Council delays vote, opts to fine-tune incentive program for creative spaces, legacy businesses

City Council plans to take the next two weeks to fine-tune the guidelines for a proposed place-based economic incentive program aimed at creative spaces, legacy businesses and community needs such as child care providers and grocery stores. Thursday’s meeting featured presentations on an assortment of new programs from the Economic Development Department, with the place-based incentive program delayed until Sept. 26 to address questions around its eventual implementation and how it could best serve areas of the city with clearly identified small business gaps.

Donald Jackson, a business process consultant with EDD, spelled out the basic components of the program, which was presented to city boards and commissions over the summer with general support. The program would delineate four kinds of developments and businesses that would be eligible for an annual property tax refund to make up for lower rents or revenue gaps in spaces offered to music venues, arts spaces, legacy businesses or other entities that address community needs.

The four categories are: new commercial or mixed-use developments that carve out space for preferred businesses; community impact businesses that offer needed services; cultural preservation cases where an existing business is offered an incentive as assistance; and projects that offer transformational infrastructure, especially in city-led development projects.

Recipients would receive their incentive payments in the form of a rebate on annual property taxes except in the preservation case, where the funding would come from General Fund revenues. Because of that nuance, Jackson said there is a limit to how many of those kinds of incentives could be granted annually unless an alternative funding source is found.

Council members expressed optimism at the potential impacts of the program, especially because it could enhance a recent state incentive for child care as well as a forthcoming Travis County tax rate election intended to raise more money for those businesses.

“I would just invite you to please explore with the county if Proposition A passes, if there are some mechanisms to be helping and coordinate with that capacity build out, where perhaps it’s a criteria if you were taking a certain number of these slots or something that there’s a mechanism to more easily allow access,” Council Member Alison Alter said. “Some of that happens (already), but some additional attention to helping those businesses take advantage of that as they go through that process, I think, could help leverage the funds that would come from Proposition A to go further and allow the city to help support that capacity growth in those small businesses.”

Alter also pushed EDD staff to design as much outreach and education as possible about the program as it is formally written in the coming months ahead of an expected launch in the spring.

“I do feel like it’s still fairly opaque to understand it if you were a business that was trying quickly to assess whether the city had a program to assist you. … I’d like to see as we move forward that we’re making it as easy as possible,” she said.

After the trio of presentations, Council Member Zo Qadri moved to postpone the vote on the program to allow Council to further refine its basic guidelines.

“If Council had been able to receive this briefing before the City Council meeting, such as at the previously cancelled work session, then I believe there would have been a majority of members ready to take action at the meeting,” he said in an emailed statement. “I believe Item 6 is a good step in the right direction, but I would like for Council and our staff to have more time to consider the policy now that we have received the staff briefing. This is something I know we all want to get right, and I look forward to passing this item in the near future.”

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