Sunday, April 14, 2024

City Council to Review Economic Incentives Policy

Williamsburg Municipal Building
Williamsburg Municipal Building

Finalizing an economic development incentives policy for the current fiscal year will be a topic of discussion at today’s Williamsburg City Council meeting.

The Williamsburg Economic Development Authority will present recommendations to the council for an incentives policy for fiscal year 2015, which began July 1 and runs through June 30. The city’s 2014-15 budget allocates a one-time contingency fund of $250,000 to be used to entice businesses to open in the city.

The proposed policy, which needs City Council approval before the funds can be allocated, lays out a set of five criteria to determine whether a project should qualify for financial incentives from the city: the business has a clear public purpose and economic benefit for the city; would not occur in the city “but for” offering incentives; has the financial stability and capacity to complete the project; has a five-year projected positive tax impact at least equal to the incentives given to the project; and is a targeted industry as established by the EDA.

The EDA has thus far established nine kinds of projects as targeted industries: existing city businesses, distilling/brewing, health/medical related, corporate headquarters, destination retail, creative economy, contemporary hospitality, research and development, and tourist attractions.

The policy also outlines six incentive guidelines. No minimum grant amount would be set, and the maximum grant amount would be limited to the sum of 60 months of tax impact. Grants more than $100,000 would require approval from the City Council. Property owners would be preferred to tenants. Gap financing, loans and grants would be the encouraged forms of incentives. Recipients of incentives would agree to execute a recapture agreement based on the performance of the project.

According to the proposed policy, the EDA would approach projects on a case-by-case basis, and would not be obligated to award incentives under any circumstances.

In a memo to council members, City Manager Jack Tuttle said the EDA’s proposed policy kept with the organization’s belief public funds should be used to subsidize private businesses in limited circumstances, such as when providing funds would result in measurable economic growth, the expansion and diversification of the city’s tax base, and the creation of new jobs.

Tuttle recommended the council adopt the proposed policy. The council will meet Thursday at 2 p.m. in the third floor conference room of the Municipal Building at 401 Lafayette St.

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