Since 2013 fiscal year, only 16 jobs have been created by companies that received Sarasota County economic development incentives, commissioner says

Michael Moran continues quest to ensure taxpayers receive sufficient return on the county’s investment in the program

Commissioner Michael Moran. Photo courtesy Sarasota County

From the beginning of the 2013 fiscal year through late October, only 16 jobs had been created in Sarasota County as a result of economic development incentives provided to companies, according to figures Commissioner Michael Moran pulled from a recent report by the county’s Office of Business and Economic Development.

Yet, since the 2009 fiscal year, Moran told his colleagues on Oct. 31, the county has provided a total of $11,042,849 for the incentives program. The beginning balance was $16,446,000 for the same period, he continued; the remaining money in the account is $5,633,151.

Moran presented the figures after pulling an item from the Consent Agenda of routine business matters that day; it pertained to county film industry incentives. He had planned to bring up his calculations during board members’ reports later in the session, he said, but he asked Chair Paul Caragiulo if he could discuss the data in the context of the film incentives. “It’s semi-relevant,” he noted of his material. “I’m not comfortable moving forward on anything until we have clear, measurable goals,” when it comes to use of taxpayer money for incentives, Moran added.

After seeing no objection from another commissioner, Caragiulo replied, “I’m fine with it.”

“I have been very vocal,” Moran pointed out, in expressing concerns about the returns the county has realized for its investment through economic incentives. The board is working with staff to find funds other than $5.4 million from the county’s Economic Uncertainty Reserve to balance the county’s current fiscal year budget, Moran continued; therefore, the $5.6 million in the incentives fund takes on more importance. “What are we going to do with it?”

Additionally, he said of the economic incentives topic, “I hope this might be a deeper conversation for our December retreat.”

Moran proceeded to go through the details of the summary he had created. From 2010 through 2017, he noted, a total of 37 companies received economic incentive contracts. Nine of them created no jobs; one of them was responsible for about 45% of the total number of jobs, which was 2,908, he said. The average wage for all those employees was $26,120.

Of the 37 companies, Moran continued, 18 were relocating to Sarasota County instead of expanding their existing businesses.

Then Moran pointed out that the Economic Development Corp. (EDC) of Sarasota County — which is a separate entity from the county’s Office of Business and Economic Development — receives $1 million a year out of county property tax revenue; private donations make up another $750,000 in annual revenue for the EDC, he added.

This is the first page of the figures Commissioner Michael Moran provided to his colleagues on Oct. 31. Image courtesy Sarasota County

The EDC has projected that 50% of its funding will come from private sources by 2020, Moran acknowledged.

Over the past eight years, he continued, the county has contributed $8 million to the EDC, while the estimated taxpayer contribution to the Office of Business and Economic Development has been $3.2 million.

The total amount of funding from property tax revenue over the past eight years provided for a variety of economic development efforts — including bolstering the EDC’s budget — has been $16,778,444, by his calculations, Moran pointed out. That includes film industry incentives, he said. The private sector has contributed $5,464,405, he added. Thus, the total invested in those efforts has been $22,242,849, Moran said. “I’ve simply asked for accountability.”

Moran questioned Jeff Maultsby, director of the Office of Business and Economic Development, about what the EDC would do if its incentives fund were exhausted.

Maultsby replied that he has not talked with any EDC representatives about that potential situation. However, he said he could do so and report back to the County Commission.

“That would be great,” Moran responded.

Moran also asked Maultsby, “Are you comfortable with the summary that I did on this?”

Jeff Maultsby. File photo

Maultsby replied that he had not had the opportunity to look at the first page of the document Moran was showing the board and staff that morning. However, Maultsby indicated that he saw no problems with the figures regarding the EDC and Office of Business and Economic Development budgets and reserve funds or the taxpayer contributions to various programs over the past eight years.

Moran explained that all of his figures came from the most recent quarterly report Maultsby’s office had produced.

Lisa Damschroder, the county’s economic development coordinator, then pointed out that the economic incentives program was changed in 2013 to link payments to actual job creation. Prior to that, she said, the county was giving money to about 10 firms a year. Since the program was modified, she noted, money has been going to only one or two companies a year.

The film and entertainment incentives

“I think that’s useful information,” Commissioner Nancy Detert said of Moran’s figures. However, she pointed out, the County Commission had changed its film incentives program to provide rebates instead of awarding funds outright. The item on that day’s Consent Agenda, she added, “is kind of a housekeeping [matter].”

The agenda item called for adoption of a resolution revising the Sarasota County Film and Entertainment Industry Economic Rebate Program to provide rebates for lodging only to companies that use facilities that remit the Tourist Development Tax to the Sarasota County Tax Collector’s Office. A related item called for adoption of a resolution revising the county’s film industry application for permits necessary for use of county facilities; the modification would seek information about lodging, so staff could track data more easily.

On Sept. 15, 2010, a staff memo said, the commission established the Film Industry Incentive Program and allocated to it $250,000 of the Economic Development Trust Fund to provide incentives for production and post-production work in the county. The goal also was to spur the hiring of county residents, contractual arrangements with county businesses and payments for meals and lodging in the county.

Commissioner Michael Moran says he used this quarterly report to compile his figures. Image courtesy Sarasota County

“As a result,” the memo noted, “Sarasota County has gained recognition by Hollywood and other major film, television and multimedia production markets as a true ‘film-friendly’ and proactive production location of choice.”

On May 10, 2011, the memo continued, the board adopted the Rebate Program Application, which “set forth the process and eligibility criteria” and the production/post-production expense categories.

Thus far, the memo said, the total amount allocated for rebates has been $641,992.

On August 2013, the memo continued, the board established the permitting process for use of county-owned and controlled property and equipment by people involved in film, television, video and still photography production, and other forms of media. A separate permit is required for any use of county park facilities, the memo notes. Permits are issued for a number of projects that do not entail rebate requests, the memo adds.

This is the cover of the application for the film incentives rebate program. Image courtesy Sarasota County

“I do look forward to our December meeting, to discussing [the incentives],” Detert told Moran and her colleagues.

That session, which traditionally focuses on the setting of board priorities for the coming year, should put the spotlight on other public/private partnerships, Detert added. Among them, she continued, should be the relationship the county has with the Suncoast Aquatic Nature Center Associates (SANCA), which manages Nathan Benderson Park.

Detert asked that county staff provide the commissioners with all the pertinent information so they could consider how best to proceed with those partnerships.

Detert then made the motion to approve the resolutions regarding the Film and Entertainment Industry Economic Rebate Program, and Commissioner Charles Hines seconded it. Moran was the only board member to vote “No.”