Florida Gov. Ron DeSantis nixed a $10 million appropriation for Osceola County’s BRIDG advanced manufacturing center as part of sweeping round of vetoes Monday aimed at slashing the state budget by $1 billion in the wake of the coronavirus pandemic.
The BRIDG veto was a gut punch to the $70 million facility that anchors the county’s 500-acre NeoCity high tech district, and it caps a tumultuous year in which the non-profit cooperative saw the ousting of its chief executive officer and nearly lost its primary funding partner, University of Central Florida.
Acting CEO Brian Sapp said he had no advance notice of the pending veto and learned about it Monday afternoon when DeSantis released the 18-page list. Since then he has been meeting with UCF and county stakeholders and reaching out to its public and corporate clients to help sustain the program.
“The governor had to make very tough decisions as a result of the loss of revenue and our dependency on tourism,” Sapp said. “If we can maintain this course and continue to grow BRIDG, we are a solution to that problem. We can help diversify this economy we can help uplift economic opportunities.”
Osceola County Commissioner Cheryl Grieb believes it’s too soon to know how the budget cut will affect the development of NeoCity, but it will definitely limit the county’s ability to attract private investment at BRIDG. She said it’s disappointing that Osceola County, which has the highest unemployment rate in Florida due to COVID-19, was targeted for the region’s largest veto.
“We’ve got to find a way to get industry going, and this was a way to help make that happen – with higher paying jobs,” Grieb said.
The funding was earmarked for a number of operating expenses, but the bulk of it would have gone to pay for additional tools needed to ramp up production of semiconductors that are are a key component to smartphones, TVs, tablets, cars, aircraft, and industrial machines. The Florida Legislature increased the funding over its $6 million allocation in 2019 to focus on expanding the facility’s work within targeted industries: cybersecurity, defense, aerospace, and space. The hope was that the R&D capabilities would evolve to include medical, autonomous vehicles, agriculture, and more.
Grieb said the second round of tools funding was key to landing lucrative deals with the likes of consumer electronics companies like Samsung and LG. “You have to have the tools in place, and they need to be proven or you’re not going to get a Samsung to invest in your facility,” she said.
South Florida hotelier, Riviera Point Development Group, is also negotiating a contract with the county to build and operate a 200-room boutique hotel in NeoCity valued at $40 million, along with three hotels across the street at Osceola Heritage Park. Carlos Jose Chuman, director of finance and asset management for Riviera Point, told GrowthSpotter the funding issues with BRIDG won’t affect the timing of their investment since the NeoCity site was always slated to be the last of the four hotels to be developed.
Real estate developers and investors have looked at NeoCity to be an economic engine that will bring high-wage jobs to the Kissimmee area and wean Osceola County from its reliance on the tourism industry. A perceived blow to the district could create a lack of confidence in the E192 corridor and threaten a number of pending deals, according to David Calcanis, managing director of land for Colliers International in Orlando.
“There’s no way this won’t have ripple effects throughout that whole submarket, especially when you look at retail and how it’s been affected by the pandemic,” Calcanis said. “The good news is this shouldn’t be long lasting. Once we get the pandemic under control, I think the market will bounce back.”
Sapp told GrowthSpotter he’ll work closely with Osceola County and UCF to continue looking for ways to cut costs and seek new funding sources to offset the loss of state funding. “I’ll have to look at our budget very closely and determine what actions we need to take, but certainly I know that our growth plans and hiring, things like that, will be impacted.”
BRIDG spokeswoman Jenna Bainter noted that in the last several months, the agency has grown its revenue by securing new contracts and doubling the level of funding committed to its existing contracts.
In May, BRIDG secured a three-year, $28 million contract with Radiance Technologies. That announcement was preceded by two U.S. Department of Defense contract awards in late 2019 totaling $27.5 million. Earlier this month U.S. Commerce Secretary Wilbur Ross visited BRIDG to highlight the importance of U.S. leadership in the global semiconductor industry.
Sapp said Ross’s recent visit, combined with two new pieces of legislation introduced in Congress this month, give him reason to be optimistic. The bipartisan CHIPS for America Act and American Foundries Act would invest tens of billions of dollars in semiconductor manufacturing incentives and research initiatives over the next decade. The federal grants and incentives could help fill the gap left by the state budget cut, and BRIDG will be poised to compete for those funds as soon as they’re available.
“Those new federal initiatives that are available and being proposed for domestic semiconductors, those are ours out there to win, and it’s just about having the runway to get there,” Sapp said.