City Makes Progress on Getting EEZ - The Missourian: Communities

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City Makes Progress on Getting EEZ

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Posted: Wednesday, April 24, 2013 7:45 am | Updated: 7:32 pm, Sat Jun 22, 2013.

St. Clair is making progress toward establishing an Enhanced Enterprise Zone that could spur industrial and economic development and expansion in and around the city.

The EEZ has been on St. Clair’s radar for several years, and late in 2012 it gained momentum through the assistance of the St. Clair Area Chamber of Commerce, which has partnered with the city toward developing the area. Chamber Executive Director Angela Crawford has been spearheading the local EEZ efforts.

“Now that we have all of the basics of the application covered, I’m really excited to pull it all together,” Crawford told The Missourian. “St. Clair and the surrounding area will soon have one more tool in their economic development toolbox as they work to create jobs and enhance the economic vitality of the region.”

During the April 15 board of aldermen meeting, an ordinance was approved establishing the seven-member EEZ advisory board. Those members are St. Clair R-XIII School District Superintendent Mike Murphy as school board representative, St. Clair Ambulance District Chief Bill Hollo as taxing entity representative and Tammy Garrett, Charlie Butler, Vince Morrocco, Bob Pelton and Kathy Maupin as board members.

That board will manage the EEZ.

It also was shared that a public hearing on the zone has been scheduled for 6 p.m. on Thursday, May 9, in city hall. A public hearing must take place as part of the application process with the state.

In 2011, the Franklin County Commission approved going forward with the EEZ application process with city governments having to determine the size of each zone from qualifying U.S. Census tracts as well as what kinds of businesses will be able to seek property tax abatements associated with the zone.

St. Clair’s EEZ takes in the city and Parkway Village as well as a swath along the Interstate 44 corridor from Stanton to Villa Ridge.

A week ago Tuesday, the Franklin County Commission tabled an effort to declare St. Clair and an area surrounding it blighted. That designation is necessary for an EEZ.

Commissioners put the issue on hold until St. Clair takes further action related to the zone.

The EEZ Advisory Board will conduct its first meeting at 7 p.m. on Thursday in city hall.

Qualifications

An Enhanced Enterprise Zone is an economic development program designed to assist communities that qualify. In order to qualify, the unemployment rate in the targeted zone must be higher than county and state figures, and 60 percent of the median family incomes in the zone must be lower than 90 percent of the county and state average.

“EEZs are based geographically only on census tracts,” Childers said for an earlier story. “There is no direct link to political or any other kind of boundary. In putting an EEZ together, the cumulative total of involved tracts have to qualify. They’re based on unemployment figures and income levels.”

How It Works

The zone works by supplying a tax abatement program for current businesses that want to expand or new businesses that want to locate here. The benefits apply only to those that qualify after the EEZ is established.

“The ultimate goal is creating jobs and business investment within the zone, which benefits the community,” Childers said. “You give new or existing businesses a tax break to build or expand locally, and the cost of this is zero dollars to the taxpayer.”

According to information from the state, the EEZ program is a discretionary business recruitment and expansion program offering state tax credits, accompanied by local real estate property tax abatement, to Enhanced Business Enterprises. Tax credits may be provided each year for five years after the project commences operations.

To receive tax credits for any of the five years, the facility must create and maintain the minimum of two new employees and $100,000 in new investment for a new or expanded facility or two new employees and a $1 million investment for a replacement business facility.

An EEZ cannot be used for retail development or expansion.

Partnership

In February, a contract was signed between the city and the St. Clair Area Chamber of Commerce. The one-year pact calls for the Chamber to provide economic development services for the city. In return, the Chamber will receive $6,500 for the work.

The contract was signed by Mayor Ron Blum and 2013 Chamber board President Bob Triphahn.

In January, the city’s board of aldermen approved an ordinance authorizing Blum to enter into the agreement for the professional services with the St. Clair Chamber. The Chamber board then approved the same contract later in the month.

The contract between the two entities states that the Chamber will complete the city’s Enhanced Enterprise Zone application process and seek the city’s designation as an EEZ from the Missouri Department of Economic Development. Also, the Chamber will be responsible for updating the city’s existing market area demographics from the 2000 Census data to 2010.

The original deadline was March 31, but the board of aldermen has extended that date to May 15.

City officials have said there already are a couple of businesses interested in taking advantage of the EEZ once it becomes a reality.

The Chamber has said Crawford will continue to spearhead the project.

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