City boosts incentives for corporate headquarters project
Major construction effort will bring jobs corporate headquarters project
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Bones Brands, LLC will receive an increased incentive package for their national headquarters facility in the city.
The total incentive approved by Cape Coral City Council Wednesday increased from $2,040,050 to $2,728,652.
Bones Coffee Company was founded in 2016 in Cape Coral. The company is now consolidating its manufacturing, distribution, and administrative operations at 2621 SW Pine Island Road.
The original estimate of $25.8 million for the project has increased to $27,296,521. The additional cost includes expansion to the square footage for administrative and executive offices.
The total investment includes real estate acquisition, site development, construction costs, interior buildout, equipment and related costs, according to agenda documents.
Job creation was among the benefits to the city cited.
"This facility comes with a purpose," City Manager Michael Ilczyszyn said. "This fills multiple buckets for us as an economic bucket."
Economic Development Manager Sharon Woodberry said 57% of the city's workforce leaves Cape Coral for their jobs every day.
"We have an opportunity to retain the existing jobs here and keep the 75 employees here and bring an additional 55 jobs. The wage premium is 40% over the average wage. The average wage is $28.16 an hour. The average Bones Coffee wage is $39.46 an hour. We are wanting to make it work in terms of this project in particular," Woodberry said. "This investment is creating a headquarters for operations of expanding nationally. It makes Cape Coral a national name and hub for a company that we believe is going to continue to grow and have a significant presence."
Ilczyszyn said when city staff looks at economic development incentives, they look at each incentive package to try to hit particular targets and goals for the organization and private sector.
"What we try to do is understand what is happening with that business and develop a plan of attack with success of Cape Coral against whoever we are competing with," he said, adding that they recently lost a business that moved to Fort Myers. "I was not going to let it happen again to Bones."
Many council members shared their approval of having a national headquarters in Cape Coral that will further put the city on the map.
The original incentive package that was approved in August included a site improvement reimbursement grant of $562,500, ad valorem tax reimbursement up to $387,550 over 10 years, direct equipment funding grant of $1 million, lease buyout funding grant of $90,000 and impact fee deferral up to $175,000 deferred for two years. The total value was $2,040,050.
Mayor John Gunter, who cast the lone dissenting vote, said at $25.8 million the city made an investment of 7.91% as a stakeholder for the project.
"When it came back the project increased to a little over $27.3 million, which took the stakeholder investment from 7.91% to 10%.
"If we stick to the 7.91% formula, that we did originally, that would only increase their ask by $119,184. For me, if we are going to approve any modification, we still stick with the 7.91% formula," Gunter said.
When he looks at incentives and votes to approve them, he said he is looking at what types of jobs the project will bring to the city.
"That wasn't applied here. Seventy-fix existing jobs, bringing 55 additional positions. Looking back on this now, I would have liked to see a breakdown for job creation," Gunter said.
Councilmember Bill Steinke asked why the percentage rose from 7.91% to 10%.
"The 10% comes from an internal discussion that happened between the city manager and I. We were presented with the cost increase. They started to finalize some of the numbers. A significant part of the increase was because they decided to expand administrative office space from 6,000 square feet to 14,000 square feet," Woodberry said of the $1.8 million in construction cost.
She said they made a compelling case of construction of a new building, compared to an existing building in Fort Myers.
"Ten percent is where we like to be at if we are going with different types of programs," Ilczyszyn said.
Steinke said the city is not gaining 55 jobs, the city is getting 130 jobs as they are retaining the 75 original jobs.