Title
Qualified Target Industry (QTI) Refund Resolution - Arnold-Hanafin Corporation (B)
This item seeks City Commission approval for a Qualified Target Initiative (QTI) contribution for the prospective location of an engineering design center within the City of Gainesville.
Explanation
Arnold-Hanafin, a firm specializing in IT and Engineering staffing and other disciplines in staff augmentation, is considering Gainesville as a location for an engineering design center.
The Qualified Target Industry (QTI) incentive is a tool available to Florida communities to encourage quality job growth in targeted, high value added businesses. Pre-approved applicants creating jobs in Florida receive refunds on the various taxes they pay including corporate income, sales, ad-valorem, insurance premium and certain other taxes.
Eligible QTI applicants must pay an average annual wage that is at least 115 percent of the State Metropolitan Statistical Area (SMSA). In order to participate, the applicant must apply to Enterprise Florida prior to making a decision to locate in Florida. The local community normally provides a resolution from the City or County Commission recommending the applicant for the incentive and provides a match equal to 20% of the total tax refund.
However, in this case, because a final location within the Gainesville area has not been determined at this juncture, a per job incentive amount is being utilized. The attached Resolution indicates City participation only in the event that the firm locates in the City of Gainesville corporate limits.
With respect to Arnold-Hanafin Corporation specifically, the company is expected to create 160 new jobs phased in over three years at an average wage of approximately $57,512 ($27.65) or 200% of the Alachua County average. Jobs are to be cycled in at ten the first year, fifty the second and one hundred the third.
The Gainesville Area Chamber of Commerce, City of Gainesville and Alachua County are partnering on this effort to attract Arnold-Hanafin Corporation to the Gainesville area. The enactment of the QTI resolution is seen as a community investment in the growth potential of Arnold-Hanafin Corporation over a period of years.
The proposed resolution stipulates that the City of Gainesville will participate through provision of 50% of the local contribution (with Alachua County providing the remaining 50%) of the total refund or $80,000 spread over FY 08, FY 09 and FY 10 and FY 11consistent with Arnold-Hanafin's phased plan to add one hundred and sixty jobs in the area.
Fiscal Note
Arnold Hanafin's QTI application indicates a requested local financial support amount of $1,000 per job created or $160,000. The Commission will pay to the Florida Economic Development Trust Fund up to $80,000 to be paid as follows: FY2008 -- $10,000, FY2009--$10,000 FY2010--$30,000, FY 2011--$30,000 in the event that Arnold-Hanafin Corporation locates its engineering design center within the City of Gainesville corporate limits. The initial year's funding is included in the proposed FY 08 Economic Development Department Plan. Future funding will have to be presented to the City Commission in the context of applicable budget submissions. It has been indicated to staff as mentioned that Alachua County has indicated a willingness to consider providing 50% of required local funding.
Recommendation
The City Commission: 1) authorize the Mayor to execute the QTI Resolution regarding Arnold-Hanafin Corporation on the condition that similar action has been taken by Alachua County and that Arnold-Hanafin Corporation is located within the City of Gainesville; 2) direct the City Manager to forward the executed QTI Resolution to Enterprise Florida.