LAKELAND — Publix Super Markets Inc. has gained approval for county tax breaks of $26 million and public funding worth $500,000 to incentivize the grocer to open its new technology campus at the former FedEx building downtown.
The Lakeland City Commission unanimously passed a resolution on Monday giving Publix $250,000 over three years as promised jobs are created. A county ordinance was passed unanimously by Polk County commissioners on March 15 providing the other half of the public funding, through Publix’s application for the Polk County Business Incentive program.
The Lakeland-based grocer also received a county property tax break, which includes a 75% discount on its tax bill for 10 years. The grocer would still pay school and other taxes to the tune of $250,000.
Publix director of communications Maria Brous did not respond to an email asking for comment about the project.
Nor did Publix – which recently recorded its highest sales in company history at $48 billion for 2021 – have a representative speak during either public hearing on the measures in the government chambers. No public comments preceded the unanimous vote in favor of the Publix exemption.
The only friction Publix encountered came from Polk County Commissioner Neil Combee, who said he had not voted in favor of tax abatements proposed in the past.
“I have a long-standing opposition to tax abatements,” he said, citing a voting record against past requests but then saying he realized Publix has been very beneficial to the county and the rest of Florida and he would hate to lose the company’s investment to Orlando or Miami.
“To what extent do I have a basis for voting no?” he asked, adding his yes vote would put him “in a pickle.”
County attorney Randy Mink and board Vice Chairman George Lindsey quickly explained to Combee that Publix‘s application met a previously set standard for approving such requests, but the board did have discretion to oppose applications if those standards were not met by an applicant.
If applications met the standards but were not approved, the decision could be seen as “arbitrary” or “discriminatory” by the board, they told him.
In addition, Polk County voters approved a Nov. 6, 2012, referendum authorizing this type of exemption.
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Addressing Combee’s fear of losing the project, Publix had considered Atlanta as a possible spot for its technology campus, according to assistant county attorney Sandra Howard, who presented the panel with the dual ordinances.
In Lakeland, Jason Willey, business development and special projects manager for Lakeland, also said Publix was looking at other areas.
The Publix application with Polk County asked for the financial support to start in tax year 2025 for its expansion into the building that once housed the former Maas Brothers department store at 333 E. Lemon St. Publix currently leases space at the Ledger Building for some of its IT workers.
The FedEx building covers more than two acres and has an assessed value of $7.248 million, county records show.
Publix's application said the deal would generate 100 new full-time jobs in Polk County at an average annual wage of $93,500, or 200% more than Polk County's current average annual wage countywide.
The company expects to spend at least $40 million in real property improvements and the purchase of equipment and other tangible personal property.
Publix, which says it is the world’s largest employee-owned company, also said in its application that it wants to source people and material for the project locally and sustainably.
The county receives overall property taxes of more than $302 million annually and currently exempts $3.5 million, according to the ordinance.
The estimated taxable value lost to the county for the Publix exemption will be $15 million for real property and $10.9 million for tangible personal property, which includes items in the building such as computers and furniture. The ordinance stated that the tax breaks would meet the definition of an “expansion of an existing business” as defined by state statutes.
A county form attached to the ordinance said Publix would spend $17 million on office furniture, computers and restaurant equipment, among other things. Renovations on the 142,250-square-foot building, set to start in June, would cost $24.5 million and the property purchase price would be $8.5 million. The form was signed in February by Gino DiGrazia, vice president of finance for Publix.
As a condition of continuing the Publix exemption, the grocer must show continued performance to the commissioners and could lose its special status if it fails to meet the performance agreement. The Publix exemption would expire on Dec. 31, 2034.
Based on the Property Appraiser’s report, it is estimated that $183,011 in ad valorem taxes will be lost each year of the 10-year exemption. The county would recognize new ad valorem tax revenue just over $61,000 annually during that time, representing the remaining 25% of value.
Additionally, annual new tax revenues gained for the Polk County School Board, Stormwater Municipal Service Taxing Unit and Southwest Florida Water Management District are estimated at $246,000, collectively.
Publix has used code names for other projects, including “Project Sky” for its 940,000-square-foot refrigerated warehouse and 1.2 million-square-foot grocery warehouse in Greensboro, North Carolina.
The project, brought forward by Enterprise Florida and identified only as Project Horizon, had remained a closely guarded secret on Friday at a Lakeland agenda review meeting prior to City Commission’s approval.
Jason Willey, business development and special projects manager for Lakeland told the panel, “The jobs will be a wage ... around $93,500 — a great wage.”
Florida's Qualified Target Industries Tax Rebate program sunset in 2020 and has not been renewed by the state, he said. The requirements for that program were similar to those used in the city-county program, including the jobs salary table to determine the funding amount.
Commissioner Bill Read asked, “We don't know if they are coming yet?”
Willey said approval of the resolution by the City Commission was part of a competitive process. “They will say we have an interest in Georgia and an interest in North Carolina and other areas, so this is really putting our hat into the ring to be competitive for the project to show we want them in Lakeland.”
The Atlanta mayor’s office had not responded by Wednesday morning to a request to confirm Publix’s interest in sites there.
Willey said Publix sought and gained a similar deal to improve its headquarters in Lakeland. He said the city might have about 10 outstanding projects that have some variations of payment.
“Some of them are as low as $1,200 to $1,500 a year,” he said. “This one is obviously a bigger one.” Still, he said it is uncommon for an employer to request funding to provide jobs at 200% more than the average county wage, as Publix has proposed.
“You all have an opportunity to approve a resolution, but really, it's up to the company to perform,” Willey said. “If the company doesn’t perform or meet job numbers, we don’t talk about it again, but maybe they fall off.”
Publix now has 1,297 stores in the Southeast, including 833 stores in Florida, according to its website. Other stores are in Alabama (82 stores), Georgia (196 stores), North Carolina (51 stores), South Carolina (64 stores), Tennessee (52 stores) and Virginia (19 stores).
Its 10th distribution center will be in North Carolina. Publix’s website lists nine other distribution centers in Boynton Beach, Deerfield Beach, Jacksonville, Lakeland, Miami, Orlando and Sarasota; Lawrenceville, Georgia; and McCalla, Alabama.
It has 11 manufacturing facilities in Lakeland, including a bakery plant, dairy plant, deli kitchen, fresh foods and printing services. In Georgia, they are located in Atlanta (bakery plant) and Dacula (dairy plant, fresh foods). Others include Deerfield Beach (dairy plant, fresh foods) and Jacksonville (fresh foods).
This article originally appeared on The Ledger: Lakeland, Polk OK tax breaks for Publix to renovate old FedEx building