An economic-development advisory board is recommended that the Brevard County Commission provide a 100% property tax break to gun-maker Dark Storm Industries LLC for 10 years as an incentive for the company to move its headquarters and manufacturing from Oakdale, New York, to Titusville.
The Economic Development Commission of Florida’s Space Coast’s Ad Valorem Tax Abatement Council voted 10-0 to make that recommendation, after hearing that Titusville is in an intense competitive battle with a community in the state’s Panhandle region for the project.
The EDC estimates that Dark Storm would save $13,197 a year, or $131,970 over a 10-year period, through the tax break, which must be approved by the Brevard County Commission.
The County Commission is scheduled to vote on the proposal on April 20.
Dark Storm is proposing building a 25,000-square-foot complex on a county-owned vacant site off State Road 407 within the Spaceport Commerce Park in south Titusville. The company said it would make a $3.2 million capital investment and add 50 jobs by the end of 2025 — jobs paying an average of $50,000 a year.
The company would have to meet or exceed the job creation and capital investment targets to qualify for the property tax break.
The property tax break is on top of incentives totaling $862,600 that county commissioners approved last month by a 3-2 vote, after a unanimous recommendation from the North Brevard Economic Development Zone board.
The Titusville City Council this month also plans to consider a property tax break for Dark Storm, according to Lisa Nicholas, the city’s economic development director. City staff will recommend a 10-year, 100% property tax break
The Titusville City Council will consider that proposal tonight at its April 13 meeting, then a 2nd hearing at a April 27 meeting.
The county and city tax breaks, if approved, would increase the total incentive package for Dark Storm to $1.08 million.
Tax Abatement Council member Robert Jordan of Genesis VII Inc. says “it just makes sense for us to go all-in” on the financial incentives offer to Dark Storm Industries Inc., “and not leave anything on the table.”
Competition from Panhandle
“This is an extremely competitive project between us and the Panhandle,” said Edgar Campa-Palafox, the EDC’s director of business development. “We need to put our best foot forward.”
Campa-Palafox said an undisclosed Florida Panhandle location is offering Dark Storm a “pad-ready site” ready for construction, as opposed to the Titusville site that needs preliminary work before it can be used for development, including mitigation of wetlands on the site.
Additionally, he said, Panhandle counties can tap into settlement money received from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico for economic development projects, and that is expected to be part of the incentives being offered there for Dark Storm.
Campa-Palafox said, if Brevard County tries to “shortchange” Dark Storm, it could lose the expansion project to the Panhandle.
Under the county’s tax abatement program guidelines, assuming 50 jobs paying an average of $50,000 a year are created and the company makes a $3.2 million capital investment, Dark Storm would qualify for a property tax break of 60% for six years.
If the company continues its expansion plans, and eventually creates 100 jobs, the guidelines would qualify Dark Storm for a property tax break of 80% for eight years.
But Tax Abatement Council Chairman Neal Johnson of Union Home Mortgage said he felt that it was appropriate to suggest a higher tax break because of “mitigating factors.”
Tax Abatement Council member Robert Jordan of Genesis VII Inc. agreed, saying: “It just makes sense for us to go all-in on this, and not leave anything on the table.”
The company is proposing spending $2 million to purchase the land in Spaceport Commerce Park and construct the building, plus $1.2 million on equipment.
It says the building would house manufacturing, warehousing, shipping, sales, marketing and accounting functions.
The company currently has more than 40 employees, annual sales of more than $12 million and a six-month backlog of new orders.
Dark Storm indicated in its application that “the company’s growth trajectory requires expansion of its manufacturing capabilities,” which “provides the opportunity to relocate to a more economically desirable location” than its current facilities on Long island, New York.
The company said it looked at locations in Florida, Georgia, North Carolina, South Carolina and Texas.
“Our business is extremely competitive,” Dark Storm said in its application. “The costs associated with taxes, wages, as well as land and construction, are the major factors in making our final decision.”
The company said it has pending offers from other Florida counties for a 100% property tax abatement for 10 years.
The EDC estimates that the company’s creation of 50 jobs would lead to 37 spinoff jobs, with a total wage from the 87 jobs of $4.44 million a year.
The company said it tries to use local suppliers for materials, tooling, packaging and finishing services.
Brevard’s firearms cluster
If Dark Storm moves to Titusville, it would add to a cluster of firearms companies in Brevard County, and would help diversify the Space Coast manufacturing economy beyond aerospace.
Among the other firearms companies already in north and central Brevard are Diamondback Firearms and Kel-Tec, both in Cocoa, and Knight’s Armament Co. in Titusville.
Campa-Palafox said the clustering of businesses in the same industry in one location is “when exciting things happen” with more companies in the same industry and their suppliers also open in a region.
The $862,600 incentive package for Dark Storm that the County Commission previously approved included a $362,600 reimbursement on the purchase of a 9.8-acre land parcel in Titusville, intended to be the site of the new plant, Other incentives totaling $500,000 would help reimburse the company for infrastructure and site improvements, as well as for capital investments.
County Commission Vice Chair Kristine Zonka and Commissioner John Tobia voted against that incentive package.
Tobia cast doubt on the company’s job-creation promise, and noted that the “claw-back” agreements did not even call for the company to create 50 jobs to get those incentives.
“Clearly, there is not any good faith here,” Tobia said, comparing it to putting lipstick on a pig.
“This is nothing more than a government handout,” Tobia said. “They pay for the land, and then we reimburse them. I just don’t think it’s the best direction for county taxpayers. Yeah, guns are cool. But do we really want to hand over this money?”
Zonka said the cash incentives meant the county was “essentially financing (Dark Storm’s) business risk.”
“We’re essentially paying them back for their investment and … I am never going to be OK with that,” Zonka said.