The dark days of free money as a job-creating incentive to businesses crashed and burned along with Sanborn Studios LLC. Sarasota County quit writing checks to companies making big promises to create jobs in the name of economic development — a tough lesson after Sanborn cashed that check and the company soon fell apart.
The county’s 2010 contract with Sanborn did not contain a clawback clause, a terrible oversight. But Sarasota won a court ruling in August and will get a bit more than half the money back — $350,000. But $300,000 in taxpayer money has been lost. This illustrates government gambling at its worst.
Manatee County’s policy on incentives never gave money upfront, a very prudent policy; companies had to fulfill a contract with actual job creation, not flimsy promises.
In Sarasota County, officials were blinded by a Hollywood-esque presentation with live-action video of a crime television series. Sanborn Studios only produced shame. The Bradenton Herald never fell for the company’s pitch and dug deep into the histories of the primary players, exposing numerous red flags.
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67 Number of companies that have signed economic development contracts with Manatee County
As the Herald’s current weekly business series on Manatee County’s incentive program indicates, caution and due diligence are vital to success. Since 2009, 67 companies have signed economic development contracts with the county. Many of those enterprises are small but important to the overall economic health and quality of life here, and their incentive packages do not enrich the recipients.
Motorworks Brewing, for example, won a $30,000 incentive contract on projected job growth of 30 employees with an average wage of $35,700. The 2011 agreement still has a few years to run, and Motorworks has been paid $18,000 from the county for job creation between 2012 and 2014. Considering the husband and wife owners, Frank and Denise Tschida, invested about $5 million into the property and have a monthly payroll of $40,000, the incentive package is relatively small.
In partnership with the state, the county can offer the big bucks to the big prospects. Feld Entertainment, a global giant that relocated its headquarters to Palmetto some four years ago, entered into an agreement with Manatee County and the Florida Department of Economic Opportunity for a total of $3.3 million in incentives paid over five years. That was contingent on Feld making a capital investment of $20 million and creating 235 jobs with wages at 200 percent or more of the average annual salary in the county.
The company — consisting of the Ringling Brothers and Barnum & Bailey Circus, Disney on Ice shows and Monster Jam truck spectacles — signed a second agreement in 2015 worth $2 million should Feld create another 200 jobs by 2020.
Feld has surpassed job creation goals with almost 600 employees working at the cavernous Palmetto base of operations. The company consolidated operations here from sites across the country. On capital investments, the company qualified for the county’s rapid-response permitting process for its multiple projects.
Today, Feld’s vice president of finance and strategic planning, Casey Rodgers, told the Herald the company has sharpened its focus on growing connections with the community and nonprofits — certainly demonstrating admirable corporate citizenship.
This is the flip side to Sanborn Studios, an abject failure and cautionary lesson in economic development. The flashy company never came close to creating the 117 jobs at an average annual salary of $72,000 by September 2013 in exchange for $650,000 in incentives. None of Sanborn’s projects materialized. The company completely dissolved this past April.
In helping to attract and retain businesses, Manatee County’s incentive program grows the tax base, thus earning a return on the investments. Big companies such as Feld grow the county’s reputation as a good place to do business, raising the potential for even greater economic development and job creation. With the risks low and potential rewards high, Manatee County’s program places good bets on businesses.