Economic Vitality Committee Agenda and Packet 2024 06 21

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Cityof ECONOMIC VITALITY COMMITTEE Louisville COLORADO • SINCE 1878 SUBJECT: PROPOSED BAP AMENDMENT DATE: JUNE 21, 2024 PRESENTED BY: VANESSA ZARATE, CECD, ECONOMIC VITALITY MANAGER SUMMARY: In 2007, the Louisville City Council adopted Chapter 3.24 of the Louisville Municipal Code establishing the City's Tax and Fee Business Assistance Program (BAP), which authorizes rebates of certain taxes and fees to businesses to encourage the recruitment, retention, establishment and/or expansion of sales tax generating businesses and employers within the City. The intent of the program is to provide financial rebates to businesses that provide employment opportunities, provide goods and services and positively contribute to the economy and quality of life for Louisville. The BAP has proven to be quite successful over the years. The BAP allows businesses to take advantage of multiple rebates to include building permit and sign permit fees, construction and use tax fees and sales tax rebates. All incentives are performance based and rebates for true costs incurred for the project. As of May 2024, there are 34 active BAPs that include retail, office and industrial users. In addition, there are 76 archived BAPs. The BAP is the only city-wide attraction, retention and expansion incentive available to businesses looking to locate or expand in Louisville. Businesses of all sizes and industries can apply for a BAP incentive through the Economic Vitality team. To be eligible, a company must be one of the following: a new business seeking to open in or relocate to Louisville; an existing business which proposes to expand in the City; or an existing business that must relocate to a new premises due to non -renewal of a lease or other unforeseen circumstance outside of the business owner's control. Application for inclusion in the BAP must be made prior to the proposed opening, acquisition or expansion. All agreements are structured as rebates, no up -front incentives are offered through this program. • Through the current program, the City can offer rebates on the following items for a period of up to 10 years or until a specified maximum amount is reached: ■ Building Permit Fees ■ Sign Permit Fees ■ Construction Use Tax ■ Consumer Use Tax ■ Sales and/or Use Tax Historically, the City's most used parameters are to issue rebates equal to approximately 50% of the above -listed fees and taxes for projects that are awarded an incentive through the BAP. In 2010, the City adopted a tax for using, storing, distributing or otherwise consuming tangible personal property or taxable services inside the City, aka `consumer use tax', which became