by Max Marbut
Staff Writer
“It’s never about anything but a team approach. We harness all the energy and positive aspects of our private sector and consolidated government. It’s what allows us to compete and win.”
That’s how Jacksonville Economic Development Commission Executive Director Ron Barton described the system that was created more than 12 years ago to streamline and strengthen the City’s economic development strategy. The idea was to consolidate about a dozen different City departments and programs into a single entity with a well-defined mission: to join forces with the business community and achieve results that would be unattainable without a coordinated effort.
The JEDC’s mandated responsibilities include Downtown development and redevelopment, the promotion of Jacksonville’s sports and entertainment and film and television production economies and the development of the 6,000-acre Cecil Commerce Center.
Jerry Mallot, president of Cornerstone, the economic development arm of the Jacksonville Regional Chamber of Commerce, said of the public-private partnership: “What makes it work so well is the defined roles and relationship. We complement each other well. We do the marketing and research and find the deals then JEDC puts the deal together that works for the client.”
The part of the JEDC’s mission that makes most of the headlines involves what Barton called “business recruitment incentive negotiation.” That process involves using tax credit programs approved by the State Legislature to attract companies that are starting up or expanding and convincing them to set up shop at a Jacksonville address. A common incentive is only used to close agreements with what’s designated as a “Qualified Target Industry” (QTI). The biggest requirement for QTI status is the company must promise to create jobs that pay more than the state average salary, an economic advantage that improves Jacksonville’s per capita income. That usually also means capital investment on the company’s part, another source of municipal revenue. Jacksonville provides only 20 percent of the tax credit with the state picking up the balance and incentives are credits for verified performance as opposed to advance payments or credits.
“The programs JEDC does with Cornerstone pay for themselves with economic development. We generate more ad valorem tax revenue than we use in incentives,” said Barton. “All of our programs are tax credits which could be described as discounts on taxes. By definition that’s new money so we’re creating more wealth. The projects we do also create jobs with disposable income. That creates consumers which in turn supports small businesses.”
In terms of the philosophy of using tax incentives to lure new business to Jacksonville, both economic development executives said it comes with the territory.
“Make no mistake, Jacksonville competes every day with other cities in other states. Incentives are part of the game,” said Barton.
“The programs were put in place because we have to be able to compete. It would be great if no states offered tax incentives but that’s not the way it is,” added Mallot. “The State’s tax incentives level the playing field and allow us to be in the game. The projects we’ve been able to do have produced a significant dividend in terms of jobs and capital investment. Developing that tax base has been a terrific boost for the City’s revenues.”
Remaining competitive while the economy pulls out of the recent recession is also part of the JEDC’s and Cornerstone’s combined mission, said Barton.
“In an economic crisis, the strategy shouldn’t be to get out of the economic development business. We think the strategy should be to redouble our efforts and stay in the winning mode,” he said.
JEDC report card
Efficiency
• JEDC’s proposed FY 2009-10 operating budget reflects a 14.2 percent decrease over FY 2008-09.
• Over a seven-year period staffing decreased from 41 positions to 17 positions in proposed FY 2009-10, a 58.5 percent decrease.
• Over that same period, salaries and benefits decreased from $2,948,677 to $1,568,805 in proposed FY 2009-10, a 46.8 percent decrease. The overall JEDC budget also decreased from $7,928,894 to $3,977,442 (49.8 percent).
Economic development
• In 2008, JEDC projects generated more than $8.5 million in incremental new county and ad valorem taxes.
• In 2008, JEDC projects created and retained 14,000 jobs and more than $760 millage in direct annual payroll.
• JEDC projects have generated $1.2 billion in private capital investment in Jacksonville.
• During 2007-08 JEDC permitted 110 film productions creating more than 1,600 jobs and generating an economic impact of $8.7 million.
• In the past five years JEDC has assisted 306 companies, mostly small businesses, within the Enterprise Zone (Northwest Jacksonville) to create 5,862 jobs.
Public investment in place
• Flagler Development at the I-95 Interchange: 28 companies representing 6,163 jobs and $262 million in private capital investment with 2.8 million square feet of commercial space, a 192-bed hospital, a 120-room hotel and 100 residential units.
• RiverCity Marketplace: 71 tenants with 1,380 jobs, $182 million private capital investment, 920,000 square feet of retail and entertainment space and 278 residential units.
• Fidelity National Financial: 3,068 jobs, $182 million private capital investment, 780,000 square feet of office space.
Public investment pending
• Deutsche Bank: 1,000 jobs and $12.1 million in private capital investment.
• Alenia North America: 300 jobs and $104 million in private capital investment.
• Bridgestone Firestone: 250 jobs and $43 million in private capital investment.
Source: Jacksonville Economic Development Commission
356-2466