Tea Party Advocate Wrong On Everbank Deal

June 9, 2011 65 comments Open printer friendly version of this article Print Article

"It's unheard of to give public funds to relocate a firm from one part of town to another part of town," Chuck White, president and CEO of NAI Commercial Jacksonville and First Coast Tea Party member. While this may be Mr. White's position regarding a deal to bring 1,200 corporate jobs to Downtown Jacksonville, not everyone agrees.

Here is a letter being passed around in the downtown area by small businesses struggling to stay afloat in a city that has subsidized suburban development for more than 60 continuous years.

Understanding The Everbank Deal

Downtown Jacksonville job growth compared to peer cities from 2002-2009

• EverBank QTI, also called “Project Plaza. Jacksonville-based EverBank requests Qualified Target Industry Tax Refund and Quick Response Training Program assistance of up to $2.4 million from the City and state to add 200 new, full-time jobs at an average wage of $49,000, creating a payroll of $9.8 million and an investment of about $1.6 million in capital for technology, infrastructure and furniture.

If EverBank locates within the Enterprise Zone, which includes the urban core, it could qualify for the $2.4 million, consisting of $420,000 in tax refunds from the City and $1.98 million from the state. The state total would consist of $1.68 million in tax refunds and $300,000 for quick response training. If EverBank chooses a site outside the Enterprise Zone, the incentives are $1.3 million, consisting of tax refunds of $200,000 from the City and $800,000 from the state, along with the $300,000 training assistance.

• EverBank Relocation. The City proposes to provide $2.75 million to help EverBank relocate a minimum of 1,000 jobs by Sept. 30, 2012, from the suburbs to Downtown. EverBank has negotiated to lease more than 225,000 square feet of space and 1,400 parking spaces Downtown and said it will spend more than $26.5 million in tenant improvements.

If Everbank consolidates their offices to a centralized downtown location, it would vacate office space at Quadrant II and Cypress Plaza, both Southside buildings.

Three Reasons The Everbank Deal Should Be Approved

One of Jacksonville's leading commercial real estate brokers is trying to rally opposition against City Hall giving financial incentives for EverBank to relocate at least 1,000 workers from the Southside to downtown.

Taxpayer incentives should be reserved for expansion that adds new jobs, not moving existing workers to a different place, said Chuck White, past president of NAIOP, the Commercial Real Estate Development Association, which is a trade group.

"It's unheard of to give public funds to relocate a firm from one part of town to another part of town," White said Monday.

Some believe that it is ludicrous to spend tax payer dollars on a move from one part of town to another. Some actually believe that bringing and creating 1,200 in the heart of Downtown Jacksonville would do absolutely nothing to improve the city.  Here are three reasons that suggest otherwise.

1. Public Return On Investment (ROI)

Every deal involving public money should be evaluated on a case-by-case basis to determine the potential return of investment.  In 2008, taxpayers spent $2 million to landscape State Road 9A between JTB and Beach Boulevard.  Other than looking at expensive palm trees and shrubbery, this investment does nothing for stimulating the tax base or job creation.  

On the other hand, investing a similar number to add 1,200 jobs into a walkable environment immediately creates opportunity for indirect job creation by facilitating and supporting small business growth.  In addition, this small business growth directly leads to an increase in the city's property tax base, helping reduce the budget deficients plaguing city hall.

Construction continues near campus

What: Adding two lanes and resurfacing from east of Kernan Boulevard to San Pablo Road (5.8 miles)
Began: July 2007
Completion: Fall 2009
Cost: $28 million

What: Adding two lanes to create a six-lane highway between FCCJ to Hodges Boulevard (3 miles)
Began: March 2005
Completion: Spring 2008
Cost: $25 million

What: Landscaping from north of JTB to Beach Boulevard (2 miles) - including entrance to UNF
Began: July 2007
Completion: Spring 2008
Cost: $2 million

Beach/Kernan Overpass
What: Rebuilding the intersection to include an overpass which would allow Kernan Boulevard traffic to pass over Beach.
Began: March 2007
Completion: First quarter of 2009
Cost: $43 million

All costs have been rounded to the nearest million.
Sources: Florida Department of Transportation, UNF Office of Facilities Planning and Jacksonville Transportation Authority.

2. Leveling The Playing Field

Where was opposition over the years as billions of taxpayer dollars have been funneled to the suburbs to subsidize growth to the detriment of the urban core?  For example, as a part of a move that relocated 236 employees out of downtown to the Southside, the JEDC granted Adecco financial incentives in September 2010.  What's wrong with trying to invest in areas of the city that don't involve expanding highways and straining taxpayer pockets to facilitate that growth?

Adecco Group North America, which acquired Jacksonville-based MPS Group Inc. earlier this year, is considering adding 100 jobs in Jacksonville and is seeking tax incentives to help the expansion.

Adecco Group North America’s request for $300,000 in financial incentives for adding 100 jobs in Jacksonville won approval Thursday from the Jacksonville Economic Development.

Adecco's main Jacksonville office is in the Modis building downtown. Modis was a major subsidiary of MPS. But the company is planning to leave that building for new offices on the Southside next year. The new jobs would be put in the new offices at the Deerwood South business park.

3. Small Business Growth

Those who refuse to look at things from a holistic viewpoint will suggest that the potential Everbank deal is a form of "corporate welfare."  However in reality, using $2.8 million in incentives and grants to bring an additional 1,200 people past the front door of hundreds of small businesses in downtown is one of the most cost effective ways to create jobs, promote downtown revitalization and small business growth.

First of all, EverBank is a good community corporate partner. Having their headquarters here in the city speaks volumes. Wanting to expand and grow and be Downtown is great. They’re going to create 200 new additional jobs. I think that’s what you want, the public-private partnership that will allow the city to grow, and increase our tax revenue. Remember, in 1986, Downtown generated 17 percent of our tax revenue. Today it’s only 3 percent. I try to remind people of that.

We have a lot of small businesses Downtown. How do you help small businesses? Having 1,500, 2,000 more people working Downtown, patronizing the restaurants, I think it’s important. - Mayor-elect Alvin Brown

For those interested in attending, the Everbank deal will be discussed at this morning's JEDC Commission Meeting.

JEDC Commission Meeting

Thursday, June 09, 2011
Time: 9 a.m.

Ed Ball Building
214 N. Hogan Street
8th floor in CR 851


Article by Ennis Davis