CLEARWATER — For the first time in six years, a business is looking to move downtown with the help of state tax refunds encouraging high-wage jobs.
For pledging 50 new jobs, the company could earn a refund of $8,500 per job, totaling nearly half a million dollars. The city would cover 10 percent of that refund, paid out by 2018.
Yet we can't know who's leading the business, what it's called or where exactly it's planning to move. In fact, the few details we know from city officials are that the company is coming from out of state and is "relatively new."
Welcome to the weird world of tax incentives, where the hunger for new business leads to promises of public funds.
Economic development officials say the tax breaks give Florida the push it needs to lure good jobs. But sometimes after the money is paid, the jobs never arrive.
City economic development director Geri Campo Lopez stressed that the refunds are performance-based: The pledged jobs must stay filled for four years or the refunds are withdrawn.
A company representative pledged he would hire 25 employees for computer systems design, 15 for marketing and consulting, and 10 for management in his new corporate headquarters downtown. To count for the refund, each job would have to pay more than $46,000 a year.
Clearwater has been the home of 217 promised jobs in recent years due to the state's Qualified Target Industry Tax Refund. Publix, boat dealer MarineMax and eye-care company Bausch & Lomb have all gotten incentives.
The state allows applicants to remain anonymous, and the company representative looking here is also considering other states.
Moving to downtown Clearwater, though, would give quite a healthy tax break, some of which could come from the city's taxpayer-based general fund. The standard $3,000 per job would be nearly tripled, Lopez said, because downtown is considered both an environmentally contaminated "brownfield" area and an "Enterprise Zone" for future development.
The tax incentives, Lopez said, could lead to more than just good jobs in a downtown visibly lacking good jobs. An economic impact model shows the business could bring in $5.4 million locally over the next few years, with $350,000 spent on equipment and $175,000 on construction and renovation.
Mayor George Cretekos cheered the application, saying the tax refund could incentivize industries that would help Clearwater expand beyond tourism, the city's main moneymaker.
"We need to try to diversify our economy," Cretekos said. "Programs like this will enable us to do that."
The City Council could vote to endorse the application tonight. Later this month, the application will go to the county, which would cover 10 percent of the refund, before being returned to state officials.
Florida's Qualified Target Industry Tax Refund was criticized in a report earlier this year by Good Jobs First, a nonprofit studying state tax incentives, for failing to penalize businesses that didn't meet goals for new jobs.
A report last year by the Times/Herald Tallahassee bureau found the state had signed off on $1.7 billion in tax breaks since 1995 for promises of 225,000 new jobs. Though the state paid 43 percent of the contracts, only a third of the jobs had been filled.
Data from Good Jobs First show that companies in Pinellas County have won nearly $90 million in tax breaks since 1995, a third of which came through the high-wage jobs program. The county's nearly 14,000 promised jobs cost the state more than $6,000 each.
Contact Drew Harwell at (727) 445-4170 or email@example.com. Send letters to the editor at tampabay.com/letters.