Meeker on Economic Development: Mountains Of Questions Before the Next Summit
FlaglerLive | February 22, 2011
By Frank Meeker
As William Arthur Ward put it, the pessimist complains about the wind, the optimist expects it to change; the realist adjusts the sails. Let’s face it, we have our share of pessimists in Flagler County. I read the letters to the editor section in all of our local papers and they appear to be everywhere.Then there are the optimists. They want change, but aren’t sure what they want to change, but they know “something” has to change. Lastly come the realists. To me, those who choose this path, I’d like to think I’m one of them, recognize that what we’ve been doing in the past regarding levels of service, the size of government, how much we tax, and even how do we handle economic development, will require some “adjusting of the sails.” With the economic summit coming up, I’ve been thinking over my own “ten economic development commandments for trimming sails,” not necessarily ranked in any order of importance. Below are some of my questions:
1) Should Palm Coast just remain a bedroom community for other areas and forget trying to grow a city much bigger than we already are? Until we have the guts to find a way to answer this question, we’ll never have full buy-in.
2) Should Palm Coast still opt out of any economic development proposals, let the economy improve on its own, and wait for the commercial/industrial folks to come to us? It’s happened before so why not just wait it out and see what happens?
3) Should government be in the business of economic development in the first place?
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a. If the answer is yes, to what extent should they be involved? Should they create pad- ready sites (that is, sites where buildings can go up almost immediately), create an industrial park, put up spec buildings, offer incentives?
b. What types of incentives should be included? Cash, impact fees, mitigation credits, old city halls?
4) One of the prime considerations of anybody thinking to relocate here is the “availability of the workforce.” Actually, I think the question is better put, “what is the capability of the workforce.” Does our workforce have the training and skill set necessary to support some of the new businesses trying to relocate here, or will new residents with preferred skill sets replace others who couldn’t adjust forcing those that cannot adapt to move elsewhere?
5) Recent studies have indicated there are a number of reasons potential commercial/industrial projects do not locate to a new area. Some didn’t respond, but for those that did 21% indicated the incentives offered were not enough and 10% indicated they couldn’t find the right land or proper building. Do we think our county can compete dollar wise with other local governments having millions of tax dollars at their disposal to throw at these new projects? Does local government at the city or county level present roadblocks to new businesses with overly stringent permitting requirements, difficult land development codes, and inept “bureaucrats” imposing high cost impact fees? For example, I looked at some numbers from Jacksonville recently which showed after land cost, site work, and construction cost were added to concurrency fees, the cost to a big box retailer was about $8.25 million. Their rental income was only $520,000 and mortgage payment was $600,000 so they were in an $80,000 hole to start with, and the project didn’t happen. Remove the $1.2 million for concurrency fees, the project comes into town, jobs are produced and taxable value is created that far exceeds the “benefit” of concurrency fees coming into local government.
6) Do any “benefits” outweigh the risk of failure from poor implementation by government or uncertainties of the marketplace when using the public as the funding source? It’s one thing to risk your own money on a venture; it’s another to risk the public’s. Further, does the economic development effort implemented promote the circulation of additional secondary dollars within the community? Do other smaller companies that support the larger effort encourage an exchange of money locally with other businesses?
7) Will our efforts compete with other local businesses and the funds they have already invested in our local economy? Is it fair to finance a government effort to compete against other local business owners unless both are on a level playing field?
8) Is it true if one benefits, we all benefit? Should county and local city government directly benefit in their general funds from the investment of the public’s tax dollars? Should funding priorities be encouraged within Community Redevelopment Agencies? The way CRAs are set up, the CRA benefits, but not the local governments or county government. Do we care?
9) Should we fund any project that doesn’t have any “skin” in the game? The more the company has invested, the more likely they are to stick around. The way tax breaks are tossed about, the local government won’t receive any direct benefits to their general fund for probably the first five to 20 years as a property tax or capital improvement tax is usually the very first incentive offered to attract the business in the first place. If they have nothing vested within the local community and they relocate someplace else as the tax breaks dry up, is the creation of jobs over ten to 20 years enough for local governments to spend money attracting them?
10) Lastly, during the comment period on economic development at the joint meeting with local governments and the county there was no consensus on funding. Is it possible we are ready to tackle the issue of economic development with varied views of cost and benefit?
I’ll be trying to get answers to these and other questions at the summit. I hope all of you will take a keen interest in the discussions and get involved wherever you can. Answers to some of these questions may trim the sails and adjust the course of Economic Development one way or another.
Frank Meeker is the District 2 member of the Palm Coast City Council. Reach him by email.
The next countywide meetings on economic development are scheduled for Friday, March 4, from 1 to 6 p.m., Saturday, March 5 from 8 a.m. to 5 p.m., and March 18, if a third meeting proves necessary, at a time yet to be determined. All three meetings will take place at the Flagler County Association of Realtors building on State Road 100.