Universal largest beneficiary
Scott approved $16M from fund meant to diversify economy for road extension
A few days before Christmas last year, after he was elected to the U.S. Senate but before he’d left Tallahassee for Washington, former Florida Gov. Rick Scott gave a $16 million gift to Orange County.
Itwas a grant to help pay for an extension of Kirkman Road in the county’s International Drive tourism corridor, and it had been pulled from a pot of economic development money known as the “Florida Job Growth Grant Fund.” It was the biggest grant Scott had ever awarded through the fund, which he and the Florida Legislature established in 2017 amid promises to end “corporate welfare.”
Orange County Mayor Jerry Demings, for one, was thrilled. In a prepared statement issued by Scott’s press office, Demings said the Kirkman Road extension would “support the economic growth of our various industries here in Orange County, including aerospace, defense and tourism.”
Neither Scott nor Demings mentioned the biggest beneficiary of the project: Universal Orlando, the giant theme-park resort that generates more than $2.4 billion a year in revenue, according to state records. Most of the 1.7-mile Kirkman Road extension will run alongside or through the 760-acre property upon which Universal plans to build a new theme park, dubbed “Universal’s Epic Universe,” plus new hotels and other facilities.
The $315 million road extension will provide a crucial link between Universal’s existing parks and hotels on the northern end of the I-Drive corridor and the new park at the southern end. It’s so important to Universal’s expansion plans that the resort will, according to a preliminary agreement with Orange County, design, engineer, permit and construct the publicly owned road itself — and get public sources to
help foot the bill.
Orange County is a conduit for the state grant; the $16 million will ultimately pass to Universal. The county has also tentatively committed $125 million of local tax money toward the Kirkman Road extension.
The law that governs the fund prohibits any of the money in it from being used “for the exclusive benefit of any single company, corporation or business entity.”
“Providing infrastructure is a key role of government. However, government projects should not benefit or provide one business with a direct competitive advantage,” said Phillip Suderman, the policy director of the Florida chapter of Americans for Prosperity, the conservative, Charles Koch-backed organization that opposes some economic development incentives. “The integrity of this programis at risk if government chooses to prioritize programs that only benefit one company with taxpayer dollars.”
Scott did not respond to a request for an interview. But in a written statement, a spokeswoman for Scott said every Job Growth grant the former governor approved was the result of “a thorough review.”
“His focus is always on making sure any use of taxpayer dollars has a strong return on investment for Floridians,” the spokeswoman said.
Demings noted that Orange County decided to pursue the grant under his predecessor as mayor, current Orange County School Board Chair-Teresa Jacobs. But he also said he supported the decision because the road will help many residents, business owners and tourists in the area.
County officials have been thinking about an eventual Kirkman Road extension since at least 2001.
“It’s not like onlyUniversal Studios will be using the roadway,” Demings said. “I live out near the Sand Lake area and I can tell you that Sand Lake is one of those roads that has failed and so any improvement in that entire Kirkman Road corridor really benefits everyone who drives that.”
Universal isn’t the only private company to benefit from a public JobGrowth grant. Florida has also awarded multimillion-dollar grants to help an industrial park north of Jacksonville owned by Florida Power & Light and an aircargo hub in Lakeland being built by Amazon, among other examples.
Florida has pledged $170 million through the Job Growth fund in the past two years. Gov. Ron DeSantis, who succeeded Scott in November, announced last month that his administration is accepting proposals from local governments and other agencies for another $40 million.
The Florida Job Growth Grant Fund emerged from the ashes of an ugly battle in 2017 between Scott, a big supporter of economic development incentives, and former House Speaker Richard Corcoran, who criticized incentives as special-interest favors that distort the private market.
Corcoran, who is now Florida’s commissioner of education, said at the time that the new grant fund would be “only for infrastructure and education that is only across the board” and would ensure “zero corporate welfare,” according to the Miami Herald.
Corcoran did not respond to requests for comment.
By law, the grants can only go to projects that fall within a relatively narrow range of categories. The state can give grants to work force training programs at state colleges or technical centers. Or it can give grants to public infrastructure projects that promote the economic recovery of a specific region in the state; economic diversification; or “economic enhancement” in one of a delineated list of “targeted” industries.
In Orange County’s grant application, which Universal helped prepare, the name “Universal Orlando” isn’t mentioned until the last sentence. And the application stresses “no plans have been communicated” by thecompany for all the land it owns in the area.
The application describes the area around the Kirkman extension as “not only a tourism destination but a center of corporate and regional headquarters, modeling, simulation and training, digital media, aviation and aerospace, homeland security and defense, and clean tech.” Each of those categories are on the list of of what Florida considers “targeted” industries.
Yet the application identifies only four specific employers — three of them related to the tourism industry and two of them government-owned: the Orange County Convention Center, the University of Central Florida’s Rosen College of Hospitality Management and Universal. The fourth was aerospace and defense giant Lockheed Martin, whose Missiles and Fire Control division has an office complex near the intersection of Kirkman and Sand Lake Road.
Orange County officials said Lockheed is an example of modeling, simulation and training; aviation and aerospace; and homeland security and defense. They said Universal is an example of digital media. And they said the convention center is an example of clean tech— because the center is green-certified, has rooftop solar arrays and helps trade shows collect food-bank donations, among other “sustainability initiatives.”
Later, when county officials presented the agreement with the state to county commissioners, they said the Kirkman Road extensionwould create at least 2,534 new jobs that would pay an average salary of more than $51,000 — which they noted was more than 115% of the average salary in the county.
To reach those totals, they included jobs Lockheed had announced nearly a year earlier in which the company said it would build a new office building at its campus near Kirkman Road and hire 500 more workers over two years at an average salary of just over $87,000. But Lockheed completed that office building six months ago, and a company spokeswoman says the company is already filling those new positions — while construction on the Kirkman Road extension hasn’t yet begun.
Excluding the Lockheed positions, the average salary of jobs created by the Kirkman Road extension is likely to be substantially lower. The county says it does not have more detailed salary figures.
Then again, the salaries are of little consequence when it comes to the grant itself. That’s because the grant agreement between Orange County and the state of Florida does not include any minimum salary requirement. The only jobrelated condition is that the county must certify that at least 2,534 new jobs will be created “as a result” of the Kirkman Road extension within 10 years of the new road’s completion.
Universal alone should have little trouble clearing that hurdle. When company executives announced Epic Universe earlier this month, they said they expect to hire 14,000 more workers.
Ultimately, the inclusion of Lockheed Martin in the application appears to have been the key to getting the Kirkman Road grant approved. When asked how the project met the requirements for the Job Growth grant fund, a spokeswoman for Enterprise Florida, a state economic-development agency that helps evaluate Job Growth grant applications and recommend which should be funded, said it qualified because it enhanced the growth of the aviation and aerospace industries.
A spokeswoman for Lockheed Martin said the company planned to build its new office building whether or not Kirkman Road was extended.
Representatives for Universal Orlando helped Orange County prepare the grant application, according to county officials, although the document was signed only by the county’s economic development administrator. A spokesman for Universal Orlando would not say whether the company also discussed the application with anyone in the governor’s office, Enterprise Florida or the Florida Department of Economic Opportunity, which also evaluates and recommends grant proposals. Nobody in Scott’s office or either of the two economic development agencies would say who specifically recommended the grant be funded.
While $16 million is a relatively small amount in the context of a $91 billion state budget, it’s also enough money to cover nearly500 special-needs families currently waiting for Medicaid coverage. It’s about as much as Florida will spend this year on wildfire suppression.
It’s also not the only Job Growth grant ticketed for a project in which a large company is one of the primary beneficiaries.
On one of his final days in the Governor’s Office, for instance, Scott awarded $5 million to the tiny town of Callahan in northeast Florida. The money will help pay to extend water and wastewater lines to a roughly 500-acre property owned by Florida Power & Light. The utility, which is contributing $4.5 million of its own money to the project, is developing the site as an industrial park and is currently marketing it to large manufacturers and other potential large-scale users. Aspokeswoman for FPL said the company’s economic-development team spoke with Enterprise Florida about the grant.
That same day, Scott also awarded nearly $4.7 million to Lakeland for the city-owned Lakeland Linder International Airport. The city will spend the money to strengthen a runway and upgrade its landing systems— two projects it has committed to do as part of a contractwith Amazon, which plans to build a $100 million air-cargo operation.
Columbia County, the rural North Florida county where Interstate 75 meets Interstate 10, has received two Job Growth grants: About $3.1 million to build a rail spur and $10.2 million to build a water plant, both of which will serve the “North Florida Mega Industrial Park.” That’s a 2,600-acre project owned by timber company Weyerhaeuser.
And in October, Florida awarded $4 million to the city of Melbourne to build an engine testing enclosure facility at Orlando Melbourne International Airport. Airport officials say several of their tenants requested the facility, which muffles the noise when jets test their engines at full blast. But one company that benefits particularly is airplane manufacturer Embraer, which had been planning to spend its own money building a temporary testing facility if the state didn’t fund it, according to the grant application.
Rich Templin, a lobbyist for Florida AFL-CIO, a federation of labor unions around the state, said the Job Growth grant fund amounts to the same “corporate welfare” that supporters claimed they were eliminating. Templin said many of these companies would likely pay for these projects themselves if Florida didn’t do it. Universal’s parent company, cable and media company Comcast Corp., earned an $11.7 billion profit last year on revenues of $94.5 billion. FPL parent Next Era Energy Inc. earned a roughly $6.6 billion profit on revenues of $16.7 billion. And Weyerhaeuser earned a $750 million profit on sales of $7.5 billion.
Some of the companies are also large campaign contributors. For instance, NBCUniversal, the Comcast media division that includes Universal Orlando, gave $90,000 to the Republican Party of Florida between the time Orange County submitted its Kirkman Road grant application and when Scott approved it. Meanwhile, Florida Power & Light wrote a $25,000 check to a Super PACthat supports Scott about two months after its grant was approved. Both companies spend millions of dollars on Florida elections.
“At the end of the day, this is still public money being used to enhance private enterprise,” Templin said.