Economic development director seeks new enterprise zone
By ANTHONY WILSON / Abilene Reporter-News
Zoltek is in the zone.
So is Bandag, Eagle Aviation Services and Roadway Package System. Defunct Highland Foods was once there.
Now John Breier, the city's new economic development director, wants other businesses to join them.
At its next Thursday meeting, Breier will ask the Abilene City Council to renew the city's two state-designated enterprise zones and add a third zone downtown, where he believes some vacant stores could be refurbished for office operations.
Breier calls the zones, which must win state approval, a "win-win" situation: Industries within them can reap up to $1.25 million in state tax incentives while the city enjoys added jobs.
"It's to our benefit to create zones that bring companies in because the financial burden is paid for by the state and not the local community," he said. "It's a tool we can use smartly -- using someone else's money to bring jobs to Abilene."
The Texas Enterprise Zone Program encourages job creation and capital investment in economically distressed areas.
Businesses nominated by the city and designated as "enterprise projects" by the state commit to create and maintain jobs, invest in the zones, and fill at least 25 percent of new jobs with people who are economically disadvantaged or residents of an enterprise zone.
In return, the companies can earn state sales, use and franchise tax refunds up to $1.25 million over five years based on their job creation. They also win priority for various other state programs.
Cities must also offer three "unique" incentives within their zones.
Breier's department proposes:
-- A one-year refund of the city's 2-percent sales tax for certain local purchases for businesses that do not qualify for tax abatement.
Though available, the local sales tax refund hasn't been used in the past. Breier explained the incentive is more appropriate for existing, smaller businesses wanting to expand, a niche he's hoping to target.
-- An additional 5- to 10-percent property tax abatement.
The council rarely grants tax abatements.
-- In the central and eastern zones, Tax Increment Financing funds and the downtown loan program are available.
-- In the western zone, the Development Corporation of Abilene may provide infrastructure for businesses in the Greater Abilene Industrial District.
Seven years ago, the city won state designation for the western zone, a 7.3-square-mile area that includes the GAID, and the eastern zone, a 10-square-mile tract around the Abilene Regional Airport.
Before the zones expired Sept. 1, five businesses gained state designation as enterprise projects, Zoltek being the latest.
The carbon fiber manufacturer won DCOA aid with its infrastructure and expects to maximize the state incentives.
"Zoltek should create enough jobs and buy enough equipment to use up $1.25 million," Breier said. "That's a lot of money. When you put that as part of an incentive package, that's an important element.
"Without it, we would be less competitive with other states. We need that additional slice of incentives that are unavailable in any place besides enterprise zones."
The eastern and western zones are meant for manufacturing operations. Breier said the zones target property for industrial development where air quality concerns would be lessened.
He forecasted some Metroplex companies migrating to Abilene as the federal government applies ever-stricter pollution controls.
The new 3.6-square-mile central zone would encompass much of downtown. It's envisioned for "back-office" operations like the Blue Cross/Blue Shield claims processing center.
Each zone, which would exist for seven years, is drawn to include neighborhoods with high unemployment and poverty from which employers can hire workers.
Breier reported a couple of companies are currently considering seeking enterprise project designation.
The City Council will conduct a public hearing on the nomination of the three enterprise zones at 9 a.m. next Thursday. The proposal is expected to win council approval.