Re: Re: [web-126] Hillsborough County and $15M

From: Peter
Sent on: Friday, March 16, 2012 6:03 PM
Mike,

Thanks for jumping into the debate.  I think you and the County have a few things wrong.

Bass Pro was going to move here any way. The incentives happened when negotiations between the land developer and the shop broke down.

Bass Pro does this again and again - and the numbers don't add up:
http://www.pjstar.com/news/x104354896/Study-claims-Bass-Pro-Shops-falls-short-on-jobs-tax-revenue

http://sbj.net/main.asp?SectionID=48&SubSectionID=108&ArticleID=87347

Bass Pro Shops is a Forbes 93 at $3.83 Billion
http://www.forbes.com/lists/2011/21/private-companies-11_Bass-Pro-Shops_ISAK.html

Our County budget has problems: "Layoffs, recreation center closings and the elimination of after-school programs. Those are among the highlights of Hillsborough County Administrator Mike Merrill's preliminary budgets for fiscal years 2012 and 2013, which call for layoffs, the elimination of vacant positions and massive spending cuts to plug anticipated revenue shortfalls. Overall, the proposed $2.95 billion FY 2012 budget is $566 million less than the current fiscal year, mostly due to decreases in debt, and capital improvement spending. In FY 2013, the budget will rise to $3.19 billion, mostly due to capital improvement projects."  http://www2.tbo.com/news/politics/2011/jun/04/hillsborough-countys-budget-cuts-to-run-deep-ar-234897/

$15M is a lot of money.  And it is being spent wrong.

In my industry - telecom - I see time and again where projections are just plain wrong. As would the job numbers and economic impact on this. I would like to ask Ft Myers what the impact is from their Bass Pro Shop.  And like you said, this market is already full with Sports Authority, Dick's Sporting Goods, Walmart and more. 

We have enough empty big boxes from Circuit City, Borders, K-Mart, Sears and car dealerships. Do we really need to build yet another one????

My issue is that the county spends too much effort and money on retail and call center jobs when it should be focusing that effort and those dollars on tech jobs. We have a tech community here.  Support that, not a Forbes 93 company.

Tampa has been burned by this before: CapitalOne's campus off Waters was funded with tax dollars and when the incentive wore off, so did the jobs.

On a lifestyle choice, how many more stores can you add to Brandon before it's one big snarled traffic mess?? Where's the impact study on that?

While the county says that the payback is 6 years, my guess it would be longer. It almost always is.

And if we are going to talk about the future, let's put money in education. That has a direct impact on what kinds of jobs CAN come here.

Regards,

Peter


So, on to the DISCUSSION!

Let's look at how the money is being spent.  The county just isn't handing over $15m to Bass Pro Shops.  In fact, Bass Pro Shops will receive ZERO from the county!  That's right!  Check it out for yourself!

1.)  The county will re-imburse the developer for required road improvements to the tune of $8 out of the $10 million to modify the roads.  That may sound like a lot, but the annual budget of the county is 2.95 billion (varies a bit).  What is that?  .2% of their annual budget?  And guess what?  Fixing roads is what counties do as a normal part of business.

2.)  1.5 million is a bonus of the developer gets the store up by 2013; and only then after the developer has put in $25 million of their own money.  Performance bonuses are common.

3.)  The developer gets paid $550,000 per year for the next 10 years if the Bass Pro Shops bring in gross revenue of $55 million per year.  Hillsborough County's sales tax rate is 7%.  At 55 million annually, that's about 3.8 million in additional tax revenue per year.  So what's that?  A 7x return on their money annually?  Sounds like a wise move to me.  And if my math 'chip' is working correctly, of the 55 million, 28 million will come from outside the area.  A great way to stimulate any local economy is to bring in revenue from outside the area.

I know that the $15m sounds like a lot, but this year alone, Hillsborough County will spend 12 million on tourism advertising.  The county's annual budged is almost 3 BILLION.  Also, the $15M will be paid out over 10 years; and only if certain financial milestones are met.

According to the county, the the payback is estimated to be 6 years, not the 3 that I 'guessed' in my earlier assessment.  Oops!  My bad!

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