards of performance, quality, and customer support the company has produced some of the most successful ram air canopies ever designed. The company remains committed to research and development so it can satisfy customer needs with innovative products that stand the test of time. The company s products portfolio includes more than 250 parachutes of various sizes and model combinations. The company primarily serves sport markets, although it does supply highly specialized products for elite teams in the Army, Navy, Air Force, and Marines. Each parachute is designed to fly differently, which accounts for the variety of models. Design limitations in the 1980s imposed by then-current fabric technology became more significant. Fabric permeability was proving to be a hindrance to the development of more dynamic wings. Performance Designs responded by devising a process to produce a completely zero porosity fabric (no air passes through). This process was provided to a fabric converter, modified, and was able to be manufactured in production quantities. Freed from the limitations previously imposed by air leaking through the fabric, the company s vision of the future for ram air canopies became crystal clear. In 1989, after four years in development, the company introduced a parachute with the new zero porosity fabric. The product design and the fabric was a perfect match made for the sky, and remained the benchmark for canopy performance for over a decade. In pursuit of efficiency and consistency, Coe designed and constructed a computer-controlled laser cutting system to replace the traditional method of cutting canopy parts by hand. The laser tables have made it possible to cut and mark every piece of material through a laser cut code, and have taken the consistency and precision of canopy manufacturing to a whole new level. Performance Designs is the only manufacturer in the industry with such capabilities, Coe said. The company continues to lead the field in many areas of skydiving technology. Performance Designs has weathered the economic storm and has experienced an increase in sport markets. In many ways, the sky s the limit.

4 Economic development 101: The economic development process CCommunities that desire a better standard of living through job creation and community development progress can be successful in attracting new business, growing startups, and helping their existing businesses expand despite a lack of funds from federal and state government. It all starts with economic development strategic planning. Strategic planning First, there are several strategies to the creation of a successful economic development plan. For example, many business opportunities require additional infrastructure. Government leaders responsible for long-term planning must understand that expanding the tax base is necessary for growth, but they still need to make a convincing case to their residents, taxpayers and the existing business community. When a community goes through an analysis of its strengths, weaknesses, opportunities, and threats (SWOT), it faces the challenge of matching its strengths and opportunities with existing or new strategies. To move forward, the essential action steps of organizing, planning and execution are necessary to implement the strategic plan. By Phil Ehlinger, Director Volusia County Economic Development Long- and short-term strategies Every strategy must be organized and task-assigned. Once organized, a prospective project s feasibility must be evaluated along with the financial, technical and human resources needed for implementation. For example, a downtown development strategy frequently requires physical improvements and the promotional and business recruitment activities on the front end. Substantial projects, such as industrial parks, office complexes, hotels and convention centers take several years to construct and become operational, and may take many more years to have a major impact on the local economy. Sometimes too much emphasis is placed on short-term gains, such as tax incentives and other credits to businesses, rather than focusing on the far-reaching benefits of such activities. Making it happen After organization and planning, strategy execution begins. For a business recruitment strategy, this can include attendance at industry trade shows, contacts with site selectors, and development of marketing brochures, websites and other programs. Like everything else, economic development requires money. Funding needs to be addressed for staffing, business development, and long-term investments in infrastructure. Community One of the key elements in economic development success is community capacity. As a rule, there are seven primary elements of community capacity for business development: a business development strategy; staff and team development; industrial land and infrastructure; targeted industries; marketing; prospect and lead management; and if all goes well, ability to close the deal. Property Industrial land and infrastructure are critical to economic development success. Ideally, a community has control of available land that is competitively priced and is properly zoned with the necessary infrastructure. On a scale of zero to 10, this is a 10 on the list of economic development prerequisites. This is why Volusia s County and city governments have placed so much emphasis on the creation of shovel-ready industrial parks. The county s DeLand Crossings Industrial Park, Parktowne in Edgewater, Ormond Beach Industrial Park, and the new industrial park at the DeLand airport are prime examples. Very few developers here have been willing to invest in the economic development potential of their own properties. In spite of successful, cohesive marketing and business recruitment efforts, the whole process grinds to a halt if there is no place for a new company to call home. Developed and available infrastructure is a key element in the planning strategy because most companies won t wait the two to three years it takes to make an industrial site ready for building or plant construction. Civic attitude No matter how strategic a community is in selecting its direction, and how sophisticated it is in terms of optimizing community capacity, the intangible of civic attitude will go a long way to achieving economic development goals. If a community s attitude is apathetic, and there is a lack of unity, and a reluctance to progress, these intangible signs are clear to an economic development prospect. The same can be said of a community that is upbeat, cohesive, friendly, helpful, organized, and focused. UCF business incubator at DBIA up and running The University of Central Florida has opened a business incubator at Daytona Beach International Airport (DBIA) in partnership with Volusia County Government. UCF is the national leader in business incubator programs and the facility at DBIA is its ninth. The business incubator program already has four tenant companies. They are Innovation, Research Engineering & Development, a company using renewable and energy-efficient technologies; Fusion Fitness Design, a manufacturer of high-end, high-quality strength training equipment; Black Creek Financial, a financial services, audit risk and management consultant; and a company dealing with quality healthcare centers. The incubator is reviewing 14 other applications. It can accommodate up to 20 companies depending on space needs. Pictured on opening day are, (from left): Carl Persis, Volusia County Council member; Jim Dinneen, Volusia County Manager; Joie Alexander, Volusia County Council member, Frank Bruno, Volusia County Chair; Pat Northey, Volusia County Council Vicechair; Andy Kelly, Volusia County Council member; and Josh Wagner, Volusia County Council member.

5 United Way, business community team to tackle health and human service needs United Way kicked off its annual campaign with a Rocky boxing theme it is United Way against this economy, we may be down but we are not OUT! United Way s motivated board of directors, led by Elan Kaney, Cobb Cole, are determined to regain our championship status and are encouraging all businesses to participate in this year s campaign. Beginning in 1941, United Way (then known as the Daytona Beach Community Fund) began fundraising in our community to fill the needs of our citizens. The money that is raised here stays in Volusia and Flagler counties to provide direct assistance to our neighbors and friends. Last year one in three of our residents was served by a United Way-funded program through our 36 partner agencies and 58 funded programs. United Way giving remains one of the most efficient and effective ways to invest in our community. Our mission is to increase the organized capacity of our community to care for its people. We do this by advancing the common good and focusing on the building blocks to a better life education, the cornerstone of individual and community success; income, by promoting financial stability and independence; and, health, through promotion of good health and wellness. Guest Columnist: Ray Salazar United Way also prides itself as being a community leader by defining and solving community social service issues and building bridges that connect other community leaders, agencies and governments to help provide our citizens opportunities for a better life. The partner agencies we fund provide systems of care for our community ranging from subsidized childcare from the Early Learning Coalition permitting parents or caregivers to obtain or keep their jobs, to the wonderful Meals On Wheels provided by dedicated Council On Aging volunteers who deliver nutritious meals to homebound seniors. For a list of all the services we fund, go to our website: unitedway-vcf.org. As businesses, United Way and its partner agencies account for approximately $130 million of budgets that pay salaries to case managers, therapists and social workers. Our businesses purchase products from local vendors that contribute directly to our economy that have a multiplier effect of more than $300 million. According to the study Economic Contribution of Florida Nonprofit Organizations: A Resource for the Public Good, not-for-profits are the sixth largest employer in Florida generating $61 billion in total economic activity. Statewide, we create 88 million hours of volunteer time which is equal to the work of 42,000 fulltime employees. For our local businesses, you can access social services by dialing United Way s to inquire from our information and referral specialists where you can refer an employee for help. Or, you can contact our volunteer center to see where you may be part of the 88 million hours of service to others. Join us in making this year s campaign a success by calling our Resource Development Office at Dona DeMarsh, director of Volusia County Government s Community Assistance Division, is chairwoman-elect of United Way of Volusia and Flagler Counties. She and John Guthrie of Daytona International Speedway are co-chairs of this year s United Way campaign. RAY SALAZAR, President/Secretary Volusia/Flagler United Way SunRail taking shape in Central Florida SunRail is on the way. The long-awaited commuter rail service that will whisk riders from DeBary to Orlando is scheduled to start in late SunRail is a $1.2-billion commuter rail project that is being funded by federal, state and local governments including Volusia County. It is expected to transport mostly workers, but residents and visitors as well, across Central Florida without having to drive on Interstate 4. Additionally, it is projected to create thousands of jobs and stimulate economic development along its route. The station in DeBary alone is expected to stimulate growth around the surrounding area. Overall, SunRail is projected to create more than 5,000 direct and indirect jobs. It has been a long and winding road leading to the creation of SunRail, said Volusia County Chair Frank Bruno. It s a complex project traversing several jurisdictions and overcoming challenges of geography, right-of-way, economics, politics and more. But it has been designed meticulously with passenger safety, comfort and efficiency in mind. SunRail has evolved and is an excellent concept that will help address Central Florida s transportation challenges. Bruno is a member of the Central Florida Rail Commission, which oversees the project. All systems are a go for the Sunrail Commuter System. Trains should be heading to and from DeBary by late 2013 Initially, trains heading from DeBary will depart every 30 minutes during peak morning commuter times and arrive back in DeBary every 30 minutes during the peak afternoon commuting times. Service will be Monday through Friday. There will be no weekend service. Trains will travel at a peak speed of 79 miles per hour, with an average speed of 45 mph. That means the trip from DeBary to Sanford will be about five minutes; 32 minutes to Winter Park; and 45 minutes to Church Street Station in Orlando. Votran will offer bus service from various points to the DeBary SunRail station. When complete, the SunRail will run along a 61-mile stretch of existing rail freight tracks in the four-county area. SunRail s 31- mile first phase will serve 12 stations, linking DeBary to Orlando. A DeLand station is part of SunRail s second phase. The project s governing board is the Central Florida Commuter Rail Commission. It is chaired by Orlando Mayor Buddy Dyer and includes Orange County Mayor Teresa Jacobs, Seminole County Commissioner Carlton Henley, and Osceola County Commissioner Brandon Arrington. Bruno represents Volusia County. With traffic congestion getting worse, SunRail will be a welcome alternative for commuters. It is one element of a complex solution to Central Florida traffic woes. That s why the Florida Department of Transportation, the federal government, Orange, Seminole, Volusia and Osceola counties, and the City of Orlandoare investing in SunRail. Volusia County Government s share of the cost is $88 million over 30 years. According to the American Public Transit Association, traveling by public transportation uses less energy and produces less pollution than travel in private vehicles. For more information and updates on SunRail go to: sunrail.com.

6 C O V E R S T O R Y Bob s Space Racers masters the business of fun Bob s Space Racers produces arcade games for worldwide audiences

7 Whac-A-Mole. Dolphin Dash. Stinky Feet. Dog Pounder. If you ve been to a theme park, a carnival or a fair, you may have been challenged by these and many other games created by one of the amusement industry s pioneers Bob s Space Racers located right here in Volusia County. Bob s Space Racers occupies 13 acres on 15th Street in Holly Hill. Founded by Bob and Joyce Cassata in 1970, their first game was designed and built in their garage. The company has grown consistently and now employs 80 people in a 200,000-square-foot complex that includes design studios, manufacturing facilities and office space. We are fortunate to work in a fun business that produces products that people enjoy, said company president Jack Cook, who has been with the firm since It s a family business that is very specialized and technology-driven. We have a talented, hands-on workforce that produces creative, engaging products known for reliable performance and exceptional craftsmanship. The founders are retired, but the company they built continues to be a force in the highly competitive amusement business. The company s products can be found in small onegame family enterprises to some of the largest multi-game operations in the world. For example, Bob s Space Racers products are in Chuck E. Cheese entertainment centers, Universal Studios, Walt Disney World and Six Flags theme parks. The company even has placed a product package in a new mall in.mongolia! Bob s Space Racers is a perfect example of how a company can grow from humble beginnings into an industry leader, said Holly Hill Mayor Roy Johnson. The folks at Bob s Space Racers export local craftsmanship and expertise all over the world and we are particularly proud they have chosen to grow their enterprise in Holly Hill. While the company manufacturers many games, its Whac-a-Mole game may be the best known. It features a field of mole characters that pop out of their respective mole holes offering mallet-wielding players a moment to whack them on the head and score points. The game has become a part of our culture and Whac-A-Mole often is used as a description for life s challenges. People can relate to the game. There are various home versions and consumer products on the market under the Whac-A-Mole brand. The company makes a line of custom Whac-A-Mole games for executive offices, home game rooms and special exhibits, adding to its iconic status. As for the company name space racers, it is not the name of a game, but a game feature. Throughout its history, Bob s Space Racers has produced water games that have players shoot water pistols at targets. Each time a target is hit and points are scored, a rocket ship inches up toward a moon target, ostensibly a race to space hence, the name, Bob s Space Racers. So what does it take to be on the Bob s Space Racers team? The company s people come from backgrounds in arcade, midway and theme park operations. They are engineers, graphic artists, designers, and cabinetmakers. Longevity is a hallmark of the company s workforce. Many of its employees have been working together creating award-winning games longer than many manufacturers have been in business. The BSR team is committed to leading edge technology, meticulous craftsmanship, boundless creativity and the highest quality standards in the industry a formula that has kept Bob s Space Racers at the top of its game.

8 Trails reveal heart of Volusia County; provide recreation, economic opportunity The trails traverse through some of the county s most scenic publicly-owned lands For many years, people supporting the creation of more trails throughout Volusia County have shared vision, ideas and plans that led to the establishment of the first comprehensive and ambitious Trails Plan, approved by the Volusia County Council in Today, many of the trails in that plan have been created and more are on the way. Volusia County is a very special part of a very special state, said Volusia County Council Vice-chair Pat Northey, long a proponent of the trails initiative. Our county offers spectacular natural beauty, some of which is readily accessible to people and some of which can only be experienced through trail access. Trails actually can protect the surrounding areas, while at the same time attracting more people. This is because trail access confines people s movement through sensitive areas. And Volusia s trails program is resonating in Washington. Just days before the release of a 50-state report outlining the country s most promising wast to reconnect Americans to the natural world, U.S. Secretary of the Interior Ken Salazar has highlighted two projects in Florida that will be included in the final report. The 32-mile Shingle Creek Trail in Seminole and Osceola counties and the 50-mile East Central Regional Rail-Trail from Lake Monroe on the St. John s River in Volusia County to Titusville on the Indian River Lagoon are among 100 projects nationwide that will be highlighted in the report two in every state as part of President Obama s America s Great Outdoors initiative to establish a 21st century conservation and recreation agenda and reconnect Americans to the natural world Two countywide summits on the Trails Plan have been conducted to help keep the program up to date by adding and deleting segments. The summits have been well attended, with spirited participation. The result is a new plan that includes a network of interconnected trails that is accessible to nearly all residents and visitors to Volusia County. The new Trails Plan includes multi-use trails, enhanced bicycle and pedestrian trails, hiking trails, equestrian trails and paddling trails (trail maps can be viewed at: volusia.org/trails). The first trail to be developed by Volusia County Government was the Spring to Spring Trail in western Volusia County. This multi-use trail is being constructed as a paved, 12-foot-wide, separate path within public rights-of-way. Nearly 15 miles have been completed and opened with enthusiastic public support. Trailheads have been built at DeBary Hall Historic Site, Gemini Springs Park, Lake Monroe Park, Lake Beresford Park, Blue Spring State Park and along Grand Avenue in Glenwood. When complete, the Spring-to-Spring Trail will stretch 26 miles from Gemini Springs Park to DeLeon Springs State Park. Other trails include: The Bike the Beach Trail takes bicyclists along the magnificent shoreline of Volusia County beaches from Brevard to Flagler counties, with breathtaking views of the Atlantic Ocean along the way. The East Central Regional Rail Trail corridor, which stretches more than 50 miles, is being developed and managed by Volusia and Brevard counties. When complete, the East Central Regional Rail Trail will traverse more than 50 miles from Enterprise to Edgewater and on to Titusville in Brevard County. This abandoned rail corridor was purchased by the state and leased to Volusia and Brevard counties to be developed as a multi-use trail for walkers, joggers, inline skaters, bicyclists and people with disabilities. This purchase is the longest rail-to-trail conversion in Florida and will generate significant recreational and economic benefits to Central Florida. Scenic Spruce Creek Park in Port Orange is within the 2,477-acre Doris Leeper Spruce Creek Preserve. Its 536-foot boardwalk begins miles of nature trails leading to the 15-foot observation tower and continues to Rose Bay. The tower overlooks the marsh area near Spruce Creek. Hickory Bluff Preserve in Osteen is 150 acres and overlooks the St. Johns River. There are two trails covering about two miles. It contains many natural communities including scrubby flatwoods, oak hammock, cypress domes, floodplain swamp, and wet prairie. Wildlife along the trail may include osprey, eagle, great blue heron, barred owl, gopher tortoise, alligator, river otter, bobcat, deer and turkey. Also in Osteen is Wiregrass Prairie Preserve. It consists of approximately 1,400 acres and is situated almost entirely in the St. Johns River Valley. The preserve and its trails are a mosaic of upland and wetland natural areas, cypress domes, strand swamp and wet prairie. Hikers may identify distinct natural communities by the presence of certain plants. Wet flatwoods are characterized by an overstory of slash and longleaf pine scattered across the landscape. Cypress domes may be recognized from a distance by the dome-like appearance of their tree line, and can be observed on multiple trails within the preserve. Lake George Forest and Wildlife Management Area near Pierson consists of 7,800 acres acquired in This conservation area is part of a 35,380-acre wildlife management area that provides more than 20 miles of contiguous habitat for many species of Florida s wildlife along Lake George and the St. Johns River. Marked trails lead to several of Florida s natural communities including pine flatwoods, cypress swamps, and marsh. The trail passes Lake George, the second largest lake in Florida and the largest lake along the St. Johns River. Longleaf Pine Preserve east of DeLand consists of approximately 12,000 acres and has two marked trails. The red trail is a six-mile loop. The blue trail is nearly 11 miles and traverses through wet flatwoods with an overstory of pine and an understory of saw palmetto, gallberry and seasonal wildflowers. It winds through a cypress strand swamp. These trails are marked for biking, hiking and horseback riding. Wildlife along the trail may include sandhill crane, great blue heron, river otter, bobcat, coyote, fox, deer, black bear and alligator. Lyonia Preserve in Deltona is a 360-acre joint project of Volusia County Government and the Volusia County School Board. Since 1994, restoration efforts have removed overgrown sand pines and opened the understory, creating the characteristic bare sand areas with low growing vegetation preferred by scrub species. Many families of the threatened Florida scrub jay live on the preserve. Three trails cross through Florida scrub one of the most endangered ecosystems in the United States. Scrub habitat exists on porous, infertile sand which extended out of the sea as island dunes approximately two million years ago when Florida s peninsula was covered by ocean.

9 Scene & noted News and notes from recent editions of On the Economic Scene, the Monday morning newsletter of Volusia County Economic Development ONLINE VERSION AT FLORIDABUSINESS.ORG On the Economic Scene is Volusia County Economic Development s popular newsletter that is faxed every Monday and then posted on-line. The one-page communication features timely briefs on economic development-related subjects. The newsletter reaches more than 2,000 people every week. If you would like to receive it, contact Volusia County Economic Development at Here are a few briefs that appeared in recent editions. If you have news you would like to share, please send it to Dave Byron, Volusia County Community Services Department director, 123 W. Indiana Ave., DeLand, FL , or by at: dbyron@co.volusia.fl.us. PROGRESS ENERGY S SUNSENSE A WAY TO SAVE MONEY Progress Energy has a way to save on electrical expense. To make the application process easier, Progress Energy s SunSense Solar Water Heating Program applications are now available online. For information, Solar_water_heating@pgnmail.com or call The website is tinyurl.com/4yr2wds. BUSINESS REFERENCE LIBRARY ONLINE Volusia County Public Libraries provides a wealth of free information for business owners through volusialibrary.org. A library card, available at any Volusia Count library, is required to access the information, which includes demographic data, details on more than 12 million U.S businesses, general reference and how to information. DBIA BUSINESS CENTER OPENS The new Business Center at Daytona Beach International Airport is now open on the concourse of the main terminal. Sponsored by Volusia County Economic Development, the center provides a private place for up to 12 individuals to work while waiting for a flight. The center is wi-fi capable and offers individual computer stations. A printer is available at no charge, and a public use computer will be added soon. In addition, private conference facilities are available. For more information call Volusia County Economic Development at FPL OFFERING LOWER RATES TO SPUR GROWTH The state s Public Service Commission (PSC) has approved modifications to Florida Power & Light Company s electric service rate options, enabling the utility to provide an incentive for businesses to start up, expand or relocate in Volusia County. The new economic development rates offer discounted electric service for new or expanding businesses that add a minimum level of new electric load and new jobs. Businesses interested in applying for the rates should PoweringFlorida@FPL.com for more information. FREE TUTORING AVAILABLE FROM KHAN ACADEMY The Khan Academy can help you learn whatever you want, whenever you want, at your own pace by offering an online library of more than 2,400 videos and practice sessions on such topics as arithmetic, physics, finance and history. For more information go to: khanacademy.org.

10 Construction activity sluggish at best, not recovering as officials had hoped A Paytas Home under construction at Promenade Park at Venetian Bay in New Smyrna Beach. Third quarter new building permit activity across Volusia County continued at a slow pace with the number the residential and commercial permits and values close to record lows, but that may turn around by catching September s national wave of increased apartment and condominium construction. Just look at the economy; it s discouraging, said Sandy Bishop, executive officer for the Volusia Building Industry Association, in reference to the local third quarter permit numbers. According to data collected by Volusia County Economic Development from the county and city building permit offices, the county and Volusia s municipalities in the third quarter issued 117 residential permits valued at $30 million. During the same July-September period, there were 22 commercial permits issued valued at $13 million. The numbers are not unexpected, said Phil Ehlinger, Volusia County economic development director. Things are about where I thought they would be. The building market here has struggled since the first quarter of RESIDENTIAL The 117 residential building permit total in the third quarter is down 17.6 percent from the 142 permits issued in the second quarter of It s also down 34.3 percent from the 214 residential permits issued during last year s third quarter, which partially was inflated by homebuyers who took advantage of signing building contracts for the federal first time homebuyer tax credit before the program expired in July Residential building numbers slowly increased through the quarter from 35 in July, to 39 in August, and then 43 in September. There is still an unknown shadow inventory of possible Construction crews build a new 17,000-square-foot Davita Orange City Dialysis center on South Volusia Avenue less than a mile from Florida Hospital Fish Memorial. foreclosures out there that is causing some hesitation, Ehlinger said. Buyers do not want to see what they buy fall in value. Many builders have been smart and reduced the size of the homes and lowered the prices to compete. Daytona Beach set the residential building permit pace for the third quarter with 22 permits issued worth about $5.8 million. Port Orange issued 20 permits worth $4.9 million. DeLand and Volusia County each issued 19 permits, valued at $5.6 million and $5.1 million respectively. Seven cities, including New Smyrna Beach, issued no residential building permits in the third quarter. The 117 residential permits issued in the third quarter is the second lowest total since the housing boom that crashed in late Only the 104 permits issued in the first quarter of this year was lower. The $30 million value ties for the second lowest recent value with the first quarter of this year. It s only surpassed by the $29 million value of the 120 permits issued in the fourth quarter of At the current home construction pace, less than 500 new homes will be built this year in Volusia County. That compares to 734 last year, 694 in 2009, 1,157 in 2008 and 1,938 in Volusia County is not different than elsewhere. Across the nation, building permits declined 5 percent in September to an annual rate of 594,000. Single-family permits fell.2 percent, according to the U.S. Commerce Department. Area home builders are having to compete with a large inventory of foreclosed homes and short sales that are being sold at discounted prices, Bishop said. A lot of builders have gotten into the remodel business because many of the foreclosures have maintenance issues, Bishop said.

11 Another reason for the slow place of local home building is the slow pace of home sales elsewhere in the country, especially the north, Bishop said. If people can t sell their homes up north, they re not retiring here and building new homes like they used to, Bishop said. Retirees are a big percentage of our residents and they don t feel comfortable buying right now. They no longer are buying or building a second home in the area and then waiting a couple years to sell the one up north to move here full time. That has passed. What may provide a boost are recently approved moratoriums on residential construction impact fees by Volusia County and DeLand that will lower home costs, Bishop said. The building industry association is working with other cities in the county to get them to drop impact fees until the economy recovers. The U.S. Commerce Department recently reported a 15 percent hike in housing starts in September around the country to a 658,000 annual pace, the highest since April An increased demand for rental properties drove the increase. Starts of multi-family buildings of five or more units increased 53 percent while single-family starts rose a modest 1.7 percent. COMMERCIAL The commercial building permit picture in Volusia County is a mixed bag. The 22 commercial permits issued in the third quarter is up 44.6 percent from the 15 issued last quarter, and up more than 57 percent from the 14 issued in the third quarter of The value of $13 million in the third quarter is up 30 percent from the $10 million value in the third quarter last year, but is down more then 47 percent from the $23 million value of permits in the previous quarter. There was no one or two projects that stand out this quarter, Ehlinger said. There were many in the $1.2 and $1.3 million range. Unlike the first quarter that was out of whack where we had one very large project. In the first quarter, permits for the Andros Isle apartment complex were issued in Daytona Beach, accounting for a heavy majority of the quarter s 30 permits valued at $57 million. Deltona led the third quarter commercial permit board with four permits, but with a total value of less than $1.2 million. Daytona Beach, DeLand and Port Orange each issued three commercial building permits in the third quarter with values of $2.6 million, 1.4 million and $1 million. Orange City was tops in total value with two permits valued close to $2.7 million, including a 17,000-square-foot medical building. Commercial permit activity started at a good pace with 11 in July, but then shrank through the quarter with eight in August and then three in September. Eight jurisdictions reported no commercial building permit activity in the third quarter. We re bumping along the bottom, said Ehlinger. I m still optimistic about a recovery, but more guarded now. The impact will be much further along than I thought. The recovery will be like a gravy boat, with a long shallow recovery.

12 PRSRT STD U.S. POSTAGE PAID Daytona Beach, FL Permit #