Local Government Economic Development Tools

Creating Jobs and Growing Our Economy

Broward County Commissioner Chip LaMarca (District 4)

House Community & Military Affairs SubcommitteeJanuary 11, 2012

11:30am – 2:00pm

The Greater Fort Lauderdale Alliance (Alliance) partners with Broward County to effectuate the following mission:

… “to lead Broward County in building a stronger and more diverse economy. We do this by promoting increased public/private sector collaboration, delivering business development initiatives focused on new investment and job growth, enhancing the competitiveness of Broward's business climate and driving regional initiatives.”

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Economic Development Tools at Work

In FY 2011, the Alliance achieved the following successes:

New “Value Added” Jobs Created 1,002 Job Retention and Expansion 1,764 Direct Capital Investment $56.1 million Private Sector Investment $1.4 millionSource: Greater Fort Lauderdale Alliance 2011 Annual Report

Some of the companies the Alliance and OESBD attracted and/or retained over the past 10 years include:

DHL’s Americas Headquarters 1,300 new jobs Kaplan University’s Headquarters 1,700 new jobs Aetna Rx Mail Order Pharmacy 857 new jobs Research in Motion (RIM) 500 new jobs Associated Grocers Headquarters 400 new jobs Royal Caribbean Cruise Lines 410 new jobsSource: Broward County Office of Management and Budget. 3

Economic Development Tools at Work

The local business tax (LBT), authorized by the Legislature in 1995 and formerly known as the local occupational license tax, is a major source of revenue for Broward County’s successful economic development programs.

The maximum annual LBT “business” contribution is $150 per year.

LBT revenue is reinvested back into the community for economic development, supporting new business marketing, recruitment and expansion efforts

In 2011, Broward County’s Office of Economic & Small Business Development used the LBT revenues for the following programs:

Economic Development $558,540 Small Business Development $1.2 million Economic Development Incentives $143,325

Source: Broward County’s Office of Economic and Small Business Development

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Economic Development Tools at Work

POTENTIAL IMPACT OF REPEALING LBTR

The Legislature’s Revenue Estimating Conference estimated the loss to local governments at $156.4 million. Broward County would lose a total of approximately $3 million in LBTR revenue, including a $1.7 million loss for the municipalities.

Between FY 2007-2011 Broward County collected $5,242,522 for economic development efforts from the LBTR. This funding was allocated between the Greater Fort Lauderdale Alliance (Alliance) and the Office of Economic & Small Business Development (OESBD) and distributed in the following manner:

Alliance $ 4,816,460 OESBD $ 426,062

Source: Broward County’s Office of Management and Budget.5

How many businesses have been attracted to Broward by these programs?During the period from 2007 through 2011, the Alliance and OESBD have assisted more than 700 targeted industry companies through their business assistance programs. In addition to its efforts with targeted industries, the OESBD maintains an active client list of 1,537 certified firms that receive various types of services.

How many direct jobs have been created by these programs?The total number of direct targeted industry jobs created with assistance by the Alliance, OESBD, and municipal partners is 8,668 (FY 2007-2011). The total number of targeted industry retained jobs is 5,447.

Source: OESBD Summary of Performance Accomplishments (FY2007 – FY2011), December 22, 2011.6

Economic Development Tools at Work

Small businesses also benefit from Broward County’s commitment to their success:Complementing economic development responsibilities to those of the Alliance including a special focus on small to mid-sized companies Assistance in identifying procurement contract opportunities for the County offered to small businesses and many municipalitiesNew start-up technical assistance, industrial revenue and private activity bond financing, and export/import trainingBusiness outreach and marketing Business development and counseling Business finance and incentives programs Regulatory & Support Functions

Source: OESBD/GLFA Recruit and Expansion Projects – Highlights 12 22 2011 

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Kaplan, Inc.                  

Industry: Higher EducationJobs:                           300

Incentive Amount:          QTI (County Portion): $ 25,000                                    Direct Cash (County Portion):  $  75,000                                    Total County Portion:              

$100,000                                       Total QTI:                                 

$250,000                                    Total Direct Cash:                    

$150,000                                     Total Incentive Awarded:        

$400,000

Investment:Construction/Renovations          $    3,010,000 Equipment                                $   1,739,000Total Investment (Phase III) $   4,749,000

Source: Broward County Board of County Commissioners’ Agenda 9/1/2009.

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CBeyond, Inc.              Industry:                      Telecommunications Equipment and ServiceJobs:                            100

Incentive Amount:          QTI (County Portion):                $ 50,000                                    Total County Portion:               $  50,000                                       Total QTI:                                 

$500,000                                    Total Incentive Awarded:         $500,000

Investment:Construction/Renovations          $   1,145,000 Equipment                                $ 13,404,313Total Investment                      $ 14,549,313

 Source: Broward County Board of County Commissioners’ Agenda 10/23/2007.9

S & B Industries                Industry:                      Mobile Communications Device Development and

EngineeringJobs:                            150

Incentive Amount:          QTI (County Portion):                $  75,000                                    Direct Cash (County Portion):     $  50,000                                    Total County Portion:               $125,000                                       Total QTI:                                  $750,000                                    Total Direct Cash:                      $100,000

Investment:Construction/Renovations          $    1,325,000 Equipment                                $ 15,975,000Total Investment                      $ 17,300,000 Source: Broward County Board of County Commissioners’ Agenda 6/2/2009.

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Nipro Diagnostics, Inc. (formerly Home Diagnostics)

Industry:                     Medical Device Development/Manufacturing

Jobs:                             135

Incentive Amount:         QTI (County Portion):                $  40,500                                    Direct Cash (County Portion):     $135,000                                    Total County Portion:               $175,500                                       Total QTI:                                  $405,000                                    Total Direct Cash:                     $270,000                                     Total Incentive Awarded:       $675,000

Investment:Construction/Renovations     $   2,200,000 Equipment                                $ 27,800,000Total Investment                      $ 30,000,000Source: Broward County Board of County Commissioners’ Agenda 12/12/2006.

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Federated Precision, Inc.    

Industry:                      Aerospace Parts ManufacturingJobs:                            66

Incentive Amount:          QTI (Broward County 10% Match)                  

$33,000QTI (City of Deerfield Beach 10% Match)      

$33,000QTI (State of Florida – 80%)                               

$264000Total QTI                                                                

   $330,000

Investment:Equipment                                $13,875,000Total Investment                      $13,875,000

Source: Broward County Board of County Commissioners’ Agenda 6/28/2011.

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Local Government Economic Development and Financing

Tools

put people to…

WORK!