By Ashley Lopez
Florida Center for Investigative Reporting
Hertz, one of the nation’s largest rental car companies, announced this week that it is moving its headquarters from New Jersey to Southwest Florida. The Fortune 500 company committed to the move after officials with the state and Lee County offered $19 million in economic incentives.
According to The News Press in Fort Myers:
County commissioners approved $4.6 million in economic development incentives and the Florida Legislature approved $14.4 million in the same, to help entice Hertz to come to Southwest Florida.
Getting the money and taking advantage of other incentives is contingent on Hertz spending $60 million to build a 300,000 square-foot headquarters and employing 700 in Lee County by 2015.
Hertz recently acquired Dollar Thrifty, based in Oklahoma, and decided to consolidate operations and relocate to Florida, a tax-friendly state. In a news conference announcing the deal on Tuesday, Hertz CEO Mark P. Frissora said the combination of quality of life, business climate and tourism industry in the state and region persuaded the company to move to the area. Gov. Rick Scott credited Lee County’s success at job creation as a big factor in the decision.
Economic incentives have been the bedrock of Gov. Rick Scott’s job creation plans. These incentives, which can be tax breaks or subsidies, are meant to attract companies interested in expanding in or relocating to Florida. The incentive money is also used to prevent companies from moving out of Florida.
Open government advocates have criticized the millions of dollars spent on these incentives because there is so little transparency in the selection process and some doubt about whether these incentives create or sustain jobs in the state. This year, state lawmakers established new rules that will require greater accountability for these economic incentives.
With the Hertz relocation, state official anticipate the move will create quite a few jobs in Florida because the company has 700 well-paid positions at its headquarters. However, Hertz officials have said they anticipate about half of their current employees will relocate from the company’s current headquarters in New Jersey. This means the $19 million incentive would likely bring 300 to 400 jobs in Southwest Florida.
According to the News-Press, the money will mostly pay for some of the relocation costs:
But Hertz also will be able to use the tax credits to pay for the estimated $68 million construction cost of its planned 300,000-square-foot headquarters at the southeast corner of U.S. 41 and Williams Road in Estero, company vice president for corporate affairs Richard Broome said Tuesday.
“It’ll be spread out over 20 years starting once our headquarters building is completed,” he said. “It’s a maximum of $3.4 million a year for 20 years, based on the total investment in the facility.
A release Monday from Enterprise Florida, a public/private organization that helps facilitate corporate investment in the state, said only that Hertz “could be eligible for certain corporate tax credits up to $3.4 million a year.” Enterprise Florida chief Gray Swoope called the deal an “incredibly important accomplishment.”
Among the more controversial aspects of the deal was that the Lee County Commission, which had to approve the economic incentives, voted on the money blind. The commissioners didn’t know which company they were giving money to until after the deal was done. State officials said secrecy was needed to protect current employees of Hertz.
For this year’s budget, which will be signed in the coming days, Scott asked the Legislature to set aside $278 million for the state’s economic incentives program. State lawmakers allocated about one-fourth of that amount.