Policy born out of Three Springs area grocer's needs
The city of Durango hopes to use incentives to attract certain businesses to certain areas, such as a grocery store in the Three Springs area. (Durango Herald file)
The City of Durango is implementing a new program to strengthen local businesses and their ability to deliver vital services by incentivizing select companies to hire workers and invest in infrastructure.
An economic development incentive policy adopted by the Durango City Council in May will provide incentives such as tax breaks, infrastructure assistance, grants and loans, and technical assistance to selected businesses.
Tommy Crosby, the city's economic opportunity manager, said the program will contribute to a thriving economy by promoting job creation and economic growth and ensuring essential services continue to be provided to residents.
He said the program will be more impactful than a similar program called Colorado's Rural Jump Start Zone plan, which was also recently adopted by the City Council.
“The primary incentive that this program offers is sales tax,” he said. “The incentive leverages the amount of sales tax that businesses pay to the city of Durango, whether that be a sales tax exemption or a sales tax refund.”
He said that if businesses meet certain performance goals, such as creating jobs or earning revenue, they can receive a sales tax refund, either in part or in full, depending on the agreement they reach with the city. The refunds can be used to invest in infrastructure, hire new employees or support local programs.
The new program was born out of a need for a grocery store in the Three Springs area, he said.
“Market forces alone would not have been able to build a grocery store in that area. The city believes it is an essential service to a growing portion of the community.”
As area grocers expressed interest in opening in Three Springs, discussions began about tax incentives.
“This has been a helpful push for the city to be proactive in crafting policies that can be deployed with the best interests of Durango residents and businesses in mind,” he said.
Crosby said infrastructure support, in terms of business expansion, relocation and development, is another powerful tool the new policy can provide.
Examples include aligning the city's capital projects with business expansions, repairing or widening roads to accommodate increased traffic to new businesses and expanding water and sewer lines to new developments, he said.
He said each incentive agreement is unique to each company and that the city uses its economic development incentive policies “prudently and exceptionally,” meaning the city only uses the policies when it is financially ideal.
Other incentive agreements entered into under the policy may address processes and permits, such as expedited review and permit approval.
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