The seemingly daily attacks on Enterprise Florida as "corporate welfare" need to stop. Let's call the program's incentives what they truly are: corporate investments that provide documentable returns on investment. I'm an economic development professional who has worked in Florida since the early 1970s, and I fear that the Florida House's dangerous and misguided scorched earth approach will relegate the Sunshine State to the back of the competitive pack.
• FIRST, SOME IMPORTANT HISTORY: Florida's well-known legacy industries -— construction, agriculture and tourism (or "CAT" industries) — have long created jobs. But CAT was an unbalanced three-legged stool.
Several economic downturns in the late 1970s and early '80s led Florida's economic development planners in the late '80s to embrace the recommendations of SRI International, which called for sharper focus on complementary Target Industry Clusters with high capital investment and higher wage, skilled employees whose work served markets beyond just Florida. That would add a stabilizing fourth leg to the stool.
Today, Enterprise Florida and its local partners work to attract, expand and retain employees in key clusters including aviation/aerospace, financial/professional services, homeland security/defense, information technology, life sciences, manufacturing, logistics and distribution, clean tech and headquarters.
Florida's cost-effective inducement and incentive programs such as the Qualified Target Industry Tax Refund, Quick Response Training, Closing Fund and Economic Development Transportation Fund are specifically limited to companies that could locate anywhere, paying wages exceeding the state/county annual average by 15 percent, with a current state average wage of $45,562. Put simply, only target industries qualify for economic development incentives.
Here are several real world examples of target industry relocations/expansions secured with incentives in Tampa and Hillsborough County: Citigroup Center Tampa, JPMorgan Treasury Technologies and Diversified Consumer Services, Coca Cola Enterprises, Depository Trust and Clearing Corp., MetLife Financial Business Center/Consolidated Comptrollership Division, Moffitt Cancer Center/Merck M2Gen and PriceWaterhouse Coopers. They represent several hundred million dollars of capital investment and thousands of high-wage direct jobs providing long-term benefits many times over what incentives were used to help offset their initial relocation and start-up expenses.
In fact, numerous relocating employees of Citigroup Center Tampa, JPMorgan Treasury Technologies and Depository Trust and Clearing Corporation — with facilities located along the I-75 corridor — bought homes in the Wesley Chapel/Lake Jovita area of Pasco County in the home district of House Speaker Richard Corcoran, who stridently opposes Enterprise Florida.
Florida's incentives are performance-based with specific contractually binding terms and conditions for benchmarks monitored for compliance over the incentive's life. If not met, they're not eligible for the incentives — a strong safeguard for the public's money.
• LONG-TERM RELATIONSHIPS MATTER AND PERCEPTION IS REALITY: Many of these investments were secured through established relationships between key company decisionmakers and Enterprise Florida.
Florida's past tax structure and policy hurt us in competition for target industry projects. Here's one egregious example. The Unitary Tax, passed in 1983 and repealed in 1984, caused IBM to move Boca Raton PC manufacturing operations to Texas and North Carolina and cost us Sony's compact disc manufacturing plant, which moved to Indiana. On a personal note, three years after the tax was repealed I was in Boston recruiting a global electronics manufacturer to locate a facility near the University of South Florida and was told by the company's corporate real estate director that he couldn't consider Florida because of the unitary tax. He thought it was still in effect, and this perception was hurting us. We needed Enterprise Florida's sort of networking and marketing to sell the true story of Florida's business climate.
Recently I spoke with a longtime site selection consultant friend in New York City regarding last year's loss of funding for the Closing Fund — an especially important incentive for attracting corporate headquarters. His commentary was telling: "Yes, Florida is definitely in bad shape. It has unfortunately stagnated in many ways. Hope it finds its way again, as it used to be a beacon for the nation and has since rested on its laurels."
Florida's Senate should take a more reasonable and measured approach than the House. The Florida economy is depending on it.
Robin Ronne has directed nationally award-winning economic development programs at the Tampa Committee of 100 and CEO Council of the Greater Fort Lauderdale Alliance, is a past president (1984) of the Florida Economic Development Council and former global board of directors member of CoreNet Global, the world's largest association of corporate real estate managers, service providers and economic development professionals. He is currently an independent corporate real estate and location strategy adviser. He wrote this exclusively for the Tampa Bay Times.