The Palm Beach County Commission approved the preliminary reading of ordinances Tuesday that will give aircraft engine manufacturer Pratt & Whitney incentives to attract more jobs to its facility on the Beeline Highway. Final reading of the ordinances is set for Tuesday, May 16.
Both ordinances set ad valorem tax exemptions and cash incentives to encourage economic development for Pratt & Whitney, a division of United Technologies, which was once a major economic engine for the county. The company employed more than 10,000 people locally before most of the operation left Palm Beach County in 2000.
The first ordinance would establish an exemption from certain ad valorem taxation for a specified time on the condition that it provide a return in jobs for the county.
The ordinance finalizes an agreement made in March 2013, when the county approved an agreement with Pratt & Whitney providing an ad valorem tax exemption of up to $700,000 over a seven-year period, as well as an economic development cash incentive of $300,000 over a four-year period.
The ad valorem tax exemption was for tangible personal property improvements undertaken in the company’s renovation of a 90,000-square-foot facility and construction of a 100,000-square-foot testing facility. The business involved the establishment of the Florida Engine Delivery Center, a new Pratt & Whitney business unit.
The exemption, together with the incentive payment, serves as the local financial support for the State of Florida’s commitment to the company of $4 million, of which $3 million is from state financing and $1 million is from the county.
The agreement requires Pratt & Whitney to make a minimum of $63 million in cash investments, create 230 new jobs over a 10-year period at an annual average wage of $81,110, and maintain those jobs for five years.
The project is estimated to have a $442 million economic impact over a 10-year period.
The second ordinance is similar in format.
In April, the county approved an agreement with Pratt & Whitney providing an ad valorem tax exemption of up to $650,000 over a six-year period for real property and tangible personal property improvements undertaken in the company’s construction and renovation of a 35,000-square-foot facility that will facilitate the company’s redial Auxiliary Power Unit (APU), moved from San Diego.
APU is a gas turbine engine used to produce energy for applications such as providing electricity, compressed air and/or shaft power to start main engines, air conditioning, electric power and other aircraft systems. They are manufactured for both commercial and military customers.
The exemption, together with the incentive payment, serves as the financial support for the state’s commitment of $2.3 million, of which $1.65 million is from the state and $650,000 is from the county.
The second agreement requires Pratt & Whitney to make a minimum $25 million capital investment, create 110 new jobs over a three-year period at an annual average wage of $84,892 and maintain those jobs for five years. The project is estimated to have a $183 million economic impact over a five-year period.
Both ordinances were presented as a requirement by state statute, and both motions for approval carried unanimously without discussion by the commissioners.