Palm Coast Data, at one time its namesake’s and Flagler’s biggest private employer, will pay the state of Florida $1.76 million to settle a breach-of-contract lawsuit stemming from the company not living up to its end of the deal in exchange for $3 million in economic development incentives the state awarded it in 2008.
The settlement agreement, finalized on May 4 and filed with the Securities and Exchange Commission, closes another chapter in the company’s stark reversal of fortunes since its peak in 2008.
In 2008, Palm Coast Data was at the height of its success. It was consolidating its operations from several states into its Palm Coast campus on Commerce Boulevard. It was employing some 1,000 people locally. The stock of its parent company, Amrep Corp., had traded at $136 a share the year before, up from $23 in 2005. In economic development deals with Palm Coast government, county government and state government, Palm Coast Data was pledging to add 700 more jobs over the next few years and enlarage its campus.
The company got $400,000 in tax breaks from the city and $100,000 in direct subsidies from the county. It leased a 70,000 square foot building from Palm Coast for $240,000 a year. The building had been Palm Coast’s City Hall. City government ended up moving to a rental in the process, and the company then exercised an option to buy the building for a mere $3 million. All on the expectation that it would grow.
Based on that same expectation, the company got $3 million in 2009 from Florida government–specifically, with the Office of Tourism Trade and Economic Development, which was subsequently replaced by the Department of Economic Opportunity.
“The Award Agreement includes certain performance requirements in terms of job retention, job creation and capital investment which, if not met by Palm Coast, entitle the State of Florida to obtain the return of a portion, or all, of the $3,000,000,” a filing with the Securities and Exchange Commission by Palm Coast Data’s parent states. The statement goes on: “Palm Coast [Data] has not met certain of the performance requirements in the Award Agreement.”
Soon after 2008, business prospects for Palm Coast Data darkened, and year after year the company lost revenue, shrank its payroll, saw its parent company’s balance sheet record loss after loss and its share price tumble below $4 a share in 2016. It is now trading at just under $7. Palm Coast Data exited several of the buildings on Commerce Boulevard, including a 42,000 square foot building in 2015.
And it never repaid the state the $3 million. State government officials had been secretive about the deal and its outcome in subsequent years, refusing to turn over information when a Tampa Tribune reporter requested it, but the company’s reports and the settlement documents shed light on the agreement’s history.
Palm Coast Data “is expecting to have to repay up to $2,527,000 of the award to the State of Florida,” the company’s 2016 SEC filing stated.
The company and state government negotiated a repayment. It did not go well. Last December 30, Florida sued Palm Coast Data in circuit court in Leon County.
The May 4 agreement requires Palm Coast Data to make a $163,000 within 30 days of the agreement’s finalization, then pay the state $40,000 every quarter from Oct., 2017 through July 1, 2027, unless the company decides to accelerate the payments. The agreement was signed by Palm Coast Data Vice President Christopher Vitale.
Meanwhile, Palm Coast Data’s parent company, which effectively is now made up mostly of Palm Coast Data, has continued to struggle, according to its 2016 annual report. For 2016, the company’s continuing operations recorded a net loss of $10.2 4 million compared to a net loss of $3.6 million in 2015. Excluding impairment charges in both years, the net loss for 2016 was $3.6 million, and $2 million in 2015.
Revenues at Palm Coast Data decreased from $43.7 million in 2015 to $34.8 million in 2016. “Magazine publishers are one of the principal customers of the Company’s Fulfillment Services operations, and these customers have continued to be negatively impacted by increased competition from new media sources, alternative technologies for the distribution, storage and consumption of media content, weakness in advertising revenues, and increases in paper costs, printing costs and postal rates,” the report states, lines it has been reprinting from year to year. “The result has been reduced subscription sales, which has caused publishers to close some magazine titles, change subscription fulfillment providers and seek more favorable terms from Palm Coast and its competitors when contracts are up for bid or renewal. This, in turn, resulted in lower than expected 2016 revenues and operating results for the Fulfillment Services business.”
Palm Coast Data does not reveal its employment numbers, but the report points to continuing decreases in payroll: Operating expenses in Palm Coast were $31.8 million last year, compared to $37.3 million the year before. The reason for the sharp decline? “[P]rimarily due to decreased payroll and benefits and supplies expense, both reflecting the lower business volumes, together with reduced facilities costs,” the annual report states. Administrative and general expenses also decreased year over year by 27 percent for the same reason.
Steven says
What a worthless and cold employer!!! Half of us working there hate who we work for because the managers and supervisors are always scheming on who they will ‘layoff’ next. BTW, layoffs are permanent though, but they lie about that too……All they did was layoff and hire, layoff and hire!! Just to make it look like they’re hiring quota looked good in the books…….well, that is until I told the city what was going on!! After following the layoff and hire scheme long enough, the city saw right through their crooked ass’s!!!! As for me? I keep dodging and ducking them, to keep taking home the paycheck they owe me. But, I digress, they are soon to be swallowed up by the internet giant!!Oh, gotta run and tend to my Kindle Fire….downloading some ‘books’………….LOL!!!!
Resident and former Employee says
Well, it is about time the City got wise to Palm Coast Data’s false promises and jobs – its more like a sweat job at best with your vacation having to pay for the holidays so really no time off – I thought this went out in the ’50’s – get rid of an employer who uses individuals for their own pleasure and clients to “milk” for money. A bad employer and even a worse place to work!
woodchuck says
Wow can’t believe it,they held there feet to the fire and are supposed to get money back?Still think Palm Coast Data got away cheap.Still better than nothing.
TR says
I hate to be the one to say I told you so, but I knew something like this was going to happen. Serves them right for lying as to what they will do compared to the realization of what they would do.
Ken Dodge says
Does this mean I will never be called back for that second interview I have been awaiting since 2008?
Lou says
“Economic development” is a corporate welfare, get rid of it.
John Iceman says
It’s old news, by pepe writing this article, it does nothing but hurt the county, nobody says how we put 20 million into the county in paychecks per year, if it wasn’t for PCD, this town would feel it big time in unemployment. I wonder what tune these people would have on the unemployment line. Where do people go when they need a job. This town and the employees need PCD to continue putting food on their families tables, remember that when you are trying to tear us down.
Had enough? says
Wal-Mart – Your tax dollars were used to build Old Kings Road and install water and sewer lines to a piece of property Wal-Mart bought north of S.R. 100, east of and adjacent to I-95. The City even realgined OKR so Wal-Mart would be visible from I-95, giving them free advertising. We’re not getting paid back on that one. And retail as we know it is going to be extinct because of Amazon.
I concur with Lou – “Economic development is a corporate welfare, get rid of it.”
JasonB says
I know many people that have worked there in the past, and a few who still work there …. and not one has a good thing to say about them.
EV says
About time!
suewho says
I hope they fold out and fade away. They are a human waste shop. The mistreatment of employees and the lies some of those old ****** want to tell themselves is hilarious. Now their lies have caught up with them. I hope they are fined and punished. We the employees and all former employees should get a class action against them for the mistreatment we have to and had to endure working for them. Bye Bitches
Palm Coast Pioneers says
If you want confirmation of this below, contact the P.Appraiser; that Building was Federally ORDERED to be built to be ready to attract Industry to the Palm Coast Project. This was REDRESS Federally Ordered for us early purchasers.
When a Business needed a Building; there was this Building Available. The occupying Business would assess their needs while occupying that Building. Once Assessed that Business would erect another Building to meet their specific needs. This then would make available this Federally ORDERED Building to be available to attract yet another Business for the Palm Coast Project.
This was just one of the many ORDERED things which was put in place for REDRESS compensation for us.
For the newer Palm Coasters that want to read the origin of this Building and read all the ORDERS….go to the Federal Trade Commissions’ Website and look up F.T.C. Docket C-2854 & Federally ORDERED ‘ …15 Year Compliance Report…’.
It is very sad indeed that that Building was SOLD so cheaply; if it were still available, encumbered by F.T.T. C-2854 it could be used by the Palm Coast City Council and others to *attract* more Business here for jobs.
Palm Coast Pioneers says
RE: Office Building Federally ORDERED to be built as Redress Compensation for me/us early purchasers:
( F.T.C. C-2854 & 15 Year Compliance Report )
Nature of Case
International Telephone and Telegraph Corporation ( ITT) , its land sales subsidiary, ITT Community Development Corporation ( ICDC), and ICDC subsidiary Palm Coast, Inc., 1 . were charges with misrepresenting ITT’s obligations and responsibilities of ICDC and Palm Coast, unfairly and deceptively selling land by misrepresenting the investment values of Palm Coast lots, misrepresenting the types of amenities and facilities available at Palm Coast and failing to provide cancellation and refund rights and failing to disclose other pertinent information.
__________________
1 ITT is one of the major industrial corporations in the United States. The 1991 Standard & Poors Register lists ITT’s revenue as $ 20.05 billion with 119,000 employees. ICDC is a land sales and development firm engaged in selling and developing Palm Coast, a land development in northeast Florida, and also some surrounding areas. Palm Coast is located in Flagler County, between Daytona Beach and St. Augustine, Florida. Attached is a map which shows the various communities that comprise Palm Coast. On the reverse side is an aerial photograph of Palm Coast that clearly shows where growth and development have occurred during the past fifteen years.
Background
A consent order was issued in this matter on December 10, 1976. The initial compliance report of February 28, 1977, a spot check investigation report of December 28, 1978, a compliance investigation report of April 1, 1981, and the final complance investigation report of October 6, 1983, were accepted by the Commission. The Atlanta Regional Office (ARO) was responsible for this matter until December 1989, whereupon the Enforcement Division took responsibility for future compliance activity.
Scope of the order
The Major purpose of the order is to prevent misrepresentations and to require disclosures concerning: (1) the extent of Palm Coast’s developoment, (2) ITT’s financial responsibilities for the development, (3) the investment potential of Palm Coast lots, (4) total lot costs, (5——->) the current extent of lot use and the timetable for development, (6) the proximity of Palm Coast to major roads, cities and necessary facilities and amenities, (7) number and size of facilities, amenities, and residents, (2) office building , <————- (3) commercial, manufacturing, and research park, (4) corporate headquarters, (5) I-95 interchange, (6) St. Joe Road improvement. All of these improvements were developed and constructed within the time limitations imposed by the order.
*****************************************************************************************************************
Truly, it is indeed very sad that this Building isn't available anymore to attract Businesses, and that it was sold so Cheap. It would have been great again to create Jobs for the struggling Palm Coast Families.
Lou says
How can a many loosing company come up with $1.76 million to repay the public?
Terminus says
You know there are still people in this town that work for them and depend on that paycheck to live. It’s easy for all of you to talk negative but if PCD closes, think about what all those unemployed people will do to this towns economy. Yes, there are enough people working there that it will impact places if money can’t be spent because they have none to spend. With that said, if PCD closes I hope it negatively affects those that have harped in the company over the last few years – loss of hours, wages, cut backs by their own employer, etc. it will be the perfect karma for those wanting the employees at PCD on the unemployment rolls.
Steven says
Thank-You for that question Lou!!!! NOW many will see that PCD has been holding out on Palm Coast all the while paying for cheap labor in their damn sweat shop and banking the rest!!!!! Thank-You for your curiosity!!!
John says
As an employee of PCD for over 10 years, the work I do and pay I receive puts food on my family table, pays my bills. Am I rich no. Can I go work elsewhere, yes. PCD does have a future. It has a lot of hard working employees who care about this company and are trying to make it work. I understand the soreness of those who have been released.
PCD provides excellent service to its clients and their customers. The people there work very hard. The decision of purchasing the old city hall and taking money from local governments was made t a higher levels than those hard workers. Its not just PCD who took money either. A lot of companies have taken advantage of these programs and have not performed as hoped.
Remember 2008? It was the start of one of the worse recessions. How about all those people the government gave money for peoples mortgage bailouts. How about all those people taking mortgages 2, 3 ,4 times higher than they could afford. Everyone blames just the banks.
After the recession, that many people and businesses are still feeling, it is lucky that PCD was able to adjust as needed to keep the doors open and keep as many employees as they could.
As someone mentioned earlier, if they closed their doors, the city of Palm Coast and businesses would take a huge hit.
All you negative nanny’s, how about supporting local companies instead of always trying to knock down,
PCD did not sell any buildings. It did decide not to renew the lease on one building because it had space at their other facilities. Again, trying to save money.
Hopeful says
I’m surprised the place is still open. Constant lay offs and out dated technology.
Karma says
I have been employed at PCD for over 5 years. I love my job and enjoy working here. It allows me to pay my mortgage, feed my child, make my car payments and enjoy time with my family and friends along with very decent and fair flexibility.
I was out of work years ago for way too long and it was the worst experience of my life. Maybe that is why my perspective is so different from most of you negative nancies. I need my job therefore I am thankful for it… My boss is completely fair and nice, my co-workers are mostly a pleasure to work with and I actually enjoy what I do.
I hear people complaining about their job all the time… Trust me, there is someone who needs your position so be thankful you have one. I would never ever wish the company to close down or fail. Whether PCD employs 300 or 1,000, these people are living in our community. They are our neighbors and friends. So think positive! Who wants to see failure in our community?
GZ13 says
Dear FlaglerLive,
I’m a big fan of your reporting and I think you do an outstanding job in bringing to the forefront many of our city’s issues. You should truly be commended and recognize for your remarkable work. HOWEVER, I’m usually disappointed in how you cover news about Palm Coast Data, as it seems to come from a place of deep contempt. I would love to see a profile piece on some of the outstanding individuals who now lead and work at Palm Coast Data and their extraordinary efforts to continue to maintain this company as one of Flagler’s biggest employers. Or perhaps a piece on how vital Palm Coast Data is to our community’s economy and how it has changed the integrity and make-up of our community? Did you know that we are one of Flagler County’s most diverse employer? It’s so crucial to focus on the bigger picture here, really.
I think you would be surprised at how our Corporate Culture has radically changed for the better in the past few years and how our leaders aim to enrich our community and its citizens. We may not be as big as we were in 2009 but we are leaner, stronger, kinder and more evolved. We create a flexible and supportive environment for our employees and offer them benefits that are almost extinct from our community. It is incredibly misguided to dismiss a company based on a few disgruntled voices and omit any balanced reporting on the positives. Our leaders are fair, good-natured and motivated individuals who want to see our community thrive and prosper because we realize the importance of our symbiotic relationship. By constantly focusing on the negative and exaggerating our set-backs, we all lose.
FlaglerLive says
There is never any contempt in factual reporting of unfortunate circumstances, as Palm Coast Data’s circumstances have tended to be, again and again, for many years. And while internal improvements are always a plus, the primary focus must remain on bottom lines and transparency. Reporting must not be PR. That said, we tried to do precisely what you described when Palm Coast Data was led by Mike Duloc–get to re-learn the company from within, candidly and broadly. Duloc proved arrogant, insulting and misleading at every turn. Rory Burke has been more approachable, credible and decent. And you’re right, Burke has been here long enough now that another attempt to re-learn the company is overdue.
EV says
Palm Coast Data is a sinking ship. The management will never look out for their employees but are continually pulling the wool over everyone’s eyes. Management is looking out for management and will never do anything to help their poor employees, it was, and will always be for the benefit of upper management and to line their pockets
poppy says
I have worked for PCD for sometime now & have to believe those who commented that they work there & make a decent wage must be a family member of a supervisor or someone hire up in the company. Lets face it all of the managers family members work there too. In order to get a raise you must have a “review” & meet all of their qualifications (which is a daunting task), the reviews are dated in June & you don’t have the actual “review” until October. It’s been over a year since I’ve had a review & when I ask I’m told “HR doesn’t care”, so I call HR & they say “it’s up to your supervisors discretion if you have one or not!”. They just completed a full remodel inside the office, updating all the computer software, they’re making $$, but they certainly aren’t passing it on to many of their employee’s.
Karma says
If you’re referring to me poppy I assure you I’m not a managers family member. I’m just a hard working employee.
Afraid to say says
This is all so amusing. They don’t care about these comments. They are all set in their ways. I just wish they would update their management skills and business etiquette. It seems a little old fashioned. But that won’t happen. Just hang in there for as long as you can.
A REASONABLE PERSON says
I am totally disgusted by the derogatory comments about Palm Coast Data. This company employs so many Loyal, Hard working people, both hourly and salaried employees. Those Palm Coaster’s that wish PCD would go away should be ashamed. We ALL need our jobs. We should not wish something like that on anyone. Of course things could be better; I expect it is like that at most companies….
A suggestion for PCD, maybe you should consider giving all your employees a Cost of Living Wage increase. This would be great to help the employees and also would elevate Good Public Relations.
Benjamin Bartlett says
poppy:
Back in 1999-2002, nepotism was the key to promotions and raises
at PCD. I believe that the parent company was DIMAC when I left. (’00)
That was seventeen-years ago, and maybe things haven’t changed.
I cannot believe the crap that went on there back in the day.
They had a history of mistreating people at the magazine-sub call center.
If you were a call center employee (1999-2002) you held up
a wooden paint stirrer, which had a bright orange painted accent at the tip,
to signal to the supervisor that you needed a bathroom break.
Many was the time that these “signals” were ignored. (˃̶᷄︿๏）
One front-office employee kept the PCD salaried-employee spreadsheet
file in her Windows-NT trash can, which was visible over the network!
Oh the stories….
Juan A says
Replies sure makes me happy I did not accept the job at Palm Coast Data I have neighbors who work there I have seen their paychecks and it’s ridiculously low the way I read and hear about Palm Coast Data the managers should all be fired the way they treat their employees as more like Sweatshop than anything else I’m glad they’re blowing off our tax dollars in there remodeling other office and everything to make it look so pretty but they sure don’t play their employees well at all we will be lucky to see anything back to the state for the money that they received as far as I’m concerned that place is a joke