CHARLESTON -- City leaders see the business incentives now on offer in Charleston after a City Council vote Tuesday as a jump start to activity on Lincoln Avenue.
The city got council approval to have a guideline of incentives the city can offer a business in order for them to expand or to entice a new business to the area.
Charleston Mayor Brandon Combs said while the newly approved business incentive program is meant to attract businesses to every aspect of the city, he hopes this specifically revitalizes Lincoln Avenue. Vacant lots litter the city's main drag currently.
"There is empty and vacant properties on Lincoln. There are empty and vacant properties on other main drags," Combs said. "We are not just focusing on Lincoln, but we would like to see some of that cleaned up... I really think this will coincide in making the corridor into (Eastern Illinois University) possibly look even better."
Four main incentives are now available for use by city staff to attract new business to the city. These incentives include two-year abatements of various city taxes for new and expanding businesses coming to Charleston, excluding those in TIF (tax increment financing) districts that already receive city benefits, as previously reported.
On the list of incentives the city could offer, one covers sales taxes. The incentive allows for businesses to get reimbursed for the city’s share of the sales taxes collected from the business for a two-year period should the business come in.
The city's share of the sales tax amounts to 1 percent of the normally 6.75 percent tax on most items.
Another incentive offers an abatement of sales taxes on construction materials used to improve an existing structure for a new business or expanding a business. Combs said this would hopefully give local business leaders the incentive to expand or clean up their buildings.
These materials covered under the incentive would include concrete, lumber, floor coverings, wall coverings and paint, according to a measure that would implement these incentives.
For those looking to build on vacant lots that have been empty for more than two continuous years, the incentive program would offer an abatement of property taxes to the city on a prorated scale based on construction costs for two years.
For example, if the cost of construction on the vacant property is between $1 million and $2.5 million, the business may abate or remove up to 90 percent of the property taxes due to the city from the property for two tax years.
The last incentive on the list would discount permit fees, based on a prorated scale.
The measure leaves open the chance for further incentives based on the scale of the business coming in.
“If extra incentives are needed or a business would like to ask for changes or a few extra, we have some --I guess you would say-- wiggle room,” Combs said.
He said the intention is not to play favorites with businesses, however, if a large scale business comes in with a special offer, it might be considered. Combs noted that any decision like that would be made by the city council members.
More details on the recently approved measure can be found in the city agenda item mentioning this.
“(Steve Pamperin, city planner) gets phone calls all of the time and when they call, one of the first questions they ask him is ‘what incentives do you have’ and quite frankly Steve has to say ‘none,’” Combs said about the situation before the inclusion of these incentives.
And often, business are looking at a few different sites when deciding where to land, said Cindy White, Charleston Area Chamber of Commerce president.
Scott Smith, city manager, said this might change the tide for business.
“It will be something (city staff and me) have in our back pocket to be a starter for some conversations and maybe be able to go back to some that we have talked to over the last few years that have expressed an interest in one way or another in coming to town,” Smith said. “That may make a difference for some.”
Hadley Phillips, Unique Homes vice president, considers the move to be an enticing offer that he thinks will attract more going forward.
“The majority of what we do right now is commercial in nature,” Phillips said. “When we go to towns, we are looking for incentives to get into the market.”
Phillips said incentives can really make a difference for a business on whether it can even economically work for them to build in a city.
“I know especially in our business if we are going to come to a certain town, it will make or break whether I can make the project really happen,” Phillips said. “The building codes are just getting more stringent. So, every year you are adding thousands of dollars to the cost, and sometimes, the market can't keep up with that.”