ACTION REQUESTED:
Title
Communication from the City Manager and Community Development Director with a Request to Approve the Following:
A. An ORDINANCE Designating an Area within the City of Peoria and County of Peoria as the URBAN PEORIA ENTERPRISE ZONE and;
B. An INTERGOVERNMENTAL AGREEMENT with PEORIA COUNTY, the CITY OF WEST PEORIA, and the VILLAGE OF PEORIA HEIGHTS Related to the URBAN PEORIA ENTERPRISE ZONE.
Body
BACKGROUND:
The City must re-apply for Enterprise Zone status by December 31, 2014. If approved by the State, the new Enterprise Zone will go into effect on January 1, 2016. In order to present a more competitive application to the State, the City has been working with Peoria County staff over the past six months to create a multi-jurisdictional application. The other partners in this application are the City of West Peoria and the Village of Peoria Heights. A joint application increases the total number of square miles available in the Enterprise Zone from twelve (12) to fifteen (15). It also reduces the potential number of applications that the State will consider for approval. As there is a limited number (48) of Enterprise Zone approvals available, reducing the number of applications from a specific geographic area should increase the chance that a joint application is selected. There are two joint applications being submitted from jurisdictions on the east side of the Illinois River. The "North" application includes Washington, Germantown Hills, East Peoria, and Tazewell County. The "South" application includes Pekin, Morton, Tremont, and Tazewell County. Finally, a joint application furthers the existing partnership among the jurisdictions in the Peoria metro area related to economic development initiatives.
The Urban Peoria Enterprise Zone Application must be submitted to Department of Commerce and Economic Opportunity (DCEO) by December 31, 2014. The term of the Urban Peoria Enterprise Zone shall commence on the date when it is certified by DCEO as an "Enterprise Zone" under and pursuant to the Act, and shall be and remain in effect for fifteen (15) years. The Enterprise Zone may be extended another ten (10) years upon review and approval by the State. A board appointed by the Governor of Illinois will make a decision on each zone selected. The application is still under development and will be provided to Council as an informational item prior to submission to the State.
The following list provides highlights of the Intergovernmental Agreement and Ordinance as well as addressing questions, feedback, and subsequent action taken from the Policy Session.
· The City would receive TEN (10) square miles of the new Enterprise Zone.
· Sales Tax Exemption on Building Materials.
· Prevailing Wage or a Project Labor Agreement (PLA) would be required on all jobs valued greater than $50,000. Prevailing Wage required for Sales Tax Exemption benefit only.
· Any project, over $50,000, not seeking Sales Tax Exemption would not be required to pay Prevailing Wage.
· City Property Tax Abatement of 100% for three (3) years, and 50% for two (2) years would be offered.
· Benefit of Property Tax Abatement would require a commitment from the Business not to request a reduction in assessed value for a period of five (5) years after the abatement period ends.
· All Planning & Zoning fees would be waived.
· 50% of Building Permit fees would be waived to a cap of $10,000 per project.
· A fee would be assessed for all projects that make use of Enterprise Zone benefits. The fee would be .5% of the total construction material value, to a cap of $50,000 per project.
The initial map (Attachment C) that will be submitted with the application has only minor changes from the current City portion of the Enterprise Zone. The current City Enterprise Zone covers approximately 5.6 square miles. If the application is approved, the City would have the ability to expand a further 4.4 square miles under the proposed agreement. The City also has the ability to use the Rivers Edge Redevelopment Zone (RERZ) benefits - that are very similar to the EZ benefits - to expand the area further.
FINANCIAL IMPACT: The following local incentives will be effective pending the approval of the Peoria Urban Enterprise Zone.
a) A sales tax exemption that applies to any remodeling, rehabilitation or new construction of any:
i. Commercial, industrial, or manufacturing building or structure within the zone where the total amount of the project, as per the building or zoning permit, exceeds $7,500; If the total amount of any project exceeds $50,000, compliance with the Illinois Prevailing Wage Act will be required.
ii. Owner-occupied residential building or structure within the zone where the total amount of the residential project exceeds $7,500.
b) A property tax abatement that:
i. Applies to improved commercial, industrial or manufacturing property located within the Enterprise Zone.
ii. Shall be for five years at the rate of 100% for the first three years and at the rate of 50% for years four and five, commencing the first year after any improvements have been assessed.
iii. Stipulates that the property owner shall not pursue a reduction in assessed value of the property for a minimum of five (5) years following the expiration of the property tax abatement period.
c) A waiving of building, permit, or zoning fees which shall be subject to rules and guidelines issued by each County or Municipality.
d) Additional loan consideration under any loan program provided by the County or Municipalities.
NEIGHBORHOOD CONCERNS: N/A
IMPACT IF APPROVED: The Urban Peoria Enterprise Zone will be submitted to the State of Illinois for approval. With the State's approval, the Enterprise Zone will provide an incentive for regional job creation and retention, revitalization, which fosters and supports economic growth.
IMPACT IF DENIED: No application will be submitted to the State of Illinois. The City of Peoria's current Enterprise Zone will expire June 30, 2016. At the time of expiration, all Enterprise Zone incentives would become unavailable. If not selected, another application can be submitted in 2015 for approval starting January 1, 2017.
ALTERNATIVES: N/A
EEO CERTIFICATION NUMBER: N/A
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Grow Peoria: Businesses, Jobs, and Population
2. Vibrant Downtown: Riverfront/ Central Business District/ Warehouse District
3. Financially Sound City Government, Effective City Organization
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Grow employers and jobs.
2. Reinvest in neighborhoods.
3. Keep taxes and fees competitive.
DEPARTMENT: Community Development