The Fayette County Development Authority (FCDA) on March 26 adopted its first formal policy on incentives that can be used to attract businesses to the county.
FCDA President Alan Durham said the move by the board is the first time that FCDA has implemented a formal policy for incentives.
“I felt that it was important to develop standards for the projects that we are working on so that every company would be objectively evaluated utilizing the same consistent standards,” Durham said. ”The FCDA Board of Directors also needed an established policy put in place to help guide their decisions. Other metro Atlanta counties have an economic development ordinance and we looked closely at those policies and came up with one that we feel is the best fit for Fayette County.”
So what are companies interested in moving into a community looking for and what role do incentives play in the decision?
“I am always leery when the first question from a company is regarding incentives,” Durham said. “Most companies are more interested in workforce availability, quality of life, school systems, traffic and crime. Incentives do not win a project alone. Incentives make a good location a great one. The cautious and judicious use of incentives will help us recruit and retain the kind of companies we want to see in Fayette County.”
The policy includes nine possible inducements that may be offered to targeted industries and businesses. Those include:
• Reduction of development impact fees.
• Reduction of fees for development permits.
• Reduction of application fees for rezoning requests, special use permits, variance requests and requests for changes in zoning conditions.
• Reduction of business occupation taxes.
• Reduction of water/sewer charges including reduction of system development charges for water and sewer services.
• Acceleration of all aspects of the development review process.
• Acceleration of public hearing dates for rezoning requests, special use permits, variance requests, and requests for changes in zoning conditions.
• Inducements authorized by the state Redevelopment Powers Act.
• Inducements authorized by the state Development Authorities Act, including tax abatement.
“The size and scope (of the project) will affect the amount of economic development incentives offered,” Durham said. ”Smaller projects may only qualify for expedited rezoning, medium sized projects may qualify for fee waivers if the county or cities elect to do so. Larger projects that qualify for tax abatement will have to have a positive impact on the tax digest. FCDA will never bring forward a project that has a negative return on investment. The economic impact of a project is calculated using a local fiscal impact program that serves as a cost/benefit analysis so we can see quite accurately what revenues will be generated and what additional costs will be incurred.”
To be eligible for inducements, the policy requires that the company be identified as a Targeted Industry/Business and meeting the following criteria:
1. No inducement shall be offered to any Targeted Industry/Business which does not satisfy at least two of the following conditions: add at least 25 new jobs, pay an average salary that is equal to or greater than the county’s average wage or have an estimated fiscal impact with a net present value to taxing authorities of at least $100,000, as determined by a local fiscal impact analysis.
2. A Targeted Industry/Business shall be required to contract with FCDA to meet the fiscal impact requirements.
3. In determining whether FCDA should offer inducements to a Targeted Business, the FCDA board may consider whether the Targeted Business has received a funding commitment from the state of Georgia contingent upon the business’ relocation or expansion within the state.
4. Targeted Industries/Businesses include advanced manufacturing, aerospace/aviation, bioscience, corporate or regional headquarters, film/digital media, green technologies, healthcare/medical, higher education, high tech/IT/data, logistics, manufacturing/warehousing and research/development
5. Standard tax abatement shall be for a period not to exceed 10 years. Exceptional projects that create at least 50 new jobs and have a net present value to taxing authorities of at least $500,000 may qualify for an extended abatement period with the approval of the FCDA Board of Directors. All tax abatement proposals will be disclosed in writing to affected tax authorities before a bond-for-title transaction is executed.
The policy comes with a number of stipulations that will be placed on businesses or industry receiving any inducements.
“Any Targeted Industry/Business, which receives any inducement under the provisions of this policy, shall agree not to relocate outside Fayette County for the entire period during which the inducement is granted. Should the Targeted Industry/Business relocate outside Fayette County during the inducement period, the Targeted Industry/Business shall immediately reimburse the Development Authority for the full value of any and all inducements received pursuant to this policy.
“Should the Targeted Industry/Business fail to meet its capital investment requirement, wage requirement, or employment requirement, any economic inducement offered to the Targeted Industry/Business by the Development Authority shall be refunded by 20 percent for the first such year. In the event that the Targeted Industry/Business fails to meet its requirements pursuant to this agreement for more than one year, any economic inducement offered to the Targeted Industry/Business shall be refunded by 50 percent for the second such year. The third year of non-attainment of its requirements shall result in termination of all inducements pursuant to this policy,” according to the policy.
FCDA did not implement any tax abatements in 2014 but was still successful at several relocations and expansions, Durham said.