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Jax Daily Record Tuesday, May. 16, 2017 2 months ago

Mayor Curry's incentive deals

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Mayor says pension reform frees up city to be more aggressive in pursuing deals
by: David Cawton Staff Writer

Taxpayer-funded incentive projects approved since Jacksonville Mayor Lenny Curry took office in 2015, according to the city:

CompanyCode nameIndustryJobs to be createdPrivate capital investmentAverage wageMaximum city incentivesROI
Macquarie GroupPostFinance & insurance123$3.1 million$64,356$393,6001.1
Deutsche BankIndependenceFinance & insurance350$23 million$64,356$959,0002.65
Fidelity GlobalSunbeeFinance & insurance300$12 million$64,356$488,0005.39
FIS (Sungard)RevereInformation technology250$2.2 million$49,340$330,0001.30
Resource SolutionsLanceRegional headquarters75Unknown$49,340$45,0001.64
KLS Martin ManufacturingArnicaManufacturing & HQ25$5.3 million$70,000$125,0004.19
Maxwell House / KraftFootprintsManufacturing40$36 million$54,828$1.04 million2.87
Ernst & YoungOmegaFinance & insurance450$5.95 million$49,340$450,0002.26
City Refrigeration HoldingsStarCorporate headquarters100$5.7 million$67,000$230,6002.10
AmazonRexLogistics & distribution1,500$200 million500 at $50,000$13.4 million1.32
Mercedes-Benz USAGraceManufacturing54$2.1 million$66,098$64,8003.90
Hans-Mill Corp.BucketManufacturing23$11.8 million$30,000$200,0004.28
The Safariland GroupSafetyManufacturing152$2.5 million52 at $45,420$432,0001.41
Camper’s InnRamblerHeadquarters22$195,000$66,098$26,4001.65
Amazon IIVeloLogistics & distribution1,200$115 million325 at $50,000$7.1 million1.79
UPSMountainLogistics & distribution105$196 million10 at $50,675$4.3 million3.54
Grace AerospacePrototypeAerospace manufacturing25$300,000$50,675$25,00027.38
River City CrossingMixed-use20$33.8 millionN/A$1.95 million1.84
ConfidentialVelocityAdvanced manufacturing20$54 million$40,000$2.21 million2.30
AvailityAvalancheHQ/IT/life sciences250$12.1 million$70,000$300,0004.23
Totals5,084$721 million$34 million

Mayor Lenny Curry wants CEOs to know that Jacksonville is open for business and willing to make a deal.

In an interview Monday, the mayor said bringing more jobs to the area was one of his main priorities, in addition to pension reform and public safety, when he chose to run for mayor.

Public records show Curry’s Office of Economic Development has been making deals.

Since Curry took office July 1, 2015, City Council has approved at least 20 economic development agreements that provide up to $34 million in local incentives.

Curry said the structure of the incentives allows Jacksonville to compete for economic development while protecting taxpayers.

“We measure everything and make sure that the city, meaning the taxpayer, gets more tax dollars back than goes out,” said Curry.

“It always comes back to a return on investment,” he said.

Deutsche Bank, United Parcel Service Inc. and others on the list promised to add a total of 5,084 new jobs and make more than $721 million in capital investments.

The agreements usually commit both city and state money, handed out as tax rebates, grants and other incentives, paid out over time.

For example, in 2015 Grace Aerospace LLC was awarded an incentives package of $332,500 that included $25,000 from the city in the form of a Qualified Target Industry Tax Refund, paid out over five years.

The state is responsible for the rest.

There’s always the chance a deal will fall through when a company fails to make good on its promises.

Curry said the agreements are structured to favor the city, ensuring money isn’t granted until businesses hit certain employment or investment targets agreed to during the negotiations.

He claims the city won’t enter an understanding unless it benefits taxpayers in the long run.

He called a return on investment “the stake I’ve put in the ground.”

In the case of Grace Aerospace, the company must add 25 jobs by 2019 and move its headquarters from New York to Jacksonville.

While the Grace Aerospace deal is on the smaller side, most of the local incentives packages range from about $200,000 to $2 million, with a few exceptions.

Other deals are much larger, including one struck with retail giant Amazon.com last year.

That agreement committed $13.4 million from the city in return for 500 jobs that pay $50,000 a year, which are among the 1,500 jobs total it intends to hire. Amazon pledges a $200 million capital investment.

The deal gives Amazon a QTI grant of up to $300,000, a Recapture Enhance Value grant of up to $10 million, a training/hiring assistance grant of $600,000 and a road improvement grant of up to $2.5 million.

The state, by comparison, will pay $4.95 million through its QTI share of $1.5 million, a road-fund grant of up to $3 million and a training grant of $750,000.

A second Amazon deal involved city incentives of $7.1 million for 325 jobs paying $50,000 on average out of 1,200 jobs total. The state will pay $1.2 million.

Often, local money accounts for a smaller portion of economic development agreements than the state.

According to Curry, the state funds often mean the difference between closing a deal or not.

Florida’s ability to provide those incentives may have hit a snag with the latest proposed state budget.

This month, the Florida Legislature agreed on a budget that reduced funds for the state’s economic development organization, Enterprise Florida Inc.

Expanding Enterprise Florida was one of Gov. Rick Scott’s major funding requests in 2017 that didn’t make it into the budget.

Scott has not yet signed off on the budget and has the option to veto the legislation.

Curry said a cut in state incentives is not ideal, but Jacksonville would share the pain with other areas of Florida.

“If we’re losing out, other cities around the state are losing out on those dollars, too,” he said.

Curry said the city must “find a way to locally turn that into a competitive advantage for us, and be even more aggressive.”

For Curry, being more aggressive could be a little easier now that his pension reform legislation has passed council.

Curry said the city is in a much better position having handled it.

He said solving pension reform showed outsiders that city leadership is willing to work through a complicated issue.

“We’re focused on making sure that if investors want to invest here, they know that we can cut through the bureaucracy, and we can cut through the red tape,” he said.

As for the next two years of his term, Curry said he’s going to work with developers to complete Downtown projects.

“Capital knows that we’re open for business in Jacksonville, and there’s a buzz about us outside of our city,” he said.

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