Publix gets tax aid for brownfield sites
As mega-grocer Publix continues expanding, it is decontaminating property in east Seminole County for a shopping center — all with the help of government tax incentives.
Florida’s largest company will get as much as $580,000 for creating jobs and reclaiming once-toxic land at both the Oviedo site and a distribution center constructed near Orlando International Airport two years ago. Brownfields are property that might be contaminated by hazardous materials, pollutants or other contaminants. The state gives away tax credits to encourage redevelopment of the polluted land.
“We select a site based on what we feel is prime location to serve our customers. The Chuluota site was selected on the merits of the site alone. Unfortunately, the site required some cleanup from its prior use, which qualified the site as a brownfield,” said a spokesman for Publix.
Publix is one of more than a dozen com-
panies that received $5.4 million in brownfield redevelopment incentives from the state in recent years, according to a report filed earlier this year by the oversight group for the Legislature. The report showed most of the state’s brownfield incentive programs had not reached job goals during a two-year period ending in 2015.
With more than $34 billion in annual revenues, the Lakeland-based chain is one of the 10 largest supermarket chains in the country, according to the company. This year, it climbed a few spots to rank as Florida’s largest company and the country’s 85th largest, according to Fortune 500.
As Publix expands with more than 1,130 stores mostly in Florida but also throughout the Southeast, it has increasingly shifted to purchase real estate rather than lease store space.
Colliers International Managing Director Jorge Rodriquez, who specializes in retail real estate, said the employee-owned company has benefited for years from ample cash assets and has opted to purchase a lot of the shopping centers they anchor.
And even when it leases space, Publix includes an option to purchase the center if the owner decides to sell.
“This helps them control their destiny,” said Rodriquez, adding that they can also better control their tenant mix when they own the center.
By purchasing centers, Publix no longer has to pay state taxes on their lease, although its ownership stake puts it on the tab for property taxes.
One of the biggest problems with buying land, though, is that many of the choice locations are long gone, leaving far-flung suburbs and polluted sites instead. Other groups have turned to brownfield sites, including Kissimmee’s partnership on the Toho Square retail and civic area, which rests on 2 acres of a reclaimed brownfield site at the 200 block of Pleasant Street in Kissimmee.
“A lot of what I would consider to be the low-lying fruit — uncontaminated property — has already been developed,” said Orlando attorney Robyn Neely, partner with Akerman law offices. “With some of the properties, you have more challenges and you need these incentives to help finance and facilitate the deals. Brownfield projects definitely help revitalize communities.”
Florida’s brownfield laws have shifted in recent years so that property owners can win tax bonuses and credits if the property is merely perceived as polluted. The Publix property near Oviedo, though, has a history of pollutants.
Publix purchased 10 acres in the historic Village of Taintsville, which is a rural spot on County Road 419 in the midst of suburbs between Oviedo and Chuluota, for $3.25 million two years ago. Records show the once-wooded land had the remnants of an old cattle-dipping vat, which was used to submerge livestock in arsenic and pesticides in order to remove disease-causing insects. Other chemicals cited in a report include mercury, lead, barium and cadmium. The chemicallaced soil was removed from the property last year, according to Jacksonville-based environmental consultants Golder Associates Inc. That group detailed a monitoring plan to the state.
As developers turn the old cattle operation into the Shoppes at Sterling Park, the state will reimburse cleanup and monitoring costs. No one from Publix was available to estimate what the costs will run and whether they were included in the original price.
Publix’s brownfield tax credits of $580,000 spread over about the next eight years are approved with the condition that the grocery giant creates more than 200 jobs combined at the Oviedo center and its $200 million distribution center off Lee Vista Road in south Orlando. Tax credits reduce the company’s bill for everything from corporate income tax to sales and property taxes.
At just the Oviedo site, tax incentives would kick into place starting late next year if Publix begins to meet goals of creating 95 jobs. The average annual wage required to get the funds is $30,784, state economic development records show.