by Bradley Parsons
Staff Writer
After receiving unanimous approval from the City Council’s Finance Committee Tuesday, the City looks likely to offer Washington Mutual, Inc. $2.1 million in tax breaks to encourage local expansion. Now the question is, will the financial services company accept?
Washington Mutual’s vice president of corporate property, Ted Telford, confirmed after the committee meeting that Jacksonville was “one of several” cities being considered for a 700-job expansion. The tax incentives, which still require full Council approval, are necessary for Jacksonville to compete with Albion, N.Y., Florence, S.C. and several other locations that Telford would not name.
If the Council approves the incentives as expected, it doesn’t guarantee the jobs will come to Jacksonville. But without the incentives, it’s a sure bet the jobs would be headed elsewhere, said Telford.
“What getting these incentives approved does, is it gives us a comprehensive financial picture to evaluate Jacksonville,” said Telford. “In all honesty it would do Jacksonville a disservice to not be able to factor in incentives.”
With the incentives, Jacksonville will receive heavy consideration as Washington Mutual looks for cities in which to consolidate their nationwide operations. The winners will add jobs, the losers could lose them as the company continues to consolidate.
Washington Mutual already employs 2,100 people at its Baymeadows Way offices. The new jobs would be new to the state, but many of them would already be filled as transfers from other cities. Telford said the Seattle-based company likes the quality of life offered by the city and employee training offered by the state.
By packaging those assets with the heavily state-subsidized tax incentives, the City has offered Washington Mutual an attractive package, said Jeanne Miller, director of business development for the Jacksonville Economic Development Commission.
Still, she expects heavy competition. Florence and Albion both offer lower cost of living than Jacksonville and Miller said she’s anticipating a tough fight from the small-town competition. The loss of Washington Mutual jobs would be felt more severely in their smaller economies, and Miller expects them to go all out to keep them.
Long-term, Washington Mutual’s decision could pay even larger dividends for the city of choice. The JEDC believes the company will continue to consolidate and might add more jobs in the future.
“My impression from them through all of this is that this is part of a nationwide consolidation and streamlining. This sets us up for a long-term and productive relationship with Washington Mutual,” said Miller.
The Qualified Targeted Industry Tax Credit that the Council is considering has become a favorite of the JEDC because the state pays 80 percent. The credits also govern themselves. They only pay if the beneficiary adds jobs of the promised quality and quantity.
For instance, Washington Mutual is promising to add 700 jobs averaging about $36,500 in salary in exchange for a $3,000 tax credit on each job. If the number falls short or the salary dips, the credit would be pared back. If Washington Mutual adds jobs as promised, the City would pay $420,000 of the $2.1 million total.