Agenda Item #
Columbus Consolidated Government
Council Meeting
08/26/2014
Agenda Report #
TO: Mayor and Council
SUBJECT: Enterprise Zone
INITIATED BY: Planning Department
Recommendation: Expand the current boundaries of the Enterprise Zone to
include areas as noted in the attached map
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
Attachments
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