by Mike Sharkey
Staff Writer
For developers and fledgling businesses outside the downtown area, Thursday’s Special Committee on Economic Development Incentives meeting was both good and bad.
The bad news is that with one quick motion, a second and unanimous vote, the committee opted to not extend the geographical boundaries of the Jacksonville Economic Development Commission’s incentives range, which encompasses essentially anything north and west of the river and a small portion of the Southbank. To a developer like Craig Meek, who is a part-owner of Metro Square Office Park on Philips Highway, that kind of news could have been devastating, especially considering the office park is currently well below 50 percent capacity and a hard sell to new businesses.
The good news is that help is on the way in the form of $22 billion over the next eight years for areas of town just like Meek’s.
Several months ago when a large portion of downtown Jacksonville was declared an Empowerment Zone, only a section of Cecil Field was included as a non-contiguous section of the EZ. Developers like Meek argued that the designation left the rest of Jacksonville, which is virtually impossible to incentivize, to fend for themselves as they pursue new and expand existing businesses. The EZ has now been altered to include an area near Imeson International Industrial Park on the Northside and the Philips Highway Corridor on the Southside.
Although there are several different tax credits, deductions, bonds and capital gains within the EZ designation, the most beneficial to developers like Meek is the Empowerment Zone Employee Credit, which gives employers credit against federal taxes up to $3,000 for each employee hired by the EZ business that also lives in the EZ for next eight years. Meek says that while the incentive isn’t a cash grant or low-interest loan, he’s happy with the designation and calls it a start.
“That’s wonderful,” said Meek. “At least it’s a step in the right direction. Is it exactly what we as a group want for the continued effort for improvement? I don’t know, but it will certainly help us move forward. For a new employer looking in the area, by what the EZ would allow, that’s positive. It’s a positive movement.”
Much of the credit for expanding Jacksonville’s EZ to include three non-contiguous areas of town goes to JEDC senior project managers Ros Phillips and Karen Nasrallah, both of whom were in Washington, D.C. recently lobbying Housing and Urban Development — the federal entity providing the $22 billion — to allow JEDC officials to include Imeson and Philips Highway in the local EZ. Nasrallah says her job now it to market the tax incentive package and let residents and business owners in the EZ know what’s available.
“I think we will be very successful with this,” said Nasrallah. “Once they meet the criteria, this will be huge for retail and getting retail downtown, especially if the work is performed in the EZ and the employees live in the EZ. By mid-July we should have the marketing packets from HUD and we will probably start going to the CPACs [Citizens Planning Advisory Committee], the [Chamber’s] Area Councils and community groups to update them on what we are doing.”
With a current occupancy rate of about 35 percent, Meek said the EZ tax credit will give him another angle by which to approach prospective businesses.
“It gives us another tool,” said Meek. “We’ve come a long way, without a doubt, and this program is a step in the right direction. It gives us a little more ammunition in trying to entice someone in. Each EZ district is distinctly different. This area is a main corridor to downtown and some issues here are unique. This area is in transition. This area is one with facade issues and code enforcement issues. There are issues with various areas and their perception. That this is now an EZ doesn’t necessarily affect all of that, but it’s another tool to assist us.”