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Aldermen to Consider Extending Special Tax Zone's Life

Updated: Friday, August 15 2014, 09:50 AM CDT
SPRINGFIELD -- The Houston administration wants to keep it tax free.

Mayor Mike
Houston  is sponsoring an ordinance on behalf of the Office of Planning
and Economic Development to extend the city's enterprise zone's
expiration date from Dec. 31, 2014 to July 1, 2016. The 56 "sub-zones"
in the city allow homeowners and businesses in economically depressed
areas to get tax incentives for new construction.

 Projects can
receive an abatement on their property tax for three to five years and
pay no state or local sales tax on building supplies.

This can
mean the difference of a project happening at all. MJ Kellner, for
example, almost didn't move to their West Side location.

"I think
we would have had to question where we put it," said MJ Kellner
vice-president, Dave Rikas. "Obviously moving just outside of the City
of Springfield, we could have saved some additional jobs."

But
because the project would create more than 20 jobs, the project site was
able to become one of the city's enterprise sub zones , which meant no
state or local sales taxes could be applied to the  building supplies on
the $7.4 million facility.

"Big chunk of change," said Rikas.

So,  the city kept the food distributor as a business.

The
tax incentives provided by the zones have helped businesses and
homeowners afford building projects since the first enterprise sub zone
opened up in the 80's out near the airport. In 2013, 13 projects
benefitted from the program - eight businesses and five residential
projects.

The city wants to keep that going, especially for the sake of business.
   
"Well
if we extend the enterprise zone, it helps market Springfield," said
Teri Whitfield, the city's enterprise zone administrator. "It's a good
incentive to bring business here."

It's possibly also a necessary one.

"You
know, there's certain companies I feel that wouldn't be able to locate
here in Springfield, without the incentive of the enterprise zone,"
Whitfield said.

Plus, the homeowners or businesses can get a
break on the city's portion of their property taxes for up to three or
five years. By extending the life of the enterprise zone, the city
extends the benefits for projects that might otherwise have been cut
short.

"Otherwise it would fall off," Whitfield explained. "Some
of them are going to receive that three-year. Some of them are going to
receive the five-year by extending it to July 2016."

And while an
extra 18-months wouldn't help new projects much with the property tax
abatement, zero percent sales tax on building supplies is a big deal.

"We
only had a limited amount of dollars available to us," Rikas said.
"That 8 percent really made the project easier to put together."Aldermen to Consider Extending Special Tax Zone's Life


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