State may try to recover Digital Domain incentive money

I read an article written by a Palm Beach Post Staff Writer indicating that the Florida Department of Economic Opportunity is considering clawbacks for incentives paid to Digitial Domain Media Group. According to the article, Digital Domain was paid a total of $20 million in four installments in 2009, 2010 and 2011 under the Quick Action Closing Fund incentive program.  Unfortunately, the company did not meet the overall requirements for the program and thus, was responsible for returning a portion, if not all of the funds to the State.  Here is a link to the full article http://bit.ly/S6NoU4.

This situation with Digital Domain shouldn't scare businesses from participating in economic incentive programs.  However, I strongly urge businesses to make realistic estimates of what they'll be able to accomplish.  Many businesses overestimate their goals to qualify for a larger award amount.  This is definitely not a sound strategy when pursuing incentives. 

I would say though, that this situation should encourage businesses to hire a firm who fully understands the incentives process and requirements BEFORE they start pursuing these incentives.  If you are considering economic incentives, give us a call.  We have the experience you'll need to make the BEST decisions as it relates to your incentives.

Teleseminar: What You Wish You Knew About Your QTI Project

Last week I presented a FREE teleseminar to Florida businesses to help with their QTI incentive projects.  This FREE teleseminar was developed after hearing the concerns of businesses that there is no guidance for the QTI program after a project is awarded.  These businesses faced the challenge of not knowing enough to successfully track and report their QTI goals to the State.

In this 1-hour teleseminar, we covered the following:

- Four major reasons why businesses do not get their FULL scheduled payment.

-  General requirements of the QTI program. 

- Review of the 60+ page QTI agreement.  The agreement terms were broken down into simple day-to-day language that the "ordinary" person would understand. 

- Why it is important to track incentive goals each year to ensure that the company WILL meet the requirements to receive FULL payments each year.

The next teleseminar is scheduled for the month of August.  Stay tuned for more information on dates and times.

If you would like to find out more about this and other services offered by MarLynn Consulting, give us a call at (850) 727-0293.  We look forward to partnering with you on ALL of your incentive project needs.



Margo Thomas
MarLynn Consulting Group, LLC
2012 Start-Up Business of the Year

Margo Thomas, owner of MarLynn Consulting is an expert in economic incentive grants compliance management.  For nine years, she assisted the State of Florida in analyzing incentive data to determine if a business met the requirements to qualify for its scheduled payments.  Today, she helps businesses in incentive programs like Florida's QTI track and report their project goals to the State. She provides guidance and training to businesses participating in economic development incentives to ensure they receive ALL of the money awarded under their incentive project agreement.

Darden gets approval for its first QTI payment

Congratulations Darden!!

Thanks to the Economic Recovery Extension (ERE), Darden was able to extend its QTI job requirements until the economy picked up.  As a result of the extension, Darden's QTI project agreement was not terminated.  The State allowed them to extend the job creation portion of the agreement by two years.  Today, Darden's 2011 QTI claim hass been approved for a $210,187 QTI refund payment.  Had the State not granted the ERE, Darden may not have had the incentive to begin hiring again.  With Florida's unemployment still at a high rate, it is awesome news when an existing Florida business is given an opportunity to reduce some of its costs.  If you think of it, this payment should encourage Darden to begin hiring its next phase of employees.

Click on the link below to see the full article in the Orlando Sentinel.
http://articles.orlandosentinel.com/2012-04-05/business/os-darden-new-jobs-20120405_1_darden-restaurants-tax-incentives-olive-garden

Ringling Bros. Circus Will Remain in Manatee County

Feld Entertainment announced that it is moving its production headquarters from the City of Palmetto to the City of Ellenton.  According to the article in the Herald Tribune (http://www.heraldtribune.com/article/20120130/article/120139968), the company is relocating to accommodate growth. With this move, Feld Entertainment will be able to retain 148 current jobs and create an additional 235 new jobs in Manatee County.  

Feld Entertainment will get some assistance from economic incentives like the QTI and Quick Action Closing Fund programs.

QTI Compliance Reporting Process

Over the years, businesses have inquired about the economic incentive compliance process.  In this blog post, I wanted to provide you with a list of important dates and timelines associated with the Claims or Payment Process of Florida's economic incentive programs, like QTI.

Important Dates/Timelines	QTI Claim Process
October / November	Business Receives Claim Application from the State’s Agent - It is usually at this time that businesses are alerted about their incentive project.
December 31st	QTI Jobs and Wage Implementation date - Business has to meet its project goals by this date.
January 31st	Claim Application due - Businesses are required to submit their claim application to Sharpton, Brunson & Company (agent for Department of Economic Opportunity) for review and approval of the scheduled payment. This is the most crucial part of the economic incentive compliance process.  In order to receive the scheduled payment, a business must prove to the State that the obligations set forth in its incentive agreement have been met.  The claim application must be supported by accurate data and reported in a format acceptable by the State. Business have an opportunity to request a one-time 30 day extension.
March 1st	QTI Claim Application due – if an extension was granted, a business has until this date to submit its claim application and ALL supporting documents to the State's agent for processing.
January - June	Sharpton, Brunson & Company (SBC) verifies that the compliance goals have been achieved.  Once SBC verifies that the business is eligible to receive its scheduled payment, a recommendation is prepared and submitted to the State for approval/denial of the payment.
July 1st	July 1st marks the beginning of the State's 2012/2013 fiscal year.  Funds for economic incentive programs, like Brownfield and QTI are appropriated by the State to begin processing payments.  Once The Department of Economic Opportunity (DEO) receives the local match payments from local governments, they begin the payment approval process.  When a business' claim application and supporting documents are approved, the business is notified of either an approval or denial of its scheduled payment.  The payment is made within 21 business days if there are no disputes.

Remember that this process is similar for most claim-based economic development incentive programs as well.  So, if you are a participant of a Quick Action Closing Fund Program or the Brownfield Redevelopment and Qualified Defense and Space Contractor Tax Refund Programs, you will follow this process.

In order for your claim process to be as efficient as possible, you must be proactive with your project.  Do not wait until the payment request is due to begin analyzing your project goals.  To find out how we can help you maximize your payment, give me a call (850-727-0293) or email me at mt@marlynnconsulting.com.

Governor Rick Scott's Attempt at Job Creation is Graded

An article in the Orlando Sentinel titled, "Gov. Rick Scott's jobs agency gives itself good grades" (see full article - http://thesent.nl/vF3Pqg), Enterprise Florida evaluates the number of jobs created by businesses participating in economic incentive programs, like QTI, Closing Fund and Brownfield Redevelopment.  Florida's job creation agency noted that active participants in the QTI program during the fiscal year ended June 30, 2011, created 10 percent more jobs than their contracts required.

Likewise, The state's Department of Economic Opportunity also confirmed that 93 businesses with completed QTI agreements created 56 percent more jobs than they were obligated to create.

Now you may be curious as to what these numbers mean to Florida taxpayers?  These numbers mean that for the most part, many businesses who pursue the State of Florida for relocation or expansion opportunities have met the requirements of their economic incentive agreements.  Unfortunately, other businesses were unable to meet their job commitments due to the downturn of the economy. 

It is the hope of all Economic Development Professionals that 2012 brings a significant upswing in the economy to allow these businesses to recover.  This would give Florida business owners more confidence, and would encourage their ability to grow their workforce - thus creating quality Florida jobs.

Florida gets a "C" grade for Following the Dollars and Turning Them Into jobs

I read a Post On Politics which  hightlighted the results of a report by Good Jobs First (a non-partisan, nonprofit based in Washington, D.C.).  According to the report, Florida's ability to trackand creating jobs which bring decent wages meets the national average. Click on link for details http://bit.ly/vjMGQj. 

Have you taken advantage of any of Florida's incentive programs, like QTI, Closing Fund or Workforce Training Grants? What has been your experience?

Get Your Incentive Reports Right The First Time

The other day, I noticed a gentleman shooting arrows at a target. It was amazing to see that he was able to hit his mark, even from a far distance.

His ability to successfully hit his target probably came from the following:

·         Learning from others’ experiences
·         Determining which type of bow was best
·         Implementing the tools and skills he learned

I immediately thought about economic incentive programs like QTI. I can appreciate that there are a required targets a business must hit before it can qualify for its annual QTI payments. Unfortunately, many businesses miss their QTI target goals because their aim is off. 

Typically, a business being awarded an economic incentive award is celebrated. This is for a good reason. The community is excited that a business has made a decision to grow here. However, it is imperative that the business owners understand that the business must hit all of its incentive goals in order to receive the scheduled award payments.

Just like someone participating in the sport of archery for the first time, a business must learn the rules of the game.

To successfully hit a QTI target on the first try, the following must be done:

• Learn from others who’ve had experience with the QTI program
• Determine why one method of documenting QTI goals is better than another
• Master the skills needed to track and report QTI project results
• Implement the tools and skills learned to accurately prove to the State that the QTI goals have been met

Knowing ahead of time what is required eliminates the “unknown”. When it comes to any economic incentive project, a business must ensure that its target goals are in sight at all times. For this reason, I usually recommend that my clients start aiming at their QTI target goals at the beginning of the year, rather than waiting until the report is due to determine whether they meet their goals. By then, it may be TOO LATE.

Is Lack of Communication Costing You a Full QTI Refund?

While having a discussion about economic development incentives, someone asked “what is one of the BIGGEST issues that cause a breakdown in the incentives process? After thinking about it for a minute, I recognized that lack of communication may be one of the biggest factors that negatively affects the incentives process.

My reasoning behind this statement is based on past experiences working with economic incentive projects like QTI (Qualified Target Industry Tax Refund Program). Over the years, I've noticed that after a business' management is approved for an incentive project, it  celebrates and assigns a staff to manage the project. Unfortunately, since the project administrator has not been involved earlier, he/she may not be knowledgeable enough to successfully manage the project.

Fast forward one year later and its time to qualify for the incentive payment.  After receiving the notification, questions like, “What is this project about?”; or “How did the State come up with our commitment?” are asked.  If the project administrator was involved from the beginning, he/she would know about the project and itscommitments. 

Failure to communicate about an incentive project prior to the reporting deadline may be detrimental.  If you do not track your compliance goals, you may learn too late that you do not qualify to receive your incentive payment. Alternatively, you may find that you qualify for your incentive payment, but the stress of reporting at the last minute may prove to be an overwhelming task.

What Should Happen: Management is responsible for providing enough information to allow the project administrator to successfully manage the incentive project. The project administrator should then set up a system to periodically monitor compliance goals to keep track of the commitments. When the reporting deadline approaches, the project manager would be in a better position to effectively prove that the company achieved its commitments to qualify for the incentive payment.

Of course, if this process seems to be too much for the project administrator, I'd suggest communicating the need to hire an Incentives Consultant to assist with managing the project early on.

As you can see, communication does play a significant role in determining the success or failure of an incentive project. I recently worked with a client who was overwhelmed with the QTI reporting process. She was unsure of what was required, but her manager insisted that she figure it out on her own. Eventually, I was able to help her through the process. As a result, her company was able to secure the full refund.

If you would like to have someone hold your hand through your economic incentives reporting process, give us a call at (850) 727-0293.