Tuesday, Nov. 27 2012 5:29PM
Zoning in on enterprise
By Russ Pulley
rpulley@lsjournal.com
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ReprintCreating an “enterprise zone” in Lee’s Summit will help the city compete for more businesses said an official with the Missouri Department of Economic Development.
More than 120 Missouri communities have such designated areas for tax abatements for new investments. An Enhanced Enterprise Zone also would help Lee’s Summit with competition with Kansas communities, said Grey Jackson, an incentive specialist with the Missouri Department of Economic Development.
She said Lee’s Summit faces limitations on the size or location of a proposed enterprise zone because of its relative affluence, but just having an enterprise zone is an important distinction.
Many companies or real estate and site location consultants include enterprise zones as criteria in their electronic searches for land or buildings. Because Lee’s Summit doesn’t have an enterprise zone, it gets automatically kicked out of the search and so might be overlooked, she said.
Even if Lee’s Summit’s zone isn’t one that would work for a company, once it has the city on its radar other potential sites could be in play.
“To even have a small one keeps you on the list of business consultants,” Jackson said.
The economic development tool would be a blend of state tax credits and local property tax abatement.
“It is a business attraction and expansion tool,” said Chris Sally, a consultant working for the city, “one of the most basic economic development tools that can help Lee’s Summit level the playing field.”
Sally also advises the Lee’s Summit Land Clearance for Redevelopment Authority, but this zone would not be a function of that board because enterprise zones are not designed for redevelopment.
The potential Enhanced Enterprise Zone will be considered by the City Council’s Community and Economic Development Committee. The city also plans to contact the Lee’s Summit School District and hold community forums on the enterprise zone, Arbo said.
One hurdle is finding an area that fits state criteria, because it limits to zones areas with certain levels of poverty and unemployment, based on census tracts, she said.
Arbo said the city would like to create its first zone by early 2013, while it can use census data from 2000, before criteria change to require using the 2010 census, which might make it more difficult to find a site for an enterprise zone. Arbo said the city’s tactic would be to create the zone it’s identified under current information, and then look for others which might be possible later.
In the enterprise zone, tax abatements would only be on improvements. Property taxes would be frozen at a base set at time the project is approved and would stay at that level 10 years. The company would pay 50 percent of the normal taxes on improvements and 100 percent of personal property taxes. It also offers state tax credits. The life of a designated zone would be 25 years.
Missouri also has restrictions to make sure the companies applying for the tax credits pay a quality wage and at least 50 percent of employees’ health care premiums.
City and state officials would have to approve applications for the tax abatements in the zone.
Jackson said enterprise zones are about sixth on a company’s priorities in site selection, she said, with highway access first, followed by labor costs and access to skilled labor. Low crime rates and good access to healthcare also are high on the list, she said.
The area now being considered by the city would take in residential neighborhoods because it’s based on census blocks. Councilmember Kathy Hofmann asked how that might affect homeowners.
Jackson said enterprise zones would not override local zoning or planning regulations. Nor can it be used for eminent domain, she said, so there wouldn’t be a direct impact on residential neighborhoods.
Councilmember Allan Gray suggested the city proceed with the process and other members agreed even before the formal presentation was wrapped.
“You had us at hello,” Gray said.
