Why Bill Gates And Jeff Vinik Are Investing Billions To Build An Ecosystem In Tampa

November 8, 2016

Amy Guttman | Forbes

Ten years ago, Jeff Vinik retired from Fidelity Investments after managing their high profile Magellan Fund. Worth an estimated half a billion, it’s safe to say Vinik can live wherever he wants, and do almost anything he wants, or nothing at all. Instead, Vinik is using his millions to reinvent himself and the city of Tampa.

The investor and his family moved from the Northeast to Florida in 2010, where Vinik fulfilled his dream of owning a sports team. Like any investment, he weighed up the pros and cons before buying the NHL’s, Tampa Bay Lightning. For Vinik, the decision was about much more than winning records. He was looking for an opportunity to build a success story and help develop the city of Tampa and its surrounding communities. But, this isn’t a tale about a money mogul turned real estate tycoon. As Vinik explained in a recent interview, Tampa is an under-valued city with largely untapped potential. Vinik wanted to help build the foundation for an entrepreneurial ecosystem through smart planning and development to avoid the kind of too much, too fast growth that locals anywhere come to resent – with enough housing to keep it affordable, and road construction in line with population growth.

He understood that to do so also requires substantial community building in an area that, until recently, consisted of several fragmented suburbs. The once-empty downtown streets are on their way to becoming more pedestrian-friendly, with food trucks, and better hotels for investors who expect world-class service.

Through his own investment fund, joined by Bill Gates’ Cascade fund, Vinik acquired 40 acres of land for a multi-billion dollar transformation of the vacant waterfront into a planned community called Riverwalk. The complex will host a new USF medical school and a heart institute on land Vinik donated, as well as corporate headquarters, residential, hotel, and meeting space, shops and restaurants. The entire downtown area is being designed for healthy living, in consultation with a wellness company paying close attention to things like air quality meters, Smart buildings with lighting tied into circadian rhythms, bike lanes, water fountains and fruit and vegetable gardens.

Construction began earlier this year, and within 10 years, the city will look nothing like the Tampa of today. With Vinik’s vision, it will be a model city of the future.

But even as Tampa’s transformation is just beginning, the city is already a magnet for more than 200 new residents a day, many of them entrepreneurs seeking the same things that brought Vinik here.

I sat down with Vinik recently to find out why Tampa offers a great value proposition for investors as well as entrepreneurs.

Amy Guttman: You could live anywhere, or even divide your time between multiple places. Why Tampa?

Jeff Vinik: A big reason was moving to and adopting an area that has real potential. This is a great place to live. People are friendly. I view the whole Tampa Bay market as being very undervalued, very under appreciated. It’s full of eager, ambitious people, but never really caught on in terms of strong economic growth. But it has all the ingredients to be a great place to live work and play.

By June 2015, the population of Hillsborough County went up 2.33 percent in those 12 months. Population growth like that is an incredible economic tailwind.

Guttman: What kind of potential is there for Tampa to become a thriving ecosystem for entrepreneurs and business?

Vinik: It isn’t Boston or Chicago. This is a city early in its growth. It’s a process and we’re in the beginning to middle stages of that process. As someone who’s an investor, I look for potential and this has every bit of the raw materials to be a great place. In the six years I’ve been here, we have double the number of restaurants opening than before.

Guttman: What makes Tampa different than other cities in Florida?

Vinik: I moved Vinik Asset Management to Tampa about five years ago and brought 25 people in from Los Angeles, San Francisco, Boston, New York and Miami. They were all financial workers new to the Tampa area. A year and a half later, we shut our doors so I could focus on Tampa Bay Lightning. Of the 25 people, 20 stayed here because they love the lifestyle. Not having the commute, being so close to the beach, having sunshine in winter, friendly communities – these things make a difference. The cost of living is low here. An apartment in Tampa is probably 40 cents on the dollar what it is in San Francisco.

Guttman: What are the current and long term development plans for Tampa to attract entrepreneurs?

Vinik: There are pockets of innovation that exist, but we’re not doing well enough. We need to incentivize mentorship and we need to get more venture capital in here to attract top talent. It’s something I’d like to take a leadership role in.

Phase 1 is four years from now. Its $2bn of investment with Bill Gates’ Cascade fund. An incubator-accelerator is part of that phase. I could see starting up an entrepreneurial venture before those four years are up. The next step for me is to run that and mine the talent we have in the community as well as bring in new talent.

Guttman: What are Tampa’s competitive advantages?

-We have great proximity to Latin America.
-We have a lot of old people which makes it a natural for medical studies.
-We’ve got tourism. There are plenty of new ventures focused on disrupting tourism.
– I don’t think you’ll find many cities that have as many college grads within 100 miles of here.

Guttman: What are some of the challenges Tampa faces?

-There are a lot of graduates who want to stay local, but they’re not finding the urban environment they want or the opportunities, the restaurants or the good jobs they want. It starts with creating those environments.
-The most significant weakness of Tampa is wages – we’ve got to have better paying jobs and higher wages.
-The ecosystem is fragmented. There are pockets of organizations and communities. They’re not funded as well as they should be. They try to talk to each other, but everyone has to worry about their own success. I’d like to explore convening the leaders.
-We need some success stories. We’ve got to have intellectual capital.

That’s how you get people to buy in.

Watch this space for startup to watch from Tampa’s emerging entrepreneurial ecosystem.