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St. Pete officials seek tax exemptions for companies

Mark Parker

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Downtown St. Petersburg at dusk. In addition to the sunsets and scenery, local officials hope to lure companies to the area with tax exemptions. Photo by Mark Parker.

In an effort to increase business recruitment and remain competitive in the region, the St. Petersburg City Council is seeking a path to provide economic development ad valorem tax exemptions for new and expanding companies.

Florida statute stipulates that a city can create a ballot referendum allowing voters to grant officials the authority to provide tax exemptions to businesses over a 10-year term. In 2011, St. Petersburg residents approved such a measure by nearly 67%. According to background documents for Thursday’s city council meeting, St. Petersburg has granted just two exemptions under that process as of July 1, 2021.

The authority granted by the 2011 referendum expired on Nov. 9, 2021, after reauthorization failed by 87 votes during that month’s election. City council now hopes to close that gap on this year’s ballot and receive another decade’s worth of approval to grant tax exemptions.

“Our Chamber of Commerce was shocked and quite disappointed in ourselves that we did not pass this the last time,” said Chris Steinocher, president and CEO of the St. Petersburg Area Chamber of Commerce. “We need these.”

“We need to remain competitive – our state is letting us down on that, and our city can support us in this.”

According to the accompanying documents, “numerous Florida counties and cities” provide economic development ad valorem tax exemptions. These include areas throughout the region St. Petersburg is directly competing with, such as Hillsborough and Pinellas Counties and the Cities of Tampa, Clearwater and Largo.

City administration requests that the council approves the referendum to remain competitive in the hunt for new and expanding businesses, which create capital investment and jobs, according to the document.

However, Councilmember Richie Floyd asked Gary Jones, economic and workforce development manager for St. Petersburg, why the administration believes the city should put the item back on the ballot a year after failing to garner the required votes.

“Well, it was a close loss – it lost by 87 votes,” said Jones. “I think that it was a big ballot, and it was there at the end of it. I think it got caught up in ballot fatigue and so forth.”

Floyd noted that the upcoming election occurs in an even year, and the ballot will display more items than it did in 2021.

Jones did not offer a rebuttal, instead relaying that the city has a significant project in the pipeline and that officials are using the tax exemptions as a “potential incentive.”

“We look at it as a lost opportunity if we don’t move forward with this,” said Jones. “We would like to do a better job this year and get it passed.”

Floyd said he is uncomfortable with the city trying to move an initiative forward the following year if officials are unhappy with the previous election’s results.

In a statement he said should not surprise anyone, Floyd also believes that the city should require businesses, “particularly people at the top,” to pay their fair share of taxes.

“The same as the rest of us do,” he added. “I’m a hard ‘no’ on this today.”

Since the incentive program’s adoption, four projects have asked for tax exemptions, with two receiving approvals, according to the documents. The city council approved American Strategic Insurance for a $100,000 exemption from 2014 to 2019 and Jabil for $67,334 in August 2020 over a five-year term.

The council passed a resolution to consider Power Design for exemption in April 2016 and Halkey-Roberts in March 2021.

The documents state that the ordinance does not create a direct funding impact, “however, future budgets could be impacted by reductions in ad valorem tax exemptions as a result of an approval of the referendum by the voters.”

Councilmember Lisset Hanewicz said she understands that the city does not exist in a bubble and must remain competitive with the surrounding area in its pursuit of new and expanding businesses.

“Just like employers need to be competitive with employees and the benefits that they’re giving them,” she added. “We rely on tourism a lot, and sometimes it’s hard to get those other jobs that would end up going up north.”

Hanewicz did agree with Floyd’s concern about the length of ballots and recalled that after receiving one in the mail, she thought that “no one’s going to read all this.” She elaborated that officials task voters with reading the proposals and then deciphering what their government wants them to decide.

Even as an attorney, Hanewicz said she sometimes struggles to understand ballot language and realizes the fatigue associated with referendum questions. However, she said the difference of just 87 votes drives her to approve the measure and give the city another shot at passage.

“If you get a ‘no’ again, that’s it,” said Hanewicz. “It’s a done deal.”

Council Chair Gina Driscoll said the city needs to better educate voters on what the item means and its benefit to St. Petersburg. She also noted that residents approved the measure by 67% in 2011, and city officials only granted two exemptions in the following decade.

“So, it doesn’t just kick the barn doors open as a free-for-all,” said Driscoll.

“It gives us another tool in the toolbox to advance our local economy and ensure that we are continuing to attract the best companies and the best jobs.”

The first reading of the potential ordinance to create a ballot referendum that could grant the city council authority to provide ad valorem tax exemptions passed by a vote of 7-1, with Floyd dissenting. The city set a public hearing on the matter for Aug. 4. If approved, residents will have the final say during the Nov. 8 election.

 

 

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5 Comments

5 Comments

  1. Avatar

    Golden Goose

    July 23, 2022at3:11 pm

    Okay, the people have spoken. Democracy is at work. Uh, oh, wait, we didn’t get the answer we wanted; the people aren’t smart enough to know what’s good for us; business needs incentives (extortion) to locate here; Jabil needs a tax break, really? Of course the Chamber of Commerce knows best,so let’s just educate the masses and have a do over. We’ll get the rich richer while the smucks pay more & more for sewer & water & other infrastructure that they will use, but business get a pass on paying for. The tax break for the rich referendum was a bad deal a year ago – nothing has changed since then, except inflation – still a hard No.

  2. Avatar

    Bruce Nissen

    July 23, 2022at5:49 pm

    Richie Floyd has it right. Government should not be giving tax money raised primarily from moderate income residents to the very wealthiest — that is redistributing income upward, the opposite of what should be done in the most unequal country among the advanced industrial nations.

  3. Avatar

    James Donelon

    July 24, 2022at6:42 am

    Welfare for the rich

  4. Avatar

    Yikes

    July 24, 2022at6:46 am

    Richie Floyd has it wrong. No explanation required.

  5. Avatar

    Terese W Hilliard

    July 24, 2022at7:27 am

    Don’t give Corporate Welfare to businesses.

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