Landing the GE Oil & Gas deal meant stretching — almost to the point of breaking.
Not just from the city, but from the private sector, too.
Dan Tatsch remembers the feeling. The Hillwood Investment Properties senior vice president recalls a conversation with Ed Randolph, a city business development manager, in early June just after the final offer was made.
Neither felt optimistic, Tatsch said. Just the opposite, actually.
“We knew we had stretched as far as we could,” said Tatsch.
On his side, the rent levels at the Cecil Commerce Center building were as low as they could offer. On the city side, incentives for GE were as high as they could go.
“I’ll be disappointed, but I won’t feel we left anything on the table,” he told Randolph.
The disappointment had come weeks before, when Jacksonville had been knocked out of contention because its offer wasn’t competitive enough. Then came a last-gasp meeting on what else could be done to bring the deal home.
On the city side, it meant $10 million in incentives, including a new incentive for manufacturing specifically created for the GE deal. The state added another $5.4 million in incentives.
Still, they didn’t know if it would be enough.
In July, Tatsch got the call: Jacksonville had been selected.
“You always love to win a deal, especially a hard fought deal,” Tatsch said.
There were high-fives all around the room at Hillwood. Celebrations followed at the JAX Chamber, City Hall and CBRE, the commercial real estate firm that worked on the deal.
On Friday, after five months of work, the subsidiary of General Electric Co., a Fortune 10 company, announced Jacksonville would be home to up to 500 new high-paying jobs and an advanced manufacturing operation.
Early mystery
Like other major deals, the GE Oil & Gas deal took time and, at first, had a little mystery.
Tatsch received the first inquiry April 1 from Terry Quarterman, a CBRE vice president and listing broker for AllianceFlorida at Cecil Commerce Center.
The undisclosed prospect needed up to a 500,000-square-foot building. Hillwood was building a speculative building that met that requirement and could be expanded to 1 million square feet.
Yet, many preliminary inquiries “turn into nothing,” Tatsch said. He compared it to drilling a hole for oil — most times you strike out.
Just a few days later, JAXUSA Partnership, the economic development arm of the JAX Chamber, received a call from Quarterman wanting building specs and information about the local labor force.
Jerry Mallot, the partnership’s president, and Aaron Bowman, vice president of business development, began to speculate on the type of company and possibilities of what it could mean.
“Our first thought was an apparel manufacturer,” Mallot said. “There were a couple in the market around that size.”
Two weeks later, though, Mallot and Bowman received an inquiry from Enterprise Florida, the state’s economic development agency. The ask was the same: information on the building’s specs and the data on the labor force.
With Enterprise Florida involved, Mallot said his speculation turned to manufacturing.
The two put together the usual packages about what Jacksonville can offer — the quality of life, the workforce, the culture — and sent it away.
Meanwhile, the city’s economic development team led by Ted Carter, Office of Economic Development executive director, and Randolph began having
discussions about incentives it might take for a company seeking to invest in the Hillwood property.
Months earlier, the two made a trip to Dallas to meet with Hillwood officials to reaffirm the company’s importance. The company had to continue building out in order to maintain its contract with the city. That meant millions of dollars in construction without any assurance of a return on that investment.
“It was a critical meeting with them, letting them know they made the right decision to continue the partnership,” Randolph said.
Months later, that sustained relationship would prove to be fruitful.
The site visit
A team from GE Oil & Gas visited Jacksonville on May 9. The contingent stayed at a hotel on the Westside off Chaffee Road, near the facility.
It was the only site visit the company would make — a rarity, Mallot said, for such a large investment.
It was a morning spent showing GE leadership different Jacksonville neighborhoods like Avondale and Riverside, selling them on Jacksonville and its housing and quality of life for the company’s workers.
Then came meetings at the Cecil Airport Conference Center with a full staff on deck. Officials from the city, JEA, CBRE, Hillwood, CareerSource, Florida State College at Jacksonville and the chamber were all in attendance. So, too. were officials from Saft America Inc. and Southeast Toyota, two companies with a large local presence.
“It was a pretty good-sized group,” Mallot said.
For most, it also was the point where the mystery was revealed: GE Oil & Gas was the potential client. Confidentiality agreements quickly followed.
There were discussions about Jacksonville and a stop at the building’s site. Then came a moment Mallot believes was a turning point.
Half of the group went to Saft, an international company having great success in Jacksonville that was able to convey why Cecil and Jacksonville worked.
“That was a very critical point,” Mallot recalls.
Mallot said he believed it was the point that transitioned from a technical trip to one that ended with an emotional attachment to Jacksonville.
Despite the indications, Mallot and others would soon be left scrambling for answers.
Out of the running
After that site visit and into June came the major discussions, the back-and-forth regarding incentives from the city and contract details from Hillwood.
Tatsch said at least half a dozen proposals were made, part of what he calls the art of negotiating. On the Hillwood side, it wasn’t so much the improvements needed, like the space needed for an interior crane, but the cost of rent.
There also was up to a $400,000 gap in incentives, Randolph said, although he wouldn’t disclose what the earlier offers were.
“We were being told the site team loves your city, but you’re not close,” Mallot said.
By the first week of June, Jacksonville was out of the running.
Immediately after, an “all hands on deck” meeting was arranged at City Hall with the state and local officials involved.
“We don’t have to lose this deal,” Mallot recalled saying. “We should not lose this deal.”
Carter agreed.
“We have to come out of our shoes on this one,” he said.
Mayor Alvin Brown’s instructions about the deal: Make it happen.
Person by person, organization by organization, discussions were had on how to make a more attractive offer. Gov. Rick Scott made a call to GE CEO Jeff Immelt supporting Jacksonville for the project.
A couple of days later, a new proposal came together.
Hillwood’s rent dropped a little lower. The city’s incentives were boosted.
It was enough to put Jacksonville back in the running.
Winning and secrecy
Tatsch said he can’t recall how soon afterward he received the call.
But, he said, “They didn’t keep us on the hook for a long time.”
Mallot said it wasn’t a particular call that led to the news, but a series of back-and-forth emails and assurances Jacksonville could keep its side of the deal.
There was a final request from GE: The company didn’t want its name made public until everything was finalized. The project was known publicly as Project Speed.
Typically, incentive deals that head to City Council have the name of the company interested in moving to Jacksonville. The GE deal did not.
In early August, legislation for “Project Speed” was introduced, asking for $10 million from the city. Included in that was a new incentive: the Economic Development Manufacturing Employer Grant worth up to $3 million. It pays out $400 per employee for 15 years.
It was that perk that was credited with getting Jacksonville back in the running, with Mallot crediting Carter for “thinking outside the box” when it came to what the city could offer.
Carter said council members had questions about the deal and the company, but the trust was there. Council ended up passing the incentives by a 17-0 vote Sept. 9.
Mallot was nervous during August. Answering council questions truthfully without revealing it was GE was difficult. So was keeping it a secret from the public.
He was fearful the entire deal could blow up if word spread.
Based on line job postings, media reports began to speculate the company was GE Oil & Gas.
On Friday, flanked by national, state and local leaders, GE was ready to make the announcement.
In front of the cameras, it was all smiles.
For those involved with making the deal a reality, a sense of relief.
The work, the rejection, the comeback, the win all were a part of securing the deal for Jacksonville.
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