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Council approves economic incentives

After more than a month of consideration, the Pagosa Springs Town Council approved a portfolio of economic incentives proposed by Town Manager David Mitchem at its Tuesday, Sept. 1 meeting.

In language introducing the resolution, Mitchem wrote, “A pro-business and pro-development climate in the Town of Pagosa Springs is a prerequisite for economic growth and job creation. The Town of Pagosa Springs should consider deploying a portfolio of incentives to encourage public/private partnerships that advance economic development.”

With just council member Shari Pierce opposing, the council passed the second reading of the resolution.

To the stated ends, the resolution recommends several procedural and financial incentives presumably meant to stimulate the local economy.

• An expedited review process for all proposed development. The town promises to cut review time in half, “as measured by the time elapsed from initial application to final decision.”

• Local bidders will be given preference on town projects when bids are within 10-percent of the next lowest bidder. Exceptions would be if projects are funded through state or federal programs.

• Existing businesses can receive up to a 25-percent rebate on increased sales tax/lodgers tax if the business shows an increase in those taxes the following year after taking Marketing for Smarties, Business Finance, Customer Service, and one other Chamber of Commerce or Archuleta County Economic Development Association (AEDA) course, or NxLevelTM Leading Edge Entrepreneurial classes offered by Fort Lewis College or Southwest Community College. Other incentives are available, however, and interested business owners can contact Town Hall to see how the various incentives have been structured.

• A 25-percent rebate is offered to businesses on increased sales/bookings if that business can show a 30-percent increase in sales tax/lodgers tax receipts from the preceding year. A business that can show a 15-percent increase can be eligible for a 12.5-percent rebate on increased taxes. Finally, a business can apply for rebates under this and the previous program, making them eligible for up to a 50-percent rebate on increased receipts.

• Business expanding (25-percent expansion in floor-space or a 25-percent increase in number of employees) in the downtown area (defined as one and one half miles to the east and west of the intersection of Hot Springs Boulevard and U.S. 160 and within town boundaries north and south) will be eligible for a 50 percent sales tax rebate. In the second year, that business would get a 25-percent rebate and a 12.5-percent rebate in the third year. However, if a business expands to the point where it shows “exceptional benefit to the community (i.e.: making a major capital investment in infrastructure, employment of a large number of community residents, creation of jobs paying at least 150 percent of the County average wage, etc.),” the business would get a 50-percent rebate for two years (with no rebate the third year).

• A 40-percent rebate for expansion outside of the downtown area will be offered, structured as in the previous section.

• The town manager will be provided the authority to structure further incentives for businesses providing a benefit to the town.

More details of the plan are available by calling Mitchem at 264-4151, Ext. 236.

“This economy has a much better chance of succeeding if we approve these incentives than if we do not,” Mitchem said, summarizing the portfolio of incentives.

“This is a self-liquidating incentive plan,” added council member Mark Weiler. “We get the money before anyone else does.” Weiler was responding to questions regarding how to track increases in sales tax receipts. In fact, the town would collect those taxes and then, if a business shows an increase, a rebate would be awarded on the increased amount.

“We have designed incentives for existing businesses to build their business,” Mitchem concluded. “I think it’s an innovative step.”

Whether or not local business owners agree with Mitchem’s assessment remains to be seen, although Mitchem claims that word is already out on the proposed incentives.

“We will promote it through the Chamber, our Web site, the AEDA,” said Mitchem. “We’re already getting calls from businesses asking if we’ve implemented this yet.”

With a motion by council member Jerry Jackson and a second by Don Volger, the resolution was passed , making the incentives effective at that moment.

Council meets again Thursday, Sept. 17, at noon at Town Hall.

jim@pagosasun.com