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Agenda 12/11/2018 Item #11B12/11/2018 EXECUTIVE SUMMARY Recommendation to accept a report regarding Collier County’s Economic Development Program. OBJECTIVE: To update the Board regarding the current economic development program. CONSIDERATIONS: On September 25, 2018, the Board approved three public-private partnership contracts for Fiscal Year 2019 with our economic development partners - the Partnership for Collier’s Economic Future, the Southwest Florida Economic Development Alliance, and Economic Incubators, Inc. That discussion invoked questions regarding the County’s economic development program, and the Board asked that staff bring back a holistic report on the program. Established in 2013, the Office of Business and Economic Development (OBED) has worked toward achieving the goals and objectives set out by the Board of County Commissioners and County Manager upon its inception. Collier County’s approach to economic diversification seeks to leverage public-private partnerships with specialized missions for new business attraction, retention of valued existing businesses and acceleration of new local business startups and direct foreign investment. The top three priorities of Collier County’s economic development programs are: business retention and expansion, business attraction, and entrepreneurship through incubation and acceleration. In addition to its focus on improving the local business climate, the OBED accomplishes its priorities through active management and supervision of a financial incentives program and the three previously referenced public-private partnerships. An enclosed report provides a detailed account of the Collier County economic development program. FISCAL IMPACT: The FY 19 budget for the Collier County economic development program is $2,063,500. The program's budget is further divided into OBED operations $608,100, financial incentives $580,400, and partnership contracts $875,000. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this report. LEGAL CONSIDERATIONS: This item has been reviewed by the Country Attorney, raises no legal issue, and requires majority vote for acceptance. -JAK RECOMMENDATION: To accept the report regarding Collier County’s economic development program. Prepared by: Sean Callahan, Executive Director, Corporate Business Operations ATTACHMENT(S) 1. OBED 2018 Annual Report (final) (PDF) 11.B Packet Pg. 586 12/11/2018 COLLIER COUNTY Board of County Commissioners Item Number: 11.B Doc ID: 7480 Item Summary: ***This item to be heard at 1:30 p.m.*** Recommendation to accept a report regarding Collier County’s Economic Development Program. (Sean Callahan, Executive Director, Corporate Business Operations) Meeting Date: 12/11/2018 Prepared by: Title: – County Manager's Office Name: Sean Callahan 12/04/2018 2:35 PM Submitted by: Title: County Manager – County Manager's Office Name: Leo E. Ochs 12/04/2018 2:35 PM Approved By: Review: Business and Economic Development Leo E. Ochs Additional Reviewer Skipped 12/04/2018 12:44 PM County Manager's Office Sean Callahan Additional Reviewer Completed 12/04/2018 2:36 PM Office of Management and Budget Leo E. Ochs Level 3 OMB Gatekeeper Review Skipped 12/04/2018 12:44 PM County Attorney's Office Leo E. Ochs CAO Preview Skipped 12/04/2018 12:44 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 12/04/2018 2:42 PM County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 12/05/2018 8:45 AM Board of County Commissioners MaryJo Brock Meeting Pending 12/11/2018 9:00 AM 11.B Packet Pg. 587 1 INNOVATION IN PARADISE 2018 Annual Report Office of Business & Economic Development 2660 Horseshoe Dr. N, #105 Naples, FL 34104 (239) 252-8990 11.B.1 Packet Pg. 588 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 2 Introduction Collier County’s approach to economic diversification seeks to leverage public -private partnerships with specialized missions for new business attraction, retention of valued existing businesses and acceleration of new local business startups and direct foreign investment. Established in 2013, the Office of Business and Economic Development (OBED) has worked toward achieving the goals and objectives set out by the Board of County Commissioners (BCC) and County Manager upon its inception. The following annual report describes Collier County’s economic development programs. The top three priorities of these programs are: business retention and expansion, business attraction, and entrepreneurship through incubation and acceleratio n. In addition to internal division programs, OBED accomplishes its priorities through active management and supervision of a financial incentives program and three public-private partnerships — Economic Incubators Inc., Southwest Florida Economic Develop ment Alliance, Inc. and the Partnership for Collier’s Economic Future, Inc. The report provides an analysis and description of the programs OBED has used to achieve its goals, including providing regulatory assistance, financial incentives, a certified sites program, business recruitment and retention programs, and its business accelerator project. Finally, the report will provide future plans that outline the outcomes and new programs that OBED hopes to achieve and execute over the course of FY 2019, including desired economic indicators that the Office will use to define success. 11.B.1 Packet Pg. 589 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 3 Table of Contents I. Introduction 2 II. Table of Contents 3 III. Mission Statement 4 IV. Outcomes/Economic Climate 5 a. SWOT Analysis b. Economic Indicators V. Structure 10 a. Internal Team b. Partnership for Collier’s Future Economy c. Southwest Florida Economic Development Alliance d. Roles & Responsibilities e. Accelerator Project f. State Partnership VI. Tools 17 a. Incentives b. New Market Tax Credits c. Opportunity Zones d. Innovation Zones e. Free Trade Zone f. Regulatory Reform and Permitting VII. Future Projects and Goals 25 a. Annual Report b. Certified Sites Program c. Collier County/SWFL Economic Scorecard d. Targeted Industry Study 11.B.1 Packet Pg. 590 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 4 Mission Statement Implement a successful program of economic policies, strategies, and incentive programs that institutionalize a business-friendly environment through delivery of world -class customer service. 11.B.1 Packet Pg. 591 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 5 Economic Climate & Outcomes Southwest Florida and Collier County continue to show signs of robust growth. In FY 2018, Business & Economic Development continued to promote diversification and economic growth, resulting in our unemployment rate dropping to 3.1 percent in October 2018, from 4.1 percent a year earlier. Our strong economy ranked 18th1 this year on The Milken Institute's index of "Best-Performing Cities" in the nation, and our taxable sales experienced a 5 percent year-over-year growth to $772 million in March 2018. Collier County is witnessing strong growth in targeted industries. In 2017, Collier County-based companies won 296 U.S. Department of Defense contracts totaling $45 million. Since 2000, 115 companies have won 4,063 contracts worth over $283 million 2. Even with these successes, the economy is still heavily dependent on three legacy industries: agriculture, construction, and tourism. With steady population growth expected through the next three decades, occupations gaining the most new jobs in Collier County are concentrated around unskilled, low-wage jobs, according to the Florida Department of Economic Opportunity. With a concentration of jobs in these industries, Collier County is more susceptible to economic downturn – based on employment data. In positive economic times, Collier County does far better than the national and State average, though in negative climates the County does far worse. 1 Naples Daily News. “Naples ranks again as a ‘best-performing city.’ January 10, 2018. 2 Government Contracts Won. Defense Contractor Search. Retrieved here December 3, 2018 11.B.1 Packet Pg. 592 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 6 The largest sector in Collier County, Florida is Retail Trade, employing 22,322 workers. The next-largest sectors in the region are Accommodation and Food Services (21,111) and Health Care and Social Assistance (20,408). DEO data3 shows that occupations anticipated to gain the most new jobs from 2017 – 2025 are: 1. Retail Salespersons 2. Landscaping and Grounds Keeping Workers 3. Registered Nurses 4. Construction Laborers 5. Food Service Workers Since the inception of OBED in 2013, the Collier County BCC has created incentive programs and invested $9,610,038 in economic development during this time. The outcomes of this investment will be discussed further in this plan. Currently, the BCC has allocated $2,063,500 to its Fiscal Year 2019 eco nomic development budget, which is allotted to the following operations4: Program FY 19 Total Office of Business & Economic Development $604,000 Partnership Contracts $275,000 Accelerator Project $600,000 Other Expense $4,100 Economic Development Incentives $580,400 Total $2,063,500 Note: $2,063,500 represents 0.0017% of the FY 19 Collier County budget. 3 Florida Department of Economic Opportunity (2017). Labor Market Information, Employment Projections. Retrieved from: http://www.floridajobs.org/labor-market-information/data-center/statistical-programs/employment-projections 4 Collier County Fiscal Year 2019 Budget. Retrieved from: https://www.colliercountyfl.gov/home/showdocument?id=82946 11.B.1 Packet Pg. 593 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 7 Staff has reviewed multiple studies and sources of data citing the need for economic diversification in support of the OBED. Through this data, incentive programs and funding available through the State of Florida and BCC programs, OBED and its partners will continue their focus on business retention and expansion, business attraction, and entrepreneurship to do so. 11.B.1 Packet Pg. 594 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 8 SWOT Analysis The following diagram describes the main Strengths, Weaknesses, Opportunities and Threats related to Collier County’s economy. This represents a combination of the responses from stakeholder interviews, current economic data, and previous economic studies on the County: Based on this SWOT analysis, OBED will continue to pursue strategies and leverage programs based on the strengths and opportunities outlined in this chart. Though perspectives on the development of Collier County differ, an important gauge of the OBED’s general effectiveness will be the level of community support garnered. OBED strives to receive a high degree of community support by actively engaging a wide array of community stakeholders by being present at a variety of events and meetings. 11.B.1 Packet Pg. 595 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 9 Economic Indicators OBED quantifies inputs and measures its success based on several outcomes based on quantifiable data which is tracked for performance assessment. These metrics were originally conceived in the FY 14 business plan that was approved by the BCC to estab lish OBED. The metrics have been revisited and evaluated for future use. Long term strategic metrics will focus on employment growth, net earnings growth, gross county productivity growth rate, unemployment rate, average wages and growth in sales tax and ad valorem revenue. Operational work inputs and outputs include the numbers of contacts, actively managed projects, number & percentage of prospects making a commitment, average wage and job numbers of prospects committed and the percentage of total coun ty job growth attributed to economic development activity. 5 Similarly populated counties include Waukesha (Wisconsin), Loudoun (Virginia), St Charles (Missouri), Paluski (Arkansas), Allen (Indiana), Davis (Utah). Retrieved from here October 2, 2018 6 Bureau of Labor Statistics. QCEW State and County Map. Retrieved from: here October 1, 2018 7 Bureau of Economic Analysis. Local Area Personal Income. Retrieved from: here November 16, 2018 8 Bureau of Economic Analysis. GDP by Metropolitan Area. Retrieved from: here October 1, 2018 9 YCharts. Florida Unemployment Rate. Retrieved from: here October 3, 2018 10 The Florida Economic Scorecard. Collier County Metrics. Retrieved from: here and Bureau of Labor Statistics. Local Area Unemployment Statistics. Retrieved from: here November 16, 2018. 11 See footnote 5. 12 The Florida Economic Scorecard. Collier County Metrics. Retrieved from: here October 1, 2018 13 Data USA. Collier County, FL Profile. Retrieved from: here October 2, 2018 14 Regional Economic Research Institute, Industry Diversification Report. Retrieved from: here November 16, 2018. 15 Source: OBED Incentives Masterlist (Arthrex, Ferris, Haynes, Position Logic, ACI. Five Star Gourmet, Anchor, First Bank. TMI) 16 Collier Clerk Internal Audit, Published Reports. Retrieved from: here October 4, 2018 and DEO Report of SL007 Indicator FY 2014 Target Collier 2018 FY 2019 Targets Year over year employment growth Highest among similarly populated counties5 1.8%6 (2018) Highest among similarly populated counties Net Earnings growth rate 5% > state average 2.5% (2017)7 Meet or exceed state average Gross County Product growth rate 5% > state average 1.2% (2017)8 2 points > state average Unemployment Rate 1 point < state average (FL = 6.5%)9 3.1%10 1 point < state average Gains in Average Wages 3-5% 6.2%11 (Q1) 3% Average Annual Sales Tax Growth 5-10% 13% (2017)12 3% Property Value Growth 3% > state average gr. (FL gr. = 9.7) target 12.7% 13.4% (2016)13 2.5% (2018) 3 points > state average gr. Industry Diversification n/a 3rd in FL14 Top tier in FL Number of actively managed projects 20 1715 20 Percentage of prospects making a commitment 35% 29.4% 30% Committed Jobs 5% growth > baseline (base= 2013) 119516 (2018) 5% growth 11.B.1 Packet Pg. 596 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 10 Structure An important aspect of any successful economic development approach lies in the organizational structures developed to facilitate implementation. This section will highlight the institutional structures being developed to implement a comprehensive Collier County economic development approach. Internal Team The Collier County Office of Business and Economic Development was given the task of improving Collier County’s competitiveness and business climate through a combination of business attraction, retention, expansion, and other economic dev elopment services. Since the OBED’s creation, staff has worked to build institutional capacity by completing internal staffing needs. OBED directly reports to the County Manager’s Office, and staff is composed of a Director, Financial and Operational Suppo rt Manager, Economic Research Analysts, Accountant, and an Operations Coordinator. Director (130) Jace Kentner Manager (125) Vacant Accountant (118) Phyllis Kraft-Hendrick Operations Coordinator (114) Jennifer Leslie Economic Research Analyst (118) Lincoln Price 11.B.1 Packet Pg. 597 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 11 Roles & Responsibilities The following table outlines the roles and responsibilities of each of the positions in OBED: Position Roles & Functions Director Provides direction and oversight of Office and implements BCC & County Manager’s long-range planning and direction of economic development. Represents County to local businesses, community groups, and general public. Works across County departments to coordinate economic development activities. Manager – Financial & Operational Support Directs the financial and operations staff to ensure all financially related transactions are accurate and processed in a timely manner. Economic Research Analyst Performs research, data collection, and economic statistical and demographic analysis. Accountant Receives, and processes financial documents for assigned accounting functions (i.e. purchase order requisitions, invoices, etc.); reviews documents; ensures accuracy. Operations Coordinator Performs a variety of administrative duties including preparing/processing budget, purchasing, payroll, and accounting documents; Reviews documents and summaries; Performs data entry; Maintains records and files; Provides assistance and information to internal and external callers and visitors 11.B.1 Packet Pg. 598 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 12 Partnerships OBED maintains successful public-private partnerships focusing on business retention, expansion, attraction and entrepreneurship . A clear separation of roles and functions between the partnership entities serves to reconcile public needs with business interests in the promotion of Collier County’s future prosperity, allowing the public sector and private sector to serve roles best suited to their unique attributes. Partnership for Collier’s Future Economy OBED created the Partnership for Collier’s Future Economy (Partnership) with the Greater Chamber of Commerce to facilitate the creation of a private, non-profit partnership organization with a structural design guided by a division of l abor. The effort and cost sharing of this partnership resulted in the production of the “Opportunity Naples Strategy,” which was accepted by the Board in November 2014. The specific initiatives and action plans produced as part of the Opportunity Naples Strategy planning effort continue to form the basis of the Partnership. In today’s economic climate, Collier County must be mindful of retaining solid performing companies and their quality jobs in the community. Through its annual contract, the BCC provides funding that includes a dedicated position at the Greater Naples Chamber of Commerce to focus on business retention and expansion. This has resulted in 153 retention visits since the program started. The contract deliverables also include the maintenance of a website for the Collier EDO, as well as required attendance and direction of meetings. The Vice President, Economic Development at the Chamber of Commerce maintains a close relationship with the Collier County OBED, which results in regular repor ting about ongoing operations and business activity in the area. Serving as the point of contact for Enterprise Florida and Florida Power & Light Incentives programs, the Partnership acts a catalyst to successfully recruit economic development projects to Collier County Activities include focused research, targeted business visitation aimed at identifying strengths and needs of existing businesses, and other services with the goal in mind of protecting and promoting Collier-based businesses. 11.B.1 Packet Pg. 599 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 13 Upon learning of a potential economic development project, the VP, Economic Development passes this information along to OBED. OBED then coordinates across the agency to construct a package of existing authorities and tools for presentation to the Board of County Commissioners. Once approved, OBED coordinates delivery of the financial incentive and oversees the administration of the project. Southwest Florida Economic Development Alliance In addition to efforts to build a local partnership focused on Collier County’s economic development, OBED has a regionally-focused economic development partnership centered on promoting Southwest Florida as a premier region for economic development with the Southwest Florida Economic Development Alliance (Alliance). The Alliance helps companies expand and grow in Southwest Florida, assisting with site location, incentives, talent attraction, process navigation, and regional data. 11.B.1 Packet Pg. 600 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 14 This regional partnership works cooperatively with the five Southwest Florida counties, as well as Florida Gulf Coast University, other regional educational institutions, and other private, non-profit organizations. In addition to promoting the Southwest Florida brand, the Alliance serves as a key resource for data and information in promotion of the region and its communities. Since its inception in 2015, the County’s partnership with the Southwest Florida Economic Development Alliance proved fruitful, with the Alliance representing the County and Southwest Florida in over twelve marketing events including r ecurrent participation at the: 1) Food Automation and Manufacturing Conference 2) SelectUSA Investment Summit 3) Consumer Electronic Show 4) Enterprise Florida Board of Directors Meetings 5) Certified Commercial Investment Member (CCIM) Thrive Conference 6) Medical Device and Manufacturing Show and 7) Florida International Trade and Cultural Expo (FITCE), This participation has resulted in 10 prospects (including Project TNT) and various Request for Information from businesses to OBED. interested in Collier County Roles & Responsibilities Entity Will Office of Business & Economic Development 1. Provide regulatory assistance to create a friendly business climate. 2. Administer incentives and recommend policy to BCC. 3. Provide management of contracts and assist with funding the local and regional partnerships. Partnership for Collier County’s Future Economy 1. Develop and budget for marketing and outreach programs. 2. Manage projects with collaboration from partners. 3. Direct retention efforts and facilitate partnerships. 4. Raise private funds for the economic development of Collier County. Southwest Florida Economic Development Alliance 1. Brand SW FL region. 2. Manage pass-through leads from the web and other contacts to all partners. 3. Aggregate data and pertinent information. 4. Manage website. 5.Provide a forum for regional issues. 11.B.1 Packet Pg. 601 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 15 Accelerator Project – Economic Incubators, Inc. In September 2013, the Board approved a goal of developing a Business Accelerator Project, an original project of the OBED Business Plan. Economic Incubators, Inc. (EII) became the administrative entity for the Collier County accelerator project in November 2014. EII has since opened two facilities, the Naples Accelerator and the Florida Culinary Accelerator @ Immokalee. Established in 2014, the Naples Accelerator is a membership-based business accelerator, certified soft-landing international business accelerator and co-working office in Naples. Its staff and partnership programs assist members with essential support to launch their ideas and businesses, including legal, administrative, marketing and funding support. From July 1, 2015 through the end of Fiscal Year 2018, there have been 101 participants who have joined the Naples Accelerator, 42 are currently active as of October 2018 in the accelerator. The Florida Culinary Accelerator @ Immokalee opened in March 2018 in Immokalee. It provides a state-of-the-art commercial kitchen which is open to its membership base. The Florida Culinary Accelerator also provides the pos sibility of venture funds and business assistance so that members can truly see their culinary creations become a reality. The Florida Culinary Accelerator has 22 active participants as of October 2018. Collier County’s approach to economic diversification seeks to leverage public private partnerships with specialized missions for new business attraction, retention of valued existing businesses and acceleration of new local business startups and direct foreign investment. The mission of the Accelerator project fulfills the public purpose of forwarding the Board of County Commissioner’s strategic goal of economic diversity. In September 2018, an administrative MOU was developed and agreed to with Florida Gulf Coast University, Hodges University, and Florida SouthWestern State College to expand on the County’s regional partnership with other state and local universities at the Naples Accelerator. Leveraging this partnership for mentoring and marketing opportunities will be an important focus for FY 19 operations. 11.B.1 Packet Pg. 602 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 16 State Partnership It is vitally important for OBED to maintain solid relationships with the State of Florida economic development partners at Enterprise Florida and the Department of Economic Opportunity. OBED has established strong working relationships with key individuals in both agencies to maximize the effectiveness of local economic development efforts. Additional Local Strategic Partners Additional important local strategic partners include Southwest Florida Works (workforce board), Collier District Schools, Florida Southwestern State College, Hodges University, University of Miami’s Bascom Palmer Eye Institute, Florida Gulf Coast University, Southwest Florida Regional Planning Council, Naples Municipal Airport, Collier County Aviation Authorit y, Southwest Florida International Airport, S.C.O.R.E., CRA’s and the FGCU Small Business Development Center. 11.B.1 Packet Pg. 603 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 17 Tools OBED has identified and developed a state-of-the-art, industry-standard set of key tools to implement a course of action for economic development. Financial Incentives Financial incentives are utilized by OBED to boost Collier County’s competitiveness and induce new business activity. OBED is committed to partnering with the State of Florida in its financial incentive programs and has locally-originated financial incentive programs contingent on the policy direction of the Board of County Commissioners. The following incentives have been expended or funded and have resulted in the following outcomes: Project Direct Jobs Indirect Jobs17 Investment Florida Specialties18 12 280 $89,000 Animal Specialty Center19 3 47 $54,000 Guadalupe Center20 5 97 $50,000 Haynes Corporation21 5 154 $149,643 Anchor Health22 10 854 - Arthrex2324 990 1,084 $1,965,818.97 ACI25 57 - - First Bank26 6 - - Naples Accelerator27 56 - - Culinary Accelerator 14 - - FY 19 Incentives - - $580,400 Total 1,195 2,516 $2,888,682* 17 REMI Models run by the Southwest Florida RPC from ESRI’s Policy Insight Software (Base year: 2015) 18 Collier Clerk Internal Audit. Audit Report 2015-6. Retrieved here December 3, 2018. 19 Collier Clerk Internal Audit. Audit Report 2017-1. Retrieved here December 3, 2018. 20 Collier Clerk Internal Audit. Audit Report 2017-6. Retrieved here December 3, 2018. 21 Collier Clerk Internal Audit. Audit Reports 2014-9 & 2017-11. Retrieved here and here December 3, 2018. 22 Collier Clerk Internal Audit. Audit Report 2013-2. Retrieved here December 3, 2018. 23 Collier Clerk Internal Audit. Audit Report 2018-3. Retrieved here December 3, 2018. 24 Collier Clerk Internal Audit. Audit Report 2017-12. Retrieved here December 3, 2018. 25 Includes committed jobs. 26 CID ($151,000) will be paid over 5 years. Agreement approved May 2017. Includes committed. 27 Department of Economic Opportunity. Grant SL007. Q2, 2018 Report. (4 jobs since from Logiskool include d) 11.B.1 Packet Pg. 604 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 18 The following projects are scheduled to be funded in FY 19: Project FY 19 Incentive Arthrex Advanced Broadband $8,400 Arthrex CID #1 and #2 $184,500 Arthrex Job Creation $66,700 Position Logic $29,400 Project ICE ALPS (ACI Worldwide) $143,000 Project Incentive Contingency $137,500 State of Florida QTI Program $10,900 Total FY 19 Incentive Budget $580,400 OBED’s incentive programs are summarized below: Basic Industry Growth Incentive Program The Basic Industry Growth Promotion Incentive (Basic) recognizes Collier County’s desire for near term job growth opportunities for the expansion of local compan ies and recruitment of new companies which might not qualify for the Qualified Targeted Industries (QTI) program. The recipients of the Basic, even those with wages under QTI thresholds, tend to export a significant percentage of their product and as a result create net new wealth and net new spending power in a local economy. Growth in those industries assists with our community’s economic recovery. Applicants are eligible for a county Basic Industry Growth In centive grant of $3,000 per job if a project creates at least five new jobs within 12 months in a targeted industry with wages that meet or exceed the Collier County average for the applicant’s specific three - digit North American Industry Classification System industry code. Businesses that demonstrate energy efficiency, resource conservation or environmental sustainability in either the firm’s operational process or products will be eligible for a $500 per-job bonus over the base grant. To meet Collier County’s program requirements, employers must report their average wage and job levels. 11.B.1 Packet Pg. 605 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 19 State of Florida Qualified Target Industry Tax Refund Program The State of Florida’s Qualified Target Industry Tax Refund Program (QTI) is designed to facilitate the attraction of high-value, export industry jobs that generate new wealth and create jobs. The program seeks to diversify Florida’s economy by targeting certain industry clusters of strategic importance to the state’s economic diversity. Perhaps the State’s most important financial incentive, QTI offers businesses in designated Targeted Industries an award of $3,000 per new job, or $6,000 per new job located in an Enterprise Zone. Businesses are eligible for certain bonuses, including a $1,000 per job bonus if it pays over $150% of the average local wage, and a $2,000 per job bonus if over 200%. For high-impact industries, as defined by Enterprise Florida, an additional bonus of $2,000 per job is available. Enterprise Florida Inc. staff will shepherd businesses and communities through the entire application process, ensuring that the company and community understand what is required for a complete, effective application. Collier County’s Board of County Commissioners is committed to providing the required 20 perc ent local match requirement for eligible businesses that create jobs in the county. Advanced Long-term Productivity Strategy Incentive Program (ALPS) The Advanced Long-term Productivity Strategy Program (ALPS) expands Collier County’s competitiveness in attracting extraordinary high value economic development projects in augmentation to our existing Qualified Targeted Industries (QTI) program. This program is divided into two “tiers.” Tier One offers businesses that create at least 25 new jobs with wages exceeding 150% of average county wages an incentive equal to 1.000% of actual payroll for each of four years. Tier Two offers businesses that create at least 25 new jobs with wages exceeding 200% of average county wages an incentive of 1.063% of actual payroll for each of four years. Participants must adhere to all QTI requirements as well as additional Collier County requirements. 11.B.1 Packet Pg. 606 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 20 Capital Investment for Diversification Incentive Program Collier County offers qualifying applicant’s eligibility to the CID I ncentive as an inducement grant providing a benefit equivalent of up to 100 percent of the value of the transportation impact fees actually assessed and remitted for business space that directly houses the occupancy of a target industry business. The CID Incentive provides four equal annual installments of the grant amount commencing with the first anniversary of the issuance of the Certificate of Occupancy for the facility, and will continue each year until the full grant amount is paid, conditioned and c ontingent upon the project remaining current on all local tax liabilities and the operation of the facility as a targeted industry, as evidenced by a certified county approved method, or in substitution, an equivalent Targeted Industry Business operation acceptable to the county Florida Power & Light (FPL) incentives FPL’s business customer bills are among the lowest in the southeast and well below the national average, but FPL understands that in today’s competitive economy, more is needed. FPL is able to further cut rates for large power users through two special programs for economic development projects. One is a definitive tariff program (EDR) and the other is a flexible negotiated rate (CISR). 11.B.1 Packet Pg. 607 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 21 Other Programs Industrial Development Revenue Bonds Industrial Development Revenue Bonds (IRDBs) are securities issued by a local governmental agency, such as the Collier County Industrial Development Authority, for the purpose of financing capital projects for companies. Industrial Development Revenue Bonds, also known as “private activity bonds,” are a viable method of financing certain types of industrial relocation and expansion, as outlined below. That debt is a liability of the respective company, not the local governmental agency. Industrial Development Revenue Bonds offer some advantages over conventional financing methods, including the following: • Since IDRBs are considered limited and special obligations of governmental units, the interest on the bond may not be subject to federal income tax and certain state and local taxes, including intangible taxes and documentary stamp taxes. • Some capital costs associated with the acquisition of an industrial project may be financed. New Markets Tax Credit Through the NMTC Program, the Community Development Financi al Institutions (CDFI) Fund allocates tax credit authority to Community Development Entities (CDEs) through a competitive application process. CDEs are financial intermediaries through which private capital flows from an investor to a qualified business lo cated in a low- income community. CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. Using the capital from these equity investments, CDEs can make loans and investments to businesses operating in low -income communities on better rates and terms and more flexible features than the market. A credit equal to 39% of the purchase price of a qualified investment as defined in Section 288.9913(9), F.S. may be taken. The credit may be carried forward for five years. 11.B.1 Packet Pg. 608 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 22 Opportunity Zones Five Census tracts in Collier County were among 427 areas statewide that were nominated Low Tax Opportunity Zones by Gov. Rick Scott and certified by the U.S. Department of the Treasury in June 2018. Three areas in and around Immokalee, one in Naples Manor, and one in Golden Gate City were designated. Naples Immokalee Opportunity Zones, established by the federal Tax Cut and Jobs Act of 2017, encourage long-term investment and job creation in targeted communities by allowing exclusion of capital gains taxable income for investment in low-income communities. Opportunity Zones are an economic and community development tax incentive program that provide a new impetus for private investors to support distressed communities through private equity investments in businesses and real estate ventures. The incentive is deferral, reduction and potential elimination of certain federal capital gains taxes. Innovation Zones In 2010, the BCC adopted a policy to create and fund an economic development program and to advance economic development initiatives in zones of geographic concentration within the county’s unincorporated areas. These zones, called Innovation Zones, are designated by the BCC through the implementation of Economic Development Plans adopted by resolution for each Innovation Zone. The use of available tax-increment revenues within an Innovation Zone as a dedicated economic development tool and funding source enhances the county’s general welfare through the advancement of new employment opportunities, the implementation of redevelopment initiatives, the creation of new economic development opportunities and locations, and the expansion of existing employment centers. 11.B.1 Packet Pg. 609 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 23 The tax increment will be deposited into a trust fund, and proceeds w ill be used to implement the Economic Development Plan established by the developer and approved by the BCC. Expenditures that are expressly prerequisites for the development of a target industry’s physical operations – including pre-paying impact fees, public infrastructure or transportation requirements. So far, the BCC has designated three Innovation Zones: • Ave Maria Innovation Zone • Interchange Activity Center No. 9 Innovation Zone (July 2017) • Golden Gate Economic Development Zone (November 2018) As the interest and scope of Innovation Zones continue to grow, staff will be needed to administer and oversee the Advisory Boards and projects occurring within them. Immokalee Free Trade Zone The Immokalee Free Trade Zone (FTZ-213 Site#3) became a Foreign Trade Zone (FTZ) in January 1997. The 60-acre FTZ offers economic advantages to companies when importing and exporting goods by virtue of the fact that land within the FTZ is considered outside of the customs territory and duties and taxes are waived when good s enter the zone and are delayed until the goods are exported out of the FTZ to the U.S. market. The US Department of Commerce designation allows companies that manufacture within the industrial park to import raw materials to manufacture their products a nd export them duty free. Collier County entered a Foreign Trade Zone Development Interlocal Agreement with Lee County Port Authority which commits the LCPA to assist with the application to the FTZ Board and serve as the Port Director and FTZ Board as req uired. 11.B.1 Packet Pg. 610 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 24 Ecosystem for Innovation Several unique tools for assisting local businesses are being utilized to assist in the start - up and acceleration of local new businesses. The approach is different from traditional economic development which focuses on incentives. The approach called economic gardening focuses on providing resources to create a robust environment and network of tools and opportunities within the community. Collier County’s network of accelerators and strategic partnerships with the FGCU Small Business Development Center and Service Corp of Retired Executives (Score) is the foundation of this ecosystem. Additionally, Collier County has added dynamic resources such as the Florida Virtual Entrepreneur Center which places companies in a se archable database and provides opportunities for local businesses. The 1 Million Cups program adds an element of connectivity to Collier County’s ecosystem to connect startups with local business leaders and investors. Regulatory Reform and Permitting When first established in 2013, OBED was charged with implementing a friendly regulatory atmosphere for businesses in Collier County. Working throughout the agency, and with established partnerships, OBED created the Collier County Fast Track Program. The Collier County Fast Track Program is an expedited review program to encourage and support economic development by streamlining the development process, providing process certainty, reducing approval times and providing a central point of contact. Approved fast track projects receive priority review. Eligible Fast Track projects are those that create new or expand primary employer businesses. Primary employers are businesses that create a product or service that is principally sold outside of a region to generate new money and profits in the region. They include aviation, aerospace, clean technology, defense and Homeland Security, information technology, financial and professional services, IT, life sciences, logistics/distribution, and manufacturing, but are not limited to the industries listed in the box below. The retail, restaurant and hospitality industries are excluded. 11.B.1 Packet Pg. 611 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 25 Future Projects & Goals Annual Report OBED will submit an annual report to the Board to assist the Office and partners in better understanding the strengths, weaknesses, opportunities, and threats facing Collier County’s economy. The strategic direction outlined by the plan will be driven by data and quantitative analysis, as well as community inputs and other qualitative factors. Using a full range of inputs, the strategic plan will highlight relevant strategies for the Office to pursue in developing Collier County’s economy and guiding its economic future. Certified Sites Program Collier County’s shovel-ready Certified Site Program assures the quality of properties that are marketed for development to investors and improves collaboration between the county and land owners. Under the program, a landowner and/or agent must attest to the validity of a certified site application and submitte d documentation. Purpose: 1. To reduce risk, cost, and time for a prospect company by providing full documentation that a site is available, fully served and is developable. 2. To create a trackable and marketable inventory. Program Requirements (PESTO). Collier County’s Site Certification Program requires an applicant to certify: 1. Peak Utility Capacity. Ensure that adequate utilities (electricity, water, sewer, gas and telecommunications) are available and identified, or can be quickly delivered to a site in suitable quantities for targeted project sizes with redundancy features. 2. Environmental Consideration. Environmental, geotechnical and archeological studies are provided to identify any areas of risk and the property’s total acreage. 3. Scale. The site’s shape is conducive to development and expansion, including specifying zoning, land use and construction restrictions. 4. Transportation. Transportation access exists for employees, raw materials, supplies and product shipments. Required information includes a transportation infrastructure map identifying ingress and egress routes; rail line availability; the name of the closest commercial airport, with the average distance in miles and travel time in minutes from 11.B.1 Packet Pg. 612 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 26 the site; the closest interstate highway north-south route; and the closest east-west interstate highway. 5. Ownership. The property is controlled through ownership or option and is readily available for ownership transfer to a prospective applicant. Required information includes a tax map; large-scale boundary survey map; and title and deed. Data/Economic Scorecard In undertaking the update of the OBED Business Plan for FY 19, one of the greatest needs that emerged was a need for greater and more detailed analysis of existing economic development programs. Through the new acquisition of low-cost data tools, OBED will begin to produce monthly economic reports for the BCC and public. The Accelerator Project recently formed a partnership with four local and regional universities and colleges – which will result in the production of the Collier County/SWFL Economic Scorecard. This annual scorecard will assess how the economy is doing each year and inform the County’s economic development efforts. The Florida Chamber of Commerce Scorecard below provides a good outline for an economic scorecard that can be customized to specific metrics below: 11.B.1 Packet Pg. 613 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 27 Targeted Industries In the coming year, OBED will undertake a targeted industry analysis to gain a better understanding of what industries are viable for recruitment. A 2015 FGCU study identified 11 industry clusters in Southwest Florida, comprised of Collier, Lee, Charlotte, Hendry, and Glades counties OBED has looked at these 11 industries and put together a matrix identifying support necessary for them: Maturity Industry* Types of Support Legacy (traditional) Industry Regulatory Promotion Incentive Contracts Accommodation/Resort Tourism Agribusiness Business/Financial services Construction Corporate HQs Healthcare/Hospitals/Senior Living Emerging (innovative) Industry Advanced Manufacturing Agritechnology/Culinary Products Eco-Tourism/Agri-Tourism/Sports Tourism/Medical Tourism Electronic Commerce Performing Arts/Film Wellness, Lifestyle & Innovation • Alphabetically Listed 11.B.1 Packet Pg. 614 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report) www.colliercountyfl.gov/obed 28 In the coming year, OBED and its partners will zero in on these industries to study which sectors will provide the best opportunity for high -wage, high-growth jobs in Collier County. Preliminary data analysis predicts that areas such as financial services, health and wellness, professional services are some areas that targeted engagement could provide a high-rate of return on investment for the OBED staff. Identified sectors will advance the private sector, diversify the regional economy, and make it more resilient to economic downturns or government policy changes. 11.B.1 Packet Pg. 615 Attachment: OBED 2018 Annual Report (final) (7480 : Economic Development Programs Report)