By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
So in October, when Bush needed public support for Scripps, he again called Villamil, who produced a report lavishing economic praise on the project. Owner of the Coral Gables-based Washington Economics Group consulting firm, Villamil claimed that in 15 years, Scripps would help bring an astonishing 50,500 jobs to Palm Beach County. The state would see a 45 percent return on its $310 million investment, he claimed. Bush and local lawmakers used the numbers to gain broad support for Scripps. In announcing the deal, the governor said, "Just as the visions of Henry Flagler and Walt Disney changed Florida's future, so too will the people of Scripps."
Critics soon found Villamil's report rife with errors and exaggerations that call into question the economic benefits of the Scripps plan. But the euphoria of the initial announcement, with its rosy projections, seemed to eclipse dire news that has trickled out about the program since. First, the initial figure pledged wouldn't come close to the total to buy the property, supply it with utilities, build temporary lab space, put up 364,000 square feet of research space, and pay Scripps' expenses and payroll for seven years. Updated estimates now reach somewhere near $600 million. Road and utility upgrades could bring the total near $1 billion, critics say, and Bush has added another $1 billion investment from the state's pension fund to be used in risky biomedical ventures.
Robert Cruz, a Barry University professor who wrote the original report for Villamil's company, stands by his initial figures. The report was produced free of charge to Bush "as a public service to the state," Cruz says, and errors were no more than "minor discrepancies." As to whether the report was exaggerated so Bush would look good publicly, Cruz says, "No, that wasn't our goal."
Gov. Bush did not respond to numerous calls, faxes, and e-mails from New Times requesting comment. Spokeswoman Alia Faraj said she could not comment on Scripps and referred questions to the governor's Office of Tourism, Trade, and Economic Development. But Pam Dana, director of that office, did not return phone calls either.
County officials are still holding fast to the original job projections and say they've already received dozens of calls from companies interested in locating near Scripps. "The Cleveland Clinic, Johns Hopkins, they all want to be next to Scripps," says Mary McCarty, a county commissioner. "I think this is going to actually be more successful than we first thought."
After touring Scripps in California and the biotech companies that have gravitated to it, county commissioners envision the same thing happening in Palm Beach County. "If you look at the La Jolla location," Commissioner Tony Masilotti says, "you can see there are thousands and thousands of jobs created around it. There's no reason to believe it won't be created here [as well]."
Fearing Bush's numbers were inflated, though, state Rep. Dan Gelber commissioned his own study. In October, Gelber, a Democrat from Miami Beach, hired a former economist with the Florida Legislature, Ed Montanaro, who found that the initial study grossly exaggerated the potential benefits. Villamil's report had used a dubious best-case scenario, asserting that 499 private firms would follow Scripps to Palm Beach County, adding 44,000 new jobs to the 6,500 generated directly by Scripps. A more accurate projection, Montanaro determined, would see Scripps attracting 109 new firms, generating 16,000 jobs, with Scripps itself creating 5,700 jobs -- all in all, less than half of Bush's rosy job projections.
State Sen. Klein, the Palm Beach County Democrat, says he always suspected the governor deliberately exaggerated the numbers to get backing from the public. "I've said from the beginning that the jobs-creation numbers weren't necessarily substantiated, but over a five-, ten-, or 15-year period, if we give this enough support, it will become something very substantial." Klein says Bush, by hyping the numbers, underestimates his constituents. "I didn't think the governor needed to exaggerate. People would've been on board anyway, even if it was as low as 16,000 jobs."
Despite dissent from critics, the Florida Legislature approved spending $310 million in money it got from the federal government for economic development. Bush called a special session of the Legislature to approve the money, and in the four days of discussion in Tallahassee, the plan met little scrutiny. "It was rubber-stamped with very little input," Gelber says. "They said there would be an economic impact, but if you spend half a billion on anything, it would create jobs."
The contract the state signed with Scripps requires little of the firm, says state Rep. Doug Wiles, a Democrat from St. Augustine. Of the thousands of jobs promised, Scripps is required to create just 545 jobs over the next seven years and 3,000 jobs within 15 years. That's hundreds of thousands of dollars per job and a snail's-pace return on the state's investment, says Wiles, the House minority leader. "It took 30 years for Scripps to develop in California," Wiles says. "Let's hope it doesn't take 30 years for them to develop in Florida."
Montanaro also found that Scripps itself may have embellished its ability to get government grants to pay for its operating expenses in Florida. Roughly 85 percent of Scripps' current $200-million-a-year budget comes from government sources. Montanaro doubts Scripps can double its government grants to pay for the budget of the Florida branch.