Business

A weakened Enterprise Florida battles external critics, internal angst

Everything was looking up for Gov. Rick Scott and his job creation engine, Enterprise Florida, when he joined Amazon.com CEO and Blue Origin founder Jeff Bezos, left, for the debut of a launch vehicle on Sept. 15, 2015, at complex 36 at Cape Canaveral Air Force Station. Bezos said his company would bring over 300 new jobs to the Space Coast.
Everything was looking up for Gov. Rick Scott and his job creation engine, Enterprise Florida, when he joined Amazon.com CEO and Blue Origin founder Jeff Bezos, left, for the debut of a launch vehicle on Sept. 15, 2015, at complex 36 at Cape Canaveral Air Force Station. Bezos said his company would bring over 300 new jobs to the Space Coast. Orlando Sentinel

Gov. Rick Scott and dozens of business leaders running Enterprise Florida, the state’s chief economic development arm, were riding high during their January board meeting here.

“We have momentum,” Scott said, ticking off record job creation stats and the economic development incentives he used through the quasi-governmental agency to lure companies to Florida.

Moments later, Enterprise Florida unveiled a splashy, $10 million branding campaign with the tagline: The Future is Here.

Then it all unraveled:

▪  The Legislature in March refused to give any new money to Scott’s signature job-creation program.

▪  The hard-charging CEO of the organization, former PortMiami director Bill Johnson, abruptly resigned Monday with no explanation.

▪  And Scott announced plans for a major shake-up, leaving some of the biggest supporters of the organization wondering if it has any future at all.

“If it looks like we can’t get anything done, why would I want to be there?” Sarasota businessman and Enterprise Florida board member Jesse Biter said.

In short, Scott’s most cherished government entity is reeling.

“The whole mission of Enterprise Florida is going to have to change,” a subdued Scott told reporters earlier week shortly after he ordered the agency’s board of directors to make $6 million in cuts to its staff and office space out of an agency that has 90 employees and a payroll of $9 million.

Is it obsolete?

The organization’s most tireless backers say they still have the resources to help improve Florida’s business environment and see the agency surviving.

But some critics of Enterprise Florida — including incoming Florida House Speaker Richard Corcoran — say it’s time to review whether the agency created 20 years ago has outlived its purpose in a more conservative fiscal era.

The organization’s 64 board members — including top officials from Disney, Publix, Florida Power & Light — recruit out-of-state companies and arrange contacts. Businesses pay to score a spot on the board and fund their own way for travel when Scott leads them on trade missions.

Created in 1996 under then-Gov. Lawton Chiles, Enterprise Florida was a first-of-its-kind experiment to morph parts of the former Department of Commerce into a part-private, part-public organization to recruit companies to Florida, conduct trade missions and help businesses navigate regulations to grow. With more private-sector tendencies, the hope was it would be more nimble than a bureaucratic, government agency.

I certainly hope that we don’t completely burn down the agency because I believe that at some point in the future there will be an opportunity to evaluate how we move forward.

Agriculture Commissioner Adam Putnam

While other governors have participated in the organization, none have devoted as much political capital to it as Scott, said Alan Becker, a Fort Lauderdale attorney who serves as the group’s vice chairman. Because of his campaign pledge to create more jobs, Scott honed Enterprise Florida’s mission to be about aggressively luring businesses from other states.

“Our mission became the No. 1 priority of the governor,” said Becker, who has been on the board for 18 of its 20 years of existence.

Without the incentive fund, Becker said, Florida is at a disadvantage going forward to compete for prizes like the Hertz Corporation, which moved its headquarters to Southwest Florida or Navy Federal Credit Union, which chose the Pensacola region over Virginia

Florida Agriculture Commissioner Adam Putnam, who many expect will run for governor in 2018, is among those who hopes Enterprise Florida’s model as a public-private partnership survives.

“I certainly hope that we don’t completely burn down the agency because I believe that at some point in the future there will be an opportunity to evaluate how we move forward,” he said.

Tight purse strings

In 2015, the Legislature first began to tap the brakes on the fund. Scott sought $85 million, but ended up with about half that, despite his warnings that it would result in fewer deals getting done. This year, Scott aggressively pushed for $250 million over three years to infuse the incentive fund.

While the Senate ultimately agreed (though with demands for more accountability for how the money is used), the House refused to give any money. The result: Scott was left to sign a budget that had no additional money for Enterprise Florida’s recruitment fund.

Scott directly blamed the Legislature for Enterprise Florida’s demise, telling the board of directors to brace for big cuts.

But Corcoran, the incoming House Speaker from Land O’Lakes, has a different take.

“The enemy of Enterprise Florida is not the Legislature; it is an adherence to the free market,” Corcoran said.

It’s a view that resembles what Tea Party-inspired groups like Americans for Prosperity have been advocating. The group’s Florida chapter launched direct-mail campaigns and flooded lawmakers with calls and letters from their membership calling on legislators to oppose what the group called EFI’s intrusion into the private business market to the benefit of a handful of businesses.

Corcoran isn’t the only Enterprise Florida critic. Records show more than 90 percent of the funding for the group comes from state taxpayers, making it a target for multiple state lawmakers who wonder about the “private” part of funding or if it is even something government should be involved with.

State Sen. Nancy Detert, a Sarasota County Republican and member of the board for more than a decade, recalled that lawmakers considered scrapping Enterprise Florida as far back as the early 2000s.

“This comes in cycles,” said Detert, the chair of the Senate Tourism and Commerce Committee. But, she added, what the agency does in drawing businesses to Florida and helping businesses in the state tap into national and international markets is too important.

“This is not the death of Enterprise Florida,” Detert said.

Some board members, including Becker, point out that despite the loss of incentive funding, the Legislature still fully funded most of the agency’s other initiatives, including its general operations, market, international outreach programs and military support.

“Ninety percent of what Enterprise Florida does was not affected,” Becker said.

As hard as Scott fought for more funding for the Enterprise Florida fund, he seemed in January to predict the groundswell of opposition among fellow Republicans.

At the same Enterprise Florida board meeting in which he celebrated the agency’s “momentum,” he warned that if they could not convince the Legislature to replenish the job recruitment fund this year, the odds of reversing that in future years would be slim.

“This is our last chance,” Scott said. “If we don’t get it this year, we are not going to get it done.”

Staff writer Steve Bousquet contributed to this report.

Contact Jeremy Wallace at jwallace@tampabay.com or (850) 224-7263. Follow @jeremyswallace. Contact Michael Auslen at mauslen@tampabay.com. Follow @MichaelAuslen.

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