Over the years Flagler County government has provided various companies incentives in the form of subsidies either to encourage them to stay in the county or to set up shop locally. Eleven years ago the county gave Palm Coast Data $100,000. Two years ago, it gave a pair of companies a $90,000 subsidy each, one to help build a “spec” building, another to move and expand within Palm Coast. It gave a few other companies smaller subsidies, such as the $35,000 that went to a nutrition supplement firm in 2015 and $15,000 that went to a stoneworks company in 2017.
All those packages pale compared to the subsidy county government is preparing to give a company that would move its furniture assembly and distribution plant to Flagler County, constructing what would be the largest building in the county and operating off of U.S. 1, in unincorporated Flagler–a 250,000 square foot structure. The direct subsidy: $680,000 over 10 years.
It is more money than all the economic development “incentives” or subsidies the county has given companies in 11 years, combined.
It would all go to a company that’s yet to be named, in a process the county has kept under wraps for months, first calling it “Project Discover,” then calling it “Project Columbus,” with some details of the package getting approved by the county’s economic advisory council earlier this month. (That meeting’s video, usually made available on the county’s website, has not been posted.)
Helga van Eckert, the county’s economic development director, says the package is entirely defensible because the land the company would buy is currently generating barely more than $100 in county and school taxes, and that even while the county is subsidizing the company, the new operation would generate some $80,000 in new school taxes in the first year alone. Tax revenue in subsequent years would increase and 50 jobs would be created locally, with an average (not median) wage of $50,000 a year.
“This is a legitimate company, this is a relocation, this is not speculation, this is a company that wants to come here, that’s already in business and is very well established,” County Commission Chairman Donald O’Brien, who also chairs the economic development council, said.
The company’s plans to move to Flagler aren’t speculation. The way the incentive package was sized, however, is largely based on speculation. And none of the plan has been put in writing for public inspection, especially a central plank of the plan: the calculation from which the subsidy amount was drawn.
The value of the incentive is based on a speculative calculation even Property Appraiser Jay Gardner calls “vague”: that the proposed building would be valued at $13 million, and would therefore, according to van Eckert, generate the equivalent of $113,000 in property taxes owed the county’s general fund in the first year–the subsidy amount the company would get paid each of the first two years of operation. The subsidy amounts would then decline in subsequent years, zeroing out by the 10th year.
It’s not clear how van Eckert calculated that a building assessed at $13 million would generate $113,000 in county property taxes the first year. She said it’s based on current property tax, or millage, rates. But the current rate is $8.2297 per $1,000 in assessed value. At that rate, a property valued at $13 million would generate $106,990, not $113,000.
No one knows what the building’s value will actually be, once it’s built. No one knows what the economic climate will be, or whether the company will not have had to alter some of its designs. “There’s a million things that could change between now and then,” Gardner said of speculative assessment estimates, describing the information provided for the estimate as “only a guess.”
The county, in other words, may well end up paying the company significantly more than what property taxes the company would be paying the county.
Van Eckert extrapolated the tax revenue the new building would generate based on a description of the prospective building to a property appraiser staffer, who then provided only the most general estimate of what such a building’s tax assessment might be. No blueprints were provided the property appraiser. There is no written document showing the property appraiser’s estimates. “I don’t have anything in writing, no,” van Eckert said. She could not recall the name of the property appraiser who helped with the calculations.
“We don’t like writing down something like it’s a fact, because it’s not,” Gardner said today. (Though van Eckert could not remember who she spoke with at Gardner’s office to calculate the estimates, Gardner did: it was Mark Whitley, in charge of commercial appraisals. He could not be reached today.)
The property appraiser’s office is not involved in any way in the economic development deal the county is preparing: it provided information–or guesses–merely because it was asked, and would provide that information to anyone who asks for similar estimates–with the caveat that they are estimates, at best.
Yet the incentive package is about to turn into a 10-year financial commitment based on those guesses and very little else: when the economic development council heard van Eckert discuss the proposal at its meeting earlier this month, it had no written documentation aside from a chart–itself half speculative–showing what amount the county would pay the company each year, and what speculative amount the company would pay in property taxes each year. The chart, which you can see here, presents the “taxes paid by the company” as fact, without caveat nor explanation.
FlaglerLive requested the backup material that normally accompanies county government initiatives of the sort–even economic development initiatives that don’t include the compajny’s name–but there was none provided.
The County Commission is scheduled to approve the incentive package at its July 15 meeting. The incentive package the commission will be asked to approve takes the estimates as a concrete basis for hard numbers. And the incentive is in no way tied to tax assessments beyond the estimates van Eckert is providing the commission. In other words, whether the assessments come in higher or lower–or much higher or much lower–the county will be bound to pay the company the $680,000 subsidy regardless, even though van Eckert is justifying the figure by tying it to the tax revenue she expects the company’s building to generate.
O’Brien, interviewed a second time later this afternoon, said he would not be voting for an incentive package that isn’t directly tied to the tax assessment, whatever that assessment ends up being once the building is built. “Whatever the tax bill says, that’s what we would be reimbursing. If there’s a change in the tax bill, if there were a massive change in the assessment, then that’s what the incentive is going to be,” O’Brien said. “The language of the agreement is going to say that or I’m not going to vote for it.”
If that’s the case, then the $680,000 figure itself becomes sheer speculation, to be adjusted once the building is completed and the first assessment is in. But that can also mean that if the building is assessed at more than the figure van Eckert has in mind, the county’s subsidy would then rise accordingly, at least for the first two years. What’s certain in the agreement is that the first two years, the county will pay back 100 percent of the company’s county tax bill.
Previous subsidies were drawn from a special pot called the “economic growth fund.” But that fund is dwindling: it’s down to $62,000 this year. To pay for the new incentive package, the County Commission will have to draw from the general fund, and make an annual appropriation to which future commissioners will be bound. County taxpayers’ tax rate is based on the general fund’s needs.
The company would be getting $113,000 the first year and $113,000 the second year. The subsidy would begin to fall in the third year, with the last county payment in 2029. “The key is that it has to be performance based, and the key is that it has to bring more value than it costs the community,” van Eckert said. “This is the biggest project that we’ve brought into the county.” She said it takes Flagler “to a different tier.”
But “performance-based” would mean that the company is operating and paying taxes locally. The agreement is not dependent on the company providing 50 jobs (some previous agreements have been tied to job numbers).
The company would assemble home furniture on site, then ship it out. It would not manufacture it on site. Van Eckert protected the name of the company, which appears to be a known company. She said the company is currently doing its due diligence in the county, and that “long term, they’ll be moving their full operation here.” If everything goes well, “before the end of next year they’d be up and running. They’d be looking to break ground before the end of this year.” By then, the company is expected to have invested $20 million in buying the land and building its structure.
Still, much of “Project Columbus” remains speculative, especially in so far as any information publicly available is concerned, and will remain so up to the day the commission is asked to approve the project, sight mostly unseen, on July 15.
Reality Reeks says
Before I actually reread this, I’ll say, change the name! You are literally spewing
racism and hatred by calling “This” thing “Project Columbus. ”
WTF does a drunken sailor have to do with this at all??
WILLIAM NELSON says
Not for nothing, BUT, what is the record of return on all the other THOUSANDS of dollars given as an incentive?? Is the giving away of $$ the easy way out of attracting new business ?? If so, we have the wrong people in the wrong places.
Where would this “furniture assembly company” be located? If they are working with paper, compressed sawdust and wood products, I wouldn’t want to be anywhere near them. Environmental pollution is no joke.
OK write this down: ” the new operation would generate some $80,000 in new school taxes in the first year alone. Tax revenue in subsequent years would increase and 50 jobs would be created locally, with an average (not median) wage of $50,000 a year. ”
Then we can back and check it at some unspecified future date. You’d think Flagler County would be a little leery of ‘promises” (or in this case more like “suggestions”) from private business. Are there any ramifications if this is not met? Didn’t we do something very similar with business at the airport?
Why is it that private enterprise can build a 250,000 sqft facility for $13 million, but the local government wants $21 million for only 60,000 sqft of building space in a new public works facility?
Project Who Gives a Hoot will come here anyways with or without the incentives. The location is absolutely ideal (rail and interstate plus direct shot to port of Jax), cheap land, cheap labor, low taxes, zero state income taxes, relative low cost of living, plus a high likelihood the owners want to live (and ultimately retire) here anyways.
No need to give up anything. Hell, they should be paying us!
Jane Gentile-Youd says
No money to repair a wastewater tank affecting over 5 000 current taxpayers voters and residents. No money to give clean drinking water..no money to re-home sheriff operation…no no ey for emergency helicopter 12 hours a day …no money to give many county employees above minimum wage but promising our hard earned money to strangers is taking money from your family to support a gambling addiction.
This plain stinks…bordering on theft in my opinion
Concerned Citizen says
With the current track record our county has of “deals” This sounds really suspect.
I don’t trust our BOCC or county leadership anymore. And in regards to promising subsidy one only has to look at Palm Coast and Palm Coast Data. I believe promises were made and money was exchanged.
Palm Coast Data failed to meet several of the terms and ended up owing Palm Coast money. None of which it will ever see.
Is this subsidy going to mire down the County in the same fasion Captains BBQ has?
Willy Boy says
Bing’s Landing on steroids.
“FlaglerLive requested the backup material ” well there is documentation available but not for a news source until the project is a sure thing. Right now its nothing but speculation. But I see some new jobs for a few of the hundreds that got let go from SeaRay.
““This is a legitimate company, this is a relocation, this is not speculation, this is a company that wants to come here, that’s already in business and is very well established,” County Commission Chairman Donald O’Brien, who also chairs the economic development council, said. ”
If the company is all of this (“a company that wants to come here, that’s already in business and is very well established”), then why do you need to offer ADDITIONAL incentives? Sounds like they are just fishing for the best deal (i.e. which town is willing to sacrifice their future the most).
And here we go again tapping our county strain operating funds to benefit some well connected meanwhile Palm Coasters keep being double taxed by this county that gives us the most if so 20 to 30 percent of our services when the city comes up with 70 to 80 percent instead. That makes possible for the FCBOCC and administrators to spend our hard earned taxes like drunk sailors. There you go guys you get what you vote in for “all good old boys” raping our pockets and not giving us our services.
How about calling it – Project Piss Our Taxpayer Dollars Away !!!!!
Interesting…..the return to taxpayers is now revenue from a vacant lot that will be active and 50 jobs brought to FC for a prime piece of property , with rail/interstate access. New justification variables introduced
Does the County have a net loss of jobs since the Sea Ray exit for 2019? Several have asked for job growth scorecards …jobs gained, jobs lost.
Something is missing! Just compare significant expansion to the north and south of us.
Back where I came from, our county gave large incentives to Volkswagen. They built a large plant and employed many people. Once the incentives were gone, they were gone and many people became unemployed. Then Sony was given large incentives to take over the plant and they did. Once their incentives were over, they left also, leaving many people unemployed, including my sister and my brother. It’s all about the mighty dollar and they only stay until the incentives are over.
Mr. Reese says
Let them go somewhere else. No company is worth this kind of taxpayer subsidy over the next 10 years.
If the Commission feels subsidies are a worthy policy to attract new business, then at least set a maximum
that will be given to ANY company. Also, Board members need to take a close look in the mirror to remember what their track record with businesses look like. Spoiler alert. IT’S NOT VERY GOOD! The supposed to be Sheriff’s headquarters building mess; the Captain’s BBQ fiasco; and the purchase of the former Sears building
are glaring examples of how savvy your business skills are!!! Your track record of doing what is best for the taxpayers is gruesome at best !
Percy's mother says
Why aren’t the taxpayers privy to the name of the company?
Why aren’t the taxpayers privy to the deal?
Isn’t this taxpayer money?
Why wasn’t there reimbursement from Palm Coast Data for reneging on their incentive package?
van Eckert needs to go.
O’Brien needs to go. When’s his term up?
Can we the taxpayers start a joint effort to have van Eckert OUT?
Bill White says
How about structuring the incentive where the county would get guarantees. If the project doesn’t meet the first years projection the incentive is reduced proportionately. This would apply each year until the incentives are depleted.
John R Brady says
Why don’t the County Commissioners act like business people. OK with incentive but this unnamed company must put some skin in the game. How about this unnamed company putting about 20% of the incentive in an interest bearing account which will be returned after the second year of operation.
Concerned Citizen says
@ Our BOCC and other County officials,
If you go thru with this deal I will make it my mission to see that none of you get reelected. You all have done nothing but throw away OUR tax dollars on worthless and borderline criminal real estate deals. Most of you are already guilty of Malfeasance Of Office. We still need a forensic audit and a federal investigation.
You continue to act like your invincible and that Flagler County has a bottomless wallet. We need representitives that watch out for their constiuents. Not bribe special interests.
Someone needs to freeze the BOCC’s spending privlidges before Flagler County ends up broke. They obviously think we just have money to hand out to everyone.
I’d be willing to do Ms. van Eckert’s job for half her 6 figure salary. All she appears to be is a liason for businesses needing bribes, I mean incentives, tax credits, subsidies or whatever word salad you want to call it. She and Dunn seem to have the same modus operandi…can’t they bring tourists or business here without the “incentives”, wink?
The original woody says
Yea because Palm Coast Data worked so well.City still waiting for the full reimbursement.
Helga works very hard. I trust her if she says this is a good deal.
What i do not understand is how negative people are in this county. I think its always the same people who comment on everything.
seriously, lets be positive.
Concerned Citizen says
One only has to pay attention to the daily debacles our BOCC gets into. Then you will understand. Our County/city leadership in this area has done nothing but squander prescious financial resources. And they continue to get away with it.
The only way we know about it is because of our local media. Its been years since our elected/appointed leadership has follwed Sunshine laws.
Mary Fusco says
$50,000 salary to assemble furniture? hmmm. Our teachers don’t even make that much.
We could of had a BMW assembly plant. We could of had a Walmart distribution warehouse. Every one knows If you live in Palm Coast there are no real jobs here. People move here to sleep. That’s why they are building all those new homes off of US1. We lost 400+ jobs when the boat factory closed. This furniture company will bring 50 jobs?
Furniture assembly this is the high-tech industries we are recruiting? Please
Justine overland says
50 Jobs? Is that a typo? 500, maybe. But 50 jobs that will be gone before the incentive is gone? Bad deal. Pissing away taxpayer money! Vote these asshats out.