Agenda Date: 08/06/2024
Subject:
Title
Resolution 84-2024: Adopting the City’s Updated Economic Incentives Policy
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Brian Garner, Interim Economic Development Director |
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Presentations: |
Brian Garner, Interim Economic Development Director |
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Jamie Crout, Economic Development Specialist II |
PURPOSE:
To consider approval of the updated Economic Partnership Incentives Policy.
LONG-TERM OUTCOME(S) SERVED:
Robust and Resilient Economy
DISCUSSION:
Economic incentives are a strategic economic development tool offered by cities, counties, and states to remain competitive in business attraction and retention. They are used to partner with private developers to boost confidence that a project will benefit both the community and be profitable for the developer while delivering the level of infrastructure and community compatibility desired.
Littleton is currently competing with other communities with aggressive incentive opportunities for regionally attractive retail and entertainment amenities. The city has also prioritized the revitalization of commercial corridors in the community. The incentives policy highlights the revitalization grants that have been in place for a number of years that help small businesses compete, which, in turn contributes to a robust and resilient economy.
The city has approved one incentive agreement so far this year and is aware of several economic incentive applications that will require City Council consideration in the coming months. Economic Development staff has worked to update the Economic Partnership Incentives Policy to be more relevant and strategic, directly reflecting City Council policy interests expressed in previous discussions. Once adopted by the Council, the updated policy will be used to guide staff and assess requests as they are received.
BACKGROUND:
The city is realizing increasing development and investment interest, which includes businesses and/or developers seeking economic partnerships with the City of Littleton. The city’s current economic incentives policy has not been updated since 2016 and does not provide the level of guidance needed to evaluate and meaningfully consider incentive requests from the private sector. Economic Development is anticipating at least three incentive requests that will necessitate action by City Council this year.
At the January 2024 study session, the discussion focused on the city’s current policy and the practices of surrounding cities pertaining to incentive levels, complexity, and types. As you may recall, incentives may be funded in a variety of ways, and may be a combination of general fund, tax increment financing, sales and use tax share back programs, special taxes such as lodger’s tax, and frequently through urban renewal. Littleton is not currently positioned for some of these incentive types and accordingly, the incentive policy needs to reflect what is realistic at this point in time.
The updated policy program options remain intentionally narrow; the goal is to provide a pragmatic framework that is aligned with current city fiscal obligations and constraints. It is possible to expand program options for available incentives in the future as city revenues increase and support for additional programs become available.
Prior Actions or Discussions
Potential updates to the Economic Incentives Policy were last discussed at the January 9, 2024, City Council study session. Economic development initiatives remain a key component of City Council’s strategic plan and initiatives.
Council feedback from January was incorporated into an updated policy and was discussed at council’s July 23, 2024, study session. Council provided direction to staff to bring forward the amended policy on August 6, 2024.
FISCAL IMPACTS:
The Economic Partnership Incentives Policy provides guidance for council to make determinations that may result in significant fiscal impacts.
STAFF RECOMMENDATION:
Staff recommends adoption of the updated Economic Partnership Incentives Policy.
ALTERNATIVES:
• Further amend the updated Economic Partnership Incentives Policy.
• Eliminate the Economic Incentives Policy altogether.
PROPOSED MOTION:
Proposed Motion
I move to approve Resolution 84-2024 adopting the City’s updated Economic Incentives Policy.