The City of Conyers Economic Development Committee came to general consensus that the city should pursue establishing an enterprising zone to help spur redevelopment.
The chosen area to get the designation will be about 23 acres of property between Iris Drive and Salem Gate Way, which includes the Salem Gate Shopping Center, 1355 Iris Dr., Conyers.
What is an enterprise zone?
An enterprise zone is a program under the Georgia Department of Community Affairs (DCA) that gives businesses a number of tax reduction or abatements, including property and occupation taxes, regulatory and building inspection and other fees.
School taxes, sales and use taxes and taxes imposed for general obligation debt are excluded.
In exchange for receiving the incentives, a business has to create five or more full-time jobs, provide "economic stimulus" to the area, which the local government has to interpret for itself, and, if possible, at least ten percent of new employees must be low-and-moderate income level individuals.
The program has been in existence since 1997.
Only certain kinds of businesses are eligible to participate in the program, including retail, manufacturing, warehousing and distribution, residential construction, daycare providers, finance, real estate, insurance, tourism, research and development, telecommunications and processing.
Areas can only receive the enterprise designation if it meets three out of five categories, which include, pervasive poverty, a significant unemployment rate, underdeveloped property, general distress and general blight.
Why Salem Gate?
Along with the Salem Gate Shopping Center and the surrounding properties, the sub-committee discussed using the enterprise zone tag on properties along Ellington Drive.
However, there were three reasons why the committee chose to purse the Salem Gate instead.
"The one advantage that Salem Gate will have over Ellington is that is it in the opportunity zone," said City Planner J.P. Alexander.
An opportunity zone is another DCA program that gives businesses a tax credit up to $3,500 per job created in a designated opportunity zone.
Based on research he conducted on other areas who utilized an enterprise zone, Alexander postulates that overlaying an opportunity zone with an enterprise zone will help spur redevelopment in the given area.
"Between that and the opportunity zone, I don't know what more you can offer to redevelop that property," said City Chief Operating Officer David Spann.
Also, other properties in the area of the intersection of Old Salem Road and Ga. Highway 138 could be included in a future application for enterprise zone development.
"(Enterprise zones) have to be contiguous," said Alexander.
Plus, there may be an opportunity to recoup some lost property tax monies with sales tax revenue increases.
"You have potential for the sales tax to go up dramatically, where you wouldn't have that in Ellington," said Spann. "So, that can offset some of your loss."
No property tax for city...and county?
A developer looking to conduct a business within the enterprise zone will enjoy a number of tax reduction or abatements, including property and occupation taxes, regulatory and building inspection and other fees.
However, it must be agreed property taxes, from the city and county, could be exempt for the first five years of the building's establishment. After that, the total amount of property taxes due would rise incrementally by 20 percent, until after the tenth established year in the area when 100 percent of property tax would be due.
Although, a lower percentage of property tax incentives could be offered, says City Councilmen Vince Evans.
However, getting the property tax abatements from the county may be the city's biggest hurdle.
Conyers Planning Director Marvin Flanigan says that an enterprise zone established in the city won't work unless the county is also willing to offer some tax abatements. The officials decided to make plans to speak with county representatives to gauge their interest on the matter.
"It wouldn't make any sense to establish an enterprise zone and we give tax incentives and Rockdale County does not," said Flanigan. "For it to work, it has to be a joint effort."
Illinois-based Tri-Land Properties Inc. and Atlanta-based S&S Hale Properties Inc. paid a combined $62,000 in county taxes and $22,000 in city taxes in 2014 on the properties that would be exempt from taxes, according to City Planner J.P. Alexander.
Rockdale County Chief of Staff Gerald Sanders told The News that county officials would be open to working with the city on this endeavor.
"The County would be interested in possibly partnering with the City to create jobs, increase sales tax collections, and enhance the overall prosperity of the community," said Sanders in an e-mail.
Sanders worked on establishing an enterprise zone in the city of East Point, Georgia. Currently, Rockdale County hasn't designated any area as an enterprise zone.
"The experience was enlightening and helped to revitalize an industrial corridor that had become a blighted part of the community," said Sanders. "(Enterprise zones are) a time tested (economic development) tool available to municipalities throughout the State that desire to reverse disinvestment in local commercial districts."