Semiconductor firm Rogue Valley recommended for Brevard tax break if it opens in Palm Bay
An economic development advisory board is recommending that an Oregon-based semiconductor company receive a 70% property tax break from Brevard County extending for seven years, in return for the company opening a facility in Palm Bay.
The proposal will go to the Brevard County Commission on Jan. 24 for consideration.
The company, Rogue Valley Microdevices Inc. of Medford, Oregon, said, if it opens in Palm Bay, it expects to make an initial investment of $25 million on new equipment and other improvements at the proposed site at 2301 Commerce Drive NE. Of the $25 million, $21.4 million would go for clean-room equipment.
That 50,000-square-foot building is currently vacant and is in a light-industrial area.
Palm Bay proposal:Oregon-based high-tech company seeks county, city tax breaks to expand into Palm Bay
Economic Development Commission of Florida's Space Coast Director of Business Development Edgar Campa-Palafox said the addition of Rogue Valley to Palm Bay would help create a semiconductor "cluster" in the city and would help diversify the local economy.
Among the other semiconductor makers in Palm Bay is Renesas Electronics Corp., which Campa-Palafox said has about 300 local employees. Japanese-based Renesas in 2017 completed its acquisition of Intersil Corp., which became a wholly owned subsidiary of Renesas.
Campa-Palafox said Renesas makes semiconductors for a wide ranges of uses, including for space satellites, motor vehicles and cellphones.
If Rogue Valley decides to open operations in Palm Bay, the company said it would crate 30 jobs there within three years. Those jobs would pay an average of $59,900 a year, and would be in 21 job categories. Salaries would range from a $120,000-a-year operations manager to a $31,000-a-year accounting associate.
Previously approved tax break:West Melbourne high-tech company USSI Global plans expansion, seeks tax incentives
An analysis by the Economic Development Commission found that the 30 direct jobs that Rogue Valley plans to create would lead to 20 spinoff jobs. Those 50 jobs would have a total annual payroll of $2.99 million and would bring $4.72 million a year into the local economy.
A 70% county property tax break could be worth $57,260 a year to Rogue Valley, or $400,820 over the seven-year period.
The EDC's Ad Valorem Tax Abatement Council made the recommendation of a 70% tax break for seven years, based on a formula that takes into account the company's planned capital investment, number of jobs created and average salary for those jobs.
Rogue Valley said in its application that, after a national site search on where to expand, it is considering sites in Arizona, Texas and Palm Bay.
Campa-Palafox cautioned the Tax Abatement Council that Arizona is "extremely aggressive" in offering companies economic incentives to attract jobs.
Still, Tax Abatement Council Chair Neal Johnson, who is senior mortgage loan officer with U.S. Bank, said he believes the availability of high-tech workers on the Space Coast, coupled with the proposed Brevard incentives, could be the combination that attracts Rogue Valley to expand in Palm Bay.
The council's vote was 14-1, with Katherine Wall voting against the the tax break.
Wall, who is Brevard County's central services director, said she voted no because there was no agreement in place at the time of the vote to prevent the owner of the Palm Bay property ― and not Rogue Valley ― from getting some of the benefit of the tax break.
Rogue Valley founder and Chief Executive Officer Jessica Gomez said in her application for tax break that the Palm Bay site would generate an estimated $15 million a year in sales of the company's products.
A tax break would require the company to meet its capital investment and job creation projections. It the company does not meet those requirements, its tax tax break would be revoked.
Rogue Valley also is seeking a break on property taxes paid to the city of Palm Bay.
Based on Palm Bay's tax abatement formula that takes into account jobs created, average wage of those jobs and capital investment ― Rogue Valley could qualify for Palm Bay property tax breaks over a six-year period. The tax break would amount to a 60% city property tax reduction in Years 1-3; 50% in Year 4; 40% in Year 5; and 30% in Year 6. The Palm Bay City Council can modify those tax breaks, based on various circumstances.
Palm Bay Deputy City Manager Joan Junkala-Brown said the Palm Bay site Rogue Valley is considering formerly was occupied by AAR Airlift and Harris Corp. (now known as L3Harris Technologies).
Rogue Valley Microdevices was founded in 2003. The company is a manufacturing partner to more that 150 technology companies supporting the development and commercialization of a wide range of technology, including autonomous vehicles, cancer screening equipment, devices that detect airborne toxins, glucose monitoring devices and gas flow sensors.
The company said in its application that approval for property tax breaks from Brevard County and Palm Bay "would be of great benefit to our growth and expansion efforts by allowing the company to better leverage its capital to increase efficiency and raise competitiveness. It will enable us to move forward with an expansion in Florida."
In its application for the county property tax break, Rogue Valley said: "Due to growing customer demand, Rogue Valley Microdevices has decided to expand its production capacity by building a second manufacturing facility. The ideal facility will have 50,000 square feet of space to support significant growth in capacity and allow the company to more than double in size."
Brevard County voters in 2014 approved the program to provide economic incentives to new and expanding businesses, with 70.31% support.
If approved, this would be the first such county property tax break approved in more than a year. On Dec. 2, 2021, the Ad Valorem Tax Abatement Council recommended a tax abatement of 60% for six years for West Melbourne high-tech company USSI Global for its planned expansion. The County Commission approved that tax break on Dec. 21, 2021.
Contact Berman at dberman@floridatoday.com, on Twitter at @bydaveberman and on Facebook at www.facebook.com/dave.berman.54.
This article originally appeared on Florida Today: Semiconductor firm Rogue Valley recommended for Brevard tax break
