City Council on Tuesday debated a resolution dealing with the adoption of a new 380 Incentives Policy incentives policy that would give companies rebates on property taxes to spur investment and job creation.
In her presentation to the council, Economic Development Director Kathryn Dodson said that in order for businesses and individuals to be eligible for the incentives, they must first be current on all city taxes along with any other obligations to the city.
Those interested in the incentives must also comply with certain wage requirements set by the city.
The current incentives policy is based on the median county wage, or MCW, which last year dropped from $10.57 per hour to $10.42 per hour. Because of that decrease, the economic development department is seeking the qualifying wage for incentive eligibility to be set at the higher MCW of $10.57 per hour.
The economic development department also recommended setting the lowest wage threshold at which projects can receive incentives to $9.51 per hour, which increases it from 80 percent to 90 percent of the qualifying wage.
Projects receiving incentives at this wage level must also meet other criteria: they must be located in a targeted area, must be a targeted type of business, or be considered a capital-intensive project.
Businesses and individuals meeting those criteria are only eligible for a 25-percent grant, Dodson said.
Dodson also explained that in addition to quality wage incentives, the city will also provide rebates to capital-related projects, describing them as projects that benefit the community by providing much-needed monies to the city’s general fund through property tax collections.
To be considered as capital-intensive, a project must be located in a targeted redevelopment area. These projects will receive incentives bases on capital investment only.
Projects that qualify under both the quality job criteria and the new capital-intensive project criteria may be eligible for up to a 65-percent grant. Those that qualify under the capital-intensive criteria and meeting the minimum wage threshold may qualify for up to a 35-percent grant.
In addition to applying for those two grants, businesses and individuals can apply for an additional 50 percent bonus by meeting one of three other criteria: agreeing to locate within the area of the Downtown 2015 Plan; locating a headquarters unit in El Paso and meeting a 100-employee minimum; or locating a research and development facility, as defined by federal law, in El Paso along with a minimum of 25-percent of the new jobs at that facility being involved with research and development.
The final policy change presented to council was the recommendation that incentives be approved for no more than 100-percent of the tax income stream generated from the project. This incentive cap was recommended because any amount above the 100-perecent mark would have to be taken from the city’s general fund, which would effect the city’s budget.
Rep. Susie Byrd was pleased with the presentation given to council by Dodson’s department. “It’s very refreshing that economic development has been listening and fine-tuning as we go along,” she said.
Council 5-1 to approve the resolution, with Rep. Eddie Holguin voting nay and Rep. Melina Castro not present when the vote was taken.
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Rene Leon can be contacted at rene@newspapertree.com, or at 915.351.0605.
