International Paper is Escambia's big EDATE winner
- December 16, 2014
- / Carlton Proctor
- / economy
How much do you have to give away to get a company to invest in your community?
Many communities offer tax incentives to encourage companies to invest in or expand their business. Local economic development professionals say that is just the cost of doing business in today’s highly competitive world.
“When we’re competing against Alabama and Georgia, that’s what companies are looking at, your overall incentives package,” said Scott Luth, executive director of the Community Economic Development Association. “That’s what can make the difference between a company investing in our community or one in another state.”
[sidebar]
What is an EDATE?
EDATEs are ad valorem tax exemptions (school taxes not included) for economic development projects that allow up to 100 percent of the assessed value of real property improvements and new tangible property acquisitions for up to 10 years.
Developers who wish to apply for EDATEs will see their projects rated on an evaluation system that includes: industry type, amount of capital investment, number of current and proposed employees, project location and design.
[/sidebar]
Escambia County in particular, has taken advantage of Economic Development Ad Valorem Tax Exemptions — EDATEs — compared to other counties in the state.
The biggest beneficiary of EDATEs that are now on the tax rolls is International Paper. The Cantonment paper mill operation has more than $122 million in property off the tax rolls, saving it more than $813,000 a year, Property Appraiser Chris Jones said.
See a chart of EDATES in Escambia County here.
Nineteen businesses and industries have been granted EDATEs that have removed more than $250 million from the Escambia County and City of Pensacola tax rolls. EDATES reduce ad valorem tax receipts by about $1.5 million annually, Jones said.
Escambia County Commissioners last week added Daily Convo LLC, a company owned by Quint and Rishy Studer, to the list of approved EDATEs.
That exemption will give a tax break on the $50 million urban redevelopment project at the site of the old Pensacola News Journal building in downtown Pensacola. The couple bought the property in 2013 for $3.4 million.
The PNJ property is in the city's Enterprise Zone. Projects in the Enterprise Zone are automatically eligible for EDATE’s.
The tax break was considered essential to making the overall financial numbers work, and moving the redevelopment project forward, said Quint Studer.
The Studers will continue to pay taxes on the property at the current assessed value.
The 2014 taxable value of the property is $2,964,553. The tax bill on the PNJ property generated about $80,000.
In 10 years, the tax bill will be assessed on the full, post-investment value of the new project.
The Studers plan to build a mixed-use development that will include 300 apartments and space for retail and office rentals.
[caption id="attachment_12992" align="alignright" width="165"]
Escambia County Commissioner Steven Barry[/caption]
Commission Chairman Steven Barry said EDATEs are an essential economic development tool that helps level the playing field for Florida cities and counties that must compete with neighboring states for jobs and capital investment.
“We’ve issued a lot of EDATEs over the past several years, but it’s important to remember that those properties will roll back on the books after 10 years,” Barry said.
Despite the loss in ad valorem tax revenues, the overall impact on local government revenues is still positive, he added.
“Even when you grant an EDATE, the county is still getting a substantial multiplier off the new jobs that are created,” he said. “And that’s priceless in a community, especially one that has struggled economically like we have.”
Hardcourt LLC matter
Luth said just about every major project he’s worked on involves a company that can choose just about any offer from any community.
“They are extremely helpful, and in competitive projects they always come into play,” he said.
But they don’t come without controversy on occasion.
Pensacola Mayor Ashton Hayward withdrew a request for an EDATE for Hardcourt Development LLC, which plans to build an 89-unit apartment complex off Wimbeldon Drive in Cordova Park.
[caption id="attachment_10908" align="aligncenter" width="850"]
The groundbreaking for Harcourt Development LLC's Summer Vista project earlier this year.[/caption]
The complex would be an assisted living facility for senior citizens, that would feature 22-units in a special wing for Alzheimer’s and dementia patients. City Councilmen Brian Spencer and Larry Johnson are investors in the project.
The development’s location, off Summit Boulevard near the Cordova Park neighborhood, is outside the city’s Enterprise Zone.
Projects outside of an Enterprise Zone still may apply for a tax exemption. They are evaluated on a scorecard based on: industry type, amount of capital investment, number of current or proposed employees, project location and design.
Developers in the Hardcourt project applied for an EDATE, and received a 75 percent exemption based on the worksheet for the project — it would have totaled up to $10,725,000 over 10 years. If approved, the city would forego up to $46,000 in ad valorem tax annually for 10 years. See the EDATE worksheet for Hardcourt's Summer Vista development here, pages 57-66.
But the application was not signed off on by Escambia County Property Appraiser Chris Jones, as is required by statute. The Pensacola News Journal reported that Jones met with city official Dick Barker and Ed Spears to remind them about complying with the statute that requires Jones’ review of all EDATE applications.
On Tuesday, Hayward said he appreciated Jones’ efforts to help the city implement the correct process.
In the Hardcourt LLC project "city staff followed the same process they have used for many years, since long before I took office as mayor,” Hayward’s statement read. "However, it has come to my attention that this process does not meet the requirements of the relevant state statute.
“I have directed the city administrator to work closely with (Jones’) office to ensure our process complies with the letter of the law. As part of that process, city staff will review past and present EDATE applications for compliance, and no further applications for EDATE incentives will be presented to the City Council until these issues have been resolved."
Escambia’s big EDATE winners
[caption id="attachment_12993" align="alignright" width="165"]
Escambia County Commissioner Grover Robinson IV[/caption]
Commissioner Grover Robinson said EDATEs have worked well for the county, and have been an important element in attracting thousands of new jobs to the community.
“What you get by the individual job being created is so much more than you give up in ad valorem taxes,” Robinson said.
The commission’s action on the Daily Convo LLC project is one more in a long line of EDATEs that have been granted to local businesses and companies that have expanded and created new jobs.
These include:
— Navy Federal Credit Union has been granted property tax exemptions on nearly $60 million of its sprawling 302-acre campus in the Beulah community.
That exemption saves Navy Federal more than $392,000 a year in property taxes, according to data provided by the Escambia County Property Appraiser’s office.
— Gelman Sciences, which has an exemption on $18,304,066 in property, which saves them $121,109 in taxes annually.
— Ascend Performance Materials Operations, (the former Solutia), has an exemption on $15,645,825 in property, saving the company 103,521 in taxes annually.
Rick Harper, who heads the Studer Institute and the University of West Florida’s Office of Economic Development and Engagement, said in the highly competitive world of job creation, presenting an attractive incentives package is essential.
“Most relocation competitions come down to three or four sites,” Harper said. “And at that point, once companies consider the labor force, once they consider access to markets, once they consider the states’ regulatory environment, then it really comes down to the bottom line dollars and cents cost of locating in a particular community.
“And EDATEs can have a significant impact on that bottom line cost,” he said.
Said Barry: “I’m not saying it looks great to have that much property off the tax rolls, but I’m willing to take some pushback because I passionately believe it’s still something we’re doing that overall is in the clear best interest of the county.”
Escambia County Commissioner Steven Barry[/caption]
Commission Chairman Steven Barry said EDATEs are an essential economic development tool that helps level the playing field for Florida cities and counties that must compete with neighboring states for jobs and capital investment.
“We’ve issued a lot of EDATEs over the past several years, but it’s important to remember that those properties will roll back on the books after 10 years,” Barry said.
Despite the loss in ad valorem tax revenues, the overall impact on local government revenues is still positive, he added.
“Even when you grant an EDATE, the county is still getting a substantial multiplier off the new jobs that are created,” he said. “And that’s priceless in a community, especially one that has struggled economically like we have.”
Hardcourt LLC matter
Luth said just about every major project he’s worked on involves a company that can choose just about any offer from any community.
“They are extremely helpful, and in competitive projects they always come into play,” he said.
But they don’t come without controversy on occasion.
Pensacola Mayor Ashton Hayward withdrew a request for an EDATE for Hardcourt Development LLC, which plans to build an 89-unit apartment complex off Wimbeldon Drive in Cordova Park.
[caption id="attachment_10908" align="aligncenter" width="850"]
The groundbreaking for Harcourt Development LLC's Summer Vista project earlier this year.[/caption]
The complex would be an assisted living facility for senior citizens, that would feature 22-units in a special wing for Alzheimer’s and dementia patients. City Councilmen Brian Spencer and Larry Johnson are investors in the project.
The development’s location, off Summit Boulevard near the Cordova Park neighborhood, is outside the city’s Enterprise Zone.
Projects outside of an Enterprise Zone still may apply for a tax exemption. They are evaluated on a scorecard based on: industry type, amount of capital investment, number of current or proposed employees, project location and design.
Developers in the Hardcourt project applied for an EDATE, and received a 75 percent exemption based on the worksheet for the project — it would have totaled up to $10,725,000 over 10 years. If approved, the city would forego up to $46,000 in ad valorem tax annually for 10 years. See the EDATE worksheet for Hardcourt's Summer Vista development here, pages 57-66.
But the application was not signed off on by Escambia County Property Appraiser Chris Jones, as is required by statute. The Pensacola News Journal reported that Jones met with city official Dick Barker and Ed Spears to remind them about complying with the statute that requires Jones’ review of all EDATE applications.
On Tuesday, Hayward said he appreciated Jones’ efforts to help the city implement the correct process.
In the Hardcourt LLC project "city staff followed the same process they have used for many years, since long before I took office as mayor,” Hayward’s statement read. "However, it has come to my attention that this process does not meet the requirements of the relevant state statute.
“I have directed the city administrator to work closely with (Jones’) office to ensure our process complies with the letter of the law. As part of that process, city staff will review past and present EDATE applications for compliance, and no further applications for EDATE incentives will be presented to the City Council until these issues have been resolved."
Escambia’s big EDATE winners
[caption id="attachment_12993" align="alignright" width="165"] Escambia County Commissioner Grover Robinson IV[/caption]
Commissioner Grover Robinson said EDATEs have worked well for the county, and have been an important element in attracting thousands of new jobs to the community.
“What you get by the individual job being created is so much more than you give up in ad valorem taxes,” Robinson said.
The commission’s action on the Daily Convo LLC project is one more in a long line of EDATEs that have been granted to local businesses and companies that have expanded and created new jobs.
These include:
— Navy Federal Credit Union has been granted property tax exemptions on nearly $60 million of its sprawling 302-acre campus in the Beulah community.
That exemption saves Navy Federal more than $392,000 a year in property taxes, according to data provided by the Escambia County Property Appraiser’s office.
— Gelman Sciences, which has an exemption on $18,304,066 in property, which saves them $121,109 in taxes annually.
— Ascend Performance Materials Operations, (the former Solutia), has an exemption on $15,645,825 in property, saving the company 103,521 in taxes annually.
Rick Harper, who heads the Studer Institute and the University of West Florida’s Office of Economic Development and Engagement, said in the highly competitive world of job creation, presenting an attractive incentives package is essential.
“Most relocation competitions come down to three or four sites,” Harper said. “And at that point, once companies consider the labor force, once they consider access to markets, once they consider the states’ regulatory environment, then it really comes down to the bottom line dollars and cents cost of locating in a particular community.
“And EDATEs can have a significant impact on that bottom line cost,” he said.
Said Barry: “I’m not saying it looks great to have that much property off the tax rolls, but I’m willing to take some pushback because I passionately believe it’s still something we’re doing that overall is in the clear best interest of the county.”
Recent Posts
-
CivicCon launches with a look at good growth in cities
-
Building stronger brains one baby, one parent at a time
-
SCI debuts commercial on Early Learning City
-
Entrecon: World class speakers and an opportunity to sharpen skills
-
PYP Quality of Life survey 2017
-
EntreCon Pensacola 2016: A look back
-
Leadership tip: getting better employee takeaways
-
Leadership tip: be interested instead of interesting
-
Leadership tip: delivering difficult messages
-
Brain Bags boost Arc, Early Childhood Court programs