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Econ Development Bd Recommends $1,650,000 Retail Incentive for Another Shopping Mall

The old Kmart shopping mall on U.S. 90.                                                               ++Enlarge

Econ Dev Dir Glenn Hunter

COLUMBIA COUNTY, FL –  Yesterday, the Economic Development Advisory Board on a 4-3 split, voted to recommend giving Hutton Shopping Mall Developers $1,650,000 of Columbia County tax dollars divided between a $650,000 direct cash rebate and $1,000,000 in direct property tax rebates over ten years. The property tax rebate could be more. Economic Development Director, Glenn Hunter, when pressed by Assistant County Manager Scott Ward, said he was in favor of the arrangement. Econ Dev Dir Hunter is a non-voting member of the board.

A Little History

In 2013, Joel Foreman, the then and now Economic Development Advisory Board (EDAB) Attorney, lobbied to hire the Alabama consulting firm Retail Strategies to attract retail business to Lake City. At that time he told the County 5 that more stores enhance the quality of life. The cost to the county was $80,000. (Columbia County 5 At It Again: Skimming $80,000 of Cream Out of Taxpayer's Pockets)

The findings of Retail Strategies and the results of the relationship between the City/County/Chamber of Commerce have never been quantified.

Hutton Real Estate Development Construction

According to Econ Dev Dir Hunter, Hutton has been working with the County Economic Development Office since October of 2015.

Hutton's Kevin Jennings

Your reporter asked Hutton representative, Kevin Jennings, "Did you work with Retail Strategies?"

Mr. Jennings answered, "I understand they were involved with the downtown TIF district that was created. We did not work with them. We were brought to the site. We have relationships with retailers. We believe in the viability of the site."

Mr. Jennings said that the shopping center will eliminate the blighted area (the empty parking lot of the old Kmart shopping center); be a regional draw; create a minimum of 109 jobs; bring in almost $400,000 of new sales tax revenue; pay $77k in new school taxes; pay $10k to the Lake Shore Hospital [Authority]; and eventually increase the ad valorem tax revenue to the city/county.

Mr. Jennings explained the project incentives: "You are helping mitigate project costs for the developer. It's based on me making a 17 million dollar investment in the community and delivering sales tax revenue and job creation."

Hutton is asking for tax abatements (a tax refund) for ten years and an additional $650,000 in cash incentives from the City and the County, $320,000 from the County and $230,000 from the City.

Not Asking for a Handout

       Marc Vann

Long time Columbia County political insider and one of Columbia County's quintessential good ole' boys, Marc Vann said, "We're guaranteeing you an additional profit."

Mr. Jennings responded, "Yeah, helping mitigate my upfront project costs and you're doing so in a mechanism that does not put any risk or burden on the city - county - community. If I don't build it there's nothing for me to collect."

Mr. Jennings continued, "The $650k gap. If services or materials are provided to mitigate that cost you're going to provide that before the buildings open; if I don't open; if I don't get a certificate of occupancy, I'm committed to paying you that money back. I'm not here trying to get a handout."

"I'm here telling you that in order for me to bring this project, I've got a shortfall that I have to meet, or else it's not going to hit my return hurdle and I just can't do the project."

Mr. Vann said, "All we will be losing is the additional revenue that the City and County would get. (estimated to be at least $1mil)

City Manager Wendell Johnson

City Manager Wendell Johnson, a self-proclaimed economic development expert, inquired about the $650,000 City/County cash donation, asking if it was a construction cost for "additional things" on the site, such as the sink hole mitigation. "That's your construction cost?" he asked.

Mr. Jennings answered:  "No, I wouldn't say it like that. We analyzed the total project cost. It was roughly $18 mil and then we analyzed what we can get from an economic perspective and it comes up with what the return is on the investment. There was a shortfall. The shortfall equated to 1.65 million dollars. The first million can be paid back by the rebate of the ad valorem property taxes. That left you with $650,000. There are extra-ordinary costs associated with the property that have raised my total project cost to $18 mil. I really need the project cost to be at $16.4 million to make sense from a return perspective."

Mr. Vann asked if the tax rebate goes over $1,000,000 does the City/County get the difference.

Mr. Jennings answered, "No. If it exceeds that I would like the ability to capitalize on that." He also explained that Mr. Johnson knew his answer to that question before the meeting.

Mr. Johnson made the motion to give Hutton the entirety of the tax rebate over ten years and never mentioned anything about the $1,000,000 rebate threshold.

Board Member Glenn Owens: The County is Paying the Profit

EDAB member Glenn Owens is a longtime private business owner in Lake City. He told the Board, "I still don't like the tax rebate idea. I understand that it makes your project profitable. That's the same problem anybody has when they build a project. I really question if it's smart of us to make Hutton's project profitable."

Commissioner Sylvester "Bucky" Nash addressed the $320,000 cash incentive, "The County will write a check for the difference between the shortfall of in-kind services and the $320k commitment. The County is guaranteeing the $320k."

Assistant County Manager Scott Ward told the Board, "I have some concerns about the procedural issues. What are we doing here? Someone comes in and does a presentation to us and we cut em' a check?"


After the meeting your reporter asked Commissioner Nash when he expects a written Economic Development Retail Incentive program.

Mr. Nash said they will be working on it, but that for now, "All the projects are vented."

Next step: The County 5 for approval

Comments  (to add a comment go here)

On April 8, 2016, Tom Shafer of Lake City wrote:

Sinkhole mitigation? That whole area is built over a swamp that was filled on/in with leftover junk from construction sites. That's why it subsided in the first place. Now we should throw money in that pit? Why not turn it into a public area? Lots of potential there.


On April 8, 2016, a Lake City resident wrote:

Very, very SCARY!  Have you noticed how much Vann is looking and acting like Berry? I saw where "they" would be paying taxes---really, ten years down the road?  And we should be thanking them for about a hundred part-time minimum wage rotating schedule jobs.  Who the heck will have the income to buy all this stuff? With the Epperson property now going for auction there will be an additional big box project soon and the precedent will be set in concrete.  Give us all a break!


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