Last month Palm Coast government announced that Ground Up, the Connecticut-based muscle-car parts company, was eventually closing shop there and moving its operations to the 70,000 square foot building on Commerce Boulevard that once served as City Hall then as headquarters to Palm Coast Data. Ground Up pledges to bring 30 to 40 jobs. The city had been in talks with the company since January.
Today, the Palm Coast City Council embraced an unusual incentive to the company: a five-year, 75 percent discount on the property taxes Ground Up will owe the city. In exchange, the company will have to spend what money would have gone to the city on certain city-related initiatives. The package is the first of its kind in Palm Coast, though it’s not a particularly unusual approach in aid packages: American foreign aid is usually structured the same way. The federal government requires recipient countries to spend their aid dollars on American goods, thus recycling the money back to home coffers.
Palm Coast is calling its approach a “recapture, enhanced value grant,” a method in use by a few cities, namely Jacksonville and Lakeland, if differently structured than Palm Coast’s. Jacksonville and Lakeland offer a rebate of up to 50 percent on the incremental increase in property taxes, from a base year, and stretch the grant over 10 years.
Palm Coast government’s goals include the directive to “create a business recruitment program and develop incentives through in-house resources.” In previous years, the city has offered incentives by discounting impact fees (the one-time levies on new construction) or, in Palm Coast Data’s case, sold it that very building at 2 Commerce Boulevard for what at the time, was a very low price. County government a few years ago offered rebats on property taxes of prospective new companies, but the approach fizzled out.
As Palm Coast Development Director presented the tax rebate approach to the council in a workshop this morning, council members were quick to applaud it and hope for more.
“For the amount of money it’s a no brainer. I hope that they pay decent salaries, which I’m sure they will. And I’m hoping that we are opening a good can of worms,” Council member Eddie Branquinho said.
“How can we parlay this success into broadcasting to other businesses, perhaps, maybe competitors, maybe in a similar industry or just similar size, how can we herald the fact that we’ve got these people coming and we want more?” Alfin said.
There is a cost to the city. But since it’s only one company for now, the cost is almost insignificant. In 2020 the tax bill for 2 Commerce was $55,855. The Palm Coast portion of that was $12,884. Based on those numbers, DeLorenzo said a 75 percent tax rebate would be $9,684, “and over a five year period depending on taxable value growth and millage, that can be…