With the
economy still simmering well below the boiling point, economic
development officials across the nation are trying to hang on to
what they have and stave off job losses that occur when companies
fold, cut back or pull out.
Volusia
County is not immune to this kind of attrition. However, local
officials recently took the lead in keeping one local company local,
avoiding relocation to Michigan, which was dangling a carrot of $7
million in front of the company’s board of directors.
“The
company is Sparton Corporation, a specialty electronics manufacturer
with annual sales of $229 million to commercial, medical and
government entities,” said Phil Ehlinger, Director of
Volusia County’s Department of Economic Development.
The
company has operations in DeLeon Springs and Brooksville; Jackson,
Mich.; Strongsville, Ohio; Ontario, Canada; and Vietnam.
“Sparton
had announced plans to close its Jackson plant and this meeting was
to have been a briefing on that decision and its impact on Sparton’s
Florida operations,” said Ehlinger. “But when Sparton officials
arrived with Dick Harkey of Congressman John Mica’s office and Bob
Rorhlack of Enterprise Florida, we knew this was no ordinary
briefing.
We were
informed that Michigan had offered Sparton a sweetheart deal to
remain there. It amounted to $7 million in incentives over 12 years
plus a free building. They explained the rationale and outlined the
company’s timetable for making a decision, giving Florida five days
to respond if it wanted to counter Michigan’s offer.”
Faced
with the possibility of losing 230 good manufacturing jobs in west
Volusia County, Ehlinger began to develop a strategy that would keep
Florida in Sparton’s future and save the west Volusia County jobs
that suddenly were at risk of rapid extinction.
“Losing
those jobs in that part of the county would be a big hit,” said
Ehlinger. “We had formidable competition from Michigan, which
included the active participation of Governor Jennifer Granholm.”
Ehlinger
spoke with his counterpart in Hernando County, representatives of
Enterprise Florida and Workforce Florida. Each had a stake in
keeping Sparton in Florida. He dissected the Michigan offer to
evaluate which elements were real money, which elements were fuzzy,
and everything in between. He kept in mind the reality that
consolidating and moving a defense-related manufacturing facility is
expensive, complicated and time-consuming.
Armed
with this information and a steely determination to trump the
Michigan overture, Ehlinger and his colleagues began to create their
own package.
Enterprise Florida re-classified Sparton as a qualified defense
contractor, making it eligible for tax refunds of up to $1.7 million
under the Qualified Defense and Space Contractor Tax Refund program.
Quick
Response Training funds of up to $472,800 were offered by Workforce
Florida. A $246,000 sales tax exemption on a capital equipment
purchase of $3.4 million was identified. Assistance in finding a
suitable Florida location for Sparton’s new headquarters was
offered.
Volusia
County offered a one-time grant of $1,000 per job or $312,000 and
the Center for Business Excellence offered training grant of $5,000
per job. Hernando County offered a grant for existing and new jobs
totaling up to $389,500 as well as mitigation of impact and building
fees and training assistance.
For its
part, Sparton Corporation would underscore its commitment to Volusia
and Hernando counties. The company agreed to retain 262 jobs and add
50 new jobs at the DeLeon Springs plant; maintain a $35,664 average
salary (115 percent of Volusia County’s average); retain 179 jobs
and add 100 new jobs in Hernando County; maintain a $31,932 average
salary (115 percent of Hernando County’s average); invest $3.4 in
machinery for DeLeon Springs plant; invest $1 million in machinery
for Brooksville plant, and locate its headquarters in Florida.
The
Florida package totaled $3,093,478 and was amassed over five very
busy days, arriving at Sparton Corporation in time for deliberation
by Sparton’s board of directors. Those deliberations resulted in
Sparton choosing Florida’s $3 million package over Michigan’s
$7 million package.
“This is
a major save in economic development circles,” said Robert Rohrlack,
senior vice president of Enterprise Florida. “The commitment of
officials in Volusia County and Hernando County as well as at the
state level resonated with Sparton and our commitment to its success
in Florida carried the day.”
The
Volusia County Council unanimously approved the incentive plan to
keep Sparton in DeLeon Springs.
