Five Questions for Gray Swoope
Around the State
As chief executive officer of Enterprise Florida and the state's commerce secretary, Gray Swoope leads efforts to draw businesses to Florida. In doing so, he is a key point man for Gov. Rick Scott, who has made job creation the highest-profile issue in his administration.
Prior to his appointment in February 2011, Swoope was executive director of the Mississippi Development Authority, a Cabinet-level position appointed by Gov. Haley Barbour. During his tenure, Swoope oversaw the $4.5 billion federally funded program for Hurricane Katrina recovery. He also led the agency's recruitment of Toyota, which established its tenth North American manufacturing facility in Mississippi -- along with a number of its suppliers: GE Aviation and PACCAR, the manufacturer of Kenworth and Peterbilt trucks.
Before coming to the Mississippi Development Authority, Swoope served as president of Area Development Partnership -- a private nonprofit that provides economic development and commerce services for Hattiesburg and the surrounding region, and as division director of the Arkansas Economic Development Commission in Little Rock.
Swoope earned his bachelors and master's degrees in business administration at Mississippi State University.
The News Service of Florida has five questions for Gray Swoope:
Q: Gov. Scott recruited you from Mississippi after his election. Describe what you found when you arrived and where we are now.
SWOOPE: Well, first of all, it's a real honor to work for the state of Florida. And when I got here, I think I found opportunity. You look at a state like Florida and all the resources and the things that we have to offer, but we probably weren't as strong as a team as we should be for economic development. And so we operated in silos. We weren't working together -- not just in Enterprise Florida, but other entities. ... And if we're not working together, then we can't have an effective state strategy.
Also, it was interesting to find that we didn't have some of the things like relationships, like I said, on the local level, but outside the state as well: relationships with site-selection consultants, relationships with businesses that have multiple locations around this country.
So, as I said, it was a great opportunity, and I knew this was a state that could compete by just working together.
(As secretary of commerce, you could break down some of those silos.) I've always said that Florida's had a kind of bifurcated process for doing economic development. So if you think about it in terms of in the old days, you had Enterprise Florida, that was working projects, and then you had the Office of Tourism, Trade and Economic Development in the governor's office -- OTTED -- and that was where incentives were vetted, projects were vetted and approved. And there was not a relationship between the two. Not one that was very clear.
So with strong processes now with the Department of Economic Opportunity that we know how our projects flow, competitive projects, that Enterprise Florida's working the project up until the time the incentives are actually put on the table to the time they're approved, the Department of Economic Opportunity's with us at the table, so that there's no question about context of how projects evolved instead of starting all over in the process. Because you know, speed to market's very important.
Q: What from Mississippi's economic development landscape did you bring to Florida?
SWOOPE: First of all, they're very different states in their approach to economic development as far as a public-private partnership versus (an) all-public partnership. That part's different. But one thing's common. I honestly think to be successful as a state economic development team, you have to work together as a team. It's a spirit of cooperation, a spirit of teamwork that makes you successful and sets you apart from the others.
And so if you look at the states that we have to compete with, Florida, as I mentioned earlier, had this bifurcated process -- and that's hard to compete when you really can't give a straight answer. Just as we're sitting here today face-to-face, if I'm sitting with a company and talking about doing business in Florida, if I said "Well, I'll get back with you, I'm not sure if we can do that" -- the other states are sitting out there every day, and they can look you in the eye and say, "This is what it takes, this is what we need to do, this is how we compete for jobs." So it's that spirit of cooperation that transcends from whether you're in Mississippi or you're in Florida.
(Are other states doing anything that Florida should emulate?) You asked me earlier about walking in. One of the observations is just: the tools in the toolbox to compete. And so I think now we're beginning to hit our stride. We've been here three years now, catching up with what other states were doing -- but small things. Things like having a sites-and-buildings database. When you're out there selling your state, whether it's (an) aerospace aviation project or a life science project, most often, the site-selection consultants have already done their thorough research on your state. And when they're doing that, they're going to their website and they're looking at "What are the available sites? What are the available buildings?" Well, the state of Florida didn't have that. Every one of these surrounding states has an available sites-and-buildings database.
The other thing the states were doing that we're doing now is really working with our partners. Those partners are utility partners, they're our communities, they're our public partners. And it's all of us working together to put the best foot forward to compete for these competitive projects.
The last thing other states have done: They've always had a great relationship with site-selection consultants. They'll tell you they do probably a little over 30 percent of the deals that are out there -- that number, I think, is higher on the larger capital-intensive projects because companies want to make sure they're making the right decisions. You have to have a relationship with that site-selection consultant. You cannot let 30 percent of your projects just say they're not going to compete with you because we don't have the relationship.
Q: What do you say to criticism that Florida is paying too much in economic incentives to companies that don't keep their promises to create jobs?
SWOOPE: Well, first of all, that's not true. All our incentives are performance-based. And so if they're not performing, then there are claw-backs, there are things we can do to protect the taxpayer. There's a fiduciary responsibility.
I get tickled at that, because we've had four independent reports on incentives recently. Every single one of those reports, four different groups -- one private sector, (the Office of Economic and Demographic Research), (the Office of Program Policy Analysis and Government Accountability), our own report and then Ernst & Young even did a report -- every one of them found that the incentives in this state work, and they're based on performance.
So if you look at overall, Quick Action Closing Fund -- that's probably where the state has the most risk, so to speak, in an incentive, because those are closing funds. Over the life of quick action closing funds, there's been less than 1 percent failure -- total, over the life.
If you look at a program like Qualified Targeted Industry, which is a tax rebate, performance-based, you look at the number of jobs the last three years, which is what one of those reports looked at, that they're contracted to perform and what they've actually performed, they're 32 percent ahead of schedule. So they're working.
Again, in a perfect world, I'd love to say, "Hey, come to Florida, we don't have to do incentives." But businesses today know that there's a premium for jobs. And so if we're looking for game-changing type projects that -- talking about jobs that we want in this state so our college kids can stay here, and the type of jobs we're envious of, (then) you have to compete.
And so you have to look at what's right from a fiduciary responsibility, first of all, of what has to be returned to the state. And if there's a return to the state, we hope there's a return to the business. So I always take the approach that incentives will never make a bad deal good, but they can make a good deal better.
Q: There have been recent accusations that EFI abused taxpayer dollars with spending for limousines, luxury meals, resorts and hotels, etc. EFI explained the reasons for the expenditures and the sources of the funds -- not, as charged, taxpayer dollars in every case. Why do you think EFI is the target of such criticism?
SWOOPE: You know, I'm baffled by it. I would like to think it's a lack of understanding. As you can see, I'll sit down with anybody and talk about the process. We're transparent. You can go to our website, and everything that people question about is out there. We have nothing to hide.
It's been my experience when working with credible watchdog groups that you have an opportunity to build better public policy. And we work with a lot of them that do that. For instance, they have some things that they want to talk about, they'll come in, sit at this table with us and say, "Hey, these are our findings. Help us to understand how we can build a better public policy based on our findings." And then we can point out, "Oh, that's accurate, that's not accurate," and you have a conversation so there's a greater good for everybody.
Like I said, I don't understand why, for instance, you pick out expenses that you know are inflammatory, that you don't show context with. So if you're thorough and you look at the expense report and you see, "Oh, you paid for a limousine service," for instance. The public then thinks, well, those guys are just out there renting limousines, when in fact the limousine service is, we used a bus to transport the board from an event to another event. A bus!
And so I would love to have that dialog and understand, but I don't know that we ever will. But I know that what we're doing here is totally legal. We're audited every year. We're doing everything we can to be as transparent as possible. And our focus right now is just trying not to get distracted by that, continue to do the right thing, because we've raised the bar. And I'll let our numbers speak for (themselves) because I think this organization is doing a better job than what it's ever done in its going-on-18-year history.
Q: Economic development interests are synonymous with reducing regulations. What are some examples of big fish that went to another state because of Florida's regulatory codes?
SWOOPE: Well, you're not going to want to point and say this is X, Y, Z company that left because of regulations, because there's a lot of things in the process. But I can tell you this: that this state probably did not get to see a lot of projects because of regulations being burdensome.
Last week, as a matter of fact, I was sitting with a company talking about a project that they're going to have that's going to look at the Southeast. And they laid out their criteria. And I know their criteria and this product that they're going to make. And the timeline that they want to make, everything's got to be in synch. And if your state is listed as there is a high risk of permitting delays, then we won't even get the look. We won't even get the request for proposals. That is very real.
I look at the good work that (the Department of Environmental Protection is) doing. First of all, we want to protect our environment. Like you and all Floridians here, we have a beautiful environment, we want to enjoy that. It brings 100 million visitors to our state a year -- we're going to protect that. And so there are times on a permit it's OK to say no. ... But what you don't want to do is get into a process that goes on and on and on, where the company cannot mitigate the risk. And so I look at the good job that Herschel Vineyard, Secretary Vineyard and DEP and being able to improve their cycle time for just -- I think three years ago it was just under 80 days to get a permit to today, that we're down to 33 days to get a permit. And that's average across the board.
But even just small-business permits. You look at (the Department of Business and Professional Regulation) -- they've gone from what was 41 days to get a business license and now it's less than two days. And so the average entrepreneur -- it helps everybody by doing that. And it truly does create jobs.