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Palm Coast’s Secret Deal With Solar Company: Long Tax Holiday and Other Perks for 180 Jobs

| November 30, 2010

solar project iceman

A deal for solar, minus the sunshine (NASA)

The Palm Coast City Council today will hear public discussion for the first time of the details—such as they are—of a secretly negotiated deal between the city administration and a solar energy technology company that would bring 180 jobs to the city over three years, and capital investment of at least $49 million. The agreement would extend the company a 10-year property-tax break. The company would pay no such taxes for the first four years, then would start paying in 10 to 15 percent increments after 2014.

The agreement doesn’t name the company or its origin, but notes that immediately after the agreement is signed by the two sides, the company would either lease or buy “appropriate business space” in Palm Coast “suitable to meet the employment commitments” made under the agreement. The company would then notify the city of the location and size of the space it has secured suggesting that the company has scouted a space ready for occupation and use. The $49 million in capital investment would be subsequent to that move, suggesting further construction. The length of the tax holiday is not necessarily going to be 10 years. The company would apply for the tax break only after it’s started making good on the $49 million investment.

The agreement calls for the company to create jobs at an average annual wage 115 percent above the county’s average $30,000 wage—that is, jobs would average $34,500. Average is not median, however. In other words, if 100 employees make $25,000 each and a single executive makes $1 million, the average wage is $35,000, even though the media wage is $10,000 less than that. The agreement does not specify that the average-wage requirement should apply to the rank and file, exclusive of executive salaries.

Although the agreement puts a premium on local hires, it also makes provisions for granting executives or managers their moving expenses on the city’s dime. That odd provision is couched as another incentive. The city and the company, the agreement states, acknowledge that the company “may need to recruit candidates for the jobs […] who are not currently a local resident.” As such, the agreement states, the city, for two years, will reimburse 50 percent of the company’s individual relocation costs, at up to $1,500 per employee, for up to 20 employees. The special allowance applies only to employees with wages of $60,000 or more.

In a detail existing local businesses would envy, Palm Coast also promises to “expedite the processing of all city permit applications submitted to the city” by the company “including, but not limited to, applicable land development permits and business licenses.”

Dubbed “Project Iceman,” the deal describes the company as one “looking to develop, manufacture and assembly (sic.) electrical/thermal solar technology.” Florida law allows local governments to negotiate secretly with private companies, outside the purview of the Sunshine law, for up to two years. The exemption to the Sunshine law is vague and broad enough that public input may—as in this case—be excluded until the deal is done.

In 2008, Palm Coast and Flagler County secretly negotiated $500,000 in incentives with Palm Coast Data, the magazine subscription company, and the city sold its 70,000 square-foot city hall to the company for $3 million, significantly less than the building was worth, in exchange for the company’s creation of 700 new jobs over three years. The company also received $3 million in state incentives under the Governor’s Quick Action Closing Fund. At the end of 2009, the company had just 1,158 employees. If it doesn’t have 1,700 on staff by the end of 2011, it would have to return that $3 million. Barring a miraculous turn-around in the magazine industry, which has been in a tailspin, the company is not likely to make good on the pledge.

The majority of those jobs were not created permanently, though the company did create many jobs and end many others, thus taking advantage of some of the local tax breaks.

Whether and how Palm Coast Data or Project Iceman actually comply with the city’s incentive agreement to qualify for tax-dollars is not publicly verifiable, even though the deal involves hundreds of thousands of tax dollars: In a reflection of Palm Coast City Manager Jim Landon’s propensity for cloaks and clubbiness,  the agreement the companies sign with the city ensure that any job-hiring and wage data, even the data transmitted to the city, is kept secret. The city’s word to taxpayers, essentially is: trust us.

Neither Enterprise Flagler—the private-public economic development partnership—not the Flagler County administration were involved to any significant degree in “Project Iceman.”

The timing of the deal’s announcement is significant, however: county and city governments are heading toward their quarterly “intergovernmental” meeting on Dec. 15. That meeting’s agenda is devoted to economic development. The county, which chairs those meetings, was intending the session to start laying out a cohesive, countywide vision for economic development, largely to replace Enterprise Flagler’s failed effort to levy a property tax that would have paid for new industrial construction. Palm Coast doesn’t take Enterprise Flagler or the county seriously when it comes to economic development, intending to go at it largely on its own. “Project Iceman” is its latest example.

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17 Responses for “Palm Coast’s Secret Deal With Solar Company: Long Tax Holiday and Other Perks for 180 Jobs”

  1. lawabidingcitizen says:

    Ya can’t make this stuff up folks. Remember when you write out the check for your property taxes today, your elected officials have exempted perfect strangers from paying theirs for a decade to come — all for vague promises that will probably never materialize and even if 180 high paying jobs are created, there’s no rule these people must live in Palm Coast or the anywhere else in the county.

    Wake up people.

    Forensic accountants, auditors and/or investigative reporters out there, please go back ten years and do an expose on how much of our taxes have gone down the black hole of “economic development.”

    A couple of days ago there was an article about how the tax payers of the city of Edgewater south of Daytona Beach were left holding the bag when they entered the “economic development” arena.

    We need to put a stop to it.

  2. Barney Smythe says:

    Bend over and hold your ankles!! (Yet again)

  3. What? says:

    Does any of the citizens in Flagler County understand 30 to 35K is not big money!? Really good wages would be 50K and above. So, this company is bringing in its own executives that will get the really good wages. They are just going to pay the citizens here average wages. It is expensive to live in this county and to have a family. I would like to see a company come here that would provide you with a career. Not just a job while you wait for a better opportunity so you can jump ship. I don’t know why most companies think you live here just for fun in the sun. You can’t live on that.

  4. Pulling The Wool Over says:

    Once again. No company is going to locate to this region to pay wages that are out of sync with the average or median wages of this SMSA. Companies move to the sun belt in order to pay LESS wages and to have right to work and employment at will advantages. Is there a clause in the agreement that states the jobs must be full time jobs? A company could hire a boat load of part time employees with little or no benefits.
    The (town council, mayor) and town manager start salivating as soon as the four letter word JOBS is spoken. If what is reported in here is factual Palm Coast does appear to be negotiating from a position of weakness, not strength.
    Don’t look at this company as the goose laying golden eggs. The prospective company is looking for the best deal for them and their stockholders, FIRST.

    Next in line is the promoter of BMX. How much money is the city going to pour down the drain for someone whose track record is spotty.

  5. Orion says:

    In this AM’s City Worshop meeting, the City Manager went through line bt line, an explanation of the proposed agreement. Since this was a workshop, no public input was allowed. You will need to wait for this to be brought up at a City Council meeting, and then you will get 3 minutes to offer your comments. What is not known, is that the City some how got involved with “Iceman” AFTER the City of Bunnell was involved. No mention of that fact, nor how they eventually got together. Mr. Meeker challenged the statement, that the tax abatments were granted by “the electorate”, back in 2004, under ordinance 2003-14.. He asked if it was really the “electorate” or the Council..The City Manager ,once again had a memory lapse, like ANNEXATION, and sadi he forgot, but would look it up. This is not the first time, that relocation benefits have been offered..This was also done with Galtronics.. If I’m correct, the City would have to issue a income tax form, as all types of relocation reimbursements are taxable, per the present Tax Laws. Later in the same workshop, the City introduced it’s PROSPERITY 2021 program. It was a list of the assets, Palm Coast has to offer. It also promised to work together with Enterprise Flagler (which I doubt), and the other municipalities (which I also doubt), on economic development, which it defined …And folk, not a mention was made about funding. If you think that Enterprise Flagler’s program, where we’d pay about $25-35/year more in taxes was high, don’t be surprised at their numbers when they eventually come out.. All the suggestions for economic development and PROSPERITY came from City staff/team… event coordinator, and IT person, a budget person, and a senior planner, who I would bet is on his second employer at best. None have been directly involved in Development.. Stay tuned if you like the new events coming up..This will make the new City Hall look small..

  6. Palm Coast Pioneers says:

    When we see things like this we really miss our : ‘… (3) a multi purpose office structure located within the office and research park area referred to in (2) herein, …’ which was Federally ordered REDRESS for us , and to benefit all future Palm Coasters.

  7. Jerry M says:

    Actually the City didn’t have anything to do with attracting this client. The client chose Flagler and has looked at numerous sites throughout the County on and off over the past year. As a matter of fact this prospect has been in constant communication with Enterprise Flagler in addition to the various economic/community development offices of our other municipalities.

  8. SAW says:

    So, what does the local ( tea party ) crowd have to say about this, their silence is deafening ?

  9. Palm Coaster2 says:

    When I read news with lines that highlights secret deals and the public (alias taxpayers), not allowed input is when I ask myself; do we really live under a capitalist democracy because looks and feels to me as is in reality a socialist (communist) totalitarian regime. Who are we kidding here…ourselves? Is just you pay and shut up!

  10. Pulling the Wool Over says:

    SAW says:
    November 30, 2010 at 6:28 pm

    So, what does the local ( tea party ) crowd have to say about this, their silence is deafening ?

    Just look for the Chamber of Commerce comments. They are one and the same voice.

  11. PCadiron says:

    lawabidingcitizen, cities/counties have been offering incentives to companies forever. Take a look at the Research Triangle Park in North Carolina. Most of those high tech and pharmaceutical companies got some sort of tax break, cheap land etc to move there. That area has weathered the recession very well. I can’t say the same for Flagler County! Why is everyone so against the city doing what they can to actually get companies to move here? Isn’t this what the people want and complain about all of the time??? The only thing I can think of is the people who moved here from NY/NJ to retire are upset that their taxes may go up. It’s still cheaper than up north and you need to think about all of the younger people here who are trying to raise families.
    As far as someone commenting about this new company not paying local people higher wages (more than $30k). I don’t think there are probably enough qualified local people to work for a high tech solar company. If there were, I’m sure they would much rather hire the locals than have to pay relocation.
    This is why we need to attract businesses like this to our area….give the younger generation some motivation to further their education and get advanced degrees, rather than just finish high school and work for minimum wage for some of the current local employers.


  12. puzzled says:

    You know all you hear is people crying and complaining about how the city does nothing to get jobs in our area. When something comes and offers more jobs all you hear is that its not good enough. wal-mart pays 7.00 dollars a hour. This job even if its an average of 30,000 dollars a year is better than that. I am by no means happy with the city and the way they do things. I don’t like the loop holes that I see with what was written. I do understand that we are giving the a tax break. BUT this will bring JOBS here that mean people can pay their BILLS (mortgages) buy things at the stores (pay more taxes). I think that’s its a good start. One thing I do hate is all the secret back door cloak and dagger spook crap that this city does. Its time that we demand a clear and transparent form of government, not that that would ever happen. You know I wonder if Council even has an idea what Landon is doing……

  13. johninc says:

    Kudos to Palm Coast for doing something more on the smart side – instead of giving away what they have in hand, like buildings, they are using what they do not have, i.e. taxes that have not been collected. I don’t like the secret negotiations because I doubt the ability of the council to make good business decisions. But I do like where this deal is going… in the right direction.

  14. Barney Smythe says:

    Puzzled, if Wal-Mart is paying only $7 an hour, they are in violation of Federal Wage law. Report them immediately!!

    180 jobs over 3 years is only 60 jobs per year. What’s the unemployment rate in Flagler??

    Enterprise Flagler=Giant Blood Sucking Leech! Those old folks from NJ really know how to keep the city bent over!

  15. KC says:

    Time to fire the current City Council members by voting out all the incumbents and vote in a council that will get rid of Landon and bring in someone accountable to the residents of Palm Coast.

  16. Justice for All says:

    In 2005 the voters approved allowing the City Manager to negotiate with companies and City Council to approve giving them tax breaks in exchange for jobs. Few people voted in that election, so a small majority of voters approved it. This allowance has to be repealed, or the cycle will continue, just with a different Council and Manager. The better questions to ask the City Council are in the five years since this was passed has anybody got a list of companies, how many jobs were REALLY created, and how many tax dollars have been lost in exchange for those jobs? And since we suspect those jobs really haven’t materialized in the numbers reported, will the companies be able to pay their taxes, just like the rest of us?!

  17. SAW says:

    **Pulling the wool over, you got that right, just look at who the chair is.

    Why is it that we see through this, but the ( tea party membership ) is either not aware of it, or does not wish to question it ? If this is the case, and do not realize what is going on, they should move to disband the group, as it will only serve to raise their taxes DUH ?

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