The city of Sullivan hopes to spur economic development with the creation of a new zone.

The area would be called an Enhanced Enterprise Zone, and it would include all of the city of Sullivan, the village of Oak Grove, village of Miramiquoa, and a portion of unincorporated Franklin County around Sullivan.

This would be the first Enhanced Enterprise Zone in Franklin County, and the program has been in place since 2004. Statewide, there are 126 of the zones.

Under the state program, businesses that locate in the zones can get local property tax abatements.

“It really is an incentive that gives businesses a very strong reason to consider relocating to the zone,” said John Fougere, spokesman for the Missouri Department of Economic Development.

Communities within the zone can use it as a marketing tool, Fougere said, adding that the program can help small, growing businesses.

Sullivan City Administrator J.T. Hardy said he is awaiting approval from the state Department of Economic Development to see if the application for the zone will be approved. He said he expects to hear in the next couple of weeks whether the zone is approved.

To qualify for the Enhanced Enterprise Zone designation, an area must meet the statutory designation of being “distressed,” Fougere said.

To meet that designation, the unemployment rate in the proposed zone must be higher than the state or county average; 60 percent of the people living in the zone must be at or below the federal poverty level; and the population in the zone must have decreased.

Hardy said the Enhanced Enterprise Zones were designed to improve the quality of life in an area by reducing the unemployment rate and raising wages.

The program works by abating property taxes for new businesses and expansions of existing ones.

Hardy said only certain types of industries are eligible for the Enhanced Enterprise Zone benefits. Retail, gambling and eating/drinking establishments are among the businesses ineligible for the program.

Manufacturing, construction and warehousing are examples of industries that could benefit from the program.

Under the program, a business can qualify for 50 percent tax abatement for 10 years if it invests a minimum of $100,000, pays 50 percent of employees’ health insurance costs and creates two new full-time jobs that pay the average wage of the county.

Larger abatements, up to 90 percent for 20 years, are available to businesses depending on the amount of investment, number of employees and amount of wages.

Hardy said a good aspect of the program is that it does not cause taxing entities, such as fire districts, schools and libraries, to lose any of the revenue they are getting presently. For instance, if a business gets an abatement for expanding, the tax break only applies to the new portion, not what is currently being taxed.

If approved, the Enhanced Enterprise Zone will give Sullivan and the area around it an advantage when it comes to attracting new industry, Hardy said.