$6M in tax breaks to help in job-creation
The Economic Health Office, headed by Josh Birks, is also looking to spend five times as much money — a total of $50,000 a year — to help the Northern Colorado Economic Development Corp. identify and attract certain types of companies to bring to the city.
It also wants to spend money helping to promote local retailers.
Those are the highlights of the spending plans that would have a direct impact on business in the two-year spending blueprint now before the council.
Excluding rebates offered to businesses, Economic Health’s budget would increase by less than 5 percent, hovering around $1 million in each of the next two years.
The $6 million in incentives includes $2 million in sales- and use-tax rebates in 2013 and another $4 million for 2014.
None of this is new money, per se, though these dollars were not included in past budgets, Birks said. The $6 million was added for 2013-14 as part of a push for greater transparency, he said.
The rebates — based on dollars created by new economic activity — are used to assist so-called primary employers with relocation and expansion efforts.
The Economic Health Office is also seeking a $40,000 increase in the “investment” it makes in the NCEDC. Right now, the city spends $10,000 a year in NCEDC, Birks said, but his department is asking to increase that amount to $50,000.
The money, Birks said, would be used to work with the NCEDC to target supply-chain gaps.
Some companies here import raw products from elsewhere in the country to manufacture their products, Birks said.
The idea, Birks said, is to try to attract the manufacturers of these raw products to our area, creating jobs and minimizing shipment costs for local companies.
The city also could work to bridge gaps in industry clusters, Birks said. The city has identified five industry clusters, which are geographically concentrated companies and institutions in a particular field.
Fort Collins’ clusters — not to be confused with CSU’s Superclusters — are bioscience, clean energy, technology, water innovation and “uniquely Fort Collins,” which includes those companies that are unique, independent and contribute to the quality of life in Fort Collins.
Two of these clusters overlap with CSU Superclusters. CSU is home to clusters in the areas of clean energy, infectious disease — which is a parallel with bioscience — and cancer research.
Between the city and CSU, there are clusters in six different sectors, but working more closely with the NCEDC may help to identify other areas in which an industry cluster may be helpful, Birks said.
Another change requested by the Economic Health Office is a $15,000 investment in the Shop Fort Collins First initiative, which encourages shoppers to spend their retail dollars locally instead of heading to Loveland’s Centerra or Denver.
Shop Fort Collins First works to educate consumers that 60 percent of the funding for city services like parks, police and the fire department, comes from sales- and use-tax, and that for every $100 spent in Fort Collins, $3.85 goes to city services.
The effort is supported mostly by local retailers and retail associations, but the city’s increased support will help create a single marketing campaign, Birks said.
Beyond these changes, the Economic Health Office is looking to streamline the process for businesses that request incentives.
Birks cited the recent example of Avago Technologies, which was recently approved for a second round of tax breaks worth $4.6 million.
It took several months for Avago’s request to be heard by City Council, Birks said, rather than a more desirable time frame of six to eight weeks.
A request to use $1 million to establish a revolving loan fund to help existing businesses expand or move to a new location within the city was not approved by council on its first reading of the budget last month. The fund would have targeted startups that are no more than 2 years old and businesses that are focused on arts and culture or local food production.
The budget must pass a second reading by the city council on Nov. 20.
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