South Florida gets a small share of Florida’s $155 million payout to companies thinking of adding jobs in the state.
Lisa McKerracher might set up a spinal-cord lab in Miami, or she might set it up in Massachusetts. Florida will pay her $83,000 to pick the Sunshine State.
“I’m not sure this is where I need to be,” McKerracher said from her temporary office in Dania Beach. “I’m going up to Boston in two weeks to look at space.”
McKerracher’s quandary captures the high and low stakes involved as Florida uses tax dollars to woo companies that may add jobs in the state. In the last two years, Florida’s economic-development agency pledged about $155 million in rewards for companies planning to add jobs in the state either with new locations or expanding their current ones.
BioAxone Biosciences, McKerracher’s fledgling company, hopes to create a new drug for paralysis victims, making it the kind of research firm South Florida pines for as it tries to move its economy away from depending on tourism and real estate. But McKerracher only plans on hiring 12 people tops for a small lab at the University of Miami’s new commercial research building, representing a tiny win for a region that has lost 134,000 jobs in the recession.
South Florida relied on modest deals like McKerracher’s for the nearly $12 million in pledges from Enterprise Florida, with smaller counties receiving larger grants. Of the 20 largest Enterprise grants since 2011, none were in Broward or Miami-Dade. The biggest was April’s $14 million pledge to Embraer Aircraft in Brevard for a new facility designed to add 650 jobs.
The largest payout in South Florida went to Saveology.com, an online discount site slated to get $1.5 million for moving from Fort Lauderdale to a larger headquarters in Margate. The relocation includes plans for 750 new employees, and prevented the company from accepting offers from other suitors, including San Francisco, said Bob Swindell, president of the Greater Fort Lauderdale Alliance, Broward’s economic development agency.
The incentive numbers were revealed late last week when a Florida official inadvertently released a confidential database in responding to a public-records request from Integrity Florida, a nonprofit research group in Tallahassee focused on ethics reform. The database showed some pending offers that otherwise would have remained secret. South Florida’s list mostly involved companies already in the area, or moves that had been made public.
The list reveals that SAB Miller, the global brewer, is in line to receive $182,000 in state incentives for moving its Latin American headquarters from Bogota to Miami-Dade. Earlier this year, media reports disclosed the planned move to Miami’s Brickell Avenue, but Miller’s relocation has not been confirmed by the company or Miami-Dade officials.
Though Enterprise pledges money to companies, the cash often won’t be paid out until years later, once the hiring goals have been met, officials said.
Overall, the Enterprise list showed South Florida taking a lower share of incentives than the size of its economy would suggest.
Broward’s $6.5 million pledged payout from Enterprise Florida represented 4 percent of the $155 million earmarked by the agency since 2011, though Broward accounts for about 12 percent of Florida’s workforce. In Miami-Dade, the $5 million share of relocation incentives and other business sweeteners from Enterprise amounted to just 3 percent of the statewide budget, despite Miami-Dade’s 16 percent share of Florida’s workforce.
Stephen Beatus, a top executive at Miami-Dade’s economic development agency, cautioned against viewing the gaps as negatives. “The amount of incentives shouldn’t be used as an indication of success at attracting companies,” said Beatus, a vice president at the Beacon Council, the tax-funded organization that recruits businesses to Miami-Dade. Beatus said the Beacon Council isn’t eager to make government dollars part of a relocation pitch for a company. “It should be a last resort,” he said.
While Enterprise Florida’s $83,000 sweetener wouldn’t hurt, McKerracher has bigger challenges at the moment as she picks between the UM site near the Jackson hospital campus or lab space in Boston, one of the nation’s top medical hubs.
She’s looking to raise $15 million from investors, and likes UM’s standing in the spinal-cord field. But while she sees the green-walled UM building as “gorgeous,” McKerracher’s budget requires more shared research equipment than the new Miami complex offers.
“There’s not really the critical mass there yet for borrowing,” she said. Enterprise Florida’s pledge wouldn’t be enough to buy the equipment herself, even if the payout wasn’t delayed. The $83,000 incentive “makes things better a couple of years from now,” she said.