Five days before City Council is scheduled to consider perhaps its most ambitious economic incentives package ever, its newly created Special Committee on Economic Development Incentives waded through its first meeting Wednesday, seeking to focus and justify how such money is spent.
The seven members of the panel led by Council member Alberta Hipps did not speak much about specific projects, such as the $17 million Vestcor loan to be taken up at Council’s meeting Tuesday. Instead, they spent the nearly two hour meeting trying to define the economic behemoth they must try to tame, or at least understand a little better.
Judging by the range of concerns raised about the City’s current economic incentives policy, any substantive action will not come until long after a decision is made on Vestcor.
Kirk Wendland, Jacksonville Economic Development Commission director of finance, tried to lend some of his expertise to the discussion, but admitted the panel’s task is a difficult one.
“I do think one of the things that I’m hearing is that we’re kind of getting comments in a lot of different directions,” he told the Council members. “I think that’s the thing we ultimately wrestle with in this process. We try to have an incentives policy that deals with so many different things. There’s just a lot of different components of things that we have to wrestle with to try to incorporate into one master policy.”
One of the issues Wendland addressed was competition and perceived bidding wars between communities to entice companies to move here.
“I can assure you that we have not, and will not, get into any bidding wars with any of our regional competition,” Wendland said. He cited one company who seemed to be trying to set up such a competition between Jacksonville and St. Johns County.
“I contacted that company and told them that if St. Johns is going to offer you less than what we’re going offer you, then we’re reducing our offer to meet there’s. We’re not going to be in a competitive situation with our own counties.”
Wendland said a suggestion by Council member Elaine Brown to develop a scoring system by which to judge the importance of various proposed incentives projects is a good idea that would be very difficult to implement.
“How do you set up a matrix for the Shipyards project versus a large manufacturing project that’s going to have $50 million in capital investment versus a small project on the Northside that wants $20,000 for water and sewer hookup? It’s typical that we have so many different components of things that we’re trying to do. I hear all of what you’re saying, and I don’t disagree with any of it, other than trying to get your arms around the whole thing and bring it all together.”
Brown said she understood the difficulty, but she thought some kind of plan was necessary and that City leaders would be able to “compare apples to apples” when it came down to deciding on incentive projects.
“We’ve done an awful lot, in the past, of reacting,” she said, citing several projects, including Vestcor. “But at what point have we reached a goal that the market then starts to drive what you’re looking for? My point: more of a proactive approach to what we’re looking for.”
Brown cited the Osborn Center, which she said “has always been, really, a failure in as far as really attracting the sizes of the conventions that we want.” She said the lack of planned incentives to get a hotel near the structure is an example of what she said is lacking from the City.
Council member Warren Alvarez described his concern as being the same as his constituents in the rural District 11 who constantly tell him they can’t understand how the City can just give away taxpayer money to large corporations.
“If you put this on the ballot, it’d fail big time,” he said of the entire notion of economic incentives.
But Council member Faye Rustin countered that the city has “come a long way in a short period of time, and I think incentives are a big part of that.”
Wendland said some of the popular sentiment against what are seen as “giveaways” could come from the misunderstanding through the media and other sources that the City is actually giving this money away, which is not the case.
“You’re right, when you read about it ... they say, well, the City is committing $2 million to this project. Well, that may be the case, but the City is committing $2 million to this project because that project is guaranteeing or saying that they’re going to create $30 million capital investment, they’re going to pay $4 million in taxes over a 10-year period, and we’re going to rebate two of them. I think there’s a clear difference between that and company XYZ walks in the door, we serve them a check for $2 million and HOPE they create a capital investment and HOPE they create the jobs. You’re not approving a set of packages like that, and if that’s the perception, you’re right, we need to change that perception, because that’s not what’s happening.”
Wendland and the JEDC staff also provided the committee with copies of its annual status report from 2000 that describes each of the City’s incentive deals, breaking them down into what each company projected in terms of jobs and capital investment and what city financial incentives were committed.
All tolled, the projected figures were these:
Jobs committed — 18,779.
Capital investment — $1,055,191,650.
City assistance — $117,005,357.
Wendland was hopeful the committee could possibly fine tune the JEDC’s incentive policy, which was approved by the Council in 1999.
“When it initially passed, admittedly, we didn’t have a whole lot of history at the JEDC,” he said. “We’d only been in existence for a year, year and a half. Well, now we’ve got more than five years experience. We’ve got a little more experience in what we’ve done. And that was one of our planned items this year was for Council to review the incentive policy and make sure that they’re comfortable with where we’re at, that we’re the type of program that they want, and that we’ve got the guidance so that we can go forward.”