Title
Qualified Target Industry (QTI) Refund Resolution - Ignition Entertainment, Limited (B)
This item seeks City Commission approval for a Qualified Target Initiative (QTI) contribution for the prospective location of a gaming software development firm within the City of Gainesville.
Explanation
Ignition Entertainment, Ltd., a firm specializing in the development of computer generated gaming software, is considering Gainesville as a location for its principle design/development studio in the United States. The firm was formed in 2002 and has major design and development studios in London and Tokyo as well as sales offices in Chicago and Los Angeles. The firm is a subsidiary of UTV Entertainment, a major media conglomerate in India. The firm appears to be attracted to the area primarily due to its abundance of intellectual capital and potential labor reserves.
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 and/or County Commission recommending the applicant for the incentive and provides a match equal to 20% of the total tax refund.
With respect to Ignition Entertainment, Ltd. specifically, the company is expected to create 70 new jobs phased in over three years at an average wage of approximately $45,006 or 150% of the Alachua County average. It is reported that the firm is expecting a gross annual payroll of $2.8 million dollars and will make a capital investment of approximately $650,000 dollars.
The Gainesville Area Chamber of Commerce, City of Gainesville and Alachua County are partnering on this effort to attract Ignition Entertainment, Ltd. to the Gainesville area. The enactment of this QTI resolution is seen as a community investment in the growth potential of Ignition Entertainment, Ltd. over a period of years and represents a potential addition of capital investment and jobs in the City's established Innovation Zone.
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 $49,000 spread over FY 08, FY 09 and FY 10 and FY 11consistent with Ignition Entertainment, Ltd.'s phased plan to add seventy jobs in the area.
Fiscal Note
There is no specific line item for funding of this request. However, the Council for Economic Outreach (CEO) has requested that the City Commission consider utilizing funding that has been established within the context of the existing performance agreement between the CEO and the City of Gainesville for development of the City's Innovation Zone. This performance agreement is to be funded by prior City Commission Resolution 040522 transferring $100,000 from Gainesville Regional Utilities to the Economic Development Fund. The funding for the Ignition Entertainment, Ltd. contribution would come from the this adopted Resolution.
It has been indicated to staff as mentioned that Alachua County has indicated a willingness to consider providing 50% of the 20% required local match and will be meeting to consider this request on September 11, 2007.
Recommendation
The City Commission: 1) authorize the Mayor to execute the QTI Resolution regarding Ignition Entertainment, Limited upon action similar action taken by Alachua County; 2) direct the City Manager to forward the executed QTI Resolution to Enterprise Florida.