Arthrex asks court to block Jackson Lab bonds

Jackson Lab and Arthrex debate

Political science: Jackson Lab intrigue

Coyle: Athrex, candidate lead fight

JACKSON LABORATORY

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Reporting from Bar Harbor, Maine:

• Day 1: Bar Harbor, Maine, to Collier County would be 'two-way street'
• Day 2: Discovery Days at Jackson Lab draws Naples group, Obama in town
• Day 3: Jackson Lab work 'a badge of honor' to Bar Harbor
• Day 4: Two Collier commissioners support Jackson Lab, Bar Harbor trip persuasive

NAPLES — Naples-based Arthrex Inc. and several local residents have separately filed legal action over Collier County seeking a judge’s ruling that issuing $130 million in bonds for the Jackson Laboratory project would serve a public purpose.

Arthrex, a medical device manufacturing firm, has retained a Tampa firm in filing its opposition to the county and wants the court to dismiss the county’s effort to get the bond authorization.

In addition, local residents and Jackson critics Peter Gaddy, David Trecker and John Chandler have filed a court document that states the Jackson project is controversial and there is “great public interest” in the county’s plans to issue bonds.

The residents’ say extensive discovery can be expected and they are asking the court to consider the amount of time needed for the public to participate, according to the group’s court filing.

The county last week filed court documents to ask a judge to determine whether the Jackson project qualifies for bond financing. A court hearing is held and the law requires the bond proceeds serve “a valid and paramount public purpose.”

It’s a required procedure for any governmental entity, political district or subdivision to ask a Circuit Court judge to validate the issuance of bonds.

Collier Circuit Court Judge Hugh Hayes has been assigned the county’s bond validation proceeding but a hearing date has yet to be scheduled. Regardless of how the judge rules, the outcome can be appealed to the state’s Supreme Court.

The county needs to come up with $130 million to match state funding to entice the Maine-based Jackson to open an institute for personalized medicine near Ave Maria. So far the state has pledged $50 million, if Jackson’s economic incentive application gets approved. If so, the state Legislature would have to approve the remaining $80 in million in subsequent years.

The local money would be used to build a 165,000-square-foot building with wet labs that would be leased to Jackson. The Barron Collier Co. has agreed to donate 50 acres on Oil Well Road for the project.

Besides a pledge to create several hundred jobs over a five-year period, the project calls for Jackson to serve as an anchor for the development of a bio-medical park with other medical-related companies. The expectation is that thousands of jobs could be created over a 20-year development span.

Arthrex attorney J. Carter Andersen, of Tampa, said in his court filing that the state Supreme Court has ruled that counties may not issue bonds to pay for the development of property that will be used primarily by a private entity “in the name of economic development.”

Projects involving a private enterprise “cannot be found to serve a paramount public purpose on the basis that such projects will result in increased employment opportunities, higher wages and other economic benefits,” according to Arthrex’s attorney.

Arthrex president and founder Reinhold Schmieding has been a vocal critic of the Jackson project and says the return to the county for its investment is questionable.

With about 1,000 employees in Collier and an annual economic impact of more than $400 million, Schmieding is considering taking future expansions of Arthrex out of Collier if the county goes forward with the Jackson funding without letting the public vote on it.

Last week, Arthrex filed a different court filing against the county’s plan to use an arbitrator to resolve a question about how many votes are needed by the Collier County Commission for a zoning issue for Jackson in Ave Maria. Arthrex owns about 13 acres in Ave Maria.

Collier Commission Chairman Fred Coyle said he is not surprised by the two legal actions by Arthrex.

“There will be lawsuits at every step of the way,” Coyle said. “I fully expected someone would challenge the validity of the bond issuance and that is the reason we took it to court in the first place. You don’t have to go to court. In our research, some of the biomedical research (projects in Florida) did not go through this process. We are an unusual county in that respect. We have a lot of people who have contrary views. The smart thing to do is let it be decided in the court.”

In the bond issuance matter, the Arthrex attorney points to several cases in Florida where the court has found distinctions among projects and whether the public is the greater beneficiary or if the private group stands to gain the most.

In a case between the City of Daytona Beach and an agreement with the Daytona Beach Motor Speedway for use of a race track during six months of the year, the court ruled the public purpose of the race track outweighed the private benefit to the company.

On the other hand, the Arthrex attorney cited another case involving the Jacksonville Port Authority’s efforts to issue bonds to construct a shipyard and repair facilities that would be leased by Lockheed Aircrarft Corp.

In that case, the court ruled the Jacksonville Port Authority was lending its credit to Lockheed and the only public purpose was the promotion of the port and the “general welfare of the area served by increasing payrolls and providing employment.” As a result, the proposed bond issuance did not meet the requirement of a paramount public purpose.

Connect with health-care reporter Liz Freeman at www.naplesnews.com/staff/liz_freeman