2008 State of Downtown

With all the financial turmoil of the last few months, good economic news sometimes seems a distant memory. While most of us are troubled by the dramatic changes occurring almost daily in our national and world economy, a lot closer to home the reality on the street tells a different – and more positive and encouraging story. Continuing the trend started back in the early part of this decade, there are more employees working in Downtown Pensacola today than there were this same time last year.

For each of the last four years, the Pensacola Downtown Improvement Board has completed a comprehensive “Downtown Business Census and Survey” of the enterprises, both public and private, that have at least one employee housed in Downtown Pensacola. A one-hundred percent employee count is obtained through a door to door, telephone, and written canvassing over a several month period.

The 2008 results yielded a 1.7% growth in the number of businesses and a 4.1% growth in the number of employees. This year, Downtown Pensacola houses 578 total enterprises with at least one employee. Seven of those establishments are governments. While the growth this year is only about twenty-five percent of what it was in the 2007 analysis, Downtown has nonetheless seen the net number of enterprises grow by 9.2% since early 2005. The total size of the downtown workforce has not only grown over just the past year but also over the last four years (for a net gain of +831). As a result, the total downtown employment number now stands at 9594. Downtown Pensacola continues to be the primary employment center for the region.

Some might think it suspect that the workforce of downtown has increased during such an uncertain year. Upon closer analysis of the NAICS sectors present in downtown, the big gainers in terms of new business units were found in Wholesale Trade, Administration and Support, and Professional, Scientific and Technical Services. This latter group of fast growing employers offers compensation to its well educated workers at an average of just over $60,000 per year – or 58% higher than the all downtown average. When all the dust settles and the existing businesses are subtracted and the new businesses are added, downtown saw a net gain of 11 new businesses during the past year and 92 over the past four years.

The number of businesses responding that their business had improved during the last year fell from 64% in 2007 to 48% today. That’s still almost half of all enterprises downtown. Correspondingly, the number of businesses that identified a decline in their business during the same period rose to 16%. More than a third responded that their business had stayed about the same.

The ownership of downtown’s businesses is still majority male (54%). The percentage of female owned businesses and publically traded enterprises dropped slightly to 20% and 10% respectfully this year. However, the percentage of minority owned businesses increased again this year to 11% of the total – a positive attribute for our competition in the increasingly global economy.

The ages of the downtown workforce are getting younger. For males, the average age is now 39.44 years; and for females the mean age is 40.02. The number of downtown employees in the 26 to 45 age group grew by 25% during the past year. More than 54% of all downtown employees now fall within this age group. Conversely, the number of employees in the 18 to 25 age group and the 65 and over age group saw significant declines.

The tenure of downtown businesses now averages 13 years with the full range running from under one year to more than 254 years. This statistic should increase over time because 48% of all downtown businesses also own the downtown space where their enterprise is housed. This “ownership” statistic remains one of the highest in the nation regardless of city size. It also says a lot about the confidence that the businesses have in downtown Pensacola as an investment opportunity as well as their intentions to stay and grow here.

The gender of the downtown workforce continues to trend toward more female employees during 2008. In 2005, the percentage of female employees was 52%; today it is 56%. Each of the last four years has seen gains in the percentage of female employees in the downtown workforce.

When downtown businesses were asked to identify the factors that are most important for keeping their respective business in downtown, the top answers were identical to those in 2007. The top five factors for locating or keeping a business in downtown (outside of financial success) were identified in order of importance as: the arts and cultural offerings, the many special events, the historic buildings, the restaurant selection, and the central location of downtown.

Job growth is not the only encouraging occurrence of the past year. The number of people that reside in the downtown and call it their home also posted positive net gains during the last year. Sixty-three new households moved into downtown during the past year bringing the total number of households to 1158. Likewise, the net total number of people that live in one of the downtown residential units also increased by 136 during the past year. As a result, Downtown Pensacola is now home to 2002 residents. As such, it is the fastest growing neighborhood in the City. The occupancy rate for all built and habitable residential units increased during the past year by 2% to a total occupancy level of 88%. In short, people are still moving into downtown.

During the past year, we also introduced two major multi-year initiatives to stabilize and enhance downtown retail and to change – for the better – the experience of parking in the downtown area. I’m pleased to report that great progress is already being made with regards to implementation of these efforts.
Movement on the Downtown Retail Strategy has resulted in

The beginning of the conversion of Palafox Place back to two-way traffic
Creation of the Palafox Market at MLK Plaza
The creation of new marketing partnerships with local and surrounding CVBs to promote downtown’s history, its unique shopping, and its fine restaurants.
The creation of a retail storefront matching grant program
Expansion of the number of Gallery Nights

With regards to the Downtown Parking Management Strategy, similar movement has started:

Over 400 all day parkers have been moved out of the high-demand shared curbside parking spaces to make it easier for customers, clients, and visitors to park close to the businesses and attractions where they want to go.
Work is finally about to begin on major upgrades to public parking facilities on Jefferson and Baylen Streets to help make parking easier, more predictable, and more visible.
The reality of security in our garages has increased significantly with the placement of uniformed bicycle police officers in the Jefferson Street Garage during the evening and a zero tolerance policy for any type of illegal activity. As a result, more people now feel comfortable using off-street parking in the evenings.

Both of these initiatives are expected to take several years to fully complete – but great progress is being made already. With the positive job and residence statistics that downtown is still experiencing, we should expect continued progress on these foundational efforts. When fully implemented in four and three years respectively, the face as well as the future of downtown will be on a more stable and sustainable footing for years to come.

Downtown Pensacola, it’s still very worth the effort that so many of you in this room exert towards our common objective.
The Pensacola Downtown Improvement Board remains optimistic about what 2009 and beyond will bring for the heart of the City of Five Flags.

Franklin D. Kimbrough
Executive Director
Delivered at the 2008 Annual Meeting
October 10, 2008