by Mike Sharkey
Staff Writer
For those opposed to economic incentives, a survey conducted by Stadtmauer Balkin Biggins, LLC for the Jacksonville Economic Development Commission shows that incentives are a way of life for cities trying to lure new businesses to town, and they are here to stay in Jacksonville.
The survey was presented Thursday to the City Council Special Committee on Economic Incentives. Jay Biggins of the New York-based economic development consulting firm spent the better part of two hours explaining the 28-page first draft to the committee, which is chaired by Council member Alberta Hipps.
Requested by both the JEDC and the incentives committee back in January, the survey, in short, shows that Jacksonville is remarkably compatible with the nine similar metropolitan areas that Biggins and his staff researched. Every one of them, including Jacksonville, offers prospective companies everything — in some form — from tax breaks to grants to low-interest loans. According to JEDC executive director Kirk Wendland, the information came as no surprise. What he and the committee was looking for, though, was something off the beaten path.
“Back in December or January, this committee had a discussion and decided to look at our incentive policy,” said Wendland. “We wanted to have an understanding of what other communities were doing. We wanted to know the industry names and if there were ideas out there that were not being utilized in Jacksonville. That was the basis of the survey.
“I didn’t see anything [in the results] that made me say, ‘Oh gosh, that’s news to me.’ We will sit down and take a long look at the survey so we can make a valid comparison.”
At a cost of $7,900, SBB spent almost two months gathering incentive data on nine cities that are similar to Jacksonville in either size, growth or economy — Richmond, Savannah, Nashville, Charlotte, Tampa, Orlando, Atlanta, Dallas and Indianapolis. The survey covered everything from whether a particular jurisdiction had a formal, written incentive policy to the length of negotiations, from the time business shows initial interest until the deal is finalized.
The bottom line? Jacksonville isn’t doing anything out of the ordinary and neither is anyone else. And, if Jacksonville ever opts to get out of the incentive business altogether, odds are real good new businesses will never set roots down in the River City.
“Incentives have a significant influence on a company’s choice of location,” said Biggins, explaining that all things being equal, a company is much more likely to go with the city that offers the best incentive package. “That’s where the rubber meets the road. Economic developers are always going to promote the community first, then the incentives.”
Over the last several years, the JEDC has awarded hundreds of millions of dollars in economic incentives. While some may argue against them, without incentives there would be no Adam’s Mark Hotel, Berkman Plaza or Shipyards project. In a way, those projects have helped not only spawn other smaller developments, but also helped show the National Football League that Jacksonville is serious about both development and redevelopment. Those factors combined to help Jacksonville land the 2005 Super Bowl.
Still, the JEDC and its “corporate welfare” have raised eyebrows all over town and served as the impetus for Hipps’ special committee and its long term agenda.
In a few weeks, SBB will deliver its final results which will include several things the committee would like to see added, namely how Jacksonville stacks up against the other nine cities in a comparative analysis. At this point, though, Hipps is pleased with what was presented.
“I think they have done a good job in terms of benchmarking Jacksonville against what the other cities are doing,” said Hipps, adding that she was surprised to see that other towns often use the local school taxes as bait, but Jacksonville doesn’t. “I was amazed that so many others use their school board tax as part of their incentive package. I am pleased to see that we don’t and we have no intentions of doing so.”
Hipps said once the final results are delivered, she will likely advise the JEDC to use the findings to help develop a master incentive plan for Jacksonville, one that can be easily referenced and updated on a regular basis.