December 14, 2019

Mallory Herrmann

The city council is moving forward with draft policy language related to Land Clearance for Redevelopment Authority (LCRA). The policy provisions will be incorporated into the city’s economic development incentive policy.

The language was written to help guide the decision-making process for the council as they consider requests for economic development incentives.

While the city does not frequently receive such requests, the process has not been especially consistent. The LCRA program was reauthorized in 2009 and has since been approved for real property tax abatement benefits for 13 projects.

The new policy language includes 13 guidelines for the LCRA and city council to follow when considering future applications, though the language is strictly a guide and not legally binding. These include the level and duration of abatement requested, giving preference to projects that do not request more than half of the real or personal property taxes or more than ten years.

The guidelines also include provisions related to public benefit or improvements, the immediate generation of new tax revenues, new and retained jobs, sustainable development and historic preservation.

One of the biggest points of discussion among the council was whether to approach incentives based on the calendar year, granting abatement for a set number of years, or based on a targeted amount, granting abatement until a designated dollar amount has been abated.

While the LCRA’s recommended language proposed a targeted-amount approach, Councilmember Bob Johnson argued for a calendar-based approach.

“I don’t feel comfortable going beyond calendar,” Johnson said, suggesting that a project approved based on their intention to add quality jobs may not make it.

“If they can’t make it, I don’t want to continue the tax subsidy only because I don’t see the quality jobs being produced.”

Mayor Bill Baird disagreed, noting that a lot can change over ten years and that a targeted-amount approach offers a fairer opportunity to developers.

“Ten years ago, no one would’ve guessed that property tax values would go down in the county,” Baird said. “Within a ten-year period, Councilmember, it does even out.”

Still, Johnson said that with programs like these that rely on public participation, the city should be making sure that the goals are achieved.

“If you’re asking for the taxpayer to contribute on this, on these various programs, then I want something in return,” said Johnson. “And what that is, is I want quality jobs.”

Mark Dunning, assistant city manager, noted that the spreadsheet used to total the criteria shown in the guidelines is weighted to favor quality jobs more than other factors, including more than simply adding new jobs that may be low wage.

In the end, the council voted unanimously to direct staff to draft an ordinance that will come back to the council for review in January.

Councilmember Craig Faith was absent from the Dec. 10 session.