Business

Miami-Dade may lose tax incentives for poor neighborhoods

A man runs past a vacant lot between Northeast 14th and 15th Streets, just west of Northeast First Avenue in Miami, which is part of Miami-Dade’s enterprise zone, in January. State legislators may not renew the enterprise zone program, which provides tax incentives for businesses that create jobs in neighborhoods with high rates of crime, unemployment and poverty.
A man runs past a vacant lot between Northeast 14th and 15th Streets, just west of Northeast First Avenue in Miami, which is part of Miami-Dade’s enterprise zone, in January. State legislators may not renew the enterprise zone program, which provides tax incentives for businesses that create jobs in neighborhoods with high rates of crime, unemployment and poverty. MIAMI HERALD STAFF

A state program that local leaders say has created thousands of jobs in economically distressed areas of Miami-Dade County is in danger of not being renewed next year.

The program — which is scheduled to sunset at the end of the year — gives tax incentives to businesses that create jobs in designated “enterprise zones,” areas with high rates of unemployment, poverty and crime.

In the last fiscal year, the state distributed $15.8 million in incentives to 65 enterprise zones across Florida and created about 13,000 jobs statewide. The top recipient of the funds was Miami-Dade, which received $4.7 million, according to state figures. Broward County received about $122,000.

State lawmakers, including House Speaker Steve Crisafulli (R-Merritt Island) and Senate President Andy Gardiner (R-Orlando), have criticized the program as ineffective and have not passed legislation to extend it.

Supporters maintain that beyond the number of new jobs, the enterprise zones also encourage neighborhoods and businesses to grow by creating new infrastructure.

“The tax credits have been very helpful to us,” said Lourdes de la Mata-Little, vice president of marketing at Goodwill of South Florida, which is based in Allapattah and trains people with disabilities for jobs. “They help us hire more people who live in economically disadvantaged areas and then take the money we receive from the credits and redirect it to our core mission.”

Goodwill has hired about 70 people who live in enterprise zones to work in its retail stores and manufacturing center.

“It would be a concern for us if this program ended,” de la Mata-Little said. She said Goodwill would not lay employees off but that its programs for the disabled would take a financial hit.

“That will be money taken away from programs that benefit people with disabilities,” she said.

A January report by the state legislature’s Office of Program Policy Analysis & Government Accountability found that enterprise zones “underperformed” non-enterprise zones in several economic and social indicators.

It also found that the majority of businesses polled in several enterprise zones did not know of the incentives available, and that few businesses had applied for them.

But the nonprofit government watchdog Florida TaxWatch recently put out a contrasting report, arguing that the program had been a cost-effective way of improving economically distressed areas.

The report recommended that legislators renew the program, while making improvements such as increasing transparency, giving local leaders more flexibility, collecting better data and launching an improved marketing campaign.

“This is an important tool in our economic toolbox,” said Robert Weissert, senior vice president for research at Florida TaxWatch, in an interview. “And its main goal is not necessarily just job creation, but also drawing private-sector investment to improve these communities.”

Available incentives include a sales and corporate income tax credit for companies that create new, full-time jobs for residents of enterprise zones, as well as property tax credits, sales tax credits and exemptions for equipment, building material and electricity costs.

Last year, the incentives allowed businesses to create 618 new jobs in Miami-Dade, the sixth-most in the state after Jacksonville (2,296), Kissimmee/Osceola County (1,258), Hillsborough County (718), St. Petersburg (669) and Palm Beach County (646).

Since 2006, businesses in Miami-Dade’s enterprise zones have created a total of 7,432 jobs, according to a county report. The program has a 10-year goal of creating at least 9,700 jobs by 2016.

“Taxpayers are making a great investment because the money is spent in areas where creating employment has been historically difficult,” said Alan Becker, vice chair of Enterprise Florida, a public-private partnership that serves as the state’s economic development arm, and a founding shareholder at the law firm Becker & Poliakoff.

Miami-Dade’s economic development zone includes three major parcels.

▪ North Central: a chunk of northwest Miami-Dade that encompasses Miami International and Opa-Locka airports, and parts of East Hialeah, as well as much of the city of Miami, including the neighborhoods of Allapattah, Wynwood, Edison, Little River, Overtown, Culmer, East Little Havana and Little Haiti.

▪ South Dade: most of the cities of Homestead and Florida City, as well as Cutler Ridge, Perrine and Princeton.

▪ Miami Beach: parts of South Beach, Collins Avenue and North Beach.

Major employers taking advantage of the tax credits in the last year include Walmart, Walgreens, Goodwill, Centurion Air Cargo, Bouygues Civil Works and several restaurants and hotels including Lure Fishbar, Seaspice, Sobe Hotel Miami Beach and the Setai Hotel, according to a county report.

Florida established its enterprise zone incentives by statute in 1982. But the relevant legislation did not create a mechanism for removing the enterprise zone designation from an area once its economic conditions had improved.

Some neighborhoods in South Beach, Blue Lagoon and other areas have revived with help from the incentives and may not need taxpayer funds anymore, said Larry Williams, president and CEO of the Beacon Council, the county’s economic development arm.

Williams said he supports the idea of revising the program so the boundary lines of enterprise zones can be redrawn.

“We need to graduate some of these areas and then continue to use this very successful program to benefit other parts of the county,” Williams said. “But there’s no need to throw the baby out with the bathwater. We are bullish that the legislature will step up and make the changes necessary to continue this program.”

Political leaders at the county level also support the program. Jean Monestime, chairman of the Miami-Dade County Commission, said renewing enterprise zones was a “top priority” for the commission.

But after a recent trip to Tallahassee to lobby lawmakers on that and other issues, Monestime said he hadn’t seen “too much positive traction yet in terms of extending the sunset date, which is unfortunate.”

“The program is an investment in this community for the future,” Monestime said. “Businesses need to see some kind of incentives to come to the poorest areas of the urban core.”

Gov. Rick Scott has not taken a public position on the issue. When asked for the governor’s stance, spokeswoman Jeri Bustamante repeatedly said that Scott will “will review any legislation that makes it to his desk.”

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