Florida Trend | Florida's Business Authority

Rural Advantages


Building materials producer Hanson PLC is a forward-looking company with 27,400 employees in 14 countries and annual revenues of about $10 billion. The leading U.S. maker of concrete roofing tile, Hanson chose rural north Florida and Baker County to build its new $24 million roof tile production facility.

The 120,000-square-foot plant in Sanderson opened in 2006 with 30 employees. Hanson plans to add another 50 employees within a few months, and the company has room to double its production.

The London-based firm chose rural Florida for a combination of reasons, including the superb regional transportation network, a positive business environment, a cost-cutting incentive package and the booming Florida market, says Dylan Walters, Hanson Roof Tile's executive vice president.

The surrounding area benefits by gaining permanent new jobs that pay wages 15% higher than the county average. In return, Hanson tapped into a state and local incentives package worth up to $1.45 million, including free land at Enterprise West industrial park; local property tax abatement; Workforce Quick Response Training; Rural Job Tax Credits; and Qualified Target Industry Tax Refunds.

The Governor's Office of Tourism, Trade and Economic Development, Enterprise Florida Inc., and the Jacksonville Regional and Baker County chambers of commerce worked closely with Hanson to land the deal.

By locating at Enterprise West, Hanson can access rail service from CSX Transportation. The plant is near I-10 and U.S. 90 east-west highways, and several north-south arteries including nearby I-75 and I-95, which provide easy access to Georgia and to Gainesville, Orlando and Tampa.


Unmatched advantages

The Hanson project exemplifies the unmatched advantages Florida's rural counties offer: business-friendly environments and small-town enthusiasm, with big-city convenience close by. More than a million people live in Baker and surrounding counties, and Jacksonville is just 20 minutes away.

Florida's excellent transportation network means that no rural site is more than a two-hour drive from one or more deepwater seaports or commercial airports, and more than 60% of the continental U.S. is accessible by overnight motor freight.

Yet business costs are low in rural counties. For instance, the cost-ofliving index in Baker County is 93.05 (against a statewide average of 100). Simply put, it costs less to do business in Baker and other Florida rural counties. And special state designations provide rural counties with greater access to state and local economic development incentive programs.

Of the state's 67 counties, 33 are formally defined as rural. And while the counties are rural, advances in digital technology have all but eliminated previous barriers to expansion away from urban centers.

West Florida Electric Cooperative, which serves Calhoun, Holmes, Jackson and Washington counties in Northwest Florida, recently took part in a pilot project to study broadband over power lines. BPL transports high-speed Internet via highfrequency radio waves over electric power lines and could prove especially useful in rural areas where electric co-ops serve about 70% of U.S. land mass and less than 15% of the population.

Opportunity Florida, an eight-county Northwest Florida economic development alliance, is pushing broadband, says Executive Director Rick Marcum. Opportunity Florida works with Atlanta-based Broadband South LLC, which is armed with a $33.8 million, low-interest federal rural development loan to expand broadband across rural North and Northwest Florida. Marcum also works with the Chipola Regional Workforce Development Board to help small businesses build their own low-cost e-commerce websites.

In south central Florida, Florida's Heartland Rural Economic Development Initiative provides regional economic development coordination. Backed by state funding, the group is studying how best to enhance broadband capability in the region. Meanwhile, the Heartland is home to a major new enterprise with the arrival of Royal Concrete Concepts.


Concrete success

Wally Sanger, president and founder of Royal Concrete, is a big fan of the six-county Heartland region. In fact, "I'm high on the future of Florida," he says. Royal Concrete's new 900-employee, $20 million modular building manufacturing plant in Okeechobee County should create more than 1,300 jobs.

Located on 173 acres off U.S. 98, Royal makes portable classrooms, military structures and 16 other product lines of lightweight concrete with a polystyrene core; the buildings can withstand 200-mile-per-hour winds.

Sanger says the Okeechobee site is "an ideal piece of property," centrally located with easy access to urban markets. Thanks to a state Economic Development Transportation Fund grant of more than $1.5 million, a 9,000-foot rail spur has been built on site to help bring product in. Other incentives include a Qualified Target Industry Tax Refund and property tax breaks.

Enterprise Florida and local economic developers and officials have been very helpful, says Sanger, and Royal will work with Indian River Community College to train employees in various trades.

Another rural success story is Arizona Chemical's $10 million project on 11 acres in Jackson County. At this Northwest Florida site, Arizona Chemical (a division of International Paper) has opened a 115,000-squarefoot distribution/warehouse facility for its pine resin products. The resins are used in a variety of products needing "stickum"--from sticky notes to vehicle tires to baseballs.

The building is owned by Prologis, a major developer of warehouse/distribution facilities. Its location in Distribution Park, near I-10, was crucial for Arizona Chemical. Also key were a $276,061 state Rural Infrastructure Fund Grant and a $300,000 state Economic Development Transportation Fund Grant for road improvements.

Combined with direct investments made by Arizona Chemical, the grants helped fund some $900,000 in wastewater, natural gas lines and roadway improvements at Distribution Park, which is located within a Rural Enterprise Zone.

-- Gary Shepherd

Enhanced Incentives
In Rural Enterprise Zones (REZ), located in most of Florida's 33 designated rural counties, companies may tap into enhanced incentives such as tax credits and tax refunds in exchange for job creation. REZ incentives in place under Florida law through at least the year 2015 include:
REZ Jobs Tax Credit
A tax credit for up to 24 months is allowed against corporate income tax or sales and use tax for new jobs created. The credit is for 30% of wages paid to employees living in a REZ. If more than 20% of employees live in the REZ, the credit may jump as high as 45%.
REZ Property Tax Credit
A tax credit on corporate income tax equal to 96% of ad valorem taxes paid on new or improved property, for up to $25,000 per year for five years; the cap is $50,000 per unit if 20% of employees live within the REZ.
REZ Business Equipment Sales Tax Refund
Refund of sales taxes paid on business property with a sales price of at least $5,000 per unit; the property must be used exclusively in the REZ for at least three years.
REZ Building Materials Sales Tax Refund
Refund of sales taxes paid on the purchase of building materials used to rehabilitate real property. Up to $5,000 is refundable (or $10,000 if 20% of the employees live within the REZ) per parcel.
Credits, Refunds, Training
Economic incentives for companies to locate in rural Florida include:
Qualified Target Industry Tax Refunds
Over a minimum of four years, the cash tax refund program pays at least $4,800 per job created for eligible companies.
Economic Development Transportation Fund
The "Road Fund" is enhanced for rural locations. Grants go to local governments on behalf of business, with monies used for road improvements--up to $2 million per project.
Rural Job Tax Credit
A tax credit against sales and use or corporate income tax may be taken by eligible businesses for the creation of new jobs at a rate of $1,000 per job created.
Quick Response Training
QRT grant funding is available to reimburse companies for customized training costs for new employees.
Incumbent Worker Training
IWT grant funding is available to reimburse training costs for existing employees.
Rural Infrastructure Fund
Grants made to local government on behalf of a business may fund up to 30% of the costs for public infrastructure upgrades.
Community Development Revolving Loan Program
A loan or loan guaranty available for a specific project that will lead to new jobs and increase the economic vitality and diversification of Florida's rural counties.