City staff presents draft of job creation grant program
By Seth Thomas Gulledge
The Daily Reflector
Thursday, June 14, 2018
A near-final draft of the city’s job creation grant program will give the Greenville City Council the power to reward companies that bring sizable investment and jobs into the city and extraterritorial jurisdiction.
On Monday, during its pre-council workshop meeting, the council members were presented with an updated version of the program by interim economic development director Christian Lockamy. The council has been working on developing the program with city staff since summer 2017. The 2018-19 city budget, which is expected to be approved on Thursday, includes $100,000 for the program.
The program is designed to give the council the ability to incentivize companies in one of two options.
The first option requires the businesses to be investing at least $500,000 at the site of their expansion or development. In addition, the company must be creating a minimum of 25 full-time jobs to receive the grant, and must be located either within the Greenville city limits or the extraterritorial jurisdiction (ETJ).
The actual grant amount for these companies is based on a 3-tier structure. Tier one encompasses companies bringing 25-74 jobs, tier two between 75-124 jobs, and tier three is for companies creating 125 or more full-time jobs. Each tier awards $1,000 per job, with an annual grant cap of $100,000. Companies in tier one are eligible to receive two annual installments, tier two offers 3 annual installments and tier three companies are eligible for up to five annual grant installments.
The second option for the program also requires a minimum investment of $500,000, but increases the minimum job creation to 50 full-time jobs. The second grant option also is limited to companies within city limits.
The grant amount for these companies is awarded between 50-75 percent of the property tax range, to be decided per grant award. The maximum annual grant amount for this option is $150,00 per year, and companies are eligible for the award for 3-7 years.
As an example, Lockamy presented a company that would be bringing 300 news jobs to the area, creating $100 million in new ad valorem tax base. At the current tax rate, the company would pay $520,000 in property tax.i f awarded the highest possible award package of 75 percent, the company would be eligible for $390,000 — well over the annual cap for the program of $150,000. Instead, the company would receive the $150,000 per year for five years, totaling $750,000 in awards.
For both options, companies only are eligible if their wages are consistent with the average wage rate in the area. Businesses in the retail and restaurant sector are not eligible for the grant award.
The award can only be used for situations where there is demonstrated competition from other cities or states or the incentive is needed to make the project go forward.
All grant awards include a ‘claw-back’ provision, giving the city the right to suspend the grant or recover funds if the company does not adhere to the terms of the grant, such as the amount of jobs created.
Following Lockamy’s presentation, the council seemed generally in agreement over the program. Lockamy said the version presented on Monday is likely the final draft of the program, though some slight revisions could be made before the Council votes on it during the August council meetings.
Contact Seth Gulledge at email@example.com and 329-9579.