Public considers business property-tax relief

EAST COUNTY — For years, the Manatee County economy relied on tourism and retirees buying homes.
But, when the recession hit, Manatee County government staff and the Bradenton Area Economic Development Corp. officials began making moves to attract high-growth companies.

County Administrator Ed Hunzeker envisioned high-density buildings occupied by accounting and investment banking firms.

Sharon Hillstrom, president of the EDC, began developing relationships with site consultants from firms from all over the United States. She tried to recruit businesses from high-impact industries already established in Manatee County, including sectors such as life science, sports performance, clean technology and agribusiness, among others.

Manatee County leaders believe, however, the region has no bait.

At least, until now — they hope.

When the public votes on a much-publicized half-percent, sales-tax increase to fund indigent health care in a special referendum June 18, they also can vote on ad valorem tax exemptions for businesses.

Under the proposed property-tax breaks for new or expanding businesses, county commissioners would approve breaks for certain businesses, vetted by county staff and the EDC, based on their ability to create jobs.

“We are operating at a competitive disadvantage in our own region without this,” Hillstrom said.

Currently, 42 out of the 67 counties in Florida have some form of a system that provides property-tax relief for new or expanding business.

Under the proposal for Manatee, the businesses eligible for such tax relief would be discretionary.
Companies have to create a certain number of jobs at a specific wage in a targeted sector.

Companies would receive the tax breaks — an amount up to 100% of property taxes — for up to 10 years. They would be subject to annual performance reviews, and, if the targets were not met, the tax relief would expire.

The companies must be high-impact and high-paid, with 60% of their revenue coming from outside the region, as well.

County staff works together with the EDC to recommend to county commissioners which businesses should qualify for property-tax relief.

County commissioners have final say with their vote.

Opponents to the tax abatement say government officials are assuming new jobs the recruited businesses promise would never be created by anyone else.They wonder if government is picking winners and losers, rather than letting free competition take effect.

Hillstrom sees it differently.

She says a recruited business, with less to pay in taxes, will use the saved money to hire 10 or 20 more employees than it would otherwise.

Those new employees will buy homes, cars, groceries and insurance, fueling more growth in the economy.

“This is not a haphazard process,” Hillstrom said. “There’s a vetting process that we would stick to. Economic development is highly competitive right now, and to have this would simply put us on an even playing field.”

Without the ad valorem tax relief tool, the region still has recruited business.

Last year, Feld Entertainment — which produces shows such as Disney on Ice — announced it would move its headquarters to Ellenton.

IRISS, a leader in the industrial infrared window market, opened its new global headquarters April 3, in the Lakewood Ranch Business Park.

But, Hillstrom dwells on the misses.

She tells a story from October 2012, when she received a call from a manufacturing company looking to relocate.

“It pained me to tell them we don’t have what we’re looking for,” Hillstrom said. “Could we still attract businesses without the tax relief? Sure. But there’re so many we would miss out on.”

With or without the tax breaks, Hillstrom will recruit by carrying a laundry list of Manatee’s selling points: sea ports, sports, airports, higher education and a business-friendly government.

Hunzeker hopes it’s enough.

“If you wanted to be in Florida, on the West Coast, and have tax abatement, Sarasota would be on the list,” Hunzeker said. “Pinellas is on the list. Hillsborough is on list. And we’re not. And, we didn’t even know there was a list. This isn’t all that radical.”

Contact Josh Siegel at [email protected].

How it would work
Companies have to create a certain number of jobs at a specific wage in a targeted sector.

Companies would receive the tax breaks in an amount up to 100% of property taxes. Breaks would be effective for up to 10 years.

The companies would be subject to annual performance reviews. The tax relief expires if targets are not met.

The companies must be high-impact and high-paid with 60% of their revenue coming from outside the region.

County staff works together with the Bradenton Area Economic Development Corp. to recommend which businesses should qualify for tax relief.

County commissioners vote on whether a business will be allowed the exemption.

Existing companies, who already do business in the region and want to expand, can get property-tax relief only on the expanded part of the facility or on newly purchased equipment.

The abatement only would apply to county-levied taxes.