St. Petersburg approves $240,000 tax break for Sam's Club

Published June 8, 2012

ST. PETERSBURG — The City Council rejected pleas from small business owners and voted Thursday to award the world's largest retailer a $240,000 tax reimbursement for cleaning up a site that could be polluted.

By a vote of 6-2, the council decided that Walmart, the corporate parent of the Sam's Club that is near completion at 34th Street and 17th Avenue N, should get the tax break.

"It's disingenuous on our part to negate the fact that (Walmart) is a successful company," said council member Bill Dudley. "They have a good business plan. Sam Walton had a great idea. To penalize them because they have gobs of money and they don't need it, that's baloney."

Dudley was joined by Jeff Danner, Charlie Gerdes, Jim Kennedy, Wengay Newton, and Council Chairwoman Leslie Curran in approving the tax break. It comes in the form of a state tax refund of up to $2,500 for each job created. Developers say the Sam's Club will create 120 jobs that pay an average of $20,000 and are full time, which, by the state's definition, would be at least 35 hours a week.

Council members Steve Kornell and Karl Nurse objected to the tax breaks, calling them harmful when state government is cutting back drastically.

"At a time when the state cuts $300 million from the higher education budget, this one is difficult," Kornell said.

Representatives for Walmart claimed that early last year they discovered pollution on the property that came from a nearby dry cleaner.

"We could have very easily dropped the project at that point, let it go, and let it remain a blight for the community," said Michael Goldstein, an attorney for the project. "We didn't run away, we walked toward the problem and rolled our sleeves up."

In Florida, the state can award tax breaks to companies that build in so-called brownfield areas, an official designation that means the land is so contaminated or perceived to be that tax incentives are needed to spur development.

It's up to local jurisdictions to designate the areas.

But it's not clear if the 14-acre site, which had previously hosted a Home Depot and an Office Depot, is polluted. The Florida Department of Environmental Protection is reviewing a test done by site developers to determine if the pollution has reached dangerous levels.

Nurse said he thinks Walmart's claim of contamination is a ruse. He pointed out that Walmart's own representatives wrote the Florida Department of Environmental Protection in June 2011 stating that there was no soil contamination and only "very minor levels of dry cleaning solvent" on the property.

Goldstein said that letter was written before a second test showed higher levels of pollutants. State officials are reviewing the second test and have yet to determine if the pollution exceeds acceptable levels.

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The City Council decided it didn't need to wait for those results.

"We are getting something out of this," said Danner. "We're getting some good development."

Walmart has repeatedly sought brownfield credits for its stores. According to an April report by Integrity Florida, a nonpartisan research institute in Tallahassee, Walmart has been awarded $18 million in state incentives since 2000, mostly for building on these less-than-ideal sites.

Four years ago, St. Petersburg's City Council expanded an existing brownfield area to include a Walmart Supercenter one-fifth of a mile away on 34th Street. State officials say Walmart is due for a $312,000 refund this year for that.

Several representatives for small businesses and community groups argued Thursday that the incentives sacrificed government funding for libraries, youth programs and elderly care for corporate profits.

"This $240,000 is a pittance to Walmart, they make that in a half-hour," said Lenny Flank of Occupy St. Pete. "To Florida, it means a lot."

"We'd rather see this money create jobs for small businesses," said Jim Grinaker, an attorney who is a member of Keep St. Pete Local. "When you support local businesses, the money stays in the community."

But Mayor Bill Foster, who supported the project, said it would send the wrong signal to other developers if the city didn't approve the tax break.

"We want the sign on our gateway sign to say, 'St. Pete, we're open for business,' " said Foster. "We want this to be an environment where it's easy to do business. We don't want to send the wrong message that you are entitled to a state benefit, but we will stand in your way, we will be the impediment."