The Flagler County Commission on Monday approved a potential $680,000 subsidy for a new company that would build a light manufacturing plant off U.S. 1 at the south end of Flagler County, and add 50 jobs. It is by far the largest subsidy or economic incentive package the commission has approved, dwarfing all previous incentives combined.
The unanimous vote capped a brief presentation followed by a nearly hour-long stream of public support and commissioners’ applause, though most elements of the package remain hidden, and, enthusiasm aside, many of the statements were speculative, exaggerated or inaccurate.
Commissioners and Helga van Eckert, the county’s director of economic development, did not disclose the name of the new company, nor what its actual location would be, though it is expected to be located at the south end of the county (where the county was having difficulties securing a water connection for the eventual plant). State law allows for the secrecy for a period, as companies and governments negotiate such arrangements. The company will assemble and distribute furniture from what van Eckert said would be a 250,000 square foot plant, the largest building in the county if built at that size. It would start operations by August 2021. The company has been in business over 20 years.
The subsidy would be paid directly out of the county’s general-fund reserves. It would be paid over 10 years, and would be proportional to the expected county property taxes the new company would pay. The county is estimating that the new plant will have an assessed value of $13 million, generating $113,400 in county taxes once the plant is in operation, presumably in 2021. For the first two years of the incentive package, the company will be reimbursed that annual county tax bill. The following two years, it will be reimbursed 80 percent of the tax bill, then 60 percent for the two years after that, and so on, until the subsidies zero out by the end of the decade.
“We’re in a due diligence period right now, where they’re doing their evaluations,” van Eckert said. The company would invest $20 million to buy the land and build its plant, she said, providing numbers economic development departments typically provide regarding “economic output” and indirect jobs, but those figures are more speculative and unsupported by solid evidence.
Van Eckert said the average wage for the 50 jobs would be $50,000. Average wages in companies are misleading, as they average out executives’ pay with that of line workers, whose pay is considerably less. Van Eckert was asked previously to provide the median wage, a more accurate reflection of actual wages at the company. She did not do so. But furniture-assembly workers are generally paid between $9 and $18 an hour, according to payscale.com, with average pay at $12 an hour, or $25,000 a year.
The contract with the company does not make the subsidy dependent on the 50 jobs. And those jobs may not necessarily go to Flagler County residents: the contract calls for employees to live within 50 miles of the plant. The land the company is exploring is near the Volusia County line, suggesting that most jobs would go to Volusia County residents.
The assessment-tied incentive does not include the land value on which the building will rise, only the building’s value.
“There was some misinformation out there with regard to the dollar amount being connected to an assessed value or not,” van Eckert said. “The amount of the incentive would fluctuate with the assessed value of the property. These numbers are based on the property being assessed at $13 million. If it is assessed for less, of course the incentive amount would be less as well, and would work in scale with that. But once those numbers are set, we’ll go from there.” The “misinformation” had been van Eckert’s own, in an interview with FlaglerLive, in June, when she said the incentive would not fluctuate.
Commission Chairman Don O’Brien was opposed to such an approach, and said he wouldn’t approve it if the incentive wasn’t capped or lowered in case assessments came in lower than the scheduled incentive. Van Eckert complied. “Per the direction of the Chair of the County Commission,” the back-up material for the package read by Monday, “the funding schedule will be reduced pro rata by the percentage reduction in the investment of the company.” But neither the back-up material nor the contract specify what would happen if the assessments came in at greater the expected value, leaving open the door for larger incentives: there is no cap in the wording of the contract.
County commissioners were all supportive. “This would be equivalent to me turning around right now and giving everybody in the room $100 and say, give me $20 back,” Commissioner Joe Mullins said. “This is the beginning of what we’ve been working for, it’s bringing the high-paying jobs–50 jobs, doesn’t seem like a lot, but it is, especially in a town that for the last four years has seen a decrease in job market, when we lost sea ray.”
In fact, the job market in Flagler has grown significantly in the last four years, regardless of the losses at Sea Ray: the number of Flagler residents with jobs has grown from 40,093 in June 2015 to 46,600 in May 2019, a record–and an increase of 6,500 jobs, or 16 percent, with which the county’s economic development department or the county’s incentives had very little to do.
“The state of Georgia is doing it in the movie industry,” Mullins, a Georgia transplant, continued as he explained his support for incentives. “They’re turning around, giving 40 percent back to every dollar that’s spent, they give you 40 cents back, so if you spend $100 million you get $40 million back. It’s a multi-billion dollar industry that has changed their economy. So these things are very normal.” Mullins was overstating the case: The tax credit is actually 20 percent and applies only on production costs using Georgia vendors, and kicks in only when a production exceeds half a million dollars. If the production agrees to incorporate a promotional element about the state, the incentive rises to 30 percent. But film crews and actors’ costs are not part of the package. And the benefit is not a cash rebate, but a tax credit that applies only to a company’s Georgia liabilities. But Mullins is right about the spending the credit has generated: in 2017 alone, Georgia drew $2.7 billion in spending from film productions, according to the Atlanta Journal Constitution, a ten-fold increase in 10 years.
Mullins said he met with company officials.
Numerous people spoke in support of the project, including the chamber of commerce president, a member of the county’s economic development board, a Bunnell city administration official and others. Only one critic spoke against the project.
The Contract With the Furniture Company:
Mark says
Why do we need jobs? Everything is gonna be free, free, free.
Fredrick says
@mark… I agree. And the world is gong to end in 12 years. So if the county is smart they will work in the tax incentives beyond that so they won’t matter!! AOC was the inspiration for that thought. She is the business wiz kid of the left. We are in safe hands with her around.
You Watch says
You watch…. Just about every worker there top to bottom will live in Volusia county, shop in Volusia county, pay taxes in Volusia county, etc etc. This is a handout that lines a few pockets (guess who), and benefits no one else in Flagler.
Unfortunately the “I told you so” aspect of all this doesn’t mature until 2030, for which all will be forgotten and forgiven, and the proceeds spent by (insert corrupt politician name here), who will be long gone.
Look at it at face value. There is no real discernable benefit to a politician. A few jobs at a very low wage with likely high turnover, and likely to be replaced by automation anyways in the coming years. Therefore, the benefit to the politician must be somewhere else. Somewhere elusive. Somewhere secretive. Somewhere illicit perhaps.
Just the facts says
Considering the County Commission’s track record I have serious doubts about this. I seem to remember incentives being given, in the past, to companies that never delivered on their promisess.
snapperhead says
In a study conducted by the Snapperhead Economic Impact Institute it was found my spending directly and indirectly supports 300 jobs in the Flagler County area. I’m expecting a $2.5 million tax credit over the next 10 years Commissioners. We can call it the “Free Market Capitalism Kickback Project”
KC says
According to the contract, an employee will count toward the employment metrics if they live within 50 miles of the proposed plant. So Flagler County taxpayers may be paying for jobs for people who live outside Flagler County.
Jane Gentile-Youd says
What happened to government in the sunshine and advertised bids for incentive funds?
Huh – we don’t know about that in Flagler County .. land of ” it’s your money, not ours, who cares?”
I hope I am still around when these 50 jobs for $50 thousand a year happen but I am not holding my breath…
Percy's mother says
Van Eckert said the average wage for the jobs would be $50,000.00 a year.
Is that $50,000.00 PLUS BENEFITS?
or
Is that $50,000.00 INCLUDING BENEFITS?
There’s a big difference.
Since benefits average out to 30% to 35% give/take, if the $50,000 van Eckert has quoted INCLUDES benefits, that computes to $35,000.00 a year . . . or $673 a week before taxes.
Sooooo . . . when van Eckert says $50,000.00 jobs, which is it? Including benefits or not including benefits?
Am I the only one who has thought to ask this question?
How much can a furniture assembly person garner in the workforce since its really unskilled labor? The spin sounds great though.
As an aside, announcement was made today that IKEA is moving its furniture assembly OUT of the USA and over to Europe. The article can be found in the business section of any news publication. Something to think about when trying to attract a furniture assembly plant to this county.
FlaglerLive says
We should have included that detail in the story: the $50,000 was said to be straight wages, not including benefits.
gmath55 says
I’m holding out for FREE car and FREE house. You know the FREE NEW DEAL! Yahoooooo
Willy Boy says
Houz’ aboot a tax break for the taxpayers.
wow says
I really don’t get why anyone would write such open-ended contracts. No guarantees of jobs, no assurance of local employees, no information about they come up with the “average” 50K salaries, but oh well here’s your 680K. Who does that? I can’t imagine this is how good business gets done. Reminds me of the similar handout to the business that was going to develop something wonderful at the airport – which didn’t happen either. Really poor way to manage money.
Another Fiasco says
So most of the “elements” of the “package” remain “hidden”.
And the average salary is $50,000.
But this includes “executive” pay.
Another smoke and mirrors ploy.
If you want decent paying jobs here, on which people can raise a family, put some pressure on firms such as Coastal Cloud who benefit from no bid contract(s) with the City of Palm Coast, to sponsor local hires to obtain Salesforce Certification.
Bottom line is that subsidizing $9-$12 per hour jobs is not what the local Government should be promoting.
I saw this “here today, gone tomorrow” scenario play out numerous times in Sarasota County.
Btw, here is another consideration.
What will happen if a Federal Minimum Wage of $15 is introduced?
At that point, over to China it will go.
Just Wondering says
I wonder if they couldn’t buy the old Sea Ray plant for about half of what they are planning to spend on a new place. Water, Electric, Sewer and zoning all in place. It’s about 250,000 sq ft setting empty. They could move in and start producing now.
Agkistrodon says
I’m thinking it might be time for those Bamjo’s…………..
Concerned Citizen says
About the only way we hear of things anymore is from our local media.
Our BOCC along with other important people in this county hand out bribe money like it’s candy. Last time bribe money was handed out on this scale it was between Palm Coast and Palm Coast data. And look how that turned out. Palm Coast Data owes the city money from that deal to this day.
Our BOCC and other County/City officials CANNOT be trusted with our money. Between bribes to special interests and shady real estate deals they have no busniess in the list goes on and on.
Sunshine Laws? Ha!!
I seem to remember this Comission going after Kimberly Weeks for recording folks. She inded up being convicted of a felony in basically a witch hunt. Why is our Comiision and other leaders so dirthly afraid of permanent records? Why? I will tell you.
This current regime in our county does not know how to act ethically or morally. That went out a long time ago. Now it’s about how much can I screw the citizens of this county out of. How muc can I line my pockets with.
From Jerry Cameron who had money issues in St. Johns then slinked his way down here to Joe Mullins trying to get an “inside deal” with a hospital from his brother the list grows and stinks. How many dollars was wasted on Bings Landing? Then along comes The Sheriff and his Operations fiasco along with renting more space. You just can’t make this stuff up!!
That was just on the county level. Look at what the city has going on!!
Folks we have eelctions coming up in 2020. If we aren’t going to hold these folks liable then let’s vote them out. Time for the old guard to go and to have new people who we can make responsible.
MAGA BoY says
Palm coast great again!!
Mark says
Does this mean that we can now get library chairs that cost less than $800 each?
Jane Gentile-Youd says
Where were you all Monday night? Only one person asked the Commissioners to vote NO…to this ‘deal’ made in the ‘shade’.
Ya gotta live within a 50 mile radius to be hired: W
Wow – wee – includes Putnam, St. John’s as well as Volusia County and even almost borders Brevard from the southern most section of Flagler County ( bordering Hunter’s Ridge..) Might even include Marion county also – who knows? who cares?