To

Mayor and Council

Subject

Enterprise Zone

Initiator

Planning Department

Recommendation

Expand the current boundaries of the Enterprise Zone to include areas as noted \n \n in the attached map

Approval

Approved

Background

In 1997, the Georgia legislature adopted the "Enterprise Zone Employment Act."

The Act is intended to encourage revitalization in areas within cities that are

suffering from disinvestment, underdevelopment and economic decline by offering

"Job Tax Credits" . To qualify as a locally-designated Enterprise Zone, the

area must demonstrate three of the following four criteria: pervasive poverty,

unemployment that is 10% greater than the state average, general

distress/underdevelopment or blight. In 1998, CCG Council adopted our original

Enterprise Zone and named it the "Columbus Business Development Center."

Analysis

The current geographic boundary of the Columbus Enterprise Zone was re-adopted

in 2008. Since the 2010 US Decennial Census has been undertaken, new

demographic data has become available for analysis of our current Enterprise

Zone. Based on current data, many more areas are eligible for inclusion in the

Columbus Enterprise Zone.

Financial Considerations

The Act states that a tax abatement may not exceed 10% of the overall tax

digest. Beyond that, compatibility with overall City goals must be measured

against future benefits gained from business location decisions. For example,

the Enterprise Zone allows abatement of ad valorem taxes (not including school

taxes nor for taxes collected to retire general obligation debt) for a period

of ten years, offering 100% abatement for the first 5 years, 80% abatement for

the 6th & 7th years, 60% abatement for the 8th year, 40% abatement for the 9th

year and a 20% abatement for the 10th year. Therefore, if very little ad

valorem tax and no retail sales taxes are being collected on a vacant lot (just

for example), then a qualifying business brings immediate economic benefit with

the creation of 5 new jobs, and begins to produce additional tax revenues on a

higher value of land and property after 5 years. Businesses must maintain the

5 jobs each year in order to continue to receive the Enterprise Zone tax

abatement. Additionally, any residential development which increases the tax

value of the land or home by 500% qualifies for the Enterprise Zone tax

abatement.

Projected Annual Fiscal Impact Statement

Businesses who have been granted Enterprise Zone tax abatement benefits (or

who apply for and are granted Enterprise Zone tax abatements) for creating and

maintaining 5 or more jobs each year will not contribute to the tax increment

growth at all for the first 5 years. The next two years, they will pay only

20% of their tax obligation, and only 40% for the next year, 60% the following

year and 80% the tenth year. State legislation allows for local jurisdictions

to negotiate this benefit.

Legal Considerations

The Columbus Business Development Center, a.k.a. Enterprise Zone will stay in

effect for a minimum of ten (10) years. Qualifying businesses or residential

taxpayers who are approved to receive Enterprise Zone benefits in the tenth

year are eligible for the full ten-year exemption in taxes.

Recommendations/ Actions

Adopt the ordinance to amend the current boundaries of the Columbus Enterprise

Zone to include the areas noted in the attached map

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