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Memo To Enterprise Flagler: Why Your Tax Plan Is Fumbling (and What To Do About It)

| September 7, 2010

Not likely to recover.




Congratulations. You unveiled your tax plan publicly last week, three months after announcing it to government agencies and convincing the Flagler County Commission to put the initiative to a vote on the November ballot. Good luck. You’ll need it.

Since the overwhelming majority of people still don’t know who you are—and nowhere on your site do you explain what on earth Enterprise Flagler is—let alone what the plan is about (just one indication of the steep climb you face if you’re going to get this thing passed), a quick summary is in order. Enterprise Flagler is a public-private economic development partnership between local governments and private industry. Local governments pay the large majority of Enterprise Flagler’s budget ($240,000 to private companies’ $60,000) and serve on its board. The tax-and-build plan would raise property taxes by 25 cents per $1,000 in valuation, or $25 a year on a homesteaded house valued at $150,000. The levy would be in place for 10 years. The $2 million in annual revenue would be administered by the county, by a yet undetermined administrative staff, and used mostly to build commercial or industrial buildings, beginning with a 50,000 square-foot facility, probably at the county airport. The building would presumably attract industry to the county, creating jobs.

That, anyway, is the theory.

It’s doubtful the initiative will pass—not because people don’t want “economic development.” They overwhelmingly do. Some 83 percent of respondents in Palm Coast’s latest citizen survey cited economic development as either important or extremely important, by far their leading local priority. But the plan was poorly conceived. It was poorly incubated as you spent three months—three very long months—preparing it for public consumption. And it is being dishonestly portrayed as a “grass-roots initiative.”

I’m glad you put quote marks around the word when you used it on your website. But a plan concocted by the executive committee of the Flagler chamber of commerce and contrived behind closed doors by an invitation-only committee of barely more than a dozen white, wealthy, employed or gainfully retired disciples at weekly Thursday meetings hardly fits the descriptions of “grass roots.” That list of names you have there—the Garry Lubis, the Patrick Kellys, the Mark Langellos, the Doug Baxters and Michael Chiumentos of the local world—are a who’s who of Flagler County’s rarefied good ol’ boys’ annex. Perceptions aside, there’s nothing inherently wrong with good ol’ boys. They can get things done in the right circumstances. But these boys fear grass stains. They don’t know grass roots. Which is precisely why their plan—your plan—is in trouble.

Editor’s Blog

I haven’t been a fan of this initiative, even though I have nothing against higher taxes: I think our property taxes are damagingly low. But your tax plan isn’t an answer. I’ll tell you why, and try to provide some alternatives that might have made it more appealing. But with less than two months to go before the election, it’s probably too late.

The message. Sports analogies are risky. They’re like verses from scripture. You can always find their opposite. Phrases like “Get Flagler back in the game” and “Flagler County has been sitting on the bench long enough” send the wrong message. They don’t help your campaign. They undermine it. You’re telling me that Enterprise Flagler has been sitting on the bench all this time, with the $240,000 a year in tax-dollars funding the agency going to waste. Rather than getting back in the game, I’d have been interested to hear of a game-changer. You could have crafted your message of a new tax around that pitch: Unlike other counties, we’re not going to wait for the economic climate to change. We’re seizing the occasion. We’re changing the climate—and the rules—on our terms: a tax as game-changer sounds more appealing than a tax to resume doing the same old thing. And yes, you are doing the same old thing, only you’d do it with more money.

The messenger. Enterprise Flagler has a serious image problem starting with its purpose and transparency. Most people don’t know what you’re about. They think you’re a club of insular men (mostly men, anyway) who like to do things their way, maybe to line up projects that help line their pockets along the way, with little regard for the public, let alone public accountability. For all your good intentions, the perception is closer to the truth than not, especially the way this tax-and-build plan was put together. There’s a reason local governments—the school board, the city, the county—have each been successful in passing referendums in the past 10 years. Besides the fact that government does run certain things better than private industry, there’s plenty to be said for openness and accountability. It’s a shortcut to public trust. Locked doors do the opposite. A website and a Facebook page are no substitute for making your budget, your documents, your membership (all but your negotiations with prospecting companies that are owed discretion) transparent.

A look at your budget might raise further questions: You spent $6,200 on “business recruitment” expenses in 2009, out of $370,000 in total expenses. That’s just 1.68 percent of your expenses on what’s supposed to be your core purpose. You spent more money–$7,000—on expenses by the board and its committees (that all-volunteer board you talk about) than you did on business recruitment. In comparison, you spent $224,000 on personnel. This year’s expenses aren’t that much better: $21,000 on business recruitment, still almost $3,000 less than you spent on total membership and organization expenses. No wonder you want to keep that under wraps: Enterprise Flagler looks like its own most profitable enterprise fund. Needless to say, FlaglerLive obtained those figures through no help of Enterprise Flagler.

The county airport’s white elephants. To suggest that raising taxes to build spec buildings is anything new in Flagler strains credibility. The county spent millions in public dollars in the past decade to build up the county airport in hopes of keeping or attracting industry. Admittedly, it did so without asking the public’s permission. All three buildings designed for that purpose flopped, leaving the public holding the bag. County Administrator Craig Coffey loves to split hair and say that taxpayers aren’t on the hook for it all, because the airport generates its own revenue. He’s wrong on two counts: public money is public money regardless; and the more than $200,000 a year going to mortgages on empty buildings is wasted public money that could be better spent elsewhere. Three buildings stand empty at the airport. One of them is set to be a new company’s home. We’ll see. The other two are whistling in the wind, at our expense. And you want to build more. The difference, you say, is size: the county has no 50,000 square foot facility. But what’s to say it’ll be filled by a company with more scruples than, say, the Ginn Co.? Why should taxpayers underwrite that risk when they’ve already been burned?

Your plan doesn’t explain. The bit about needing a 50,000 square-foot facility might be compelling. But in that case, you should tell us what companies looked to relocate here but declined when they couldn’t move into a building that size. Tell us their names. Let us hear their testimonies directly, and let them tell us who won them over instead. Then we’ll start believing the story.

What’s Palm Coast’s new city hall got to do with it? Speaking of 50,000 square foot facilities: Palm Coast’s city manager, Jim Landon, convinced the city council to plow ahead and build a 44,000 square foot city hall in Town Center, for $10 million, without raising taxes. If that $10 million is available for construction, and it’s true that the city and the county are all working toward economic development, then what on earth is the city doing, building a structure that won’t add a single job (it just laid off more than a dozen)? Is housing the city’s employees in plush surroundings more important than building a facility that could attract high-paying jobs? It looks that way. Enterprise Flagler’s plan doesn’t address the contradiction.

Voters don’t care who’s doing the construction. They know public-money waste when they see it. They also see through the crock of talking economic development with one side of the county’s mouth (the county side) while another side of that mouth (the city’s) plunks $10 million in taxpayer dollars on a scaled-down Taj Mahal that won’t do one thing for jobs. The last thing they’ll see is local governments working in unity toward an economic development plan. Enterprise Flagler couldn’t look more benched on that one. Imagine how effective a spec-building plan would have been if Palm Coast’s apparently available $10 million could have been shifted to that purpose. Fewer people would have objected than are objecting to a new city hall.

The overriding issue is that the city opposes the Enterprise Flagler tax plan because it won’t get anything out of it. So much for a unified front.

Palm Coast’s mega-developments. Palm Coast has been racing the Nov. 2 clock to get three massive new developments in the works. (If the “Hometown Democracy” amendment to the constitution passes, local governments would have to get voters’ permission for those developments in the future.) The three developments would add a combined 14,500 homes and 5.7 million square feet of industrial and commercial space. Industrial parks are theoretically on the way, to be built by private developers. Why should taxpayers foot the bill?

The answer I keep hearing is that those developments are far down the line, because of market conditions. But market conditions might argue against any industry coming here to fill a building paid with tax dollars. Assuming there is no such delay: eventually, those other millions of square feet of industrial space will be developed. Developers will want tenants. The glut of industrial space might cause yet another round of empty-building syndrome like we’re seeing now at the airport. Again: why assume the risk at public expense? A more convincing approach would have been to discuss Flagler’s long-range economic development plan by explaining where the city’s mega-developers’ industrial parks fit in that overall picture, and why it would still make sense to pile on the spec buildings. It appears not to.

The school tax. It’s unfortunate that the tax-and-build plan is going to compete with the school-tax referendum on November’s ballot, even though the school tax isn’t new, like yours. Rather, it’s a renewal of an existing tax that school boards had been implementing, but that the Legislature decided should be implemented only by voters from now on. When it comes to economic development, there is no substitute for good schools. Enterprise Flagler should have been at the forefront of that school tax, organizing and campaigning on its behalf (though I’m not so sure the school board would be too thrilled, given Enterprise Flagler’s reputation). The tax-and-build plan will confuse the issue, and undermine the school tax (and possibly subsequent tax referendums) by giving voters the sense that they’re being shaken down.

Ideally, school taxes and economic development taxes should go together. That those two referendums appear as competitors is emblematic of the tax-and-build plan’s many problems. It underscores the plan’s isolation from the rest of the county’s larger interests.

That isolation is growing, now that the county manager is floating that back-room sales tax alternative. The half-cent sales tax would raise almost twice as much money as the Enterprise Flagler plan, thus enabling the money to be divided between the county and Palm Coast, to curry broader political favor. It’s not necessarily a better plan, as it doesn’t answer many of the problematic questions raised by either the county or the city turning into private industry’s risk-bearers at the public expense. Rather, it’s another indication of vague urgencies competing to get a half-baked plan—any­ plan—going in order to use tax-dollars to build an industrial park or two. The desperation and vagueness alone should make the public suspicious. It has.

Which argues for one alternative more convincingly than others. Enterprise Flagler should concede its plan’s shortcomings and do the only thing that would help future tax referendums most—including, potentially, a better thought out economic development tax. Enterprise Flagler should pull the tax-and-build measure from the ballot.

—Pierre Tristam

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25 Responses for “Memo To Enterprise Flagler: Why Your Tax Plan Is Fumbling (and What To Do About It)”

  1. Federally Ordered Business Building says:

    Federal Trade Commission Decisions
    Decision and Order
    It is further ordered, That, not later than six (6) years after the service upon respondents of this order, respondents shall cause the corporater heaquarters of ICDC to be transferred to and located at respondents’ property at Palm Coast, Florida.
    It is further ordered, That respondents shall provide or lawfully cause to provide, not later than six (6) years after the service upon respondents of this order, each of the following:
    (1) shopping center building or buildings located upon respondents’ land at Palm Coast with a total floor space of at least 40,000 square feet;
    (2) an office and research park area located upon respondents’ land at Palm Coast, to consist of at least 40 acres, which shall include appropriate roads, water lines, sewers and landscaping suitable for possible future construction of office buildings or research facilities;

    (3) a multi-purpose office structure located within the office and research park area referred to in (2) herein, which shall have a total floor space of at least 5,000 square feet;

  2. Angelo Speno says:

    Referring to your comments about the Airport having three buildings vacant and a waste of tax payer dollars, of the three building one is paid for in full as the next five years of the lease arrangement with Embry Riddle University was settled; and $900,000 was paid to the airport fund. No waste of tax payer money there.The second building the GINN Corporation building was tied up for some time going through bankruptcy settlement procedures and now is recently available for leasing. No one in the Local Government management or anyone else could have predicted this downturn in the general economy. So I don’t fault the local government economic initiatives. Although, anyone in the Banking business managing Big Banks, should have been fired as it should have been quite obvious what was happening in our Country. I want to see all of the Banking industry big banks lose their previous top management and hire honest people to manage their companies. This must happen, before I will believe in anything that the Federal Government has to say or do about this national economic crisis. I think we should not attack local government. We should give local government more power and question all that the Federal Government has created for our Nation. The third building, cakes across America, was an obvious mistake, however, it is a small building when looking at the total picture it was insignificant.

  3. Peachie says:

    Boycott these people and their businesses for supporting the referendum to suck more money out of the taxpayers of Flagler County so that the Enterprise Flagler and Chamber of Commerce folks can keep doing nothing.
    According to the website link all these people and businesses support raising our taxes for this purpose.

    Elise Johnson
    John Whelan
    Paul Carneiro
    Garry Lubi
    Barbara Lubi
    Mike Duncan
    Martha Duncan
    Timothy Conner
    Marna Conner
    Abby Santiago-Monroe
    Ameriprise Financial Kasturi, Monroe & Assoc.
    Janet Geddings
    Larry Pepper
    Jackie Pepper
    debi Peterson
    Alana Fitzgerald
    Deb Winter
    Fred Winter
    Brian Mason
    Kim Fitzgerald
    Cindy Dalecki
    Dave Dalecki
    Michael Chiumento III
    Michael Chiumento II
    Alliance Financial Partners, Inc.
    Curley Tail Design, Inc.
    Marketing 2 Go, Inc.
    Live Tour Networks
    Class A Graphics
    Palm Coast Signs
    Doug Baxter
    Jason Johnson
    Homes and Land Magazine
    Eric Vardakis
    David Fowler
    Brandi Fowler
    Eddie Herrera
    Sharon Capece
    Maria I. Carneiro
    Fernando Carneiro

  4. Unreal! says:

    I’m sad to see Peachie, say to boycott the local businesses, especially when they need us most. Whether we agree with them or not, it’s not our place to pass judgment on them. I’m completely disgusted with the idea of boycotting someone just because they decided to put their name on a website, they are stating their opinion and so are you. Would you want those local businesses to boycott you for service, would you want walmart to turn you away, publix, restuarants, etc.. just because you will vote one way in November? I think it’s shameful and honestly don’t even care who is on the list. What matters most is not who is on the list, what matters is only how YOU feel. Don’t worry about everyone else!

  5. KL says:

    Why don’t we all hear it for ourselves at the forum… if we have something to say or want to know more I think this is the place to start.

    Mark your calendar for this Thursday from 6-7pm at the FCAR building for a FREE public forum on Flagler’s New Game Plan and other important issues on November’s balot.

  6. Pierre Tristam says:

    Peachie, I’m not in favor of this initiative either, but I’m not sure which is more blinkered: your idea of boycotting its supporters’ businesses or your listing of their names. My initial impulse was to remove the names and let you link to their website, though that, too, would have been offensive: boycotts are an entirely defensible means of expression, political expression especially, and this is primarily a political issue. Censoring political ideas, even offensive ideas, would be far worse. And there’s no question that signing one’s name to a public endorsement isn’t a one-way street: it invites reactions.

    Nevertheless I think the notion of a boycott in this case is patently wrong. Unreal nails it: you’re after their names and reputation for doing something that simply disagrees with you. Think about what you’re doing: you’re condemning these people and businesses for their civic engagement and their willingness to stake their names over it. Where’s the honor in that? A boycott is generally intended to apply pressure against people or businesses that are doing something indisputably harmful. There’s no harm in the real sense of the term in this tax–not even in the extra $25 or so you’d be asked to pay (less money than you’ll spend at your next Ruby Tuesday’s excursion). There’s likely waste, there’s a potential for a few palms being greased. That’s the usual currency of any intersection between private business and government slush. But outright harm? Not quite.

    There is harm in boycotting local businesses that are contributing to what economic health we have left in this county. More than that: there is greater harm in suggesting that any solution to our problems, economic or political, comes from drawing up an enemies list. Witch-hunting is an American specialty. That doesn’t mean it should have a Flagler County franchise. You have me tempted to add my name to that list–not because I agree with them, but because I admire and defend their engagement.

  7. John I says:

    Let’s make sure we have an understanding: Enterprise Flagler is a publicly funded economic development agency that hopes to form cooperative relationships for local governments with private industry. They have over the years shown limited results that would hardly be considered successful overall. If their prior results were successful, we cwould not have the worst unemployment figure in the State. Their present idea, that of taking more public funds to build commercial or industrial buildings for large businesses that already have the money to do so themselves, is misguided and hints of desperation. It is a sad day that when this is the best idea of which the the minds of Flagler can think. Perhaps new leadership would bring fresh, plausible ideas that would not tax a populace already suffering.

  8. Kip Durocher says:

    @KL why do you hide. The forum asks for a name any yet you choose to hide your identity/affiliation.
    Not hard to see which side of this coin toss you are on here. “a FREE public forum.” The Board of Realtors, Chamber of Commerce and Enterprise Flagler are going to tell us their plans for our tax money for ” FREE.” Somehow that does not ease my mind enough to loosen my grip on my wallett.

  9. Here are the facts.... says:

    Pierre, I believe it’s extremely hypocritical of you to make the statement, “Witch-hunting is an American specialty”. You have repeatedly attacked, slandered and smeared the names of good people in this community. If you were a legitimate reporter you would know that these men you have targeted in this article and other articles are hard working, honest, men that devote countless hours of their own time working for the betterment of this community. Not only do they work diligently for the business community but organizations like the Chamber of Commerce have instituted programs to help underprivileged families and so much more. By you stating falsehoods like, “They think you’re a club of insular men (mostly men, anyway) who like to do things their way, maybe to line up projects that help line their pockets along the way, with little regard for the public, let alone public accountability” you have incited the community to react the way Peachie has. It’s ridiculous that you are surprised by her reaction and her hit list. Peachie is a perfect example of the type of devoted followers you have attracted.

    I refuse to give my name due to fear of retaliation by Pierre…..

  10. Dorothea says:

    To Here are the facts:

    Here are the facts–>

    Pierre posts the facts and states his opinion, which apparently you don’t agree with. But speak for yourself, because until Pierre’s blog went on-line, the citizens of Flagler County had no idea what was going on in Flagler County. It appears that the facts are an embarrassment to YOU, not to this county. The print media failed to keep us informed and only printed what the local government’s public relations officers told it to print. The result is a failed Flagler County government. Hopefully the citizens and voters of this county will make more informed and better decisions in the future. So, Mr. Here are the facts, I say “Thank you Pierre.”

  11. Pierre Tristam says:

    Here here: Read the comment policy. You’re welcome to smear and slander, but you’ll have to back up what you claim and sign your name–with a verifiable email address. Short of that, your Lexus-scented ad hominems will be deleted.

  12. Kip Durocher says:

    @Angelo Speno says ~ “it is a small building when looking at the total picture it was insignificant.”
    Sorry Angelo, but gross misuse and waste of taxpayer money is never “insignificant.”

    @Here are the facts…. says: “I refuse to give my name due to fear of retaliation by Pierre…..”
    I love a person who has the dignity and honor to stand behind their own words!
    I am glad the Founding Fathers of this nation did not fear a little retaliation.

    @Dorothea ~ Thank you. Your post is 100% correct. The NJ story on Enterprise Flagler’s plan looked
    like a copy and paste of the PR blurb that Enterprise handed out.

  13. Dorothea says:

    Pierre, you gutted the comment that I just answered. But I read Here’s the facts (facts??) entire comment before its evisceration and if he didn’t have the courage to leave a verifiable email address, I don’t blame you.

  14. Larry says:

    Pierre has made himself the quite the pariah around the Chamber, especially during Chamber board meetings. One has to question his motives for being a Chamber member, was it to join the Chamber for the purpose that most businesses join or to gain access to meetings which would otherwise be off limits to non-Chamber members. Here’s to hoping he doesn’t delete my comment.

  15. Pierre Tristam says:

    Larry, whatever your point is, I’ve never attended a chamber meeting nor do I intend to. I have no access to meetings that aren’t open to the public. Enterprise Flagler meetings are public for the most part, the agency’s insular reflexes notwithstanding.

  16. Tim O'Donnell, Pres. of the Flagler Palm Coast Civic Association says:

    I wanted to address this comment:

    >> “a FREE public forum.” The Board of Realtors, Chamber of Commerce and
    >> Enterprise Flagler are going to tell us their plans for our tax money for ” FREE.”
    >> Somehow that does not ease my mind enough to loosen my grip on my wallett.

    The forum KL was referring to was hosted by the Flagler/Palm Coast Civic Association, not the Flagler County Association of Realtors. We just held the forum in their building because they have a room large enough. The Chamber of Commerce was not involved. Enterprise Flagler representatives did attend to present the “pro” side of their initiative. We also has a speaker for the “con” side.

    The economic initiative was just one of the topics discusses.

  17. Ben D says:

    Yeah we shouldn’t do anything. And lets get rid of enterprise flagler; we don’t need economic development.

  18. NOT OUT OF THE WOODS says:

    JUST STOP IT !!!!!
    Unveil game plan blah blah blah…..
    tax increase needed to support enterptise Flager……blah blah blah…
    get with the program !
    work with what you already have and show some REAL results before we fund any increases!!!!
    if you were in the private sector your would have been fired a long time ago!!!
    show some real reslults before going back to the well for more money !!!!!

  19. George says:

    Enterprise Flagler is a combination Private/Public sector organization, read the above article and it illustrates how much of a failure economic development is when left in the hands of a private organization(s).

    Just to elaborate on the Private/Public aspect, the Public part comes from tax payer dollars which is a significant portion of their budget and the Private part is Enterprise Flagler and its membership base comprised of business owners and business leaders, just wanted to clarify.

  20. Cindy says:

    I agree with Pierre’s Sept. 8th post that at least the people involved are engaged and trying to do something about our high employment rate. No matter what direction the referendum goes, we still need to get people back to work, slow down the foreclosure rate, and pump some life in to this county. Think about what you can do for this community to help get them back on their feet. Did you attend the presentation Thursday to hear both sides of the story? If not, there will be a Q&A every Thursday at the Chamber’s meeting room through the November election at 5:30 pm.

  21. Barney Smythe says:

    Why does Enterprise Flagler still exist? This organization is just like a vacuum cleaner on the tax payers.

    The city wants it’s residents to help bring in businesses. They would get a $1000 finders fee. No I want the yearly salary of the CEO of EF if I’m going to do his job.

  22. Barney Smythe says:

    add Sun Leisure to that list.

  23. Richard Hamilton says:

    I don’t agree with you all the time, but i love your eloquence. I agree this enterprise flagler tax is dead on the vine. Personally i don’t mind paying taxes for worthwhile things but this one seems to have no base in reality. I spent over 20 years in positions where I was involved in decisions about relocating and establishing new businesses. Cynically, the #1 factor was usually where the business unit manager wanted to live, but excluding that the other three top factors were (a) availability of qualified workers (b) ease of getting product to the customer (c) cost of labor.

    Industrial buildings are usually built for a specific purpose. Building one on speculation is a recipe for disaster and is only likely to attract businesses that have no clear plan.

  24. Richard Hamilton says:

    I guess I should have added; my vote is to put more dollars into educating kids to survive in today’s world. We have enough land available for industry, and it does not take long to put up an industrial building,and we have I95 throughout the county for access, and we have good high speed internet. All we need to do is show the world we have a highly educated. smart, literate workforce

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