Tampa City Council approves incentives to keep finance firm from moving jobs

TAMPA — In an unusual vote, Tampa City Council members Thursday joined a city-county partnership aimed at keeping an international financial services firm from moving jobs out of town.

With the vote, the city and the county have agreed to offer a total of $1.2 million to the yet-to-be-identified company, which says 1,633 local jobs are at risk.

The city's contribution would total $610,000 — $550,000 approved Thursday to entice the company to stay, plus $60,000 approved in June as an incentive for the firm to create 200 more jobs.

The vote was unanimous, but council member Mary Mulhern did not like that the company's name was being kept secret under an exemption to Florida's public records law.

"It's a fine line we walk because we are in a situation where our revenues are dropping," she said, and "we have a lot of people who need help."

So when a global firm asks for money, the council "ought to know who we're dealing with," Mulhern said.

On Tuesday, Hillsborough County commissioners agreed to chip in their share of the $1.2 million. With an expected pledge of $800,000 from the state, the total value of public subsidies to the company could reach $2 million.

The state's business development laws allow state and local officials to negotiate public subsidies to businesses in secret, permitting them to withhold the identities of the companies involved until a deal is reached.

In exchange for the subsidies, the company is expected to spend $78 million on a new building with 225,000 to 250,000 square feet.

That could generate an estimated $154,000 a year in city property taxes. Moreover, the company would start paying property taxes before the city hands over its subsidy, officials said.

"This is an inducement to get a company to set down more roots and spend more money in our community, to build a new building from which we would benefit," said Bob McDonaugh, the city's acting economic development administrator.

As a condition of the deal, the city would not pay its share of the incentives until after the new building was constructed. The money would be paid out in six equal installments of $91,666 from 2017 to 2022.

Before the vote, Mulhern repeatedly asked for assurances that the city would not pay anything until the company fulfilled its promises.

"Will it be written into the agreement that that $78 million will have been spent before they receive their tax incentives?" Mulhern asked.

"Absolutely," McDonaugh said. "Yes."

"All $78 million will have been spent?" Mulhern asked.

"Invested in our community," McDonaugh said. "Correct."

County officials have said the use of taxpayer funds to keep an established company from leaving could be unprecedented, though McDonaugh said it may have happened in the city.

Offering tax incentives for a company to expand is more common. Under the incentives approved by the city and the county this spring, the new jobs are to have an average annual wage of at least $46,833. The first 75 are to be created by the end of next year.

While local officials have not identified the company, an application lists its "project location" as the West Shore business district.

Financial and professional service companies in Hillsborough County with 1,500 or more employees include J.P. Morgan Chase, Citi Group, PricewaterhouseCoopers, Progressive Insurance, USAA and MetLife, according to the state's Enterprise Florida website.

PricewaterhouseCoopers has a large presence in West Shore, though county records don't make clear whether the company seeking incentives is located there now. Meanwhile, USAA has faced a space crunch at its office complex in North Tampa due to hiring in recent months, forcing it to lease space elsewhere.

Background material from the county indicates the company is considering relocation options in South Carolina, India, Singapore and Argentina, which also come with subsidy offers and/or opportunities to reduce costs.

Council members approved the subsidy 5-0. Council Chairman Charlie Miranda was absent because of an illness. Mike Suarez is traveling.

• • •

In unrelated business Thursday, the City Council also voted to ask its attorney to investigate whether it has the authority to direct how money generated from new red-light cameras will be spent.

Under a contract approved in April, American Traffic Solutions of Scottsdale, Ariz., will install surveillance cameras at no fewer than 10 but maybe more than 20 intersections around the city.

Mayor Bob Buckhorn's administration estimates that the cameras will bring in $2 million a year in revenue, which it plans to use to help cover a $34.5 million shortfall in the 2011-12 budget.

During a budget workshop, several council members wanted to try to direct that money to the areas where the cameras will be placed.

"The least the city could do is go back and improve the intersections in the area — curbs, sidewalks, whatever needs to be done," council member Frank Reddick said.

Richard Danielson can be reached at Danielson@sptimes.com or (813) 226-3403.

Tampa City Council approves incentives to keep finance firm from moving jobs 07/21/11 [Last modified: Friday, July 22, 2011 12:59am]

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