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Tampa threatened by Savannah, Albuquerque?

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Tampa Faces Rivals To Draw Businesses

By DAVE SIMANOFF

[email protected]

TAMPA - The Tampa Bay area will remain one of the most attractive places in the nation for corporate relocations, but it's going to face stiff competition from smaller cities that offer cost-cutting corporations even more savings, according to a leading national consultant.

The Boyd Co., a Princeton, N.J.-based firm that helps companies choose sites for relocations and expansions, says in its latest research report what local economic development officials have been saying for years: that the Tampa Bay area is a bargain for corporations.

A company can expect to pay $17.8 million a year to operate a 350-employee, 50,000- square-foot office in the Tampa Bay area, the report says. In comparison, a similarly sized operation in San Francisco, the most expensive city surveyed in the Boyd report, would cost nearly $4.7 million more a year, or $22.3 million.

In Miami, the most expensive Florida location, a similar office would cost $1.3 million more a year to operate, or about $20 million.

The cost advantage should keep companies heading to the Tampa Bay area, but local economic development officials shouldn't rest on the region's bargain-priced laurels, location consultant John Boyd Jr. said.

Companies are increasingly eager to save money and willing to consider relocations in smaller markets that they may have dismissed in the past, he noted.

Metropolitan areas much smaller than the Tampa Bay area, such as Savannah, Ga., and Albuquerque, N.M., ``are on the radar screen'' for corporations, he said.

``The fundamentals here in Tampa are strong, and you will continue to attract your fair share of industry,'' Boyd said Tuesday while in Clearwater on business. ``But the reality is that you're facing new, stiff competition from smaller markets.''

Labor costs make up the lion's share of any company's expenses, so locations where wages are less are more advantageous to companies than markets where employees command more money, he said.

Savannah is the least expensive city listed on the Boyd Co.'s report: It costs an estimated $17.3 million a year to run an office there with 350 employees and 50,000 square feet of space. The same setup in Albuquerque would cost $17.7 million, the same as in the Tampa Bay area.

Lynn Pitts, senior vice president for sales and marketing at the Savannah Economic Development Authority, said his group is seeing interest from companies that haven't considered Savannah in the past for relocations and expansions.

``We're having a much easier sell,'' he said. ``If we can get someone to come visit Savannah, they see they can conduct their business and not lose any efficiency, plus they can recruit and retain top employees.''

Economic development officials in the Tampa Bay area say they already compete against metropolitan regions of all sizes for corporate relocations.

Stuart Rogel, president and chief executive of the Tampa Bay Partnership, a business group that seeks to attract and retain jobs and companies, said thearea's potential labor pool gives it an advantage over smaller competitors. About 3.6 million people reside in the seven-county region around Tampa Bay comprising Hernando, Hillsborough, Manatee, Pasco, Pinellas, Polk and Sarasota counties.

``The key factor in smaller markets is labor availability,'' Rogel said. ``If you can't find the labor, it doesn't matter how much it's going to cost.''

Many companies today consider moving jobs to third- world nations to cut expenses, a trend known as outsourcing or offshoring.

Boyd said some of his firm's clients have looked at offshoring, but eventually decided to expand in the United States after considering the burdens of operating overseas, such as recruiting issues, high turnover rates and higher than expected training costs.

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