It is part of Florida lore that in this state of sunshine laws and ethics commissions there are no backroom deals between government and business. Of course that’s not true. Backroom deals were written into law since the Republican one-party state began under Jeb Bush in 2001, giving local governments the freedom to cook up deals in secret with companies looking for handouts.
This corporate welfare is done under the cloak of economic development “incentives.” Local governments will approve those deals, with your money, and you’ll know nothing about them for up to a year or more, the way Bunnell did a few months ago for something called “Project Christine.” The city is giving away almost $100,000 in tax dollars over seven years in exchange for the promise of just 17 new jobs. No one knows who the company is, what it’ll be doing or where, and by the time we find out, it’ll be too late. The deal will have been sealed.
Those deals may sound like they’re making a difference, or that they’re absolutely essential to the local economy. They’re not. In the last 10 years Flagler County residents have netted 10,000 new jobs. You can probably count the jobs owed corporate welfare on two hands. These deals are nothing short of government pandering at the expense of the public’s right to know where its money is going and what properties are being used for what kind of business.
Palm Coast is in the middle of just such a secret deal, with an Atlanta-based company called DC Blox. The company, operating locally under the name of DCB Orchid, bought 34 acres in Town Center for $3.3 million last fall. It plans to build a data center there to land several undersea internet-data cables, by way of Flagler Beach. The city and the county are cooking up some kind of tax incentive with the company. We don’t know how much. We don’t know for how long. We don’t know for how many jobs, though it’s not that many: data centers employ dozens, not hundreds. Presumably, we’ll find out when the deal is sealed.
We know about the company only because, to its credit (or rather to Flagler Beach’s), it spoke openly about some of its plans when it sought permission from the Flagler Beach City Commission to use a couple of parcels of land there as landing points for the undersea cables. But when I was about to report on that earlier this month, I got a call from a county official hoping to kill the story, on the bogus claim that its publication would damage the deal. I thought I was back in 1940 Okeechobee.
It reminded me of when Palm Coast and the county gave away the farm to Palm Coast Data some years ago–$400,000 in tax incentives from the city plus, for a pittance, that 70,000 square foot building on Commerce Boulevard where the city once had its offices. The county gave $100,000. The state gave $3 million. It was just one of those secret deals. All supposedly to keep Palm Coast Data, even though the company had made up its mind to consolidate operations from several other states here already. Palm Coast data was promising 700 new jobs.
Not only did the jobs never materialize, but what was then the largest employer in the county was reduced at last check to a miserable little storefront in Bunnell with two and a half employees. “Simply put,” a lawsuit filed a few years ago states, after Palm Coast Data “received the $3 million award, it failed to live up to its end of the bargain–at the expense of Florida taxpayers.” The state recovered some of the incentive money. Palm Coast and the county lost all they “invested.” A little more transparency before the secret deal might have prevented the swindle.
There’s nothing wrong with incentives. The city’s terms could very well include tax breaks and other benefits. Governments should have the authority to offer incentives. But in the open from start to finish, with full public participation. Denying public involvement implies the public is too stupid to know what’s good for it. Greasing a deal in a secret arrangement is an admission that what Palm Coast has to offer in the open isn’t enough, that we’re the sort of city that begs and panders, when it should be the other way around.
Governments will always claim that they need the secrecy to close these deals, otherwise companies won’t come here. That’s rubbish. Most employers make their moves outside of government pandering, and those that don’t tend to play governments against each other in their own little backroom auction. It’s a sordid business. But if a company is willing to be so secretive upfront, it’ll be deceptive down the line.
Maybe a data center in Town Center is the greatest thing since Palm Coast Data. Maybe it isn’t. Either way, we won’t know until it’s too late. And for what?
Companies playing the incentive game always make wild predictions about millions to be invested, millions to be reaped in new wages, and many more millions to ripple through the economy. The companies rarely or never provide the blueprints that verify the claims, and the economic multiplier data that governments love to huckster and reporters love to swallow, no questions asked, is the the rankest snow job this side of Mencken’s bathtub hoax. That kind of data is fabrications, typically issued in the florid speculation of press releases announcing the done deal.
If this is what Palm Coast is working on with DC Blox, let’s withhold applause and demand more transparency, because Flagler Beach has already been surprised by the company’s demands for those two easements on the shore, on public land, for which it is willing to pay only a fraction of what the easements are worth. Now that the city is reluctant to let one of its parking lots be used as a cable landing zone, the company is proposing to run the cables through Veterans Park (Veterans Park!), and offer some mysterious incentive to ease the way.
They’re still working on it on the island, with feverish lobbying as we speak: the company asked to meet with individual city commissioners–behind closed doors, of course. They’re meeting this week, one after the other, while Palm Coast remains entirely mum on the company’s dealings, and conducts its own lobbying of Flagler Beach officials.
State law grants secrecy for incentive programs. Secrecy is not mandatory. Palm Coast and DC Blox could choose to be upfront and transparent and still work out an incentive package. That’s the route they should take. The only thing that should be buried and out of sight is those internet cables–not public dollars, certainly not public awareness and participation. If we’re to trust it, let this deal come out of its black hole.
Pierre Tristam is the editor of FlaglerLive. A version of this piece airs on WNZF.
