LARGO – The city of Largo economic development staff will be developing an incentive program to encourage new and expanding businesses by exempting city property taxes, after commissioners voiced favor for the program May 14.
The program is in direct response to a 59 percent vote in favor of the idea on a citywide referendum in November. It would be designed to specifically encourage high-wage jobs.
Not many businesses would likely qualify, Economic Development Manger Teresa Brydon explained to the commission during the workshop discussion.
“We don’t see too many of these coming in front of us. These are going to be very unique situations,” she said.
The program Brydon presented would require qualifying new businesses to develop 10 or more jobs within manufacturing or targeted industries, including clean-tech, life sciences, information technology, aviation/aerospace, homeland security, financial/professional services or corporate headquarters. If a business has 50 percent of sales outside the state of Florida or is an office-type business, it would have to bring 50 or more new jobs in order to qualify.
Expanding businesses or businesses within a designated Brownfield area have different job creation requirements.
The average wages for those jobs would have to be higher than the county average. Should a business qualify, their real and tangible property taxes would be exempt in the year after the construction on the new building expansion is completed.
Brydon suggested that the commission not limit the dollar amounts to be granted to businesses per fiscal year, given the fact that there may be some years where two or more businesses qualify and some years where no businesses come forward. She also asked that the West Bay Drive redevelopment district be exempted from the program, as it will have its own unique incentives to offer businesses moving to the area.
Commissioner Woody Brown suggested the city give clear direction on the requirements to any new businesses that might qualify, so that they aren’t surprised to not receive the incentive when their construction is completed. He also suggested the city create specific parameters of qualification for different levels of exemption, instead of the city arbitrarily granting 25, 50, 75 or 100 percent of the property tax exemption over a varying number of years.
“I don’t necessarily agree with coming to the commission on each individual basis and saying, ‘You know what, we’re going to give this company 100 percent for 10 years but this one over here 75 percent for five years because … this company is just happier or something,” he said. “I’d prefer to set it up and get emotion out of it.”
Brydon agreed to come up with a list of standards for different levels of exemption and agreed that those parameters should remain clear.
“That makes more sense for the business too so they have some idea what to expect when it comes to this.” Mayor Pat Gerard said.
Robert Murray was the only commissioner to speak out against the program entirely, arguing that it would negatively impact the city’s property tax revenue in the future.
“Due to the fact that it’s an ad valorum tax, I certainly don’t support it,” he said. “The impact on the general fund is going to be a little bit more each and every year.
“At some point we need to make up that revenue,” he added.
Commissioner Curtis Holmes said he supported the idea because the city still benefited better employment and revenue from other fees.
“Are we going to lose a company to Pinellas Park because they’re offering something that we’re not offering?” he asked.
Gerard agreed that the incentive helped Largo get “a leg up on our local competition” over nearby cities.
“We’re not affecting our current tax base, just capital investment and the future tax base,” Brown argued. “If this brings development to Largo, for a short period of time, it will stall the tax base, but 10 years out, they’ll be paying their taxes just like everybody else.”
Brown said that bringing jobs to Largo residents also was a factor in his decision.
Murray disagreed, arguing that employers look for a skilled labor force and transportation infrastructure when deciding where to move or build a company.
“A lot of these incentives lead to short-term gains where corporations come in and then as soon as the market changes, they’re out. There’s not that long-term commitment to the community,” he said.
But with the support of the majority of the commission for the program, Brydon said she would develop parameters to present during an upcoming commission meeting.