Nevada, Vernon County create Enhanced Enterprise Zone
By Ralph Pokorny
Nevada, Mo. -- Wednesday afternoon members of the newly-formed Vernon County Enhanced Enterprise Zone Board took the first step in acquiring new incentives for businesses to locate or expand in portions of Vernon County, by approving the boundary of the proposed Enhanced Enterprise Zone.
"What you need to do today is choose which of these three potential Enterprise Zones that you think best fits your needs," Molly McGovern, a consultant who was hired to help the Vernon County Commission and the city of Nevada to bring this plan to fruition, said, prior to a a public hearing in the Nevada City Council chambers.
The Vernon County Commission established the board in October and members were appointed from each of the affected taxing entities in the county.
The current members of the board are Ron Clow, chairman; Kathi Wysong, secretary; Scott Kennedy; Russell Johnson; Tom Hissink; and Sara Brock.
"This is very much needed in every community we work in," Mark Dawson, Aquila economic development director, said.
All three of the proposed zones included all of Deerfield, all or most of Nevada, all of Coal and Deerfield townships and a portion of Vernon County immediately outside the Nevada city limits.
The primary reason for the establishment of this Enterprise Zone is to provide property tax abatement and state tax credits for the Prairie Pride bio-diesel plant being built between Nevada and Fort Scott; however, the same incentives will also be available to other eligible businesses that locate or expand in the Zone.
McGovern and Joel McNutt, Missouri Department of Economic Development incentive specialist, spent the next hour explaining why the areas in each of the possible zones were chosen to the board members as well as fielding questions and comments from Vernon County residents.
"I am always in favor of economic development, but if possible the Enterprise Zone should include U.S. Highway 71, since it is going to become I-49 in the future," Hissink said.
"Why can't we have something that includes Highway 71 and Highway 54 to Walker?" he said.
McGovern told him that the three zones they were proposing were the only ones that they could put together that met the income and unemployment requirements set by the state.
She said that in these zones 60 percent of the population must have a household income that is equal to 90 percent or less of either the county or state median household income and must also have a higher unemployment rate than the county or state. The median income level for the areas that Highway 71 and 54 east of Nevada, go through areas with income levels too high to qualify.
All of the areas included must be contiguous.
The proposed Enhanced Enterprise Zones for Vernon County have a higher median income than the county median, but it is less than the state median income.
Jerry Long, Nevada, said that he would like to see the southern part of Richland Township included because of the natural resourses in that part of the county.
McGovern said that area might qualify, but it would mean changing the boundaries. Such a change would require getting the new proposal qualified and going through the public notification again, which would delay the process by weeks.
McGovern said that the Enterprise Zones are built around blockgroups -- statistical area established by the U.S. Census Bureau. The median household income levels for blockgroups comes from the 10-year census.
In rural areas, blockgroups can be large with few people living there, while in more heavily populated areas and towns, blockgroups are typically smaller with more people in each one.
Some Vernon County townships only have three or four blockgroups, while Nevada has about 16 blockgroups.
McGovern told the board that the three selections they brought for them to choose had been prequalified by the Department of Economic Development.
If you change any of the boundaries they will have to be checked again to see if they meet the qualifications, McNutt told the board.
"If time is a factor, you need to choose one of these boundaries today," he said.
When it appeared that the board might postpone approving the boundary Wednesday, Dawson told the board that he had a business interested in locating in the zone if it was approved Wednesday.
"I implore you to adopt Zone 7. If you go past today Vernon County will lose a new business," Dawson said, adding that he could not reveal the name of the business at this time.
The potential incentives for any qualified business can be substantial.
McGovern said that qualified businesses would be eligible for real property tax abatement on new construction of at least 50 percent for 10 years. New jobs created by the companies would mean the company could be eligible for three state tax credits. Each new job created in the Enterprise Zone generates a $400-per-year tax credit for 10 years; if the new employee lives in the zone there is another $400 tax credit; and a third $400 tax credit is available if the job pays more than the county's average wage.
If an existing business located in the Enterprise Zone expands and adds two new qualifying jobs they can get those tax credits as well. They can also get a maximum 2-percent tax credit for 10 years, she said.
The property tax abatements do not apply to personal property.
Each governing body will make its own decision on how much tax abatement to grant a business.
Nevada and Deerfield will decide the level in their boundaries and Vernon County will set the abatement in unincorporated areas, McGovern said.
This means that each body can set a different level of tax abatement.
"What is currently on the tax rolls stays on the tax rolls. There is no loss of tax revenue. Only new improvements to the real property gets an abatement," McNutt said.
The board will meet next at 3 p.m., Dec. 27, in the city council chambers in Nevada to take the next step in the process and decide which businesses will qualify for the incentives.
They can also decide what kind of business will not receive tax credits.
McNutt told the board that gambling establishments, retail trade and food and drinking establishments are not eligible for the state tax credits.
If the local board does not support providing tax credits for a business the state will not do so either, he said.
On Jan. 2. the Nevada City Council and Vernon County Commission will hold a public hearing at 6:30 p.m., in the City-County Community Center, Nevada, before considering a resolution setting the percent of the property tax exemption and its duration.
When that is done and sent to the DED it will take about three or four weeks to complete the process.
"I hope to see if finished in January," McNutt said.
Enhanced Enterprise Zones replace the old Enterprise Zone program, which expires in 2007. Nevada and part of Vernon County had an Enterprise Zone under the old program.