The city and the St. Clair Area Chamber of Commerce appear to be close to reaching an agreement that would allow for some economic development services to be performed for the city by the not-for-profit organization.
During Monday’s board of aldermen meeting, an ordinance was passed authorizing Mayor Ron Blum to enter into an agreement for the professional services with the St. Clair Chamber. If the Chamber board of directors also approves the contract when it meets on Jan. 23, the deal will be inked.
The city and Chamber have been negotiating a potential pact for several months.
“This is an item that has been discussed pretty extensively,” City Administrator Rick Childers told aldermen during the Jan. 7 meeting before they unanimously approved the first ordinance of the new year.
The latest version of 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.
Both deadlines are before the midpoint of the year.
In exchange for the services, the city will pay the Chamber $6,500.
“The fact that the Chamber’s mission is in part to further the economic development of St. Clair, this partnership is a perfect fit,” said Chamber Executive Director Angela Crawford, who worked with Childers and Mayor Blum as well as the Chamber board of directors in putting the deal together. “In order to take some of the responsibility off the city, I will be utilizing my Chamber relationships to meet the needs of companies in the area.”
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.
City officials first decided to work toward establishing an EEZ in 2011 but have not had the manpower to proceed.
During meetings around that earlier time frame, the Franklin County Commission approved going forward with the EEZ application process, but said city governments will have 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.
Childers earlier has said St. Clair’s EEZ will stretch along the Interstate 44 corridor from near Stanton to near Villa Ridge and will encompass the entire St. Clair city limits as well as Parkway. Census information from 2010 states that 10,378 individuals live in that proposed zone.
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 Enhanced Enterprise Zone is established.
“The ultimate goal is creating jobs and business investment within the zone, which benefits the community,” Childers told The Missourian for an earlier story. “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 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.
Ultimately, an Enhanced Enterprise Zone board would be put together. Those board members — which must include a member from school districts serving the area, one member from the other taxing entities within the zone and five members appointed by the chief authority, such as a mayor — will complete the application and submit it to the county and state for approval. Ultimately, that board will manage the EEZ.
The $6,500 fee the city would pay the Chamber significantly is less than the original proposal prepared by Crawford, but the included items for the services performed are fewer as well.
Originally, she proposed a $39,000 price tag for the city that included attending conferences and training as well as including marketing services. Of that amount, $26,880 was salary.
A second proposal prepared by her for the city and approved by the Chamber board carried the $26,880 salary figure and included the EEZ application process, the Census update and several other items, including creating and maintaining an economic development page on the Chamber’s website.
In December, the city ended up approving $9,000 for economic development in its 2013 budget. The contract that included the $6,500 came in early January.
“I feel like I’m already using my skills as executive director of the Chamber,” Crawford said. “But to use them directly for economic development is something I’m very excited about.
“In terms of the EEZ and doing other things for the city, I think they’re essential tasks to help move St. Clair forward.”
An executive committee consisting of 2012 Chamber officers on the board of directors worked with Crawford to prepare the proposed contract.
The Chamber has said Crawford will be doing the work.
If the Chamber board approves it later this month, it will be signed by Blum and City Clerk Chris Fawe as well as by 2013 Chamber board President Bob Triphahn and Vice President Tim Davis.