Florida’s newest Fortune 500 company comes with a price tag that could top $84 million, reports Jim Turner of the News Service of Florida.
State, local and utility performance-based incentives start around $19 million for the Hertz Corporation to relocate from Park Ridge, N.J., to the Lee County community of Estero, with 20 years of potential tax credits driving up the number.
In return, the worldwide rental-car agency is expected to bring at least 700 high-paying jobs to Florida over the next two years and spend $60 million building a new headquarters.
Gov. Rick Scott, who helped announced the deal Tuesday, defended the incentives package while appearing Wednesday on CNBC’s “Squawk Box” program.
“Every project like this we’ve got to get a return on investment, it’s no different than a return for shareholders, I’ve got to get a return for the taxpayers,” Scott said.
“What we do in all of the projects I’ve done —I’ve done over 300 projects since I’ve been governor — we’ve got to get five times the return over the next five years,” Scott said. “So if we give an inducement of $100,000 … the state taxpayers get back $500,000 over the next five years.”
The Hertz package includes:
— $3.4 million a year, for up to 20 years, through the Capital Investment Tax Credit.
— $945,000, Quick Response Training program, reimbursement for training costs.
— $7 million, Quick Action Closing fund, paid out based on specific performance-based criteria.
— $3 million, Qualified Target Industry Tax Refund, once the company meets job and salary criteria.
— $4.6 million, Lee County incentives. Enterprise Florida estimates the local incentives could top $5 million.
— $125,000 a year, for four years, through an economic development rate reduction from Florida Power & Light Co.
“I hope everybody rents more Hertz cars so we can add more jobs in Florida,” Scott said.
The headquarters must be completed in 2015.
Hertz, in its release on the move, highlighted the growth potential in Florida for the rental car industry as a reason behind the move. The relocation plans follow the company’s $2.3 billion acquisition of the Tulsa, Okla.-based Dollar Thrifty Automotive Group in November.
Hertz, which already employs more than 3,000 people in Florida, isn’t abandoning New Jersey, noting that more than 2,000 employees, including 150 in Park Ridge, will remain in the Garden State
The incentives package comes as the state has been under intense pressure to detail the different economic incentive programs since the failure in September of Digital Domain Media Group, a visual effects company in Port St. Lucie that had been awarded $20 million from the state’s Quick Action Closing Fund in 2009.
The Legislature’s recently completed $74.5 billion budget for the next fiscal year includes $500,000 requested by Scott to support the state’s interest in any Digital Domain bankruptcy action.
The state’s contribution to Digital Domain was dwarfed by local incentives offered from Port St. Lucie ($10 million in cash, $10.5 million for land, $39.9 million in bond refinancing) and West Palm Beach ($10 million in cash, $9.8 million in land, $15 million in bonds).
The Hertz package doesn’t match the lofty incentives packages that were awarded when state and local leaders envisioned the creation of bio-tech hubs, starting in 2003 with a $579 million package – $310 million offered from the state – for California’s Scripps Research Institute to open Scripps Florida in Jupiter.
Over the next few years, the state put up: $157 million for California-based Sanford-Burnham Medical Research Institute to land in Central Florida; $94.1 million for the Germany-based Max Planck to open in Jupiter; $24.7 million for Torrey Pines Institute for Molecular Studies to expand from California to Port St. Lucie; and $60 million for Oregon Health and Science University’s Vaccine and Gene Therapy Institute also expand to Port St. Lucie.
