(A) New business incentive. New business incentive is targeted for new companies that are considering a site in the city and the incentive will be a deciding factor as to whether the business will locate in the city.
(1) Eligibility. A business shall be eligible for incentives under this division (A) provided the business:
(a) Applies for an incentive under this division (A), is recommended by the Department of Economic Development and approved by the Board of Commission, and executes an incentive agreement;
(b) Has not announced a site location decision and is proposed to be located in the city at the time of its application, and if approved, thereafter remains located in the city;
(c) Will have employees within the city who are primarily engaged in professional, technical and innovation, administrative, manufacturing, communication or general medical and/or general surgical hospital occupations; and
(d) Within the first year of the agreement the awardee must create a minimum new annual payroll of $250,000 to be eligible for this incentive.
(2) Nature of incentive. A business approved for an incentive under this division (A) may receive an annual reimbursement of up to 1% of taxable payroll. The incentive rate shall be based on the most recent payroll incentive evaluation factors.
(3) Duration.
(a) For companies leasing a site, the incentive period may be for up to half of the applicant’s lease term, up to a total of five consecutive calendar years, provided the business continues to meet all requirements of this chapter and the agreement.
(b) For companies purchasing a site, the incentive may be for up to a total of five consecutive years, provided the business continues to meet all requirements of this chapter and the agreement.
(c) A retention period equal to the number of years of the incentive period will immediately follow each incentive period, where the business must remain an active business in the city and meet all requirements of this chapter and the incentive agreement, including, but not limited to, all annual payroll requirements.
(B) Enhanced new business incentive.
(1) Purpose. The enhanced new business incentive is targeted for new companies that are considering a site in the city that will have a significant economic impact and the incentive will be a deciding factor as to whether the business will locate in the city.
(2) Eligibility. A business shall be eligible to apply for an incentive under this division (B), provided the business:
(a) Applies for an incentive under this division (B), is recommended by the Department of Economic Development and approved by the Board of Commissioners;
(b) Has not announced a site location decision and is proposed to be located in the city at the time of its application and thereafter remains located in the city;
(c) Will have employees within the city who are primarily engaged in professional, technical and innovation, administrative, manufacturing, communication or general medical and/or general surgical hospital occupations;
(d) The applicant must create a minimum new annual payroll of $2,000,000 within the first year of business within the city to be eligible for this incentive; and
(e) The business demonstrates to the Economic Development Department that the relocation of the business sufficiently satisfies at least two of the evaluation criteria in Category A or at least four of the evaluation criteria in Category B below.
1. Category A (at least two).
a. The business is a target industry sector as determined by the city’s economic development strategy, as such is adopted by city commission from time to time;
b. The business will be locating a facility headquarters in the city;
c. The business will be making a private investment of at least $3,000,000 in property acquisition, lease, improvements, machinery and equipment, infrastructure or other similar investments; and
d. The business will bring or create over 25 jobs paying above the city’s median wages for that given year of the incentive application, and offer an employee benefit package.
2. Category B (at least four).
a. The project ties into a specific strategy recommendation within the city’s economic development strategy, as such is adopted by City Commission from time to time;
b. The business has demonstrated a strong commitment to the city, such as hiring Covington residents, agreeing to a longer non- incentivized retention period, or other similar efforts as outlined by the business;
c. The project will stimulate investment in redeveloping neighborhoods outside of the TIF District that the city may deem of significant benefit to the community;
d. The investment provides the opportunity for future expansion and increased employment; and
e. The business’ industry sector will help diversify the city’s economy as determined by the applicant’s appropriate North American Industry Classification System (NAICS) codes.
(3) Nature of incentive. A business approved for an incentive under this division (B) may receive an annual reimbursement up to 1.25% of taxable payroll. The incentive rate shall be based on the most recent payroll incentive evaluation factors.
(4) Duration.
(a) For companies leasing a site, the incentive period may be for up to half of the applicant’s lease term, up to a total of ten consecutive calendar years, provided the business continues to meet all requirements of this chapter and the agreement.
(b) For companies purchasing a site, the incentive may be for up to a total often consecutive years, provided the business continues to meet all requirements of this chapter and the agreement.
(c) A retention period equal to the same number of years as the incentive period will immediately follow each incentive period, and the business must remain in the city and meet all requirements of the agreement.
(C) Business expansion incentive.
(1) Purpose. The business expansion incentive is targeted for existing Covington companies that are planning an expansion that includes new jobs.
(2) Eligibility. A business shall be eligible for an incentive under this division (C) provided the business:
(a) Applies for an incentive under this division (C), is recommended by the Department of Economic Development and approved by the Board of Commission, and executes an incentive agreement;
(b) Has not announced the expansion or started the project:
(c) Is located in the city; and
(d) Applicant must create a minimum new annual payroll of $250,000 in excess of its base taxable payroll to be eligible for this incentive.
(3) Nature of incentive. A business approved for an incentive under this division may receive an annual reimbursement up to 1% of taxable payroll in excess of its base taxable payroll. The incentive rate shall be based on the most recent payroll incentive evaluation factors.
(4) Duration.
(a) For companies leasing a site, the incentive period may be for up to half of the applicant’s remaining lease term, up to a total of five consecutive calendar years, provided the business continues to meet all requirements of this chapter and the agreement.
(b) For companies owning or purchasing a site, the incentive may be for up to a total of five consecutive years, provided the business continues to meet all requirements of this chapter and the agreement.
(c) A retention period equal to the same number of years as the incentive period will immediately follow each incentive period, and the business must remain in the city and meet all requirements of the agreement.
(D) Business retention incentives.
(1) Purpose. The business retention incentive is to be used prudently for existing Covington companies that are at risk of relocating out of the city for an expansion that includes new jobs and capital investment.
(2) Eligibility. A business shall be eligible for incentives under this division (D) provided the business:
(a) Applies for an incentive under this division (D), is recommended by the Department of Economic Development and approved by the Board of Commissioners, and executes an agreement;
(b) Has employees within the city who are primarily engaged in professional, technical and innovation, administrative, manufacturing, communication, or general medical and/or general surgical hospital occupations;
(c) The applicant must have a minimum annual payroll of $2,000,000 to be eligible for this incentive;
(d) Has operated in the city with a valid occupational license at all times;
(e) Can provide documentation to the Economic Development Department that the business is undergoing due diligence on a site in another municipality, as demonstrated by a competing written incentive offer letter, a lease/purchase LOI or other documentation deemed acceptable by the Economic Development Department; and
(f) The Economic Development Department demonstrates that the project sufficiently satisfies at least three of the evaluation criteria in Category A or at least five of the evaluation criteria in Category B below:
1. Category A (at least three).
a. It can be demonstrated that without incentives the jobs may be moved away from the area or eliminated, as evidenced by a written statement and evidence from the business;
b. If retained, the business will be making a new private investment of at least $3,000,000 in property acquisition, lease, improvements, machinery and equipment, infrastructure and the like;
c. The business will retain over 25 jobs and add additional jobs; and
d. The business is a headquarters facility.
2. Category B (at least five).
a. The business has demonstrated a strong commitment to the city, such as hiring Covington residents, utilizing city contractors/suppliers, philanthropic activity or other local community efforts;
b. The business is a target industry sector as determined by the city’s economic development strategy, as such is adopted by City Commission from time to time;
c. The project ties into a strategy recommendation within the most recently adopted economic development strategy, such as “Develop and Invest in Real Estate Product for the City”;
d. The project will stimulate investment in redeveloping neighborhoods outside of the TIF District that the city may deem of significant benefit to the community;
e. The investment provides the opportunity for future expansion and increased employment; and
f. The business’ industry sector will help diversify the city’s economy as determined by the applicant’s appropriate North American Industry Classification System (NAICS) codes.
(3) Nature of incentive.
(a) A business approved for an incentive under this division (D) may receive an annual reimbursement up to 0.75% of its base taxable payroll and up to 1% of its taxable payroll in excess of its base taxable payroll, provided the business’s total taxable payroll is in excess of its base taxable payroll. The incentive rate shall be based on the most recent payroll incentive evaluation factors.
(b) If the taxable payroll of a business approved for an incentive under this division (D) is not in excess of its base taxable payroll in any calendar year, then the business may receive an annual reimbursement for that calendar year up to 0.75% of its taxable payroll.
(4) Duration.
(a) For companies signing a new lease, the incentive period may be for up to half of the applicant’s new lease term, up to a total of five consecutive calendar years, provided the business continues to meet all requirements of this chapter and the agreement.
(b) For companies owning or purchasing a new site, the incentive may be for up to a total of five consecutive years, provided the business continues to meet all requirements of this chapter and the agreement.
(c) A retention period equal to the same number of years as the incentive period will immediately follow each incentive period, and the business must remain in the city and meet all requirements of the agreement.
(1984 Code, § 116.04) (Ord. O-13-20, passed 8-11-2020)