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Jax Daily Record Monday, Dec. 16, 201904:25 PM EST

Maxwell House plant doesn’t meet job target, but exceeds investment

Kraft Heinz wants the DIA to redraft its 2016 incentives agreement.
by: Mike Mendenhall Associate Editor

Kraft Heinz Foods Co. has asked the Downtown Investment Authority to redraft the terms of its 2016 incentive agreement with the city after failing to hit a job target at its Downtown Maxwell House coffee plant.

At the same time, the DIA board will consider a resolution Wednesday to allow the company to receive $904,000 remaining from a $1 million taxpayer-backed Recaptured Enhanced Value grant, which is based on capital investment.

DIA documents state that, despite not adding the 40 jobs in the economic development agreement approved in January 2016, Kraft Heinz is reporting a $50 million-plus investment in machinery and equipment at the plant. That is $20 million more than called for in the agreement.

In its resolution, DIA staff uses the higher level of investment to justify amending the terms.

The century-old facility at 735 E. Bay St. is Maxwell House’s last remaining U.S. coffee plant. Kraft Heinz is the fifth largest consumer packaged food and beverage in the world.

In February, the company reported a loss of $12.6 billion in the fourth quarter 2018 because of a noncash charge related to valuations of certain assets, including its Kraft and Oscar Meyer brands.

At the time, CNBC reported Kraft Heinz could sell its Maxwell House coffee business. As of Nov. 21, the company had not commented on that report. 

DIA CEO Lori Boyer confirmed in a phone call Nov. 7 that she had a teleconference with Kraft Heinz representatives in October, but she declined to comment about the subject of the meeting.

Kraft Heinz withdrew from the state’s Qualified Target Industry Tax Refund program, a second incentive approved in Ordinance 2016-0059, after it missed the Dec. 31, 2018, job creation target. With QTI, a company is refunded after jobs are created and wages are verified.

The company would have received $160,000 from the state, or $4,000 per job. The city’s portion was $40,000, or $1,000 per job. Kraft Heinz did not receive payment from the state or city for the QTI incentives. 

The seven-year REV grant in the existing agreement is capped at $1 million. The city has paid out $95,657 to date. It was a reimbursement of 50% of the increase on the property’s ad valorem taxes.

If approved by the DIA board and City Council, the new agreement would provide the company with five more REV grant payments from fiscal year 2020-21 through 2014-25. 

Kraft Heinz employs 200 people at its Jacksonville plant, according to the DIA. The amended agreement would reduce the REV grant award proportionately any year employment levels at the Maxwell House factory drops below 200. 

The grant would be forfeited if the plant’s staff level falls below 175 at any time before the end of fiscal 2024-25.

The DIA is scheduled to meet at 2 p.m. in the Lynwood Roberts Room at City Hall, 117 W. Duval St.

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