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Now browsing: Hometown News > Business & Finance > Volusia County

Tax incentive programs are going too far
Rating: 3.17 / 5 (18 votes)  
Posted: 2012 Dec 14 - 06:00

By Cecil G. Brumley

The Daytona Beach City Commission and the state are considering a rather disturbing tax incentive for a business that will provide jobs with an average of $25,000, a rather generous estimate considering it's in the restaurant industry.

There will be a hearing Dec. 19 on the proposal to grant Qualified Brownfield Business status to the Darden Restaurants/CBL & Associates' plan to demolish the Ramada Inn Speedway and replace it with Bahama Breeze and Olive Garden restaurants. It would create a property tax exemption for the project over seven years that amounts to $77,366 and would provide a 20 percent match to what the state will kick in for 64 jobs.

The question is whether a project should get any public help when it basically eliminates an ongoing business, the Ramada Inn (granted the restaurant there was closed by Uno's) and replacing it with businesses that usually provide mostly low-wage jobs. Not to mention that Darden probably would do the project anyway since it puts two of its restaurants across the street from Daytona International Speedway, an area that generates a lot of business every year.

There is a trend right now the public should take a hard look at. Cities are declaring areas blighted that really seem to be only slightly tarnished. It's happening mostly along U.S. 1, but in Daytona Beach it extends across much of the city. All of this probably will shift more of the property tax burden away from business and onto the shoulders of residents. Wouldn't it be more sensible to just look for ways to reduce the overall tax burden, thus encouraging private business development and giving taxpayers more money to spend at those businesses? The trend is getting so out of hand, it's making old moderate independent me sound like a member of the Tea Party.

That's not to say all tax incentive programs should be eliminated. While it's unfortunate that both Daytona Beach and South Daytona are working on competing incentive programs, the payoff is a Green Earth Technologies plant, making its bio-oil, and the creation of 31 jobs at an average salary of $49,900. The company has identified both cities as potential expansion sites, so both are developing the incentives to go along with what the state and Volusia County are doing. In this case, the incentive program helps encourage a start-up business with a good bit of risk to create higher-paying jobs in one of the cities.

There just needs to be some common sense applied to tax incentive programs.

***

Biketoberfest apparently was bigger this year, but throw in Embry-Riddle Aeronautical University's big Wings & Waves Air Show and the lodging industry had a much better October this year. Countywide bed tax collections were 11.4 percent in October from October 2011. It was the first time bed tax collections broke the $400,000 mark in October in five years. The Halifax Area and Southeast Volusia had healthy gains for the month, but West Volusia was down 13.25 percent. The word didn't get out that the manatees showed up at Blue Spring State Park earlier than usual. I wonder if the word is really getting spread throughout the country enough that West Volusia is a gem for eco-tourism.

***

After remaining relatively quiet for a while, commercial real estate has suddenly boomed in Volusia. The highlight was two big deals: a group of nursing homes across the county selling for about $33 million and the Integra Shores apartment complex selling for $32 million. Also, New York City area investors paid $4.85 million for the new strip center in front of Lowe's in Port Orange. A Hallandale Beach investor paid $1.2 million for the new Family Dollar Store at 200 N. Ridgewood Ave. in Daytona Beach. Even the vacant land just north of Oakridge Boulevard and the Seabreeze Bridge sold. While attempts to develop the land have failed, a Coral Gables investor bought the riverfront property for $455,000.

***

Construction already is starting on a new Trustco Bank office on North Nova Road in Ormond Beach while BB&T apparently is going forward with an office on State Road 44 next to the new ABC Wines & Spirits.

***

Harbor Freight Tools has begun renovations to put a new store at 2401 Enterprise Road in Orange City. Harbor Freight also has a store in Daytona Beach. Also, Dollar Tree is moving to a large space at New Smyrna Regional Shopping Center on State Road 44.

***

Sparton Corp. got another big contract for sonobuoys from the U.S. Navy, which wants another $71.2 million of the underwater detection devices. About 41 percent of the work will be done at DeLeon Springs.

***

Brown & Brown continued its march toward $2 billion in annual revenue, buying Behnke & Associates of South Florida. The company has offices in Hollywood and Pembroke Pines, and generates about $4 million in annual revenue.

***

On a final note, claims for unemployment compensation remained below last year in November in Volusia at 1,634, which was 5.4 percent less than in November 2011.

Associate Managing Editor Cecil G. Brumley has been tracking business in Volusia County for more than 15 years. Contact him at cbrumley@hometownnewsol.com or follow him on Twitter @cecilbrumley.




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