(A) The appropriate purpose and use of incentives is to broaden and diversify the tax base, create new job opportunities for the citizens of the city and promote the economic growth and welfare of the city. Economic development incentives are necessary because of the inherent competition between localities for new businesses, new investments and jobs. Nevertheless, incentives shall be used prudently on projects where they will be a deciding factor as to whether a business will remain or locate in the city.
(B) The city’s objective for offering economic development incentives shall be to encourage the expansion of commerce to businesses demonstrating a long-term commitment to the community by:
(1) Creating and retaining quality, value-added (primary) jobs;
(2) Broadening and diversifying the city’s tax base;
(3) Encouraging capital investments;
(4) Increasing the city’s global competitiveness; and
(5) Promoting the growth and wellbeing of the city.
(1984 Code, § 116.01) (Ord. O-13-20, passed 8-11-2020)
For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
AGREEMENT. An agreement made pursuant to this chapter between the city and an approved business or building owner with respect to an economic development project.
ANNUAL PAYROLL. All compensation paid or payable by a business for work done or services performed or rendered in the city by every resident and non-resident who is an employee of that particular business, which is normally subject to the city’s occupational license tax pursuant to § 110.03(A)(1) including compensation in excess of the FICA cap provided for in § 110.03(B)(1).
APPLICANT. A business or building owner applying for incentives under this chapter.
AWARDEE. A business or building owner that has been approved for incentives under this chapter by the City Commission and has executed an agreement.
BASE TAXABLE PAYROLL. A businesses existing taxable payroll as calculated as of an agreed-upon date under an agreement.
BUILDING OWNER. A natural person, corporation, limited liability company, partnership or other entity that owns or has as similarly permanent interest in a building located within the city. For purposes of this section, any group of owners of a single building shall constitute a single BUILDING OWNER.
BUSINESS. A corporation, firm, partnership, limited liability company, sole proprietorship or similar entity engaging or intending to engage in commercial activity within the city. Accelerators, incubators and co-working spaces may constitute a single business for the purpose of applications and agreements under this chapter.
DEPARTMENT. The city’s Department for Economic Development.
ECONOMIC IMPACT ANALYSIS (EIA). Examines the effect of an event on the economy in a specified area. It usually measures changes in business revenue, business profits, personal wages and/or jobs. The economic event analyzed can include implementation of a new policy or project, or may simply be the presence of a business or organization. An ECONOMIC IMPACT ANALYSIS typically measures or estimates the change in economic activity between two scenarios, one assuming the economic event occurs, and one assuming it does not occur. An ECONOMIC IMPACT ANALYSIS is commonly conducted when there is public concern about the potential impacts of a proposed project or policy.
GOOD STANDING. A qualified and properly licensed business with a city occupational license for any and all city locations, are not in default of any prior or current agreements with the city, have not made or filed pending adverse claims against the city in the form of settlement demands and/or lawsuits, are not delinquent on its obligations to pay loans, fines, liens or other obligations owed to the city, and are in good standing with § 35.004 of this code of ordinances.
NEW ANNUAL PAYROLL. The annual payroll that is created by a business following, as a result of, or in anticipation of an agreement.
PAYROLL INCENTIVE EVALUATION FACTORS. Written criteria approved by City Commission used for evaluating the payroll incentives described in this chapter. The PAYROLL INCENTIVE EVALUATION FACTORS shall provide the criteria for staff to make recommendations on the percentage amount of any incentive described in this chapter. The PAYROLL INCENTIVE EVALUATION FACTORS shall be available to the public upon request. The city is hereby authorized to pass and update the PAYROLL INCENTIVE EVALUATION FACTORS via Commissioners’ order.
PROJECT. The commercial and industrial projects created by such combined efforts of the public sector and the private sector are known as economic development projects.
RETURN ON INVESTMENT (ROI). A performance measure used to evaluate the efficiency of an investment ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
TAXABLE PAYROLL. All compensation paid or payable in the city for work done or services performed or rendered in the city by every resident and non-resident who is an employee of a particular business, which is normally subject to the city’s occupational license tax pursuant to § 110.03(A)(1) or any other provision of this code. This definition shall not include any compensation that is exempt or otherwise not subject to the city’s occupational license tax.
(1984 Code, § 116.02) (Ord. O-13-20, passed 8-11-2020)
(A) Application.
(1) An applicant shall submit its signed application for incentives under this chapter to the Department of Economic Development on forms provided by the Department and will provide any additional information reasonably requested to enable the Department to evaluate the application, including a copy of the proposed lease, letter of intent or purchase terms for the proposed business location.
(2) A non-refundable application fee of $1,000 is payable to the city upon submission of a signed application.
(3) Each request for incentives will be evaluated on an individual basis. All requests for local incentives will have an economic impact analysis (EIA) and/or a return on investment (ROI) calculation completed prior to consideration by staff. These will be used initially to determine the viability of the proposed project and must show a positive economic impact upon the city. The analysis will be performed for the number of years that equals the number of years the incentive recipient would be subject to monitoring and compliance provisions in the incentive agreement.
(4) All economic development incentives will be formalized in a written agreement between the city and the recipient business. At minimum, it will outline:
(a) Specific employment and capital investment targets, including:
1. Jobs created and payroll commitments;
2. Capital investment in real property;
3. Compliance with the non- incentivized retention period;
(b) Compliance with all applicable governmental laws, rules, ordinances and regulations; and
(c) Compliance with any conditions imposed by the Economic Development Incentive Agreement.
(5) If the Department of Economic Development recommends approval of an agreement and it is approved by the city’s Board of Commissioners, the applicant will provide the Department with an executed copy of any lease or purchase agreement prior to execution of the incentive agreement.
(B) Disbursement of incentives.
(1) All incentives provided for by this chapter shall be disbursed on an annual basis for the previous calendar year. With the exception of commonwealth incentives under § 123.05, an applicant’s first year in which incentives are provided shall begin on January 1 of the year provided for in the agreement, but no later than 18 months from the effective date of the agreement between the city and the applicant.
(2) An awardee that has executed an agreement pursuant to this chapter shall submit requests for reimbursement of incentives for the previous calendar year to the City Finance Department by April 30 of each year. The awardee shall use the form provided by the City Finance Department, and provide all necessary information for the City Finance Department to calculate the amount of the incentive. If the City Finance Department does not receive an awardee’s request for reimbursement by April 30 of any year, then the awardee shall forgo all reimbursements under this chapter for the previous calendar year.
(3) The City Finance Department, upon proper request by an awardee pursuant to division (B)(2) above, shall disburse incentives for the previous calendar year to the awardee by July 31 of the same year.
(4) An awardee shall not be eligible to receive incentives under this chapter for the previous calendar year unless it has paid in full all taxes owed pursuant to § 110.03 of this code and is in good standing with the city.
(C) Failure to comply. If an awardee fails to comply with the agreement or fails to meet the requirements of this chapter, the awardee shall not be eligible to receive any reimbursement provided for by this chapter that has not been disbursed at the time of noncompliance.
(D) Incentives may not be combined. The incentives provided for by this chapter may not be combined with any other occupational license incentive programs offered by the city without the approval of the Board of Commissioners.
(E) Prior incentives. Changing economic conditions and availability of funds may cause the city to modify, amend or discontinue any economic development incentive program. Incentives provided to a business under an agreement pursuant to prior version of this chapter shall remain in effect as originally agreed, unless this chapter clearly indicates otherwise.
(F) Compliance.
(1) Annual reviews will be conducted by economic development staff to establish compliance with the written agreement between the city and the awardee.
(2) For any out of compliance incentive, the Economic Development Director will schedule a business retention and expansion meeting with the awardee that has missed the contractual performance obligation. The Economic Development Director will then meet with the City Manager, City Solicitor and Finance Director to review and make recommendations on non-performing agreements.
(a) First occurrence. The city will not process a payment for that year, but the agreement will continue without modification for a one-year probationary period. The city will warn the business and notify it that it has one year to achieve its payroll expectations or the agreement will terminated.
(b) Second occurrence. After two consecutive or non-consecutive years of non- compliance, the city will terminate the contract due to non-performance and pursue the claw backs outlined in the agreement.
(3) Each fall, Economic Development and Finance will compile all active incentive agreements and provide a summary incentive report on actual performance and compliance. The City Manager will include recommendations to City Commission for any out-of-compliance agreement.
(1984 Code, § 116.03) (Ord. O-13-20, passed 8-11-2020)
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