Sarasota County leaders defend economic incentives program
SARASOTA — County leaders are standing by their economic development incentive programs this week as a formal review of potential improvements to those incentives starts this fall.
The Sarasota County Commission raised questions this summer about its programs and whether they need review after voting down a high-profile incentives package code-named "Project Mulligan" amid fierce backlash from local businesses.
The debate over the project to lure the headquarters of a national roofing firm — later revealed to be North American Roofing, which recently announced it is moving to Tampa instead — highlighted the tug-of-war between using incentives to encourage growth and the perception that they unfairly benefit potential competitors to local companies.
County commissioners have since suggested an evaluation of the kinds of specific industries those incentives should target, what other Florida counties practice and whether those inform certain updates to Sarasota's existing programs.
The commission unanimously agreed Wednesday to direct county staff and the Economic Development Corp. of Sarasota County to review those issues and make recommendations back to the commission, but stressed they still support the use of incentives.
"This has been a really highly successful program when you look back on its history," Commissioner Carolyn Mason said. "We had some hiccups in the beginning, but each hiccup we found the antacid to give us the relief that we needed to heal. We tweaked the process and made it better each time."
Since the county began offering incentives in 2010, the commission has approved almost $5.5 million in grants and tax incentives for job creation, according to the county's Office of Business and Economic Development.
That funding is doled out through two programs, one run by the EDC and the other by the county, that are used in tandem to reward eligible companies based on the jobs they create with above-average annual salaries. Those funds are also often matched by state economic development tax refunds.
More than 35 companies have taken advantage of the incentives to expand in or relocate to Sarasota County to create more than 2,000 jobs, according to their agreements.
So-called "hiccups" have rocked the programs, though, and hundreds of thousands of those incentives were either never paid out, have been paid back or are set to be paid back. The most high-profile fallout from the early use of the programs came to a close last month when the now-defunct Sanborn Studios film production company agreed to pay back $350,064 to the county for failing to meet its obligations to a 2010 economic development package.
The county now institutes particular "clawback" provisions — the "antacid" Mason referenced — to take money spent on economic development projects that don't deliver on agreed upon goals and economic developer leaders do not cut checks upfront for incentives, county economic development director Jeff Maultsby and EDC CEO Mark Huey have said.
With those procedures in place, county commissioners agreed they support the programs. Blemishes from past projects or the "Project Mulligan" debate this are outweighed by small successes and celebrated achievements, like the Innovation Station of Sarasota County and relocated freight brokerage firm Total Quality Logistics, they said.
“To get a seat at the table you have to have these (incentives), in many cases just to even start a conversation, and we’ve been able to do that," Commissioner Christine Robinson said.
The most important improvement to make to the incentives programs is how they are communicated and viewed in the hyper-competitive battle to attract businesses, Commissioner Charles Hines said. Sarasota is in such an economic position that it does not have to take every possible deal it considers and can instead focus on very particular industries or projects, he said.
"Being (among) middle-sized counties that have sometimes different interests makes it harder for these" projects, Hines said. "Talk about the targeted industries we need and that we’re going to focus on. If we don’t get every single one every year, I think I’m OK with that."