With code names like Project Turtle and Project Empire, nearly a dozen companies negotiated economic development deals with the city of Jacksonville in 2018 without divulging their identities to the public.
The deals included millions of dollars in taxpayer financial incentives negotiated outside of public view and voted on by City Council without an identified name.
Since January, economic development packages for 11 companies that were unidentified in legislation included more than $13.3 million in city and state-backed financial incentives.
Those companies proposed adding 1,169 jobs over the next five years and investing more than $200 million in private capital into new or existing facilities.
Eight of those agreements have been executed.
Incentives usually are paid out over several years and only after the company reaches agreed-upon hiring goals or investments at their facilities.
Under state law, companies can protect what they consider sensitive and identifiable information during negotiations.
The prospects require government officials to sign nondisclosure agreements that protect their identities for up to a year after an agreement is executed.
City-appointed economic development officials can vet the deals behind closed doors and City Council members can vote on them without divulging the name to the public.
Economic development officials can meet individually with council members before the votes to explain the deal and the prospect.
The city maintains it doesn’t negotiate deals unless they include a positive return on investment, a figure calculated through a formula.
Most of the information provided to the public includes the number of jobs and wages or the amount of private capital the companies plan to invest. Sometimes the size and general location of the project is included.
Nonspecific information sometimes is provided through public documents, drafts of the development agreements or through legislation.
For example, the city described Project Blaze as an “eco-friendly Midwest-based hair-care product maker.”
Project Empire was described as a “national distributor of an assortment of household goods.”
Companies and the city sometimes announce the names after council approves the incentives. The name also can be found in the completed economic development agreement signed by the city and a company representative.
Shielding details ‘vital’
Council President Aaron Bowman is involved directly in the incentives negotiations through his job as senior vice president of business development of the JAXUSA Partnership, the economic development division of the JAX Chamber.
He said shielding proprietary or identifiable details is vital for prospects.
“They frankly don’t want their competition to know what they’re doing,” Bowman said. “It can impact stock prices, employee morale and even real estate prices.”
Bowman said Jacksonville is competing with other cities to land deals with companies like Amazon, which had code names for its Westside and North Jacksonville fulfillment centers – Project Rex and Project Velo.
The Jacksonville Daily Record and Record & Observer identified several of the companies using code names in 2018 by researching public documents, corporate information and reporting.
Among other projects, the Jacksonville Daily Record identified Project Empire as Wayfair LLC, Project Blaze as Ecoco Inc. and Project Volt as JinkoSolar before the city would provide the information.
The Project Volt agreement was terminated and new legislation was introduced that named JinkoSolar.
Bowman said that reporting the names before the companies want them disclosed can jeopardize negotiations.
“I’ve been told very bluntly by several consultants that, ‘Jacksonville, you’re on the shortlist but if I read about this in the paper, you’re immediately off’,” he said.
Bowman said in an email he didn't know of any lost deals. "But of course you never know why you did not get considered or win a project," he said.
Bowman said he usually doesn’t know who his competitors are, but when he does, “we’ll use that to our advantage.”
“If I know that a company is looking at Charleston, South Carolina, then I’m going to do everything I can to exploit Charleston’s weaknesses and make sure that Jacksonville looks stronger,” he said.
“You better believe they’re going to do the same.”
The code-name challenge
Coming up with code names is another challenge.
“Sometimes they come already with a name and a lot of times we’ll have to double code word it,” Bowman said.
“Because if Charleston finds out that we’re also working on a Project Hunter, then they automatically know who their competition is,” he said.
Criticism of the deal-making is that the public, and in some cases, the council members voting on the agreements, can’t vet the companies.
“I get it. You’re asking 19 council members to approve a $17 million package and you’re telling them, we can’t say who they are or what they do in public,” Bowman said. “I can see how that can be a problem.”
Bowman said council members “can trust economic development officials to be good stewards of taxpayer funds.”
If a deal is big enough, or if a council member asks, Bowman said the Office of Economic Development will host one-on-one meetings to share sensitive information with the understanding that the conversation remains private.
“There’s no paperwork, there’s no recordings or emails,” he said.
And usually there is little public debate before council members approve a deal.
Bowman said he expects more deals to come up in 2019.
“We’ve got a few that are moving along nicely and should come to fruition in the spring,” he said.
