A redrawn incentives package aimed at propelling the expansion of a local financial services company has been put forward to Jacksonville City Council.
The Council Rules Committee approved the revised $21 million incentives deal for the code-named Project Paper Company on a 7-0 vote Nov. 18.
The original package also was $21 million. It comprised a $10 million Recapture Enhanced Value Grant over 13 years; a $5 million Business Expansion Grant over 10 years; a Local Targeted Industry Employment Grant up to $3 million for job creation; and a Job Retention Grant up to $3 million.
As revised, the REV Grant increases to $16 million over 13 years, the targeted industry grant rises to $5 million and the other two grants are eliminated.
Project Paper Company, as described in city documentation, matches Intercontinental Exchange Inc. The city says the company’s expansion plan would add 500 employees to its 1,500-member workforce.
Spending concerns
The changes in the incentive package came about after Council members Nick Howland and Will Lahnen, unbeknownst to each other, raised concerns to Mayor Donna Deegan’s administration and the JAX Chamber about how that deal would affect the city budget at a time when Council auditors have projected deficits of up to $105 million through 2029.
Howland and Lahnen were particularly concerned about the $11 million in the original package that didn’t involve REV Grants. Payment for those non-REV grants comes the city’s general fund, which essentially acts as its savings account.
A REV Grant, on the other hand, is a refund on ad valorem tax revenue generated by a new development. Although the city gives back much of that increased revenue, it still collects more than it would have if a property hadn’t been improved.
By increasing the percentage of REV Grant funding, Howland and Lahnen sought to reduce the reliance on the so-called “cash grants” that are payable from the general fund.
Lahnen said he also was concerned about potentially establishing a precedent of providing public funding to retain companies. A new round of negotiations between the city, the company and the chamber, which helped forge the original deal, resulted in the new package.
Among the changes, city funding for each new job created would increase to $10,000 from $6,000 and the REV Grant is for 90% over 13 years as opposed to 50%.
Howland said the revisions reduced the city’s risk while increasing return on investment from $1.01 per $1 of public funding to $1.17.
The company’s total investment for the expansion is listed by the city at $173 million, which could possibly rise to $216 million over five years for construction, equipment and building improvements.
Howland, chair of the Rules Committee, said after the meeting that there was “definitely concern” going into the renegotiation that the company might not re-engage and instead look elsewhere.
“There was discussion originally with Aundra Wallace at the chamber over would they be amenable to a change in the structure to be more heavily tax rebate focused,” Howland said. “He said, ‘It might be tough.’”
“But at the end of the day, it’s still a $21 million incentive package that largely achieves the same thing for Project Paper Company.”
'They want to be here'
Howland said the company’s willingness to go back to the table “means they want to be here.”
“They value the business environment that this city over the last few decades has created,” he said. “This is a city on the upswing, and I think Project Paper Company is an indication of that.”
Council member Chris Miller said he shared concerns about the original package and applauded all involved in the revisions “for being able to find a more middle ground that I think is more fiscally responsible on the part of the taxpayers.”
“I think this was a good example of when we bring up a concern and people sit down and work it through at all levels,” he said.
Finance Committee next
The Rules committee’s vote was to recommend approval of a substitute for the legislation containing the incentives, Ordinance 2024-0836. Next up, the Council Finance Committee is set to consider the package on Nov. 19.
Intercontinental Exchange Inc. describes itself as a Fortune 500 company that designs, builds and “operates digital networks that connect people to opportunity. The company has said already it was expanding in Jacksonville.
ICE completed the $11.9 billion acquisition of Jacksonville-based Black Knight Inc. in September 2023. Black Knight is a software, data and analytics company that serves the housing finance market, including real estate data, mortgage lending and servicing, as well as the secondary markets.
ICE, best known as the operator of the New York Stock Exchange, said it is upgrading the former Black Knight headquarters at 601 Riverside Ave. in the Brooklyn area of Downtown Jacksonville.