Imagine a world
without incentives.
Last week, political science professor Henry Thomas
outlined that scenario to the City Council Special Committee
on Economic Development Incentives. That committee has been
meeting since September to consider revising the city's 3-year-old
incentives policy and wants to complete its work by June 30.
Thomas chaired the 1998 Jacksonville Community Council
Inc. study, Incentives for Economic Development. He is
chairman of the University of North Florida's department of
political science and public administration.
In fact, he called on the council to take another step.
"It was our view then, and is our view today, that Jacksonville
would be better off in a world without incentives. City Council
should approve a resolution calling on the U.S. Congress to
eliminate these kinds of incentives," Thomas said, reading from a
prepared statement.
The committee had no immediate comment as Thomas continued his
remarks.
Incentives are controversial nationwide as cities and states
compete for jobs and capital investment. To recruit development,
governments negotiate to give tax breaks, grants, infrastructure,
job training, land, cash and other perks to companies.
Thomas told the committee that the recommendation was "the most
controversial part of our study."
"It was our sense that in a world without incentives,
Jacksonville would be advantaged because of economic, cultural,
climatic, logistical and other assets. In our view, such a world
would be more efficient, more effective and perhaps more equitable,"
he wrote in his remarks.
"We would be better off and our firms would be better off," he
said.
Still, he and the JCCI study committee recognized the reality of
the situation.
"Once other cities and states begin to offer incentives, we must
do so as well," he said. "It would be derelict for Jacksonville to
fail to compete in such an incentive arena. Therefore, our study
committee recommended that City Council call for an elimination of
this competitive incentive spiral."
He told the three council members at the meeting that the
recommendation drew controversy because some people considered it a
call for "strengthening federalism and weakening state and local
prerogatives."
Thomas also covered the "five core problems" that the 1998 study
identified:
The lack of a strategic plan related to incentives and economic
development. Thomas said that problem has been addressed by the 1999
city incentives policy and the 2001 long-term strategy for the
Jacksonville Economic Development Commission, although "it is
less clear how far we have gone in terms of a regional approach to
incentive policy."
Insufficient guidelines to target incentives toward industries
and locations. Thomas noted that the policy provides for targeting
specific industries and areas, but the JCCI study called for more
"neighborhood specificity" for older and inner-city locations.
Insufficiently detailed analysis by the commission before
council approval of incentive packages and insufficient monitoring
of completed deals. Thomas said the commission now analyzes the
deals for direct economic impacts, but not indirect impacts. He also
noted the City Council Auditor's Office will be auditing how
the commission monitors the projects approved by the council.
Overly complex and time-consuming permitting and regulatory
requirements. Thomas said the commission and the city both have
taken steps to fast-track permitting. "While some may argue that
more could be done, it is my sense that the city has moved with
dispatch in this area," he said.
Insufficient city accountability for its incentives use and
insufficient public awareness and understanding about incentive
benefits and costs. Thomas said the audit will provide some answers
and also said that the commission has developed a communications
policy.
"Despite this, however, the man on the street is often
overwhelmed by a sense of confusion about incentive policy," Thomas
told the committee.
JCCI suggested better communication through the six Citizens
Planning Advisory Committees.
Thomas also said that the Jacksonville Chamber of
Commerce and other entities "should take care not to pre-empt
the subsequent public decision-making process of JEDC and City
Council."
In closing, Thomas said that "JEDC has to minimize secrecy in its
decision-making process by making public, as early as possible,
information about proposed incentive packages."
"This is important to reduce the possibility of companies playing
Jacksonville off against other communities and to ensure public
awareness and understanding," he concluded.
Commission executive director Kirk Wendland told the
committee that JCCI's recommendations made it into the city's
policy.
"We incorporated the majority of their suggestions into the
incentives policy," he said.
... Council member Elaine Brown responded that "in a
perfect world, the private sector would play fairly and cities would
play fairly." Regarding quality of life, she said that education
must be emphasized. "When we say 'quality of life,' one of the
biggest qualities is education."
... Thomas said expanding companies "are very interested in
quality of life issues," and that "if companies are looking for low
taxes, they'll end up in Port-au-Prince, Haiti."
Wendland said that "we absolutely agree" that quality of life is
a top corporate draw. Companies narrow their site choices and choose
a location based on more factors. "The reality is, once you do make
those short lists, then it does become a competitive issue," he
said. Business costs also are an important factor for expanding
companies, and incentives play a role in those.
... Brown has long supported more neighborhood economic
development and stated that "we need to approach it across the board
from now on, period."
... Council Auditor Bob Johnson said that incentives
always will raise concerns. "We're always going to be challenged"
about economic incentives being considered "a giveaway."
"We have to justify that incentives are necessary," and "stop
giving them" if they aren't, he said.
To that end, Johnson suggested that an incentives oversight
committee, like the special committee, could be created to
continually review the issues.
Westlake Industrial
The $29 million BJ's Wholesale Club Inc. and the
$50 million Southeast Toyota Distributors LLC distribution
centers are taking shape as the first corporate residents at the
Westlake Industrial Park in West Jacksonville.
Westlake is west of Interstate 295, along Pritchard Road, and
north of Interstate 10. It's west of the Westside Industrial
Park.
Southeast Toyota notified the Jacksonville Economic
Development Commission that it has started "vertical"
construction of its vehicle processing center at the park. It began
in October.
That means that the 252-acre site along Pritchard Road was
prepared for development and that work has begun to build the
nine-structure, 283,000-square-foot complex. The company will
accessorize and distribute vehicles from there.
The company said permits were issued for all of the buildings
except the administration building, but it expected approvals for
that within the month. Construction of the office building's
foundation was approved last Monday.
Company controller George Bothwell said in the letter to
commission executive director Kirk Wendland that, assuming
there were no delays due to conditions such as weather or materials
shortages, the center should be completed by the fourth quarter this
year.
The company has said the project could generate 50 more jobs for
its Jacksonville workforce of 400. A little more than half of that
workforce will operate at the Westlake site. The remainder will be
at the Talleyrand location.
At the same time, plans have been filed with the Jacksonville
Planning and Development Department for the first phase of the
proposed BJ's Wholesale Club warehouse on 120 acres along
Pritchard Road, across from the Toyota complex.
That first phase calls for three buildings totaling about 481,700
square feet. The main building, about 480,050 square feet, comprises
a warehouse and cross-dock facility. There also will be a
1,600-square-foot security center and a 50-square-foot guard center.
That first phase should be completed in 2003 and start with 200
jobs. The center eventually could expand into a $60 million, 1.5
million-square-foot center on the 157-acre site, employing 700
people.
The project also will include regional corporate offices and a
training center.
BJ's is a Natick, Mass.-based wholesale club company that sells
consumer goods through its network of nearly 120 stores, primarily
along the East Coast.
Economic incentives are involved in both projects.
BJ's developer Casto Southeast Inc. negotiated $3.3
million in city and state road improvements to improve access to the
site, while Southeast Toyota negotiated a $15 million package for
road improvements, tax breaks and an economic development grant.
Karen Brune Mathis can be reached at 359-4305 or via e-mail
at kmathis.
