09-10-2007, 11:52 AM
Sales tax plunge shakes North Port :shock:
More than 100,000 square feet of new space will be available in the city, where retail sales are in decline
By MICHAEL BRAGA
michael.braga@heraldtribune.com
NORTH PORT -- The city of North Port's sales tax revenues were down sharply in June, representing the most serious year-over-year decline in sales since the beginning of the decade.
With more than 100,000 square feet of commercial retail space coming on line this year, the drop in sales could not have happened at a worse time.
No one questions the fact that the decline was brought on by the serious slump in North Port's two major industries: home building and real estate sales. What retailers, real estate agents and market watchers do not know is how long the slump will last.
Some think North Port is passing through nothing more than a much needed correction that will be resolved in a year to 18 months, when the excess inventory overhanging the real estate market gets bought up.
But others wonder whether North Port, and the greater Southwest Florida area, may be in for a more prolonged recession.
"I've talked to a lot of people who have ridden out downturns here," said Bob Vanderhyde, whose company is trying to lease the 36,000-square-foot Design Center on Toledo Blade Boulevard. "They say this one goes deeper. It's affecting a lot of established organizations."
Whatever the case, the plunge in retail sales is not making anyone feel confident these days.
Sales tax revenues collected by North Port in June from the .5 percent and 1 percent sales taxes amounted to just $581,590, 11.3 percent less than the $655,573 collected during the same month a year ago.
Though that is the first serious decline in sales tax collection in five years, year-over-year sales had been slowing in recent months.
Sales tax revenues in May were up just 1 percent from the same month in 2006, while sales tax revenues in April were up just 3.2 percent when compared with the same 12-month period.
That compares with increases in sales tax revenues of nearly 20 percent from April, May and June of 2004 to those same three months a year later.
Some retailers, however, say the slowdown and decline in sales tax numbers do not really show what retailers in North Port have been going through.
"There are not many people coming in," :shock: said Karen Taylor, owner of Second Chance Home Furnishings -- a 12-year-old business on Tamiami Trail. "Our sales have dropped by half. Everyone is talking about how their business is down, that they've had to let people go. I've had to let mine go."
If sales do not pick up over the next 12 months, she and her husband might have to shut down, Taylor said.
"It's dropped that drastically," she said.
Bill Conway, who owns the Li'l Saver Market on Tamiami Trail, echoed Taylor's concerns.
"Of course we're down. Everybody is," Conway said. "There's no construction. That was what was driving the economy."
In the midst of all this, developers will complete more than 100,000 square feet of retail space this year.
About 50,000 square feet of that is emerging on Tamiami Trail near Sumter Boulevard. Another 20,000 square feet is going up in Bobcat Village, and then there is the 36,000-square-foot design center that Arnold & Arnold Real Estate has erected on Toledo Blade.
Optimists say this space will be absorbed relatively quickly given North Port's rapid population growth and the fact that the city has been under-served by retail.
"We were grossly under-built here," said Fred Schute, a North Port developer and real estate agent. "The space will fill up. It's just that everyone is scared to death to rent right now because of all the doom-and-gloom. But this is just a correction. It will end, and people would be silly not to take advantage of the opportunities."
Retailers are showing interest, said Vanderhyde, who is trying to lease the 36,000-square-foot design center on Toledo Blade.
"The interest is much slower than we had hoped," Vanderhyde said. :shock:
"What happened in residential real estate obviously had an impact on the sense of urgency for some people."
As a result, Arnold & Arnold may end up renting some of its space to a restaurant or video arcade instead of the high-end plumbers, tile and flooring companies or interior decorators that the building was meant for.
But it will fill, Vanderhyde said.
"The location near the Interstate is one of our advantages."
But pessimists think that it will take a long time for North Port's economy to recover and for its new retail space to fill.
They say North Port's population may be inflated by more than 10 percent. :shock:
Though the U.S. Census Bureau recently came out with a report that put North Port's population at more than 50,000, the calculations were based in part on building permits.
Not only were 2,100 more building permits issued than were actually used to build homes in 2004-05, but there are about 1,000 homes sitting empty in the city, says Dennis Black, a Port Charlotte appraiser who has studied the North Port market closely.
Multiply those 3,100 empty or nonexisting homes by 2.4 -- an average number of people per dwelling -- and you end up with nearly 7,500 fewer people in the city than retailers thought there would be when they anticipated the need for their products.
More than 100,000 square feet of new space will be available in the city, where retail sales are in decline
By MICHAEL BRAGA
michael.braga@heraldtribune.com
NORTH PORT -- The city of North Port's sales tax revenues were down sharply in June, representing the most serious year-over-year decline in sales since the beginning of the decade.
With more than 100,000 square feet of commercial retail space coming on line this year, the drop in sales could not have happened at a worse time.
No one questions the fact that the decline was brought on by the serious slump in North Port's two major industries: home building and real estate sales. What retailers, real estate agents and market watchers do not know is how long the slump will last.
Some think North Port is passing through nothing more than a much needed correction that will be resolved in a year to 18 months, when the excess inventory overhanging the real estate market gets bought up.
But others wonder whether North Port, and the greater Southwest Florida area, may be in for a more prolonged recession.
"I've talked to a lot of people who have ridden out downturns here," said Bob Vanderhyde, whose company is trying to lease the 36,000-square-foot Design Center on Toledo Blade Boulevard. "They say this one goes deeper. It's affecting a lot of established organizations."
Whatever the case, the plunge in retail sales is not making anyone feel confident these days.
Sales tax revenues collected by North Port in June from the .5 percent and 1 percent sales taxes amounted to just $581,590, 11.3 percent less than the $655,573 collected during the same month a year ago.
Though that is the first serious decline in sales tax collection in five years, year-over-year sales had been slowing in recent months.
Sales tax revenues in May were up just 1 percent from the same month in 2006, while sales tax revenues in April were up just 3.2 percent when compared with the same 12-month period.
That compares with increases in sales tax revenues of nearly 20 percent from April, May and June of 2004 to those same three months a year later.
Some retailers, however, say the slowdown and decline in sales tax numbers do not really show what retailers in North Port have been going through.
"There are not many people coming in," :shock: said Karen Taylor, owner of Second Chance Home Furnishings -- a 12-year-old business on Tamiami Trail. "Our sales have dropped by half. Everyone is talking about how their business is down, that they've had to let people go. I've had to let mine go."
If sales do not pick up over the next 12 months, she and her husband might have to shut down, Taylor said.
"It's dropped that drastically," she said.
Bill Conway, who owns the Li'l Saver Market on Tamiami Trail, echoed Taylor's concerns.
"Of course we're down. Everybody is," Conway said. "There's no construction. That was what was driving the economy."
In the midst of all this, developers will complete more than 100,000 square feet of retail space this year.
About 50,000 square feet of that is emerging on Tamiami Trail near Sumter Boulevard. Another 20,000 square feet is going up in Bobcat Village, and then there is the 36,000-square-foot design center that Arnold & Arnold Real Estate has erected on Toledo Blade.
Optimists say this space will be absorbed relatively quickly given North Port's rapid population growth and the fact that the city has been under-served by retail.
"We were grossly under-built here," said Fred Schute, a North Port developer and real estate agent. "The space will fill up. It's just that everyone is scared to death to rent right now because of all the doom-and-gloom. But this is just a correction. It will end, and people would be silly not to take advantage of the opportunities."
Retailers are showing interest, said Vanderhyde, who is trying to lease the 36,000-square-foot design center on Toledo Blade.
"The interest is much slower than we had hoped," Vanderhyde said. :shock:
"What happened in residential real estate obviously had an impact on the sense of urgency for some people."
As a result, Arnold & Arnold may end up renting some of its space to a restaurant or video arcade instead of the high-end plumbers, tile and flooring companies or interior decorators that the building was meant for.
But it will fill, Vanderhyde said.
"The location near the Interstate is one of our advantages."
But pessimists think that it will take a long time for North Port's economy to recover and for its new retail space to fill.
They say North Port's population may be inflated by more than 10 percent. :shock:
Though the U.S. Census Bureau recently came out with a report that put North Port's population at more than 50,000, the calculations were based in part on building permits.
Not only were 2,100 more building permits issued than were actually used to build homes in 2004-05, but there are about 1,000 homes sitting empty in the city, says Dennis Black, a Port Charlotte appraiser who has studied the North Port market closely.
Multiply those 3,100 empty or nonexisting homes by 2.4 -- an average number of people per dwelling -- and you end up with nearly 7,500 fewer people in the city than retailers thought there would be when they anticipated the need for their products.