Finance Committee Agenda and Packet 2019 06 07

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SUBJECT: BUSINESS ASSISTANCE PROGRAM REVIEW AND ANALYSIS DATE: JUNE 7, 2019 PAGE2OF6 Building Permit Fee Rebates — The City can rebate a portion of the building permit fees associated with a new building or remodel of an existing building to incent job creation or new retail sales. Louisville has generally offered rebates of 50% of the cost of 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. A key component for businesses to remain eligible for a BAP is they must not have decided to move forward with the project or expansion prior to the BAP approval. Staff interprets `moving forward' as signing a lease, picking up a building permit (but they can apply for the permit), or close on a property. DISCUSSION: Current Strategy relating to BAP implementation The BAP program focuses on attracting and expanding primary employers (businesses which produce goods or services greater than what the local economy can consume) and retailers (businesses primarily focused on sales to end users which collect sales taxes on sales) to town. Staff utilizes a business assistance application form to obtain project details from interested businesses. Primary Employer Assistance Packages In evaluating primary employer assistance applications, staff look at several metrics of the application to determine whether to recommend an assistance package to City Council for approval. The metrics are: 1) Are the jobs created and maintained earn a salary greater than the Boulder County average wage (Currently $65,000 per year)? 2) Does the investment in Louisville real estate yield significant new revenues to the City? 3) Is the business in an industry that adds to job diversity or builds on an existing competitive advantage for the City? 4) Is the project a headquarters location for the business? Primary employer packages typically include the following incentives to encourage the project: CITY COUNCIL COMMUNICATION 9