Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

St. Petersburg council approves tax breaks to lure company

ST. PETERSBURG — If a tax break worth more than $1 million works, then a financial services company will move to St. Petersburg and create 350 jobs by the end of 2015.

Even better, the company's annual payroll of $16 million would be a windfall for the city.

Council members voted unanimously Thursday with little discussion to approve the incentive for an unnamed firm that plans to pay an average salary of $46,428, with an additional $12,000 in average benefits. The company is expected to move into existing office space but spend $724,000 on renovations.

In exchange, the city and Pinellas County would each have to refund $105,000 in taxes. The state would cover the rest, translating into a $3,000 tax break for each job created.

If history is any guide, however, the tax breaks will do little to lure the company to St. Petersburg, and those jobs won't materialize.

Since 1996, St. Petersburg has offered the Qualitative Tax Incentive program, which refunds an assortment of taxes — corporate income, sales, ad valorem, intangible personal property, insurance premiums — for companies that create high-wage jobs in industries such as technology and finance.

Of the $1.8 million in city tax refunds that companies relocating to St. Petersburg have qualified for, only $685,600 has been paid — less than 38 percent. If one includes refunds the state later paid the city because companies often didn't meet their obligations, the city only paid 23 percent of the incentives.

Since the 2008 economic downturn, it's been even worse. The last four projects offered the incentives never materialized.

Last year, Florida, Pinellas and St. Petersburg approved $1 million in incentives to a "global conglomerate" that was to move its information technology department to the city. That company has since pulled the plug on the project, said Sophia Sorolis, city economic development manager.

In 2010, a green technology company that specialized in air conditioning and heating was approved for nearly $3 million in refunds to create 350 jobs. That project, too, is defunct, because the company, Cool Sound Industries Inc., couldn't get the funding to develop the technology.

"So it went south," said Mario Faras, who lobbied for Cool Sound. "They're regrouping. But if the incentives aren't there, they'll go somewhere else. We're competing against cities that are offering a lot."

Also in 2010, council members approved a refund of $1.8 million for human resources outsourcing company Ceridian Corp. That didn't go anywhere, either.

Neither did a management services company called Back of the House that was to create 100 jobs with incentives approved in 2009. "We're getting a lot of goose eggs," Sorolis said.

Sorolis said that in a bad economy, companies have greater leverage to play cities off one another. That has set off an arms race among cities to cut taxes in a process designed to favor corporations. For instance, under Florida law, the name of the company negotiating the tax breaks is confidential, allowing it to talk with other competing cities in secret.

Just last year, St. Petersburg voters approved a property tax break for companies that expand or relocate. The reason council members put it on the ballot? Other cities, like Sarasota and Tampa, offered it.

Council members say there's no harm in the incentives because companies don't get any breaks if they don't create jobs.

"So they have to create the jobs first," council member Karl Nurse said. "I'm pretty comfortable with that."

St. Petersburg council approves tax breaks to lure company 05/03/12 [Last modified: Thursday, May 3, 2012 10:25pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Told not to look, Donald Trump looks at the solar eclipse

    National

    Of course he looked.

    Monday's solar eclipse — life-giving, eye-threatening, ostensibly apolitical — summoned the nation's First Viewer to the Truman Balcony of the White House around 2:38 p.m. Eastern time.

    The executive metaphor came quickly.

    President Donald Trump and first lady Melania Trump view the solar eclipse from the Truman balcony of the White House, in Washington, Aug. 21, 2017. [Al Drago | New York Times]
  2. Secret Service says it will run out of money to protect Trump and his family Sept. 30

    National

    WASHINGTON — The Secret Service said Monday that it has enough money to cover the cost of protecting President Donald Trump and his family through the end of September, but after that the agency will hit a federally mandated cap on salaries and overtime unless Congress intervenes.

    Secret service agents walk with President Donald Trump after a ceremony to welcome the 2016 NCAA Football National Champions the Clemson Tigers on the South Lawn of the White House on June 12, 2017. [Olivier Douliery | Sipa USA via TNS]
  3. After fraught debate, Trump to disclose new Afghanistan plan

    War

    WASHINGTON — President Donald Trump will unveil his updated Afghanistan policy Monday night in a rare, prime-time address to a nation that broadly shares his pessimism about American involvement in the 16-year conflict. Although he may send a few thousand more troops, there are no signs of a major shift in …

    U.S. soldiers patrol the perimeter of a weapons cache near the U.S. military base in Bagram, Afghanistan in 2003. Sixteen years of U.S. warfare in Afghanistan have left the insurgents as strong as ever and the nation's future precarious. Facing a quagmire, President Donald Trump on Monday will outline his strategy for a country that has historically snared great powers and defied easy solutions.  [Associated Press (2003)]
  4. Trial begins for man accused of threatening to kill Tampa federal judge

    Criminal

    TAMPA — Jason Jerome Springer was in jail awaiting trial on a firearms charge when he heard inmates talking about a case that had made the news.

    His attorney said Jason Jerome Springer, 39, just talked, and there was “no true threat.”


  5. Editorial: Tampa Electric customers should not pay for utility's fatal misjudgments

    Editorials

    There will be financial fallout from the terrible miscalculations that resulted in five workers being killed in June at Tampa Electric's Big Bend Power Station. State and federal regulators should ensure those costs are borne by the company's shareholders, not its customers. Monetary considerations will not begin to …

    LUIS SANTANA   |   Times
There will be financial fallout from the terrible miscalculations that resulted in five workers being killed in June at Tampa Electric's Big Bend Power Station. State and federal regulators should ensure those costs are borne by the company's shareholders, not its customers.