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Observations and musings on Jacksonville Politics

Did Jacksonville promise battery maker $7 million in cash?

The Peyton Administration celebrated a major coup several weeks ago when news broke that Saft America, a division of Johnson Controls, was looking to build a $200 million high-tech battery manufacturing facility at Cecil Field using $100 million in DOE federal stimulus grant money.  According to the Mayor’s Office, the plant could add up to 800 jobs in Jacksonville.

The plant, however, is not a guarantee.  The decision to locate in Jacksonville would be contingent upon successful negotiations with the City of Jacksonville and the State of Florida regarding the utilization of available incentive programs related to capital investment and job creation.  It also depends on the state allowing the city to use the federal stimulus grant program—provided Saft is awarded the highly competed for DOE grant funding—for the construction of the facility.  This could explain the reasons behind the Mayor’s hosting of a fundraiser for Charlie Crist, even though he has had long standing differences with the Governor over Tallahassee’s continued erosion of local government authority.

Stimulus dollars, however, aren’t the only issue Saft is seeking to overcome.  On May 13th, the Mayor’s staff personally arranged a meeting between Saft America officials and Congresswoman Corrine Brown.  The topic at hand was Saft’s concerns that PHMSA (the US Department of Transportation Pipeline and Hazardous Materials Safety Administration) was not representing their interests. The Air Line Pilot’s Association was pushing for the FAA to take over hazardous goods regulation  and Saft was concerned that it could lead to potential tightening of U.S. regulation of lithium batteries in transportation.

Regulation issues aside, The News Herald in Morgantown, North Carolina, has reported that Saft chose Jacksonville because of the city’s offer to pay $7 million in cash.  Saft already has a plant in Valdese, North Carolina and Valdese had been in talks with the company to build an additional plant.  The plant, according to Jeff Morse, the Valdese Town Manager, would have added 150 jobs to the local economy in the first three years, with the potential to add up to 700 jobs over the next 15 years.

Valdese competed rather aggressively for the new plant, even flying in North Carolina Governor Beverly Purdue to meet with company officials.  In the end, however, the company chose Jacksonville.  According to Morse, it was for one reason—cash up front.  Morse told The News Herald that “the town, county or state doesn’t offer cash to companies. If the state plunked down cash to each company it tried to recruit,” Morse went on, “it could bankrupt the state.”

While the opportunity to develop manufacturing jobs is something Jacksonville should be focused on, it is important to make sure adequate protections are in place to ensure any taxpayer dollars that are spent are not wasted.  If Jacksonville did indeed pledge $7 million in cash to secure the relocation of the Saft plant, it’s important that Duval County taxpayers understand where those dollars are coming from and how their interest would be protected if the plant—and the promised jobs—failed to materialize as promised.

After all, last Thursday, Saft’s stock dropped as much as 16% after the company announced that 2nd Quarter sales were down 10%.   The warning came on the heel of the news that the company was refinancing debt at higher spreads than on its existing debt.  Additionally, there are always the concerns that a limited supply of lithium could end the manufacturing boom before it even gets moving.

Transparency is something that has been spoken of quite a bit lately, perhaps this would be a good opportunity for the city to deliver.  Growth is good, jobs are important, but let’s make sure the taxpayers are protected in the process.

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City Bid Process Challenged for Cecil Field

I guess bidding out the Trail Ridge Landfill contract may not be such a great idea if the City’s Professional Services Evaluation Committee handles that bid process the way they did this one (at least according to the bid challenger anyway).

From the Jacksonville Business Journal:

A Fort Lauderdale firm looking to be the master developer of Cecil Commerce Center is protesting the score it received in the bidding from the city’s evaluation committee.

The protest filed by MBA Development Partners LLC will be heard by the city’s Professional Services Evaluation Committee April 30. Dallas-based Hillwood Development was scored highest by the committee, but its vote was stalled after MBA filed a protest.

“It is very uncommon for the fourth-ranked bidder to protest,” said Michael Clapsaddle, the city’s chief of procurement.

The firm protests receiving a 15 out of 40 in the financial responsibility category, which is one of 10 criteria. He said even if MBA were to receive a perfect score in the category, they would still place last.

MBA’s attorney, Matthew Jackson, also questioned how the city could have scored Hillwood the highest in the financial responsibility category since it had to give up its stake in a large mixed-use development in Dallas after not being able to bring anticipated returns to investors.

“An initial review of the scoring indicates that the decision was at best, ambiguous and arbitrary,” he wrote. “Worse, the integrity and the transparency of the process by which the master developer is chosen is highly suspect.”

MBA also protested the score it received in the “volume of current and prior work for using agencies” category. It turned out that they scored a perfect score, but a faxed copy from the committee appeared to give them a negative score.

“You can have the greatest response in the world but if your written response doesn’t address all issues of the [request for proposal] you’ll get a lower score,” Clapsaddle said.

Hillwood, which leased 602,000 square feet of space at West Point Trade Center in Jacksonville to Dr Pepper Snapple Group Inc. last year, beat out San Diego-based The Allen Group, Malvern, Penn.-based Liberty Property Trust, and Jacksonville’s Steinemann & Co.

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Could Jax Become Home to a Space Port?

The FAA approves another step in the process.

The licensing process for construction of a commercial spaceport at Jacksonville’s Cecil Field that could launch up to 52 sub-orbital space flights annually has moved another step forward with the Federal Aviation Administration’s release of a favorable Environmental Assessment of the site.

According to The Jacksonville Business Journal, the FAA study found that no significant environmental impacts would be created by locating a commercial spaceport at Cecil Field. The results put the Jacksonville Aviation Authority closer to receiving a Launch Site Operator License from the FAA.

The approval required the FAA to look at potential federal policy violations, safety issues, and environmental issues, including noise. The public’s objection to excessive noise at Cecil Field is the reason the Navy stopped using the former military base altogether.
“It’s all about safety of the uninvolved public,” said FAA spokesman Hank Price. Since the FAA started overseeing commercial space flight in 1989, it has licensed about 170 launches, Price said, and has never had a public casualty or significant property damage.
As ANN reported, the Jacksonville Aviation Authority initiated the licensing process after a 2006 Florida Space Authority report said Cecil Field is “the best airport for aircraft-like launch vehicles.” The reusable spacecraft launched from the site would take off horizontally, rather than vertically.

The next hurdles to be faced in the process include a public comment period which will end May 20 and a public hearing slated for May 14 at the Cecil Commerce Center.

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