Economic Vitality Committee Agenda and Packet 2024 08 16

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SUBJECT: INCENTIVE IMPACTS DATE: AUGUST 16, 2024 PAGE2OF3 Similarly, permit and sign fees are eligible for rebate within the Business Assistance Program. Like the tax portion, these are rebates based on true cost of fees for the project. There is no up -front cost paid out by the City of Louisville and all fee rebates are paid from the new fees generated by the project. The City retains the remainder of the net new revenue from the project fees. New jobs created by the project are also a direct result of the project opening in a community. These are jobs created by the new business that did not exist in the community prior to the business opening. These new jobs provide income to employees, creating a stronger economic environment. Additional jobs in a community create opportunities for employees to find the right fit and engage in their economy to the best of their ability. Potentially the most visible impact from new businesses is blight mitigation and vacancy reduction. There is a lot of excitement around constructing a new building or filling an existing vacant building. There are additional benefits such as additional lighting, potential reduction in crime, increase in property taxes and sales taxes, and new site activation Indirect Impacts For this conversation, indirect impacts are going to be the things we associate with new businesses and investment, but do not have as linear a connection as direct impacts. New businesses and investments often result in an increase in property values and related property taxes. While the City does not receive the full direct benefit of increased property taxes, we see indirect benefits from the County and partner services that benefit from increases in property taxes. This increase in property taxes provides the receiving entities additional funding for operations and activities, of which Louisville is often a recipient. New jobs also provide indirect benefits to the City of Louisville from people working and spending that new money within our community. The income spent can be considered an indirect benefit because it is hard to determine exactly how much of the incomes from these new jobs are spent within the City of Louisville but we often see an increase in sales tax from surrounding businesses as new businesses open and hire in the City of Louisville. Creating environments where a multitude of business types and residents are able to interact, provides opportunity to these new jobs to continue to spend money in Louisville. The City of Louisville receives similar benefits as new jobs from construction jobs. As projects move forward and investments are made in our community, we benefit from the construction of the project in a variety of ways. The direct impacts can include the fees and taxes that come from the construction project itself as discussed above. The CITY COUNCIL COMMUNICATION