Receive a Staff presentation on the City of San Marcos Economic Development Incentive Policy, and provide direction to Staff.
Item 01: Economic Development Incentive Policy
- Thread starter COSM_Admin
- Start date
- Status
JHughson
CoSM Members
Presentation:
Please be ready to fully discuss the Maintenance & Operations (M&O) Incentive because that’s never been a topic for Council in the past.
What is the difference? In M&O and full?
Please explain what we have been doing and advise.
Please be ready to explain fully the difference in a Chapter 312 and 380 agreement. I see the description on slide 18 but that doesn’t tell me what I need to know.
Why is the recommendation to start at 100% year one?
And why is the scoring matrix different in that it starts with 80% for 81-100 points?
How the 10+10 extra points will count in the incentive computation is not addressed. Would that be up to 120 points?
What is the recommended amount for the upcoming budget for each of the following AND source of funds:
Why is Administrative approval recommended for fee waivers and infrastructure assistance? [Note this is on slides 29 and 30]
You have definition of “small business” - "Established to mean a firm with less than 26 employees throughout all its locations." Does this mean 26 employees TOTAL throughout all locations or less that 26 at EACH location? I think you may mean TOTAL but this doesn’t exactly state that.
Be ready to explain “Tax-based incentives will be for the increase in property value over the base value before improvements rather than on the total assessed value” – is the just to reinforce its INCREASE only? Isn’t that what we’ve done previously?
DOCUMENT
General Purpose & Objectives
This has information about SMTX and that we will establish standards but I don’t see a real purpose statement about the types of business/industry we are seeking. The rest of the document addresses it but I’d like to see a good statement on page 1.
EXAMPLE The San Antonio Policy (from 2014) includes
1.1. The following project categories are eligible for consideration for Economic Development Incentive Fund (EDIF) assistance:
a) The attraction and recruitment of companies who plan to create jobs and investment in targeted industries, including corporate headquarters.
b) The retention/expansion of local companies, including corporate headquarters, who are considering relocating and/or expanding in communities outside of San Antonio.
c) Promote development and investment at and around active and former military bases and in distressed areas, such as in the Inner City Reinvestment/Infill Policy (ICRIP) Area (see definition below), State Enterprise Zone census tract areas and the City’s designated Reinvestment Plan Areas.
d) Promote development at and around higher educational institutions and other non-governmental institutions, such as the Texas Research and Technology Foundation, which help create jobs and support growth in the targeted industries.
Definitions section
6. In the document, why would a “headquarters” need to have 26 full-time people to be a headquarters?
9. This needs help ““Local labor force” shall mean a resident” Perhaps “local residents”
3. Incentive Policy Criteria
Minimum Requirements
(please letter them – will help for referencing in the future)
Why is the Small Business Retention Incentive exempted from the County all industry average wage? (Section 3, Incentive Policy Criteria, p.3.) Is it the only one to be exempted?
“Except for the Small Business Retention Incentive, all jobs calculated or counted for jobs-based economic development purposes shall earn no less than the county all industry average wage for the county in which the firm will be or is operating.”
How can a business do this: “Applicants must demonstrate within their application that, without receiving incentive assistance, the applicant would not locate or expand within the City of San Marcos.” If we require them to prove they are looking around, might we lose them if they look around a little more? I agree fully with the concept. It’s the “proof” that concerns me.
Any company receiving incentives [is expected to make efforts to] use local public resources to inform the local labor force of career opportunities (e.g., San Marcos Public Library, Workforce Solutions Rural Capital Area, Texas State University, San Marcos Daily Record, local job fairs). Why not use MUST?
4. Types of Incentives
Why are Fee waivers approved by the City Manager up to $100,000 instead of $50,000?
Process Incentives - “The City of San Marcos has a professional Planning and Development Services and Engineering department experienced in developments of all sizes.” What is the purpose of this statement in the item? Are we offering to do work for them that we don’t do now?
What about state-wide programs such as Property Assessed Clean Energy (PACE)? Out-of-state folks may not know about this and others. Can just list them and link them.
Exhibit A – Why does it have “received by” instead of “submitted to”?
Applications for Chapter 312 Agreements, Chapter 380 Agreements, Economic Development Supplemental Fund, and Fee Waiver incentives will be received by the Greater San Marcos Partnership on behalf of the City of San Marcos. That’s what the process section #1 states.
Process section
Why isn’t there a step between 2 and 3 for city staff to evaluate and make recommendations?
Exhibit B – Business Improvement & Growth (BIG) Grant
B.I.G. notes applicable in the downtown area but doesn’t mention review by and/or requirements by the Historic Preservation Commission in certain cases and areas. That may come as a surprise if we don’t note it in the requirements. Same for compliance with our new Downtown Design Guidelines.
Exhibit C Objectives includes some information duplicated about BIG Grant. Should that be there?
Exhibit C Business Eligibility - “Businesses must be located in the San Marcos downtown area designated by the Main Street Program” has a name. I think it’s the “Main Street District.”
Exhibit C Eligible Projects - Advertising must include “Downtown San Marcos” or a similar “phase”- should that be “phrase”?
Exhibit E Economic Development Supplemental Fund – Not sure exactly the purpose of this fund, if it is matching, or the maximum amount.
Exhibit E Legacy Business Program Description second paragraph is missing words at the end of it. Legacy business definition. What does “contributes to the history, culture, and authentic identity of the city” mean?
I’d like to add that we will assist with nomination for the Texas Historical Commission of the Texas Treasure Business Award for businesses that qualify (50 years or more). See Texas Treasure Business Award | THC.Texas.gov - Texas Historical Commission for info
Exhibit E - Main Street Incentive Grant Objectives includes some information duplicated about BIG Grant. Should that be there?
Exhibit E Business Eligibility – “Applicants must be commercial property owners or commercial tenants located in San Marcos within the Downtown district.” Need specific definition of “Downtown district.”
We have 5 or 6 different maps that encompass downtown or parts of it. I suggest we NOT create the need for a new map and that we use/specify existing maps.
Exhibit G – Small Business Retention Incentive
I suggest we call it a loan than can convert to a grant instead of vice versa.
Eligibility – “Demonstrate that the company would otherwise close permanently, relocate to another municipality, or not expand its operations in San Marcos should support not be received from the City.” – If we require them to prove they are looking around, might we lose them if they look around a little more? I agree fully with the concept. It’s the “proof” that concerns me.
Please be ready to fully discuss the Maintenance & Operations (M&O) Incentive because that’s never been a topic for Council in the past.
What is the difference? In M&O and full?
Please explain what we have been doing and advise.
Please be ready to explain fully the difference in a Chapter 312 and 380 agreement. I see the description on slide 18 but that doesn’t tell me what I need to know.
Why is the recommendation to start at 100% year one?
And why is the scoring matrix different in that it starts with 80% for 81-100 points?
How the 10+10 extra points will count in the incentive computation is not addressed. Would that be up to 120 points?
What is the recommended amount for the upcoming budget for each of the following AND source of funds:
- BIG grant
- Downtown Co-Marketing Fund
- Economic Development Supplemental Fund
- Legacy Business Program
- Main Street Incentive Grant
- Small Business Retention Incentive
- Speculative Buildings
- Sustainable Resources Grant
Why is Administrative approval recommended for fee waivers and infrastructure assistance? [Note this is on slides 29 and 30]
You have definition of “small business” - "Established to mean a firm with less than 26 employees throughout all its locations." Does this mean 26 employees TOTAL throughout all locations or less that 26 at EACH location? I think you may mean TOTAL but this doesn’t exactly state that.
Be ready to explain “Tax-based incentives will be for the increase in property value over the base value before improvements rather than on the total assessed value” – is the just to reinforce its INCREASE only? Isn’t that what we’ve done previously?
DOCUMENT
General Purpose & Objectives
This has information about SMTX and that we will establish standards but I don’t see a real purpose statement about the types of business/industry we are seeking. The rest of the document addresses it but I’d like to see a good statement on page 1.
EXAMPLE The San Antonio Policy (from 2014) includes
1.1. The following project categories are eligible for consideration for Economic Development Incentive Fund (EDIF) assistance:
a) The attraction and recruitment of companies who plan to create jobs and investment in targeted industries, including corporate headquarters.
b) The retention/expansion of local companies, including corporate headquarters, who are considering relocating and/or expanding in communities outside of San Antonio.
c) Promote development and investment at and around active and former military bases and in distressed areas, such as in the Inner City Reinvestment/Infill Policy (ICRIP) Area (see definition below), State Enterprise Zone census tract areas and the City’s designated Reinvestment Plan Areas.
d) Promote development at and around higher educational institutions and other non-governmental institutions, such as the Texas Research and Technology Foundation, which help create jobs and support growth in the targeted industries.
Definitions section
6. In the document, why would a “headquarters” need to have 26 full-time people to be a headquarters?
9. This needs help ““Local labor force” shall mean a resident” Perhaps “local residents”
3. Incentive Policy Criteria
Minimum Requirements
(please letter them – will help for referencing in the future)
Why is the Small Business Retention Incentive exempted from the County all industry average wage? (Section 3, Incentive Policy Criteria, p.3.) Is it the only one to be exempted?
“Except for the Small Business Retention Incentive, all jobs calculated or counted for jobs-based economic development purposes shall earn no less than the county all industry average wage for the county in which the firm will be or is operating.”
How can a business do this: “Applicants must demonstrate within their application that, without receiving incentive assistance, the applicant would not locate or expand within the City of San Marcos.” If we require them to prove they are looking around, might we lose them if they look around a little more? I agree fully with the concept. It’s the “proof” that concerns me.
Any company receiving incentives [is expected to make efforts to] use local public resources to inform the local labor force of career opportunities (e.g., San Marcos Public Library, Workforce Solutions Rural Capital Area, Texas State University, San Marcos Daily Record, local job fairs). Why not use MUST?
4. Types of Incentives
Why are Fee waivers approved by the City Manager up to $100,000 instead of $50,000?
Process Incentives - “The City of San Marcos has a professional Planning and Development Services and Engineering department experienced in developments of all sizes.” What is the purpose of this statement in the item? Are we offering to do work for them that we don’t do now?
What about state-wide programs such as Property Assessed Clean Energy (PACE)? Out-of-state folks may not know about this and others. Can just list them and link them.
Exhibit A – Why does it have “received by” instead of “submitted to”?
Applications for Chapter 312 Agreements, Chapter 380 Agreements, Economic Development Supplemental Fund, and Fee Waiver incentives will be received by the Greater San Marcos Partnership on behalf of the City of San Marcos. That’s what the process section #1 states.
Process section
Why isn’t there a step between 2 and 3 for city staff to evaluate and make recommendations?
Exhibit B – Business Improvement & Growth (BIG) Grant
B.I.G. notes applicable in the downtown area but doesn’t mention review by and/or requirements by the Historic Preservation Commission in certain cases and areas. That may come as a surprise if we don’t note it in the requirements. Same for compliance with our new Downtown Design Guidelines.
Exhibit C Objectives includes some information duplicated about BIG Grant. Should that be there?
Exhibit C Business Eligibility - “Businesses must be located in the San Marcos downtown area designated by the Main Street Program” has a name. I think it’s the “Main Street District.”
Exhibit C Eligible Projects - Advertising must include “Downtown San Marcos” or a similar “phase”- should that be “phrase”?
Exhibit E Economic Development Supplemental Fund – Not sure exactly the purpose of this fund, if it is matching, or the maximum amount.
Exhibit E Legacy Business Program Description second paragraph is missing words at the end of it. Legacy business definition. What does “contributes to the history, culture, and authentic identity of the city” mean?
I’d like to add that we will assist with nomination for the Texas Historical Commission of the Texas Treasure Business Award for businesses that qualify (50 years or more). See Texas Treasure Business Award | THC.Texas.gov - Texas Historical Commission for info
Exhibit E - Main Street Incentive Grant Objectives includes some information duplicated about BIG Grant. Should that be there?
Exhibit E Business Eligibility – “Applicants must be commercial property owners or commercial tenants located in San Marcos within the Downtown district.” Need specific definition of “Downtown district.”
We have 5 or 6 different maps that encompass downtown or parts of it. I suggest we NOT create the need for a new map and that we use/specify existing maps.
Exhibit G – Small Business Retention Incentive
I suggest we call it a loan than can convert to a grant instead of vice versa.
Eligibility – “Demonstrate that the company would otherwise close permanently, relocate to another municipality, or not expand its operations in San Marcos should support not be received from the City.” – If we require them to prove they are looking around, might we lose them if they look around a little more? I agree fully with the concept. It’s the “proof” that concerns me.
MBaker
Council Member
Section 2.3 "...Financial ability...desired level of service"
What exactly goes into this calculation (police fire response, infrastructure, traffic, etc.)?
Section 2.5 Update the living wage definition
The $15.42 is for a single person no kids according to the MIT fact sheet referenced. If we look at providing quality jobs for families and long-term residents this is insufficient. If they make less than $30k/year, then they must live in a place where rent is less than $740/month to not be cost burdened. According to statistics there are less than 16% of our housing stock that falls between $700 - $1000/month. At the high end of that number someone would need to make at least $40k/year (or roughly $20.82/hour), which is near the recommended salary on the MIT fact sheet for 2 adults with 2 children.
Include health care requirement in this section
Section 2.8 Targeted industries
Remove Distribution centers
Include statement for pollution considerations as it relates to sustainability (particularly for Heavy or Light Industrial)
What are the current number of targeted businesses already in the area, and is there an ideal point at which to stop incentivizing those industries?
Section 3. Incentive Policy
Have GSMP AND SMTX conduct their own scoring along the matrix and compare outcomes
GSMP serves as the liaison to get all the data and information, Staff verifies its completeness and then both move forward with analysis
Minimum requirements (Use numbers/letters instead of bullet points since I know the Mayor will say something)
(3.3) This seems like it might be stifling infill development and may need to be reconsidered/reworked
(3.5) Change "or" to "and" to read "increase real property values AND increased FTE
Section 5. Performance
Require Quality of Life Survey for businesses receiving incentives
City creates the format, and the business distributes then returns them along with other reporting metrics
Failure to maintain a quality place of work could lose them their incentive
What exactly goes into this calculation (police fire response, infrastructure, traffic, etc.)?
Section 2.5 Update the living wage definition
The $15.42 is for a single person no kids according to the MIT fact sheet referenced. If we look at providing quality jobs for families and long-term residents this is insufficient. If they make less than $30k/year, then they must live in a place where rent is less than $740/month to not be cost burdened. According to statistics there are less than 16% of our housing stock that falls between $700 - $1000/month. At the high end of that number someone would need to make at least $40k/year (or roughly $20.82/hour), which is near the recommended salary on the MIT fact sheet for 2 adults with 2 children.
Include health care requirement in this section
Section 2.8 Targeted industries
Remove Distribution centers
Include statement for pollution considerations as it relates to sustainability (particularly for Heavy or Light Industrial)
What are the current number of targeted businesses already in the area, and is there an ideal point at which to stop incentivizing those industries?
Section 3. Incentive Policy
Have GSMP AND SMTX conduct their own scoring along the matrix and compare outcomes
GSMP serves as the liaison to get all the data and information, Staff verifies its completeness and then both move forward with analysis
Minimum requirements (Use numbers/letters instead of bullet points since I know the Mayor will say something)
(3.3) This seems like it might be stifling infill development and may need to be reconsidered/reworked
(3.5) Change "or" to "and" to read "increase real property values AND increased FTE
Section 5. Performance
Require Quality of Life Survey for businesses receiving incentives
City creates the format, and the business distributes then returns them along with other reporting metrics
Failure to maintain a quality place of work could lose them their incentive
Response provided by Kelsee Jordan Lee, Economic Development Manager:
Be ready to explain “Tax-based incentives will be for the increase in property value over the base value before improvements rather than on the total assessed value” – is the just to reinforce its INCREASE only? Isn’t that what we’ve done previously?
1.1. The following project categories are eligible for consideration for Economic Development Incentive Fund (EDIF) assistance:
a) The attraction and recruitment of companies who plan to create jobs and investment in targeted industries, including corporate headquarters.
b) The retention/expansion of local companies, including corporate headquarters, who are considering relocating and/or expanding in communities outside of San Antonio.
c) Promote development and investment at and around active and former military bases and in distressed areas, such as in the Inner City Reinvestment/Infill Policy (ICRIP) Area (see definition below), State Enterprise Zone census tract areas and the City’s designated Reinvestment Plan Areas.
d) Promote development at and around higher educational institutions and other non-governmental institutions, such as the Texas Research and Technology Foundation, which help create jobs and support growth in the targeted industries.
Definitions section
6. In the document, why would a “headquarters” need to have 26 full-time people to be a headquarters?
9. This needs help ““Local labor force” shall mean a resident” Perhaps “local residents”
3. Incentive Policy Criteria
Minimum Requirements
(please letter them – will help for referencing in the future)
Why is the Small Business Retention Incentive exempted from the County all industry average wage? (Section 3, Incentive Policy Criteria, p.3.) Is it the only one to be exempted?
“Except for the Small Business Retention Incentive, all jobs calculated or counted for jobs-based economic development purposes shall earn no less than the county all industry average wage for the county in which the firm will be or is operating.”
An example is the City of Houston’s application. The application has a section where the applicant must describe the gap the project is experiencing that would prevent the project from coming if not met through an incentive.
Any company receiving incentives [is expected to make efforts to] use local public resources to inform the local labor force of career opportunities (e.g., San Marcos Public Library, Workforce Solutions Rural Capital Area, Texas State University, San Marcos Daily Record, local job fairs). Why not use MUST?
- Taxes received from the M&O portion of the tax rate are deposited into the General Fund of the City which is where the economic development incentive (rebate) is funded. Taxes received from the I&S (debt) portion of the tax rate are deposited into the City’s Debt Service Fund and may only be used to service the debt of the City. If an incentive is offered from the total tax rate, it would include a rebate of the I&S taxes which cannot legally be paid from the Debt Service fund, so that portion must also come out of the General fund which means that more funds would come from the General Fund than may have been deposited by the company. Please explain what we have been doing and advise.
- The current practice of the City is to offer tax-based incentives on the total tax rate. Please be ready to explain fully the difference in a Chapter 312 and 380 agreement. I see the description on slide 18 but that doesn’t tell me what I need to know.
- Yes, there are several differences. A Chapter 312 is an abatement where all or part of the property taxes are exempted from being paid, whereas a Chapter 380 can be used to provide a grant to rebate all or a portion of the property or sales taxes after they have been paid. A Chapter 312 agreement requires additional up-front work to be done in that it requires a resolution to be passed stating the City’s intention to grant abatements and establish guidelines and criteria that will govern the abatement agreements. A reinvestment zone must also be establish prior to granting a Chapter 312 agreement. Chapter 312 guidelines are also required to be evaluated every two years and incentives can legally be for a maximum of 10 years. A Chapter 380 agreement can offer more flexibility in the length of an agreement, the terms and conditions, along with the ability to offer incentives outside of solely property tax (e.g. Chapter 380s can be used for sales tax and programs including loans, grants, municipal personnel, and municipal services.)
- Can you share where you see the recommendation is to start at 100% in year one? The intent is that the maximum consideration for any one (single) year is 100%, not that the recommendation is to offer 100% in the first year.
- The current policy is 80% for applications scoring 81-100 points, unless an extraordinary impact is met which may qualify the incentive amount to be up to 100%. It is not a maximum of 80% in a given year, but a maximum of 80% of the total tax liability over up to 10 years. The proposed update keeps this the same as the current policy.
- In theory a project could score above 100 points and up to 120, but this is unlikely due to the extraordinary conditions that would need to be met to receive all 20 extra points. The intent was to have an avenue where a project could receive additional points for consideration if it met areas that are of extra concern for the City of San Marcos. If a project met all the extraordinary impact items, they would likely also qualify to be considered for up to a 100% tax incentive instead of the 80%.
- BIG grant
- Downtown Co-Marketing Fund
- Economic Development Supplemental Fund
- Legacy Business Program
- Main Street Incentive Grant
- Small Business Retention Incentive
- Speculative Buildings
- Sustainable Resources Grant
- The amount to be provided will depend on other budgetary needs through the budget workshop and other assistance that may be provided through other departments. The BIG Grant has historically been funded through the General Fund ($45,000 in the current FY); the Downtown Co-Marketing Fund is funded through the Hotel Occupancy Tax ($20,000 in the current FY); the Economic Development Supplemental Fund was previously funded through a combination of General Fund, Water/Wastewater Fund, and Electric Fund; and the Main Street Incentive Grant is funded through Main Street operational budget through the General Fund ($10,000 expected in the next FY). The Legacy Business Program, Small Business Retention Incentive, and Sustainable Resources Grant would likely be funded through General Fund or Strategic Initiative allotment. Speculative Buildings is proposed to be a tax rebate through a Chapter 380, so there is not a pre-allocated grant amount to be considered.
- This item came up at the last work session as a way to offer more timely assistance to businesses, particularly for those in the legacy and small businesses categories.
- Less than 26 full-time employees total throughout the entire company (i.e. if there are multiple location, the total count of all locations cannot exceed 26 full-time employees). This wording can be changed for clarity.
Be ready to explain “Tax-based incentives will be for the increase in property value over the base value before improvements rather than on the total assessed value” – is the just to reinforce its INCREASE only? Isn’t that what we’ve done previously?
- Correct. This has been the practice of the City already. This statement is included as reinforcement and to also clarify it for projects that may be coming from out-of-state that do not have a similar requirement.
1.1. The following project categories are eligible for consideration for Economic Development Incentive Fund (EDIF) assistance:
a) The attraction and recruitment of companies who plan to create jobs and investment in targeted industries, including corporate headquarters.
b) The retention/expansion of local companies, including corporate headquarters, who are considering relocating and/or expanding in communities outside of San Antonio.
c) Promote development and investment at and around active and former military bases and in distressed areas, such as in the Inner City Reinvestment/Infill Policy (ICRIP) Area (see definition below), State Enterprise Zone census tract areas and the City’s designated Reinvestment Plan Areas.
d) Promote development at and around higher educational institutions and other non-governmental institutions, such as the Texas Research and Technology Foundation, which help create jobs and support growth in the targeted industries.
Definitions section
6. In the document, why would a “headquarters” need to have 26 full-time people to be a headquarters?
- Being designated a headquarters qualifies a project for having an extraordinary impact, and potentially up to a 100% tax incentive, which is why it is suggested to be required to have a larger personnel base than what constitutes a small business.
9. This needs help ““Local labor force” shall mean a resident” Perhaps “local residents”
3. Incentive Policy Criteria
Minimum Requirements
(please letter them – will help for referencing in the future)
Why is the Small Business Retention Incentive exempted from the County all industry average wage? (Section 3, Incentive Policy Criteria, p.3.) Is it the only one to be exempted?
“Except for the Small Business Retention Incentive, all jobs calculated or counted for jobs-based economic development purposes shall earn no less than the county all industry average wage for the county in which the firm will be or is operating.”
- The Small Business Retention Incentive is the only jobs-based incentive to be exempted. This was a suggestion from the EDSM Board as smaller businesses in San Marcos that need assistance may not be at the same level of pay yet for employees as larger companies who are seeking incentives.
An example is the City of Houston’s application. The application has a section where the applicant must describe the gap the project is experiencing that would prevent the project from coming if not met through an incentive.
Any company receiving incentives [is expected to make efforts to] use local public resources to inform the local labor force of career opportunities (e.g., San Marcos Public Library, Workforce Solutions Rural Capital Area, Texas State University, San Marcos Daily Record, local job fairs). Why not use MUST?
- This could be changed to “must” to be clearer.
Last edited:
4. Types of Incentives
Why are Fee waivers approved by the City Manager up to $100,000 instead of $50,000?
Process Incentives - “The City of San Marcos has a professional Planning and Development Services and Engineering department experienced in developments of all sizes.” What is the purpose of this statement in the item? Are we offering to do work for them that we don’t do now?
What about state-wide programs such as Property Assessed Clean Energy (PACE)? Out-of-state folks may not know about this and others. Can just list them and link them.
Exhibit A – Why does it have “received by” instead of “submitted to”?
Applications for Chapter 312 Agreements, Chapter 380 Agreements, Economic Development Supplemental Fund, and Fee Waiver incentives will be received by the Greater San Marcos Partnership on behalf of the City of San Marcos. That’s what the process section #1 states.
Process section
Why isn’t there a step between 2 and 3 for city staff to evaluate and make recommendations?
Exhibit B – Business Improvement & Growth (BIG) Grant
B.I.G. notes applicable in the downtown area but doesn’t mention review by and/or requirements by the Historic Preservation Commission in certain cases and areas. That may come as a surprise if we don’t note it in the requirements. Same for compliance with our new Downtown Design Guidelines.
Exhibit C Objectives includes some information duplicated about BIG Grant. Should that be there?
Exhibit C Business Eligibility - “Businesses must be located in the San Marcos downtown area designated by the Main Street Program” has a name. I think it’s the “Main Street District.”
Exhibit C Eligible Projects - Advertising must include “Downtown San Marcos” or a similar “phase”- should that be “phrase”?
Exhibit E Economic Development Supplemental Fund – Not sure exactly the purpose of this fund, if it is matching, or the maximum amount.
Exhibit E Legacy Business Program Description second paragraph is missing words at the end of it. Legacy business definition. What does “contributes to the history, culture, and authentic identity of the city” mean?
Exhibit E - Main Street Incentive Grant Objectives includes some information duplicated about BIG Grant. Should that be there?
Exhibit E Business Eligibility – “Applicants must be commercial property owners or commercial tenants located in San Marcos within the Downtown district.” Need specific definition of “Downtown district.”
Why are Fee waivers approved by the City Manager up to $100,000 instead of $50,000?
- The intent was to keep consistent with fee waivers and infrastructure assistance. $100,000 was suggested as projects can often incur large price tags.
Process Incentives - “The City of San Marcos has a professional Planning and Development Services and Engineering department experienced in developments of all sizes.” What is the purpose of this statement in the item? Are we offering to do work for them that we don’t do now?
- The intent is to share that the City’s staff is already very responsive and knowledgeable in the demands of commercial and industrial development so that it isn’t always necessary for a process incentive to be provided. However, for example, some projects, particularly those working through the State’s Economic Development & Tourism Department, may be eligible to have an expeditated pre-development meeting with development staff due to time constraints.
What about state-wide programs such as Property Assessed Clean Energy (PACE)? Out-of-state folks may not know about this and others. Can just list them and link them.
- Incentives that are not managed through the City are not recommended to be embedded in the policy; however, programs such as PACE can be linked to the City’s economic development webpage under incentives and grant resources.
Exhibit A – Why does it have “received by” instead of “submitted to”?
Applications for Chapter 312 Agreements, Chapter 380 Agreements, Economic Development Supplemental Fund, and Fee Waiver incentives will be received by the Greater San Marcos Partnership on behalf of the City of San Marcos. That’s what the process section #1 states.
- The wording can be changed for consistency.
Process section
Why isn’t there a step between 2 and 3 for city staff to evaluate and make recommendations?
- The implication was that staff is brought into the discussions to do these items. However, it can be worded more expressly if needed.
Exhibit B – Business Improvement & Growth (BIG) Grant
B.I.G. notes applicable in the downtown area but doesn’t mention review by and/or requirements by the Historic Preservation Commission in certain cases and areas. That may come as a surprise if we don’t note it in the requirements. Same for compliance with our new Downtown Design Guidelines.
Exhibit C Objectives includes some information duplicated about BIG Grant. Should that be there?
- It appears the updated wording did not transfer over to the uploaded version of the draft policy. Below is the appropriate wording and it will be corrected in the next version.
- Description The City of San Marcos Downtown Co-Marketing fund is a marketing program that provides matching advertising funds for downtown businesses to promote their business in areas outside of the San Marcos area. This program is funded by hotel occupancy tax dollars which are generated by guests staying in hotels located within the city limits of San Marcos. If approved, 50% of total marketing costs will be reimbursed to the applicant. The co-marketing fund is limited to the amount funded by City Council per fiscal year and are available on a first come, first served. The maximum amount of funding per applicant/project is $5,000.
- Objective The Downtown Co-Marketing Fund supports the promotion of the City of San Marcos and its downtown businesses to attract new visitors and customers from outside the area.
Exhibit C Business Eligibility - “Businesses must be located in the San Marcos downtown area designated by the Main Street Program” has a name. I think it’s the “Main Street District.”
Exhibit C Eligible Projects - Advertising must include “Downtown San Marcos” or a similar “phase”- should that be “phrase”?
- Yes.
Exhibit E Economic Development Supplemental Fund – Not sure exactly the purpose of this fund, if it is matching, or the maximum amount.
- The intent is to have a source of funds to provide an up-front grant similar to what a Type A or Type B Corporation can do to recruit and retain exceptional projects.
Exhibit E Legacy Business Program Description second paragraph is missing words at the end of it. Legacy business definition. What does “contributes to the history, culture, and authentic identity of the city” mean?
- The missing words should be $100,000 to keep in consistent with the other programs.
- This is taken from the City of San Antonio’s legacy business program and was suggested by the San Marcos Main Street Advisory Board and Historic Preservation Commission. Staff would evaluate items such as whether the building or businesses is associated with important events or people, if there are news events or newspapers articles that mention the business’ contribution to the community, and a historical narrative provided by the business in the application.
Exhibit E - Main Street Incentive Grant Objectives includes some information duplicated about BIG Grant. Should that be there?
- Those portions should be changed to the Main Street Incentive Grant. The Main Street Incentive Grant and BIG Grant share similar objectives to support the rehabilitation or improvement of exterior facades. This will be corrected in the next version.
- Description The San Marcos Main Street program has established the Main Street Incentive Grant to provide financial assistance to property owners or business owners seeking to renovate or restore facades or signage in the Main Street district. The Main Street program will provide a fifty percent matching grant to reimburse up to $2,000.
- Objective The Main Street Incentive Grant is designed to impact properties in need of revitalization, resulting in improved exterior visibility and presentation of a property, as well as enhanced occupant safety. The Main Street Incentive Grant is not designed to subsidize corrections to building code violations that prolong the life of a commercial property. The Main Street Incentive Grant strives to increase sales and/or revenue for the property owner or tenant.
Exhibit E Business Eligibility – “Applicants must be commercial property owners or commercial tenants located in San Marcos within the Downtown district.” Need specific definition of “Downtown district.”
- The GIS team has a map of the designated Main Street boundary used by the State. This boundary can be used for the purpose of this incentive. We have 5 or 6 different maps that encompass downtown or parts of it. I suggest we NOT create the need for a new map and that we use/specify existing maps.
Exhibit G – Small Business Retention Incentive
I suggest we call it a loan than can convert to a grant instead of vice versa.
Eligibility – “Demonstrate that the company would otherwise close permanently, relocate to another municipality, or not expand its operations in San Marcos should support not be received from the City.” – If we require them to prove they are looking around, might we lose them if they look around a little more? I agree fully with the concept. It’s the “proof” that concerns me. - The applicant would be required to list the gap in resources and how assistance from the City would be used to help them stay open or expand in San Marcos.
Response to CM Baker provided by Kelsee Jordan Lee, Economic & Business Development Manager:
Section 2.3 "...Financial ability...desired level of service"
What exactly goes into this calculation (police fire response, infrastructure, traffic, etc.)?
The $15.42 is for a single person no kids according to the MIT fact sheet referenced. If we look at providing quality jobs for families and long-term residents this is insufficient. If they make less than $30k/year, then they must live in a place where rent is less than $740/month to not be cost burdened. According to statistics there are less than 16% of our housing stock that falls between $700 - $1000/month. At the high end of that number someone would need to make at least $40k/year (or roughly $20.82/hour), which is near the recommended salary on the MIT fact sheet for 2 adults with 2 children.
Include health care requirement in this section
Section 2.8 Targeted industries
Remove Distribution centers
Include statement for pollution considerations as it relates to sustainability (particularly for Heavy or Light Industrial)
What are the current number of targeted businesses already in the area, and is there an ideal point at which to stop incentivizing those industries?
Section 2.3 "...Financial ability...desired level of service"
What exactly goes into this calculation (police fire response, infrastructure, traffic, etc.)?
- In the model that GSMP runs through its 3rd party program, there needs to be a net benefit to the City fiscally that the expected revenue exceeds the expected costs. The intent is to ensure the City has the ability to maintain a proportional level of staff and infrastructure to serve the increased demand that new development can bring.
The $15.42 is for a single person no kids according to the MIT fact sheet referenced. If we look at providing quality jobs for families and long-term residents this is insufficient. If they make less than $30k/year, then they must live in a place where rent is less than $740/month to not be cost burdened. According to statistics there are less than 16% of our housing stock that falls between $700 - $1000/month. At the high end of that number someone would need to make at least $40k/year (or roughly $20.82/hour), which is near the recommended salary on the MIT fact sheet for 2 adults with 2 children.
Include health care requirement in this section
Section 2.8 Targeted industries
Remove Distribution centers
Include statement for pollution considerations as it relates to sustainability (particularly for Heavy or Light Industrial)
What are the current number of targeted businesses already in the area, and is there an ideal point at which to stop incentivizing those industries?
- Staff is working towards improving the tracking of how many businesses are in San Marcos along with key characteristics such as NAICS category (the standard used by Federal statistical agencies in classifying business establishments). The new CRM has only been activate for a month so the results pulled may be used for general knowledge, but should not be taken as definitive reports. Preliminary information on target industries is below, but these number may change as staff further refines the entries in the software. There are just under 3,000 entries in the CRM currently.
- Aerospace manufacturing can be under NAICS 31-33 manufacturing. The current total of NAICS 31-33 companies is 65 or 2.2% of San Marcos businesses.
- Business support services can be under NAICS 56 administrative and support services. The current total of NAICS 56 companies is 68 or 2.3% of San Marcos businesses.
- Materials science can also be under NAICS 31-33 for manufacturing and NAICS 54 for professional, scientific, and technical services. The current total of NAICS 54 companies is 185 or 6.2% of San Marcos businesses.
- Information technology can also be under NAICS 54 for professional, scientific, and technical services.
- Regional distribution can also be under NAICS 56 administrative and support services.
- Destination attraction is not listed at this time as it is not its own NAICS code but can be comprised of multiple other industries that attract visitors from outside the area.
Section 3. Incentive Policy
Have GSMP AND SMTX conduct their own scoring along the matrix and compare outcomes
GSMP serves as the liaison to get all the data and information, Staff verifies its completeness and then both move forward with analysis
Minimum requirements (Use numbers/letters instead of bullet points since I know the Mayor will say something)
(3.3) This seems like it might be stifling infill development and may need to be reconsidered/reworked
(3.5) Change "or" to "and" to read "increase real property values AND increased FTE
Section 5. Performance
Require Quality of Life Survey for businesses receiving incentives
City creates the format, and the business distributes then returns them along with other reporting metrics
Failure to maintain a quality place of work could lose them their incentive
- Status