Adecco Group North America, the U.S. operation of Switzerland-based Adecco S.A., will be offered almost $2 million in state and city incentives to move its corporate headquarters and 185 jobs to Jacksonville in legislation submitted Monday to City Council, which meets today.
Filed as "fast track" legislation, the deal could be back to council for final approval April 8.
"If you are using that money to attract a headquarters corporation, it's a reasonable use," council President Bill Gulliford said this morning.
"The big gorilla in the room is that we are going to get a national headquarters of an international company, so I don't have any great heartburn at all," he said.
Mayor Alvin Brown and his Office of Economic Development submitted resolution 2014-229 on Monday to council. The deal had been code-named "Project Dome."
According to the resolution, the city would be responsible for $407,000 of the incentives and the state would pick up the remaining $1.59 million. The incentive package works out to be about $10,800 per new job.
In return, Adecco Group would pay a salary and benefits package averaging $85,969 per job and make a capital investment of $3.4 million in renovating space for the headquarters.
Gulliford said he considers job creation, but looks even more at the capital investment.
"Jobs have a value, but sometimes that value goes to St. Johns County or somewhere else, although it adds to the overall economic strength of the region," he said.
The capital investment is expected to generate $384,000 in new taxes over six years and generate $612,000 from 2015-34, according to a city project summary.
Gulliford said the Adecco incentives as structured could pay back the city's investment in 10 years or less.
The legislation will be introduced as the addendum to the council agenda tonight and receive a first read. It will then be referred to the council Finance Committee next Tuesday for a presentation by the Office of Economic Development and a committee recommendation, then return to council for final approval on second reading April 8.
The compensation package includes an average wage of $63,669 for the 185 jobs. That amount is 150 percent of the state's average wage. The average benefits would be $22,300.
A schedule shows that 150 jobs must be created by Dec. 31, 2015, and the remaining 35 a year later.
The incentives would be paid out over a five-year period beginning in 2016 after the jobs are created and the average is verified by the Florida Department of Economic Opportunity. The incentives would be paid through 2020.
Adecco Group also would retain 354 existing Adecco jobs in Jacksonville. Those jobs average $45,600 plus benefits.
The annual payroll of the 185 new jobs totals $11.8 million a year. Plus benefits, that is estimated annually at $15.9 million.
The annual payroll of the existing jobs is $16 million. With benefits, that rises to $21.6 million a year.
The city says the payroll of new and retained jobs generated over the life of the agreement is $200 million.
Adecco North America proposes to move its headquarters from Melville, N.Y. Adecco would move the headquarters to space it already leases for its Jacksonville operations at 10151 Deerwood Park Blvd., No. 200, in the Deerwood South office park and expand there.
It would renovate 50,000 square feet of space, spending $2.47 million in tenant improvements and $935,000 on buying machinery, equipment, furniture and fixtures.
Adecco is considered the world's leading provider of human resources and staffing solutions. Its services include temporary staffing, permanent placement, outsourcing, consulting and outplacement.
It bought Jacksonville-based MPS Group in January 2010 and operates businesses in Jacksonville and the state that include Accounting Principals, Ajilon Professional, Beeline, Pontoon, Entegee, Lee Hecht Harrison, Modis, Parker and Lynch, Soliant Health and Special Counsel.
When Adecco bought MPS, it moved the business from Downtown to Deerwood South in Southside. It also used the Qualified Target Industry Tax Refund program to expand the business from 236 to 354 employees. It was granted $300,000 in city and state QTI incentives to create 100 jobs.
QTI, which is a repayment of taxes, is a large component of the incentives package for the headquarters move.
The incentives for the headquarters move comprise:
• City: $407,000, consisting of $222,000, or 20 percent, of the QTI refund, and a $185,000 Countywide Economic Development Fund Grant.
• State: $1,591,000, consisting of $888,000, or 80 percent, of the QTI refund; a $370,000 Governor's Quick Action Closing Fund based on the jobs; and $333,000 from the Quick Response Training Program, also based on the jobs.
The city's funds are equal to $2,200 per job, while the state's funding works out to $8,600 per job.
The QTI award for the Adecco jobs equals $6,000 per job because they are eligible for the base $3,000 refund and also are within a state high-impact targeted industry (corporate headquarters) for $2,000; and the wage is equal to 150 percent of the 2014 state average of $42,446, for another $1,000 a job.
The mayor's office seeks a waiver of the city's Public Investment Policy, which does not provide for a County Economic Development Fund grant to support job creation.
There also are clawbacks in the event Adecco does not create the jobs. The QTI program has a built-in clawback in that it does not pay the refund if the jobs aren't created and the wages not paid. Because the closing fund and countywide grant also are tied to the jobs, the QTI method will be used to monitor jobs for the grant.
State law allows the annual payments to be reduced if the company does not create the jobs, but does not adjust incentives if the jobs fall below 80 percent of the goal.
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