Arthrex will expand in S.C. partly due to apparent limits to growth in Collier

When Collier County Commission Chairwoman Penny Taylor heard of Arthrex's plans to expand in South Carolina, she wasn't surprised.

She was disappointed.

On Monday the company announced it would build a $74 million plant and create 1,000 jobs to make medical surgical devices in Anderson County, South Carolina.

Bottom line for Collier County? It means a multimillion-dollar investment and jobs that will go somewhere else.

"This is a wake-up call because Collier County has to make some significant commitments if they want to diversify to a manufacturing economy," Taylor said. "There will be significant changes required and significant investments. Companies like Arthrex, they move at warp speed."

Although county leaders have discussed diversifying the local economy for years so it's not as reliant on tourism, construction and agriculture, they have been slow to make it happen, Taylor said. 

She hopes that will change — and Anderson County might be worth a look to see how economic development is being done there, she said.

Arthrex will purchase a 220-acre Technology & Manufacturing Center in Sandy Springs, South Carolina, to build the new plant. The government-owned park has been in development by Anderson County for about a year to attract just such an opportunity.

"I think we have a lot to learn about how they are preparing their county for the future," Taylor said. "What future is Collier County envisioning? These
are very important questions, and it's one thing to voice them, but it's another thing to invest in them, and I've not seen the investment yet."

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One of the biggest challenges in Collier County remains a shortage of affordable workforce housing, which is hampering the ability to create jobs.

A group the county appointed to come up with a plan for unmet housing needs will make recommendations to county commissioners on how to ease the problem Wednesday, but they won't be without controversy.

"We've seen it again and again: 'We live in paradise, and by gosh, don't put any workforce housing around us. Oh no,' " Taylor said.  

Michael Dalby, president and CEO of the Greater Naples Chamber of Commerce, said the expansion in South Carolina "shines a spotlight on the need for more workforce training resources ... so more of our citizens can tap into job opportunities, like working for Arthrex and other manufacturers."

The decision to put the plant in Anderson County, he said, also highlights the benefit of having a publicly held business park.

"We frequently hear from employers who want to expand in Collier County but can’t find the land to expand or a building they could expand into. It’s a challenge we need to address," Dalby said.

Kristi Bartlett, the chamber's vice president for economic development, said: "If Collier wants to be competitive and move beyond a service and tourism-oriented economy, our county officials should look at best practices and implement them here.”

It would have been easier logistically to expand Arthrex's manufacturing operations locally, but the company can't find enough skilled workers here to meet its current needs, said Lisa Gardiner, Arthrex's communications manager, in an email. 

Available training programs don't meet the company's needs. There are more than 100 open manufacturing jobs here.

"While we look forward to working with community leaders in Collier County to further develop advanced manufacturing training programs, it was necessary to expand to an area that has a well-established, manufacturing-based infrastructure that can sustain our rapid growth," Gardiner said.

Arthrex plans to work with Tri-County Technical College in Anderson to help provide qualified workers to fill manufacturing jobs. The technical school offers in-depth programs and has a longstanding relationship with institutions, such as Clemson University, that support the manufacturing industry.

"South Carolina also provides a very welcoming, business-friendly environment that's aligned with Arthrex's mission and passion for innovation, education and research — making future employees a good cultural fit," Gardiner said.

Other factors led to the company's decision to build the plant in another state.

"From a risk management perspective, it was important for Arthrex to further diversify its manufacturing capacity with an additional location outside of Florida," Gardiner said. 

She said the company looked at more than 600 sites around the country before settling on the one in Anderson County, where it was offered local and state incentives to expand. The incentives will include $12.9 million in property tax savings if Arthrex meets all of its commitments over the life of a 44-year agreement with the county.

Arthrex specializes in the design, development and manufacturing of devices for minimally invasive orthopedic surgery, with more than 11,000 devices in its domain. The company has about 3,000 employees in the U.S.

Collier County and the region should be thankful for all Arthrex has done for the economy and the community since it moved to Naples more than 25 years ago, said Jim Wall, spokesman for jobs connector CareerSource Southwest Florida. 

"I don't know what South Carolina has to offer, but there is probably a whole new pool of workers," he said. "So it's probably not just a training program that's
available."

There also might be a different mindset in South Carolina.

"Part of what we struggle with, especially in Collier County, is manufacturing still has not been accepted as a high-paying industry," Wall said.

"In Collier County, most parents are going to say, 'I want my kids to go to college.' They are not looking at a technical college or training program or at manufacturing as a long-time, high-paying career."

Arthrex has manufacturing complexes in Ave Maria as well as at its headquarters in North Naples, and there are two locations in California: one in Santa Barbara and the other in Industry. The company also has dozens of locations in Europe, Asia and Latin America.

"It's just a wise business decision on the part of Arthrex to be located in areas outside of Florida," said Collier County Commissioner Burt Saunders.

"I don't think there is any lost opportunity on the part of Collier County," he said. "I do hope Arthrex continues to grow both in Collier but outside Collier County as well."  

Jace Kentner, Collier County's economic development director, said it's only natural for a successful company such as Arthrex to be courted by other states, offering lucrative incentives.

"Would it have been cool to have those 1,000 jobs here? It would have been amazing. But I understand they have needs to support their business growth globally," he said.

Arthrex's new plant still can be viewed as a positive for Collier County, Kentner said.

"Any success of Arthrex is going to benefit us here in Collier County because we're their headquarters," he said. "They do call us home."

Arthrex's executives have said the expansion in South Carolina will not affect the company's operations or employees in Southwest Florida. A multimillion-dollar expansion of the company's headquarters in North Naples will begin in the first quarter of 2018. It will include building a 122-foot office tower and creating a more walkable corporate campus.

Collier County commissioners unanimously approved the headquarters expansion almost a year ago. 

The company could receive more than $5.9 million in incentives from the state and the county for its expansion. In turn, the company has promised to create 560 good-paying jobs at its larger corporate campus by 2021.

Incentives were a requirement for the company to continue considering Collier County for its corporate expansion.

Arthrex is on track to meet all performance goals and obligations for the incentives, including all hiring requirements, Gardiner said.

Under the state agreement, the first requirement is to create 150 jobs by Dec. 31.

McKinley Lewis, deputy communications director for Gov. Rick Scott, said the governor "fights for jobs every day and has made it much easier for companies to move and expand in Florida by cutting taxes and reducing burdensome regulations." 

"The governor believes that Florida’s education leaders should reach out to great companies like Arthrex to ensure their workforce needs are being met so they choose Florida for expansion," Lewis said.