by Bradley Parsons
Staff Writer
As the JEDC continues its self examination, one of its most frequently cited ailments is a policy that allows the City to grant incentives only in cases where development depends on them.
The policy is written into the Jacksonville Economic Development Commission’s enabling legislation. The so-called “but/for” clause — but for incentives, the development project can’t happen — is supposed to be a primary consideration of JEDC commissioners and the City Council before they give out City money. However, as the JEDC’s 60-day review grinds toward its Aug. 1 deadline, the clause has been repeatedly criticized as an unrealistic standard.
The competition among cities for corporate expansions and relocations is turning global. Faced with growing competition, the question is no longer: Could they come without incentives? Instead the JEDC should consider: Would they come? That according to JEDC executive director Kirk Wendland.
The policy is designed to limit City incentives to projects where they are absolutely necessary. However, without public dollars to attract businesses and encourage expansion, Wendland said Jacksonville could find itself on the sidelines as cities and counties across the South ante up.
Further, Wendland and several members of the committee charged with evaluating the JEDC’s finances said the current policy encourages negotiations with a wink and a nod.
“It sort of forces companies to be a little bit disingenuous and say they can’t go forward without the incentives,” said Wendland.
For instance, Washington Mutual Inc., will receive up to $2.1 million from tax breaks if it brings 700 jobs to Jacksonville. Measured against the financial firm’s ongoing 10-year $375 billion expansion, it would be tough to argue that Washington Mutual needed the tax breaks to proceed.
But Jacksonville is competing for the jobs with Florence, S.C. and Albion N.Y., both of which are offering incentives and a lower cost of living. Without incentives, it would be difficult for Jacksonville to compete, said Ted Telford, Washington Mutual’s vice president of corporate property services.
Once the JEDC resumes business, following a 60-day stay on incentives, Wendland said the commission should instead consider whether incentives would be “a material factor” to development projects.
Some members of the JEDC’s Finance Advisory Committee cautioned against making incentives too available. Alvin Brown, president of the Willie E. Gary Football Classic, said the City should stick to the “but/for” standard, and do a better job of enforcing it.
“We need to look at the kinds of companies that get incentives and whether they’re really necessary,” said Brown at a meeting last week. “A lot of it is based on relationships, if we’re going to be honest, and a lot of these companies would do these projects anyway.”
Committee chair Charles Appleby, also a JEDC commissioner and chief financial officer of Advanced Disposal Services, acknowledged the necessity of incentives in a competitive market for jobs. But he said there’s a fine line between necessity and indulgence.
“Are they asking (for incentives) because they need it or because they know it’s available?” said Appleby.