Downtown developers take advantage of incentives in first year of RURAL tax zone
Published 3:09 pm Friday, May 3, 2019
More than a year after being designated as a Georgia R.U.R.A.L. (Revitalizing Underdeveloped Rural Areas Legislation) Zone, Bainbridge developers have seen a combined $285,401 in various tax credits thanks to the piece of legislation.
Passed in 2017, the Rural Zone program targets rural downtown areas that have been adversely impacted by local economic conditions by creating Rural Zones and offering economic development incentives. It differs from other programs at DCA, which provide technical assistance and access to capital because it would establish an incentive program to stimulate investment, job creation, and economic development. It also adds in retail opportunities, which are currently excluded from job tax credits. Further, multiple sources can benefit – for instance, a single new coffee shop might provide job tax credits for the local business owner, an investment credit to an urban investor and a rehabilitation credit to a local contractor.
In 2018 in Bainbridge, there were $52,000 in job tax credits, $69, 150 in investment tax credits and $164, 251 in rehabilitation tax credits. Businesses such as Diablos and Kicks after school program took advantage of these tax incentives in 2018.
The Job Tax Credit (JTC) will be $2,000 per new full-time equivalent job per year, up to 5 years and not to exceed $200,000 total or $40,000 per year. New full-time equivalent job means an aggregate of employee worked hours totaling 40 hours per week between two or more employees. At least two net, new full-time equivalent jobs must be created to qualify. This credit is for the small business owner who opens a storefront and creates jobs.
The Investment Credit is equivalent to 25% of the purchase price, not to exceed $125,000 total or $25,000 per year. At least two net, new full-time equivalent jobs must be created and maintained to qualify for the investment credit. This credit is for people who purchase a building downtown and cannot be taken unless jobs are created and JTC is taken.
The Rehabilitation Credit is equivalent to 30% of the qualified rehabilitation, not to exceed $150,000 total or $50,000 per year. At least two net, new full-time equivalent jobs must be created and maintained to qualify for the rehabilitation credit. This credit is to offset development costs associated with the rehabilitation of a certified investor property.
The Rural Zone is a five-year designation, meaning Bainbridge has four more years to offer these incentives. According to Amanda Glover, executive director of the Downtown Development Authority, 2019 will be an even better year with Southern Philosophy Brewing Company opening on Broughton Street and Skincare By Jennifer moving to its new location at the corner of Broad and Water streets downtown.
In FY 2017-18, seven new businesses opened in downtown Bainbridge, 55 jobs were created and 32 properties were sold for a total of $1,966,500.
“It’s been very beneficial for the developers,” said Glover, who also wanted to commend Sen. Dean Burke, Rep. Jay Powell and Rep. Penny Houston, the bill’s sponsor, for getting the legislation passed.
This week, Downtown Bainbridge also was recognized as a 2019 Main Street Accredited program for meeting the standards of performances in 2018. The Georgia Main Street Program is a signature program for community development and revitalization in Georgia’s historic downtowns.