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St. Petersburg backs Jabil Circuit in its bid to pay less in road fees

ST. PETERSBURG — Two years ago, electronics manufacturer Jabil Circuit was awarded more than $34 million in public subsidies to build an as-yet-undelivered world headquarters in St. Petersburg.

Today the St. Petersburg City Council is slated to give the stalled project another boost in a move that will allow the company to get out of paying $4 million for road improvements.

Florida's Department of Community Affairs, which currently has oversight of the project, says Jabil must pay $6 million for the project's impact on area roads or build the improvements itself, mostly on Gandy Boulevard.

Jabil argues it should pay only $1.85 million to add four turn lanes to accommodate its planned Gateway Centre, which includes 1 million square feet of office, light industrial and retail space on nearly 100 acres north of Gandy Boulevard.

The disparity in road funding was large enough that DCA officials warned St. Petersburg that they would object if the city approved the project, a rare move that would have forced a long round of appeals.

The City Council may sidestep the issue today by agreeing to reclassify the project and strip it of state oversight.

"I'm not going to hold up this development with Jabil for the widening of Gandy," said Mayor Bill Foster, who is recommending the council approve the deal. "Gandy is already under way, and there's no guarantee that the Jabil project will happen. When I review what Jabil is trying to accomplish, and the payback to the city, it makes sense to support this."

The maneuver is possible because of Senate Bill 360, which was passed last year and allowed dense counties like Pinellas to void state oversight of large projects.

"At the city's urging, we took advantage of the new law," said Jim Shimberg, a partner with the Holland & Knight law firm who represents Jabil. "The city is comfortable doing it this way, so it allows us to move forward on the project."

Reclassifying it as a project that requires only city approval will save time and provide some assurance to Jabil, said David Goodwin, the city's director of planning and economic development.

DCA's objections would have bogged down the project, he said.

"Those things can drag on for months," Goodwin said. "You don't know how they will turn out, and Jabil needs certainty."

What's not certain is what DCA had to say about the project. According to agency spokesman Jim Miller, no one kept any records on the project.

"Everything was done via conference call," Miller said. "We didn't need an official document."

But if nothing is written down, how can the public understand why an agency objected to a project that may get approved anyway?

"I don't have an answer for that," Miller said. Later, he called back to say that written records were not kept because the agency's position aligned with that of the Tampa Bay Regional Planning Council. The council reviews large projects for the state, and its report last year concluded that it would cost $6 million in road fixes to absorb Jabil's project.

St. Petersburg officials have long promoted the project as crucial to the city's economic growth, and they sided with Jabil's $1.85 million estimate.

The bulk of the gap is the planning council's conclusion that Jabil should pay $3.6 million to widen Gandy Boulevard between Grand Avenue and Interstate 275.

"Jabil says, and we agree with them, that they shouldn't be responsible for fixing a road that's already failed," Goodwin said.

But the planning council's project coordinator, John Meyer, said a failed road shouldn't usher in more development that doesn't pay its way. "Even if something is failing, it doesn't give you the grounds to make it worse," he said.

The city has embraced the project, even though officials are uncertain of Jabil's intentions.

"I don't know if Jabil is intending now to build or not," said council chairwoman Leslie Curran. "I'm hoping they can get it together and do that. It's in the city's best interest."

Curran was on the council in 2008 when Jabil threatened to leave Florida if it didn't get subsidies. It pushed for them secretly, using a state law that allows for confidentiality when negotiating incentives.

In June 2008, the City Council approved $12.7 million in incentives without public notice, discussion or mention of what it was voting on. That was followed by approvals for more incentives by Pinellas County and the Office of Tourism, Trade and Economic Development.

Taken together, the subsidies totaled more than $34 million. But to get them, Jabil needed to create 858 jobs with an average salary of $42,685 (although 85 percent of the jobs were in manufacturing and paid $30,000) and begin construction by the end of 2008.

Already, Jabil has received a one-time extension allowed by the original agreement. But expiration dates for many of the subsidies are rapidly approaching. If Jabil doesn't start building by Nov. 15, the state won't contribute $2 million for the Gandy Boulevard widening project.

Goodwin said the city could use that money, but said the widening project will now cost less — $6 million instead of $12 million — because of the recession.

If Jabil doesn't create 309 jobs by Dec. 31, it will lose $12.7 million more in incentives, according to the governor's Office of Tourism, Trade and Economic Development.

St. Petersburg officials say they don't know if Jabil is trying to secure another extension.

Jabil officials did not return phone calls seeking comment.

If anything, today's council vote was the latest nudge by government to get a struggling project to show signs of life. In September, the city will take a final vote on the project.

"We ask (Jabil) how things are going, and they're telling us they can't move forward," Goodwin said. "Certainly, they're in better shape to move forward when this development agreement is settled."

Michael Van Sickler can be reached at (727) 893-8037 or [email protected]

St. Petersburg backs Jabil Circuit in its bid to pay less in road fees 08/25/10 [Last modified: Wednesday, August 25, 2010 9:03pm]
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