CORINTH — City officials hope that tax abatements and other economic development incentives will increase the number of new businesses lured to Corinth.
The city recently approved a resolution to adopt guidelines and criteria. Officials say that the abatements act as incentives to attract high-quality businesses by granting full or partial exemption from property taxes, and the policy must be approved every two years.
Guy Brown, the Corinth Economic Development Corporation director, said there are no pending tax abatements, but he said he hopes to see that change next year.
“We hope to use tax abatements and other incentives, including the city’s Economic Development Fund, to attract new business to Corinth during the next year,” he said.
According to a city staff report, there is no immediate impact on city revenue, but the city could “receive significant financial benefits from projects performed under the policy.”
When cities undertake tax abatement, the two primary things they look at are the length of the abatement and the percentage of tax that would be abated, Brown said.
“One thing to know is that for every $1 million of taxable value, the city collects about $6,000 in revenue,” Brown said in a recent council meeting. “So, if you had a $10 million project, that would be $60,000 in your revenue in the city's general fund. If you were to abate 50 percent of that, the city would then collect $30,000.”
Brown added that the Economic Development Corporation takes its responsibility seriously. The city and the corporation cannot gift property, grants or tax abatements without taking the necessary steps, he said.
“There is a process we have to go through,” he said. “There are economic qualifications, and tax abatements can be complicated and require a lot of resources from the staff and they directly affect the city’s general fund, so we want to be very judicious with tax abatements, even more so than some of the other incentives that we might provide.”
Under the guidelines, there are several qualifications that a business must meet to receive a tax abatement. For a new business, it’s expected that no less than $2 million will be invested into the facility within three years of construction. The business will also be expected to create at least 10 full-time positions in the city.
“Our goal going in was to have a formalized process that was flexible so that we could apply common sense — we never want rules so rigid that we can’t apply common sense,” Brown said.
Mayor Paul Ruggiere said the approved guidelines were thorough and will aid city officials in their decision-making. And other council members praised Brown’s work and the guidelines, saying that they’re exactly what the city needs.
As a component of the adopted tax abatement policy, the city and Economic Development Corporation will offer a beautification program in which the corporation provides grants to local businesses looking to improve the physical appearance of their buildings.
There are two types of grants under this beautification program, Brown said.
One would be a general beautification grant where businesses would be eligible for up to $10,000 in matching funds for improvements that they make to the exterior of their facilities.
The second would be a signage matching grant for up to $6,000, which is designed to help a business replace an existing pole sign with a monument sign.
A business may apply for both grants, but the maximum is $12,000 for both projects total.
Brown said the grants can be used for landscaping, tree planting, paint, brick and similar building improvements, removal of unsightly debris and improved parking and signage.
“If they were going to do paint, façade or parking lot improvements, the EDC would provide a grant to help them do that,” he said.
The tax abatements and grants are some of the tools that the city uses to attract business. Earlier this year, the City Council agreed to invest in a marketing campaign that also seeks to attract businesses.
City officials said the marketing campaign serves several purposes, including developing an identity for the city and also identifying businesses that are a good fit for the city’s demographic.
They added that it’s their plan for each incentive to complement the others to help stimulate the local economy.
JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.