Trees are coming down in Nassau County at a furious pace. The state Department of Transportation is pushing them over along S.R. 200/A1A to make way for an expanded commercial corridor stretching from I-95 to about one mile west of the Shave Bridge, which takes travelers over the Amelia River and sets them down on Amelia Island, a community known for pretty beaches, high-end resorts and an annual festival to celebrate all things shrimp.
Bigger is Rayonier’s effort plan to clear 24,000 acres of timberland and add 46,000 new residents to the eastern half of the county within the East Nassau Community Planning Area (ENCPA). This is a long-range development project, first planned in 2007, that will include a mix of housing, retail and industrial facilities. Through its real estate services subsidiary Raydient Places + Properties – and before that TerraPointe – Rayonier, the county’s largest land owner, has ambitious plans over the next 50 or so years to develop the huge pine forest into a thriving community. Regional malls, big-box retailers, hotels, motels, offices and research parks, trails, conservation networks, parks, transit stations and light industrial facilities are planned.
With bulldozers on the ground and significant building plans on the horizon, it may be surprising, then, to learn that Rayonier executives joined a citizens’ group projecting a financial meltdown for Nassau County starting next year. Since September, Citizens for a Better Nassau County has been making a case for a looming fiscal crisis. According to its website citizensforabetternassau.com, the situation is dire. “If left unaddressed, this crisis will impact every county resident and property owner and will inhibit the county’s ability to pursue economic development opportunities that are vital to restoring the economic sustainability of our community.”
The timing of this doom-and-gloom message is curious because the Nassau County Economic Development Board (NCEDB) is making a significant push for development (with $150,000 in annual support from taxpayers) and is having success. The NCEDB, whose Executive Director Laura DiBella is a commercial real estate agent (but can’t practice, according to her contract agreement), has pitched the county commission for about $12 million in tax incentives to attract a manufacturing operation with a $170 million capital investment and 220 jobs at an average salary of $43,000 to Rayonier’s Crawford Diamond industrial site near Callahan on the county’s west side. (The proposal is being considered). And on Tuesday, April 19, the county commission heard a request from the NCEDB for an approximate $4.5 million tax incentive for a joint venture, between Rayonier Advanced Materials and the Norwegian company Borregaard, for LignoTech Florida to open a six-acre manufacturing facility in Fernandina Beach, with 50 jobs at an average annual wage of $54,000 each. Company representatives have said they are planning to make a $110-$130 million investment in a new facility to process lignin, a wood product, along the Amelia River, but maintain that they have not fully committed to the project set for construction in the second quarter of 2016 (which began April 1). The county board and the city of Fernandina Beach have already agreed to split a $90,000 incentive package.
Despite the attractive incentives being offered, and Rayonier’s ambitious commitment to growth in Nassau County, over the last seven months, Citizens has spread the message of financial doom on social media, in newspapers and videos, including on-camera interviews with the Superintendent of Schools Dr. John Ruis and Property Appraiser Michael Hickox, who maintains that Nassau County shouldn’t be a bedroom community for Jacksonville. It enlisted business leaders, including those from Rayonier, Rayonier Advanced Materials, and the NCEDB chair, who runs a company that prepares land for development and is working on the new roadway into the Wildlight District, to join the group as Coalition Members. Shopping-center developer and Jacksonville Landing owner Sleiman Enterprises, which owns several buildings and continues adding more to the Villages of Amelia shopping complex in Yulee, one of the Nassau County’s largest retail developments, is also on the list.
NCEDB’s DiBella said she is not taking sides.
“Acrimony doesn’t help,” DiBella said. “I’d like to see an atmosphere of cooperation.”
What Citizens believes the county should do about impending doom was not made clear until April 12, when the organization held a public meeting and announced that the way to recovery is by fostering a “diversified tax base,” with an emphasis on commercial and industrial development. Citizens for a Better Nassau County said in a whitepaper presented at the meeting that an overabundance of residential development is draining county finances. “Residential growth – and we’ve experienced a lot of it in recent decades – is what clogs our roads and schools and consumes government services,” says the report.
It is true that people want a smooth route to get where they want to go, a good education for the kids and police and fire protection. But the group maintains that residential property taxes, protected from wide swings in the real estate market by Florida’s Save Our Home limits — up to three percent or the Consumer Price Index (CPI) for homestead properties and 10 percent for non-homestead properties — are not enough to cover the bills. And now, Nassau County’s budget troubles are so severe, they report, that staving off financial insolvency requires a diversified tax base with “higher value industrial and commercial development.”
The organization put a lot of the blame on the Great Recession. (That must have been a relief to the three county commissioners in the audience: Walter “Jr.” Boatright, Pat Edwards and Danny Leeper all voted for a one-mill tax hike in 2014, the first increase in seven years.) And it implores people to look at the numbers. Between 2008 and 2013, local real estate values declined from roughly $8 billion to $6 billion, and tax collections dropped by approximately $13 million annually, according to organizers. Further, they say, the county compensated for budget shortfalls by dipping into reserves, using the one-cent sales tax (set aside for capital improvements until the rules were changed), cutting jobs, and ignoring maintenance for roads, buildings, parks and vehicles. Citizens for a Better Nassau County says that this approach no longer works because reserves have been depleted.
Have they? According to the county budget office, as of Tuesday, April 19, the county had $1.7 million in reserves for contingencies, $3.6 million in capital reserves and $10.2 million in a minimum fund balance to pay for operations in times of trouble, such as a destructive storm or manmade disaster.
So, while county residents can breathe a sigh of relief this year because the bills will be paid, organizers say that next year begins the start of serious financial trouble that could stretch through 2019.
Citizens further says that people do not have to take their word for it, that a “highly respected” financial consulting firm, Burton & Associates, agrees with this position and has presented findings of its comprehensive audit to the County Commission. “The audit painted an undeniable picture of a looming fiscal crisis that could lead to the insolvency of the county, downgrades of the county’s bond rating and the inability of the county to meet its financial obligations,” according to the report.
“They made it sound like the sky is falling,” says Trevis Williams, a 42-year-old mother and teacher from Ratliff on the county’s far west side, who attended the meeting. “I don’t know if it is, but I have a question. Was that really a citizens meeting?”
Williams says she was puzzled by the audience, which seemed mostly made up of government officials, school board members and administrators, and business leaders, including executives from Rayonier and Rayonier Advanced Materials (someone posting on Facebook said that so many Rayonier executives were in attendance that it smelled like a pine forest). Polished presentations and professional handouts were also part of the meeting, including a five-page whitepaper on the county’s financial position and colorful copies of the PowerPoint presentations delivered by Shanea Jones, the assistant county manager and director of the Office of Management & Budget, and Brian Martin, a vice president of Robert Charles Lesser & Company, a real estate consultancy based in Orlando. Three days after the event, Williams wondered about a behind-the-scenes effort.
“Who does that?” said Williams. “Full color handouts and a business analyst? A business analyst has never spoken at any citizens meeting I’ve been to.”
Citizens for a Better Nassau County is not a typical group of concerned local residents gathering for an ad hoc discussion on the county’s finances. The group is registered with the state as a 501(c)(4) nonprofit organization, which means it can take donations without having to report how much it received or identify who provided the money. The organization maintains that its focus is education and that it will not support or endorse any candidates for elected office.
Citizens is also working with a professional and politically connected Tallahassee marketing firm to handle messaging. Sarah Bascom of Bascom Communications & Consultants counts State Senator Aaron Bean (R-Fernandina Beach) as a former client. While no one is talking numbers, it’s not likely that Bascom, a former lobbyist who attended the public meeting but was not introduced, is giving away her services for free. One coalition member told Folio Weekly Magazine he contributed $1,000 to the organization. Member Phil Griffin of Amelia Coastal Realty said he did not write a check, but in a phone interview Monday, April 18, Griffin said, “I believe in the mission and doing what I can to get the word out.”
In an interview earlier this year, Bascom said that there is no hidden agenda and that her client cares deeply about the future of Nassau County. She said that they tear up when they talk about how badly they want the county to find firmer financial footing so that their grandchildren can have a prosperous future here. “They literally have tears in their eyes,” said Bascom.
Those conversations sparked imagery for the organization’s website, she said. The homepage features a photo of smiles-wide children, perhaps eight-to-10 years old, jumping into a stream or river surrounded by lush foliage. (It’s worth noting that in Northeast Florida, that kind of waterway would likely have water moccasins and alligators.)
What sets Citizens further apart from most community associations is that its registered agent is Tallahassee builder Samuel Elliott, who’s also part of a political committee known as the Florida Sunshine Alliance, whose purpose is to support statewide elections, including legislative and local races, according to paperwork filed with the state.
Two Nassau County residents make up the organization’s board. They are Robert Spaeth, a retired business executive from Amelia Island, who serves on the Nassau County Economic Board’s executive committee, and Jimmy L. Higginbotham, a former county commissioner who now serves on the Planning & Zoning Board. Higginbotham lists himself as retired but continues to work in real estate, specializing in mobile home permitting. The two men served on a mobility fee task force that met monthly for two years before wrapping up work in 2014.
Spaeth, who served as the meeting’s host, said that residents need to embrace industrial development or face higher taxes. “And no one wants that,” he said. Higginbotham watched the presentations from a seat in the audience.
In an interview April 19, after the economic development board’s request for a tax grant to lure a manufacturing facility to Fernandina Beach, Spaeth said that incentives are a “no-brainer.” Spaeth said that he has held individual meetings with commissioners over the last several months about diversifying the tax base. “Most of them get it,” said Spaeth. “Some still have their heads in the sand.”
That may have been a reference to Commissioner Steve Kelley, a fiscal conservative who for some 30 years ran a pest control business in Fernandina Beach until retiring last year, and who has at previous meetings been critical of tax incentives and questioned the need for “corporate welfare.” Kelley voted “no” earlier this year, along with Commissioner George Spicer, on the county’s $45,000 share of tax incentive for LignoTech Florida.
During her presentation at the citizens meeting, Budget Director Jones discussed the county’s problems related to dwindling reserves and underinvestment in depreciating assets, while real estate analyst Martin discussed the fiscal sustainability of Nassau as compared to other counties based on population (none of which were coastal tourist destinations).
John Stack, who has served on the Planning & Zoning board for 15 years, and is running for county commissioner in District 5, questioned the organization’s tactics to bypass local government. “Why not attend a board meeting and tell commissioners your concerns about fiscal doom?” said Stack, who is running as an Independent. “I think the people who moved here came to get away from heavy industry and six-lane highways.” As for tax incentives, Stack said he would like to see calculations for a return on investment.
Not everyone believes the county is heading for a fiscal cliff. County Clerk of the Circuit Court & Comptroller John Crawford maintains that the county is in tip-top financial health. And he’s not the only one who thinks so. In October, Fitch Ratings affirmed an A+ rating for the county’s non ad valorem revenue bonds and an AA- rating for implied general obligation bonds. While the agency cautioned against long-term funding efforts, Fitch said the ratings outlook is “stable.”
In an interview earlier this month, Crawford said that there’s much positive news to report. He said that the county doesn’t have a lot of debt, has a pension plan that’s nearly 88 percent funded (the city of Fernandina’s pension is 64 percent funded for city workers and 67 percent funded for police and firefighters, according to the city controller), has $10 million in the bank for emergencies and is paying cash for the new sheriff’s administration building (budgeted at $10 million) and the expansion of the emergency operations centers to accommodate the 9-1-1 dispatch center (budgeted at $4.4 million). Crawford said that assessed property values are up and so are the county’s investment accounts.
“Local government has been smart about the budget,” said Crawford. “Hopefully that will continue.”
Joe Zimmerman, who left his job as a legislative aide for State Representative Janet Adkins to run for the District 5 commission seat, agreed. “I believe Nassau County is on financially solid ground,” said Zimmerman. “This is a great place to open a business because we have low taxes, good people, great tourism and open space.”
Rayonier’s Public Affairs Director Mike Bell said in a phone interview earlier this month that the company, a real estate investment trust, did not believe that the county is heading for financial disaster.
“Why are we participating? Look, we wanted people to be educated,” said Bell.
They must. The first phase of development, known as the East Nassau Employment Center (and for marketing, the Wildlight District), includes a K-5 public elementary school to be called Wildlight Elementary School (Rayonier donated 27 acres for the school as a catalyst to kick-start development). The school is scheduled to open in August 2017, to be located about one mile north of A1A, across from an intersection with William Burgess Boulevard. Nearby, Rayonier is planning to build a 55,000-square-foot headquarters, according to plans filed with the county. A YMCA building is also in discussion.
Rayonier’s plans also call for a conservation habitat network, regional centers, transit, village centers, residential neighborhoods and resort development. When all is said and done, the ENCPA will have 24,000 residential units and 11 million square feet of non-residential-use spaces, including retail, office and industrial. The development is expected to generate 379,721 daily traffic trips, according to the plan.
“What’s going on out there is essentially a new city,” said County Manager Ted Selby.
Rayonier said in a 2015 fourth-quarter statement that the ENCPA development was moving forward with momentum.
“In our real estate segment, we expect continued steady demand for rural properties. We also anticipate strengthening interest in selected development properties, particularly as we begin to sell parcels within our East Nassau mixed-use development project, which we anticipate in the second half of 2016. We are also planning on a higher level of investment in 2016 as we ramp up our development efforts in this area.”
The company did not mention the county’s fiscal cliff in its report.
FWM recently asked C.A. McDonald, general manager of Rayonier’s Fernandina Beach plant, if he is convinced the county is headed for a fiscal cliff.
“Absolutely,” said McDonald. “The county has one capital improvement project planned for 2018. They don’t have a five-year plan. They should. As a business, we have to have one.”
McDonald said he has told investors from Borregaard about the county’s precarious position.
“They’re looking forward to coming here and helping out with new investment and 50 jobs,” said McDonald.
Asked how it is possible to sell Borregaard on Nassau County while saying there’s financial trouble ahead, McDonald demurred.
“Fortunately, we are not in a crisis
right now,” he said. “It’s a warning of what could happen.”
Justin Taylor, who works for the Property Appraiser as the public information officer, is also a Republican candidate for the commission in District 5. He attended the April 12 meeting and has supported the effort by Citizens for a Better Nassau County; coalition members have supported him in return. In March, Taylor received $500 from Rayonier executive Dan Camp, $250 each from Rayonier executive Mike Bell and his wife Melissa Bell, $500 from American General Properties in Jacksonville, a Sleiman company, and $500 from Tim-Prep, a timber company in Jacksonville owned by Michael Stokes, the NCEDB board chair.
As for Trevis Williams, the mother of four who turned out for the public meeting? She had hoped to discuss concerns in her neighborhood, such as a nearby market to buy fresh groceries.
“I’m looking for a Publix to open near my house. Do you know who I would ask about that?” implored Williams.