Florida earmarked millions for Treasure Coast jobs that never materialized

TALLAHASSEE — Since 1996, Florida has inked 18 deals with companies and institutes promising 3,098 new jobs for the Treasure Coast.

Florida officials were willing to trade more than $127 million to put thousands of people to work in X-ray technology, digital movies, airplane parts manufacturing and state-of-the-art biotechnology.

But the state’s efforts over 17 years have yielded just 381 new jobs on the Treasure Coast, according to the state Department of Economic Opportunity. With $114.5 million already handed out, those positions came at about $300,400 state cost per local job produced.

Only six deals, which have pledged $99,771,666 to create 704 jobs, are still active. The rest were terminated without the companies receiving a dime, except for the $20 million Digital Domain took down when it collapsed into bankruptcy last year.

On the heels of Digital Domain Media Group’s downfall, state lawmakers want more proof that incentives are paying off. Amid their skepticism, Governor Rick Scott has asked lawmakers to nearly triple the incentive money available this year to $297 million.

“The government is probably not handing most of you a check every year to keep you in Florida,” Sen. Joe Negron, a Stuart Republican in charge of the Senate budget committee, told Treasure Coast business leaders at the Capitol last week. “That’s generally thought to be a private sector issue. On the other hand, we can’t unilaterally disarm.”

State economic development officials released their updated database this month detailing how Florida’s economic incentives programs are faring. The state estimates it has put $677.5 million into incentives to create more than 88,000 jobs. The database doesn’t include newer projects shielded by Florida economic development public records exemptions, or other projects like Space Florida or film tax credits.

But the Department of Economic Opportunity has struggled to get its numbers together on incentives. The new database omits five Treasure Coast projects previously listed as incentives recipients. The Department of Economic Opportunity’s last database said Vaccine & Gene Therapy Institute hadn’t received any state money yet, even though it used most of the $60 million to build its Port St. Lucie headquarters.

The new database also hasn’t been updated to include TurboCombustor Technology in Stuart. With its expansion, the gas turbine engine part manufacturer promised to hire 200 more employees by 2016 in exchange for a $900,000 county grant and up to $3 million from the state.

It also lists a $6.7 million payout for Piper Aircraft Inc., but doesn’t factor in any job totals or new job requirements. Piper, which was due $20 million incrementally from the state, missed the mark when it laid off employees in 2011. The company can keep $3.3 million of the $6.6 million it received in Florida taxpayer help, and possibly all of it, as long as employment stays above 650 through 2015. Piper, which employed about 1,014 in 2009, has about 755 employees now.

Torrey Pines Institute for Molecular Studies and VGTI sealed the biggest deals, but they’re both hiring on track. In Torrey Pines’ $32 million state deal, the database states the nonprofit has created 120 en route to goal of 189 by the end of 2016. VGTI has 90 employees and needs to hire another 110 by 2018.

Digital Domain’s case is well-known now. Millions of dollars in local incentives went to waste, 350 employees were laid off and $20 million in state investment could be gone for good. The state is asking lawmakers for $500,000 of taxpayer money to try to recover the $20 million — approved under Gov. Charlie Crist’s watch — in bankruptcy court.

The Treasure Coast features a mixed bag of companies that reneged on their contracts before getting payouts.

Connecticut electrical manufacturer Carling Technologies Inc. planned to move to Tradition, but balked because their employees though St. Lucie schools were lousy, The Hartford Courant reported. That deal, which was approved in 2006, promised 150 jobs averaging $55,000 a year in exchange for $615,000 in state incentives.

Xstream Systems Inc. in Sebastian, which dealt with molecular X-rays, in 2005 signed a $2.5 million state deal to create 546 jobs. The company didn’t follow through on the contract and was bought out in 2011 by Veracity Network Inc., which specializes in molecular screening for counterfeit drugs.

Lawmakers already are floating a variety of proposals aimed at incentives, from increased reporting requirements to forcing companies to post surety bonds as collateral before they get state money.

Talking to Treasure Coast business leaders last week, Florida Commerce Secretary Gray Swoope said jobs created by incentives are up 75 percent since Scott took office two years ago. He said capital investment is up 95 percent from participating companies.

“We’re continuing to do things to clean up that process, work with DEO to improve on it so that there’s transparency there, and that people are held accountable for what they do,” Swoope said.