Business Retention and Development Committee Agenda and Packet 2015 08 03

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SUBJECT: DATE: BUSINESS ASSISTANCE PROGRAM STATISTICS AUGUST 3, 2015 PAGE2OF4 these fees. The rebates are paid only after the project has received a Certificate of Occupancy from the Building Safety Division. Construction Use Tax Rebates — The materials used to construct a new building or remodel are subject to a construction use tax. The City can rebate a portion of these taxes to incent the project. These rebates are also paid out after the project has received a Certificate of Occupancy. Consumer Use Tax Rebates — For some projects, the business needs to buy items needed to operate the business (i.e. furniture and equipment). These items are subject to a consumer use tax if they are purchased from outside the City for use in the City. The City can rebate a portion of these taxes if the project meets the program's qualifications. DISCUSSION: Since 2007, the City Council has approved 59 assistance packages. Of this total, 45 are on -going or completed, consisting of 15 retail projects and 30 commercial /industrial projects. Thirteen of these agreements either did not result in the business or project coming to Louisville or the business or project did not meet the requirements to receive the assistance (i.e. didn't occur in the timeframe specified in the agreement). Staff analyzed several sources of data to evaluate the effect the Business Assistance Program has had on the Louisville economy: • Permit fees paid and construction values were obtained from Building Services department files. These values include construction costs of new buildings (if applicable) and any tenant finishes which were directly related to project incented by the Business Assistance Package. This includes projects that have paid their permits and fees, but have not been rebated. • The amount of incentives paid out from Assistance Agreements through July 2015. • Jobs and wage data obtained from the State of Colorado's Quarterly Census of Employment and Wages (QCEW) data from the third quarter of 2014. This information is confidential at the business level, but can be provided in aggregate to prevent distribution of information about a particular business. Some businesses that are in operation have not hit the database as of Q3 2014. Those businesses will likely show up in next year's reporting. This analysis is a snapshot of the program as of July 2015. Several projects have not begun (i.e. McCaslin Retail) or are in the middle of construction (i.e. Rogue Wave) so the full effect of the projects have yet to be documented. The analysis separated the projects into retail and commercial categories, as a main goal of incenting retail is to encourage new sales in the community, and incenting commercial projects is to encourage high quality primary job growth. The following CITY COUNCIL COMMUNICATION