Gray Swoope

Florida’s chief economic developer ready for significant growth in life sciences sector

On Feb. 28, Gray Swoope Jr. took over as president and CEO of Enterprise Florida after newly elected Republican Gov. Rick Scott said he wanted to take the state’s public-private business development arm “in a new direction.”

Swoope had served in the same capacity for Republican Gov. Haley Barbour of Mississippi after Hurricane Katrina devastated the lower third of the state in 2005. Since then, Swoope helped Mississippi land a second auto assembly plant and many other significant projects.

Florida Medical News asked Swoope about efforts underway to boost economic development in Florida, particularly the life sciences industry, which just celebrated the announcement of a relocation of IRX Therapeutics Inc., a clinical stage biotechnology company, to St. Petersburg from New York City by the year’s end.

Florida firmly established itself as a hub for life sciences following years of aggressive, coordinated efforts. Could you elaborate on the various incentives for life sciences business and industry locating in the state? 

The Innovation Incentive Fund, established via the 2006 legislative session during Republican Gov. Jeb Bush’s administration, enables Florida to compete effectively for high-value research and development (R&D) and innovation business projects. More specifically, it’s designed for R&D catalyst projects and is available for innovation business projects, described as:

R&D Projects:

• Average wage 130 percent of area/statewide wage (waivers)
• Catalyst for emerging or evolving technology cluster
• Significant higher education collaboration
• Break-even return on investment
• Local one-to-one match (waivers in distressed areas)

Innovation Business Projects:

• Targeted industry
• Average wage 130 percent of area/statewide wage (waivers)
• Create 1,000 jobs (500 in a rural, brownfield or enterprise zone)
• Capital investment of $500M ($250M in distressed areas)
• Local one-to-one match (waivers in distressed areas)

As with the Innovative Incentive Fund, companies, when in their early stages of considering Florida as business locale, weigh important considerations such as workforce availability and infrastructure that will affect their bottom line. When they’re finalizing their decision-making process, incentives often help tip the scales in Florida’s favor.

Our general incentive programs are performance-based in that a qualified company must first create the jobs and/or make the required capital investment before it receives the incentive payment or tax refund.

Our standard programs include:

• Targeted Industries: Qualified Target Industry Tax Refund, Qualified Defense Contractor Tax Refund, Capital Investment Tax Credit, and the High Impact Performance Incentive Grant.
• Workforce Training: Quick Response and Incumbent Worker Training Programs. 
• Infrastructure: Economic Development Transportation Fund.
• Special Opportunities: Rural, Urban, Enterprise Zone, and Brownfield incentives.

The payments are typically spread out over several years and each year, the company must prove it has maintained those jobs and investment before payments are granted.  Many of the incentives also have a matching fund component that requires local governments to invest in the company as well.

What kinds of life sciences related companies have you had notable success in attracting? 

Medical device manufacturers. Most have been attracted to qualities such as infrastructure and the ease of importing and exporting products. 

Building on the momentum that’s already been established, what industries are you targeting and what is the success rate?

We’ve targeted six high-growth industries to focus on for increasing and retaining jobs in Florida: aviation and aerospace, cleantech, financial and professional services, homeland security/defense, information technology and life sciences. Generally, we expect growth in these sectors, which we encourage because of their capability to produce higher-wage jobs. Furthermore, we concentrate on manufacturing, logistics, R&D and headquarters projects, which can fall within these targeted industries. This emphasis will help increase Florida’s competitiveness stance as a global destination for business, capital, talent, innovation, and entrepreneurship.

In fiscal year 2010-11 ending June 30, Enterprise Florida was responsible for facilitating the recruitment and retention of nearly 20,000 jobs. Ernst & Young assessed that our projects added $83.4 million to state and local tax revenues, nearly $2.5 billion to Florida’s gross state product (GSP), and a 0.38 percent increase of the state’s private-sector GSP. The return on the state’s investment was 2.66:1, which is based on the state’s direct funding for Enterprise Florida operations ($10.7 million) and the annualized value of incentives awarded to specific projects ($51.6 million). The total investment was $62.3 million. This means that for every dollar invested, the state will receive $2.66 in state and local taxes.

Concerning legislative advocacy on behalf of the healthcare/medical industry, what are the top issues you’ll be addressing in 2012 to make it even more attractive to do business in Florida?

At this point, we haven’t settled on the priorities that we’ll recommend to the Florida Legislature for its 2012 session. However, we’ll certainly advocate for more flexibility in the use of incentive funding, which would benefit our business recruitment efforts.  Also, in line with manufacturing–which in the healthcare sector includes medical device manufacturing–we’ll support the permanent elimination of a requirement that for a business to receive the state’s Manufacturing Machinery and Equipment Sales Tax Exemption, industrial machinery and equipment is exempt from tax when purchased by an expanding business for the purpose of increasing “productive output” by not less than 10 percent. We believe that the 10 percent mandate hinders the potential for expanding our manufacturing capabilities and the jobs that can result. The Manufacturing Machinery and Equipment Sales Tax Exemption is a 100 percent exemption of the sales and use tax on manufacturing machinery and equipment. 

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