It was just four years ago that county government, the Flagler Chamber of Commerce celebrated what they dubbed as the county airport’s long-awaited coming of age as an engine of economic development. The county used a $514,000 federal grant to build a 3,000-square-foot headquarters at the airport for a company called Cakes Across America in exchange for a 20 year lease and the promise of 26 well-paying jobs, and possibly 40 down the line.
Down the line is here. Last week Cakes Across America turned over the keys to its headquarters at the airport and moved out, its promise never fulfilled. The minimum of 26 jobs it had to produce in exchange for the arrangement never materialized, and the business—which matched customers with specialty cakes from bakeries across the country, without baking anything locally—was shrinking. The economy didn’t help. But the company’s troubles with the county pre-date the recession. It wasn’t doing as well as planned even in 2007, at the height of the housing bubble, generating at most eight employees, just five of them new by the time the county had to prove the grant had paid off.
Click On:
- White Elephants Grinding Down Flagler Airport
- How Ginn Corp. Stuck Flagler Taxpayers With a $2 Million White Elephant
- Council Slams Enterprise Flagler’s Camouflage, Casting Doubt on “Development” Tax
- Battling Referendums: School Tax Will Compete With Building Tax in November
- How the Chamber’s Tax Proposal Undermines Schools, Cities and the County
- Hell Freezes Over: Flagler Chamber Wants To Hike Your Taxes
“They owe us money. They have a sub-grantee agreement through a CDBG grant,” County Administrator Craig Coffey said on Saturday, referring to a federal Community Development Block Grant, “they owe us $300,000-some dollars, but we’ll have to take legal action to collect that.”
Fran Greene, the company founder and owner, said on Monday: “On several occasions, Flagler County has proposed a new lease with a significant increase in rent to Cakes Across America. On these occasions, the county has offered the company an option to vacate the building. Cakes Across America decided to exercise the option offered.”
Cakes Across America looked like a business with great potential since its inception in a Flagler Beach strip mall in 1999. But it moved to the airport on the promise of growth rather than actual growth. By the time the company was ready to leave earlier this month, it was using just one-third of the building, according to the administrator, and had changed its business model, scaling back on its original designs. The company isn’t out of business, Coffey said. The company’s address, on its website, is listed as a post office box in Flagler Beach. Calls to Fran Greene, the company president, and to Denis Bayer, the company’s Flagler Beach-based attorney, were not returned Sunday afternoon, nor were emails to two of the company’s email addresses.
Almost two years ago, the Department of Community Affairs, the state agency that channeled the federal grant for Cakes Across America, asked for the money back. The five jobs Cakes Across America created did knock off $100,000 of what the county owed. But that still left $400,000 to pay back. Coffey worked out an arrangement with Cakes Across America to pay back the money in quarterly installments of $13,370, letting the company stay at the airport and continue to make a go of it. That arrangement is over. The county is paying back the state grant in installments, through the airport’s fund–a so-called “enterprise fund,” which means revenue generated through the airport’s operations, outside of the county’s property-tax supported general revenue fund. Ultimately, taxpayers would be on the hook for the note if the airport’s fund can’t make the payments. That’s not the case for now, and may never be the case if the airport successfully re-fills the building with a paying tenant.
For the county, it is the third major business the county subsidized in the name of economic development, only to see the business break its end of the deal and leave taxpayers holding the bag. The Ginn Corp. went bankrupt after the county build a $2 million corporate hangar for it at the airport. The county, again through the airport fund, is paying $200,000 a year on that mortgage for an empty building. Earlier this year Embry-Riddle University backed out of a 10-year lease signed in 2004 to run a flight-training school out of a 19,000-square foot building also built by the county specifically for the university’s purposes. The University didn’t leave the county hanging as much, buying out the lease for $900,000. Another business may soon be moving in there, with generous rent discounts from the county.
But the airport isn’t a cash cow. Its revenue of $3.6 million in 2007-08 is down to a projected $1.4 million next year, out of which it must pay the $200,000 on the Ginn building and $111,000 on the Embry-Riddle building. That $311,000 is a considerable burden on the airport fund–a burden that will grow larger the longer the buildings are not occupied with well-paying, rather than subsidized, tenants. The Ginn building won’t be paid off until 2026. The Embry-Riddle building won’t be paid off until 2024, for a combined $6 million bill by then.
“We’re restructuring ourselves, and we’re in a bad economy, and we have people that want to criticize because we’re in a bad economy,” Coffey said. “It’s easy to do that in a bad economy. All these buildings are assets, and regardless of we’re getting it back, they’re similar to mortgages on a house. The value is still there, and we’re not upside down on them, meaning, just like a house, they’re still worth a lot more than what we owe on them.”
PCadiron says
Cakes Across America, really? Whoever thought this sounded like a profitable business was delusional!!
Alex says
Business development seems to be just another way to scam the taxpayers.
Business will develop if there is potential for profit. No taxpayers assistance is required.
Easy to blame failure on the great recession.
robyn galia says
This made me laugh years ago. How dare anyone say YOU MUST CREATE JOBS………….
Are they joking?
Give a break! Hilarious! It is the idiots that authorized this that should pay the bill
and no one else! (emphasized with me taking a slice of marble cake with vanilla bean icing and SSSMOOOSHING it in their face!)
Rudy Smith says
The Flagler Chamber of Commerce is a mickey mouse outfit. Has their name been associated with any real success in Flagler County. They need a new president and preferably someone from Flagler County with the citizens of Flagler County being given the priority they deserve..
notasenior says
I’m all for job creation (who isn’t) but who in their right mind would ever think (good economy or bad) that the cake business was the way to spur the economy?
starfyre says
but i love cake
thats how i got so fat actually
Marie says
Our chamber needs to be rebuilt from the ground up. Anyone who was involved in the Ginn or Cakes Across America fiasco, from Chamber and Enterprise executives to County Commission should be ousted. And the organization known as “Enterprise Flagler?” Shut it down.
Such a waste. Sounds like we’re in the hole almost $1 mil because of these morons.
Dorothea says
From the Chamber and the County Commissioners to Flagler’s financially strapped citizens:
In the infamous words supposedly uttered by Marie Antoinette in regard to her starving French subjects:
Qu’ils mangent de la brioche
Let them eat cake.
Robert says
The term well paying job gets thrown around a lot. A well paying job should be at least 60% -100% above the median income for THIS Metropolitan Statistical Area. All of the data that I find lists the median per capita income from $25,000 to slightly above $27,000 per year in our MSA.
Well paying jobs and Flagler County, Palm Coast Florida is a diametric / opposite claim. Business does not move to an area with a low wage base to become a Santa Claus.
One reason that they move to a low wage base area is to capitalize on the low cost of labor. To use a colloquial term they aren’t fattening up the frogs for the snakes.
Any of the politicians and others who are supporting the proposed tax for business development and who keep selling the pipe dream of well paying jobs are blowing smoke up your pants and skirts.
There may be a company that will move here and may pay wages slightly above the income scale. But has Palm Coast Data lived up to the hyperbole of more and better paying jobs? If any one of you readers has millions of dollars to invest in a business enterprise what would make you locate your company here? How about, a low wage scale?
As reported here last week if you are the town manager of Palm Coast, and probably county administrator or schools superintendent you are in a different income strata. Most of the upper management jobs in local government will pay well above and beyond the median wages. For instance the previous Director of Recreation in Palm Coast was paid an outlandish salary. He was ousted I mean he left and his replacement’s salary was reduced. The working classes should not expect any miraculous changes in income with any new business developments.
New jobs yes, well maybe. Well paying jobs, no.
NortonSmitty says
The Chamber of Commerce has pushed the right wing pro business agenda for years and worked hard to cut any measure of protection for working people, from Social Security, Unions, minimum wage, unemployment and welfare in the name of free enterprise and deficit reduction. Here is a prime example of their double standard, their belief in Welfare for business and free market capitalism for the poor.
But I can’t resist the obvious. HEY CC GUYS: Marie Antoinette lost her head by saying if the poor couldn’t afford bread, then let them eat cake, but even she didn’t have the balls to try to make a buck off the transaction.
You greedy pricks have no shame.
Raoul says
Yummy! I love cake *drool*
NortonSmitty says
Raoul, your just a genius ain’cha boy.
Gene says
I like Raoul’s thinking, nothing wrong with a bit of comic relief.
some guy says
I thought the comic relief was nortonsmitys rant
palmcoaster says
To what Marie mentions as the fault of the County Commission, Flagler Chamber of shame and Dis-Enterprise Flagler extreme flops, we have to add also City of Palm Coast and the Palm Coast Resort blunder. Promoted by all the above as the new improved resort to come and replace our beloved one for a bunch of lies displayed in those give away shirts handed out in those “hook and bait” meetings held.
There went our beautiful canopy of disrespected centenary oaks, our fun gathering place for our community events as well as the welcoming centrally located lodging for our visiting relatives and friends with the fantastic views for us all to enjoy of our Intracoastal Waterway and our vessels free launching for residents in the marina.
Worst of all there went over 300 jobs with it! Never recovered due to faulty promises as our hotel was never rebuilt. Now we can all see the “beautiful box structure” and Non Trespassing signs of non completely sold condos.
I agree with your suggestion of what needs to be done with Chamber and Enterprise as they are the number one promoters of outsourcing our taxpayers funded suppliers contracts along with our local government.
Probably Marie will sure miss also our Palm Coast Resort (ITT Sheraton), from back then.
Angela James says
I JUST now found this article. I wish I had done more research on Cakes Across America. I have contracted with them to do cakes here in Houston. On the first cake I delivered I thought “Okay, if they don’t pay, I’m only out $30.” Well, I got paid three weeks later — not a problem. Then we jumped to larger cakes and had trouble getting paid on those $211.82 and $71.30. Finally got paid after sending an e-mail to Dottie at CAA with a copy to my attorney. THEN, while I was on vacation, they ordered three cakes at $160 each for Macy’s advertisement to the Houston Chronicle, KHOU and KTRK (CBS and ABC affiliates in Houston). Well, my assistant did the cakes (and other smaller cakes around the same time). We have NOT been paid the $667.05 due. We keep getting pushed to the next day, the next day, the next day. Sounds like there’s trouble with cash flow and bad management!
Carol's Cakes says
Two years ago they kept telling me a check was sent but not cashed so they would send another.
They did finally pay me for that delivery.
Now, two years later (after delivering cakes again to a corporate event and not getting paid) I decided to check the web and …………….
I Just found this article as well. I have been trying to get paid too!!
As of Jan. 6 2012 I was promised by Dottie that a check was in the mail. WRONG!!! Still waiting……………now there is no answer at the phone numbers listed. If you or anyone knows how to reach someone please let me know. I should have know something was wrong.
palmcoaster says
Good reminder here of all of the past blunders we are forced to fund created by our county commissioners and their administrators, past and present ones. NOW they want to extend this deserted library 9,000 more sq. ft..Who’s is in the take here? Because I do not find out any other justifiable reason for the frivolous spending of our hard earned taxes aka “other people’s monies”, in this current economy.
ecs says
Myself and may contractors refuse to join the chamber when they hired out of town contractors to build their new building. Then they wonder why they cant get members
palmcoaster says
@ecs same reason why we quit this bogus Chamber, several years ago. They only promote and help their close elite and outsource for favors monetary or others, all the work that they can get their hands for like TDC, Auditorium and Chamber, they even compete with some members. Also Chamber’s head advise as well buyers from large government entities to give our taxpayers contracts to buddies contractors producing the work out of this county or even out of Florida with local sales reps, that work out of their houses. Meanwhile we small local businesses:
rent and pay commercial space, (create local jobs)
pay commercial insurance, (create local jobs)
pay commercial taxes, (create local jobs)
pay commercial license, (create local jobs)
pay commercial cleaning of our store fronts, (create local jobs)
pay commercial utilities electricity, water/sewer, telephone and cable (create lots of local jobs)
have commercial accounts in local banks (create local jobs)
and very important employ local workers. Help community organizations and generate loyal customers.
When our competitors sell from a local residence and the thousands$$ in production is made elsewhere in Florida or out of state, few pocket in some bucks, but the county and labor loose big..
By the way the Hospital uses same policy…further more work originally sold/gained/done for years by local contractors, (before the Flagler Hospital opened) was taken away from them by the Hospital and contracted outside this county. What is up with that?
How many local construction workers, contractors or machinery has the Hospital Mr. Ottati contracted for his Annex going up near Lowe’s? I would love to be documented a wonderful reply and proven my suspicions wrong. Mr, Ottati prove me wrong please, as this county needs those jobs. I was told then that I didn’t have to be Adventist to be awarded contracts while presenting bids, but no bids requested!
You were the head of defunct Enterprise Flagler advocating for ED to create jobs, while taxpayers sustained that quasi government agency, right? Yes I know the Adventist Hospital is a private entity and is breaking no laws contracting elsewhere…but is profiting from us all in Flagler and all the volunteers contributing thousands of hours of work to benefit the hospital are also from Flagler, all/mostly? Isn’t our Adventist Church concerned and wouldn’t like to help reducing the highest unemployment in this county by having Mr. Ottati contracting locally? By the way will this local Hospital Annex compete with all the Doctors and Emergency Clinics located along the Palm Coast Parkway and put them out of business as well? Because they have been operating successfully there for many years….just wondering.
Other “than build and they will come” I think is more realistic now “Outsource and they will leave!”
beverly starr says
They owe me $130.00, they keep saying the check’s about to be mailed, that’s since last July, it’s now April. Don’t make a cake for them! Don’t order cakes from them!
palmcoaster says
I am sorry Beverly for your unpaid bill it is the second time I read about your claim and yet they did not comply? I never bought one of their cakes and I never will. Looks like these were the Cakes owners that those county commissioners/administrators were so close too and benefitted then.
Now with the County asking for more money yet, from the already overtaxed Palmcoasters by the county bill in our homes taxes, lets remember some of their many costly blunders like the one above, before we approve of their greedy/frivolous demands on the 50/50 new sales tax proposed share.
Toni says
This is a shame. I worked for them in 2007. Business was booming and they offered a great service. I can honestly say that we had very few complaints. When we did get complaints, they were about the bakeries that actually made the delivery. I hate seeing businesses end up like this. :(