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EEZ Board discusses property tax abatement, job creation requirements

Wednesday, June 13, 2012 | 10:00 p.m. CDT; updated 9:51 a.m. CDT, Thursday, June 14, 2012

COLUMBIA — At its third meeting on Wednesday, the Enhanced Enterprise Zone Board focused its attention on the local property tax abatement.

The board decided on a maximum property tax abatement of 50 percent, created a subcommittee to draft local accountability measures and voted to seek legal advice on whether local minimum job creation requirements could be higher than the state minimum.

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Increasing property values

Pat Lensmeyer, the Boone County collector, recommended that the property tax abatement required for the EEZ program apply only to the increase in property value that is directly related to new investment.

The state requires a minimum of 50 percent local abatement for 10 years on “subsequent improvements” to real property within an EEZ. 

The policy recommendation would clarify that any increase in assessed value due to “market-related increases” rather than investment as part of the EEZ program would not be eligible for the abatement.

“The taxing entities would not lose quite as much,” Lensmeyer said.

The board made no formal decision on the policy recommendation.

Minimum state standards

The board discussed whether the state minimum of two jobs being created to qualify for the tax credits could be increased at the local level.

“I don’t see a problem with our standards being a little higher,” board member Anthony Stanton said. “We don’t want to be a C-average city.”

Mike Brooks, president of Regional Economic Development Inc., said that for real property investment, any new local requirements would become the state requirements for the local EEZ, based on his discussions with the Missouri Department of Economic Development. But he said he did not know if the same was true if the company did not seek any local property tax abatement.

Board member Jeremy Root made a motion to seek the legal advice of the Boone County counselor and the city counselor on whether the EEZ program allows for Columbia to impose higher minimum jobs requirements. The board passed the motion unanimously. 

Local accountability measures

Stanton expressed concern about enforcement of the minimum standards for companies to receive property tax abatement. He said companies would try to take advantage of the program without maintaining the minimum number of jobs.

“They’re going to play the books the best they can,” Stanton said. “What are we going to do to protect ourselves?”

The board voted to create a subcommittee to draft language to hold companies accountable for job creation requirements. Lensmeyer, Bernie Andrews, the vice president of REDI, and James Whitt, the Columbia Public Schools representative, are on the subcommittee.

Other business

  • The board voted to recommend the local property tax abatement within the EEZ be no more than the state minimum of 50 percent.
  • Stanton volunteered to contact the Office of Social and Economic Data Analysis to invite them to present at the next meeting of the board.

What's next?

The next meeting has been set from 5 to 7 p.m. July 2. The location has yet to be determined.

Supervising editor is John Schneller.


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Comments

Mike Martin June 13, 2012 | 10:42 p.m.

The city needs to disband this dumb idea, which is based on a series of concepts -- including blight misapplied to non-blighted areas -- that are failing around the country.

And what in Heaven's name is John Strotbeck, a Kraft Foods manager whose firm could directly benefit from the EEZ, doing back on this Blight (EEZ) Board? I had heard he decided not to re-up. Do we have no shame in this city? No sense of the need to avoid corruption and the appearance of such? Good heavens!

From an April 2011 Wall Street Journal Story, "Blight Cures Drain City Coffers"

"Redevelopment districts in California, designed to harness private enterprise to revive blighted neighborhoods, are increasingly putting a financial strain on local governments, a Wall Street Journal analysis shows.

"More than two dozen redevelopment districts in California had annual debt payments that exceeded or nearly exceeded their annual tax revenue in the fiscal year ended June 2009, the last year for which statewide data are available."

http://online.wsj.com/article/SB10001424...

(Report Comment)
David Sautner June 14, 2012 | 2:38 p.m.

No company has ever indicated that they needed enterprise zone subsidies to bring good-paying jobs with benefits to a distressed area. However, it is a fact that enterprise zone subsidies take money from public schools. If a company wants a well-trained and educated workforce, then why would it take money from schools? The answer: it doesn't care. It just wants the revenue generated from the tax subsidies. Once it gets the money, the area that it “enhanced” can go to pot (or meth as the case usually is, especially in Missouri).
The minimum job creation requirement for an EEZ is 2 jobs with a minimum investment of $100,000. That means that only big businesses get a shot at the investment. Not only that, but the jobs requirement is so low (only 2 jobs per $100,000 investment) that any higher jobs requirement on the part of the city would/could be negligible. That said, the concern over whether or not companies will try to evade the minimum jobs requirement is hilarious.
There is no mention in this article about whether or not there will be a subcommittee to oversee possible eminent domain abuse. Including members of neighborhood associations to this task would afford REDI more trust from the residents whose property they are blighting.

(Report Comment)

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