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Fasano: Why Do Wal-Mart, Coca-Cola Land Incentives to Expand in Florida?

February 11, 2013 - 6:00pm

House members on Tuesday questioned a need for more transparency to avoid the appearance of conflicts of interest and companies using inside connections as Enterprise Florida seeks to grow.

On Tuesday, members of the House Transportation and Economic Development Appropriations Subcommittee offered their support for performance-based incentives and the desire to compete for business against other states, as the Orlando-based Enterprise Florida is seeking to increase economic incentives from $111 million to $278 million.

But they also questioned the effectiveness of Enterprise's incentive programs. Programs once meant to be run on a 50-50 matching-grant basis were more in the range of 80 percent on the state side.

More importantly, they questioned why large companies, many with global footprints, were landing incentives to create jobs they most likely would have needed to add as their consumer base grows in Florida.

What are we doing for the small-business person? They dont have $50,000 to have a seat at the table? Rep. Mike Fasano asked Enterprise Florida officials.

Where are the small mom-and-pop businesses?

The critical review came on the heels of a blistering report from Tallahassee-watchdog Integrity Florida that questioned Enterprise Florida for potential conflicts of interest inthe apparent practice of picking winners and losers through selective incentive deals.

The highly critical report, which mirrored most of the findings the nonprofit watchdog found in a similar report last year, continues to reverberate in Tallahassee.

Most of the attention has been on Integrity because the report was sponsored by the conservative Americans for Prosperity.

The Tampa Bay Times reported Monday that Barbara Petersen, executive director of the First Amendment Foundation, stepped down from Integrity Florida's board due to questions about ties to AFP. She is the second board member to resign over the reports findings.

But subcommittee Chairman Ed Hooper, R-Clearwater, said the public has also taken notice as his office has been flooded by emails.

The public has become engaged in how we spend their money, Hooper said.

Enterprise Florida Chief Operating Officer Griff Salmon told subcommittee members the report contained inaccuracies, while Enterprise Florida CEO Gray Swoope, who was not in attendance at the meeting, released a counterpoint to the Integrity Florida report.

(See Swoopes response here)

Crystal Sircy, senior vice president for the Business Retention and Recruitment division, pointed out that of the 120 projects approved for incentives by Enterprise Florida, only three have been complete failures.

The three failures are highlighted by last years crash of the Digital Domain studio in Port St. Lucie, which was approved for state funding outside the standard review process during the administration of Charlie Crist.

The state is currently seeking to recoup its money.

But House subcommittee members were interested in companies that wouldnt seem to need as much help from the state to grow.

In December 2011, Atlanta-based Coca-Cola Refreshments decided to expand its decade-old juice production facility in Polk County that already employed 361 full-time workers.

The decision came with incentives from the state that could provide up to $180,000 in tax rebates through the states Qualified Target Industry Fund if the soft drink giant was able to add 60 workers at the plant.

Polk County also received $400,000 from the state for road upgrades needed for the $99 million plant expansion through the state Economic Development Transportation Fund.

Gov. Rick Scott went to Auburndale to announce the awarding of the incentive, which required 20 percent funding from Auburndale and Polk County, which had been worked out with the public-private Enterprise Florida.

Scott has since called for the state Legislature to double the funding available to offer companies incentives to add jobs.

Fasano questioned why the state was offering such incentives to companies including Wal-Mart, Publix, Winn Dixie and Coca-Cola that would most likely open shop in Florida, and whether the new employees are from Florida or relocated through the company.

We signed an agreement with Coca-Cola in Polk County to add 60 jobs. Coca-Cola was already here, Fasano said. Was Coca-Cola not going to build here after they had already spent hundreds of millions on the plant?

The Auburndale facility is one of Coca-Colas 34 facilities in Florida, including seven manufacturing plants and 15 distribution centers, with the company employing more than 6,000 in Florida.

Rep. Elizabeth Porter, R-Lake City, said the incentive program needs to consider the potential value of a company rather than just employee numbers when considering where to give incentives.

There can be a business, Im looking at the bio-sciences, where there are 11 jobs, but they have $1.257 million in capital investments, Porter said. You may be only 10 employees, but you may be a multimillion-dollar IT company.

The House review came as Sen. Andy Gardiner, R-Orlando, temporarily postponed his bill, Senate Bill 406, that would require more transparency from the Department of Economic Opportunity and Enterprise Florida, the private-public agency that doles out about $125 million a year in tax breaks and other incentives to companies that pledge to create jobs.

The Senate bill had already won support from the Senate Commerce and Tourism Committee.


Reach Jim Turner at jturner@sunshinestatenews.com or at (772) 215-9889.

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