St. Clair Area Chamber of Commerce Executive Director Angela Crawford and Mayor Ron Blum assured Enhanced Enterprise Zone Advisory Board members that residential property values will not decline if the state creates the zone that surrounds the city and extends east and west along the Interstate 44 corridor.
Crawford is helping the city establish the EEZ through a contract agreement between St. Clair officials and the Chamber of Commerce. She, Blum and City Administrator Rick Childers led EEZ board members through their first meeting last Thursday.
In order for the EEZ to be created, the area it contains must be declared blighted, or economically depressed.
“Property values already are low,” Crawford said. “That’s one of the reasons to seek the designation in the first place. The idea is to bring economic development into the area to help increase values.”
“The county assessor isn’t going to come in and lower property values further just because we’ve designated the area blighted and created the EEZ,” he said. “The blighted declaration is made solely for the purpose of the EEZ.”
If approved, St. Clair’s EEZ will encompass the city and Parkway Village and extend on both sides of I-44 from about Gray Summit to Stanton. There are 17 taxing entities and five school districts within the zone.
At least two of those taxing entities — the Boles and Pacific fire protection districts — are against the EEZ being established, Crawford said.
Once it is designated, companies may locate or expand in the area, and if certain criteria are met they receive tax credits.
The board is recommending a maximum 80 percent abatement over 20 years. The minimum is 50 percent over 10 years.
Retail businesses do not qualify.
The St. Clair Board of Aldermen still must approve the creation of the EEZ. The vote is scheduled for Monday, May 20, after the city conducts a public hearing at 6 p.m. on Thursday, May 9, in city hall.
During the public hearing, individuals either opposed to or in favor of the zone may address the board and the aldermen.
The Village of Parkway trustees already have approved creating the EEZ. Chairman Bob Pelton is a member of the EEZ advisory board.
Franklin County also has to declare the EEZ a blighted area. Commissioners plan to do so after the city votes.
Final say will come from the state.
On April 25, Crawford led the advisory board through a discussion about the EEZ.
“The city seriously started talking about this about three years ago,” she said. “Originally, it included Sullivan and Pacific. Over time, Pacific decided to opt out. Sullivan pursued EEZ designation on its own and was recently granted it.”
Sullivan’s EEZ features a 90 percent maximum tax abatement over 20 years. Some of its other criteria also is different than St. Clair’s.
In most categories, Sullivan’s EEZ is more aggressive than St. Clair’s.
However, Blum said he was adamant about keeping the maximum abatement at 80 percent.
“This is just one piece of our puzzle,” he said. “This is just one tool we would have to get us growing and moving forward as we help our community.”
During its meeting, the advisory board passed four resolutions that will be forwarded to the board of aldermen. The resolutions approved the board’s strategic plan, listed qualifying industries that can be a part of the EEZ, detailed the abatement levels and criteria and established the public hearing.
The seven-member board also elected St. Clair R-XIII Superintendent Mike Murphy as chairman and Charlie Butler of Farmers & Merchants Bank as vice chairman. Murphy represents the interests of the five school districts. Butler was appointed by Blum as a city representative.
Other board members are Bill Hollo, who represents the 17 taxing entities, and Pelton, Vince Morrocco, Tammy Garrett and Kathy Maupin, who also were appointed by Blum.
The board’s purpose is to manage the EEZ.
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.
An Enhanced Enterprise Zone is an economic development program designed to assist communities that qualify. It is based on demographic criteria that includes Census data, unemployment and poverty statistics and the presence of blight.
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.
“The reason we’re getting this is because it is a depressed area,” Crawford said.
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 set 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.