SUBJECT/RECOMMENDATION:
Title
Endorse the application for Project Last Dance and commit the City of Clearwater to provide local financial support (Local Match) not to exceed $10,000, which is ten percent of the eligible tax refund, upon certification by State of Florida Department of Economic Opportunity and adopt Resolution 20-20.
Body
SUMMARY:
The Florida Legislature created Florida Statute, Section s.288.106 to encourage the growth of Florida’s high wage, value-added employment. This program is commonly known as the Qualified Target Industry Tax Refund Program (QTI Program). This law authorizes Enterprise Florida, Inc. to accept, review and recommend applications for consideration by State of Florida Department of Economic Opportunity (DEO) for tax refunds to qualified target industry businesses. Pursuant to Florida Statute, Sections s.288.075 and s.288.106, the applicant requests certain information, including the name of the company, remain confidential until such time as is required under statute or desired by the applicant. Project Last Dance is the alias name of the applicant company.
This Resolution provides a commitment of the city to support the QTI Program which provides a performance-based incentive. The incentive is negotiated in advance of Project Last Dance commitment to expand its operations in the City of Clearwater. It does not guarantee payment until such time as the terms of the contract made between DEO and Project Last Dance are met, subject to limitations described below.
QTI Program Description
The QTI Program works as an inducement to encourage companies to locate or expand in Florida. In accordance with the QTI Program eligibility criteria, no commitment to expand in Florida has been made at this time. The incentive may not exceed that which is requested in the application. As required by the QTI Program, the Project Last Dance expansion will increase the Company’s employment in Florida by greater than 10% and, as evidenced by staff’s economic impact analysis1 , the proposed new jobs will make a significant economic contribution to the area economy.
Description of Project
Project Last Dance is seeking State, County and City inducement to expand operations and to create additional jobs in the City of Clearwater. The Company projects to add 20 jobs over five years beginning in 2021. Project Last Dance job creation schedule is as follows:
|
Phase |
Number of net new full-time equivalent Florida jobs created in the business unit |
Date by which jobs will be created |
|
I |
10 |
12/31/2021 |
|
2 |
3 |
12/31/2022 |
|
3 |
3 |
12/31/2023 |
|
4 |
2 |
12/31/2024 |
|
5 |
2 |
12/31/2025 |
|
Total |
20 |
|
Below are the types of jobs expected to be created by this Corporate Headquarters:
|
Business Unit Activities |
6 Digit NAICS Code(s) |
Project Function |
Annualized Wage ($) |
|
Custom Computer Programming Services |
541511 |
100% |
$56,236 |
|
Average Wage |
|
100% |
$56,236 |
Average wages of all new jobs created by Project Last Dance is to be no less than $56,236, which is 115% of the Statewide Annual Average Wage for the year ended December 31, 2019.
QTI Program Request & Local Match Commitment
The requested tax refund is to be paid to the applicant each state fiscal year (July 1- June 30) for a period of eight years. If approved by DEO, Pinellas County and the City of Clearwater, the applicant will receive a refund for each new job created in the City of Clearwater. The QTI Program allows for a refund of eligible taxes paid that will equal a maximum of $3,000 per new job created and $2,000 for the DEO High Impact Sector Bonus. Eighty percent of this award is provided by the State of Florida, with a Local Match of ten percent from the City of Clearwater and ten percent from Pinellas County. Therefore, the maximum Local City of Clearwater Match
award per new job created is $500 for a total Local Match of $10,000.
Payment Schedule
Disbursement of the fifty percent Local Match is paid out over an eight-year period for each phase in which the jobs are created. The schedule is as follows:
|
PHASE |
# JOBS |
ELIGIBLE LOCAL MATCH |
FY22/23 |
FY23/24 |
FY24/25 |
FY25/26 |
FY26/27 |
FY27/28 |
FY28/29 |
FY29/30 |
|
YR1 |
10 |
$5,000 |
$1,250 |
$1,250 |
$1,250 |
$1,250 |
|
|
|
|
|
YR2 |
3 |
$1,500 |
|
$375 |
$375 |
$375 |
$375 |
|
|
|
|
YR3 |
3 |
$1,500 |
|
|
$375 |
$375 |
$375 |
$375 |
|
|
|
YR4 |
2 |
$1,000 |
|
|
|
$250 |
$250 |
$250 |
$250 |
|
|
YR5 |
2 |
$1,000 |
|
|
|
|
$250 |
$250 |
$250 |
$250 |
|
TOTAL |
20 |
$10,000 |
$1,250 |
$1,625 |
$2,000 |
$2,250 |
$1,250 |
$875 |
$500 |
$250 |
The payment schedule is subject to the applicant continuing to meet all eligibility criteria which is verified each year by the DEO, the City of Clearwater and Pinellas County. Upon verification, the DEO requests the Local Match disbursement check from the City up to the maximum yearly allowed amount. The DEO then provides the disbursement to the applicant.
Conditions of Limitation & Termination
During the term of the agreement, the Local Match may be lowered under the following conditions:
• If in any year the applicant does not achieve the job creation schedule but achieves at least eighty percent of the required new jobs, the company will receive a pro-rated refund less five percent penalty of the schedule award amount for that year.
• If the total of the eligible taxes paid by the company is less than the maximum eligible refund amount awarded, the Local Match will be reduced on a pro-rated basis. The refunded amount will not exceed the amount of eligible taxes paid by the company.
The Local Match may be eliminated under the following conditions:
• If job creation falls below 80% of the required jobs, the company will not receive a refund and will be terminated from the program.
• If the average wage falls below $56,236, the company will not receive a refund and will be terminated from the program.
APPROPRIATION CODE AND AMOUNT:
For fiscal year 2022/23, funds are available in special program 181-99846, Economic Development - QTI. Future year funding will be allocated during the City’s annual budget process.
USE OF RESERVE FUNDS:
N/A