In attendance: Meeting Attendees: Elaine Brown (Chair), Guy Anderson, Sarah Boren, Sandra L. Brooks, Lee Brown, Cathy Chambers, Jeane Chappell, Yank Coble, Jim Crooks, Logan Cross, John Edwards, Marilyn Feldstein, Bill Gassett, Gabriel Hanson, Andre Higgins, David Johnson, Bill Larson, Jack Manilla, Tresa Maples, Bill Mason, Karen Mathis, Colleen McFarlane, Julie P. McNeil, Granville Reed, Clive Ricketts, Michelle Tappouni, Deborah K. Thompson, Joe Whitaker, and David Wielosiwski, [If your name does not appear, but you were in attendance, please let us know.] Staff Members: Mickee Brown, Skip Cramer, Steve Rankin and Demetrius Jenkins Meeting Time: Noon – 1:30 PM Chair, Elaine Brown welcomed the study committee and thanked everyone for their participation. The committee approved the January 12th meeting summary with minor changes. The January 19th meeting summary was distributed for committee review with approval to be discussed on February 2nd. The chair introduced the day’s speakers and the presentations began shortly thereafter. Captain Aaron A. Bowman, USN (Ret.), former Commanding Officer, Naval Station Mayport; Dr. Yank Coble, Director, Center for Global Health and Medical Diplomacy and Chair, Healthcare and Bioscience Council of Northeast Florida; and Chris Kauffmann, Chief Operating Officer, JAXPORT Aaron Bowman Presentation Speaker Questions

1. What is the current economic and job impact of the military’s presence in Northeast Florida and what are the prospects for growth or decline?

2. How does the military, the Navy specifically, affect the economic competitiveness of Northeast Florida?

3. Why is Northeast Florida an attractive market for Navy veterans? What should be done to leverage the availability this veteran workforce to attract jobs throughout the Northeast Florida seven-county region?

4. Is Northeast Florida effectively maximizing its potential for attracting military and defense contractors given the number of military personnel and the number of installations in the area? What more, if anything, needs to be done?

NAS Jacksonville is recognized as a center of excellence and moderate growth is expected to continue. Growth at NS Mayport has fallen and will continue to decline before replacement littoral combat ships arrive to replace departing frigates. Under the watch of the current commander at Mayport some 30-40 percent of personnel will be lost. Those jobs will not be recovered until approximately 2021, which affect both military and civilian jobs.

The Navy’s decisions are based upon operational needs. Local communities – schools, businesses, etc. are expected to adapt as necessary. Still, local government should be proactive in maintaining its relationship with the military.

Average impact of the Navy is $4.5 billion dollars.

Military construction projects bring dollars into the local economy. Projects totaling approximately $1 Billion are slated for Northeast Florida including a gym ($25 million), dredging ($45 million), and pier upgrades ($200 million). Likewise ship repair jobs are on the decline due to the loss of the US Kennedy and thirteen frigates.

Recession Recovery and Beyond

Study Committee Meeting Duval County

January 26, 2011

Clanzenetta “Mickee” Brown

JCCI Study Planner mickee@jcci.org

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Northeast Florida is an attractive market for Navy veterans for the same reasons that others opt to move to the area – low cost of living, favorable tax structure, and good weather. The military support structure is good and this is a military friendly community.

The majority of retirees who choose Northeast Florida have had duty in this area, which speaks well of the community. The Jacksonville area is also the most requested duty station for Navy personnel. This suggests we could be marketing the region service members leaving active duty who have not previously been stationed here.

Despite this being a major military area, the presence of defense contractors is very small when you look at other military communities, such as Norfolk, Washington, San Diego, and Los Angeles. Orlando has been quite successful attracting defense contractors. With its logistical capacity and low cost of goods, Jacksonville should be able to compete similarly.

The Navy will remain a strong presence in the region for many years. However, budget pressures across the Department of Defense and the Navy’s plan to reduce its forces will affect future expenditures.

Yank Coble Presentation Speaker Questions

1. What is the economic impact (i.e. jobs, dollars, etc.) of the health and medical sector on the regional economy?

2. What trends do you anticipate with regard to the health and medical sector over the next 5 to 10 years?

3. Describe the role of the Healthcare & Bioscience Council and its agenda. 4. What can be doing to create a medical hub here in Northeast Florida? What are the

component pieces for creating this hub? What is the Northeast Florida region missing?

The mission of the Healthcare and Bioscience Council is to, “Improve the individual and economic health of Northeast Florida.” The Council was founded in 2007 as a result of the Amelia Island Caring Community Conference. Community leaders met over three days with regional and national experts to evaluate our Healthcare and Bioscience issues and assets and define priority opportunities to be addressed by the Council

Good health is our greatest economic asset; it is universal in value – we all want to be healthy. Investments in health care and research offer a high rate of return economically and socially.

In 2008, the direct impact of healthcare and bioscience-related industries in Northeast Florida was $24.5 billion. Nearly 20 percent of those employed work in this industry. Despite the recession, healthcare and biosciences remained viable, growing 8.5 percent from 2006-2008.

Our goal for Northeast Florida is to become a regional referral center and a safe care community with Healthcare and Bioscience as its defining industry. The Council has identified 20 organizations that make-up Northeast Florida’s medical corridor: Baptist Beaches Hospital, Mayo Clinic and Hospital, UNF Brooks College of Health and Center for Global Health and Medical Diplomacy, Blue Cross Blue Shield, Vistakon, Medtronic, St. Luke’s Hospital, Orange Park Medical Center, Naval Hospital, Memorial Hospital, Brooks Rehab, Nemours, Baptist (Downtown, South, and Wolfson), St. Vincent’s, VA Clinic, and UF & Shands.

There is a great deal of research that takes place locally in Northeast Florida o $99.5 million- UNF, Shands, Nemours, and Mayo (2010) o $672 million- Jacksonville institutions and the University of Florida (2007)

In comparison, $384 million in research dollars were counted at USF and UCF, the Florida High Tech (I-4) corridor (2007). [Staff note: In 2005 the University of Florida became a principal partner of the Florida High Tech Corridor Council, which was founded by UCF and USF in 1996. Two Cornerstone Regional Partnership Counties - Flagler and Putnam – are also members of the FHTCC]

The number of medical residencies has increased in Northeast Florida from 501 in 2008 to 545 in 2010 for Jacksonville-based institutions. Including the University of Florida’s 666 residents in 2010, this increases the number of residents to 1,212. Retaining those residents impacts the availability

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of care and the overall local talent pool. [Staff note: It’s estimated 70 to 80% of medical residents remain in the geographic region of the institution where they completed their residency.]

Projections indicate that there is and will continue to be a physician shortage in Florida and in the Unites States. The more serious shortage in Florida is attributable to several factors including: medical liability concerns, an aging population with more chronic illnesses, interrupted or abbreviated physician careers, and younger retirement age for physicians, and low production of Florida trained physicians. Florida has seen an increase in the number of graduates from schools of osteopathy, but not an increase in those residencies.

The rate at which young people are entering graduate and undergraduate medical education programs in Florida is approximately one half the national averages. From a global perspective, students in the U.S. are not doing as well in science and math as their counterparts in other parts of the world – ranking 23rd and 31st internationally. Nevertheless, U.S. medical education, medical care, and biomedical science remain the envy of the world and the investment in bioscience and biomedical technology is considered a high-return on investment industry. According to the U.S. Preventive Services Task Force health outcomes are attributable to individuals 50 percent, environment 20 percent, genetics 20 percent, and medical care 10 percent. The U.S. is ranked low in health outcomes but number one in the world in most medical outcomes.

Northeast Florida including the University of Florida (which is also partnering with the University of Central Florida and Orlando Health System in medical care, education and research), has far more assets than Orlando or the Central Florida Corridor today. However, the Orlando/Lake Nona development is growing far more rapidly than expected by many. The investment being made in the “Medical City” is “conservatively $2 Billion”. Eighty percent of the ten year economic activity projection from the 2006 Milken Institute study, including $7.6 Billion in annual economic activity, was reached in two years. The UCF College of Medicine and life sciences cluster projection of 30,000 jobs, $459.9 annual tax revenue, and $2.8 billion in annual wages by 2017 now appears a conservative estimate. Fundamental to this unusual progress was a $10 million contribution to UCF, matched by $10 Million PICO funds, to form the Burnett School of Biomedical Sciences and a $12.5 million dollar contribution and real estate provided by the Tavistock Corporation to the UCF College of Medicine in Lake Nona and the subsequent attraction of the Burnham Research Institute, the Nemours Hospital, the VA Hospital and extended care facility, and the UF, MD Anderson, and Duke biomedical research facilities. A very large check can make a medical school or a research institute a reality.

Chris Kauffman Presentation Speaker Questions

1. What are the JAXPORT’s plans for expansion with regard to both the marine and cruise businesses? Discuss the assets and challenges associated with the port’s expansion plans.

2. Is it possible for every county in the region to benefit economically from port expansion? Discuss the relationship between JAXPORT, Fernandina and the other regional non deepwater ports like St. Augustine, and St. Johns River facilities in Clay, St. Johns and Putnam counties.

3. What will happen to JAXPORT’s expansion plans should federal funds for deepening the harbor not be available? What is the contingency plan and regional impact on jobs and the economy if we are not post-Panamax capable?

4. What type of community support does JAXPORT need to maximize its potential as a job generating organization?

In 2010 the economic impact of the port was $19 billion, 165 direct jobs and 65,000 port-dependent jobs and port-related jobs. When we say “the port” it includes the Tallyrand, Dames Point, and Blount Island terminals as well as the private terminals owned by various petroleum companies and Crowley.

Prior to the TraPac terminal at Dames Point, Jacksonville was known primarily for its trade with Puerto Rico and as an entry point for automobiles. Eighty-five percent of the cargo into PR comes

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through JaxPort.

Eight new shipping lines, primarily Asian companies who rank among the top 20 in world, have come online post TraPac.

With Hanjin delayed until 2016, the cruise terminal will remain in its current location for awhile. The cruise business supports 450 jobs and represents $60 million in economic impact. In the future we hope to place the cruise ship terminal east of the Dames Point to avoid air draft issues. Some of the tallest cruise ships can barely fit under the Dames Point Bridge at present.

Deepening the Jacksonville channel will maximize JaxPort’s potential. The channel and harbor must be dredged to a depth of 50 feet to accommodate the larger, post-Panamax, 6000-8000 TEU container ships. The cost for the 12 miles of dredging (from 40’ to 50’) is estimated at $650 million of which Jacksonville must contribute $200 million. The port does not have the funds to contribute on its own. Annual revenue is about $50 million: $34 million goes to costs and $16 million for debt service.

Deepening the port could generate 75,000 jobs, increase annual TEU traffic by more than 2 million units, and create $3 to $6 billion in economic impact. Without dredging, JaxPort will remain a tier II port.

Each speaker has provided a copy of his PPT presentation. Please visit the study website to view online http://jccirecoverystudy.blogspot.com/p/meeting-handouts.html. Question and answers with speakers Q. Does the new governor support dredging the Jacksonville Harbor? Kauffmann: Governor Scott visited the port recently as is most interested in education and jobs. The use of tax dollars must be supported by a return on investment to the state of Florida. The governor will be meeting with U.S. Transportation Secretary Lahood to promote investment in the Port of Miami and acquire approvals for JaxPort. The creation of 75,000 port related jobs goes a long way in supporting the 700,000 jobs that the governor promised to create while campaigning. Q. Is it possible for DoD to forgo sending an aircraft carrier to Mayport so that the Jacksonville channel is dredged instead? Bowman: The two efforts are not related. One effort cannot be substituted for the other. Dispersing the carrier fleet has been approved by the Department of Defense and the Navy. It is a matter of national security. Q. Can private equity be used to dredge Jacksonville Harbor? Kauffman: We have looked at the possibility of a public, private partnership; however the challenge is the low return on investment. The two Georgia ports at Savannah and Brunswick have received generous amounts of funding from the state. JaxPort is tenant-operated while Savannah and Charleston are port-operated. This allows us to compete on costs. Port investment in Florida – 14 ports to Georgia’s two – is a challenge. Q. When will the Panama Canal project be completed? Must the Navy dredging project occur before the JaxPort dredging project? What is Hanjin’s drop dead date for the port deepening to occur? Kauffman: The Panama Canal will be completed in 2016. The delay for deepening the channel is authorization from the Army Corp of Engineers. Hanjin is committed to JaxPort; there is not a deadline. However, Hanjin’s operations are predicated on servicing the higher capacity post-Panamax ships. Q. Will Mile Point corrections enhance port operations? Kauffman: The total cost for the project is $35 million. U.S. Rep. John Mica has arranged for the Army Corps of Engineers to make repairs at the Mile Point using operations and maintenance funds to remove half of a wall that was installed in the river 100 years ago. That partial fix is $3.5 million. This

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should happen by October 2011. Q. Because Florida hosts a large number of medical residents does that indicate the need for a medical school in Jacksonville? Coble: Florida hosts approximately one-half of the medical residents per 100,000 people when compared to the U.S. average. Northeast Florida has a large number of residents and residencies, as well as fellowships in many specialties. These opportunities are highly sought by medical school graduates from Florida and beyond. A medical school is not necessary to meet the demand for residencies at this time. Medical students who receive some of their third and fourth year clinical education in Jacksonville’s programs provide an excellent opportunity to recruit highly desirable candidates for our residencies, and increase even further the likelihood they will remain in the region. Thus, the priority is increasing medical residencies. it is reasonable that the question is often asked why there is no medical school in Jacksonville in view of the serious medical workforce deficit, especially in Florida; the large local economic impact of Medical Schools and teaching hospitals ($4.85 average by AAMC studies) and there contribution to bioscience education, technology and industry; and the size and medical sophistication of Jacksonville, - the major challenge is funding. Florida is home to the following medical schools - the University of Florida (1956), University of Miami (1952), and University of South Florida (1965), Florida State University (2000), University of Central Florida (2006), Florida International University (2006), and Florida Atlantic University (2005 joint program with UM, 2010 independent program approved by the Florida Legislature). Florida’s recent surge in funding of medical schools, the state’s budget deficit, and the difficult economy make initiating a new medical school challenging despite the wealth of healthcare and bioscience assets in this area and the still low medical student positions per capita in Florida. Funding requires legislative attention and political power that has resided in the more populated portions of the state. The appearance of increased political prominence of Northeast Florida may provide special opportunity. The impacts of a medical school are enhanced biomedical science research and education – these are gaps locally. Former Governor Bush was able to create a large foundation from Federal, State and other sources and recruited world-class bioscience research institutes such as The Scripps Research Institute, Torrey Pines Institute, Burnham Research Institute, and others. Each is closely affiliated with medical schools. Such institutions could greatly benefit this region. Q. Is it possible to capitalize on the shift in technology associated with medicine? Coble: Jacksonville and Northeast Florida are particularly well positioned to capitalize on the extraordinary advances in technology. Health Informatics, including Electronic Medical Records, has high utilization in local institutions of medical care. The diversity of our population along with our advanced medical systems and medical residency and fellowship programs provide an excellent opportunity to expand our clinical and biomedical research. Medtronic, Vistakon, the Mayo Clinic, the Nemours Clinic, and the University of Florida Jacksonville and Gainesville, and the University of North Florida are institutions particularly well suited to capitalize on rapidly developing medical technology and lead to greater innovation and opportunities in the region. Micro-surgery and robotic surgery are widely performed; remote assisted robotic surgery is on the horizon. Our Proton Beam Center is unique technology which has greatly broadened its application to patients and expanded research opportunity. The special collaborative relations between Northeast Florida medical care and medical education institutions (undergraduate, graduate, and continuing professional development) and unique collaborations between University of Florida and both the Orlando Health System and UF/Shands Jacksonville, are growing and providing opportunities to capitalize on technology advances.

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Group discussion comments

The real challenge is making sure that jobs in many sectors are represented. We do not want a community of just longshoremen. How do you take advantage of the community’s assets and meet the need for jobs, while also diversifying the economy?

The collaboration between the medical institutions is very important and should be on our radar as a major asset.

I am surprised that the Navy makes decisions based on operational needs with little consideration for local economies, which includes civilian jobs and defense contractors.

We are making plans anticipating spending someone else’s money. What can we do to help ourselves? We cannot wait for someone else.

We did not hear about the affects of dredging or how bedrock might limit the effort.

With the exception of Shands, there are no medical resources north of the river.

What affects do the Navy’s decisions have on small and minority businesses? Comments/Questions sent via email

How is the economic impact of a given industry measured? As this study moves forward, and we begin to weigh the relative merits of say “investing” in the port vs. life sciences or even education, we want to make sure that we use a standard measure(s) (as imperfect as it might be) of impact so that we can compare apples to apples.

What is the worth of a job created in the local economy, i.e. can the benefit be quantified? Knowing exactly how say 75,000 jobs will benefit the economy would be useful in deciding whether it is worth spending $500M to dredge the river. If the life time benefit of the jobs is only $300M, then the dredging just wouldn’t make sense. So some context in that regard would be useful. If there is a clear “business case” for something, raising the money becomes easier. People are just wary of situations where there are public (socialized) costs and losses, and private profits.

If the State of Florida cannot/will not cover the local one-third share of dredging costs (~$200 million), is that bondable debt? If so, who would do it and any ideas how might it be paid off?

We appear to have most of the elements to be a center of medical excellence/medical hub yet we seem to be standing still, watching Central and South Florida grow while stealing our girlfriend to boot (the University of Florida). What is preventing us from making a decision and taking action?

The chair reminded the committee to attend next week’s meeting and asked them to complete their group process check forms. The meeting was adjourned at 1:45 PM.

### Yank Coble’s responses to the study committee’s questions/comments posed after the resource speakers were excused on 1.26.2011 Regarding the lack of medical resources “North of the River”: In addition to Shands Jacksonville, the following medical resources/facilities are located in North West Jacksonville - the UF Academic Health Science Center and College of Medicine Regional Campus Jacksonville, the Proton Beam Center, the UF Simulation Center, Northeast Florida’s only Level I Trauma Center, and the VA Clinic (with funding to significantly expand their facilities in the near future). UF/Shands Jacksonville has primary care clinics and property for expanded medical activity in Northwest Jacksonville as well. We appear to have most of the elements to be a center of medical excellence/medical hub yet we seem to be standing still, watching Central and South Florida grow while stealing our girlfriend to boot (the University of Florida). What is preventing us from making a decision and

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taking action? We are in fact a center/region of medical excellence and working to enhance that status and receive broader recognition. There is little that medical science offers globally that cannot be obtained in high-quality in NE Florida and thus seldom need for referral or second opinion out of the region. Despite our excellent, though gradual progress, the perception is we are “standing still” in comparison with the dramatic progress since 2007 in Central Florida/Lake Nona and South Florida with state funding of their three new medical schools and affiliated research centers recruited with the help of state funding. The development of a four-year regional medical school campus of Mercer Medical School in Savannah along with a full time third and fourth year regional medical campus at the Medical College of Georgia with state funding has also stimulated comparisons. UF is a large teaching and research institution as well as patient care referral center. It is not surprising that it would broaden its collaboration to Orlando. While Jacksonville may not provide UF clinical referrals as in the past, Jacksonville provides excellent research and education opportunities and partnerships for UF. The UF Academic Health Science Center regional campus at Shands/Jacksonville is the third largest regional campus and has medical student, pharmacy, and nursing education and until recently, dental education. It has been anticipated that UF would expand its medical education in Jacksonville beyond 4 to 8 week clinical rotations of medical students in the third and fourth year. That is not yet a part of the UF strategic plan. The growth and success of UNF has raised the question of whether a medical school might be created there. UNF, while having many important components complementary and valuable to a medical school, has not had medical education as part of its strategic plan. With biomedical education and research being a focus of UF and UF’s engagement in Jacksonville for decades, it is understandable that UNF perceives excellent opportunities to collaborate but not a need to fill a medical education void at this time. Mayo Clinic has a significant number of third and fourth-year Mayo Clinic Rochester College of Medicine medical students taking clinical rotations in Jacksonville and has plans for full-time third and fourth-year students. Nemours, Naval Hospital, Wolfson Hospital, St Vincent’s and others have medical students from Gainesville, Rochester, Uniformed Services University of the Health Sciences, Bethesda, MD and other medical schools obtaining clinical training in Jacksonville. Though these activities are important and highly valued, they do not constitute a medical school and have low public recognition. Jacksonville is blessed with great opportunities with its port and its healthcare and bioscience industry. In both opportunities, significant investments are necessary and timing is very important. Jacksonville has significant, well identified needs including downtown development and access to care of a large un- and under-insured population, a high prevalence of health and medical issues, and the necessity to compete with its port and healthcare/bioscience industry. Thus, it is understandably difficult for the political and economic leaders of the community to identify and act on what appear to be competing and complex priorities, compared to a community that might focus only on its port or only on its healthcare and bioscience industry with improvements in medical care, education and research. Ultimately, downtown will be helped by development of the Healthcare Bioscience Industry Corridor and by implementation of the plans for the port as well. Enhancing biomedical research and increasing medical residencies are identified by the Council as priorities. There is much support for a medical school, and a need, but it is not identified as an opportunity as pressing as the other two by the Council at this time, in part because of the capital needs and limited basic biomedical science research and education resources currently. Models of medical education are evolving that require less investment and flourish with collaboration. It is the hope and anticipation of the Council that important community efforts and expertise such as this Committee of JCCI and the newly formed Civic Council, along with the elected leaders and collaboration of our Healthcare and Bioscience Industry, will help focus our regional priorities and identify and mobilize political and economic resources in an aggressive strategic plan. How is the economic impact of your industry measured?

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Economic Impact Studies were initiated by the Center for Global Health and Medical Diplomacy in Collaboration with Dr. Paul Mason, Professor of Economics, the UNF Coggin College of Business and the Jacksonville Regional Chamber of Commerce for the 2007 Caring Community Conference, and updated in 2010. It is a model originated almost two decades ago by the San Antonio Chamber of Commerce and University of Texas Health Science Center, San Antonio and used by other communities to determine their status and progress. It uses NAICS data for selected five-digit SIC codes and measures revenues generated by the industry. Local institutions provide additional and more current information for the studies. Tripp Umback’s economic impact studies of nearly all the Academic Health Science Centers/Colleges of Medicine/Teaching Hospitals, commissioned by the American Association of Medical Colleges, may be found on the AAMC web site. In recent years, both UF and the Mayo Clinic have contracted for such studies. In Florida, the firm of Arduin, Laffer and Moore based in Tallahassee, have developed economic impact studies and projections and provided consultations that were important to the creation of the Florida State University College of Medicine, the University Of Central Florida College Of Medicine and others. Updates of the UCF studies may be found on the UCF College of Medicine web site. What is the worth of a job created in the local economy and can those benefits be quantified? The Healthcare and Bioscience Industry in Jacksonville has a significantly higher per capita income than the remaining industry. Dr. Mason states “The worth of a job created is the salary paid to the employee plus the multiplier effects associated with that employee and his/her family spending that money in the Jacksonville area. Employing a conservative multiplier of 1.8 suggests that a $50,000 job created is worth about $90,000.” The change in employment % can also be quantified and compared over time. More difficult to measure are the value of the high level of education and technical expertise necessary for growth and success of this industry and the association with other desirable industry and educational institutions. Healthcare and bioscience industries, including medical education, are highly desired and recruited in major cities and institutions in the USA and globally. Opportunities to collaborate nationally and globally are many and growing.