Prioria receives city permission to lease space

In this file photo, Prioria Robotics vice president of engineering and co-founder, Jason Grzywna, left, and CEO Bryan da Frota, right, stand with Governor Rick Scott, center, during his visit to tout Prioria's high-wage tech jobs and discuss the unemployment rate, Friday, October 19, 2012 in Gainesville, Fla.

Erica Brough/Staff Photographer
Published: Wednesday, June 12, 2013 at 5:52 p.m.
Last Modified: Wednesday, June 12, 2013 at 5:52 p.m.

From last summer into February, the city spent $2.6 million to turn a 22,000-square-foot warehouse into the headquarters for Prioria Robotics, a move that helped keep the Gainesville-bred designer and manufacturer of drones in the city.

The state, city and county approved tax rebates for Prioria contingent on future job creation.

Gov. Rick Scott visited the building in October to tout the state's recovering economy. Then-Mayor Craig Lowe said Prioria was a sign of the city's innovation efforts, and vital to the redevelopment of the former Gainesville Regional Utilities complex along Depot Avenue — dubbed the Power District.

Now, four months after moving into its new home, Prioria finds itself with nearly half the building empty and looking to generate money by bringing in tenants.

The company last week received permission from the City Commission to potentially sublease up to 10,000 square feet to other technology firms or outfits that comply with the city's plans for the Power District.

Before the unanimous commission vote last Thursday to approve the lease changes, City Manager Russ Blackburn told commissioners the company had expected to need that space soon after it signed the lease.

"It is my understanding they thought expansions were imminent," Blackburn said. "Some of those expansions have not come about in the time they anticipated."

Prioria Chief Executive Officer Bryan da Frota said the change to the lease agreement gives the company "flexibility" to bring in revenues and cover the building's operating costs.

"The economy being what it is we just wanted to have the flexibility to defray costs," da Frota said.

A city staff report on Prioria's request said the company's business was contract-based and its workforce "expands and contracts in response to the specific needs of current contracts."

Da Frota said the company has in the range of 30 to 40 employees. When the City Commission approved a future tax rebate tied to job creation in September 2011, the company had 35 employees, according the application for incentives.

The Qualified Target Industry incentive for which Prioria has received approval would pay a tax rebate of up to $400,000 if the company creates 40 high-paying jobs over four years.

The state would pay out 80 percent of that incentive, or up to $320,000, and the city and county would pay up to $40,000 or 10 percent each.

At this point, the city has not received final word from the state on whether Prioria has met the job creation requirements for the first year of that QTI incentive, according to Economic Development & Innovation Director Erik Bredfeldt.

Under the lease terms, Prioria pays the city $23,375 a month, with that amount slated to increase by 3 percent annually.

Commissioner Todd Chase, who last year wanted the city to finance the renovation and opposed the decision to take $2.6 million out of reserves, said the need for an amendment four months into a seven-year lease should be a lesson to the city.

"As we go forward with this innovation economy and this Power District, the euphoria and excitement is contagious and it's almost addictive," Chase said. "But our government should not and cannot in the future be in the game of high-risk, early-stage startup stuff."

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