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BROOKSVILLE - Seizing on tax concessions and other inducements, Puerto Rican and American officials set about overhauling the island's rural economy in the late 1940s.
It was called Operation Bootstrap, and debate continues to this day over whether the enticements - which attracted U.S. businesses in droves - or related initiatives such as labor training programs were what modernized the commonwealth. Questions also linger over whether Operation Bootstrap better served the interests of Puerto Ricans or mainland businesses.
Tuesday, the Hernando County Commission is expected to set a date for a public hearing to consider an ordinance that, like Operation Bootstrap, is meant to lure industry to the area and bring jobs. The ordinance would waive the building and impact fees that companies are required to pay the county, if a certain number of high-wage jobs are created. The proposed ordinance comes after months of work by Mike McHugh, director of the county's Office of Business Development, and Commissioner Robert Schenck.
"The ordinance helps to make us more competitive," Schenck said. "It puts people on notice that Hernando County is interested in having quality industry come here."
Not all are so enthusiastic. James Nicholas, a professor of urban planning and law at the University of Florida, said that despite the ever-spreading use of the strategy since the days of Operation Bootstrap, no link has been shown between the use of inducements and attracting industry.
"The research is pretty clear," Nicholas said. "There is no evidence that business responds."
The proposed ordinance has four major provisions:
Industries that provide 10 or more jobs that pay a salary at or above the county's annual average of $24,973 will have their building permit fees excused for seven years. If at the end of that period the company is still in compliance with the original development agreement reached with the county, the building fees would be lifted. Property taxes paid by the company would reimburse the county for the lost building fee revenue.
Industries that create 10 or more jobs that pay $28,719 or more (the figure represents 115 percent of the annual average salary) could also have their impact fees excused. If in compliance with the original development agreement after seven years, the company's impact fee debt would be forgiven. Impact fees are one-time charges on new construction that help pay for infrastructure and services.
The ordinance, which is aimed at attracting companies with a national or international reach, also recognizes a state program that uses a similar approach. It offers inducements to companies that create jobs that pay at or above an area's average yearly income. Under the program, the state covers 80 percent of whatever money a local community may lose by granting enticements.
Finally, the ordinance allows officials to negotiate lease incentives at the county's Airport Industrial Park on Spring Hill Drive. The Federal Aviation Administration would have to approve the incentives.
According to Nicholas, the popularity of inducements has gotten out of hand. Not being fools, companies will tell communities and the public that they want them, he said, and often play local governments against one another in search of the best deal.
Once a company has settled somewhere, however, and you ask why it chose a certain location, Nicholas said, what you hear about is the quantity and quality of local labor, good transportation networks, public facilities and schools and, increasingly, substantial recreational opportunities.
If you don't have those assets in place, he said, economic inducements mean nothing, and if you do have them, there is no reason to have economic inducements.
Nicholas said that in the 1970s, he surveyed 300 businesses in Florida and asked why they had chosen to locate where they had. Not one, he said, mentioned inducements until they were brought up by the researchers.
If a cheap environment in which to operate a business were the main attraction to industry, Nicholas said, "Haiti would be prosperous."
McHugh agrees with Nicholas, in part, and says inducements alone are not sufficient to attract industry. But, McHugh argues, it is essential in competitive economic times to put yourself on the same footing as other communities looking to attract business and to send a message.
"Would this be the first criterion? No," McHugh said. "But it could help distinguish you. It can help swing the tide your way."
Schenck, too, does not see the inducement initiative as the sole answer. It is, though, a critical development component if the county is to avoid becoming only a bedroom community for people working in Hillsborough, Pasco and Pinellas counties, where wages are higher, he said.
"It says to any business looking to locate: "Please consider Hernando County, because we would love to have you,' " Schenck said. "Economic development is such a competitive pie, you need to have every piece of it in place."
The first public hearing on the ordinance is expected to be at 10:45 a.m. June 3 at the county government center in Brooksville.
- Will Van Sant covers Hernando County government and can be reached at 754-6127. Send e-mail to vansant@sptimes.com