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American Pie: Florida, A State In Economic Limbo

John Merchant reports that the most optimistic forecast for a return to a “normal” economy in Florida is 5 years, and many local forecasters are predicting 10 years to never.

"There are good reasons for the pessimism. Retirees from the US north, the backbone of real estate expansion in the State, now have to work longer, and the days of retiring with a generous pension and a sizable nest egg are over for many people.''

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Despite a few signs of an improving economy, South West Florida is still waiting to exhale. Some indications of activity on a few construction sites encourage one to believe that there is at least a modest amount of investment money available. But no one, other than the realtors and speculators, wants a return to the Wild West conditions of the days prior to the economic collapse.

Not that it’s likely to happen. The most optimistic forecast for a return to a “normal” economy is 5 years, and many Florida forecasters are predicting 10 years to never. There are good reasons for the pessimism. Retirees from the US north, the backbone of real estate expansion in the State, now have to work longer, and the days of retiring with a generous pension and a sizable nest egg are over for many people.

Aside from purely economic reasons, many retirees are choosing to spend their “golden years” in states other than Florida. Even before the downturn, there was a trend towards either staying put, or resettling in the Carolinas, Texas or Georgia, or even as far north as New Jersey. There are a number of reasons for this, including an attachment to four seasons. But principle among them is a desire to be within manageable driving distance of their children and grandchildren.

Concomitant with a plan to retire to Florida was a belief that the adult children and grandchildren would come for vacations, but often that didn’t happen. With both parents working, kids in school and a tight budget, it was often difficult to coordinate commitments for a long enough spell to spend time with grandma and grandpa. I suspect also that in some cases a degree of separation was welcome.

Other than the economy, there have been incidents of malfeasance among community developers that must have created feelings of distrust and diffidence among potential home buyers. Some incidents involved the misuse of funds that had been garnered as “equity memberships” in the golf clubs that are the center of attraction in many communities.
An equity membership can cost as much as $150,000, and then on top of that there are green fees and an annual membership fee. The terms of the equity were that members who moved out of the development could reclaim the fee, if not immediately then within a few weeks.

Meanwhile the developers were using the money to leverage loans for more new developments that often times were not completed, or even started in some cases. Predictably, a large number of such cases ended in bankruptcy, with the luckless, golfing home owners the losers. Now, some golf courses are neglected or have been abandoned.

Mother nature has also played a part in South West Florida’s fall from grace. Successive major hurricanes in 2004, ’05 and ‘06 scared some people away, and four years of drought brought critical water shortages and brush fires. More recently, the BP oil well disaster polluted beaches, and even though the State’s Gulf Shore was not seriously affected, it was hard to convince would-be holiday makers of that, given the publicity accorded the catastrophe.

Driving the Tamiami trail, a major commercial route that cuts through the heart of Fort Myers and its more southerly neighbor, Naples, signs of the sagging economy are everywhere. For 50 miles, empty storefronts alternate with shuttered commercial buildings and closed restaurants. Strip malls that were completed in 2008, have never been occupied. Valuable tracts of land that would have been built on by now in the old economy, stand as nature intended – bits of old Florida that have all but disappeared.

Not all the signs of the struggle are on such a large scale. The restaurants that still are trying to survive, offer a variety of incentives to attract diners: “Purchase one entrée – get one free!” exclaims one. “Two prix fixe meals, including a bottle of wine for $75” offers another; an evening out that would have cost twice that prior to 2008.

Other restaurants are trying to maintain their profitability by reducing portions; no bad thing in the land of the obese, but a sad reflection on the days of the ubiquitous doggy bag. Still others are, not so subtly, nibbling away at the quality of what they serve. On three occasions recently I have experienced platters that could only have been described as niggardly.
On one occasion, a supposed garden salad contained nothing but lettuce, shaved raw carrot and few bits of celery. On two others, fish dishes that had no accompaniments other than a baked potato in one instance, and two skewers of unripe melon, cantaloupe and a couple of pieces of chewy pineapple on another. Not a wise strategy in times when holding on to customers is vital. I didn’t complain, but I won’t go back. Beware of the uncomplaining diner.


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