Miami‐Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
Dr. Raul Moncarz, Chairman Stephen P. Clark Center, 111 NW First Street, 19th Floor Conference Room Friday, January 17, 2014 at 2:00 pm
A G E N D A
Call to Order Dr. Raul Moncarz, Chairman Welcome and Introductions Dr. R. Moncarz Approval of Minutes Chairperson’s Report Dr. R Moncarz
General Discussion Items
Sunset Review Dr. Robert Cruz Comments on Transportation Whitepaper Dr. Brian Peterson SEDC Goals for 2014 Dr. R. Moncarz Enterprise Zone Reauthorization Dr. Robert Cruz Dr. Antonio Jorge Award Dr. Robert Cruz New Business Public Comments
ADJOURNMENT
Next Meeting Date February 21, 2014
The Dr. Antonio Jorge Social and Economic Development Council Mission To improve the quality of life of all residents of Miami Dade County by providing the County Commission and Mayor with timely, objective, transparent, and thoughtful advice on significant social and economic issues. The Council aims to pursue a balanced perspective among economic development, social justice, and environmental sustainability, both in the short and long term.
The Dr. Antonio Jorge Social and Economic Development Council (SEDC) Meeting Minutes Friday, November 15, 2013 at 2:00 pm
Members Present - Dr. Wilbert Bascom, Dr. Nancy Borkowski, Dr. Thomas Breslin, Mr. Rosendo Castillo, Dr. Maria Espino, Mr. Marcos Kerbel, Mr. Santiago Leon, Dr. Kenneth Lipner, Mr. Jose Lopez-Calleja, Prof Elisa Moncarz, Dr. Raul Moncarz, Dr. Rolando Ochoa, Mr. Jesus Permuy, Mr. Robert Saco, Dr. Eunju Suh, Mr. Reinaldo Valdes, Dr. Bernadette West, Dr. Jorge Salazar-Carrillo, Dr. Pedro Pellet, Dr. Brian Peterson
Guest Present – Dr. Terry Murphy (PAC), Mike Schneider (HR), Arlene Pratt (HR), Ysela Llort, Director, Miami-Dade Transit (MDT), Albert Hernandez (MDT), Rhonda Victor Sibilia (Ethics), Gavin Stewart (FIU Intern)
Staff Present - Dr. Robert Cruz, Ms. Lori Weldon, Mr. Robert Hesler
Excused Absence - Dr. Alexandra Cornelius
Call to Order/Welcome and Introductions - The November 15, 2013 meeting of the SEDC was called to order by Chairman Dr. Raul Moncarz at 2:15 pm welcoming all members, followed by self-introductions.
Approval of Minutes - Mr. Reinaldo Valdez offered the motion to accept the minutes of the October 18, 2013 SEDC meeting. The motion was seconded by Dr. Thomas Breslin. The motion passed unanimously.
Chairperson’s Report - Dr. Moncarz informed the SEDC Members that efforts are being made to meet with the members of the Miami-Dade Board of Commission (BCC). The primary topics of discussion for the meetings would be the Dr. Antonio Jorge lecture event, the Destination Casinos Study, and to educate/reinforce the roll of the SEDC has pertaining to the BCC and economics/the economy of Miami-Dade County.
Dr. Moncarz updated the members on the meeting with Senator Javier Souto. Dr. Moncarz requested volunteers and assistance in organizing the Dr. Jorge lecture event. He further stated that he would like to have the Dr. Jorge lecture event February 8th or 9th, 2014, to commemorate the second anniversary of the death of Dr. Antonio Jorge, or September 28, 2014 in observance/remembrance of Dr. Jorge’s birthday.
Dr. Moncarz also informed the Members that he and Dr. Brian Peterson met with Commissioner Bruno Barreiro. Dr. Peterson relayed to the Council the discussion with Commissioner Barreiro included Destination Casinos/gambling, the possible positive and/or adverse outcomes, the probable benefit as it relates to property taxes and the inclusion of a technological and educational aspect regarding gambling. The discussion also included the issue of transit in Miami-Dade.
A discussion ensued regarding the traditional holiday party, which is scheduled for December 13, 2013 at 12:30 pm at Havana Harry’s.
General Discussion Items –Future of Public Transit Access in Miami-Dade County - Ysela Llort, Director, Miami-Dade Transit (MDT) - A presentation was made by Ms. Ysela Llort, Director, Miami-Dade Transit (MDT). Ms. Llort informed SEDC Members that MDT moves 107 million people per year and provides economic development opportunities through development and redevelopment. MDT is the largest transit agency in Florida and the 12th largest in the nation running four modes of transportation; Metrobus, Metrorail, Metromover, and Special Transportation Services for individuals with special needs or disabilities. Ms. Llort spoke to the Members about Transit Oriented Developments (TOD) where transit services are anchored with mixed use and economic development, i.e. residential and commercial and/or retail. TODs are done through public-private partnerships. MDT provides the land to developers through leases, which generate revenue for MDT. TODs generate over $3,000,000 in revenue annually for MDT and enhances the area economy. The developers get prime location and potential customers and/or residents as a result of location and consumer traffic. Current MDT TODs provide 2,344,000 square feet of office space, 403,100 square feet of retail space, 960 residential units (158 market rate and 802 affordable housing), and 4,746 parking spaces (garage and surface). Ms. Llort informed SEDC Members about the developing Brickell City Centre TOD that will have 5.4 million square feet of office, residential, hotel, retail and entertainment space, in addition to a two-level underground parking garage that will span seven acres below the property. The development is projected to an economic impact of $1billion. MDT is also trying to do more pedestrian friendly developments, Bus Rapid Transit Corridors, and Miami Beach Corridor Transit Connection. The future of transit in Miami-Dade County and the future for MDT includes: a Miami Intermodal Center which will include Metrorail, Tri-Rail, Amtrak, Metrobus, taxis, Rental Car Facility, and a possible speed train connection; and Downtown Miami Connections that will include All Aboard Florida, Port Miami, Metrorail, MIA via Metrorail, Metromover. Ms. Llort stated that transit and transit developments fosters improved/increased mobility, job creation, improved access to goods and services, and an improved economy. A brief discussion/question and answer period followed Ms. Llort’s presentation. Mr. Kerbel invited Ms. Llort to become a part of the organization Move On.
The Economic Benefits of Ending the 5% Employee Contribution to Health Insurance- Dr. Terry Murphy (PAC) - Dr. Terry Murphy made a presentation to the SEDC members regarding the 5% employee contribution to health insurance costs. He stated that he is standing with the Unions in requesting the BCC end the employee contribution. Dr. Murphy requested assistance from the SEDC in demonstrating/confirming ending the 5% employee contribution to health insurance costs will have a rippling positive effect on the Miami-Dade economy. He stated the initial contribution to the economy would be $60million the first year, and then a repetitive contribution of $80million subsequent years, and that Miami-Dade County would benefit more from the 5% being circulated in the local economy versus being used for the health care contribution. Dr. Murphy clarified the actual employee contribution is 16%. A discussion/question and answer period ensued. Following Dr. Murphy’s presentation, the Council discussed preparing a recommendation/letter for the BCC regarding the continuation or ending of the 5% employee contribution to health care costs.
Due to a scheduling conflict with Ms. Rhonda Victor Sibilia, Ethics training for SEDC Members will be rescheduled for a future meeting.
Meeting adjourned at 4:30pm. Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
SUNSET REVIEW
Attachment 4
Date: March 1, 2014
To: Carlos A. Gimenez Mayor From: Dr. Raul Moncarz Chairperson, Social and Economic Development Council Subject: Sunset Review of County Boards for 2012 – The Dr. Antonio Jorge Social and Economic Development Council
Pursuant to Section 2-11.40 of the Code of Miami-Dade County, I am submitting the 2014 Sunset Review of County Boards Report for the Dr. Antonio Jorge Social and Economic Development Council for transmittal to the Board of County Commissioners (BCC). The Board approved the attached report at its meeting of January 17, 2014.
It is recommended that the BCC approve the continuation of the Social and Economic Development Council.
BACKGROUND
The SEDC was created on October 17, 2001 by Resolution R-1087-01, and establishing the SEDC in Article XCIX of the County code by Ordinance #02-120 on July 9, 2002.
The SEDC provides information and recommendations to the Mayor and the Board of County Commissioners of Miami-Dade County regarding short and long-term economic policies and actions to promote economic growth and development, with special attention to the needs of low income segments of population and reducing socio-economic disparities.
The SEDC monitors and assesses socio-economic trends in Miami-Dade County and provides input into the development of County economic development plans and the preparation of the resource allocation plans as these relate to the strategic economic development goals and objectives of the overall Strategic Plan and the economic development objectives expressed in the County’s Comprehensive Development Master Plan.
______Dr. Raul Moncarz Board Chairperson
Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
2014 SEDC SUNSET REVIEW QUESTIONNAIRE RESPONSES
Attachment 6
SUNSET REVIEW QUESTIONNAIRE MIAMI-DADE COUNTY BOARDS 2014
I. GENERAL INFORMATION 1. Name of Board reporting: The Dr. Antonio Jorge Social and Economic Development Council
2. Indicate number of board members, terms of office, and number of vacancies: Number of Board Members: 22 Terms of Office: N/A – Tenured Number of Vacancies: 1
3. Identify number of meetings and members’ attendance (Attach records reflecting activity from Jan. 1, 2012 through December 31, 2013): Number of Meetings: 21 Number of Meetings with a Quorum: 21 Attendance Records: See Attachment: 2012 and 2013 Attendance Log.
4. What is the source of your funding? The SEDC receives no direct funding. The work is done by the volunteer members of the Council and is supported by county staff from Sustainability, Planning and Economic Enhancement
5. Date of Board Creation: October 17, 2001 the BCC adopted Resolution R-1087-01.
6. Attach a copy of the ordinance creating the Board (Please include all subsequent amendments).
See Attachments: (1) Resolution R-1087-01 & Ordinance #02-120 Creating the Board; (2) Ordinance #08-117 Amending Article XCIX relating to the SEDC; and (3) Ordinance #09-99 Amending Section 2-1442 of the Code; to exempt the existing members of the SEDC from the term limitations applicable under Section 2- 11.38.2(b) of the Code.
7. Include the Board’s Mission Statement or state its purpose:
To suggest and recommend to the Mayor and the Board of County Commissioners of Miami-Dade county the appropriate short and long-term policies and measures to reactivate the economy of the county, with special attention to the needs of low income segments of population in an effort to reduce the social economic disparities.
8. Attach the Board’s standard operating procedures, if any.
The SEDC does not have a set of by-laws, but is governed by the County Resolution and Ordinances mentioned in (6) above and in attachments to this report.
9. Attach a copy of the Board’s By-Laws, if any.
The SEDC does not have a set of by-laws, but is governed by the County Resolution.
10. Attach a copy of the Board minutes approving the Sunset Review Questionnaire, including a vote of the membership. See Attachment (4) Minutes of January 17, 2014
1 Attachment 6
SUNSET REVIEW QUESTIONNAIRE MIAMI-DADE COUNTY BOARDS 2014
II. EVALUATION CRITERIA 1. Is the Board serving the purpose for which it was created? (Please provide detailed information) Yes. The SEDC is monitoring and assessing socio-economic trends in Miami-Dade County. The Council provides input during the development of County economic development plans, the economic development objectives expressed in the County’s Comprehensive Development Master Plan and the strategic economic development goals and objectives of the overall Strategic Plan brought before the Council by County administration or the Board of County Commissioners. 2. Is the Board serving current community needs? (Please provide detailed information) Yes. The Council meets on a regular basis (usually monthly) to review economic trends and forces affecting economic conditions affecting Miami-Dade County low- income residents, and discuss how the County may better promote economic development.
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3. What are the Board’s major accomplishments? a. Last 24 months The SEDC has authored and published several policy position papers or letters with recommendations on revenue issues and education; provided input and feedback on economic trends. The SEDC worked with the Office of Economic Development Coordination in the monitoring the social and economic trends in Miami-Dade County, and provided comments on the proposed service and resource allocation priorities of the Mayor and County Manager relative to socio- economic development. The SEDC has received a wide variety of presentations/testimony from organizations and County departments on issues facing Miami-Dade County such as healthcare, Medicare fraud, child care and child development, affordable housing, living wage labor practices, poverty, effect of government sequester and shut down, and juvenile detention. September 11, 2013, the SEDC submitted the Destination Casino Study to the BCC delineating the pros and cons of allowing resort casinos in Miami-Dade County. September 13, 2013, provided a social economic assessment of the County to the BCC for the budget process.
2 Attachment 6
SUNSET REVIEW QUESTIONNAIRE MIAMI-DADE COUNTY BOARDS 2014 b. Since established The inaugural meeting for the SEDC was held on April 29, 2002. The SEDC has met regularly from 2002 to 2009. The Department of Planning and Zoning made the initial presentation of the proposed Economic Element of the Miami-Dade County Comprehensive Master Plan to the SEDC on June 19, 2002. The SEDC reviewed/commented on the Economic Element until it was finally adopted by the BCC on April 14, 2004, and is now participating in the Evaluation and Appraisal Report process as the County reviews and revises its CDMP. Reviewed and critiqued departmental business plans related to the socio-economic strategic plan priority outcomes for the FY 2003-04, FY 2004-05 and FY 2005-06 FY 2006-07 Proposed Resource Allocation and Multi-Year Capital Plan. Provided comments on the proposed service and resource allocation priorities of the Mayor and County Manager relative to socio-economic development for the FY 2003-04, FY 2004-05, FY 2005-06 FY 2006-07, FY 2007-08, FY2008-09 to the Mayor and BCC. The SEDC has received a wide variety of presentations/testimony from county departments on issues facing Miami-Dade County such as healthcare, affordable housing, work force housing, living wage labor practices, poverty, Homestead Exemption, General Obligation Bond 2004, economic development, community development, ethics, social issues, social services, immigration, ethnic relations, CDBG funding levels, Urban Economic Revitalization, Metro Miami Action Plan, Public Health Trust, OSBM, CAA, OCED, DHS, MDHA, MDP&Z.. In 2007, at the urging and close direction of the SEDC, the Department of Planning and Zoning provided the staff support for preparing a compilation of data and SEDC policy recommendations highlighting important socio-economic trends and areas of economic development policy priorities – the “Overview of the Socio-Economic Condition of Miami-Dade County”. In 2008 the County hired its first Chief Economist, a longstanding recommendation of the SEDC. In FY2008-09 the County established the Office of Economic Development Coordination which included the Chief Economist as well as some additional staff. This too was encouraged by the SEDC, and this Office is providing real dividends to the County in the form of high quality research and analysis. In 2010 the SEDC held a public conference/workshop Funding Government: Strategies for Generating Revenue through Reform & Economic Development. That workshop was held in the BCC chambers and televised. The workshop brought together academics and prominent local elected official to discuss long- term economic trends and policy approaches. In 2011 the SEDC organized and sponsored a public conference/workshop titled Accelerating Job growth through Economic Development. This conference was also held in the Commission chambers and televised via MDTV. The conference speakers included Dr. Thomas O’Neil, Executive Director, Economic Gardening, University of Central Florida; Dr. Nancy Borkowski, Clinical Associate Professor, College of Business, FIU and healthcare industry expert; Dr. Mike Hampton, Dean, School of Hospitality and Tourism Management, FIU; and Mr. Manny Mencia, Sr. VP and CEO International Trade and Business Development, Enterprise Florida, Inc.
3 Attachment 6
SUNSET REVIEW QUESTIONNAIRE MIAMI-DADE COUNTY BOARDS 2014
In 2012 (continued in 2013) the SEDC monitored the area of public transportation for the purpose of improving access for low-income constituents and improving efficiency, and return on investment for the County. Initiated the Destination Casino Study and researched money laundering and labor practices pertaining to destination casinos in Miami-Dade County. Facilitated discussions promoting innovation and improved performance and graduation rates in urban public schools for an improved labor force. In 2013 the SEDC completed the Destination Casinos study and presented it to the BCC. Submitted budget recommendations to the BCC.
4. Is there any other board, either public or private, which would better serve the function of this board? No. 5. Should the ordinance creating the Board be amended to better enable the Board to serve the purpose for which it was created? (If “Yes”, attach proposed changes) No. 6. Should the Board’s membership requirements be modified? No. 7. What is the operating cost of the Board, both direct and indirect? (Report on FY 2012 and FY 2013) Members of the SEDC provide their services pro-bono. In 2012 and 2013 the Regulatory and Economic Resources Office of Economic Development and International Trade provided staff support to the SEDC from existing staff resources as part of the department’s annual budget. Photocopying, mailing and costs for logistical support are also reflected in the department’s budget. 8. Describe the Board’s performance measures developed to determine its own effectiveness in achieving its stated goals. The SEDC provides policy recommendations relative to social-economic development in Miami-Dade County to the BCC through the Economic Development and Social Services Committee.
4 Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
TRANSPORTATION WHITEPAPER
Expanded Bus Rapid Transit for Dade
A draft SEDC whitepaper
By Brian Peterson
December 26, 2013
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Introduction
Bus rapid transit comes in many varieties, from very simple to very elaborate. When it works well, it cuts down on traffic, speeds up trips, decreases pollution and contributes to faster property development.
Bus rapid transit (BRT) is most appropriate in situations where potential ridership is too high to be handled well by regular buses, but too low to need light-rail systems.
BRT costs more in fixed installations (stations, separate lanes), GPS technology linked to traffic light signals and display boards of bus arrival times than does regular bus service, but it costs much less than rail.
For instance, in Bangkok, Thailand, the same investment could build 426 kilometers of BRT, 40 km of light rail (trolley), 14 km of elevated rail or 7 km of subways.
Mass transit throughout the United States generally relies on federal subsidies, but the situation with the federal budget today suggests that it might be best to come up with a system for Miami-Dade County which relies exclusively on local self-financing.
However, this need not be paid for entirely by fares. Tax revenues to county government will increase as property values grow due to transit- oriented development (TOD). County government could recycle some of this money to expand BRT.
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Here is a suggested list of priorities for the development of BRT in Miami- Dade County, starting with the changes that could do the most countywide.
Our focus is particularly on measures which could provide low-cost transportation that would allow working people to gain access to better employment opportunities.
RECOMMENDATIONS:
1. Half of the buses on the longer, more-heavily traveled routes should be designated as “limited-stop buses” and should stop only every mile. This would speed up traffic. The other half of the buses could continue as “locals” and stop every quarter-mile or so.
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2. Starting with the most heavily-travelled bus routes, traffic signals should give priority to buses. They should remain on green or switch to green if a bus is approaching. If there is a special bus lane, this lane should change to green before the other lanes do so.
These measures will speed up bus service and encourage people to take buses rather than cars.
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3. Computerized analysis should determine potential routes for long- distance “express buses” which could use expressways to travel between residential and work neighborhoods.
For instance, we know that many people live in Kendall who work in the Doral area, and express buses should connect these areas.
As is already the case on I-95 between Dade and Broward, designated lanes on all Dade expressways could serve both express buses and cars which pay premium tolls.
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4. The BRT line which would most directly serve low-income communities in Dade is on West 27th Avenue from the county line in the north to the end of the street in Coconut Grove in the south.
There are two Metrorail stations on NW 27th Avenue – Brownsville and Martin Luther King Jr, and another Metrorail station on South Douglas Road a mile from Southwest 27th Avenue.
NW 27th Avenue has six or seven traffic lanes, including sometimes a median and sometimes a turning lane, over much of its distance.
The center two lanes could be dedicated to BRT buses and could be also used as optional toll lanes for cars during rush hour. Every mile, a BRT station could be installed in the center lane.
Plans already exist to make about half of the buses along 27th Avenue into “limited stop” buses.
The greatest usefulness of a 27th Avenue BRT corridor could be property development and the creation of new jobs rather than transportation. Large stretches of this street are relatively sparsely developed today.
We could have a large-scale public-private partnership to develop Northwest 27th Avenue between the Miami River and the Broward County line.
For instance, we might waive property taxes for ten years for any new construction along this stretch of 27th Avenue.
We could shift zoning regulations to encourage factory and warehouse development along sections of this street.
27th Avenue is fairly close to the Hialeah warehouse district which runs from the Miami River far to the north between NW 37th and 42nd Avenues. We could encourage an expansion of the warehouse district to NW 27th Avenue.
Just as nodes of large-scale apartment buildings have already developed at Metrorail stations on NW 27th Avenue, we could designate certain BRT stations on that street as mixed residential-office sites.
Other BRT stations could be targeted as locations for factories and warehouses.
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5. A BRT line is in the works for 2015 between the Miami Intermodal Center (MIC) at Miami International Airport (MIA) and Florida International University’s Modesto Maidique Campus (MMC). This would allow people to take the Metrorail to MIC and then BRT to FIU.
State Road 836 would have special bus lanes for this, and these could also be used as premium toll lanes. This BRT would be very helpful for students living in the eastern part of the county in getting to FIU.
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6. A high priority of county government is a light-rail line from Downtown Miami to South Beach. This trolley would enter South Beach at Fifth Street and travel north on Washington Avenue to about 20th Street.
We support this light-rail project because traffic is so heavy here that the potential ridership justifies it. We think that this is the only route in the county where expanded rail is currently justified.
We think that BRT development should have priority over rail everywhere else in the county.
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7. North Kendall Drive is the busiest, non-expressway street in the county, aside from South Dixie Highway which is already supported by Metrorail and the South Dade Busway.
The 288 Kendall Cruiser BRT route has nine 60-foot, articulated hybrid diesel-electric buses which operate in morning and evening rush hours from the Dadeland Metrorail station to the West Kendall Transit Terminal at 162nd Avenue and 91st Street.
The logical next step on Kendall Drive would be to establish special bus lanes in the center of the street to provide faster bus service.
These lanes could also serve as toll lanes for cars with dynamic pricing to keep up high average speed in these lanes.
Faster BRT service could open up access to jobs in stores and offices along Kendall Drive to people with connections to Metrorail in the northern part of the county and to people in the south with connections to the South Dade Busway.
Faster BRT would also provide more convenient access to jobs in other parts of the county for people living along Kendall.
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Our version of bus rapid transit for North Kendall Drive would have the following features:
### Two exclusive bus lanes out of the total of eight lanes that now exist. These bus lanes might also allow cars paying tolls during rush hour.
### Stations in a median strip every mile apart. The stations would provide protection from the weather and allow passengers to enter and exit the buses with no steps up or down.
### Passengers would buy tickets from a machine in the station which would also display the actual bus schedule in real time.
### Left turns would be restricted along the BRT route.
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THE “LAST MILE” PROBLEM
An important consideration for mass transit is getting riders from their homes to their transit stops and back again.
Residential neighborhoods tend to be less dense than areas where people work, so each transit stop in business neighborhoods tends to be closer to the ultimate goal than in residential neighborhoods.
Riders could walk or ride bikes to the transit stop, but this is inconvenient in very hot or rainy weather.
Riders could drive from home to the transit stop and leave their cars in “park and ride” lots. This is being done already in connection with Metrorail and limited stop buses on Kendall, but land is expensive and pollution would be minimized if the cars were left at home
Or riders could be driven to and from the bus stop in a jitney. This is done in connection with some South American BRT corridors, and it might work very well in Miami where we already have extensive jitney service in Hialeah, Liberty City and Little Haiti.
Both Kendall and the Northwest 27th Avenue neighborhoods seem particularly well-suited for jitney service between home and transit stops. Jitneys could run regular routes and help many people access transit for a low additional cost.
Jitneys that would be allowed to link up with BRT on the regular basis could be carefully regulated to ensure safety, regularity, moderate price and high standards of service.
Driving and/or owning jitneys could become a more important source of income for many county residents, particularly for low-income, minority people.
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BRT IN OTHER CITIES
CLEVELAND
Miami-Dade County has already seen very substantial new construction – particularly large rental apartment buildings -- motivated by Metrorail stations.
The right BRT line in the right place at the right time can also promote extensive property development.
This was particularly shown by the HealthLine in Cleveland, a bus corridor where almost $6 billion in property development along seven miles Euclid Avenue was triggered by a $200 million investment in BRT.
Property values along the route have increased by almost 300%.
This line connects the downtown with the Cleveland Clinic and University Hospitals of Cleveland – the largest employers in the city. Both the Cleveland Clinic and Cleveland State Universities wanted fewer cars onsite and supported BRT.
An important element in the success of the HealthLine was convincing professionals to take the bus. The new line was given an upscale persona, and significant numbers of affluent people now ride regularly.
The slogan of the HealthLine architects was “thinking rail while using bus.”
A slogan used for advertising to the public was, “It’s not a bus. It’s not a train. It’s the future.”
Many low-income people live along this bus route, particularly in the impoverished neighborhood of East Cleveland. The number of jobs available for them greatly increased as a result of property development along the BRT corridor.
Exclusive bus lanes in the center of the street allowed increased speed and cut the time of travel from 30 minutes to 20 minutes. Buses come every seven minutes in rush hour and every ten minutes on weekdays and into the evening. Buses operate 24 hours a day, seven days a week.
Another impact of the HealthLine was to influence improvements on other bus routes in Cleveland, including better shelters, signal upgrades and peak-hour exclusive bus lanes.
Euclid Avenue had four lanes of traffic and two of these were taken for use by BRT. This left only two lanes – one each way – for cars and trucks.
Nevertheless, the conversion was successful. Some car and truck traffic switched to other, nearby streets.
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LOS ANGELES
The Orange Line in the San Fernando Valley of Los Angeles is BRT with its own exclusive lanes that run partly along a former railroad and trolley route. The total length is 18 miles. People board from stations at grade level, and the stations are spaced about a mile apart.
The City Council of Los Angeles voted in October, 2013 to reconvert the BRT line back to light rail which it had been in the past. The motion added light rail to the long-term transportation plan of the city.
The argument for light rail was the need for greater capacity. They also said that the popularity of the Orange Line BRT showed that a potentially larger ridership existed.
Funding for this would have to come partly from the state and federal governments, so this is probably not imminent.
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NEW YORK CITY
The busiest BRT route in the United States is the M15 line which carries 55,000 riders per day along First and Second Avenues between South Ferry and 125th Street in Manhattan. However, this was a very heavily- travelled route even before it switched to BRT.
M15 features special bus lanes close to the curb which results in right turns by cars and trucks cutting off buses. City vehicles sometimes travel in bus lanes.
BRT was introduced to this line in 2010 resulting in increased ridership and higher average speed.
However, these gains were minimal compared to those in Cleveland and other countries where the bus lanes are in the center of the street and where people enter buses from stations at grade level with not steps up or down.
Bringing many features of bus rapid transit together at one time helps to maximize ridership and to give the new system an image strongly differentiated from traditional city buses. New York has so far failed in its attempts to create a radically new type of bus service.
* CHICAGO
A debate is now underway in the Windy City on whether a BRT line should be built on Ashland Avenue – at first on five miles between Cortland Avenue and 31st Street and later along sixteen miles between Irving Park Road and 95th Street.
The final design plans will not be approved until late in 2014, and the system will be operational in 2016.
The existing bus line on Ashland has the highest annual ridership of any bus line in the city – ten million boardings a year, which is higher than two L (elevated train) lines in Chicago.
BRT on Ashland would increase average bus speeds from the current nearly 9 mph to a little over 16 mph. An 83% increase in average bus speed is projected for rush hours. This would be offset by an average 5% loss in car speed due to losing two lanes.
BRT stops on Ashland would occur every half mile, while current stops are every quarter of a mile.
About 10% of the parking spaces along Ashland would be sacrificed for the BRT project which would cost around $160 million and is a high priority for Chicago Mayor Rahm Emanuel. This cost amounts to $10 million a mile and does not include the costs of changes needed for nearby streets.
Some 80% of the funding would come from the federal government. Chicago, obviously, has very good connections with Washington.
Ashland BRT would serve the Illinois Medical District, the University of Illinois-Chicago, and Malcolm X College, plus many factories and schools.
Local bus service would continue to operate in the curb-side lanes, while BRT would occupy the center two lanes. Cars would have no way around local buses when the buses were dropping off and picking up passengers.
One impact of BRT on Ashland is that many drivers would choose to use another, nearby north-south street, as took place in Cleveland with the HealthLine dominating Euclid Avenue.
Some people living along Ashland Avenue do not want to give up left turns or two lanes for cars and trucks.
People on streets that would be affected by cars and trucks being forced to make right turns and going around the block are organized to fight against the BRT plan.
At the moment, it appears that the number of places where left turns will not be allowed will be substantially reduced in comparison with the original plans.
However, left turns are dangerous for pedestrians and are being banned in some cities that are not putting in BRT. Ashland does have many traffic accidents, and 15% of these involve left turns.
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The social impact of BRT for Ashland is largely to help affluent people who live in gentrified neighborhoods and work downtown.
An earlier plan to put the BRT route on Western Avenue would have been more helpful to working-class people who work in hotels and the service industry.
However, the City of Chicago would be obligated to pay more to the company that has leased parking meter revenues for 75 years if the BRT were built on Western Avenue because Ashland has more free parking than Western.
When the Metrorail was built in Miami, a similar conflict existed between Blacks who wanted the route extended through Liberty City and what is now Miami Gardens versus Kendall and Hialeah. The Blacks lost.
We can hope that this time around, greater equity can be achieved.
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LATIN AMERICA
BRT has spread more rapidly and widely in Latin America than anywhere else in the world. About 1/3 of the world’s BRT mileage is in Latin America, along with about 2/3 of the world’s daily BRT riders.
Globally, BRT is most closely associated with medium-low levels of economic development. The poorest countries cannot afford BRT, but the richest countries prefer cars (US) or rail (Europe).
Many people in Miami are from countries with BRT systems or they have visited such countries and have ridden on BRT vehicles.
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CURITIBA, BRAZIL
The first BRT system in the world was in Curitiba, Brazil in 1974, so BRT worldwide is only 40 years old. Some 70% of commuters in Curitiba use BRT daily.
The system has three elements: jitneys which pick up riders close to their homes and take them to bus stations; circumferential buses which travel around one of the concentric circles making up the city; and BRT on five spokes of the wheel which carry the largest number of passengers.
Curitiba used BRT to guide the development of the city. High-rise buildings were permitted close to the BRT lines, while low-rise residential housing was the norm further away from the transit line.
Today, one can see five strips of high-rise buildings radiated out from the city center along the BRT routes.
Tickets to Curitiba’s BRT system cost only 40 cents to travel as far as one likes, including transfers. Ten private companies operate the buses within the citywide system.
BRT in Curitiba attracted very large numbers of riders, but unfortunately, the city failed to keep up with replacing worn-out buses and maintaining existing buses.
The result has been overcrowding, followed by incidents with pickpockets and groping. The middle class largely stopped using BRT and took cars instead.
*
BOGOTA, COLOMBIA
Bogota has both the largest ridership and the most technical features of any BRT system in the world. However, the buses do lack GPS and traffic light signal priority.
Their TransMilenio system serves 1.7 million riders per day. Some 74% of the public transit trips taken daily in the city are on BRT.
Passengers pay about $1 to ride – relatively high for Latin America. This caused rioting by students in 2012.
Before this BRT system was established, Bogota was served by thousands of independent jitneys and small buses. The drivers of these protested against aspects of the BRT system in 2006.
Several private companies operate the buses in a system which is run by the government without subsidies.
Overcrowding on BRT is pushing the middle class to switch back to cars. People sometimes have to wait a long time to get a bus. Pickpockets steal from passengers on crowded buses.
*
GUANGZHOU, CHINA
This 22.5 kilometer BRT system opened in 2010 after an intensive planning effort. Guangzhou now has the second-largest urban system in the world after Bogota and uses “direct service” rather than the “trunk-feeder” model. Bus companies in many countries are now emulating Guangzhou’s direct service model.
Direct buses travel beyond the exclusive bus lanes in the main part of the BRT system in order to take riders to homes or businesses in suburban areas. This greatly cuts down the need for transfers and results in increased ridership. Passengers highly dislike transfers.
One BRT bus enters the city of Guangzhou every ten seconds. Compared to the previous system, far less congestion now exists at busy bus stops. Photographic comparisons of downtown bus stops before and after the introduction of BRT show a dramatic increase in order and efficiency.
Compared to the previous transportation system, the Guangzhou BRT system contributes to lower pollution levels. They reduce the amount of particulate matter in the atmosphere by fourteen tons per year and cut CO2 emissions by 84,000 tons per year.
Some 5,000 rental bicycles are provided at stations, and a 50% increase in bike usage has occurred at key locations. Riders can also bring their own bikes to stations and lock them there for the day.
Bus speeds are 30% faster than previously, and this saves passengers a total of 52 million hours per year.
Several different companies, including private operators, cooperate in the Guangzhou BRT system.
Costs per passenger have been cut in half in some parts of the city. Each ticket costs only thirty cents and includes transfers. Riders can go as far as they want on this one ticket.
The total construction costs for the Guangzhou BRT system was $103 million or $4.5 million per kilometer – only 1/10 to 1/20 as much as a subway line.
*
SOURCES:
The first several studies here are long and authoritative.
The impact of BRT on both ridership and property development: http://www.gao.gov/assets/600/592973.pdf http://www.gao.gov/products/GAO-12-811
*
A 45-page study of BRT by Robert Cevero: “Bus Rapid Transit (BRT): An Efficient and Competitive Mode of Public Transportation,” Institute of Urban and Regional Development, University of California-Berkeley, October, 2013. www.iurd.berkeley.edu/publications/wp/2013-01.pdf http://www.escholarship.org/uc/item/4sn2f5wc#page-1
*
Here are the standards for the features which ideally should be included in a BRT line. http://www.itdp.org/microsites/the-brt-standard-2013/
* An extensive discussion of the advantages and disadvantages of the “direct service” and “trunk-feeder” models of BRT can be found in this publication:
Bus Rapid Transit Planning Guide, 2007, Sustainable Urban Transportation Project. http://www.sutp.org/ http://www.sutp.org/en-dn-brtpg
*
Here is a study which shows the potential impact of BRT on property development:
http://www.itdp.org/documents/ITDP_MORE_DEVELOPMENT_924.pdf
*
A study on transit-oriented development:
http://www.itdp.org/library/publications/details/the-tod-standard-version-2.0
*
Other articles:
General
http://www.forbes.com/sites/jeffmcmahon/2013/09/15/bus-rapid-transit-spurs-development-better-than-light-rail-and-streetcars/ http://greatergreaterwashington.org/post/17389/the-us-has-only-5-true-brt-systems-and-none-are-gold/ http://en.wikipedia.org/wiki/Implementation_of_bus_rapid_transit_by_country * Miami‐Dade County
http://www.miamiherald.com/2013/07/18/3507452/miami-miami-beach-rail-link-to.html http://www.bizjournals.com/southflorida/blog/2012/12/miami-to-miami-beach-light-rail-under.html http://cake.fiu.edu/UniversityCity_Project_Overview.pdf http://www.miamidade.gov/citt/pdf_library/strategic-financial-studies/2013/cost-other- studies/other/MPO_brt_techmemo1_200410.pdf http://www.americantowns.com/fl/miami/news/new-kendall-cruiser-offers-express-bus-service-on-kendall-drive-334128 http://www.miamidade.gov/transit/releases/11-03-02-terminal.asp * Cleveland
Cleveland HealthLine Case Study: Transforming an Historic Corridor; Sustainable Communities Leadership Institute; by Michael Crowley; 2011 http://urbanland.uli.org/economy-markets-trends/healthline-drives-growth-in-cleveland http://www.freep.com/article/C4/20131027/BUSINESS06/310270060/ICIC-M1-Rail-Detroit-Cleveland-Health-Line http://www.cleveland.com/metro/index.ssf/2013/09/clevelands_healthline_gives_mo.html
http://www.nyc.gov/html/brt/html/routes/first_ave.shtml http://en.wikipedia.org/wiki/Select_Bus_Service http://www.dmiblog.com/archives/2009/02/learning_to_love_bus_rapid_tra.html
* Los Angeles
http://en.wikipedia.org/wiki/Orange_Line_(Los_Angeles_Metro) http://shermanoaks.patch.com/groups/politics‐and‐elections/p/city‐council‐supports‐building‐light‐rail‐on‐orange‐line‐bus‐route
*
Chicago
http://www.transitchicago.com/ashlandbrt/ http://chi.streetsblog.org/2013/11/01/the‐ctas‐ashland‐bus‐rapid‐transit‐plan‐is‐anything‐but‐unprecedented/ http://chi.streetsblog.org/2013/11/20/cta‐releases‐environmental‐assessment‐for‐ashland‐bus‐rapid‐transit/ http://chi.streetsblog.org/2013/11/04/awcs‐call‐to‐extend‐ashland‐bus‐distracts‐from‐their‐goal‐of‐killing‐brt/ http://articles.chicagotribune.com/2013‐09‐30/news/ct‐met‐cta‐ashland‐bus‐rapid‐transit‐20130930_1_bus‐rapid‐transit‐transit‐riders‐one‐ lane http://voices.suntimes.com/news/transportation‐news/ashland‐brt‐left‐turn‐ban‐could‐make‐ashland‐safer‐advocacy‐group‐says/
* Curitiba, Brazil
http://www.urbanhabitat.org/node/344 http://en.wikipedia.org/wiki/Rede_Integrada_de_Transporte
* Bogota, Colombia
http://en.wikipedia.org/wiki/TransMilenio http://www.eldis.org/go/home&id=55871&type=Document#.Ur7OhW0o7IU
* Guangzhou, China
http://en.wikipedia.org/wiki/Guangzhou_Bus_Rapid_Transit http://unfccc.int/secretariat/momentum_for_change/items/7101.php http://www.itdp.org/news/guangzhou‐brt‐awarded‐gold‐standard‐status http://www.renewcities.org/2013/02/putting‐rapid‐into‐bus‐transit.html
High Capacity BRT Planning, Implementation and Operation: Case Study of the Guangzhou BRT, by Karl Fjellstrom, Institute for Transportation & Development Policy. This is mostly photos and graphs, but very revealing of the changes since BRT was introduced.
Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
ENTERPRISE ZONE REAUTHORIZATION
Lawmaker: Eliminate high-crime tax break used by Universal Orlando
By Jason Garcia, Orlando Sentinel 7:25 p.m. EST, January 15, 2014
A prominent Florida lawmaker wants to eliminate a tax break that was intended to help high-crime communities but is subsidizing Universal Orlando and other businesses in prosperous areas.
"It's time to sunset it. This program has seen its better days," said Rep. Ritch Workman, a Melbourne Republican and chairman of the Florida House of Representatives Finance & Tax Subcommittee. The move follows a series of Orlando Sentinel articles last year that found the incentive program has become a lucrative source of tax breaks for businesses in places few would consider "high-crime."
Universal Orlando, for example, has received millions of dollars in high-crime tax breaks through the years. The giant resort — whose theme parks draw more than 14 million visitors a year — has repeatedly dipped into the program after adding jobs through major expansions, such as the 2010 opening of its hugely profitable Wizarding World of Harry Potter.
State records show that Universal and its hotel affiliate have together claimed more than $8 million since 2000 — more than a third of the total tax credits awarded through the nearly 17-year-old Urban High Crime Area Jobs Tax Credit Program.
Former state Sen. James Hargrett, a Tampa Democrat who helped establish the incentive program, accused Universal of exploiting an incentive meant to help spur investment in struggling communities.
"That's an abuse of what we intended," Hargrett said last year. Tax breaks are also going to businesses in other thriving areas across the state. Publix Super Markets Inc., for instance, got $79,000 through the program last year after opening a grocery store in downtown Miami's trendy Omni neighborhood.
Workman blamed local-government officials for designating high-crime zones that were irresponsibly broad. The city of Orlando, for instance, drew a zone that meandered from downtown to the International Drive tourist corridor. Workman also said state officials failed to effectively monitor the program.
Now the Brevard County lawmaker said he intends to file a bill within the next few weeks that would essentially repeal the incentive.
One caveat: Workman said he intends to write the legislation in a way that ensures tax credits will still be awarded to any business in a high-crime zone that has already embarked on an expansion with the expectation that it would get tax breaks.
That means Universal Orlando would still be in line for at least one more big infusion of tax breaks after the opening of its second Harry Potter land and fourth on-site hotel, both of which are planned for this year. Universal and its hotel partners could get about $900,000 in tax breaks for the hotel alone, based on the 600 jobs Universal expects the project to create.
"I don't want any existing projects that are underway ... to all of a sudden have the rug pulled out from under them," Workman said. "Even Universal, they're a billion-dollar corporation. You've still got to treat them fairly," he added. "I would concur that they're no longer in an urban high-crime area. But it's our fault, it's the state's fault, it's the locals' fault. You can't blame the citizen or the corporation if that's legally available to them."
A spokesman for Universal would not comment on Workman's plan to repeal the high-crime program. The giant resort annually doles out hundreds of thousands of dollars' worth of campaign contributions and free theme-park tickets and hotel rooms to the Republican Party of Florida and the Florida Democratic Party, as well as individual state legislators.
As it has in the past, Universal also would not say whether it intends to pursue more high-crime tax breaks after the opening of the Wizarding World of Harry Potter — Diagon Alley and the Cabana Bay Beach Resort.
Workman isn't the only lawmaker upset with the high-crime incentive program, but others say they would prefer to reform the program rather than repeal it.
Sen. Geraldine Thompson, an Orlando Democrat who represents some of Central Florida's highest- crime areas, said she is drafting a bill that would impose tighter criteria on what constitutes a high- crime zone and would force periodic reviews to ensure areas that should no longer be considered high-crime do not continue to get the tax breaks.
"If we can attract businesses to locate in places like Pine Hills, which is in my district, then the program would have value," Thompson said. "But if you're just using it in an area that used to be high-crime, then I don't know that that's the best use of taxpayer dollars." [email protected] or 407-420-5414
ENTERPRISE ZONE REAUTHORIZATION ITEM
SUMMARY NOTES
The Enterprise Zone (EZ) program provides incentives to businesses that are located in or move into the EZ. The current EZ legislation is scheduled to sunset on December 31, 2015 unless the Legislature reauthorizes the program. The Florida Senate (typically) discusses the reauthorization of the program the year prior to sunset (March 2014).
Failure to reauthorize the EZ program beyond 2015 will have a detrimental impact on economic development in low-income communities with high unemployment rates, affecting residents, businesses, small and mid-size businesses in particular.
The EZ program provides financial inducements to promote growth in employment, attract private sector investments and increase the number of business establishments within the EZ boundaries. The economic benefits, however, also extend to the areas in the county that are outside the EZ boundaries through indirect and induced economic effects.
Miami-Dade County has been a beneficiary of this program since its inception. The Florida Department of Economic Opportunity reports that businesses located in the Miami-Dade County EZ received $2,898,655 in state funded incentives and created 702 jobs in FY 2011-12. The program also assisted 1,982 businesses and created 609 jobs, and 2,670 new businesses located in the EZ in FY 2012-13.
From January 1, 2006 to March 31, 2013 a total of 6,594 new jobs have been created within the EZ and the EZ experience investments of $1,705,915,785 from companies that applied for EZ tax credits for purchases of building equipment and building material.
Reauthorizing the EZ program will continue to access to state funded incentives by businesses in the Miami-Dade EZ that have a positive impact in the county through expansion of the property tax base, economic development, and job creation. The EZ incentives do not require a local match under the current rules of the program.
Should the EZ program not be reauthorized, the County may see a dramatic decrease in the number of businesses and jobs in the EZ, a decline in property taxes associated with the closing and/or departure of businesses in the EZ and/or Miami-Dade County, and a substantial increase in the unemployment in distressed communities already severely impacted by the recession.
FLORIDA ENTERPRISE ZONE PROGRAM ANNUAL REPORT
Bureau of Business and Economic Incentives Division of Strategic Business Development Florida Department of Economic Opportunity November 1, 2013
107 East Madison Street Caldwell Building Tallahassee, Florida 32399 www.floridajobs.org
TABLE OF CONTENTS
FLORIDA ENTERPRISE ZONES MAP 3
EXECUTIVE SUMMARY 4
BACKGROUND 5
ENTERPRISE ZONE INCENTIVES 7
ENTERPRISE ZONE INCENTIVES APPROVALS 8
LOCAL INCENTIVES 9
ENTERPRISE ZONE STRATEGIC PLANS 10
APPENDICES
• Appendix A: State Incentives Approved By The 11 Department Of Revenue
• Appendix B: Local Accomplishments 14
• Appendix C: Funding Resources Accessed 18
• Appendix D: Florida Enterprise Zone Contacts 21
ADDITIONAL INFORMATION
Burt C. Von Hoff Florida Department of Economic Opportunity Division of Strategic Business Development 107 East Madison Street; MSC 80 Tallahassee, Florida 32399 Phone: 850/717-8974 Fax: 850/410-4770 Email: [email protected] Website: www.floridajobs.org
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 2 of 28
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 3 of 28 EXECUTIVE SUMMARY
INTRODUCTION This annual report of the Florida Enterprise Zone Program is submitted to the Florida Department of Economic Opportunity (DEO) in accordance with section 290.014(2), Florida Statutes. This report summarizes the results of the Florida Enterprise Zone Program during the timeframe of July 1, 2012, through June 30, 2013.
This report is based on information provided by the 65 Enterprise Zone Development Agencies (EZDA) and the Florida Department of Revenue (DOR). The purpose of this document is to examine the impact of the program and monitor the use of state and local incentives.
RESULTS FOR 2012/2013 During the timeframe of July 1, 2012, through June 30, 2013, the following activity levels were reported by the 65 EZDAs using their internal monitoring systems and not reflecting use of incentives: 5,306 businesses moved into or were created in enterprise zones 6,989 businesses received technical assistance from EZDAs 16,640 new jobs were created by businesses located in enterprise zones
During the timeframe of July 1, 2012, through June 30, 2013, the following activity levels were reported by DOR: $16,299,681 state tax incentives were approved by DOR 845 state tax incentive applications approved by DOR
State approved enterprise zone incentives decreased by more than $1.6 million as compared to the prior period when $17,955,954 (revised total) state tax incentives approved by DOR
Local incentives provided by city and county governments totaled nearly $53 million. The vast majority of these incentives provided local funds for capital projects. City and county governments received a substantial amount of federal and state support to supplement their revitalization efforts totaling more than $52 million during the 2012/2013 time period.
LEGISLATIVE CHANGES
During the 2013 Legislative Session, the Florida Legislature made the following revisions to the Florida Enterprise Zone Program: • Revised the Enterprise Zone Property Tax Credit limits of $25,000.00 or $50,000.00 for five years per eligible business to $25,000.00 or $50,000.00 for five years per eligible location.
• Provided certain Rural Enterprise Zones that contain a portion of a Rural Area of Critical Economic Concern an opportunity to request a boundary amendment revision to add up to three (3) or five (5) square miles to their existing Enterprise Zones.
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 4 of 28 APPENDIX A
STATE INCENTIVES APPROVED BY THE DEPARTMENT OF REVENUE July 1, 2012 - June30, 2013 BUILDING BUSINESS JOBS TAX JOBS TAX PROPERTY TAX ELECTRICAL ENERGY MATERIALS EQUIPMENT ENTERPRISE ZONE CREDIT CREDIT* CREDIT* EXEMPTION REFUND REFUND (Sales Tax) (Corporate) (Corporate) (Sales Tax) (Sales Tax) (Sales Tax) Bradenton $0 $5,000 $6,424 $0 Brooksville/Hernando County $0 $0 $0 $0 Broward County $27,296 $2,787 $10,331 $0 Calhoun County $20,762 $0 $0 $0 Century $0 $0 $0 $0 Charlotte County(01-01-2013) $0 $0 $0 $0 Citrus County (01-01-2013) $0 $0 $0 $0 Clearwater $0 $0 $0 $0 Cocoa $0 $0 $0 $0 Crestview/Okaloosa County $13,002 $0 $0 $0 Columbia County $0 $0 $0 $0 Daytona Beach $0 $0 $4,074 $0 DeFuniak Springs $7,388 $5,000 $0 $0 DeSoto County $1,030 $5,000 $0 $0 Escambia County $0 $1,015 $867 $0 Everglades City $17,697 $0 $0 $0 Fort Myers/Lee County $3,312 $537 $56,117 $2,049 Fort Pierce $44,772 $5,000 $43,386 $0 Franklin County $48,728 $0 $0 $0 Freeport $67,656 $2,985 $0 $0 Gadsden County $24,442 $00 $2,392 $0 Gainesville $0 $18,519 $0 $0 Glades County $36,465 $0 $0 $0
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 11 of 28 APPENDIX A
STATE INCENTIVES APPROVED BY THE DEPARTMENT OF REVENUE July 1, 2012 - June30, 2013 BUILDING BUSINESS JOBS TAX JOBS TAX PROPERTY TAX ELECTRICAL ENERGY MATERIALS EQUIPMENT ENTERPRISE ZONE CREDIT CREDIT* CREDIT* EXEMPTION REFUND REFUND (Sales Tax) (Corporate) (Corporate) (Sales Tax) (Sales Tax) (Sales Tax) Gulf County $218,956 $21,765 $0 $0 Hamilton County $0 $0 $0 $0 Hardee County $108,142 $0 $861 $0 Hendry County $208,879 $15,544 $786 $0 Highlands County $194,884 $5,000 $1,650 $0 Hillsborough County $480 $0 $570 $0 Holmes County $67,901 $4,077 $0 $884 Immokalee (Collier County) $0 $7,901 $357 $0 Indian River Co./Vero Beach $3,840 $0 $4,705 $0 Jackson County $71,510 $31,944 $7,320 $0 Jacksonville $286,496 $25,427 $231,540 $732,689 Kissimmee/Osceola $0 $724 $48,856 $0 Lake Apopka $0 $194,435 $0 $0 Lake County $0 $0 $0 $0 Lakeland $0 $0 $2,222 $0 Levy County $3,675 $10,000 $3,434 $0 Liberty County $9,351 $4,195 $0 $0 Madison County $49,882 $0 $0 $0 Martin County $0 $0 $0 $0 Miami – Dade County $4,186,770 $191,266 $382,224 $82,194 Oak Hill $0 $15,000 $610 $0 Ocala $0 $0 $4,335 $0 Okeechobee County $830,409 $5,000 $504 $0 Orange County $790 $3,459 $4,264 $0
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 12 of 28 APPENDIX A
STATE INCENTIVES APPROVED BY THE DEPARTMENT OF REVENUE July 1, 2012 - June30, 2013 BUILDING BUSINESS JOBS TAX JOBS TAX PROPERTY TAX ELECTRICAL ENERGY MATERIALS EQUIPMENT ENTERPRISE ZONE CREDIT CREDIT* CREDIT* EXEMPTION REFUND REFUND (Sales Tax) (Corporate) (Corporate) (Sales Tax) (Sales Tax) (Sales Tax) Pahokee $0 $0 $0 $0 Palm Bay $0 $0 $0 $0 Palm Beach County $6,093 $1,373 $4,475 $21,295 Palmetto/Manatee County $0 $ $623 $0 Pensacola $5,423 $5,000 $4,442 $0 Putnam County $42,815 $5,000 $0 $0 St. Marks $30,030 $0 $0 $0 St. Petersburg $85,689 $15,504 $9,119 $0 Sarasota County $1,122 $4,997 $454 $3,039 Sumter County $9,706 $0 $0 $0 Suwannee County $0 $0 $0 $0 Tallahassee/Leon County $52,344 $16,605 $3,899 $0 Tampa $78,756 $542 $7,299 $0 Taylor County $62,925 $0 $1,531 $0 Wakulla County $18,436 $0 $356 $489 Walton County $0 $0 $0 $0 Washington County $87,701 $2,003 $0 $71 Winter Haven $0 $0 $0 $0 TOTAL $16,299,681 $7,035,555 $4,663,263 $2,275,522 $632,604 $850,027 $842,710 ∗ The Florida Department of Revenue (DOR) does not identify the specific enterprise zone where corporate income tax credits are approved. Corporate income tax credits are generally claimed in consolidated corporate income tax returns. DOR has limited resources and other programming requirements that prevent them from reporting the tax credits for specific enterprise zones at this time.
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 13 of 28 APPENDIX B
LOCAL ACCOMPLISHMENTS July 1, 2012 - June 30, 2013
BUSINESSES NEW JOBS LOCAL INCENTIVES ENTERPRISE ZONE LOCAL INCENTIVE PROVIDED ASSISTED BUSINESSES CREATED AMOUNT
Bradenton 51 28 3 $57,588 Fence Replacement Grants; Façade Grants Community Redevelopment Agency; Brooksville/Hernando Co. 16 30 85 $427,388 Local Match for CDBD Broward County 19 5 7 $1,075,132 Community Redevelopment Agency Calhoun County 18 4 7 $0 N/A Century 6 6 10 $96,400 Local Funds for Capital Projects: Road Charlotte County(01-01-2013) 14 26 64 $0 N/A Citrus County (01-01-2013) 0 0 0 $0 N/A Additional Local Government Services; Clearwater 9 4 100 $506,579 CRA/DDB Incentives Cocoa 50 24 58 $84,207 Business Receipt Fee Waivers Columbia County 0 0 0 $0 N/A Local Option E. D. Property Tax Exemption Crestview/Okaloosa County 167 1 411 $76,370 Workforce Development Board Daytona Beach 0 0 0 $0 N/A DeFuniak Springs 4 10 40 $0 N/A DeSoto County 15 8 49 $0 N/A Escambia County 50 2 6 $111,648 Façade Grants Everglades City 0 0 0 $0 N/A Business Tax Receipt Exemption; Fort Myers/Lee County 806 212 1,053 $631,955 Impact Fee Waivers Fort Pierce 5 288 7 $0 N/A Franklin County 9 4 3 $0 N/A Freeport 7 1 25 $0 N/A Gadsden County 29 6 34 $0 N/A Gainesville 0 0 0 $0 N/A Glades County 223 2 14 $0 N/A
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 14 of 28 APPENDIX B
LOCAL ACCOMPLISHMENTS July 1, 2012 - June 30, 2013
BUSINESSES NEW JOBS LOCAL INCENTIVES ENTERPRISE ZONE LOCAL INCENTIVE PROVIDED ASSISTED BUSINESSES CREATED AMOUNT
Gulf County 48 11 48 $296,762 Local Option E. D. Property Tax Exemption Hamilton County 0 0 0 $0 N/A Hardee County 0 0 0 $0 N/A Hendry County 23 3 39 $0 N/A Highlands County 20 1 126 $0 N/A Hillsborough County 250 147 460 $0 N/A Holmes County 0 0 0 $0 N/A Immokalee (Collier County) 101 0 1 $0 N/A Indian River Co./Vero Beach 27 2 18 $0 Unavailable Local Agency Program (LAP) 92 9 91 $332,253 Jackson County Local Option E. D. Property Tax Exemption Local Funds for Projects QTI match Jacksonville 653 55 1,402 $15,906,600 Local Option E. D. Property Tax Exemption Additional Government Services Kissimmee/Osceola County 61 2 14 $0 N/A Lake Apopka 16 0 0 $0 N/A Lake County 34 2 18 $0 N/A Impact Fee Waivers Lakeland 132 5 660 $267,091 Neighborhood Stabilization Program City of Lakeland Small Business Grants Levy County 31 3 21 $0 N/A Liberty County 1 0 0 $0 N/A Madison County 29 8 23 $0 N/A Martin County 12 1 122 $0 N/A Miami – Dade County 1,982 2,670 6,689 $0 N/A Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 15 of 28 APPENDIX B
LOCAL ACCOMPLISHMENTS July 1, 2012 - June 30, 2013
BUSINESSES NEW JOBS LOCAL INCENTIVES ENTERPRISE ZONE LOCAL INCENTIVE PROVIDED ASSISTED BUSINESSES CREATED AMOUNT
Oak Hill 2 0 0 $0 N/A Ocala’s Economic Investment Program Ocala 398 72 415 $3,444,613 Utility Tax Abatement Local Funds for Projects Okeechobee County 0 0 63 $0 N/A Business Assistance for Neighborhood Orange County 5 2 0 $19,698 Corridors (BANC) Program Pahokee 0 0 0 $0 N/A Palm Bay 67 9 221 $0 N/A Local Match for QTI Tax Refund Palm Beach County 288 121 46 $837,144 CRA Funds for Façade Improvements Local Funds for Capital Projects Palmetto/Manatee County 17 15 51 $710 Occupational License Fee Abatement Pensacola 0 0 0 $0 N/A Putnam County 9 2 27 $0 N/A St. Marks 1 0 2 $0 N/A St. Petersburg 168 412 829 $0 N/A Sarasota County 45 54 283 $150,850 Impact Fee Waivers Sumter County 21 1 48 $0 N/A Suwannee County 15 0 0 $0 N/A Targeted Business Program Tallahassee/Leon County 11 0 70 $22,875,190 Local Funds for Capital Projects Additional Local Government Services Local Funds for Capital Projects (TIF) Tampa 879 998 2,592 $5,590,830 Reduction of Local Regulations Impact Fee Waivers
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 16 of 28 APPENDIX B
LOCAL ACCOMPLISHMENTS July 1, 2012 - June 30, 2013
BUSINESSES NEW JOBS LOCAL INCENTIVES ENTERPRISE ZONE LOCAL INCENTIVE PROVIDED ASSISTED BUSINESSES CREATED AMOUNT
Taylor County 30 0 110 $0 N/A Wakulla County 23 32 59 $0 N/A Walton County 0 0 0 $0 N/A Washington County 0 0 0 $0 N/A Business Tax Receipt Waivers Winter Haven 0 8 116 $111,698 Impact Fee Waivers TOTALS 6,989 5,306 16,640 $52,900,706
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 17 of 28 APPENDIX C
FUNDING RESOURCES ACCESSED July 1, 2012 - June 30, 2013
ENTERPRISE ZONE AMOUNT RESOURCE
Community Development Block Grant Program (CDBG); Bradenton $478,694 Community Redevelopment Agency Brooksville/Hernando County $2,301,059 Community Development Block Grant Program (CDBG); EPA Grant Broward County $0 N/A Calhoun County $0 N/A Community Development Block Grant Program (CDBG); USDA Housing and Century $1,673,001 Housing Mitigation Programs Charlotte County (01-01-2013) $0 N/A Citrus County (01-01-2013) $0 N/A Clearwater $31,270 Clearwater Community Redevelopment Agency Community Development Block Grant Program (CDBG); Cocoa $355,459 HOME Columbia County $0 N/A Crestview/Okaloosa County $0 N/A Daytona Beach $0 N/A DeFuniak Springs $515,000 Florida Department of Transportation Aviation; FAA DeSoto County $0 N/A Community Development Block Grant Program (CDBG): Escambia County $2,846,730 Tax Increment Finance Fund; Brownfield; CRA; Capital Improvement Everglades City $0 N/A Fort Myers/Lee County $0 N/A Fort Pierce $485,698 Community Development Block Grant Program (CDBG) Franklin County $0 N/A Freeport $0 N/A Gadsden County $1,259,828 County Incentive Grant Program; Disaster Recovery Grant; CDBG
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 18 of 28 APPENDIX C
FUNDING RESOURCES ACCESSED July 1, 2012 - June 30, 2013
ENTERPRISE ZONE AMOUNT RESOURCE
Gainesville $0 N/A Glades County $0 N/A Gulf County $0 N/A Hamilton County $0 N/A Hardee County $0 N/A Hendry County $0 N/A Highlands County $0 N/A Hillsborough County $32,500 Community Development Block Grant Program (CDBG) Holmes County $0 N/A Immokalee (Collier County) $3,374,255 CDBG; HUD; Rural Business Enterprise Grant Indian River County/Vero Beach $8,148 State Housing Initiative Partnership Program (SHIP) Community Development Block Grant Program (CDBG); USDA Rural $7,348,108 Jackson County Business Enterprise Grant Program; Quick Action Closing Fund Qualified Targeted Industry Tax Refund Program; Quick Action Closing Jacksonville $2,137,200 Fund; Qualified Targeted Industry Tax Refund Program Kissimmee/Osceola County $0 N/A Lake Apopka $0 N/A Lake County $825,000 Community Development Block Grant Program (CDBG) Qualified Targeted Industry Tax Refund Program; Quick Response Training Lakeland $1,260,892 Program; SHIP Levy County $0 N/A Liberty County $0 N/A Madison County $0 N/A Martin County $6,847,675 Community Service Block Grant; LIHEAP; Neighborhood Stabilization Miami – Dade County $3,540,001 Community Development Block Grant Program (CDBG) Oak Hill $0 N/A
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 19 of 28 APPENDIX C
FUNDING RESOURCES ACCESSED July 1, 2012 - June 30, 2013
ENTERPRISE ZONE AMOUNT RESOURCE
Ocala $0 N/A Okeechobee County $0 N/A Orange County $0 N/A munity Development Block Grant Program (CDBG); Economic Pahokee $316,280 Development Transportation Fund Palm Bay $0 N/A CDBG;EPA Brownfields Revolving Loan Fund; QTI; USDA Rural Palm Beach County $2,937,834 Development Intermediary Re-lending Program Palmetto/Manatee County $0 N/A Pensacola $0 N/A Putnam County $0 N/A St. Marks $600,000 Community Development Block Grant Program (CDBG) St. Petersburg $285,832 Community Development Block Grant Program (CDBG) Sarasota County $2,627,159 CDBG; Business Training Program Sumter County $0 N/A Suwannee County $0 N/A Tallahassee/Leon County $56,438 Training Grants State Housing Initiative Partnership Program (SHIP); HOME; Neighborhood Tampa $7,169,000 Stabilization Program; ESG; HOPWA Federal Aviation Authority; Florida Department of Transportation; Florida Fish & Taylor County $2,537,000 Wildlife Conservative Commission; DEP Wakulla County $750,000 Community Development Block Grant Program (Housing Rehabilitation) Walton County $0 N/A Washington County $0 N/A Winter Haven $0 N/A TOTAL $52,600,061
Department of Economic Opportunity, Florida Enterprise Zone Program Annual Report, November 1, 2013 Page 20 of 28 Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
ENTERPRISE ZONE STATE ECONOMIC INCENTIVES
REPORT
Florida Legislature
Florida Economic Development Program Evaluations – Year 1
REPORT NO. 14- 01 1/1/2014
OFFICES OF THE FLORIDA LEGISLATURE: Office of Program Policy Analysis and Government Accountability & Office of Economic and Demographic Research
OPPAGA supports the Florida Legislature by providing evaluative research and objective analyses to promote government accountability and the efficient and effective use of public resources. EDR is a research arm of the Florida Legislature principally concerned with forecasting economic and social trends that affect policymaking, revenues, and appropriations. Cover photo by Mark Foley.
R. Philip Twogood, OPPAGA Coordinator Amy Baker, EDR Coordinator
TABLE OF CONTENTS
Chapter 1: Florida Economic Development Program Evaluations ...... 1 Scope ...... 1 Background ...... 2 Findings ...... 9 Recommendations ...... 18 Chapter 2: Capital Investment Tax Credit Program ...... 19 Background ...... 19 Program Performance ...... 22 Chapter 3: Qualified Target Industry Tax Refund Program ...... 23 Background ...... 23 Program Performance ...... 26 Chapter 4: Brownfield Redevelopment Bonus Refund Program ...... 28 Background ...... 28 Program Performance ...... 31 Chapter 5: High Impact Performance Incentive Grant Program ...... 32 Background ...... 32 Program Performance ...... 34 Chapter 6: Quick Action Closing Fund Program ...... 35 Background ...... 35 Program Performance ...... 37 Chapter 7: Innovation Incentive Program ...... 38 Background ...... 38 Program Performance ...... 41 Chapter 8: Enterprise Zone Program ...... 44 Background ...... 44 Program Performance ...... 48 Agency Response from Enterprise Florida Inc...... 52 Agency Reponse from the Department of Economic Opportunity ...... 54
Report No. 14-01
Chapter 8: Enterprise Zone Program
Background
Program Creation and Development Purpose. The 1982 Legislature created the Florida Enterprise Zone Program to provide incentives to induce private investments in economically distressed areas of the state. 61 The program targets areas that chronically display extreme and unacceptable levels of unemployment, physical deterioration, and economic disinvestment. The program has several goals including revitalizing and rehabilitating distressed areas, stimulating employment among area residents, and enhancing economic and social well-being in the areas. To achieve these goals, the state, county, and municipal governments provide investments, tax incentives, and local government regulatory relief to encourage businesses to invest and locate in designated zones and residents to improve their property. State incentives include job and corporate income tax credits as well as sales tax refunds.62 (See Exhibit 8-1.) Exhibit 8-1 The State Offers Many Incentives Through the Enterprise Zone Program
State Enterprise Zone Incentives Jobs Tax Credit (Sales and Use Tax) s. 212.096, F.S. Businesses located in a zone that collect and pay Florida sales and use tax are allowed a monthly sales tax credit for wages paid to new employees who have been employed for at least three months and are zone residents or residents of a rural county in rural enterprise zones. Jobs Tax Credit (Corporate Income Tax) s. 220.181, F.S. Businesses located in a zone that pay Florida corporate income tax are allowed a corporate income tax credit for wages paid to new employees who have been employed for at least three months and are zone residents or residents of a rural county in rural enterprise zones. Property Tax Credit (Corporate Income Tax) s. 220.182, F.S. New or expanded businesses located in a zone are allowed a credit on their Florida corporate income tax equal to 96% of ad valorem taxes paid on new or improved property. Sales Tax Refund for Building Materials s. 212.08(5)(g), F.S. A refund is available for sales taxes paid on the purchase of building materials used to rehabilitate real property located in a zone. Sales Tax Refund for Business Machinery and Equipment Used in an Enterprise Zone s. 212.08(5)(h), F.S. A refund is available for sales taxes paid on the purchase of certain business property that is used exclusively in a zone for at least three years. Sales Tax Exemption for Electrical Energy in an Enterprise Zone s. 212.08(15), F.S. A 50% sales tax exemption on the purchase of electrical energy is available to businesses located in a zone. The exemption is only available if the municipality in which the business is located passed an ordinance to exempt qualified enterprise zone businesses from 50% of the municipal utility tax. Source: The Florida Statutes.
61 Sections 290.001-290.016, F.S., authorize the creation of enterprise zones in Florida and specify goals and criteria for the program. Chapter 2005-287, Laws of Florida, re-designated existing enterprise zones and extended the program until December 31, 2015. 62 Local incentives include occupational license fee reduction; municipal utility tax abatement; façade renovation and/or commercial revitalization; loans, grants, and miscellaneous; reduction of local government regulations; impact fee waiver and/or discount; local economic development property tax exemption; additional local government services; and local funds for capital projects.
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Counties and municipalities may nominate an area to be designated as an enterprise zone that has high poverty (greater than 20%), high unemployment, and general distress, and meets certain geographic specifications (zones may not exceed 20 square miles).63 Rural enterprise zones are located in counties with populations that generally do not exceed 100,000.64 Of the 65 enterprise zones within the state, 29 are rural and 36 are urban. (See Exhibit 8-2.) Exhibit 8-2 Florida Has 65 Enterprise Zones
Source: The Department of Economic Opportunity.
63 Sections 290.0058 and 290.0055, F.S. 64 Zones may be designated rural if the nominating county has a population of 75,000 or less; a county has a population of 100,000 or less and is contiguous to a county with a population of 75,000 or less; a municipality is located in a county with a population of 75,000 or less; or a municipality is located in a county with a population of 100,000 or less and is contiguous to a county with a population of 75,000 or less.
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Local governments are responsible for zone administration and monitoring activities, creating enterprise zone development agencies and employing zone coordinators. Zone coordinators serve as local contacts and assist businesses applying for state tax credits and refunds, certify incentive applications to the Department of Revenue, educate the public about the program, and submit data on zone activities to the DEO for inclusion in the enterprise zone annual report. The Department of Economic Opportunity oversees the program at the state level and approves zone designation applications and changes in zone boundaries. The department also provides technical support to local zone coordinators and submits annual program reports to the Governor and Legislature.
History. The Legislature has enacted several changes to the Enterprise Zone Program since its inception. For example, the 1994 Legislature passed the Florida Enterprise Zone Act of 1994, which repealed the existing enterprise zones on December 31, 1994, created parameters for designation of new zones, and established a program expiration date of June 30, 2005.65 In addition, the jobs tax credit criteria were revised to require both businesses and employees to reside within an enterprise zone. In 1995, 19 new rural and urban enterprise zones were designated. The 2005 Legislature extended the program for 10 years and gave existing enterprise zones an opportunity to have their zones be re-designated.66 By January 1, 2006, the former Office of Tourism, Trade and Economic Development (OTTED) had approved 53 re-designation application packages.67 Subsequently, the Legislature authorized and OTTED approved the designation of enterprise zones in nine additional jurisdictions. In 2010, the Legislature amended the definition of real property by excluding condominiums from the building materials sales tax refund incentive.68 In October 2011, management of the Enterprise Zone Program was transferred from OTTED to DEO’s Division of Community Development, Bureau of Economic Development. DEO approved three additional enterprise zone application packages in 2012, bringing the total number of zones to 65. Incentives Received Local zone coordinators must certify all applications for enterprise zone credits and tax refunds.69 Applicants must attach required documents to required Department of Revenue forms, including receipts if the business is applying for sales tax refunds and employee information if applying for jobs tax credits. The Department of Revenue audits these applications to ensure they meet several criteria, including evidence that applicants owned the property when the improvements were made; employees are full-time and live in the zone; applicants have paid pertinent taxes; and application deadlines were met.70 If DOR denies an application, the applicant is notified and may amend their application, file an informal protest with the department, or file a written, formal protest with the Division of Administrative Hearings or a circuit court.
65 Chapter 94-136, Laws of Florida. 66 Chapter 2005-287, Laws of Florida. 67 OTTED was a predecessor of the Department of Economic Opportunity. When DEO was created in 2011, OTTED’s functions were transferred to the department. 68 Chapter 2010-147, Laws of Florida. 69 Businesses applying for community contribution tax credits must seek approval from the Department of Economic Opportunity. 70 A 2011 OPPAGA report (Few Businesses Take Advantage of Enterprise Zone Benefits; the Legislature Could Consider Several Options to Modify the Program, OPPAGA Report No. 11-01, January 2011) described several deficiencies in the incentive application process including no written procedures for review and approval of tax credits; differing procedures for refunds, credits, sales and use taxes, and corporate income taxes; inability to submit tax credit applications online; and an inconsistent approval process.
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In Fiscal Years 2009-10 through 2011-12, businesses received $110.9 million in Enterprise Zone Program incentives. During the period, there was a significant decrease (74.5%) in incentives, primarily due to the 2010 Legislature’s exclusion of condominiums from the definition of real property, which in turn made condominiums ineligible for sales tax refunds for building materials.71 The largest decrease in incentives occurred between Fiscal Years 2009-10 and 2011-12, with a 56.3% decline. (See Exhibit 8-3.) Exhibit 8-3 Enterprise Zone Program Incentives Decreased 74.5% Between Fiscal Years 2009-10 and 2011-12 State Incentive Amounts Fiscal Year Fiscal Year Fiscal Year Percentage Change Incentives 2009-10 2010-11 2011-12 Total FY 2009-10 to 2011-12 Sales Tax Refund for Building Materials Used $53,030,595 $13,590,376 $2,462,136 $69,083,107 -95.4% Jobs Tax Credit (Sales and Use Tax) 4,568,257 5,979,438 7,625,993 18,173,688 66.9% Jobs Tax Credit (Corporate Income Tax) 3,892,991 5,547,786 3,484,013 12,924,790 -10.5% Sales Tax Refund for Business Machinery and Equipment 1,035,561 679,440 1,228,480 2,943,481 18.6%
Property Tax Credit (Corporate Income Tax) 1,896,648 1,906,552 992,280 4,795,480 -47.7% Sales Tax Exemption on Electricity Use 1,138,054 972,185 900,476 3,010,715 -20.9%
Total $65,562,107 $28,675,777 $16,693,378 $110,931,261 -74.5% Source: OPPAGA analysis of Department of Revenue data.
71 Chapter 2010-147, Laws of Florida.
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Program Performance To more closely examine Enterprise Zone Program performance, OPPAGA sought to gauge changes in economic outcomes and participation by businesses in five selected enterprise zones.72 We considered a range of factors when selecting our sample, including incentive amount, population, and urban/rural geography. The five zones are Gulf County, Jacksonville, Miami-Dade County, Okeechobee County, and Tallahassee/Leon County. In Fiscal Years 2009-10 through 2011-12, the five zones received sales and use tax credits and refunds totaling $73.8 million; this represents 66.5% of the incentives received statewide during the period. Miami-Dade County received the most incentives, $68.2 million, while Gulf County received the least, $477,633. The most frequently used incentive among the five counties was the sales tax refund for building materials, which totaled $61.6 million. (See Exhibit 8-4.) Exhibit 8-4 Businesses in Five Enterprise Zones Received $73.8 Million in Incentives in Fiscal Years 2009-10 Through 2011-121 Refunds for Refunds for Jobs Tax Credits Building Materials Used Business Machinery Used Total Businesses/ Enterprise Zone Businesses Incentive Individuals Incentive Businesses Incentive Incentive Miami-Dade County 102 $7,378,945 64 $59,490,547 81 $1,302,308 $68,171,800 Jacksonville 20 775,369 33 478,085 28 650,941 1,904,395 Okeechobee County 19 1,584,204 8 34,083 6 34,241 1,652,528 Tallahassee/Leon County 5 17,447 52 1,518,649 11 56,984 1,593,080 Gulf County 17 421,779 19 51,426 5 4,428 477,633
Total 163 $10,177,744 176 $61,572,790 131 $2,048,902 $73,799,436 1 The figures presented do not include credits taken against Florida corporate income taxes because the Department of Revenue does not track these incentives for individual enterprise zones. Source: OPPAGA analysis of Department of Revenue data.
The only Enterprise Zone Program incentive that is directly linked to employment is the Job Tax Credit. The incentive is available to businesses located in a zone that pay Florida sales and use or corporate income taxes; businesses are granted tax credits for new employees who have been employed for at least three months and are zone residents or residents of a rural county in rural enterprise zones. In Fiscal Years 2009-10 through 2011-12, 163 businesses in the five selected zones received job tax credits totaling $10.2 million. These businesses hired 2,517 new employees. Miami-Dade County claimed the most credits, totaling $7.4 million for 1,837 jobs. (See Exhibit 8-5.)
72 We reviewed the same five zones in 2011. See Few Businesses Take Advantage of Enterprise Zone Benefits; the Legislature Could Consider Several Options to Modify the Program, OPPAGA Report No. 11-01, January 2011.
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Exhibit 8-5 Businesses in Five Enterprise Zones Received $10.2 Million in Job Tax Credits for 2,517 Employees in Fiscal Years 2009-10 Through 2011-12
Enterprise Zone Businesses Credits Employees1 Miami-Dade County 102 $7,378,945 1,837 Okeechobee County 19 1,584,204 242 Jacksonville 20 775,369 302 Gulf County 17 421,779 123 Tallahassee/Leon County 5 17,447 13 Total 163 $10,177,744 2,517
1 This counts all new employees who were eligible for the credit for at least one month between Fiscal Years 2009-10 and 2011-12. Employees are eligible to be claimed for the credit for the first two years after they are hired. If employment is terminated before eligibility expires, the employee cannot be claimed for the remainder of the two years. The Department of Revenue determines when eligibility expires, but does not receive data indicating whether employment was terminated before expiration. Thus, this count may include some newly hired individuals whose employment was terminated prior to Fiscal Year 2009-10 and who were not claimed for the credit between Fiscal Years 2009-10 and 2001-12. Source: OPPAGA analysis of Department of Revenue data.
From 2005 through 2012, business, employment, and wage growth varied widely among the five zones. The number of businesses and employment declined for all zones, but the size of the decrease varied by county. For example, the number of businesses in Miami-Dade County decreased by 1.1%, while they decreased by 26.6% in Gulf County. Similarly, decreases in employment ranged from a 9.4% decline in Okeechobee County to a 35.7% drop in Gulf County. However, wages increased in all zones, with growth ranging from 3.6% in Gulf County to 18.8% in Miami-Dade County. (See Exhibit 8-6.) Exhibit 8-6 Economic Outcomes Varied in Five Enterprise Zones in Calendar Years 2005 Through 2012
Enterprise Zone Business Growth1 Employment Growth2 Wage Growth3 Gulf County -26.6% -35.7% 3.6% Jacksonville -15.5% -19.0% 13.3% Miami-Dade County -1.1% -12.7% 18.8% Okeechobee County -11.5% -9.4% 17.9% Tallahassee/Leon County -13.4% -13.2% 13.2% Statewide 8.2% -5.2% 17.4%
1 Changes in number of businesses. 2 Changes in number of employees. 3 Changes in average wages. Source: OPPAGA analysis of Department of Economic Opportunity data.
Other Performance Indicators As previously noted, the purpose of Florida’s Enterprise Zone Program is to establish a process that identifies severely distressed areas and to provide state and local economic incentives to both businesses and homeowners, with the goal of inducing private investment and enabling revitalization. As part of our analysis of the degree to which such improvements have occurred, we reviewed U.S. Census data from 2000 and 2010 for the five selected enterprise zones. We compared changes in median home values, median household income, unemployment rates, and poverty rates in the five selected enterprise zones to similar non-enterprise zone census tracts.
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Our analysis found low to mixed results, with enterprise zones meeting some legislative goals but falling short for others. In one of our analyses, two out of five enterprise zones outperformed similar non-zone comparison areas. In our other three analyses, only one of five enterprise zones outperformed similar comparison areas. These results indicate that while there were some successes, in general, the Enterprise Zone Program has not met legislative goals. One measure of enterprise zone effectiveness at economically revitalizing disadvantaged areas is increased residential property values. In 2000, the five zones we examined all had high percentages of residential properties valued at under $100,000, the lowest census category of property values. The lowest percentage among the five zones was Miami-Dade, where 62% of the personal residences were valued at $100,000 or less; the highest percentage was Jacksonville, where 92% of the personal residences had property values under $100,000. By 2010, all five zones saw a significant decrease in the percentage of residential property valued at less than $100,000, a sign that property values increased in the zones even for the lowest valued residential properties. However, statewide the percentage of residential properties valued at under $100,000 also decreased from 55% in 2000 to 22% in 2010, so it is possible that the zones simply benefitted from the 10-year statewide rise in property values. (See Exhibit 8-7.) In order to evaluate the growth in enterprise zone property values against a comparison group, for each zone we selected a group of census tracts from the 2000 census that had the same rural/urban status as the enterprise zones and that had the same percentage of homes valued at less than $100,000 in 2000. This allowed us to determine, for each zone, if the change in personal residences valued at under $100,000 or less was different than the change for a comparison group. In 2010, two of the five enterprise zones (Miami-Dade County and Okeechobee County) had smaller percentages than their comparison groups of personal residences valued at $100,000 or less. This shows that there was not an across-the-board increase in property values in enterprise zones that was greater than the increases that occurred in the comparison groups. We did not find strong evidence that residential property values increased more in enterprise zones than in similar non-enterprise zone areas. Exhibit 8-7 Home Values in Enterprise Zones and Non-Enterprise Zones Have Risen Since 2000 2010 2010 2000 Enterprise Zone Enterprise Zone Comparison Group Percentage of All Homes Percentage of All Homes Percentage of All Homes Difference Between Valued at Less Than Valued at Less Than Valued at Less Than Enterprise Zone and $100,0001 $100,000 $100,000 Comparison Group Gulf County 73% 37% 37% 0% Jacksonville 92% 60% 44% 16% Miami-Dade County 62% 15% 22% -7% Okeechobee County 79% 36% 38% -2% Tallahassee/Leon County 84% 40% 31% 9%
1 Enterprise zones and comparison group started at the same percentage. Source: OPPAGA analysis of 2000 and 2010 U.S. Census data.
Another measure of enterprise zone economic impact is median household income, which is a measure of a household’s ability to acquire the goods and services that satisfy their needs. Our comparison of 2000 and 2010 U.S. Census data for the five selected zones and similar non-enterprise zone areas shows that in all selected enterprise zones, median household incomes have increased. However, only one enterprise zone, Miami-Dade County, showed an increase that exceeded that of its comparison non-enterprise zone area. (See Exhibit 8-8.)
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Exhibit 8-8 Median Household Incomes Have Increased in All Five Enterprise Zones Since 2000
Percentage Change from 2000 to 2010 Enterprise Zone Non-Enterprise Zone Gulf County 32% 38% Jacksonville 29% 32% Miami-Dade County 43% 23% Okeechobee County 31% 34% Tallahassee/Leon County 21% 31% Source: OPPAGA analysis of 2000 and 2010 U.S. Census data.
Unemployment also is often used as a measure of the health of the economy. Consistent with statewide unemployment trends, for all but one of the five enterprise zones in our review, unemployment rates were higher in 2010 than in 2000; Miami-Dade County’s unemployment rate remained at 12%. When comparing enterprise zones to non-enterprise zone areas, Gulf County was the only zone that had a lower unemployment rate than its comparison non-zone area (10% compared to 13%). (See Exhibit 8-9.) Exhibit 8-9 Consistent with State and National Trends, Unemployment Rates Increased in Most of the Selected Enterprise Zones in 2000 Through 2010 2000 Unemployment Rates for Enterprise Zones and 2010 Enterprise Zone 2010 Non-Enterprise Zone Non-Enterprise Zones1 Unemployment Rates Unemployment Rates Gulf County 6% 10% 13% Jacksonville 10% 18% 13% Miami-Dade County 12% 12% 12% Okeechobee County 5% 12% 12% Tallahassee-Leon County 15% 15% 11% 1 Both areas started at same rate. Source: OPPAGA analysis of 2000 and 2010 U.S. Census data.
Finally, the U.S. Census Bureau uses a set of income thresholds that vary by family size and composition to define poverty. If a family's total income is less than the family's threshold, the family is considered in poverty. Over the 10-year period of our review, poverty rates increased for three of the five selected enterprise zones. In all but one of the five zones, the poverty rate exceeded that of similar non-enterprise zone areas; Miami-Dade County’s 2010 rate (26%), while increasing over the 10-year period, was lower than the comparison area (29%). (See Exhibit 8-10.) Exhibit 8-10 In Fiscal Years 2000 Through 2010, Poverty Rates within Most of the Five Selected Enterprise Zones Increased 2000 Poverty Rates for Enterprise Zones and 2010 Enterprise Zone 2010 Non-Enterprise Zone Non-Enterprise Zones1 Poverty Rates Poverty Rates Gulf County 17% 17% 16% Jacksonville 30% 33% 29% Miami-Dade County 27% 26% 29% Okeechobee County 16% 24% 17% Tallahassee-Leon County 37% 43% 31% 1 Both areas started at same rate. Source: OPPAGA analysis of 2000 and 2010 U.S. Census data.
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57 Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
ENTERPRISE ZONE EDR ROI
REPORT
OFFICE OF ECONOMIC & DEMOGRAPHIC RESEARCH
Return-on-Investment for Select State Economic Development Incentive Programs
Capital Investment Tax Credit – Qualified Target Industry Tax Refund – Brownfield Bonus Redevelopment Tax Refund – High-Impact Sector Performance Grant– Quick Action Closing Fund – Innovation Incentive Program – Enterprise Zone Program
1/1/2014
EXECUTIVE SUMMARY AND COMPARATIVE ANALYSIS
Background and Purpose... Recently enacted legislation directs the Office of Economic and Demographic Research (EDR) and the Office of Program Policy Analysis and Government Accountability (OPPAGA) to analyze and evaluate 18 state economic development incentive programs on a recurring three-year schedule.1 EDR is required to evaluate the economic benefits of each program, using project data from the most recent three-year period, and to provide an explanation of the model used in its analysis and the model’s key assumptions. Economic Benefit is defined as “the direct, indirect, and induced gains in state revenues as a percentage of the state’s investment” – which includes “state grants, tax exemptions, tax refunds, tax credits, and other state incentives.”2 EDR’s evaluation also requires identification of jobs created, the increase or decrease in personal income, and the impact on state Gross Domestic Product (GDP) for each program.
The review period covers Fiscal Years 2009-10, 2010-11, and 2011-12. In the first report, the following programs are under review:
Capital Investment Tax Credit - CITC; Qualified Target Industry Tax Refund - QTI; Brownfield Redevelopment Bonus Tax Refund - BFRD; High-Impact Sector Performance Grant - HIPI; Quick Action Closing Fund - QACF; Innovation Incentive Program - IIP; and Enterprise Zone Program - EZ.
With the exception of the Qualified Target Industry Tax Refund and the Quick Action Closing Fund, there were less than 10 projects per program during the review period. Measurements for programs with a significant number of projects are likely to be more reliable.
Explanation of Return-on-Investment... In this report, the term Return-on-Investment (ROI) is synonymous with economic benefit, and is used in lieu of the statutory term. This measure does not address issues of overall effectiveness or societal benefit; instead, it focuses on tangible financial gains or losses to state revenues, and is ultimately conditioned by the state’s tax policy.
The ROI is developed by summing state revenues generated by a program less state expenditures invested in the program, and dividing that calculation by the state’s investment. It is most often used when a project is to be evaluated strictly on a monetary basis, and externalities and social costs and benefits—to the extent they exist—are excluded from the evaluation. The basic formula is:
(Increase in State Revenue – State Investment) State Investment
1 Section 288.0001, F.S., as created by s. 1, ch. 2013-39, Laws of Florida & s. 1, ch. 2013-42, Laws of Florida. 2 Section 288.005(1), F.S.
1
Since EDR’s Statewide Model3 is used to develop these computations and to model the induced and indirect effects, EDR is able to simultaneously generate State Revenue and State Investment from the model so all feedback effects mirror reality. The result (a net number) is used in the final ROI calculation.
As used by EDR for this analysis, the returns can be categorized as follows:
Greater Than One (>1.0)…the program more than breaks even; the return to the state produces more revenues than the total cost of the incentives. Equal To One (=1.0)…the program breaks even; the return to the state in additional revenues equals the total cost of the incentives. Less Than One, But Positive (+, <1)…the program does not break even; however, the state generates enough revenues to recover a portion of its cost for the incentives. Less Than Zero (-, <0)…the program does not recover any portion of the incentive cost, and state revenues are less than they would have been in the absence of the program because taxable activity is shifted to non-taxable activity.
The numerical ROI can be interpreted as return in tax revenues for each dollar spent by the state. For example, a ROI of 2.5 would mean that $2.50 in tax revenues is received back from each dollar spent by the state.
Overall Results and Conclusions... This analysis develops a return-on-investment for each of the seven incentive programs under review and evaluates the key factors that affected their returns.
8 Return on Investment for Incentive Programs 7 6.9 6.8
6 6.4 6.1
5
4 4.0
3
2.3 2 1.9 1.1 1.5 1 1.1 1.1 0.7 0.2 0.1 -0.04 -0.05 0 BFRD CITC HIPI IIP QACF QTI Hybrids EZ
-1 Bundled Incentive Projects Single Incentive Projects Single Incentive Projects (Culled) Weighted Average of Bundled Projects
Weighted Average of All Projects EZ: No Property Appreciation EZ: With Property Appreciation
The seven programs are evaluated over 14 scenarios, which include projects that receive awards from only one program (single incentive) and projects that receive awards from multiple programs (bundled).
3 See section on Methodology for more details.
2
For comparative purposes, the evaluation also develops two hybrid scenarios that combine all projects in the review (excluding the Enterprise Zone program) for a total of 16 scenarios. These hybrid measures serve as a benchmark for the individual programs. The table below shows the ranked program scenarios with corresponding ROIs in four general categories.
Return-on-Investment for the 3 year period Scenario ROI Greater Than One (>1.0) QTI Bundled 6.9 QTI Single 6.8 QTI Single (Culled) 6.4 QACF Single 6.1 BFRD Single 4.0
CITC Bundled 2.3 CITC Single 1.9 Approximately Equal To One (=1.0) Hybrid 1* 1.5 Hybrid 2** 1.1
QACF Bundled 1.1 BFRD Sinlge (Culled) 1.1 Less Than One, But Positive (+, <1) HIPI Bundled 0.7 IIP Bundled 0.2 IIP Single 0.1 Less Than Zero (-, <0) EZ 1*** -0.04 EZ 2**** -0.05 * Hybrid 1 is Weighted Average of Bundled Projects ** Hybrid 2 is Weighted Average of ALL Projects *** EZ 1 is No Property Appreciation **** EZ 2 is With Property Appreciation
The programs in the Greater than One category have several common elements that lead to high ROIs:
Capital Investment Requirements – One program feature for many of the programs in the first category is the requirement for capital investment, which usually takes the form of construction. The benefits of construction are typically localized. The work is labor intensive and the wages are spent locally which drives up indirect and induced effects. In addition, many of the materials used in construction projects are purchased locally and are generally taxable. Relative to other industries, there are few leakages to the rest of the world.
High Wage Requirements – The top four scenarios share high wage requirements. In the Statewide Model high wages are linked to higher output and productivity which results in more household spending. This program feature is best exemplified in the QTI program scenarios and the QACF single-incentive project scenario. While the IIP and HIPI programs also have such requirements, the positive aspect of this feature is offset by other factors that adversely affect program ROI.
3
Large Industry Multipliers – Industries with high multipliers typically have strong backward linkages to local suppliers. They also have high employment multipliers. Both of these factors result in greater indirect and induced benefits. Relative to other industries, there are few leakages to the rest of the world. Examples are found by looking at multipliers in manufacturing industries.
Non-Economic Forces Affecting Costs and Benefits – In some scenarios awards are not fully being used – and in others, jobs, wages, and capital investments are being created in excess of the state’s contracted levels. These circumstances artificially increase the ROI for the programs by reducing the state’s cost or increasing the state’s benefit. However, if businesses were able to receive the incentives’ face value or create only the minimum jobs required, the ROIs would be reduced.
The remaining programs may have one or more of the elements identified above, but the positive impact of these features is offset by other factors that adversely affect the program’s ROI. These factors are far-ranging. For some programs, the ROI may not be the principal purpose of the program or even a secondary goal. This applies to the Brownfield Redevelopment Bonus Tax Refund, Innovation Incentive, and Enterprise Zone programs.
Other factors have to do with the timing of the review period. While there was significant capital investment within the three-year window, there were additional investments that took place prior to the review period. Had this activity taken place closer to the beginning of the review period, or during the period, the ROI would have been significantly larger for some programs. This is especially true for the Capital Investment Tax Credit.
Similarly, the Innovation Incentive Program comprises research and development projects that have 20- year break-even requirements. The evaluation measured the ROI at an early stage of the projects’ life cycle. As projects mature, the ROI may improve.
Finally, some projects could have been undertaken in the absence of the incentives. Removing (culling) Florida market or resource dependent projects lowers program ROIs by retaining the cost of incentives while losing any economic benefits associated with the projects. This concept applies especially to the Enterprise Zone Program where the program purpose and design essentially produces no increase in state economic activity. The Enterprise Zone Program does not recover any portion of the incentive cost, and revenues are less than they would have been in the absence of the program because taxable activity is shifted to non-taxable activity – producing a negative ROI.
Ultimately, a program with a ROI above 1 has sufficient justification from a financial perspective to continue the investment in the program. In this regard, decision-makers have several options as to the appropriate evaluation standard to use: breaks even; equals or improves upon the result of Hybrid Scenario #1 (all bundled projects; ROI of 1.5); or, equals or improves upon the result of Hybrid Scenario #2 (all projects; ROI of 1.1). Only policy considerations such as societal benefit or another economic measure would justify the continuance of programs that fail to break even or go negative.
In this regard, the table on the following page shows the three required economic indicators by rank, in addition to the ROI. They have been adjusted to reflect averages per year per investment dollar. The results are similar to the ROI rankings with the QTI scenarios being at the top for most measures. The
4
Brownfield single incentive scenario provides the best value for jobs per state dollar invested; however, the jobs are low wage.
Scenarios Ranked by ROI and Economic Indicators*
Personal Overall Scenario ROI Income GDP Employment for 3 year period average per year per investment $
QTI Bundled 1 3 3 2 QTI Single 2 1 1 4 QTI Single (Culled) 3 2 2 5 QACF Single 4 4 4 3 BFRD Single 5 5 5 1 CITC Bundled 6 8 7 8 CITC Single 7 9 9 7 QACF Bundled 8 6 6 6 BFRD Single (Culled) 9 7 8 9 HIPI Bundled 10 10 10 10 IIP Bundled 11 11 11 11 IIP Single 12 12 12 12 EZ 1 13 13 14 14 EZ 2 14 14 13 13
*Scenarios are ranked from 1 to 14, with 1 being the highest. Personal Income, GDP, and Employment rankings are based on calculations of the state's average investment per year compared to the average economic impact in order to account for program size.
5
FLORIDA ENTERPRISE ZONE PROGRAM
Project Summary Statistics
Fiscal Years 2009-10 through 2011-12 Total Amount Enterprise Zone Benefits # of Awards # of Recipients ($m) Building Materials Refund s.212.08(5)(g),(n)&(o), F.S. 618 573 $70,060,428 Business Equipment Refund s.212.08(5)(h), F.S. 360 283 $2,943,481 Electricity Energy Exemption* s.212.08(15), F.S. Not Reported Not Reported $5,434,504 Job Sales & Use Tax Credit s.212.096, F.S. 590 308 $18,427,998 Job Corporate Income Tax Credit s.220.181, F.S. 133 85 $13,439,598 Ad Valorem Tax Credit s.220.182, F.S. 61 40 $4,920,480
Total: 1762 1289 $115,226,489 * Electricity Energy Exemption total amount is an estimate.
Statewide Economic Model Impact of the EZ Program -- Without Property Appreciation Average 2009-10 2010-11 2011-12 Total per Year Personal Income Nominal $ (M) (98.4) (95.5) (54.4) (248.3) (82.8) Real Disposable Personal Income Fixed 2009 $ (M) (83.1) (80.1) (45.4) (208.6) (69.5) Real Gross Domestic Product Fixed 2009 $ (M) (102.8) (89.4) (39.6) (231.8) (77.3) Consumption by Households and Government Fixed 2009 $ (M) (143.3) (130.7) (65.5) (339.5) (113.2)
Real Output Fixed 2009 $ (M) (121.0) (101.9) (42.3) (265.2) (88.4) Average 2009-10 2010-11 2011-12 Minimum Maximum per Year Total Employment Jobs (601) (396) (42) (601) (42) (346) Population Persons (124) (376) (536) (536) (345)
Statewide Economic Model Impact of the EZ Program -- With Property Appreciation Average 2009-10 2010-11 2011-12 Total per Year Personal Income Nominal $ (M) (151.0) (176.1) (178.0) (505.1) (168.4) Real Disposable Personal Income Fixed 2009 $ (M) (145.1) (165.4) (162.2) (472.7) (157.6) Real Gross Domestic Product Fixed 2009 $ (M) 61.2 62.1 46.0 169.3 56.4
Consumption by Households and Government Fixed 2009 $ (M) 115.8 126.1 106.0 347.9 116.0 Real Output Fixed 2009 $ (M) 40.8 32.2 11.3 84.3 28.1 Average 2009-10 2010-11 2011-12 Minimum Maximum per Year Total Employment Jobs 188 112 (16) (16) 188 95 Population Persons (16) (63) (158) (158) (16) (79)
58
Program Description… First enacted in 1982, the Florida Enterprise Zone Program was created:
“… to provide the necessary means to assist local communities, their residents, and the private sector in creating the proper economic and social environment to induce the investment of private resources in productive business enterprises located in severely distressed areas and to provide jobs for residents of such areas.” 60
Under the Enterprise Zone Act, areas of the state meeting specified criteria, including suffering from pervasive poverty, unemployment, and general distress were designated as enterprise zones. Currently, Florida has 65 enterprise zones in 52 of the state’s 67 counties.61 Florida also has three Federal Enterprise Communities and two Federal Empowerment Zones.62 Certain federal, state, and local incentives are authorized to induce private businesses to invest in these enterprise zones. The program’s state incentives include:
Jobs credit against corporate income and state sales taxes for wages paid to new employees who are either residents of an enterprise zone or participants in a welfare transition program, up to 45 percent of wages paid for two years. Corporate income tax credit on ad valorem (property) taxes paid on new, expanded, or rebuilt businesses, up to $50,000 annually for five years. Sales tax refund on the purchase of building materials and business equipment. The amount of the refund is the lesser of 97 percent of the sales taxes paid or $5,000, or, if 20 percent or more of the business’s employees reside in an enterprise zone, the lesser of 97 percent of the taxes paid or $10,000. Sales tax exemption of 50 percent for electrical energy used in an enterprise zone, if the municipality in which the business is located has passed an ordinance to exempt the municipal utility taxes on such business.
Analysis and Findings… For a number of reasons, the Enterprise Zone Program produces a negative return-on-investment to the state. Most importantly, previously taxable activity has been converted to non-taxable activity. Further, to the extent the state funds supporting the incentive could have been more productively spent elsewhere and the business activity would have occurred anyway, the state actually foregoes revenues beyond the direct cost of the incentives.
The first reason relates to program purpose and design. Whereas most of the other programs were developed to induce business expansion or location to the state, the Enterprise Zone program has a more narrow purpose: to induce investment in designated severely distressed areas within the state and provide jobs to area residents. The program primarily captures or shifts existing economic activity from other in-state locations to the zone rather than inducing new economic activity.
This assumption is incorporated into the methodology currently used by the Revenue Estimating Conference (REC) to estimate the fiscal impacts on legislation that creates new Enterprise Zones or
60 Sections 290.001 – 290.016, F.S. Unless reauthorized, the program is scheduled for sunset in 2015. 61 See Department of Economic Opportunity, Bureau of Economic Development, Division of Community Development. Enterprise Zone Program Annual Report, 2012. Tallahassee, Florida. 62 These federal programs are scheduled to expire in 2013.
59 expands existing Enterprise Zone boundaries. The REC assumes that economic activity in an Enterprise Zone, absent the formation of the zone, would have otherwise occurred within the zone or somewhere else in the state. Existing business activity (and any future investments by these businesses) is captured in a designated geographic area when local governments establish or change zone boundaries, or when in-state businesses move into the zone. These actions do not increase the total economic activity within the state.63
Research from other states supports the REC’s assumptions. A 2005 Policy Brief prepared by the Minnesota House of Representatives Research Department that reviewed empirical research found the establishment of Enterprise Zones may result in a shift in employment growth to the zone rather than add overall employment within the region, as employers seek to take advantage of zone benefits.64 This conclusion was echoed in a 2013 review of California’s Enterprise Zone program:
“Most rigorous research has found that Enterprise Zones do not create a net increase in jobs or increase the rate of job creation…Even if an Enterprise Zone results in more job growth in a particular locality, it is likely that some of the jobs were shifted from other parts of the region or state.”65
The Enterprise Zone concept was developed in the United Kingdom.66 Recent research regarding their Enterprise Zone program supports the conclusions above. Larkin and Wilcox found that there is evidence to suggest that many of the businesses that benefited from locating in Enterprise Zones were not new firms, but simply firms that had relocated from other areas.67 Wainwright’s research corroborated these findings and suggested that designation of new Enterprise Zones “will undoubtedly result in a transfer of value from the surrounding area as existing businesses, occupiers and investors simply attempt to take advantage of the available tax allowances and reliefs.”68 Sissons and Brown,
63 In 2010, EDR was asked to review the methodology used by the REC, and concluded after a literature review and property tax analysis on the effectiveness of state Enterprise Zone programs that there was no conclusive evidence disproving the REC assumption. See “Literature Review and Preliminary Analysis of the Impact of Enterprise Zones on State & Local Collections” prepared by the Office of Economic and Demographic Research, February 2010. 64 Don Hirasuna and Joel Michael, “Enterprise Zones: A Review of the Economic Theory and Empirical Evidence,” Minnesota House of Representatives Research Department (January 2005): 13. Minnesota Office of the legislative Auditor. “Evaluation Report: JOBZ Program” (February 2008) 65 “California’s Enterprise Zone Program” Legislative Analyst’s Office presentation to the Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government (May 9, 2013): 6. Also see Fisher and Peters, “Tax and Spending Incentives and Enterprise Zones,” New England Economic Review, (March/April 1997): 127. Also see Hanson and Rohlin’s 2010 review of the Federal Empowerment Zone program, where they found a positive and statistically significant effect of the federal Enterprise Zone tax incentive program on attracting new establishments. However, they acknowledge that their findings “ignore any displacement and existing establishment effects that may occur” as a result of the incentive and that “it is possible there are substantial displacement effects of the program in other areas. Andrew Hanson and Shawn Rohlin, “Do Location-Based Tax Incentives Attract New Business Establishment?” Journal of Regional Science (2010): 18, 22. 66 John Engberg and Robert Breenbaum, “State Enterprise Zones and Local Housing Markets” Journal of Housing Research, Vol 10, Issue 2 (1999): 164. Don Hirasuna and Joel Michael, “Enterprise Zones: A Review of the Economic Theory and Empirical Evidence,” Minnesota House of Representatives Research Department (January 2005): 7. 67 Kieran Larkin and Zach Wilcox, “What Would Maggie Do? Why the Government’s policy on Enterprise Zones needs to be radically different to the failed policy of the 1980s.” Centre for Cities (February, 2011): 7. 68 Simon Wainwright, “Enterprise Zones: Do they created or transfer value?” Journal of Urban Regeneration and Renewal, Vol. 5, 2. (2012): 130. 60 citing information compiled by the Department for the Environment, report that 80 percent of jobs created by Enterprise Zones in the UK from 1980 through 1987 were displaced from other areas.69
This transfer or redirection of investments and economic activity is also evident in Federal Empowerment Zones. Like Florida’s Enterprise Zone program, the federal program offers job tax credits and other incentives for capital investments in designated economically distressed areas.70 Hanson & Rohlin suggest that the gains in federal zones are at the expense of “neighboring and economically similar areas...both in terms of the number of establishments located in these areas and employment at local establishments…” and the losses are “especially strong in the retail and services industries.”71
It is unlikely that zone incentives alone are sufficient to induce relocations to the state. Peters and Fisher argue that when compared to wages, an important location consideration, zone incentives were:
“…so small, in fact, that even quite limited local variation in wage rates could easily wipe out the business income advantages conferred by incentives. Thus our non-econometric evidence suggests that it is likely that zone incentives influence business location and investment decisions only in exceptional circumstances.”72
To the extent that Enterprise Zone incentives are an inducement, Florida has little or no competitive advantages when compared to other states. In FY 2012-13, Florida awarded $17.6 million in state incentives for the entire Enterprise Zone program, or $.91 per capita.73 Thirty-six of the 50 states have Enterprise Zone programs, of which seven are local only (no state incentives available) or primarily local programs. EDR was able to obtain program cost information for 25 of these 29 states. Only six states have lower per capita program costs.
It has also been argued that “but for” the Enterprise Zone program incentives, in-zone businesses would not have expanded their economic activity. Research addressing this issue cast doubt on this assertion as well. Peters and Fisher conclude that “the majority of the recent literature comes down on the side of Enterprise Zone having little or no impact on growth” and find through their econometric study of 65
69 Andrew Sissons and Chris Brown, “Do Enterprise Zones Work?” The Work Foundation (February 2011): 5. 70 This soon to expire program provides several different incentives, including wage credits, tax deductions, bond financing, and capital gains liability reduction. 71 Andrew Hanson and Shawn Rohlin, “Do spatially targeted redevelopment programs spillover?” Forthcoming in Regional Science and Urban Economics (2012): 26. Further, the study found that “(g)iven the …program uses tight geographic targeting in densely populated urban areas, establishments can benefit by literally moving across the street … to enjoy the benefits of the program without incurring relocation costs associated with moving further from a customer base, employees, or losing other advantages of the immediate location…Spillovers caused by relocation suggest a zero net effect from the program; however, some of our estimates suggest a negative net effect of the program. Negative net effects could be the result of spillovers causing job (and establishment) destruction in neighboring and similar areas, possibly through increased competition from establishments subsidized by the EZ program.” 72 Alan Peters and Peter Fisher. State Enterprise Zone Programs: Have They Worked? (Kalamazoo: Upjohn Institute for Employment Research, 2002): 157 - 158. 73 See APPENDIX 3. Figures in this table do not include local incentives. In Florida, local incentives were reported to be $56.6 m in local fiscal years 2010-12. Observers may note that annual state program costs have been as high as $67.6m in FY 2009-10, due primarily to sales tax refunds for building materials associated with condominium developments. See OPPAGA Report No. 11-01, “Few Businesses Take Advantage of Enterprise Zone Benefits; the Legislature Could Consider Several Options to Modify the Program“ (January 2011): 6. and “Florida Enterprise Zone Program Annual Report, 2010” Office of Tourism, Trade and Economic Development (March 2011): 10. In 2010, the Florida Legislature repealed the authority for such developments to claim this refund. See s. 9, ch. 2010-147, Laws of Florida.
61 zones in 13 states (including Florida) that Enterprise Zone “incentives have no discernible positive effect on new economic activity. In fact, a very small negative effect is discernable in all our models.” Finally, “…enterprise zones are not effective engines of economic expansion.”74
Subsequent research corroborates these findings. In a review of California and Florida Enterprise Zone programs from 1986 to 1990, Elvery concluded that it was “likely that most of the tax credits paid by the states subsidized hiring that would have taken place regardless” of the Enterprise Zone incentives.75 In its 2010 review of the effectiveness of Enterprise Zone programs nationwide, the Legislative Analyst’s Office of the California Legislature found that “most research indicates the that area programs have little if any impact on the creation of new employment…” and that the granting incentives “may result in revenue losses that are significant relative to the benefits received.”76 Peters and Fisher found in their comprehensive review of state enterprise zone programs that the impact of enterprise zone benefits on state and local government revenues was likely to be negative. This conclusion is based in part on the research showing the incentives have very little impact on firm location and job growth, so that most of the amount of the incentive is wasted. 77
While there may be individual exceptions, it is probable that general in-zone business expansion is due to the same factors that affect other businesses – reflecting the trend rate of growth and general business cycles.78
Finally, EZ program incentives are available to Florida market or resource dependent businesses. Because these business activities would have been undertaken somewhere in the state or local area absent the incentive, there is “no net gain in economic activity or jobs or income.”79
The weight of this evidence (summarized below) leads to a conclusion that the EZ program does not produce a positive return on investment to the state. This analysis assumes:
Gains in employment and capital primarily are the result of captured or redirected (shifted) in- state economic activity; EZ incentives are an insufficient inducement to relocate to Florida;
74 Alan Peters and Peter Fisher. State Enterprise Zone Programs: Have They Worked? (Kalamazoo: Upjohn Institute for Employment Research, 2002): 166, 185, 190. See also Alan Peters and Peter Fisher. “The Effectiveness of State Enterprise Zones.” Employment Research Newsletter, Vol. 9, No. 4 , Upjohn Institute for Employment Research, Kalamazoo, MI (2002): 4. 75 Joel Elvery, “The Impact of Enterprise Zones on Resident Employment: An Evaluation of the Enterprise Zone Programs of California and Florida.” Maxine Goodman Levin College of Urban Affairs, Cleveland State University (September, 2007): 21. 76 “California’s Enterprise Zone Program” Legislative Analyst’s Office (LAO) presentation to the Senate Revenue and Taxation Committee, March 10, 2010. The LAO is overseen by the Joint Legislative Budget Committee (JLBC), a 16-member bipartisan committee of the California Legislature. See also Alan Peters and Peter Fisher, “The Effectiveness of State Enterprise Zones.” Employment Research newsletter, Vol. 9, No. 4, Upjohn Institute for Employment Research. Kalamazoo, MI (2002): 4. 77 “Alan Peters and Peter Fisher. State Enterprise Zone Programs: Have They Worked? (Kalamazoo: Upjohn Institute for Employment Research, 2002): 121, 222. See also Alan Peters and Peter Fisher, “The Effectiveness of State Enterprise Zones.” Employment Research newsletter, Vol. 9, No. 4, Upjohn Institute for Employment Research. Kalamazoo, MI (2002): 4. 78 The “trend rate of growth” is the average sustainable rate of growth over a period of time, or the underlying economic growth (in response to population increases, growth in the labor force, capital growth, increases in productivity, technological advances that increase efficiency, etc.) absent business cycles. 79 Peter S. Fisher, Corporate Taxes and State Economic Growth, Policy Brief of the Iowa Fiscal Partnership, Revised February, 2012: 4.
62
In-zone expansion is not attributable to EZ incentives; and Many of the EZ businesses are Florida market or resource dependent.
Scenario Assuming No Property Appreciation… This scenario assumes there is no positive economic gain to the state and no detectable property appreciation within the zones relative to surrounding areas. No new output or investment was attributed to EZ businesses in the model. Only the state payments to the EZ businesses were included, which totaled approximately $115 million in the review period. This scenario produced a negative return-on-investment of -.040 to the state and decreased Florida’s GDP in all three years because the incentive dollars were redirected from more productive state activities.
Scenario Assuming Property Appreciation… This scenario assumes there is some positive economic gain associated with property appreciation in the Enterprise Zones. The approach uses increases in local property tax revenue attributable to EZs to measure an incidental benefit to the state.80
In 2010, EDR analyzed whether the EZ program was effective in eliminating conditions of slum and blight within the zone, as measured by changes in property values. EDR found that the “analysis of property values in Hardee, Hernando, and Sarasota enterprise zones from 1999 to 2004 did not support a conclusion that enterprise zones have a consistent, direct and quantifiable impact on property values.”81
In 2013, EDR conducted a follow-up study using property tax data from 1999 through 2012 (See APPENDIX 4). The report reviewed the impact that Enterprise Zones may have on property values over a longer period. Using the same three zones, the analysis looked at the differential growth rate between the parcels in the Enterprise Zone and parcels outside the Enterprise Zone located within a 2-mile buffer. It found that the differential growth rate changed favorably towards the EZ parcels in two of the three Enterprise Zones and narrowed in the third.
Property Appreciation Growth Rates EZ Parcels Outside Parcels 1999-2002 16.92% 28.35% 2003-2012 22.74% 12.25%
EDR used data from the report and assumed similar differentials for all zones during the review period. The result was an estimate of additional tax revenues accruing to the local governments of $123.6 million in FY 2009-10, $171.2 million in FY 2010-11 and $151.0 million in FY 2011-12.
The millage rates were held constant in the analysis. This assumption allowed the rise in property appreciation to be captured by the local governments through additional revenue. A fluctuating millage
80 Nationally, at least two studies have addressed the property tax issue. In their 1996 analysis of the Urban Enterprise Zone program in New Jersey, Boarnet and Bogart found that the program had no positive effect on municipal property values. Marlon Boarnet and William Bogart. “Enterprise Zones and Employment: Evidence from New Jersey” Journal of Urban Economics 40 (1996): 214. In their review across 22 states, Engberg and Greenbaum found that, on average, EZ designation did not have an impact on the growth of housing values. John Engberg and Robert Breenbaum, “State Enterprise Zones and Local Housing Markets” Journal of Housing Research, Vol 10, Issue 2 (1999): 179. 81 “Literature Review and Preliminary Analysis of the Impact of Enterprise Zones on State & Local Collections” prepared by the Office of Economic and Demographic Research, February 2010.
63 rate would have split the appreciation between additional local revenue and a lower tax liability per parcel. Only Enterprise Zones established on or before January 1, 2002 were included in EDR’s estimate, which represents 91 percent of the Enterprise Zones by total square miles.
The Statewide Model had to account for additional impacts besides increased local government revenue, including the rise in property taxes. The rise in property taxes was accounted for by increasing taxes on capital. Taxes on capital were split between commercial and residential parcels.
The Statewide Model estimated that Florida GDP increased because of the additional local government spending. However, the result is still a negative ROI of -.053. Two important reasons account for this negative ROI. First, the impact of local government spending on state revenues is weak because local government spending is largely not taxable. Generally only the indirect and induced spending attributable to local government spending is taxable. Second, residential properties were negatively affected by the rise in property taxes. This reduces taxable consumer spending within the state.
Conclusion… EDR’s research found that that the state Enterprise Zone program produces a negative ROI. This analysis does not measure the impact of EZ incentives on the local economy which clearly would have had some benefit from the additional spending in the second scenario. In addition, local governments may have other criteria for evaluating the impact of the incentives on their community.82
EDR’s assessment regarding the Enterprise Zone program is consistent with recent evaluations of similar programs in other states. 83 In response, some states have considered or implemented reforms, with some significantly reducing or eliminating program benefits. 84
82 As noted earlier, 36 of the 50 states have EZ programs, of which seven are local only (no state incentives available) or primarily local programs. 83 For evaluations regarding cost effectiveness of respective state enterprise zones, see: CA: David Neumark and Jed Kolko, “Do Enterprise Zones Create Jobs? Evidence from California’s Enterprise Zone Program” NBER Working Paper Series (December 2008, Revised January 2010) Budget Brief from the California Budget Project, Dollar for Dollar: California’s Enterprise Zone Program Falls Short (June, 2013) CO: Colorado Enterprise Zone Review Task Force (2012) Office of Economic Development and International Trade (November, 2012). IA: Colin Gordon, “EZ Money: Assessing Iowa’s Enterprise Zone Program” Iowa Fiscal Partnership (April 2008) State of Iowa Tax Credit Review Report, December, 2009, by the Iowa Department of Management. MD: See Baltimore Sun, “Baltimore's sprawling enterprise zone. Our view: What started as small and directed has gotten large and amorphous, but city enterprise zones remain a useful tool for promoting economic development.” September 01, 2013. Scott Calvert and Jamie Smith Hopkins, “Most city neighborhoods get little in enterprise tax breaks; Enterprise Zone program was created to bring development, jobs to poor areas,” Baltimore Sun, August 26, 2013. Scott Calvert and Jamie Smith Hopkins, “Enterprise zone tax breaks flow to Baltimore waterfront, other prosperous neighborhoods; Schaefer launched program 30 years ago to aid poor areas, “ Baltimore Sun, August 24, 2013. MN: Minnesota Office of the Legislative Auditor. “Evaluation Report: JOBZ Program” (February, 2008) NJ: Delta Development Group, Inc. and HR&A Advisors, Inc., New Jersey Urban Enterprise Zone Program Assessment (February 18, 2011) NY: Citizens Budget Commission, It’s Time to End New York State’s Empire Zone Program (New York: December 2008) AT Kearney, Delivering on the Promise of New York State: A Strategy for Economic Growth and Revitalization, Prepared for Empire State Development, 2007. EDR research indicates that as of 2013, 36 of the 50 states have Enterprise Zone programs, of which seven are local only (no state incentives available) or primarily local programs. Since 2009, eight of the 30 state programs have contracted (either by reducing program benefits to businesses or restricting benefit eligibility – NY, IL, MI, NJ, MO, LA, IA & RI) and six programs were repealed or sunset (AR, AZ,CA, KY, KS & NB). In 2013 the Texas Legislature reduced program benefits, but the Governor vetoed the bill instituting the changes.
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Miami-Dade County The Dr. Antonio Jorge Social and Economic Development Council (SEDC)
DR. ANTONIO JORGE
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Auto racing legend Ralph Sanchez dies at 64 - Motor Sports - MiamiHerald.com
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AUTO RACING | RALPH SANCHEZ (1948-2013) Auto racing legend Ralph Sanchez dies at
64 Like 182 Ralph Sanchez brought Grand Prix races and Homestead-Miami Speedway to South Florida.
BY GARY LONG SPECIAL TO THE MIAMI HERALD Legendary drivers Mario Andretti, Emerson Fittipaldi and A.J. Foyt raced exotic sports cars along Biscayne Boulevard in downtown Miami because of Ralph Sanchez.
IndyCar champions Michael Andretti, Al Unser Jr. and Danny Sullivan steered to victories on a road circuit laid out in Tamiami Park because of Ralph Sanchez.
Jimmie Johnson has secured each of his five Sprint Cup championships at a Homestead-Miami Speedway facility envisioned, planned, founded and brought to vibrant life by Ralph Sanchez.
That’s a legacy that will live on.
Sanchez died Monday morning at age 64 after a prolonged bout with cancer. Get the Deal!
The Cuban exile, who arrived in Miami alone as a Erbium Fractional laser -- child in the early 1960s Operation Pedro Pan Facial Rejuvenation -- $99 Miami Motorsports President Ralph Sanchez, left, shows airlift, became one of auto racing’s most for 1 session, $149 for 2 -- a model of the Homestead Motosports complex to Bill prominent and respected promoters and Kendall & Doral locations France, President of NASCAR after a news conference established South Florida as one of the sport’s in Homestead, Fla. Tuesday Sept. 20, 1994. MARTA premier destinations. $99.00 LAVANDIER / AP Derek Bell, the British sports car ace who shared a 1985 Grand Prix of Miami victory with Al Holbert, said Sanchez “stood 10 feet [taller] than anybody Value: $500 else promoting things in those days. Discount: 80% You Save: $401 “Miami set the bar for street races. Ralph created that ambience and atmosphere. The Miami Grand Prix was an international event, and it boosted Miami’s image worldwide.” Sign up for the daily deal email: Sanchez gave up a lucrative real estate development business to invest his money, his business acumen and his boundless passion into the 1983 inaugural Grand Prix of Miami on a demanding street circuit through Bayfront Park and along Biscayne Boulevard.
http://www.miamiherald.com/2013/04/02/3318413/auto-racing-legend-ralph-sanchez.html[1/10/2014 12:23:14 PM] Auto racing legend Ralph Sanchez dies at 64 - Motor Sports - MiamiHerald.com
He often laughed about the “yeah, right” looks of skepticism he received when he first spoke of his aspirations to City of Miami politicians and media members. MORE MOTOR SPORTS Al Garcia joined Sanchez with Miami Motorsports in 1984 and currently serves as vice president of operations at Homestead-Miami Speedway. He said he always marveled at what Sanchez was willing to Harrington's caddie collapses in Volvo Champions risk for the love of auto racing. Two people following race killed at Dakar “But when he had a dream, a conviction, he’d make it happen,” Garcia said. “And when Ralph got that Rally glimmer in his eye, you could tell something special was happening.” Stewart on track for return in February at Daytona Monsoon-like storms the morning of that 1983 inaugural flooded portions of the course and forced a Irvine given suspended 6-month sentence scheduled 168-lap race to be halted after only 27 laps. for brawl Earnhardt Jr.'s crew chief Letarte to join International Motor Sports Association sanctioning officials left up to the devastated Sanchez how much NBC in 2015 of the purse to distribute. Sanchez told them to pay the entire posted prize money. Daytona unveils innovative crossover gate That gave him instant credibility, established his reputation in the industry and paved the path to all he More achieved from then until the International Speedway Corporation bought out his interest in the Homestead-Miami Speedway operating partnership in the late 1990s.
Sanchez, who always looked as if he stepped off the pages of a fashion magazine, once said of the 1984 Prix won by Brian Redman and Doc Bundy in a Jaguar that he “hit a home run and didn’t know it.”
But every one of the late-1980s events qualified as a double or triple if not a home run.
Sanchez and IMSA conducted the Miami Prix through 1993, with international sports car stars the likes of Redman, Bob Wollek and Geoff Brabham and Juan Manuel Fangio II standing on the victory podium.
When sports car racing ebbed in the early 1990s, Sanchez continued the Grand Prix as a Trans-Am race in 1994 and an IndyCar race won by eventual Indianapolis 500 winner Jacques Villeneuve in 1995.
Sanchez also had built a road circuit through Tamiami Park where the cars and stars of Indy contested season-ending races from 1985 through 1988. Notably, Al Unser edged son Al Jr. by a point for the 1985 title, and Bobby Rahal fended off Michael Andretti for the 1986 and ’87 championships. VIDEO FROM OUR PARTNERS Progress in the bayside area that had been depressed when Sanchez began running the Miami Prix eventually spurred development that forced city officials to “evict” the race. If Brabham darted the Nissan he drove to four Miami Prix victories through the turn off Biscayne Boulevard that existed then, he’d crash into AmericanAirlines Arena.
Sanchez, however, already had solicited governmental support to build a permanent racing facility in Homestead as a significant project toward the devastated area’s recovery from Hurricane Andrew in 1992. Ground was broken in 1993.
The picturesque facility with its 1.5-mile oval sprung up in time for Dale Jarrett to headline NASCAR’s initial venture here with a dramatic Nationwide (then Busch) series victory in November 1995. Jimmie Johnson Wins 6th NASCAR Title Jarrett added to his niche in the speedway’s history when he clinched the 1999 championship in the first The NASCAR Wire Service's Reid Spencer and Cup race (then Winston Cup, now Sprint Cup) contested there. CineSport's Brian Clark discuss Jimmie Johnson's sixth Sprint Cup title his legacy and the 2013 NASCAR president Mike Helton credits Sanchez with adapting to the stock car sanctioning body’s needs Get More NASCAR Video in various track modifications in the initial years and making Homestead-Miami “a very significant destination for NASCAR and its fans.”
“Ralph certainly believed in the original [relatively flat and rectangular] design of Homestead, but he also was willing to make adjustments to accommodate the sanctioning bodies,” Helton said. “He always delivered on what he was trying to accomplish.”
Sanchez relinquished his interest in what quickly became known as “the track that Ralph built” to allow ISC to accelerate its later expansions. NASCAR made Homestead-Miami Speedway the site of More NASCAR Video championship season finales in all three of its major divisions in 2002.
Also, Michael Andretti, the late Dan Wheldon, Scott Dixon and Dario Franchitti all scored multiple IndyCar victories on Homestead’s oval between 1997 and 2011.
Sanchez is survived by his wife (Lourdes), son (Rafael), daughter (Patricia Abril) and grandsons (Nico ON FACEBOOK Abril and Victor Abril).
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http://www.miamiherald.com/2013/04/02/3318413/auto-racing-legend-ralph-sanchez.html[1/10/2014 12:23:14 PM] Ralph Sanchez, Founder of Homestead-Miami Speedway, Dies at 64 - NYTimes.com
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Ralph Sanchez, Founder of Major Speedway, Dies at 64
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Jan 18, 2014 World Series Of Fighting Buy Sat 6:00PM Hard Rock Live At The Seminole Hard Rock Hotel & Casino - Hollywood Jeffrey Boan/Associated Press Jan 21, 2014 Boston Celtics vs. Miami Heat Buy Ralph Sanchez, president of Miami Motorsports, at the Homestead Motorsports Complex in Homestead, Fla., in 1995. Tue 7:30PM American Airlines Arena By JOSEPH SIANO Jan 22, 2014 Duke Blue Devils vs. Miami Hurricanes Published: April 6, 2013 Buy Wed 7:30PM Bankunited Center At UM FACEBOOK Ralph Sanchez, a Cuban-born businessman who brought auto racing Jan 23, 2014 Los Angeles Lakers vs. Miami Heat Buy Thu 8:00PM American Airlines Arena to the streets of Miami in the 1980s and later built a major TWITTER speedway in a city devastated by Hurricane Andrew, died on TicketNetwork is a resale marketplace and is not a box office or venue. GOOGLE+ Monday at his home in Coral Gables, Fla. He was 64. SAVE MOST EMAILED MOST VIEWED His death, after a series of illnesses, was confirmed by officials of EMAIL the track he founded, Homestead-Miami Speedway. SHARE 1. BOOKS What Your Cat Is Thinking In 1983, Mr. Sanchez, a real estate developer who had done some PRINT racing himself, decided that Miami, particularly its Latin American REPRINTS 2. I WAS MISINFORMED immigrants, would be receptive to an international sports car race. Don’t Ask. Please Don’t Tell. He persuaded city officials to let him organize the Grand Prix of
Miami, which sent high-powered Porsches, Jaguars and Corvettes 3. FRUGAL TRAVELER screaming along Biscayne Boulevard and other public streets. Tips for Travel Savings in 2014
4. Q&A Mr. Sanchez was forced to relocate the race several times, and eventually began a If Winter Takes Aim at the Plumbing frustrating search for a permanent home for his racing events. That changed after
Hurricane Andrew struck Homestead, near the Florida Keys, in 1992, destroying 47,000 5. WELL
http://www.nytimes.com/2013/04/06/sports/autoracing/ralph-sanchez-founder-of-homestead-miami-speedway-dies-at-64.html?_r=0[1/10/2014 12:15:41 PM] Ralph Sanchez, Founder of Homestead-Miami Speedway, Dies at 64 - NYTimes.com
homes — about 90 percent of its housing — and 8,000 businesses. For Sleep Apnea Patients, a Possible Alternative to Masks The city, which the Cleveland Indians had abandoned as a spring training site because of 6. Mikaela Shiffrin’s Swift, if Unplanned, the hurricane, welcomed the speedway project. And the proximity of what was then Ascent to World Champion Homestead Air Force Base meant that complaints about racecar noise would be negligible. 7. PAUL KRUGMAN The War Over Poverty Ground was broken for the 65,000-seat Homestead-Miami Speedway a year after the
hurricane, and the track opened in November 1995 with a successful Nascar race. Soon it 8. OP-ED CONTRIBUTOR was a site for IndyCar races and sports car events. With its tropical pastel colors, a row How to Help College Students Graduate
of palms along the backstretch, and amenities not seen at most automobile racetracks 9. Amiri Baraka, Polarizing Poet and (like tile in the restrooms), the track was a showpiece in itself. Playwright, Dies at 79
Today it hosts more than 280 events a year, including concerts. Nascar ends its season 10. WELL there in November with a weekend of races that can determine as many as three Ask Well: Is Jogging Bad for Older People? champions. Go to Complete List » Show My Recommendations Although Mr. Sanchez and his investor partners provided the impetus to build the track, the facility is municipally owned. Mr. Sanchez owned a share of the land as well as the lease. He sold his interest to two publicly traded companies in the track-owning business in the late 1990s. One of them, International Speedway Corporation, controlled by the France family, which runs Nascar, is now the track’s sole operator.
As a child, Mr. Sanchez came to the United States alone as part of the Operation Pedro Pan airlift, in which more than 14,000 unaccompanied children, some as young as 6, were flown out of Cuba from December 1960 to October 1962 after the country’s Communist takeover. In the United States, he spent time in an orphanage until his parents arrived and were reunited with him. Clothes and character: "American Hustle" He is survived by his wife, Lourdes; a son, Rafael; and a daughter, Patricia Sanchez ALSO IN MOVIES » Abril. Bare knuckles and high heels Anatomy of a Scene: "Philomena" The track was not Mr. Sanchez’s only major contribution to auto racing. Believing that he needed a marquee driver to help promote one of his first races, he persuaded Emerson Fittipaldi, a former world champion from Brazil, to come out of retirement.
Mr. Fittipaldi had quit racing in disgust after trying unsuccessfully to run his own Formula One team, but the Grand Prix of Miami rekindled his interest in racing in the United States. He went on to win the Indianapolis 500 in 1989 and 1993.
Ads by Google what's this? A version of this article appears in print on April 13, 2013, on page A22 of the New York edition with the headline: Ralph Sanchez, 64, Founder of Racetrack. Free Obituary Search SAVE EMAIL SHARE 1) Enter any name & search free! 2) Get their obituary instantly. Get 50% Off The New York Times & Free All Digital Access. obituaries.ancestry.com
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http://www.nytimes.com/2013/04/06/sports/autoracing/ralph-sanchez-founder-of-homestead-miami-speedway-dies-at-64.html?_r=0[1/10/2014 12:15:41 PM]