Economic Development News

Local nonprofits tasked with economic development use different methods
 
Published Sunday, December 5, 2010 7:13 pm
by Erci Phaler for Scripps Newspaper Group

Amidst double-digit unemployment, Treasure Coast county governments have continued to put money toward efforts to increase jobs while other programs and services have been cut.

Martin, St. Lucie and Indian River counties all turn to nonprofit economic development agencies for help drawing high-wage jobs to the region. All three counties have unemployment rates higher than 11.8 percent, according to the latest figures from the Agency for Workforce Innovation.

"They have been effective in recruiting companies and industries here at the county," St. Lucie County Administrator Faye Outlaw said. "I think the county has gotten a good return on its investment."

In 2010, Martin County doubled its contract with the Business Development Board of Martin County to $625,000. St. Lucie County has a $225,000 contract with the Economic Development Council of St. Lucie County. Indian River County has a $119,000 contract with the Indian River County Chamber of Commerce for economic development.

Each county has a different public-private partnership.

"It's not a cookie-cutter approach to doing economic development by having all organizations look alike and act alike," said Stuart Doyle, the spokesman for Enterprise Florida, the state agency for economic development. "They really represent the clientele that they serve."

In an e-mail to Scripps Treasure Coast Newspapers, Economic Development Council of St. Lucie County Director Larry Pelton said there are advantages to such partnerships between the private and public sector. Local officials credit the council and Pelton with helping draw entities such as Digital Domain Holdings and Torrey Pines Institute for Molecular Studies to the county and putting together incentive packages featuring state and local tax dollars for the employers.

The nonprofit has created 1,755 new jobs since June 2006 and has helped local businesses expand by 1,503 full-time jobs in that time period with more projects in the pipeline, Pelton said. The county's $225,000 contribution comes from the general fund.

"The advantage of being a private organization in the recruitment of private sector jobs include: the ability to raise private funding from business investors; a great deal of credibility with private companies that we understand their business planning and needs; the ability to sign corporate confidentiality agreements that are common in the business world; the ability to organize private leadership teams to address business needs; the ability to deal with companies' sensitive proprietary information," Pelton wrote.

Area officials consider Pelton a star hire. He was hired in 2006 after he was key to recruiting Scripps Research Institute to northern Palm Beach County.

The council raised $344,000 from the private sector and paid out $362,000 in salaries, compensation and employee benefits, including $195,000 to Pelton, according to a 2008-09 tax return. According to the tax return, Pelton made $173,000 in base compensation and $22,000 in bonus and incentive compensation.

In the e-mail, Pelton wrote that none of the public funds pay the full compensation of any employees, and his compensation could be maintained without public funds.

After a national search, the Business Development Board Martin County hired Ron Bunch from Danville, Va. to be the board's director.

Bunch now makes $141,000, according to the board's 2008-09 tax return. Ten companies are slated to create 1,182 jobs during the next three years with the board's help, according to the board.

In 2010, the county doubled its contract with the board. Each year, the county gives the board money received from occupational licenses, which are taxes businesses pay to operate. The total typically is about $300,000. The rest of the $625,000 comes from the general fund.

According to 2008-09 tax returns, the business board received $82,000 from the private sector. Crystal Stiles, the board's marketing manager, said the group explored raising more private money, but the board was advised not to try while the economy struggled.

Indian River County is unique compared to others in the Treasure Coast.

The economic development division of the Indian River County Chamber of Commerce helped the county retain Piper Aircraft Inc. and attract a CVS Pharmacy regional distribution center. The two totalled 1,125 jobs. According to the chamber, the division has facilitated six job grants within the last 12 to 18 months that will add about 250 new jobs over the next several years. Another 100 construction jobs are expected from the INEOS New Planet BioEnergy LLC facility.

Private money coming into the chamber helps subsidize the government's efforts to draw business, chamber president Penny Chandler wrote in an e-mail to Scripps Treasure Coast Newspapers.

The chamber houses the economic development division, and so the chamber pays for rent to help keep the public costs down. Other chambers of commerce in the Treasure Coast are separate entities from the local economic development agency.

The chamber does not get paid up front by the county, but rather gets paid back after spending for economic development. The economic development division budget also is approved by the Economic Development Council, which is made up of industry leaders and elected officials throughout Indian River County.

For the 2010 budget year, $40,254 of the $119,000 from the county went to salary and benefits, according to the chamber's request for funding for the 2011 budget year. One position is partially paid for by county funds. The rest of the division's staff is paid from private money collected by the chamber, which reported seven-figure revenues each year from 2006-07 to 2008-09 according to tax returns.

Doyle said many local entities are struggling to raise private money. But Doyle said private sector involvement in attracting business remains key.

"It's still important to have the private sector or the business community involved in economic development because in a major way, they are experts," Doyle said.

ECONOMIC DEVELOPMENT SPENDING

Here's a look at how much local economic development agencies take in from the public and private sector and how they use the money based on information available to the public:

Business Development Board of Martin County*

Public sector contributions: $312,000

Public sector source: Occupational license fees charged to businesses

Private sector contributions: $82,000

Total revenues: $394,000

Amount paid toward salaries, other compensation and employee benefits: $249,000

Marketing and advertising: $25,000

Economic Development Council of St. Lucie ^

Public sector contribution: $268,000

Public sector source: County general fund accounts for $250,000

Private sector contributions: $327,000

Total revenues: $611,000

Amount paid toward salaries, other compensation and employee benefits: $362,000

Marketing and advertising: $13,000

Economic Development Division of the Indian River Chamber of Commerce@

Public sector contribution: $119,000

Public sector source: County general fund

Private sector contributions: Contributions sorted in separate accounts for purposes not limited to economic development. Private sector covers some salary expenses and space for economic development.

Total revenues: $119,000

Amount paid toward salaries, other compensation and employee benefits: $40,000

Marketing and advertising: $0

* Information according to 2008-09 tax return. Martin County since increased its total contribution to $625,000 through general fund contributions.

^ Information according to 2008-09 tax return. St. Lucie County since decreased its total contribution to $225,000.

@ Information according to 2010 request for funding. No money is listed specifically for advertising or marketing, but $1,350 for printing and publications. Indian River Chamber of Commerce pays for space and subsidizes economic development division through private funds.

LOCAL UNEMPLOYMENT RATES

Here's a look at the latest figures from the state's Agency for Workforce Innovation for local unemployment.

Martin County: 11.8 percent

St. Lucie County: 14.7 percent

Indian River County: 14.2 percent


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