Commission Approves Incentive for KeHE Distributors

An economic incentive package approved by St. Johns County Commissioners will keep 345 jobs in the county and add an additional 100 positions.

Deputy County Administrator Joy Andrews said under the county’s economic development incentive program KeHE will receive a 2-year reimbursement of ad valorum taxes on capital improvements and a 50% reduction on impact fees.

“They are also eligible for an expedited permitting process” as well as a reimbursement for two years of personal property tax, she said. The total incentive comes to $2.4 million, including $1 million for traffic control measures at the intersection of State Road 207and Deerpark Boulevard. The organic food distributor is moving into a new 530,000-square foot facility.

County Economist David Kiernan said the project will have an economic impact of $40.5 million annually in wages, salaries and benefits and add $61.4 million in gross county product annually.

“Right now they have 345 jobs we want to keep in the county,” Kiernan said.

Commissioner Krista Joseph said while she is happy the incentive is being offered to “companies we really like in St. Johns County,” but questioned the amount of the tax break in the package.

“I just feel like they would have stayed here anyway,” she said.

Andrews said St. Johns County was not the only location the company considered for the new facility.

“KeHE considered various locations, including Duval County and Flagler County,” she said.

Commissioner Henry Dean said there is a “larger context” to those questioning the county’s economic development incentive program, citing the disparity between tax revenue from residential properties and commercial sites.

“When I first came on the commission our ad valorum tax revenue was 90% from residential,” he said, adding the state average was 65%.

“We were relying predominantly on residential and we as a commission took the position that we needed to recruit businesses, needed to promote economic activity and the other counties in the state are doing the same thing,” he said. “If we don’t compete as other counties do, we are going to lose.”

Joseph also expressed concerns that the promised new jobs would not come from St. Johns residents.

“I’m not against this, I just want to make sure we are not being taken advantage of,” she said.

Commissioner Sarah Arnold said she spoke with KeHE representatives about the project and the incentive package.

“I have been given assurances from KeHE they will be hiring from within the community,” she said.

Commissioners unanimously approved the incentive package and directed staff to draft a formal economic development agreement with KeHE for approval at a future County Commission meeting.