TAMPA — The scent of flame retardant hangs where it once smelled like fresh popcorn, and the sounds of power tools and shouting construction workers have replaced the explosions of the summer blockbusters.
Soon, more than 100 employees will be supporting Ashley Furniture’s e-commerce operations in the new workspace that replaces 10 vacant Carmike Cinemas theaters in Centro Ybor.
The Ashley headquarters is one of more than 20 major job-producing relocations or expansions of businesses announced in the past year in Tampa and Hillsborough. Add another 30 from the previous year.
Johnson & Johnson, a new shared-services headquarters, 500 jobs. Accusoft, expansion of the imaging software developer’s Tampa headquarters, 125 jobs. Amazon.com, two new mega-distribution centers, 4,000 jobs. Tampa Tank/Florida Structural Steel, expansion of its Port Tampa Bay facility, 108 jobs.
The area’s economic development officials are on a roll.
“So many things are going right,” said Rick Homans, president and chief executive of the Tampa Hillsborough Economic Development Corp. “The visibility of the community through projects like the Vinik-Gates project. The Stanley Cup. The RNC (Republican National Convention). Bollywood.
“Those are all things that kind of elevate the community,” Homans said. “The political leadership working together, the regional leadership working together. The economy picking up is huge. It’s a tailwind. Companies are expanding. They’re actually making decisions; they’re not pulling back. ... You put all those pieces together and it creates a lot of momentum.”
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The Tampa Hillsborough EDC says its recruitment, retention and other assistance projects completed in the past year will bring 3,270 targeted high-paying jobs to the area. The figure was 4,500 the year before that and 4,100 the year before that.
Meanwhile, Tampa Bay Lightning owner Jeff Vinik, backed by Microsoft founder Bill Gates’ Cascade Investment LLC, has announced plans for a $1 billion 10-year remake of the 40 acres he owns or controls around Amalie Arena. That could add 6,700 jobs to the area with an average wage of $78,000.
Port Tampa Bay has unveiled a long-range $1.7 billion plan in the area north of The Florida Aquarium that would include 9 million square feet of mixed-use development.
The EDC partners with Enterprise Florida, a division of the state Department of Economic Opportunity, and local governments to attract businesses and retain jobs.
“Economic development efforts last fiscal year alone will create more than 33,000 total jobs and generate more than $2.74 billion in capital investment,” said Enterprise Florida spokesman Stephen Lawson. “Enterprise Florida, in conjunction with our local partners, has been instrumental in bringing a number of great companies to the Tampa Bay area over the last few years. ... Florida’s great business climate, robust infrastructure and advanced workforce all contribute to Tampa’s success.”
In all the talk about new jobs, it’s that capital investment figure that often is overlooked. When companies move, establish an office or expand existing space, the accompanying construction and infrastructure improvements can pump millions into the local economy.
At Ashley Furniture’s e-commerce headquarters, for example, the company is spending $16 million to turn the former theaters into an airy, millennial-friendly 73,000-square-foot workplace.
New and expanding companies that worked with the EDC in its most recent fiscal year planned to spend $121 million in the area. That figure was driven by a $23.5 million investment planned by Johnson & Johnson and $18.3 million to be invested at Tampa Tank/Florida Structural Steel at the Tampa port.
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Enterprise Florida itself acknowledges in its annual report that the economic development process “is dynamic, involving many different groups and complex decisions.”
Local boosters tout the cost of real estate, the availability of a skilled workforce, infrastructure, the education system, Florida’s business-friendly climate and the lack of a state income tax.
Homans said the EDC’s ace in the hole is building relationships with personnel of companies casting about for a move.
“A lot of it is very personal contact,” he said. “It’s bringing people together so when a company is looking at the market, they might come in for a site visit and, over a day or two days, we will set up a very rigorous itinerary for them.”
And then there is the money.
Enterprise Florida and local governments have millions at their disposal to sweeten the pot to get companies to come to the state or their city. Economic incentives are standard tactics in the recruiter’s toolkit, although the strategy has drawn fire.
Florida incentives come in various forms, including tax credits, tax refunds, tax exemptions, infrastructure funding and cash grants paid directly to a qualified business.
In a typical agreement, a company would apply for tax refunds under the Qualified Target Industries program, the state’s most popular incentive. The business enters into a contract with the state, which includes a new job creation goal, a schedule for those jobs to be created and an average wage — the minimum is 115 percent of the prevailing average wage.
After the business has started hiring, it submits an annual claim form and documentation of taxes paid. The state verifies the information, and if the business has met its goal, a refund check is sent to the business.
The company could also receive a grant under the Quick Action Closing Fund, a deal-closing tool in highly competitive negotiations where traditional incentives are not enough to win the deal. Closing fund projects include a performance-based contract with the state, which outlines milestones that must be achieved for grant payment.
The Johnson & Johnson deal provided the company $6.4 million in benefits, $1.5 million from Hillsborough County and Tampa and an additional $4.9 million from the state. Tampa Tank got $2 million in incentives to expand at the port. The county agreed to road and infrastructure construction worth $6 million sought by Bass Pro Shops, the giant outdoor retailer that opened in July in Brandon.
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Economic development officials insist that incentives are linked to performance, but that hasn’t always happened.
In 2009, the state paid $20 million upfront to an entrepreneur who pledged to build a high-tech digital film studio in St. Lucie County and hire 500 people. Within three years, the company, Digital Domain, was bankrupt and shuttered. There have been other missteps.
Those types of economic incentives raise hackles on both the left and right sectors of the political spectrum. In 2013, the good-government watchdog Integrity Florida and conservative Koch brothers’ Americans for Prosperity teamed up to release a blistering attack on Enterprise Florida subtitled, “Economic Development or Corporate Welfare?”
Last week, former state Sen. Paula Dockery, a Republican from Lakeland, argued in a Tampa Tribune column that it would be more beneficial for Florida to invest in training, technology, equipment and research than to “bribe” corporations.
State lawmakers also have rebelled against unbridled corporate giveaways. Gov. Rick Scott wanted $84 million in the 2015-16 state budget for economic incentives; lawmakers provided $43 million. He sought $95 million the year before; lawmakers approved $71 million.
Economic development officials say they have cleaned up the process, including passage of a state law in 2013 adding oversight.
The strategy isn’t likely to go away. In 2012, The New York Times reported that Texas, which has an ongoing friendly rivalry with Florida over who creates more jobs, spends $19 billion a year on business incentives, more than any other state.
Homans, of the EDC, said if an area couldn’t offer the right facility or an adequate workforce, “if they look at the city and state and we didn’t have any incentive programs, then we might be out.”
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A 2013 audit of Florida’s policies concluded that the state paid an average of $3,320 in incentive payments per new job. The salaries vary widely, with 2015 agreements ranging from $44,250 to $86,000.
In May, Ashley Furnitureexecutives joined Tampa Mayor Bob Buckhorn, Hillsborough County Commission Chairwoman Sandy Murman, Homans and other officials at Centro Ybor for yet another news conference announcing a major corporate move. The Tampa site was in competition with six other locations for the e-commerce headquarters.
Ashley received $380,000 in incentives from the state and additional help from the city and county.
“Everybody was very excited to have Ashley Furniture locating a major part of the company here,” said Ken Jones, speaking on behalf of the retailer. “Ybor City is a perfect location for millennials and the younger employee set, particularly in digital. We couldn’t ask for better partners than the EDC, Enterprise Florida, Hillsborough and the city of Tampa. It’s been a real pleasure to work with everybody.”
After the series of announcements about corporate relocations and expansions, the area’s economic development officials aren’t resting on their laurels. The local Economic Development Corp. reports that it has 78 prospects in its 2015-16 pipeline.
The ultimate prize is being sought by local boosters including Vinik: a major corporate headquarters relocation to downtown Tampa.
Last month, Homans told Hillsborough commissioners that five Fortune 500 companies are considering relocating to Tampa. But don’t pop the champagne corks yet, he warned. That sort of recruitment is a laborious process, with Homans again citing his reliance on building relationships.
“When we go talk to a company, we might think that they could be a headquarters prospect,” he said. “But we’re not going to walk in the door and say, ‘Hey, how about moving your headquarters?’ We’re going to get to know them. We’re going to understand their business operations, because they might be in the process of making a decision about a distribution center, a shared-services operation, a divisional headquarters. We’re going to be talking about those, and at the same time, we’re going to be building a relationship that could build trust that could lead to a conversation about the headquarters.
“What it’s saying about our community is that we know we’re good enough for a global corporate headquarters, and that’s a big step, because it forces us then to create the marketing materials, to create the message that supports that belief,” Homans said. “And that’s new for us.”