Tarpon Springs considers tax breaks for businesses

TARPON SPRINGS — City officials have agreed to let the voters decide if the city should adopt a program designed to promote economic development by providing property tax breaks for new and expanding businesses.

In 2014, Pinellas County voters approved a program that gives cities the authority to grant property tax exemptions for qualifying new and expanding businesses that are creating new jobs.

After gaining unanimous consent to move forward at a recent City Commission meeting, Economic Development Director Karen Lemmons said a resolution would be placed on the Dec. 4 commission agenda that, if approved, would authorize the referendum vote during the March 12 election.

Should the proposal pass, the city would have one year to adopt an ordinance detailing the specifics of the program, Lemmons said.

Prior to gaining consent from city commissioners to put the item before voters, Lemmons outlined the details of the program, which would allow for an exemption of up to 100 percent of property taxes for up to 10 years.

"We're always looking for ways to provide diversity to our tax base, and we think that this program would help do that because it would encourage new businesses to relocate to the city, especially larger ones that are providing jobs that pay higher than normal wage for the area," Lemmons said. "It also would encourage some of our local businesses to expand because the program would provide for tax exemptions for additions to buildings and for new equipment purchases."

Lemmons noted the purpose is to attract higher-paying jobs to the city in certain targeted industries like manufacturing, medical and IT. The exemptions would apply only to eligible taxes levied by the city, not any other taxing authorities. Land and replacement equipment are not eligible, and only the taxes on the improvements to a building are eligible for the break, according to Lemmons.

"So, we would continue to receive the current property taxes that we get on each property," she said. "It's the incremental value of the additional or the new property that would be eligible for the exemption."

The statute, which has been implemented by 21 cities, including Clearwater, Tampa and St. Petersburg, in 39 Florida counties, also contains job-creation requirements for the various target industries ranging from 10 to 50 new jobs, and it stipulates the average wage for the new jobs must be above the average wage in the area.

The proposal to put the item up for vote was met with unanimous support from the commission.

"I think this is a very innovative way to further attract people to Tarpon Springs," said Commissioner David Banther, who as vice mayor led the meeting in the absence of Mayor Chris Alahouzos.

Commissioner Susan Kikta said she is "all about bringing businesses to our community," but she questioned the loss of property tax revenue over a decade.

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"First of all, you don't have to give 10 years," Lemmons said. "These are applications to you — all of you have all the leeway to say 'yes' or 'no' or 'five years' or 'one year'. It would all depend on the individual project that comes to you."

Lemmons also noted she wouldn't call the revenue as lost "because we are already getting the revenue from that property."

She added, "It's just the additional revenue that we would delay receiving until a later time …. and once that time period is up, then we would get the full value of the property."

Commissioner Jacob Karr declared himself "in total support of any incentives we can give to businesses to come into Tarpon Springs. Anything that brings higher paying jobs is a very important part of a great community."