Over the next nine years, the company will save hundreds of thousands in taxes in exchange for job creation
PORT ST. LUCIE ― The City Council unanimously adopted an ordinance May 11 formally authorizing the launch of the $9.2 million incentive package approved more than two years ago to entice City Electric Supply to remain here and build its new facility in the Southern Groves Jobs Corridor. The city’s Building Department approved the certificate of occupancy for the 411,000-square-foot manufacturing and distribution facility at 11675 Tom Mackey Blvd in January.
Business Navigator Elijah Wooten told the Council the company had submitted its ad valorem tax exemption application to both city staff and the St. Lucie County Property Appraiser’s Office in tandem with the completion of its nearly $38-million building in January. That triggered a financial analysis report by the latter, which revealed a reduction in property tax proceeds of almost $200,000 this year due to the City Electric exemption and a smaller one for Expert Shutters.
“The total revenue available to Port St. Lucie for the current fiscal year from ad valorem taxes is $54,425,852.97,” he said. “The revenue lost to the city this fiscal year due to prior ad valorem tax revenues granted is $3,595.41, which was Expert Shutters. The estimate of the revenue lost if the exemption were granted, and property leased by City Electric Supply was subject to taxation is $191,456.64. The estimate of the taxable value lost if the ad valorem exemption is granted for improvements to real property $32,900,434 and personal property is $4,976,521.”
Mr. Wooten pointed out that City Electric’s exemptions would remain at 100 percent for the first five years and then begin a gradual reduction until sunsetting in 2029.
“The next five years is scaled,” he explained. “So, the tax exemption for year six is 90 percent; year seven is 80 percent; year eight is 60 percent; year nine is 40 percent; and year 10 is 20 percent.”
City Electric’s commitment of creating 50 new jobs will also be phased, coupled with the retention of its current 210 positions. The Tamco subsidiary of the Dallas-based company originally had upwards of 222 employees in St. Lucie West in 2018 when officials unveiled their plans to stay in Port St. Lucie rather than relocate to either Dallas or Charlotte, N.C., but that number has decreased during the recent economic downturn. Ten new jobs will be created in 2021, followed by eight more in 2022; 12 in 2023; 10 in 2024; and 10 in 2025.
“Again, all documents evidencing job retention and creation must be submitted to the city’s business navigator and the Finance Department for review and approval,” Mr. Wooten added. “It’s recommended that the applicability of the tax exemption be evaluated on a yearly basis to ensure City Electric Supply meets the exemption qualifications for each year covered by the exemption request.”
After the business navigator concluded his presentation, Mayor Gregory Oravec asked both him and City Manager Russ Blackburn to provide more of a historical overview of the ad valorem exemption program for taxpayers in the future.
“If it’s possible just in the narrative, if you would just always hit on the fact that this program was approved by the voters,” he said. “As part of our sharing with the public and all the people that move here and haven’t seen the application of this ordinance before, this economic development tool was voter authorized.”
For her part, Vice-Mayor Shannon Martin wanted to remind citizens of the projected economic impact of City Electric’s local expansion as justification for writing off so much property tax revenue over the next nine years. Although no one mentioned that impact during the latest discussion, St. Lucie County Economic Development Council President Pete Tesch told the Board in 2018 that retaining and expanding the company’s TAMCO group would ultimately create much more than just the aforementioned 50 jobs. The EDC used the analytical expertise of the national IMPLAN firm to more accurately estimate the true economic injection the company would provide to Port St. Lucie and the city’s Southern Groves Jobs Corridor.
“Because of the multiplier effect, this will create 522 direct, indirect and induced jobs in the area,” he said that March.
The vice-mayor believes reminding the public of the addition of indirect jobs – those created by business-to-business interactions – and the induced jobs created by all those employees spending their salaries locally, is also crucial.
“When we initially approved it, we also talked about the economic input and output, and I think it will be helpful to also discuss that,” she said. “Because when you’re talking about these large numbers, it’s important to show overall what the company brings to the city and not just on the tax exemption side. It helps people understand a little bit clearer.”
Councilwoman Jolien Caraballo then asked for confirmation that Port St. Lucie would not be shouldering the tax burden of this economic development project alone.
“This is a collaborative effort with the county as well, correct?” she said.
“Yes,” Mr. Wooten responded. “The incentive package included Port St. Lucie, the county and the State of Florida.”
“So, we’re not in this alone, we’re in this together,” Councilwoman Caraballo continued. “And we’re all working together to hopefully make them successful and continue to provide economic growth in our city.”
Mayor Oravec piggybacked on both their comments, reiterating the fact that Port St. Lucie had taken over the fledgling Jobs Corridor from the Tradition Land Company in 2018 but needed to better communicate its economic development successes to the public.
“I have been asking staff for an annual report that kind of provides the performance indicators that help drive our Strategic Plan to be accountable on our economic development program,” he said. “This Council was pivotal on bringing the Jobs Corridor to life and to carrying out the strategic priority of economic development and job creation. A lot of times these projects come in with fanfare, but then we don’t follow them through the process. Let’s not lose sight that several years ago, Expert Shutters was one of our major economic development projects for that year, and we’ve had them back because they’ve put forth an award-winning effort. It certainly would be fun to point out when the economic development projects over perform.”
The Council then voted unanimously to adopt the ordinance and approve the City Electric exemptions.