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Largo leaders learn from Nielsen's jilting of Oldsmar

In print: Sunday, June 8, 2008

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Most Largo commissioners probably were eager Tuesday to approve a tax incentive plan to lure the headquarters of an unnamed "international manufacturer" to the city, especially after finding egg on their faces last year after refusing to give incentives to a different company that went to California instead.

But in the interim, commissioners had seen all the recent publicity about the Nielsen Co. in Oldsmar laying off local workers and hiring contract workers from India after years of receiving tax incentives from the state, county and city of Oldsmar to create new jobs.

So commissioners asked a few questions before voting Tuesday, but those questions should be just a start. As Oldsmar officials learned too late, there is no guarantee that jobs will remain indefinitely, no matter how much money government dangles out there to lure a new employer.

The Largo commission voted 4 to 1 to give a tax rebate of $56,700 to the company, referred to only as "Project 0508-08" because it requested confidentiality as permitted under state law. According to a city document, "Project 0508-08 is an existing international manufacturer that is proposing to relocate its U.S. headquarters and expand its other aircraft parts and auxiliary equipment manufacturing positions into a facility located in the City of Largo."

Teresa Brydon, Largo's economic development manager, said the company promises to create 189 new full-time jobs over the next six years with an average salary of $41,799. The company will move into an existing 160,000-square-foot building and spend $9-million to equip the business, generating $38,482 in tangible personal property tax revenues each year for Largo, she said.

The company wants to participate in the state's Qualified Target Industry (QTI) tax refund program, which was designed to lure or keep employers that will create new, high-paying jobs. The incentive offered to Project 0508-08 is $3,000 per new job created, for a total of $567,000. The state will pay 80 percent of that amount and Largo and Pinellas County will each pay 10 percent. The city's contribution of $56,700 would be paid over six years.

Commissioner Robert Murray asked what guarantee the city has that the company will hire local or even Florida residents and not contract for workers from somewhere else.

Brydon answered that the company is locating in Largo because the labor force it needs is here, but she acknowledged that the city cannot control where the company gets its workers.

Commissioner Gigi Arntzen asked who monitors the company to make sure it keeps the jobs it creates.

The program requires that the company report the number of jobs created to a state agency before receiving its annual tax rebate. The state does the monitoring, Brydon said, but will ask the city for feedback about how things are going with the employer.

"I would imagine that the city of Oldsmar is giving some feedback to the state right now," Mayor Pat Gerard said.

The City Commission's vote Tuesday was the first of two. The second vote is scheduled for June 17.

It is good that the controversy over Nielsen's outsourcing of jobs has made public officials ask more questions about incentive programs. Largo officials might want to ask for more detail about how the state confirms that jobs have been created, and read a copy of the state's contract with Project 0508-08 to make sure they have full understanding of the program before taking their final vote.