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Jax Daily Record Friday, Jul. 23, 202105:00 AM EST

Boeing’s $425,000 grant request headed to final City Council vote

The infrastructure funding would help to offset the company’s costs in a $116.5 million expansion at its Cecil Airport.
by: Mike Mendenhall Staff Writer

Two City Council committees approved The Boeing Co.’s request for a $425,000 city infrastructure grant to offset expansion costs for its maintenance, repair and operations hangar at Cecil Airport.

The Council Finance Committee voted  7-0 and the Rules Committee 5-1 on July 19 to approve Resolution 2021-0375 authorizing the assistance for what Boeing estimates will be $3 million in infrastructure expenditures over the next three years. Those improvements include stormwater drainage installation; fencing; a new sewer extension; irrigation; and electrical lines.

Rules Committee Chair Brenda Priestly Jackson voted no.

Boeing reached a 25-year lease agreement Dec. 17 with the Jacksonville Aviation Authority to expand its 400,000-square-foot operation at Cecil in West Jacksonville. 

Under the agreement, JAA will build and lease the facilities to Boeing, which comprises about 270,000 square feet of hangar space and more than 100,000 square feet of office and support shop space on 57 acres, according to city documents and a JAA news release in December.

According to a June 2 memo from City Economic Development Executive Director Kirk Wendland, the total project is $116.5 million. Boeing representatives told the city the eight-bay hangar will create 334 jobs at an average annual salary of $65,000.

The new jobs will be in place by Dec. 31, 2026, at a $21.7 million payroll excluding benefits, according to the documents.

Priestly Jackson offered an amendment, which failed in both committees, to add a goal that at least 20% of the hired employees have lived in Duval County for two years.

The amendment would have required Boeing report about its hiring but carried no penalties for failing to meet the goal.

Her amendment would also allow workers who recently graduated from area colleges or universities to fill the employment goal. 

“Even though this resolution is requesting a waiver of the public investment policy because it does not contemplate infrastructure grants, I think the public we invest in are our neighbors,” Priestly Jackson said.

Wendland told Council that Boeing officials would not agree immediately to the contract amendment and were concerned about the logistics of collecting the two-year residency data. 

There is precedent in other city development agreements with private companies to collect residency data and, with some tax and grant incentives, make the residency provision a requirement as opposed to a goal.

The change was similar to Priestly Jackson’s amendment to a recent deal bringing data analytics company Dun & Bradstreet to Jacksonville.

Council member Rory Diamond and others said they appreciate the “spirit” of the amendment, but were concerned it would add another barrier to employee recruitment during a labor shortage and cause some companies to look at other cities for their projects. 

Council member Aaron Bowman said the residency goal would be “catastrophic to us.” 

Finance Committee Chair Ron Salem suggested Priestly Jackson work with Wendland’s team to add the 20% goal as part of the city’s early-stage incentives negotiations with private companies. 

The full Council likely will take a final vote on the grant legislation at its July 27 meeting.

The terms of the deal state that Boeing’s private capital investment cannot be less than $85 million to qualify for the city incentive.

The city’s public investment policy does not include an infrastructure grant, so the legislation waives the policy rules.

Construction is scheduled to begin in fall 2021 with operations expected to begin in January 2024, according to the JAA release.

Boeing, an international aerospace company based in Chicago, has been operating at Cecil for more than 20 years. 

A jetliner manufacturer and space and defense contractor, Boeing provides maintenance, repair and operations and engineering services and training to the U.S. Department of Defense and other customers.

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