The Slater City Council and the Saline County Commission met with a representative from the Missouri Department of Economic Development Monday, Dec. 8, to discuss a resolution to establish an Enhanced Enterprise Zone in Slater.
"This gives us a better opportunity to attract companies to Slater by offering tax credits and abatements," said Mayor Stephen Allegri.
As explained by Grey Jackson, incentive specialist for the Department of Economic Development, the Enhanced Enterprise Zone would affect both new and existing businesses, so long as they spend at least $100,000 to improve their property, hire at least two new employees and offer health insurance.
Businesses must pay at least 50 percent of employees' health insurance costs.
Eligibility for creation of an Enhanced Enterprise Zone is based on income levels and rates of unemployment and poverty in that specific area.
The whole of Slater qualified, and the zone is planned to cover the city and areas including to the west, southwest, east and northeast of Slater city limits.
The tax breaks at the state level are one-half of one percent of the total investment in the community and two percent of new payroll costs, said Jackson.
At the city level, an Enhanced Enterprise Zone will mean a proposed 100 percent property tax abatement for improvements to properties, meaning that qualifying businesses will still pay taxes on the original value of their property.
Such abatements will last for five-year increments.
At the end of one five-year increment, a business may apply for another five-year abatement, though at that time, only improvements for which it has received no previous abatement will qualify for a new abatement.
There is a ten-year limit on abatements for individual companies.
The Enhanced Enterprise Zone itself will remain in effect for 25 years, with the option to extend that time available to the City Council.
"The community leads," said Jackson, explaining that much of this will be up to Slater, and can be changed by the city at any time.
Tax credit cannot be earned until improvements to the property are complete and operations in the additions have commenced, said Jackson.
If a company qualifies for these tax credits and abatements, it will be held to the commitments it makes, or it will cease to qualify for those credits and abatements, Jackson said.
For example, if a business pledges to create four new jobs and does so, but then fires one of those people with no intent to replace the worker, it will be cut out of the program, though it can re-apply.
Jackson reported a total of 500 jobs created and an addition of $17 million in revenue that has been attributed to Enhanced Enterprise Zones in Missouri.
The average number of new businesses in urban communities attributed to Enhanced Enterprise Zones is 15, and in rural communities, the number is two or three, said Jackson.
"Sedalia has seven, but they hit the ground running with the zones," Jackson said.
The average investment of businesses using Enhanced Enterprise Zones is between $2 million and $6 million, said Jackson.
The motion to proceed with the application for the Enhanced Enterprise Zone was accepted, and the resolution, modeled after the Enhanced Enterprise Zone in Marshall, will be brought before the Slater City Council at their next board meeting, Tuesday, Dec 30, at 7 p.m.