Finance Committee Agenda and Packet 2019 06 07

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SUBJECT: BUSINESS ASSISTANCE PROGRAM REVIEW AND ANALYSIS DATE: JUNE 7, 2019 PAGE5OF6 annual wage for these jobs is $86,310. The average incentive paid to create or retain a primary job is $366. The Business Assistance Packages have encouraged improvements to property totaling $74,847,203 either through tenant improvements or new construction. Every dollar of incentive paid out through the program has leveraged $27.80 of improvements to property in Louisville. Overall, the program has encouraged significant job growth, new sales tax revenue, and investments in property in the community. The program has provided more assistance to retail projects as long-term retail projects provide an on -going source of revenue to the City. The incentive per job of $366 to encourage primary job growth is an excellent value given the benefit high -paying jobs provide to the economic condition of the area. The paid incentives leverage a significant amount of improvement to property. These improvements boost the property tax revenue to the City, School District, Boulder County and Louisville Fire Protection District. There are 54 active or complete Business Assistance Packages approved by the City Council since 2007. These BAPs have resulted in roughly $2,692,140 in total incentives paid by the City, generate roughly $1,038,000 annually in new sales tax revenue to the City, have stimulated over $74 million in new private capital investment, and helped create or retain 3,400 jobs, with almost 84% of those jobs paying an average wage of about $86,000 annually. Potential Changes for Streamlining The Finance Committee asked staff to identify parts of the BAP program that could be modified to streamline approvals of projects. We envisioned projects meeting the following requirements could be approved by the City Manager and not require City Council consideration and approval. 1. Significantly exceed the eligibility requirements of the program, and 2. Commit city incentives below a determined threshold. Staff highlighted certain sections in the attached copy of the BAP ordinance which need to be modified to accommodate City Manager approval. Questions the Finance Committee should consider when discussing whether to recommend to the full City Council modifications to the BAP ordinance are: • What incentive value threshold differentiates a project between City Manager or City Council approval? • Should there be an annual limit of City Manager approved agreements? • Should the approvals be available for primary employer and/or retail projects? CITY COUNCIL COMMUNICATION 12