The city of Tulare initiates business incentive programs, giving business large and small a reason to come to Tulare
TULARE – Early last month the Tulare City Council approved a new economic development investment program to help bring new businesses, large and small to the city.
At the March 7 meeting, city council members approved general guidelines for the creation of an Economic Development Investment Program (EDIP) available in two categories. The purpose of the EDIP is to encourage new private sector investment and job creation in the city for businesses. It is an outcome from a 2023 strategic plan study session between the city council and management staff. City manager Marc Mondell said that in his mind this is one of the most important things the city can do as far as programs go. He added the city will not front any money for any businesses, it is strictly a reimbursement style program.
“The thing that makes me completely comfortable with all of this is by and large, … the far majority of our projects will be reimbursements,” Mondell said. “They will be, you perform, and then you get your benefit.”
The city council has recognized the need for the city to focus its efforts on economic development. This program will help answer the question for businesses of why they should come to Tulare. The city will have a Small Business Incentive Program and a Large Project Investment Program. Through these programs and on a case by case basis, the city may provide financial assistance in several possible forms. The assistance would be on behalf of the company where a positive return on investment to the city and community can be determined.
The financial relief could be provided in the way of fee waivers or reductions, infrastructure improvements and or sales or property tax abatements. And the relief will only come once the business begins to follow through with their commitments and begins performing. If the city enters into the agreement, but the business falls through there is no loss to the city because the city did not put anything on the table except the agreement.
“The benefit comes out of their money,” Mondell said.
As for the city, the program will increase private sector investment and job creation that would result in additional tax and utility revenue for the city. In order for the city to address the challenges of funding important capital construction projects, city council initiatives and other quality of life projects and programs, it is necessary for the city to generate that additional tax revenue.
According to Traci Myers, Tulare’s economic development manager, if the new tax revenues are not earmarked for specific uses they would become part of the general fund, which is then used for a number of city needs.
“General fund revenues can be used on increased public safety, transportation-related projects, parks and recreation, management of homelessness issues, increased services to the Downtown area, etc.,” Myers said.
The city has a policy on what types of projects they will work with for the EDIP. The program is not typically available to support single family, multi-family or retail type uses unless the project is located within a special district. The city may consider mixed-use projects, hotel, grocery and destination retail uses. Mondell said this won’t necessarily be used for fast food restaurants or businesses who have already begun their process. However, according to Myers, each case will be left up to the city to decide.
“It will be at the discretion of the city in each and every case to determine the appropriateness of the use of incentives,” Myers said. “It’s going to be solely based on return on investment and the business or applicant is going to have to prove the positive return on investment to the city through sales tax, property tax, or other revenues.”
Within the small business program, there will need to be a minimum capital investment of $1 million, not including land acquisition and soft costs. The maximum incentive through this program is $150,000. In order to qualify, the business will need to bring in a minimum of 10 full time paying jobs at or above the Visalia-Porterville Metropolitan Statistical Area average wage plus benefits. The city may waive or adjust the minimum requirements for projects that offer a significant return to the city or offer some other significant measurable benefit.
As for the large project investment program, the minimum capital investment on the part of the business is $10 million, but there is no maximum incentive amount through this program. Again, that number does not include land acquisition and soft costs. As it is a large business, the company will need to create 50 full time jobs paying at or above the Visalia-Porterville Metropolitan Statistical Area average wage plus benefits. Again, like with the small businesses, the city may waive or adjust these minimum requirements for projects that offer a significant return or offer some other significant measurable benefit.
Any company interested in taking advantage of the City of Tulare’s Economic Development Incentive Program is encouraged to send a written request to: Traci Myers, Executive Director of Economic Development & Redevelopment 411 East Kern Avenue, Tulare, CA 93274 [email protected].