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More bang for the business: Danville may stretch incentives to lure companies in

October 27, 2009|By DAVID BROCK

Danville may have moved a step closer to offering new incentives to commercial businesses, particularly those that would locate in the downtown area.

During a special called meeting and workshop Monday, Jody Lassiter, president of the Danville-Boyle County Economic Development Partnership, told the city commission more must be done to lure businesses.

Danville currently offers property tax abatements for up to five years under certain conditions and the city has expressed willingness to work on a case by case basis. However, incentives in the past have primarily been extended. Lassiter said he thinks the city needs more specific enticements for commercial business.

"Several cities around the state are reviewing what they offer and it is good timing for us because we have some prospects that are interested," Lassiter said. "Retail and commercial is an area we have not waded into yet. I think we need to look at some targeted incentives for downtown, particularly relative to potential restaurant and grocery prospects."

Among the possible incentives Lassiter discussed were abatement of occupational license fees in the form of a job training credit, recaptured economic development bond funds that would go to site improvements for new businesses and waivers of city fees.

Danville currently has a net profit tax of 1 percent and a payroll tax of 1.25 percent.

Lassiter said any abatement of payroll could be handled in the same way the state offers their industrial incentives, with the city refunding a portion of the payroll tax to the business for a period of time.

"The only freedom that local governments really have with regards to incentives is the occupational license fee," Lassiter said.

City Manager Paul Stansbury said he is willing to work on a new incentives package, but notes the decision should not be taken with haste.

"No matter how you look at it, this is a matter of revenue," Stansbury said. "Those revenues go to maintaining services and with new businesses there is an expansion in services. We have to see what the will of the community is."

While many incentive programs in the past lay out a five or 10 year plan, Lassiter said that duration may be too long.

"Businesses are looking for as much up front as they can get now," Lassiter said. "Five or 10 years is eons in today's business climate."

Some commissioners expressed hesitation at the idea of offering incentives to retail businesses that have are susceptible to closure.

"Even with 'claw-backs,' is there really any way to guarantee that a business would be able to pay the city back," said Commissioner Terry Crowley.

Commissioners asked for Lassiter to return in November with proposals for how to strengthen existing industrial incentives, specific commercial incentives and ways to retain existing business.

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