Jabil, the largest company headquartered in St. Petersburg, will get about a $53,000 a year tax break from Pinellas County each year for the next 10 years.
Jabil (NYSE: JBL), a manufacturing services company, won’t have to pay ad valorem, or property, taxes on the increase in value at its new Innovation Center, a 40,000-square-foot facility at 10900 Roosevelt Blvd.
The Board of County Commissioners voted 5 to 1 Tuesday night to grant the tax exemption to Jabil, with Commissioner Karen Seel casting the only no vote. The vote followed a public hearing during which Mike Meidel, Pinellas County Economic Development director, told commissioners the project allowed Jabil to keep its headquarters in St. Petersburg and to add jobs.
“They currently employ 1,600 people in Pinellas County. We would have lost that if they had chosen to go to another state. The current project you are voting on tonight includes 86 retained employees at an average wage of $95,000 and it includes 12 new employees at the average wage of $62,500,” Meidel said.
The St. Petersburg City Council separately approved a tax break for Jabil in August, voting unanimously to give the company a tax exemption of $100,000 a year for five years for the new research and development center.
The Jabil Innovation Center is the first phase of a three-phase expansion plan, Meidel said.
“Beginning in the early 2000s they knew they were going to run out of space and they were looking at other sites to either expand or even totally relocate their headquarters. Over the years, they looked at Silicon Valley where they already have a significant presence, and at Austin, Texas, Boston, Massachusett, Atlanta, Georgia, and finally in May 2016 we offered this ad valorem tax exemption as an incentive for them to make that decision and stay here and continue to grow here,” Meidel said.
The city of St. Petersburg provided the space for the new Innovation Center, the former Tampa Bay Research Institute, and Jabil totally renovated the facility, spending about $11.7 million before completing it in March 2019.
“It has been fully remodeled. It is a world class technology laboratory. It’s where they design their new product lines, their new manufacturing systems for customers all over the world, and their customers are the Fortune 500 base as well,” Meidel said.
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Phase Two of the project is underway. Jabil has demolished its original headquarters building at 10800 Dr. Martin Luther King Jr. St. N. and is building a new headquarters, a $61 million, 190,000-square-foot facility slated for completion in March 2021.
“It includes food service, a fitness center, a technology lounge, conference and meeting space, and this is where the C-level employees will work along with a lot of the administrative staff,” Meidel said.
Once that is completed, Jabil will begin the third phase, renovating its existing 62,000-square-foot headquarters at 10560 Dr. Martin Luther King Jr. St. N. The building will be remodeled and become Jabil’s IT headquarters and server farm. The cost, time frame and completion date has yet to be determined for that phase of the project, Meidel said.
The tax abatement approved by the county commission on Tuesday was only for the first phase of the project, Meidel said. He also said the tax abatement is only on the added value to the existing building, and the county will continue to receive about $15,000 annually from taxes based on the value of the structure before it was renovated.
A fourth building, south of the existing headquarters, is an advanced manufacturing center and not included in the overall incentive at this time, Meidel said.
Seel, the only commissioner who voted against the incentive, asked about protections in place for the county if Jabil should be sold or go out of business.
Meidel said he would be back before the commission on Nov. 17 with an agreement that includes the legal requirements Jabil must fulfill to receive the tax abatement. That agreement will require Jabil to provide an annual update on employment and its capital investments, as well as a report from the property appraiser’s office on the value of the property.