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Jax Daily Record Monday, Nov. 21, 202212:10 AM EST

City Council to introduce $10.1 million incentives package for Paysafe headquarters

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Legislation shows the company will bring 600 jobs to Jacksonville but generate a near-term negative return on investment for the city. 
by: Mike Mendenhall Associate Editor

The Jacksonville City Council is expected to introduce legislation Nov. 22 that would award $10.1 million in cash grants to online payment provider Paysafe Ltd. to bring its North American headquarters and 600 jobs to Northeast Florida.

The bill, filed Nov. 16 by Mayor Lenny Curry’s administration, includes an exhibit estimating the city’s incentives package for London-based Paysafe’s $51.5 project would have a negative return for taxpayers.

Resolution 2022-0863 shows the Curry administration proposal to break down the Paysafe incentives into three separate grants:

• A $1.5 million headquarters relocation grant. 

• A $3.6 million employment creation grant.

• A $5 million headquarters retention grant.

The city incentives would be tied to Paysafe creating and retaining the 600 jobs in Northeast Florida and locating the headquarters office in Jacksonville. That space has not been identified.

A project summary dated Nov. 8, says the incentives would have a return on investment of 60 cents for every $1 invested.

City officials filed the legislation two days after Paysafe announced with JAX Chamber, city and state officials that it plans to consolidate its North American headquarters in Jacksonville over the next three years. 

In addition to the money sought from the city, the state is contributing $3 million from the High Impact Performance Incentive program to the project. That brings the total incentives package for the project to $13.1 million.

City Office of Economic Development Director Kirk Wendland called the ROI projections “conservative” in an email Nov. 17 and in the project summary.

Paysafe CEO Bruce Lowthers speaks at the announcement Nov. 13. Lowthers spent 15 years at the Jacksonville-based FIS before joining Paysafe in May.

Wendland said because Paysafe intends to lease its headquarters space in Jacksonville, the project would not generate as much ad valorem property tax revenue as new construction would.

He said city officials did not have firm numbers when conducting its ROI calculations on the office space Paysafe would need as the company grows. 

“However, it isn’t often that a community gets an opportunity to attract the North American Headquarters of a publicly traded company,” he said. 

“The projections of 600 new (high-paying jobs) will have a very positive impact on the overall Jacksonville economy, which isn’t taken into account when calculating the City’s ROI,” Wendland said.

The project summary says the annual average salary for new jobs created by Paysafe will be $150,000.

Enterprise Florida says the average wage Duval County companies must reach to qualify for its jobs incentive program is $54,489. 

Wendland said the city hopes that any Paysafe mergers or acquisitions would locate in Jacksonville.

Deal details

If Council signs off, the city’s $10.1 million will not be issued in one bulk payment.

The summary and a redevelopment agreement say the $1.5 million headquarters relocation grant would be paid in $300,000 increments over the first five years of the project, starting the first year jobs are created. 

The $3.6 million grant for employment creation breaks down to $6,000 per job and will be paid at 25% per year for four years. Paysafe executives say about 300 employees will be relocated from its other U.S. offices and 300 will be hired locally, which the agreement considers both new jobs created.

Paysafe would receive its first employment grant payments on Oct. 31, 2023, and the city must verify that the average salary for the jobs is $150,000. 

However, the draft economic development agreement says the city will have “no obligation” to provide the grant if the average wage for the new jobs is less than $135,000.

Paysafe would receive the $5 million headquarters retention grant in $500,000 increments over 10 years “provided that the company continues to demonstrate that its Jacksonville location serves as its corporate headquarters and the requested 600 jobs are maintained.”

There is a discrepancy between the Paysafe estimated capital investment in the bill of $51.5 million and a $30 million estimate in the draft city agreement.

Because the proposed incentives are not listed in the city’s public investment policy, the Council would have to waive portions of it to award the money to Paysafe.

According to Wendland, the incentives are not to fill a financial gap created by the company’s relocation but to make sure Paysafe chose Jacksonville instead of another U.S. city for the headquarters.

City Office of Economic Development Director Kirk Wendland speaks at the Paysafe headquarters announcement Nov. 13.

“This was a competitive negotiation with a company evaluating multiple locations,” Wendland said.

“The City investment was necessary to win the project.”

The agreement says Paysafe has to close on a purchase or lease for its new headquarters by Dec. 31, 2023. 

The agreement says the property must be located in Duval County.

To qualify for the incentives, the Paysafe employees can be based at its Jacksonville headquarters.

The agreement would allow the new workers to reside in Baker, Clay, Duval, Nassau or St. Johns counties, the Jacksonville Metropolitan Statistical Area.

Site improvements must be finished and the jobs in place by Dec. 31, 2025, although the company could ask for a one-year extension on the performance schedule.

City Council

Council will have to decide if attracting another international fintech company and Paysafe’s possible future growth and secondary benefits to Jacksonville are worth the city money.

Council Finance Committee Chair Aaron Bowman said he is not concerned about the negative ROI. 

Bowman is senior vice president of business development/advanced manufacturing for JAXUSA Partnership, the economic development division of the chamber. 

He says he supports the $10.1 million public investment. 

Bowman says the ROI calculation doesn’t take into account what he said would be 1.5 to 2 ancillary jobs that will be created for every new worker Paysafe and its contractors bring to Jacksonville. 

He was part of the chamber’s delegation that traveled in October to London, where officials say the Paysafe negotiations were finalized.

Bowman says Jacksonville now “has a seat at the table” when fintech and other large corporations look for areas to expand or relocate. 

“We now have a (fintech) labor force, and now we’re building a group of companies down here that has grown faster than any market in the Eastern Seaboard,” he said. 

“That brings huge future opportunities.” 

The company

Paysafe was founded in 1996 and offers payment processing, digital wallet and online cash solutions.

The company says it has annualized transactional volume of $120 billion as of 2021 and about 3,500 employees in more than 10 countries.

It’s part of a group of affiliated fintech companies that are based or have a presence in Jacksonville.  

In March 2021, Paysafe merged with Foley Trasimene Acquisition Corp. II, a special purpose acquisition company, or SPAC, that was founded by Fidelity National Financial Inc. Chairman Bill Foley.

Council first negotiated in 2003 to bring the FNF headquarters to Jacksonville from California. The company spun off its financial processing businesses as Fidelity National Information Services, known as FIS, in 2006.

FIS, a Fortune 500 company that reported $13.9 billion in revenue in 2021, opened its $156 million world headquarters in Jacksonville in October. 

It was awarded $29.9 million in state and local money for the project.

Foley relocated from Jacksonville to Las Vegas when he was awarded the NHL’s Vegas Golden Knights expansion team in 2016. Foley also is chairman emeritus of Black Knight.

Black Knight CEO Anthony Jabbour, who is on the board of Jacksonville-based Dun & Bradstreet, also is on the Paysafe board. 

Black Knight owns a stake in publicly traded Dun & Bradstreet, which was awarded a $21 million incentive package by Council in June 2021 similar to what is proposed for Paysafe.

Bruce Lowthers spent 15 years at the Jacksonville-based FIS before becoming Paysafe CEO in May.

The summary said expanding Jacksonville’s technology sector and skilled financial services workforce and adding 600 full-time jobs with a $90 million payroll are behind the rationale for the taxpayer investment. 

“Bringing a North American headquarters to Jacksonville significantly enhances our status in the financial services sector/information technology sector and has the potential for significant secondary and tertiary benefits that greatly elevate the conservative ROI as shown,” the city summary says.

 

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