COLUMBIA — Regional Economic Development Inc. is pushing forward with the idea of developing an enhanced enterprise zone that could create jobs while generating property tax revenue for Columbia schools and other taxing entities.
Boone County has lost a total of 1,920 manufacturing jobs since 2004, according to a REDI report delivered to the Columbia City Council on Tuesday. The enhanced enterprise zone would provide tax incentives intended to spark expansion of existing businesses or manufacturing companies and the creation of new small businesses.
Businesses in the zone would be eligible for a 50 percent abatement of property taxes over 10 years on new or expanded buildings and infrastructure. Personal property such as furniture, equipment and vehicles would be ineligible for the tax abatement, Bernie Andrews, executive vice president of REDI, said.
“Once the zone is designated, new building must take place for the company to receive the tax credits,” Andrews said. “If an existing manufacturing company (within the zone) adds on a 25,000-square-foot expansion, then only the expansion can be taxed at 50 percent.”
Although manufacturers in the enhanced enterprise zone would get tax breaks if they expand, tax revenue to the community still would rise, Andrews said.
REDI Chairman Dave Griggs cited an example during his presentation to the council. If a business along Route B, which would be included in the enterprise zone, were to make $10 million worth of investments in real property and $5 million worth of investments in personal property, the net increase in property taxes collected over 10 years would be $1.3 million. Of that, about $1 million would go to Columbia Public Schools.
Heightened competition between branch plants is another benefit of the enhanced enterprise zone program, Andrews said.
“It’s a pretty good tool for manufacturing companies,” he said. “With the program, branch companies that come to Columbia can compete against other branches across the state for cost.”
REDI officials hope the program will entice businesses such as Kraft Foods, Dana Corp. and Quaker Oats to expand their operations.
To be eligible for benefits, a business must create a minimum of two jobs. Ultimately, however, the local Enhanced Enterprise Zone Advisory Board will determine business eligibility.
REDI is recommending the following people be appointed to the advisory board:
- Todd Culley of Boone Electric Cooperative or Randy Morrow of Boone Hospital Center
- Carrie Gartner of the Downtown Community Improvement District
- Louis Gatewood of the Columbia Housing Authority
- Mariel Liggett of Williams Keepers
- Jonathan Sessions of the Columbia Board of Education
- John Strotbeck of Kraft Foods
- Representatives of other taxing entities, which might include the city of Columbia, Boone County, the Daniel Boone Regional Library and the Boone County Fire Protection District.
Solidifying the selection of the seven members of the advisory board is one of the next steps in the completion of the enhanced enterprise zone designation application to the Missouri Department of Economic Development. The exact zone area still needs to be established, and eligible business clusters have yet to be determined.