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  1. Florida Politics

Florida lawmakers show little desire to keep a familiar development tool — enterprise zones

Published Apr. 16, 2015

Roberto Torres didn't know about Florida's enterprise zone program when he decided to open a clothing boutique and coffee shop in Ybor City, but he was pleasantly surprised when he found out about it.

The Blind Tiger Cafe, which opened last year on E Seventh Avenue, sits in Tampa's enterprise zone, making the business eligible for sales tax credits on equipment purchases and wages paid to workers who live in the zone, among other incentives. Torres used the tax credits he received on $15,000 worth of equipment for a deposit on a new refrigerator, and expects to receive credit for the wages of two baristas for up to two years.

"That money gives us the flexibility to save a little bit for repairs and improvements, and we could potentially hire another employee," Torres said. "We've been banking on that."

But Florida's enterprise zone program, which offers state and local incentives to entice businesses to set up or expand in poor and blighted areas, is in jeopardy. The program sunsets on Dec. 31, and a Senate bill that would extend it is stalled with less than two weeks left in the legislative session.

Groups such as the Florida Association of Counties and the Florida League of Cities say the program's demise would hurt local redevelopment efforts and are lobbying to extend the program and make it more effective. In the Tampa Bay area, economic development officials say the loss would stunt progress made in St. Petersburg, Tampa, southern Hillsborough County and Brooksville.

"It's one of our greatest tools for the revitalization of the most economically depressed areas of our community," said Lindsey Kimball, Hillsborough's economic development director.

Florida started its enterprise zone program in 1982. There are now 65 rural and urban zones in 52 counties, including two in Pinellas, two in Hillsborough and one in Hernando. In 2014, the state awarded nearly $15.8 million in incentives to 1,497 businesses and individuals.

The lack of motivation among some lawmakers to extend the program stems largely from two state reports that suggest the zones have had mixed results.

A study by the Legislature's Office of Program Policy Analysis and Government Accountability found that seven zones it surveyed "generally underperformed" when compared with a decade's worth of data on property values, household income and unemployment and poverty rates in similar nonzone areas.

An analysis of 40 zones by the Legislature's Office of Economic and Demographic Research concluded the program produces a negative return on the state's investment because it mostly shifts economic activity instead of creating it.

The reports don't offer a complete accounting of the zones' economic and social benefits, said Sen. Jeff Clemens, D-Lake Worth. Clemens' bill to extend the program for 10 years with some revisions has yet to be heard by its first assigned committee, the Commerce and Tourism panel chaired by Sen. Nancy Detert, R-Venice.

Detert, who did not return messages, has cited the reports in criticizing the program.

The pro-business group Florida TaxWatch recommends extending the program with several changes, including a periodic recertification to show a zone is effective or still needed.

A House measure, HB 7067, would allow for a "local enterprise zone program" but does not provide state incentives. Rep. Ed Narain, a Tampa Democrat whose district includes a portion of the Hillsborough zone, voted against the bill in committee this week, saying it puts the entire burden on local governments.

St. Petersburg's zone deserves credit for redevelopment progress downtown and in Midtown, said Sophia Sorolis, the city's economic development manager. Since 2006, the zone's incentives have created about 700 jobs and about $8 million in credits and refunds, according to city data.

Hillsborough's zones cover downtown Tampa, the University area, a stretch of the 56th Street corridor and sections of Palm River, Riverview and Gibsonton. Since 2010, the program has created 106 jobs and provided nearly $248,000 worth of tax refunds for building materials and business equipment, county data show.

Brooksville's zone has made progress since its creation in 2002, and activity is picking up as the economy recovers, said city community development director Bill Geiger.

"If (lawmakers) want to create other types of economic programs to complement or augment it, great, but let's keep the tool in the toolbox as opposed to just throwing it in the can," Geiger said.

Contact Tony Marrero at tmarrero@tampabay.com or (727) 893-8779. Follow @tmarrerotimes.