Placement: Second Reading of Ordinances
Action Requested: Motion / Vote
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Ordinance 24-25, Adoption of an Ordinance Approving the Economic Development Ad Valorem Tax Exemption for Cheney Brothers, Inc.
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Submitted By: Elijah Wooten, Economic Development Administrator.
Strategic Plan Link: The City's Goal of a diverse local economy and employment opportunities.
Executive Summary (General Business): Cheney Bros., Inc. (“Cheney Bros.”) completed the construction of their 365,000 square foot distribution facility and received their Certificate of Occupancy in November 2023. The St. Lucie County Property Appraiser deemed Cheney Bros. distribution facility as significantly complete in December 2023. The company submitted their Economic Development Ad Valorem Tax Exemption application to the City, County, and the Property Appraiser’s Office in March 2024. The Property Appraiser’s Office prepared a financial analysis report and submitted it to the City for review pursuant to section 115.06(2) of the City’s Economic Development Ad Valorem Tax Exemption Regulations.
Presentation Information: A brief presentation will be provided by Elijah Wooten, Economic Development Administrator.
Staff Recommendation: Move that the Council adopts an ordinance approving the Economic Development Ad Valorem Tax Exemption for Cheney Bros. pursuant to sections 115.04(3) of the City’s Code.
Alternate Recommendations:
1. Move that the Council amend the recommendation and provide staff direction.
2. Move that the Council not approve adopting an ordinance for Cheney Bros. Economic Development Ad Valorem Tax Exemption.
Background: In June 2021, the City Council approved incentives to attract the expansion of Cheney Bros. distribution facility to the City of Port St. Lucie. The incentive package included impact fee mitigation, economic development ad valorem tax exemption, expedited site plan review, and permitting. Cheney Bros. selected Port St. Lucie as the location for their distribution facility. The expansion included the construction of a 365,000 square foot distribution facility and the creation of two hundred seventy-five (275) new jobs paying an average wage of $63,000 plus benefits. Cheney Bros. completed the construction of the 365,000 square foot distribution facility and received their Certificate of Occupancy in December 2023. The St. Lucie County Property Appraiser deemed Cheney Bros. distribution facility as significantly complete in December 2023. The company submitted their Economic Development Ad Valorem Tax Exemption application to the City, County, and the Property Appraiser’s Office in March 2024. The Property Appraiser’s Office prepared a financial analysis report which included the information required by section 115.06(2) of the Code:
1. Total revenue to the City for the current fiscal year from ad valorem tax sources.
2. Revenue lost to the City for the current fiscal year by virtue of exemptions previously granted.
3. Estimate of the revenue which would be lost to the City during the current fiscal year if the exemption applied for were granted and the property for which exemption is requested would otherwise have been subject to taxation.
4. A determination that the business meets the definition of a new or expanding business as defined in the City’s Economic Development Ad Valorem Tax Exemption Regulations.
Issues/Analysis: Cheney Bros. is responsible for taxes assessed on the property, personal property, and improvements to real property. The City’s Financial Management Department has reviewed and approved the Property Appraiser’s Financial Report. Consequently, staff recommends approval of the requested ad valorem tax exemption, with the condition that documentation evidencing entitlement is submitted to the City on an annual basis. The ad valorem tax exemption will be based on a sliding scale with 100% tax exemption for the first five (5) years. The amount of the exemption will decrease to 90% in year six (6); 80% in year seven (7); 60% in year eight (8); 40% in year nine (9); and 20% in year ten (10). The ad valorem tax exemption expires in 2034.
Financial Information: The St. Lucie County Property Appraiser’s Office prepared a Financial Analysis Report. The total revenue available to Port St. Lucie for the current fiscal year from ad valorem taxes is $258,924,008.10. The revenue lost to the City in the current fiscal year due to prior ad valorem tax exemptions granted is $620,114.64. The estimate of the revenue lost during the current fiscal year to Port St. Lucie if the exemption were granted and the property was subject to taxation is $439,533.80. The estimate of the taxable value lost if the ad valorem exemption is granted for improvements to real property is $51,383,200 and personal property is $9,776,136. The Economic Development Ad Valorem Tax Exemption expires 2034. The Financial Management Department has reviewed and approved the Property Appraiser’s Financial Analysis Report for Cheney Bros. ad valorem tax exemption.
Special Consideration: The cut-off date for the TRIM notice by the Property Appraiser’s Office is July 2024. However, the ordinance can be provided no later than mid-September, which is the end of the TRIM period. Once the ordinance is approved, the Property Appraiser’s Office can amend the TRIM notice for Cheney Bros.
Location of Project: Cheney Brothers, 1 Cheney Express Way Port St. Lucie, FL 34987.
Attachments:
1. Proposed ordinance.
2. St. Lucie County Property Appraiser’s Economic Development Ad Valorem Tax Exemption Financial Analysis Report for Cheney Bros.
3. Presentation.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 24113-09.
Legal Sufficiency Review:
Reviewed by Carly Fabien, Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, Interim City Attorney.