Gift horse or Trojan horse? BOCC will study –more.

Submitted by Suanne Z. Thamm
Reporter – News Analyst
May 24, 2016 12:46 p.m.

 

DSCN6929 (1)

 

Yet again the Nassau County Board of County Commissioners (BOCC) found a way to delay its vote on an economic incentives package for LignoTech Florida, the Norwegian company exploring collocating an industrial facility with the Rayonier Advanced Materials plant in Fernandina Beach.   By agreeing to commission a cost benefit study for $7,500, the BOCC has delayed further consideration of the issue.

BOCC chambers in the Page Governmental Center were packed on May 23, 2016 for the commission’s regular meeting. The LignoTech issue drew several speakers, all of whom supported approving the incentives package. Two commissioners—Danny Leeper (District 1) and Pat Edwards (District 3)—argued that there was no need to spend additional county funds to study an issue that had already been fully vetted. However, Commissioners Steve Kelley (District 2) and George Spicer (District 4) demurred. BOCC Chair Walter “Junior” Boatright (District 5) did not express an opinion.

After extensive discussion and public input, Commissioner Pat Edwards moved to authorize the $7,500 cost benefit study, expressing the hope that this study would remove the final obstacle to the BOCC’s approving the LignoTech incentives package on a 5-0 vote. Commissioner George Spicer seconded the motion, which passed on a unanimous vote. Chair Boatright declared a recess following the vote.

Background

As reported in the Fernandina Observer following the May 4, 2016 BOCC workshop, LignoTech Florida is proposing to invest $110M in a facility to be built adjacent to the Rayonier Advanced Material plant on Gum Street in Fernandina Beach that will bring to the community 50 or more jobs. A Qualified Target Incentive based on the number of jobs created by LignoTech squeaked by on a 3 – 2 vote in March with Commissioners Kelley and Spicer voting against despite an 80% state match ($360,00) and 10% match of ($45,000) from the City of Fernandina Beach.

This is the third time the BOCC has approved an Economic Development Grant (EDG). In 2013, VyStar received a 5-year grant for expansion of an existing business based on 11 new jobs with average wages excluding benefits of $29,182 and a 4.3 million dollar investment.

A 5-year grant was given to DaySpring Village in 2015, approved 5 – 0 by Commissioners, Boatright, Edwards, Leeper, Kelley, and Spicer, based on 85 new jobs averaging $20,320 excluding benefits and a $4.74 M investment. DaySpring Village is owned and operated by Donald “Doug” Adkins, husband of State Representative Janet Adkins.

LignoTech Florida is the first EDG in the new business category. Conservative estimates are for 50- 60 new jobs with salaries averaging $50,000 and a planned 110 million dollar investment.

Cost Benefit Study

County Manager Ted Selby kicked off the LignoTech discussion by advising commissioners that at their request the county had gone out to secure estimates for the requested cost benefit study. Only two firms had responded positively: Fishkind and Associates at $10,000 and Robert Charles Lesser & Company (RCLCO) at $7,500.

Public input

Chair Boatright invited members of the public to speak on the matter.

Mike Cole
Mike Cole

First to speak was Mike Cole, who has been a member of the Nassau County Economic Development Board (NCEDB) for 8 years. He works in the culinary program at Florida State College at Jacksonville and operates two small businesses. Cole told commissioners, “If you keep blowing out the match before we light the fuse” efforts of the NCEDB will never be able to materialize. He said that he strongly feels the need for new economic growth in the county, reminding commissioners that 60 percent of the county’s working population leaves the county daily to work elsewhere. He emphasized that the county needs companies that bring high wage, high growth jobs.

Mike Stokes
Mike Stokes

Mike Stokes, another Nassau County businessman who serves on the NCEDB, told commissioners that the county needs roads paved and new schools. He said that two studies have already addressed concerns over LignoTech. “You need industries in the county,” he said. He asked, “Where is the cost to the BOCC that needs to be studied?” adding that the city of Fernandina Beach would pay for any additional needs such as fire and police.

Stokes reminded commissioners that several years ago the county had an opportunity to attract a chip mill to the Crawford area west of Callahan. Because the commissioners at the time did not want to deal with the traffic, they passed on the opportunity. “The chip mill instead went four miles down the road to Georgia,” Stokes said. “So today [Nassau County] gets the traffic from the plant but not the economic benefit [of jobs].”

Bill Moore, a member of the Amelia Island Fernandina Beach Yulee Chamber of Commerce Board of Directors, asked the county to continue to offer economic incentives. He read a letter of support for LignoTech incentives, which is provided below:

Chamber letter

 

BOCC discussion

DSCN6927Chair Boatright recognized Commissioner Steve Kelley, who revealed that he had sat beside his wife as she Googled firms that could evaluate economic development proposals, and found that some could be hired to do so for $5,000 per year. “I don’t like being called anything from obstructionist to [worse],” he said. “I’m not trying to hold up anything. I just want the BOCC to make an informed decision.”

Chair Boatright asked Kelley why he was bringing up this evaluation proposal now when he did not do so for the two previous grants that the county approved. Kelley said that the previous grants were much smaller, adding, “We could end up really embarrassed.” Commissioner George Spicer agreed with Kelley, adding that he would like more input.

Version 2Commissioner Danny Leeper spoke next. “We’ve studied this thing to death,” he said. “This is an opportunity for us to get money to fix the roads that citizens are complaining about. I don’t think I need another study to tell me the benefits of [the LignoTech proposal]. We used a common sense approach to approving the two previous grants, and we need to do the same now. A 3-2 vote to approve the measure sends a message to LignoTech that we are an unstable county. We get to the 11th hour and then say, ‘Wait. Time out.’ I want a 5-0 vote, if we can get there.”

DSCN6928Commissioner Pat Edwards agreed with Leeper on the desirability of a 5-0 vote. He went on to suggest that county politics in the form of the upcoming elections were interfering with the decision-making process. He expressed concern that the county’s chief financial officer, Clerk of Courts John Crawford, had absented himself from the discussion. Crawford is running for reelection this year.

Edwards called Property Appraiser Mike Hickox to clarify figures that Kelley had stated on the size of the proposed incentive. He said that the BOCC’s portion was only 32 percent, not the 75 percent that Kelley had stated. In response to Kelley’s concern that such incentives might be unfair to existing businesses, Hickox said that existing businesses would also be eligible for consideration, provided they were expanding their operation and adding jobs.

Kelley went on to question the value of economic incentives, asking “When is enough enough? What’s the limit? Three companies? 28 companies? I can feel the pressure already, that is impossible to deny. The [proposed cost benefit] study makes sure we are on firm footing. Are we in such a hurry that we can’t slow down and do it right?”

Leeper reminded commissioners that the tax rebate is only as good as the company’s investment in the county. He added that all around the state and the county economic incentives are being offered. “They work,” he said. “They bring jobs.” Leeper asked that commissioners stop referring to economic incentives as “corporate welfare.”

Pat Edwards, in what he hoped was a move to an eventual 5-0 vote to approve the LignoTech incentives package, moved to approve the cost benefit analysis contract award to RCLCO for $7,500 with the proviso that the BOCC also send a letter to County Clerk John Crawford asking him to attend all meetings dealing with economic development. Spicer seconded the motion, which passed on a unanimous vote.

Chair Boatright declared a recess, giving those who had attended just for the LignoTech matter, to clear the room. Several audience members expressed frustration and puzzlement. One person asked why the county would pay $7500 for a cost benefit analysis, when no cost to the county had been identified. Others expressed anger that some commissioners were playing politics when they should be looking out for jobs and the taxpayers.

It is anticipated that the cost benefit analysis will be completed in the next 4-6 weeks.

Suanne Thamm 4Editor’s Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne’s many contributions to the Fernandina Observer.

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John Goshco
John Goshco (@guest_47243)
7 years ago

I’m waiting for the cost/benefit analysis on the next proposed residential development or hotel/resort development.