On the Tuesday before Thanksgiving, Florida Governor Rick Scott, Hertz CEO Mark Frissora, and other government officials officially broke ground at the site of the new corporate headquarters of Hertz Rent-A-Car in Estero, Florida. The decision to set up shop in Southwest Florida was announced earlier this year after the Fortune 300 Company spurned New Jersey’s efforts (including over $40 million in incentives) to remain in Bergen County: Hertz’s home for the past 25 years. Oklahoma, home to recent Hertz acquisition Dollar Thrifty, was swiftly ruled out despite having a more hospitable business climate than the Garden State. Even Texas, which is a favorite relocation destination for corporations, didn’t make the final cut.
So what made Florida – specifically the southwest region of the state – the best place for Hertz?
In a Forbes column published on December 5th, Travis H. Brown, author of How Money Walks, examines the significance of the relocation and economic impact this move will have for Lee and Collier counties.
Prior to Hertz’s May 7th announcement, relocating a Fortune 300 company to Southwest Florida had never been done. Companies similar in size and scope to Hertz seeking to relocate to the Sunshine State had traditionally favored the bigger cities and markets of Miami, Fort Lauderdale, Orlando, and Tampa. While these metropolitan areas have an advantage in population size, Lee and Collier counties remain economically competitive, having received roughly 22 percent of the total $95.61 billion in annual adjusted gross income (AGI) Florida gained between 1992 and 2010. Tourism in the region and entire state has also increased as the annual number of passengers coming and going from Southwest Florida International Airport has risen by more than 2 million in the last decade, and Florida, as a whole, had double the amount of tourists this past year than New York and the Big Apple. This is all good news for a corporation built around the travel industry.
On the subject of the overall economic impact of this move, Brown states:
According to an economic impact study conducted by Florida Gulf Coast University, Lee County can expect the creation of 700 new jobs by Hertz alone over a five-year period. During this time, another 1,000 new jobs will be created and an annual economic impact, upon project completion, is forecasted to be $190.2 million as a result. Even though the study only covers 2013 to 2017, the economic benefits are projected to continue well past 2017. Quite the economic boost for a county where the average annual wage in 2011 was $38,193 and unemployment was 6.8 percent as of March 2013.
With an ever-wider divide being created between high and low tax states, more Fortune 200, 300, and 500 companies, as well as smaller businesses, will begin to migrate to states such as Florida, where Governor Scott is working tirelessly to reduce the financial burdens of individuals and businesses.