City Council approves $10.1 million in grants for Paysafe North American headquarters

The city says the incentives for the London-based payment provider’s Jacksonville office will have a neutral return after 25 years.

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The Jacksonville City Council approved a bill Dec. 13 awarding global online payment provider Paysafe Processing Solutions LLC $10.1 million in cash grants to bring its North American headquarters and 600 jobs to Northeast Florida.

Council voted 15-2 to approve Resolution 2022-0863 to secure the London-based Paysafe’s $51.5 million project.

Council members approved an amended bill that defended a negative return for taxpayers until Paysafe has been in Jacksonville for 25 years.

The city Office of Economic Development projected the short-term return on investment would produce 60 cents for every $1 of public investment in the company’s North American consolidation to Jacksonville. 

The updated summary states the city will eventually break even. 

“While the ROI for Paysafe will not reach 1:1 until year 25, the investment in the project is clearly justified,” the amended summary says. 

“Bringing 600 new full-time jobs with an exceptional pay and benefits package qualifies this as a ‘Mega Project.’”

In the revised summary, city officials say the Public Investment Policy allows mega projects to be handled case-by-case and allows the city to formulate a “custom offer.” 

“As further stated in the PIP (Public Investment Policy), the ROI calculation is conservative in nature and does not take into account the multipliers that result from projects of this nature,” the summary says.

The bill filed by Council President Terrance Freemen on behalf of Mayor Lenny Curry breaks down the Paysafe incentives into three grants:

• A $1.5 million headquarters relocation grant. 

• A $3.6 million employment creation grant.

• A $5 million headquarters retention grant.

The city incentives are tied to Paysafe creating and retaining 600 jobs in Northeast Florida and locating the headquarters office in Jacksonville. That space has not been identified.

City officials filed the legislation two days after Paysafe announced with JAX Chamber, city and state officials that it plans to consolidate its North American headquarters in Jacksonville over the next three years. 

The legislation was approved Dec. 13, less than a month later.

In addition to the city incentives, the state is contributing $3 million from the High Impact Performance Incentive program. 

That brings the total incentives package for the project to $13.1 million.

In an email Nov. 17, city economic development Director Kirk Wendland said one reason for the conservative ROI is that because Paysafe intends to lease its headquarters space, the project would not generate as much ad valorem property tax revenue as new construction would.

“During that (15-year) time period we anticipate that Paysafe will make additional capital investments that have not been taken into consideration at this time and thereby create a greater ROI than currently shown,” the summary says.

Wendland said in the email that city officials did not have firm numbers when conducting its ROI calculations on the office space Paysafe would need as the company grows. 

“However, it isn’t often that a community gets an opportunity to attract the North American Headquarters of a publicly traded company,” he said.

According to the summary, the annual average salary for new Paysafe jobs will be $150,000.

Enterprise Florida says the average wage Duval County companies must reach to qualify for its jobs incentive program is $54,489. 

The city’s $10.1 million will not be issued in one bulk payment.

The summary and a redevelopment agreement say the $1.5 million headquarters relocation grant would be paid in $300,000 increments over the first five years of the project, starting the first year jobs are created. 

The $3.6 million grant for employment creation breaks down to $6,000 per job and will be paid at 25% per year for four years. Paysafe executives say about 300 employees will be relocated from its other U.S. offices and 300 will be hired locally. The agreement considers both to be new jobs.

Paysafe would receive its first employment grant payments Oct. 31, 2023, and the city must verify that the average salary for the jobs is $150,000. 

That would be an average $90 million annual payroll.

Paysafe will receive the $5 million headquarters retention grant in $500,000 increments over 10 years “provided that the company continues to demonstrate that its Jacksonville location serves as its corporate headquarters and the requested 600 jobs are maintained.”

The Council waived portions of the public investment policy because it does not include the proposed incentives.

According to Wendland, the incentives are not to fill a financial gap created by the company’s relocation but to make sure Paysafe chose Jacksonville instead of another U.S. city for the headquarters.

Council members Rory Diamond and Al Ferraro were the two no votes. Danny Becton and Aaron Bowman were absent for the vote.

There was no debate before the vote Dec. 13. 

The lawmakers approved the bill less than a month after JAX Chamber, city and state officials announced the company was coming to Northeast Florida.

The agreement says Paysafe has to close on a purchase or lease for its new headquarters by Dec. 31, 2023. 

The agreement says the property must be in Duval County.

To qualify for the incentives, the Paysafe employees can be based at its Jacksonville headquarters.

The agreement allows the new workers to reside in Baker, Clay, Duval, Nassau or St. Johns counties, which comprise the Jacksonville Metropolitan Statistical Area.

Site improvements must be finished and the jobs in place by Dec. 31, 2025, although the company could ask for a one-year extension on the performance schedule.