Southern states have been bribing industries since the 1940s to "create jobs."
It is a "race to the bottom, " in Justice Brandeis' phrase.
St. Johns County does not need to bribe industries to "create jobs."
This is the fourth fastest-growing county in America.
I object to these "incentives," swathed in possible nonfeasance, misfeasance and malfeasance by all-white, all-male, Republican St Johns County Board of County Commissioners.
"Secrecy is for lowers," as Senator Daniel Patrick Moynihan said it best.
What is the name of the corporation demanding this extravagant subsidy?
From St. Johns County Board of County Commissioners website.
Agenda item 3 is on April 6, 2021 agenda.
It's our money.
https://stjohnsclerk.com/minrec/agendas/2021/040621cd/04-06-21REG03.pdf
AGENDA ITEM | |
Deadline for Submission - Wednesday 9 a.m. – Thirteen Days Prior to BCC Meeting |
4/6/2021
BCC MEETING DATE
TO: Hunter S. Conrad, County Administrator DATE: March 16, 2021
FROM: Joy Andrews, Deputy County Administrator PHONE: 904 209-0562
SUBJECT OR TITLE: Project Breeze Economic Development Incentive Request AGENDA TYPE: Business Item, Contract, Grant, Report
BACKGROUND INFORMATION:
The St. Johns County Economic Development Agency (Agency) has received an application from Project Breeze for economic development incentives. The Applicant has requested confidentiality under Section 288.075, Florida Statutes, for the project as it goes through the due-diligence process. The Applicant proposes to develop a 150,000-square-foot building (Building A) to house digital media operations within the qualified targeted industry of infotech. The Applicant has yet to submit the final number of new fulltime jobs and annual average wage of the new jobs the project will bring. In addition to the provision of incentives based on the construction of a new facility and creation of new jobs, the Applicant has requested that the County consider the value of retention of existing jobs at an existing facility (Building B) within the County in its consideration of the application. The project will retain 145 jobs there, averaging $97,000 per job retained. The Applicant has also proposed additional potential inducements for further incentives, such as the conveyance of certain property rights to the County and the opportunity for the County to work with the Applicant as a resource for County-wide economic development and general marketing. These inducements would be a condition of the County’s entering into an incentive agreement with the Applicant. The County has broad authority under Section 125.045, Florida Statutes, to expend public funds for the expansion or retention of businesses. The Applicant has requested economic development incentives over a 30-year period due to the magnitude of the project and to encourage retention and expansion of an existing business with significant economic impact within St. Johns County. An incentive period of this duration falls outside of the scope of the incentive program provided under Section 11 of the St. Johns County Business Incentive Program Ordinance (the Ordinance); however, Section 7 of the Ordinance permits the Board of County Commissioners to consider incentives that fall outside the scope of the program. Completion of the project is anticipated by the first quarter of 2024. With this schedule, the first annual grant payment would be anticipated during FY26. Based on the Applicant’s request, the estimated value of the incentive for Building A is $13,774,888. Based on the Applicant’s request, the estimated value of the incentive for Building B is $9,605,237. Based on the Applicant’s request, the total estimated value of incentives for both buildings is $23,380,125. The requested values are subject to change based on the final number of new fulltime jobs provided by the Applicant and other conditions outlined for the project. In accordance with program requirements, the Agency is required to review the application and make a written report to the Board of County Commissioners.
Motion to instruct the County Attorney to draft an Economic Development Grant Agreement for Project Breeze and place the proposed Grant Agreement for consideration by the Board at a later regularly scheduled meeting.
1. IS FUNDING REQUIRED? Yes 2. IF YES, INDICATE IF BUDGETED. No IF FUNDING IS REQUIRED, MANDATORY OMB REVIEW IS REQUIRED:
INDICATE FUNDING SOURCE: ED TAX INCENTIVE REBATE – 0059-53120: No anticipated funding in FY21. Funding for grant payments to begin in FY26.
SUGGESTED MOTION/RECOMMENDATION/ACTION:
For Administration Use Only:
Legal: RL 3/30/2021 OMB: DC 3/30/2021 Admin: Joy Andrews 3/30/2021
To: Through: From: Date: Subject:
ST. JOHNS COUNTY OFFICE OF THE COUNTY ADMINISTRATOR ECONOMIC DEVELOPMENT
500 San Sebastian View
St. Augustine, Florida 32084
INTEROFFICE MEMORANDUM
St. Johns County Board of County Commissioners County Administration
Joy Andrews, Deputy County Administrator March 29, 2021
St. Johns County Economic Development Agency Report - Project Breeze Economic Development Incentive Request
The St. Johns County Economic Development Agency (Agency) has received an application from Project Breeze for economic development incentives. The Applicant has requested confidentiality under Section 288.075, Florida Statutes, for the project as it goes through the due-diligence process. The Applicant proposes to develop a 150,000-square-foot building (Building A) to house digital media operations within the qualified targeted industry of infotech. The Applicant has yet to submit the final number of new fulltime jobs and annual average wage of the new jobs the project will bring.
In addition to the provision of incentives based on the construction of a new facility and creation of new jobs, the Applicant has requested that the County consider the value of retention of existing jobs at an existing facility (Building B) within the County in its consideration of the application. The project will retain 145 jobs there, averaging $97,000 per job retained. The Applicant has also proposed additional potential inducements for further incentives, such as the conveyance of certain property rights to the County and the opportunity for the County to work with the Applicant as a resource for County-wide economic development and general marketing. These inducements would be a condition of the County’s entering into an incentive agreement with theApplicant.
The County has broad authority under Section 125.045, Florida Statutes, to expend public funds for the expansion or retention of businesses. The Applicant has requested economic development incentives over a 30-year period due to the magnitude of the project and to encourage retention and expansion of an existing business with significant economic impact within St. Johns County. An incentive period of this duration falls outside of the scope of the incentive program provided under Section 11 of the St. Johns County Business Incentive Program Ordinance (the Ordinance); however, Section 7 of the Ordinance permits the Board of County Commissioners to consider incentives that fall outside the scope of the program. Completion of the project is anticipated by the first quarter of 2024. With this schedule, the first annual grant payment would be anticipated during FY26.Based on the Applicant’s request, the estimated value of the incentive for Building A is $13,774,888. Based on the Applicant’srequest, the estimated value of the incentive for Building B is $9,605,237.1 Based on the Applicant’s request, the total estimatedvalue of incentives for both buildings is $23,380,125.2 The requested values are subject to change based on the final number of new fulltime jobs provided by the Applicant and other conditions outlined for the project.
1 The grant calculation and cost-benefit analysis calculation for Building B are not included in this report to protect the confidentiality request of the Applicant.
2 By way of comparison, if this project were proceeding solely under the Ordinance, the project would have scored 7 to 8 points, depending on the number of new jobs created. Under the ordinance, a project that receives 5 or more points is eligible for the maximum level of incentives, which includes expedited permitting and an economic development grant of up to 100% of fees paid to the County by the Applicant (impact fees and water/sewer connection fees), four years ad valorem taxes paid by the Applicant (general county portion) on capital improvements and four years tangible business personal property taxes (general county portion).
In accordance with program requirements, the Agency is required to review the application and make a written report to the Board of County Commissioners.
The following items are attached and represent the Agency Report:
Project Breeze - Grant Calculation
Project Breeze - Cost Benefit Analysis
2
Facility Size: Job Creation: Wages: Total Points
150,000 sq ft
Applicant Has Not Submitted Final Number 125%+ of County Wage
ESTIMATE OF ECONOMIC DEVELOPMENT
GRANT CALCULATION
PROJECT BREEZE
Calculations based on County Ordinance 2014-30 and millage rates effective on October 1, 2020
Building A
POINTS AWARDED*
Target Industry: Infotech (Digital Media)
2
2 1 or 2 2 7 or 8
Total Value of Capital Improvements
Multiplied by County Millage Rate
Annual Ad Valorem Tax (General County Portion) Multiplied by # Eligible Years
Ad Valorem Tax (General County Portion) Estimate
Total Estimated Value of New Tangible Assets
Multiplied by County Millage Rate
Annual New Tangible Business Personal Property Tax (General County Portion) Multiplied by # Eligible Years
Tangible Business Personal Property Tax (General County Portion) Estimate
68,000,000 0.46537%
316,451.60 30
9,493,548
24,786,537 0.46537%
115,349.11 30
3,460,473
519,900
519,900 300,967
13,774,888
9,605,237
23,380,125
13,774,888 431,801
9,605,237 400,218
as of 03.29.21
Total Square Footage
Impact Fee Category: General Office 100-200k sq ft Impact Fee Estimate (100%)
Water/Sewer Total Unit Connection Fees Estimate (100%) TOTAL ESTIMATED INCENTIVE FOR BUILDING A
Building B
TOTAL ESTIMATED INCENTIVE FOR BUILDING B (24 YEARS)
TOTAL ESTIMATED INCENTIVE (BUILDING A + BUILDING B) PAYOUT SCHEDULE
Building A
Total Maximum Possible Incentive:
Payout Will Consist of Estimated Annual Installments of:
Building B
Total Maximum Possible Incentive:
Payout Will Consist of Estimated Annual Installments of:
150,000
150,000 ($3,466 per 1,000 sq ft)
*By way of comparison, if this project were proceeding solely under the Ordinance.
The annual payment is based on the general county portion of the ad valorem taxes and tangible personal property taxes paid each year, which could fluctuate with increasing property values. The total payout will not exceed the total incentive granted.
Payout will begin when all capital improvements are recognized on the tax roll. Annual installments will not exceed the annual general county portion of the ad valorem taxes paid each year.
FINANCIAL CONTRIBUTIONS
COST-BENEFIT ANALYSIS
PROJECT BREEZE
Calculations are based on County Ordinance 2014-30 and millage rates effective on October 1, 2020
BUILDING A
Estimated Added Values: Real Property
Taxable Improvements
Tangible New Business Personal Property Total Added Value
Total Estimated Countywide Property Taxes
Real Property Taxes
Total Estimated Property Taxes Paid
Total Estimated General County Portion Taxes
Real Property Taxes
Total Estimated General County Portion Taxes Paid
Total Estimated Fees
Estimated Assessment for Impact Fees
Estimated Assessment for Water/Sewer Unit Connection Fees Total Estimated Fees
Total Estimated Value of Economic Development Grant
Net Benefit to St. Johns County (General County Portion) Over 30 Years BUILDING B
Total Estimated Value of Economic Development Grant
Net Benefit to St. Johns County (General County Portion) Over 30 Years
Annually
1,341,882
1,341,882 Annually
469,030
469,030
8,000,000 68,000,000 24,786,537
100,786,537 Over 30 Years
40,256,461
40,256,461 Over 30 Years
14,070,909
14,070,909
519,900 300,967 820,867
13,774,888 1,116,888
9,605,237 2,654,768
FINANCIAL CONTRIBUTIONS
COST-BENEFIT ANALYSIS
PROJECT BREEZE
Calculations are based on County Ordinance 2014-30 and millage rates effective on October 1, 2020
BUILDING A
Estimated Added Values: Real Property
Taxable Improvements
Tangible New Business Personal Property Total Added Value
Total Estimated Countywide Property Taxes
Real Property Taxes
Total Estimated Property Taxes Paid
Total Estimated General County Portion Taxes
Real Property Taxes
Total Estimated General County Portion Taxes Paid
Total Estimated Fees
Estimated Assessment for Impact Fees
Estimated Assessment for Water/Sewer Unit Connection Fees Total Estimated Fees
Total Estimated Value of Economic Development Grant
Net Benefit to St. Johns County (General County Portion) Over 40 Years BUILDING B
Total Estimated Value of Economic Development Grant
Net Benefit to St. Johns County (General County Portion) Over 40 Years
Annually
1,341,882
1,341,882 Annually
469,030
469,030
8,000,000 68,000,000 24,786,537
100,786,537 Over 40 Years
53,675,281
53,675,281 Over 40 Years
18,761,212
18,761,212
519,900 300,967 820,867
13,774,888 5,807,191
9,605,237 6,741,436
Project Breeze Incentive Request
St. Johns County
Board of County Commissioners
April 6, 2021
PROJECT OVERVIEW Project Breeze - Building A o The Applicant proposes to develop a 150,000-square-foot building (Building A) to house digital media operations within the qualified targeted industry of infotech. o The project will be complete and operational by the first quarter of 2024. o The anticipated investment for land, building and equipment is more than $100 million. o The project will bring $304 million in direct economic impact per year and $16.7 million in school taxes over 30 years. o At the time this report was submitted, the Applicant had not provided the final number of jobs the project will bring. |
PROJECT OVERVIEW - continued Project Breeze o In addition to the provision of incentives based on the construction of a new facility and creation of new jobs, the Applicant has requested that the County consider the value of retention of existing jobs at an existing facility (Building B) within the County in its consideration of the application. o The Applicant has also proposed additional potential inducements for further incentives, such as the conveyance of certain property rights to the County and the opportunity for the County to work with the Applicant as a resource for County-wide economic development and general marketing. These inducements would be a condition of theCounty’s entering into an incentive agreement with the Applicant. |
PROJECT SCORING – BUILDING A* Project Breeze o 7 or 8 Total Points o Target Industry / Infotech (Digital Media) / 2 Points o Facility Size / 150,000 sq ft / 2 Points o New Employment / Applicant Has Not Submitted Final Number / 1 or 2 Points o Wage Rates / 125%+ Average Wage Rate / 2 Points *By way of comparison, if this project were proceeding solely under the Ordinance. |
REQUESTED ECONOMIC DEVELOPMENT GRANT INCENTIVES Project Breeze – Building A o 100% of fees paid to the County by the applicant (impact fees and water/sewer connection fees) o 30 years ad valorem taxes paid by the applicant (general county portion) on capital improvements o 30 years tangible business personal property taxes (general county portion) paid by the applicant o Expedited permitting Based on the Applicant’s request, the total estimated value of the incentive for Building A is $13,774,888. |
REQUESTED ECONOMIC DEVELOPMENT GRANT INCENTIVES Project Breeze – Building B o 24 years ad valorem taxes paid by the applicant (general county portion) on capital improvements o 24 years tangible business personal property taxes (general county portion) paid by the applicant Based on the Applicant’s request, the total estimated value of the incentive for Building B is $9,605,237. |
REQUESTED ECONOMIC DEVELOPMENT GRANT INCENTIVES Project Breeze Based on the Applicant’s request, the total estimated value of the incentive for both Building A and Building B is $23,380,125. |
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