Failed Incentive a First

Guest Correspondence

When plans to lure North American Roofing to the Gulf Coast got shot down, it marked a historic moment for economic development on the Gulf Coast. An incentives package negotiated by state and county officials was, for the first time ever, shot down by Sarasota County Commissioners.

To consultants representing the firm in question, this showed that pols here were not “serious about economic development.” If so, that’s a new and unfortunate development. Dozens of companies large and small have accepted incentives to expand in or relocate to Sarasota County, and while that occasionally blows up in the county’s face (Sanborn Studios, anyone?), the incentives program has directly led to thousands of jobs being created in the region, diversifying the economy to make us more recession-proof. Some companies receiving incentives, like Tervis and PGT Industries, were already here and needed an economic jolt of tax relief to ignite major facility and workforce expansions. Others, like Ohio-based Total Quality Logistics, wanted to bring local offices into this region and negotiated incentives to do so. Economic development officials never want incentives to be the only reason a company moves here, but without them many firms won’t consider this region at all.

Jeff Maultsby, Sarasota County’s economic development director, says his staff always knows the vote might not go in favor of incentives, but up until now it always has. So what happened Tuesday? While incentives have always been controversial in certain parts, they generally irritate only ideologues. Libertarian-leaning folks in this area oppose on principle whenever government gives one firm a boost. Occasionally, a direct competitor expresses irritation the county would let a new swimwear company get a break on taxes when an existing beachy business never needed a break to profit on a bikini. Most constituents, though, have supported incentives. Sarasota County voters in 2010 voted by a 67-33 margin in favor of an ad valorem tax to fund incentives, knowing the return in new jobs would make up for a slight hike.

But this deal irritated too many local employers. Development still dominates here, and roofers report a workforce shortage already. Never mind that North American planned only corporate jobs, and even offered a covenant not to recruit out of local firms or bid for local jobs—two things the national firm is still free to do now the deal is dead. It’s more than that, though. Incentives always served to diversify the economy. Enterprise Florida officials won’t typically go after industries like retail and construction. But they make an exception for corporate headquarters. To translate, there’s no reason to offer incentives to a new Motel 6 near a Turnpike exit, but if the Hyatt corporation wants its international headquarters here, the state will woo—and the county’s policies largely mirror those of the state.

If county officials made clear in advance that a company doing contractor work like roofing would never be considered for incentives, corporate headquarters or no, then maybe lengthy negotiations and the combative situation last week could have been averted. The result was the same though: 180 jobs paying above-average wages likely won't come here (unless commissioners reverse this vote; still a small possibility). Economic development officials now plan to reexamine policies and avoid repeating the calamity of last week. Maybe parameters on what companies qualify for incentives today are too subjective.

But does this community still want more high-paying jobs? Does it still want an economy less dependent on migration patterns and retirement trends? If voters still feel this way, county commissioners must not limit incentives to the point where they serve no purpose at all.

Jacob Ogles is contributing senior editor for SRQ Media Group.

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