In Tampa, is this the final burn for Florida's 'Cigar City'?
Tampa -- The last standing cigar factory here, in what was once dubbed "Cigar City," has survived two world wars, the Great Depression, smoking bans and a Cuban trade embargo that wiped out much of its tobacco supply.
Its fortunes have long been linked to Cuba, the communist nation that for decades supplied the region's tobacco and continues to mint many of its workers. For years cigar executives here say they have looked to Cuba with equal parts intrigue and trepidation, a sentiment that has become more pronounced in recent years as the United States began to mend decades of strained relations with the island nation.
The death of Fidel Castro - the most iconic of cigar smokers - marks yet another milestone for the region. Many here wonder whether the once-booming cigar industry may be on its way out as well.
Among those most worried: Eric Newman, whose family has been making 31 brands of cigars, including Cuesta-Rey, Diamond Crown and La Unica, for three generations.
For 121 years, the J.C. Newman Cigar Co. has churned out millions of cigars and shipped them worldwide - even as, one by one, 149 surrounding factories shuttered their doors, many moving their operations overseas.
But now Newman, who owns the company with his brother, Bobby, says cigar manufacturers and retailers in this stretch of town known as Ybor City face hurdles that could deal a final blow to an industry that has, until now, gone largely unregulated.
The Food and Drug Administration this year introduced new guidelines that will require cigar manufacturers to get approval for new products, pay increased fees and add prominent warning labels. The FDA says the measures, which will be phased in over three years, are a matter of public safety and are meant to curb underage tobacco use. Before August, no federal law prohibited the sale of cigars, e-cigarettes or hookah tobacco to children under 18.
"For years, the unregulated marketplace was like the Wild, Wild West," said Mitch Zeller, director of the FDA's Center for Tobacco Products.
The new rules, Zeller says, will help bring order to a corner of the tobacco industry that has long operated without oversight.
Newman, though, says the regulations represent millions of dollars in new costs and increased uncertainty for his factory, which last year had sales of $10 million. On top of that, he says, the Obama administration in October loosened its ban on Cuban cigars, allowing Americans to bring back as many cigars as they like for personal use. Newman says the move, part of the thawing of relations between the nations, introduces another layer of competition at a critical time.
"What we're dealing with right now is the worst it's ever been," said Newman, whose grandfather started the business at age 20 in a family barn. "On the one hand, the government is saying, 'smoking is bad' and making us jump through all these new hoops. On the other, they're welcoming Cuban cigars - which haven't been tested, which aren't taxed - into the country. They've got this backwards."
And now, with the election of Donald Trump as the country's next president, Newman says he's dealing with even more uncertainty about the future. Will the new regulations remain in place? And if so, for how much longer?
In the meantime, he says there are pressing matters, including a looming deadline on Dec. 31 that requires him to register more than 1,300 cigar varieties with the government. In all, the process could cost him more than $14 million.
"We just have to plow ahead," Newman says, sitting up straight. "If I think about it for too long, I get nauseous."
'A brave new world of regulation'
J.C. Newman's future may be up in the air, but inside the company's brick factory on the edge of town, operations are as they've always been: Tobacco from countries such as Ecuador, Nicaragua and the Dominican Republic is dried and blended on the top level, then funneled down a chute onto the factory floor, where more than 100 workers - most of them women - fill, bind and wrap cigars using machines that date from the 1930s.
Winnie Money, 83, has been working at this plant since 1972. Juanita Green, 56, since 1988. Peaches Pickrell, 69, took a job here 37 years ago after her previous employer, a nearby emblem factory, shut down. "It was here or the shrimp factory," she said, and so here she was, putting newly rolled cigars into plastic packaging. Yesterday she bundled 6,700 cigars into 335 packages. The day before, 7,300.
Ana Rodriguez, who affixes bar code stickers onto individual cigars, has been here 15 years. She stays, she says, because she has a 401(k) and five weeks of paid annual leave.
"I say all the time, where are we going to find a job where they pay us like this?" said Rodriguez, 59, who emigrated from Cuba in 1970. "We're all older people. If this place closes, who's going to give us jobs? Nobody."
In an election year where much of the rhetoric had focused on bringing back manufacturing jobs, Newman says he can't understand why the government would want to increase burdens on an operation like his. He says having to lay off workers or, worse, move the factory to Nicaragua, where the company already has a sprawling plant and 650 employees, would have discernible consequences for the community.
"Cigars are the heart and soul of Tampa," he said. "We're here. We're employing more than 100 people. Just don't close us down."
Zeller, of the FDA, says the agency has hosted webinars to help business owners navigate the new rules and has provided special assistance and exemptions to small businesses with less than $5 million in annual sales. He estimates the costs associated with regulatory filings to be $1,500 to $22,000 per product.
"These businesses are entering a brave new world of regulation - and yes, there are costs associated with that," Zeller said. "But the FDA is in the business of reducing the harms associated with tobacco use, and unfortunately tobacco use remains the leading cause of preventable disease and death in the country."
The requirement that worries Newman the most right now, and has two company accountants working around the clock, is having to register all products with the FDA by the end of the year. At last count, J.C. Newman produced 1,382 varieties of cigars, each requiring a set of filings.
In February, Newman will have to submit health documents and an ingredient list for each item. And by May, come up with a plan for adding labels with warnings such as "Cigars are not a safe alternative to cigarettes" and "Cigar smoking can cause lung cancer and heart disease" to his velvet-lined boxes.
"We're having to go through, take pictures, list all of our ingredients, tell them about our packaging," said Drew Newman, Eric's son. "We are trying to cooperate with the law to the best of our ability, but we also have a business to run."
'The land of opportunity'
The fortunes of Ybor City have been tied to Cuba since the 1880s, when Spanish cigar maker Vicente Martinez Ybor made his way up from Havana to Key West and eventually to Tampa, lured by the region's humidity and proximity to the ocean. Ybor bought 40 acres of land and built his first cigar factory. To attract workers - immigrants from Cuba, Italy, Germany and Spain - he built hundreds of small houses that he rented out for about $1 a week. As business grew, so did the number of competing manufacturers who moved to the area in search of skilled workers and ready access to Cuban tobacco.
By 1900, Ybor City had 232 factories making nearly 600 million cigars a year.
"The entire economy of Central Florida was based on cigars," said Wallace Reyes, a historian whose family owned a longtime cigar factory in Ybor City. "For many immigrants, this was the land of opportunity."
When the Great Depression struck in 1929, the local cigar industry was among the hardest hit. Factories closed, unemployment soared and many residents left. Decades of decline followed as Americans traded hand-rolled cigars for inexpensive, machine-made cigarettes.
The biggest blow to the industry, Reyes says, came in early 1960s when the United States imposed the Cuban trade embargo, halting the flow of tobacco from the island into Ybor City. Almost all of the region's cigar makers relocated to Honduras, Nicaragua and the Dominican Republic as a result.
In the years since, there have been hints of promise as small storefronts crop up on Ybor City's main stretch. But nearly everyone here agrees: The town's glory days are gone. Ybor's original factory is now home to the Church of Scientology. Another factory down the street is being converted into luxury apartments.
"Historically, we had factories with a thousand workers, and we had smaller factories, like what my uncle owned, with just a few people," said Chantal Ruilova Hevia, president and chief executive of the Ybor City Museum Society. "We had the whole gamut, but not anymore. The entire industry has deteriorated."
'Roll with the punches'
A mile from the J.C. Newman factory, on a stretch of Seventh Avenue dotted with cigar shops, Ernesto Ceijas, 39, sits in a storefront window cutting swaths of dried tobacco. He fills them with tobacco leaves, rolls them tight and seals them shut.
On a good day, he makes 100 cigars - which means he'll make about $100.
"It's a hard life to make cigars," says Ceijas, who works at Long Ash Cigars, a boutique and lounge. Like the seven other rollers there, he is a Cuban immigrant who is paid about $1 for each cigar he makes. They will sell in the shop for between $3.50 and $13.
But Michael Cincunegui, the shop's owner, says cigar prices are likely to go up as more federal regulations take hold.
"Yes, there's going to be an impact, and yes, costs will go up," he said. "It's just hard to tell how much."
Cincunegui, whose great-grandfather emigrated from Cuba, says he was hopeful that recent strides in U.S.-Cuba relations would mean an eventual opening of trade between the two countries, allowing him to import coveted Cuban cigars and tobacco to sell in his Ybor City store. President-elect Donald Trump, however, has repeatedly vowed to "terminate" newly minted ties with the communist nation, leaving Cincunegui and others even more anxious about their future.
"It's a new administration, and we don't know the first thing about what to expect," he said. "All we can do is roll with the punches."
Cincunegui opened his shop four years ago, days before the 2012 Republican National Convention came to town. He is among a new crop of small-time entrepreneurs hoping to eke out a living in Tampa's fading cigar industry. Like the Newmans, he is grappling with new regulations and changing ties with Cuba.
"So far, the people who are left are making a decent way of business," said Reyes, the historian. "But with new rules, a new president, a new administration, who knows?"
The last plant to close in Ybor City, Hav-a-Tampa, moved its operations to Puerto Rico in 2009 after the federal government increased taxes on large cigars from 5 cents to 40 cents. Nearly 500 people lost their jobs. "It was the worst time of my life," said Joe St. Charles, 51, a mechanic there who made $28.50 an hour. "I was looking for a job, but so were 500 other people."
He applied for 150 jobs, he said. But there were few calls back, and when there were, they were for jobs that paid $10, $11, $12 an hour.
After a stint in Puerto Rico, St. Charles is back in Tampa working for J.C. Newman. He makes more than $30 an hour now, plus overtime, as the factory's lead mechanic. His fiancee, a cigar roller he met at J.C. Newman, makes about $20 an hour.
"If these rules shut us down, it'd take out our entire household income," he said. "This is the last factory left - there's nowhere else for us to go."
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