By Sammie George, Bent County Development Foundation Director
Over the next number of months I will be using this column to go in-depth about the multiple tools that I, and other economic developers utilize, which are critical to my ability to perform the expected duties laid out by my Board, the City, and the County elected officials.
First of all, let’s cover the definition of economic development.
According to Wikipedia- economic development is the process by which the economic well-being and quality of life of a region, or local community, are improved according to targeted goals and objectives.
According to Britannica- it is often used as a synonym for economic growth, generally it is employed to describe a change in a designated area’s economy involving qualitative as well as quantitative improvements.
The Bent County Development Foundation (BCDF) has taken these definitions into consideration in the development of our mission- to increase the general economic development and improve the quality of life for existing and future residents of Bent County by focusing on supporting existing businesses, and strengthening the economic infrastructure of the community so that every business can thrive.
Using this information for perspective moving forward; I’m also going to explain some partnerships that I have with other economic development organizations (EDOs) and their available resources that I utilize.
One might ask that since the BCDF is an EDO, why is it necessary for me to partner with other EDOs.
Well- it’s because not all EDOs are created equal. Some have access to different programs than others, and some have more capacity than others to manage certain programs. Being that the BCDF if a one-man-show … it is often necessary for me to rely on partnerships to maximize my time and efficiency to benefit Bent County in the most impactful ways. It’s also necessary that each and every EDO isn’t just duplicating efforts, as that would require massive amounts of funding and personnel for program startup and management … resulting in non-productive non-collaboration.
The first tool that I’d like to discuss is called Enterprise Zone (EZ) Program. This program is designed to promote a business-friendly environment in economically distressed areas by offering state income tax credits that incentivize businesses to locate and develop in these communities. Private-sector business activity encouraged by these income tax incentives brings job opportunities and capital investment to economically distressed areas. The private investment results in tax revenue for school districts, cities, counties and the state, outweighing the costs of the tax credits granted.
There are a number of tax credits under this program.
1) Investment Tax Credit: Businesses investing in EZs through business personal property can earn a 3% tax credit.
2) Job Training: Companies that implement a qualified job-training program for their EZ employees may earn an income tax credit of 12% of their eligible training costs.
3) New Employee Credit: Businesses increasing their workforce may earn a state income tax credit of $1,100 per net new employee. Under this credit if the business is an agricultural processor there’s an additional $500 per net new employee AND if you’re located in an Enhanced Rural EZ (which all of Bent County is) there’s an additional $2,000 per net new employee … which means for each new employee added to a business that owner will earn $3,100 per new employee in tax credits.
4) Employer Sponsored Health Insurance: Offers businesses $1,000 per net new employee insured under a qualified health plan for which the employer pays at least 50% of the cost. This credit is available for the first two years the business is located in an EZ.
5) Research & Development: Businesses conducting research and development may earn a 3% tax credit on the increase in such expenditures as compared to that of the prior 2 years.
6) Vacant Commercial Building Rehabilitation: Encourages redevelopment of vacant commercial property with a 25% credit for the cost of rehabilitation of a building that is at least 20 years old and has been completely vacant for at least 2 years. The credit is limited to $50,000 per building.
7) Commercial Vehicle Investment: Investment in commercial trucks, truck tractors, tractors, or semitrailers, and associated parts registered in CO and based and used in an EZ may earn the taxpayer a 1.5% credit.
8) Contribution Projects: EZ Contribution Projects encourage community participation and public-private partnerships to revitalize EZs. EZ Administrators may propose projects for EZ Project status to implement the economic development plan of that specific EZ. EZ Administrators work with their communities to bring forward proposals that support local economic improvements, result in job creation/retention and business expansion, and have the support of the community. Colorado taxpayers may earn a 25% state income tax credit by contributing to targeted efforts. The BCDF, John Rawlings Museum, and Fort Lyon are all EZ Contribution Projects in Bent County that greatly benefit from this program.
As you read through the 8 tax credits listed above- there are a number that have the potential to impact our local communities in massive ways. For example- if someone came into Las Animas and purchased an old, dilapidated building on main street that’s been vacant for more than 2 years and they fix up the building, start a new business, and hire new people; providing them insurance and training … they would utilize 5 of the 8 tax credits … which could be extremely impactful to a new business owner trying to start up.
The State of Colorado designates EZs and appoints administrators for each zone. The administrator of the EZ that unincorporated Bent County and the City of Las Animas belong to is the EDO located in Lamar- Southeast Colorado Economic Development (SECED). In order to be eligible for the benefits of the EZ Program each municipality and County (covering the unincorporated areas of the County) must be a member of SECED and pay an annual membership. If a municipality or a County opts out of the SECED program that means that businesses located within those specified boundaries are not eligible for EZ Program benefits.
The bottom line is that this program is a critical tool in my economic developer’s tool box, and it’s one that I do not have access to without a strategic partnership with SECED. For more information about the EZ Program, schedule an appointment to come by the BCDF to meet with me.
In my next column I’ll be discussing revolving loan funds which is another benefit of my strategic partnership with SECED.