by Max Marbut
Staff Writer
Fifty years ago when Jacksonville began to build a reputation as a great city to do business in, one industry in particular led the way. Several major insurance companies had headquarters here and that presence — in addition to the port and the military — supported economic growth for years.
Jacksonville has since added financial institutions to its business environment reputation and Thursday, the Jacksonville Economic Development Commission (JEDC) unanimously approved a tax incentive proposal that, if approved by City Council, could add a major international financial institution to the mix.
Deutsche Bank is considering establishing a “nearshore” operations hub in Jacksonville that would create operations and technology jobs that support Deutsche Bank’s corporate, investment banking and asset and wealth management businesses. Deutsche Bank is looking at Jacksonville as a way to diversify its operating centers away from the company’s hubs in New York and New Jersey, London and Singapore.
Deutsche Bank is the largest financial services firm in Germany and one of the largest in the world. As of Dec. 31, 2007, the company had assets of $3 trillion and its 78,000 employees operate in 76 countries.
With the proposed new hub, Deutsche Bank plans to create 1,000 new, full-time jobs by Dec. 31, 2011. The high-skill jobs will pay an annual average wage estimated at $49,200 plus benefits, or more than 115 percent of the statewide average wage, for an estimated annual payroll of $49.2 million.
The company also would invest $12.1 million in technology infrastructure and tenant improvements.
The JEDC was approached by Deutsche Bank for public investment through the State of Florida Qualified Target Industry (QTI) tax refund program, Recapture Enhanced Value (REV) grant program and the Countywide Economic development Fund (CEDF) grant program. Based on the projected salary of the new jobs that would be created, Deutsche Bank qualifies for $3,000 per job for a total of $3 million to offset a portion of the expenses for the expansion of its operations in Jacksonville. The City’s portion of the QTI is 20 percent of the basic award up to $600,000.
The proposed REV grant would be provided on an annual basis equal to 35 percent of the incremental increase in ad valorem taxes paid on personal property at the project site. The grant would have a cap of $34,071 over a five-year period.
As part of the negotiations between Deutsche Bank and the JEDC, $250,000 of the CEDF was offered as part of the incentive package, provided Deutsche Bank secures a $1 million state grant from the Governor’s Quick Action Closing Fund (GQACF).
The array of grants are on the table, said JEDC Business development Chief Lyndsey Ballas, because Deutsche Bank could expand its operations in Nashville or in another city for less investment than in Jacksonville.
Ballas also said in addition to the new high-paying jobs Deutsche Bank also represents an excellent corporate citizen that contributes to community service projects, education and the arts.
Grants from Deutsche Bank America’s Foundation support neighborhood-based organizations that develop affordable housing and housing and employment opportunities for the homeless. Deutsche Bank also supports education grants for young people from disadvantaged backgrounds who would like to pursue careers in business and finance.
“The Deutsche Bank hub in Jacksonville would be a great thing to add to our employment mix,” said JEDC Deputy Executive Director Paul Crawford. “At a time when so many communities around the country are losing jobs, Jacksonville is in the position to gain jobs and also increase the city’s visibility in international finance.”
The proposed business development agreement with Deutsche Bank will be introduced to Council Tuesday.