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Florida's Urban Advantages - Worth a Second Look


Keith Bowers, president of The Bowers Group, consulted with developers who utilized the building material sales tax refund to build affordable homes in the Tallahassee/Leon County Enterprise Zone. [Photo: Tallahassee/ Leon County Economic Development Council]

Choosing the right site for a business expansion or relocation is tough enough. But when the property under consideration is in an area showing signs of abandonment, economic decline or contamination, it can be tempting to simply move on.

In Florida, economic and environmental agencies are working hard to ensure that what some might see initially as “less-than-desirable” sites get a second look from developers, contractors and business owners. As a result, designated incentives in three categories — Urban Areas, Enterprise Zones and Brownfields — are generating a good bit of green for companies seeking to expand in or relocate to inner city neighborhoods.

Urban Areas

Inner City Advantages

Florida offers increased incentive awards and lower wage qualification thresholds for businesses locating in many urban core/inner city areas that are experiencing conditions affecting the community’s economic viability and hampering the self-sufficiency of its residents.

Protecting jobs

Film Technologies Incorporated (FTI) has been providing jobs for residents in St. Petersburg’s inner city since 1975. At its downtown manufacturing facility, FTI employs approximately 100 people, more than 60% of whom live within the perimeter where buses, bikes and foot power are the primary means of transportation. The company needed to expand, and moving out of the inner city to a more spacious “suburban” site would have left a void. So with a little help from the state of Florida, FTI decided instead to expand operations at its present location and retain much-needed jobs for the community.

CEO Don Wheeler acknowledges that incentives played a role in the firm’s decision to stay downtown. “We have some employees in our manufacturing area who have been with FTI from the very early years. When you look at an expansion, it’s much easier to look at options that will allow you to keep a trained and dedicated workforce. The incentives we received helped us retain employees who would not have been able to stay with us had we moved further out of our current geographic location.”

To increase capacity and keep pace with the growing demand for its window film products, FTI invested approximately $4 million in its existing 150,000-square-foot facility, including manufacturing line upgrades, improvements to in-house R&D equipment and maintenance infrastructure enhancements. In addition, the firm upgraded its product packaging to enhance brand awareness worldwide.

Enterprise Zones


Urban Job Tax Credits:

Eligible businesses locating within Urban Enterprise Zones and hiring a specific number of employees may be eligible for job tax credits.

» Jobs Tax Credit, Sales Tax — Credit against sales tax for 20% or 30% of wages paid to new employees who reside within an Enterprise Zone. To be eligible, a business must create at least one new job. Cannot be used in conjunction with the corporate income tax credit.

» Job Tax Credit, Corporate Income Tax — Credit against corporate income tax for 15% or 20% of wages paid to new employees who reside within an Enterprise Zone. Cannot be used in conjunction with the sales tax credit.
Enterprise Zones are defined as specific geographic areas targeted for economic revitalization. If you elect to site a business and create new jobs in one of Florida’s 30 Urban Enterprise Zones, your company may be eligible for an assortment of tax incentives. Among the financial rewards available to qualifying Enterprise Zone businesses are job tax credits against either sales or corporate income taxes; sales tax refunds for business equipment and building materials; and sales tax exemptions on the purchase of electrical energy.

To receive an Enterprise Zone designation, an urban area must demonstrate that both public and private sectors are working proactively and in partnership to increase an area’s economic vitality. Erik Bredfeldt, director of the city of Gainesville’s economic development agency, believes that the designation carries as much weight with interested companies as the actual incentives.

More than a financial boost

“Acquiring Enterprise Zone status opens the door for incentives for a company planning to locate or expand, but it’s really more than that,” says Bredfeldt. “It’s a statement that all municipalities involved are on board and ready to negotiate favorable conditions to bring an employer to the community. Yes, the incentives are very important, but it’s also a state of mind.”

For Gainesville at least, that state of mind has brought quite a few major employers to the Gainesville Regional Airport’s Industrial Park and surrounding area, including Nordstrom’s Distribution Center, Florida Foods Distribution Center and, more recently, Eclipse Aviation and DayJet.

Brownfields

Abandoned, idled or under-used commercial properties that are contaminated or appear to be so may be defined as “Brownfields.” The actual environmental status of sites within a designated Brownfield area can only be evaluated by environmental assessments, and once these assessments are made, cities can begin the application process to obtain grants and incentives from federal, state and local economic and environmental protection agencies for the purpose of property remediation.

A little help goes a long way

Lee Farkas knew the time had come to expand the corporate headquarters of his Ocala-based mortgage processing company, Taylor, Bean & Whittaker, but he didn’t see much promise in the surrounding neighborhood. The closest possibility for expansion was a site to the east of his current location where a deserted meat packing plant still stood — less than desirable for what Farkas had in mind.

“There’s no way it would have been cost effective for us to purchase that property, then go through all the demolition and necessary cleanup,” says Farkas. “The city of Ocala’s decision to declare the property a Brownfield site really got the ball rolling.”

The city was able to obtain a grant from the federal Environmental Protection Agency for Phase I and II Environmental Site Assessments in order to determine the site’s readiness for redevelopment. But then, as the remediation process got under way, several unregistered underground storage tanks were discovered; one of them ruptured and began leaking petroleum contaminants. More than 30 drums — each containing 55 gallons of unknown substances — had to be removed from the site before development could proceed. In addition, representatives from OSHA had to be called in to monitor the deactivation of an ammonia freezer. But once the land was cleared, a grant from the state’s Economic Development Transportation Fund could be used to repair and widen the road fronting on the project.

Today, on what looked like a pretty miserable piece of property, a Brownfield designation has become the catalyst for construction of a 75,000-square-foot, multi-level building that will serve as corporate headquarters for Taylor, Bean & Whitaker and bring some 200 new, higher-than-average-wage jobs to the region. The opening of the facility in November 2007 will breathe new life into a formerly contaminated, deteriorating site and, with improved road access, sidewalks and lighting, transform an entire neighborhood.

“It really has been a great project,” says Farkas. “The advantages to coming in on a designated Brownfield site are great for companies that want to reduce some up-front costs.” Plus, he adds, the whole community benefits “by building up areas that really have very little potential otherwise.”

Brownfields Around the State:

Sites in North Miami Beach, Orlando and Gainesville are success stories.

  • The Biscayne Commons project in North Miami Beach, where the city was determined to revitalize property that had been a landfill. Through aggressive public and private partnerships and effective engineering and cleanup, a site that was once an eyesore now hosts an $18-million upscale retail center.
  • City View in Orlando’s Parramore area, on the site of a former gas station. A Brownfield designation opened the door for cleanup, and this attractive, multi-use development combining residential, retail and office space has helped turn a once-declining neighborhood into a progressive community.
  • A new storm water management facility in Gainesville built on land formerly occupied by a manufactured gas plant. A Brownfield designation allowed the city to apply for state and federal funding to remediate the property. Now, in partnership with public and private agencies, the site is being transformed into a natural recreational area with walking/jogging trails; a historic depot on the property will be renovated for community activities.

According to Enterprise Florida, the state’s public-private partnership for economic development, Brownfields in Florida are some of the easiest such properties in the nation to remediate because the severity of environmental degradation/contamination here is much lower than in many other U.S. states. Businesses that elect to clean up and redevelop existing Brownfield sites are provided with generous financial incentives, regulatory benefits, technical assistance and liability protection. A few of the advantages include:

  • $2,500 Job Bonus Refund for each new job created by an eligible business
  • Highly attractive business locations with existing infrastructure
  • Voluntary cleanup tax credits
  • Cleanup liability protection
  • Low-interest loans for assessment and cleanup
  • Increased State Loan Guarantee which can improve lending opportunities
  • Expedited permitting

And since many Brownfield properties are located within Urban Enterprise Zones, additional financial incentives may be available.


A former naval base, Orlando’s Baldwin Park is today another Brownfields success story. [Photo: Gregg Matthews]

The Florida Brownfields Association (FBA) is a non-profit, volunteer service organization dedicated to assisting in the advancement and implementation of the Florida and National Brownfields Redevelopment programs. The association works in cooperation with the U.S. Environmental Protection Agency (USEPA), the Florida Department of Environmental Protection (FDEP) and other organizations to assist companies with expansions in and relocations to Brownfield sites throughout the state. The FBA’s environmental specialists provide Brownfields information and redevelopment strategies to communities and the public at-large in the interest of cleaning up contaminated properties and revitalizing areas that have been subject to economic decline.

Credits, Refunds, Training — Additional Resources

» Business Equipment Sales Tax Refund
For sales taxes paid on the purchase of certain business property used exclusively in an Enterprise Zone for at least three years.

» Building Materials Sales Tax Refund
Applies to sales taxes paid on the purchase of building materials used to rehabilitate real property located in an Enterprise Zone.

» Property Tax Credit, Corporate Income Tax
Credit against Florida corporate income tax equal to 96% of ad valorem taxes paid on the new or improved property.

» Sales Tax Exemption for Electrical Energy
A 50% sales tax exemption on the purchase of electrical energy, if the municipality has reduced the municipal utility tax by at least 50%.

» Community Contribution Tax Credit
50% credit on Florida corporate income tax, insurance premium tax or sales tax refund for donations made to local community development projects.