In an effort to make its economic environment more competitive, Louisville officials are looking to tweak the city’s business-assistance program, which provides incentives in the form of tax and fee rebates for new and existing businesses either opening or relocating.
The program has been in place since 2007, and economic-vitality staff want updates to ensure that it “is aligned with its current goals for business attraction as well as business retention and expansion,” according to a city memo.
Features of the upgrade include:
- Revised application timing requirement. Currently, businesses must apply for and receive an assistance agreement prior to signing a lease or closing on a property. Under the proposed new rules, a business would just have to apply for incentives before signing a lease. The hope is to minimize delays for businesses as business assistance package applications are reviewed by city leaders.
- Add rebate of sign permit fees. The amended program includes the addition of sign permit fees to the list of fees eligible for rebate. “New signage can be an added expense for a new business or one that is relocating, especially for small businesses,” according to the city memo. “This enhances the incentives paid but still generates some new revenue to the city.”
- Add a vacancy bonus incentive. Currently, the city code does not provide an additional incentive to businesses relocating to an already vacant space as opposed to building a new space. The proposal recommends adding a yet-to-be determined incentive for businesses to take over spaces that have sat empty for at least one year. “Though the reasons commercial vacancies occur and are sustained are mostly driven by the market and the priorities of the commercial property owners, long-term vacancies create a negative perception for the city,” the memo said. “Lengthy vacancies also have a negative impact on surrounding businesses and mean there is no revenue generation to support city services.”
- Review program criteria for relocating existing businesses. The existing program requires that eligible Louisville businesses relocating within the city move into a larger space. The proposed changes “allow a business that is relocating to be eligible even if they do not increase their square footage,” city documents show. “A new location may still allow a business to ‘grow’ — mainly by better market or customer access. Businesses that relocated would be eligible to apply for rebates related to tenant improvements, though rebate eligibility for sales and consumer use tax would still be limited to the ‘new’ increment of tax generated,” the memo said. “An opportunity for some support in the community where the business is already located may also act as a deterrent to look to surrounding communities that would offer incentives to the company as a new business.”
- Create an administrative approval process. The Louisville City Council must now approve incentive offers, but the new rules propose to “allow staff discretion to administratively approve any assistance agreement where the cap on rebates or incentives is under $50,000.”
These amendments to the business-assistance program will be presented Tuesday during the Louisville City Council meeting.
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