The county executive behind the proposed changes described them as an overdue update aimed at businesses of all sizes and not tied to Amazon, American Dream Miami or any other mammoth potential employer. But the push for larger payouts comes as Miami and the 19 other metropolitan areas in the running for Amazon’s secondary headquarters are weighing how much public money to offer the online giant and its self-created “HQ2” contest.
The county created its “targeted jobs incentive fund” in 1998 to reward companies willing to spend millions on headquarters while adding jobs to the payroll. The “TJIF” program allows companies to receive a cash refund of about 2 percent of the money it spends on construction, provided it creates at least 10 jobs paying above-average wages.
The bonuses aren’t very popular and don’t amount to much, since Miami-Dade starts paying the money only when the construction work is finished and the promised jobs are actually filled. The county’s budget office said the program only pays out about $500,000 a year, and the department of Regulatory and Economic Resources said only 10 companies have received the bonuses since 2011.
Now Miami-Dade wants to sweeten the pot. Proposed changes to the law governing the program would multiply the rewards for companies hiring hundreds of employees. American Dream Miami, a proposed retail theme park in Northwest Miami-Dade, has pledged to hire 7,500 people over 15 years and says it could employ more than double that in the 200-acre complex. Amazon wants a secondary headquarters large enough to eventually employ 50,000 people.
While Amazon says its jobs will pay an average of $100,000 a year, the American Dream project has said in regulatory documents that 60 percent of the workers on its retail-heavy payroll would earn less than $25,000 a year. Miami-Dade’s average wage was about $22 an hour in 2016, amounting to about $46,000 a year.
Depending on how American Dream sets up its operations and leasing arrangements, the low wages could be a problem. Miami-Dade’s incentive program limits payments to company paying all employees at least the county’s living wage, currently about $27,000 a year if the worker receives health benefits.
The changes to the incentive program proposed by the administration of Mayor Carlos Gimenez would boost the base rebate from 1.7 cents for every dollar of construction to 2.14 cents — a 26 percent increase. Various bonuses for environmental improvements and being located in certain economic-development zones would go up by a similar rate.
Miami-Dade pays out the money over six years, and the proposed changes would stretch that to 10 years.
Frank Nero is a former director of the Beacon Council, a nonprofit that receives county funding and serves as Miami-Dade’s economic development agency. County law gives the Beacon Council exclusive authority to make certain recommendations for the incentive program.
Nero, whose consulting firm Economic Solutions Group seeks to negotiate incentive plans for corporations looking to expand, said Miami-Dade would be bucking a trend in finding more dollars to offer companies.
“Increasingly, incentives are looked upon more negatively than they were in the past,” he said.
The County Commission’s Economic Development and Tourism Committee is set to consider the new incentive plan at its 1:30 p.m. meeting Thursday.
In revising its program, Miami-Dade also wants to start rewarding for both construction and hiring, rather than paying subsidies based solely on how much a company spends building new facilities or adding to existing ones. The proposed revision includes an additional .15 cents in rebates for every 50 jobs created. The bonus appears to apply to every new job, rather than only ones paying above-average wages.
With Amazon’s own “HQ2” website dangling a plan “to invest over $5 billion in construction” in the winning city, a 2.14-cent rebate could top $100 million. And that’s before hiring bonuses.
Program rules bar that kind of large payouts, imposing a $7.5 million cap on any one company. But an existing provision allows the County Commission to waive the cap, up to the county property taxes paid on the construction.
Leland Salomon, the county’s economic-development director, said even big projects generally wind up getting relatively modest payouts. “I have one where a guy is putting in $40 million, and he’s going to get $100,000 a year for 10 years,” he said.
Salomon said the proposed changes weren’t sparked by Amazon, American Dream Miami or any other specific project — and that no business asked for any of them. He also said the tweaks to the county’s incentive fund wouldn’t be relevant to the HQ2 calculations, where Amazon has become the top prize in a historic contest among some of the largest metropolitan areas in the country. He said negotiating an incentive package for something as large as Amazon would involve a complex mix of state and local programs.
“If that kind of a deal were to happen,’ he said, “we’d all be sitting around a table to figure something out.”