07/15/2011

With its future to be determined, the Jacksonville Economic Development Commission Thursday approved proposals that would create 205 jobs in the next five years in exchange for significant contributions from the state and smaller concessions from the City.

The commission approved a request from Medtronic Xomed Inc. for a Qualified Target Industry Tax Refund of $5,000 per job with a QTI High-Impact Sector bonus of $2,000 per job.

The total value of the QTI incentive at $7,000 per job is $1,225,000, with the City’s portion equal to $245,000.

Also part of the proposal is a Recaptured Enhanced Value Grant equal to $415,000. The grant represents 50 percent of the ad valorem tax liability that would be due on the capital improvements proposed by Medtronic, including construction of a 75,000-square-foot building on land in Southpoint already owned by Medtronic.

Cost of construction is estimated at $14.1 million.

In addition, the state proposes to provide Quick Response Training at the level of $1,500 per job totaling $262,500 and Governor’s Quick Action Closing fund support in the amount of $630,000.

Medtronic proposes to create 175 new, full-time jobs by Dec. 31, 2015.

At an average wage of about $80,000 plus an employee benefits package valued at $18,000, the jobs represent an annual payroll of about $17 million. The state average annual wage is $39,856.

The company is considering whether to expand its operation in Jacksonville or at its facility in Fort Worth, Texas.

The Texas expansion could be accomplished for $1.4 million less than in Jacksonville, according to company officials.

JEDC Business Recruitment and Retention Coordinator Joe Whitaker told the commission the REV grant proposal waives the City’s existing public investment policy, but only slightly.

Based on a metric evaluation, the Medtronic proposal earned a score of 52 while the policy mandates a score of 57 to approve the grant.

Whitaker said the evaluation was developed several years ago when local unemployment was below 5 percent, property values were consistently increasing and banks were lending money.

He said part of the metric involves promoting development in distressed areas of the county and, “Southpoint is not very distressed.”

State Rep. Mia Jones, appointed by Mayor Alvin Brown to direct the City’s boards, commissions and economic development, attended the meeting.

She asked how often the JEDC has waived the requirements for a REV grant.

“Never,” said Whitaker.

JEDC Executive Director Ron Barton said the evaluation process was “developed in a great economy.”

“We have to adapt to the economy and the competition,” said Barton.

“This is about retention,” he said. “We feel it justifies the waiver request.”

JEDC Chair Zimmermann Boulos said he didn’t remember many instances when Jacksonville was supported by a contribution from the state at the level of the Medtronic proposal.

“It’s unusual. It’s not typical,” said Barton.

Medtronic manufactures medical equipment and devices. It has 40,000 employees worldwide and global sales of more than $15 billion, including $1 billion in sales of products manufactured in Jacksonville’s Xomed division, where the company employs 600 people.

“This is exactly the kind of industry we need to be aggressively recruiting to Jacksonville,” said Commissioner Helen Rowan.

The commission also heard a proposal from KCI Aviation. The company is based in Bridgeport, W.Va., and repairs engines and components for business and military aircraft, specializing in the Gulfstream G200 and Cessna Citation.

The company plans to expand to the Southeast and proposes to lease 30,000 square feet of hangar and office space that the Jacksonville Aviation Authority would construct at Cecil Airport at an estimated $5.6 million.

The expansion would create 30 jobs at 115 percent of the state average salary in exchange for a $3,000-per-job QTI refund and a $2,500-per-job Brownfield credit for a total of $5,500 per job.

The state’s 80 percent contribution would be $132,000 with the City contributing 20 percent, or $33,000.

The commission unanimously approved KCI’s proposal.

Both proposals will now be considered by City Council for approval and appropriation.

An item that’s always on the agenda is a report from the executive director.

Before the presentation, Boulos reminded commissioners that Brown and Jones are still evaluating the JEDC’s role in the city’s economic development program.

“There’s no sense asking questions that can’t be answered,” said Boulos.

Barton then recapped the proposal approved by Council to assist EverBank in moving 1,200 employees from a suburban office park to Class A space Downtown and a separate proposal to build a parking garage adjacent to the SunTrust Building, which is still in committee,

The next meeting of the JEDC is scheduled at 9 a.m. Aug. 11 in the mayor’s large conference room at City Hall.

mmarbut@baileypub.com, 356-2466

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