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Tax credit investigation
Craig Patrick reports
TAMPA, Fla. - For the past 11 years, FOX 13 has investigated a state program to fight crime and poverty that enriches theme parks and resorts. The Florida House tried to end this program during the 2023 regular session but could not.
More than 25 years ago, state lawmakers thought they could clean up crime and blight by giving "Urban High Crime Area" tax credits to companies that stay in those areas and hire people. Under the law, cities draw and submit zones that chronically exhibit extreme and unacceptable levels of poverty, unemployment, physical deterioration and high crime.
Former State Senator Jim Hargett sponsored the law, and he’s also our tipster who first told us its being abused.
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It creates a situation in which most of the tax credits in recent years have been granted in the heart of Orlando’s tourist zone, while some struggling neighborhoods elsewhere do not even qualify for the program.
On one hand, cities like Tampa, St. Petersburg and Lakeland drew comparatively small zones, which is how some streets just outside the boundaries can miss out.
Meanwhile, the City of Orlando made its blighted high crime zone some 20-square miles — including the I-Drive attractions and Universal theme parks and resorts.
This is a state-produced pie chart of all the credits granted in every high crime zone from 2014-2022. It shows the state approved more than $6.5 million for Universal Florida and more than $2.6 million for the Universal branded hotels.
Since the program launched, Universal parks and resorts have received more than $17 million, and state economists project it will qualify for up to $3.5 million more as it completes its new Epic Universe park.
For years, Republican state house leaders and leading Democratic lawmakers have said this program needs to end.
Republican House Speaker Paul Renner said it’s a giveaway to special interests that they have been unable to remove due to the influence of special interest in politics.
"Because you have a powerful group of people that like to give those monies away and like to receive those monies," said Renner. "And they lobby very hard to keep the programs just the way they are."
The Florida Senate did not embrace the House plan to end the "Urban High Crime Tax Credit Program" and it was excised from the economic development reforms in HB5.
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FOX 13 requested an interview with Senate President Kathleen Passidomo and asked why Florida Senate leadership want to keep this program, and whether contributions from Universal or its parent company to the Florida GOP or Florida Republican Senatorial campaign influence the decision. She did not respond.
State records show the Florida Republican Senatorial campaign received more than $243,000 in in-kind contributions from Universal City Development Partners on January 27, 2023, and more than $168,000 in in-kind contributions to the Florida Republican Party on February 10.
"We allow these programs to exist with no sunset provision and continue even when we know they’re not actually working… exploiting this tax program that was supposed to be addressing community blight," said Democratic State Representative Anna Eskamani. "I actually think the map was never was really drawn correctly. I do not think this map is accurate. I think it needs to be changed, but part of having it changed is also having local support and the reality is Universal is within city limits, and they have a huge lobbying force in local governments."
In 2018, Orlando city staff declined our request for a sit-down interview with Orlando Mayor Buddy Dyer, but noted we could meet up with him at one of his public events, and we did. At the time, Dyer said he was unfamiliar with his city’s high crime zone map. He has since recertified it to the state.
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This year, his staff did not schedule a follow-up interview with Mayor Dyer but did schedule a Zoom interview with the city's business development manager. He also appeared to be unfamiliar with the program, saying he did not know when the city last updated the map, or whether the city has plans to reexamine the boundaries, and said it was his understanding the state drew the boundaries.
The city and state later confirmed Orlando produced the map, and as we reported in 2015, a Florida OPPAGA review found it is costing state taxpayers much more than what we get in return. It states that for every dollar spent on the program, the state received seven cents back in revenue.
The City of Orlando sent us an email which in part states, "incentive programs are an important part of any community’s economic toolkit and that’s no different here in the city of Orlando. As a local government, it is one of our priorities to leverage state and federal funding to encourage the expansion of local businesses, both large and small… Orlando has benefited from this performance-based, state-funded program which has encouraged private-sector business growth and strengthened our local economy."
Following our Zoom interview with the city’s business development manager, the city sent a follow-up email which in part notes, "this is a state program, and we follow all state guidelines, as set by the state, for the program. The state determines the tier of our city based on data and awards tax credit amounts to businesses that qualify per their requirements. The city recently went from a Tier 1 to a Tier 2 based on the data. The city's role is to provide the requested data to the state and help answer questions about the program for interested businesses. As Eric pointed out, no concerns have been expressed to the city by legislative leadership or Orlando residents or businesses related to this state program."