Spurring Job Creation Through Private-Public

Partnerships

By Bridging the “Financing Gap” with Economic Development Programs

New Ways to Grow Jobs –Georgia’s innovative approach

Opportunity Zones offer incentives and tax credits to attract jobs…………….

Revitalization Area Strategies rewards partnerships to implement comprehensive strategies

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Revitalization Area Strategies (RAS) and Opportunity Zones (OZs)

Purpose

Both programs encourage local governments to build strategies for redeveloping “blighted” areas

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Encourages local governments to build strategies for redeveloping “blighted” areas

RAS

• CD focus – CDBG • Local gov’ts can get

bonus points & apply annually

• Apps submitted with State CDBG Annual competition

• Usually older residential areas

• 20% CT poverty threshold

OZs• ED focus – State program

but is CDBG friendly• Enhanced Job Tax Credit

for businesses• State-wide eligibility• Apps accepted any time• Usually older commercial

and/or industrial areas• 15% CBG or ‘adjacent to’

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What is the OZ program?

• Provides an enhanced Job Tax Credit to eligible businesses

• The OZ designation criteria require the targeting of areas that display “Pervasive Poverty, Underdevelopment, General Distress, and Blight”.

• The designation criteria are met by the targeting of poverty areas that are in decline, suffering from disinvestment and are in need of redevelopment and revitalization.

• Enhanced job tax credit through the Georgia Business Expansion & Support Act – O.C.G.A 48-7-40.1

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• Rural areas with sluggish economies and blighted industrial, commercial and residential areas

• Brownfields • Historic Downtowns• Declining commercial corridors• Deteriorating in-town neighborhoods • Pockets of urban poverty in otherwise affluent

counties• Traditional industrial development

Promising Uses of OZs

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Opportunity Zones Applicable Statutes

▪ Georgia Urban Redevelopment Law – O.C.G.A. 36-61 and/or

▪ Enterprise Zone Employment Act – O.C.G.A. 36-88

▪ Georgia Business Expansion & Support Act – O.C.G.A 48-7-40.1

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Local Redevelopment Tools – Urban Redevelopment Law (O.C.G.A. 36-61)

• Provides cities and counties the power to rehabilitate, conserve or redevelop a blighted area

• Local government must adopt a resolution finding the area is blighted and that redevelopment is necessary

• Local government must adopt an urban redevelopment plan for the target area

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Local Redevelopment Tools - Enterprise Zone Employment Act (O.C.G.A. 36-88)

• State Enterprise Zone Criteria▪ Poverty▪ Unemployment▪ General distress▪ Underdevelopment▪ Blight

• Local property tax breaks for Commercial and Residential Property

• Other Local Incentives

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Opportunity Zones O.C.G.A. 48-7-40.1(c)(4)• General Strategy is fairly simple

▪ Use existing redevelopment statutes in an innovative fashion

▪ Reward local governments that undertake redevelopment and revitalization with access to maximum State Job Tax Credits

▪ Operate state-wide, wherever “pockets of poverty” exist in rural, urban or suburban communities

▪ Support bottom up, locally driven community and economic development initiatives through local collaborative partnerships

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Opportunity Zone Tax Credit Incentives:

• the maximum Job Tax Credit allowed under law - $3,500 per job created

• the lowest job creation threshold of any job tax credit program - 2 jobs

• use of Job Tax Credits against 100 percent of income tax liability and Withholding

• expansion of the definition of "business enterprise" to include all businesses of any nature

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Zebulon Redevelopment Project - Before

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Zebulon Redevelopment Project - After

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Zebulon - Redevelopment Grant

Source Amount Use Amount

RDF $344,496 Construction $279,496

Architectural $14,500

Contingencies $30,000

Administration $20,500

City $3,400 Daily Inspection $2,400

Audit $1,000

DDA $199,000 Acquisition $134,000

Stabilization $65,000

Proposed Bus. $541,580 Known Investments $541,580

Total $1,088,476 $1,088,476

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Zebulon-GCF Loan to Bookstore

Source Amount Use Amount

GCF $114,280 Acquisition $114,280

Bank $142,850 Acquisition $37,406

Build-out $93,000

FF&E $12,444

Owner Eq. $28,570 Inventory $27,120

Working Capital $1,450

Total $285,700 $285,700

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Elberton-W.O. Jones Building

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Elberton-W.O. Jones

Source Amount Use Amount

DD RLF $192,492 Rehab. $192,492

RDF $500,000 Rehab. $480,000

Grant Admin. $20,000

DDA $151,946 Equity (bldg.) $151,946

Total $844,438 $844,438