by Max Marbut
Staff Writer
It isn’t over until it’s over.
The Jacksonville Economic Development Commission unanimously approved a deal Wednesday to allow Hillwood Development Company LLC to act as the master developer at Cecil Commerce Center.
While opponents spoke up, they were told that City Council will be the final decision maker on the deal, which now starts the Council approval process.
Ron Barton, executive director of the JEDC, made the Hillwood agreement presentation to the commissioners. He said it has been more than a year since the Request for Proposals was advertised and 184 packages were sent to potential candidates, but only five proposals were received and “Hillwood was very much on top.”
Barton also said the proposed agreement would create “a relationship that’s about the successful implementation of the community’s vision for Cecil Commerce Center and not about selling land. It’s about being successful with the opportunity presented by the closing of Cecil Field Naval Air Station.”
Barton told the commissioners the objective of the agreement is to “create jobs and increase the tax base.”
Under the terms of the proposal, Hillwood will invest $1.3 billion at Cecil Commerce Center over the next 25 years. The company will develop the property and market it to tenants after paying the City $1,000 an acre for the various parcels as they are improved. Barton said Hillwood’s investment will be “$225 million to get the sites level and ready for development” and $265 million to bring the property to the marketplace.
“I’m here to tell you the City of Jacksonville is not going to make that investment,” he said. “The City shouldn’t be in the development business. If we try to do this piecemeal, it will fail.”
Preston Herold, Hillwood vice president, appeared before the commission and said his first visit to Jacksonville to meet with Barton and JEDC staff was in 2007. He also said Hillwood’s similar development projects in California and Texas have created 32,000 jobs, had a $37.5 billion economic impact and involved $7.3 billion in private investment.
Herold told the commission the distribution center developments have resulted in business growth in the communities where they are located. When asked if Hillwood might consider other markets for a similar project, Herold said Savannah offers better port facilities and better access to rail transportation, “but Jacksonville is a better place to live. That’s why we want to set up camp in Jacksonville.”
He countered criticism of the proposed agreement by saying, “Ours was the only RFP that gave any value to the land.”
Herold also referred to one of the terms of the proposed agreement that establishes minimum performance requirements in the first 12 months after the agreement is executed, including site development and permits for a 400,000 square-foot building and opening a sales and marketing office.
“We’ll do all that without a tenant and the agreement terminates automatically if the benchmarks aren’t met. We know we have signed on for a tough obligation,” he said.
After the proposed agreement was unanimously approved, commission Chair Zimmerman Boulos opened the floor to public comment.
Peter Anderson, vice president of Pattillo Construction Company, stepped to the podium and began by thanking the commissioners for allowing public comment before they made their decision.
“We only make recommendations,” responded Boulos, who added that any comments about the proposal should be directed to the City Council.
Anderson told commissioners the Hillwood agreement will be costly to the city.
“In my opinion, this agreement will cost the taxpayers $70 million in lost revenue over the life of the agreement,” based on similar industrial property selling for $1,900 an acre. He also said the agreement gives Hillwood an “unfair advantage in the marketplace.”
Attorney James McCachren with Smith, Gambrell & Russell told the commission that there were no guarantees the City will profit.
“Clearly, the City is giving this land away and getting nothing in return” since under the terms of the agreement, “Hillwood is not required to create the first job or increase the tax base.”
He also said “there is no guarantee the City will ever make any money with this agreement. The benefits to the City are illusory.”
The deal now goes before Council committees and public hearings.
In other actions, the commission sent to Council for its approval:
• A Qualified Targeted Industry tax incentive proposal for Aviation System Engineering Company. It has a contract with Boeing and the U.S. Navy to transition the Navy from the P-3 submarine hunter aircraft to the new P-8 aircraft. The company would bring 10 engineers at an average salary of $80,000 plus benefits to Jacksonville to expand its operations here.
• A QTI tax incentive proposal for Xorail, previously known as Southwest Signal Engineering Company, to expand its Jacksonville headquarters and create 55 full-time jobs at an average salary of $57,000 plus benefits. The company currently employs 200 people and provides a system to railroad companies that improves safety by alerting train engineers of blockages on the tracks ahead and can stop the train if the engineer does not respond to the warning.
• Amendments to economic development agreements between the City and Fidelity National Information Systems to transfer created jobs requirements to Lender Processing Services, which was spun off from FNIS.
“We want to true-up where the jobs are,” said JEDC Business Development Chief Lindsey Ballas. “The amendments also won’t allow double-counting the jobs.”
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