LARGO – On the Nov. 6 election ballot, Largo residents will vote on a referendum designed to encourage the growth of businesses and jobs within the city.
The referendum, if passed, would allow the city of Largo to create a property tax exemption program for new or expanding businesses that make improvements to property. Businesses within target industries would have to prove that they have created at least 10 new jobs that have an average wage higher than the county’s average wage.
Largo Economic Development Manager Teresa Brydon recently explained that the tax exemption program would help Largo to remain competitive against neighboring cities and counties, enticing its share of new jobs.
“Many communities throughout the Tampa Bay market have already implemented (the program),” she said. “It puts another tool in our toolbox in order to be competitive with Hillsborough County, Sarasota, and now St. Pete.”
A similar referendum also will be on the ballot for residents of Clearwater on Nov. 6.
By state law first passed in 2010, local governments can provide a tax exemption worth up to the full value of a property improvement. That means that an improvement that increases the property’s value by $100,000 could be exempted from as much as $4,559 in city taxes over 10 years. Essentially, the business wouldn’t pay taxes on the value of that improvement or expansion.
“It won’t affect existing property values and taxes that we currently collect. It’ll only be on the improvement,” Brydon said.
The state law provides the maximum parameters for the program but allows the local government to define the specifics of the program after its residents have passed a referendum allowing the tax exemption. Per state law, businesses can only be exempted from the full value of the improvement for a maximum of 10 years. However, the city of Largo could decide to exempt only 50 percent of the improvement’s value for only five years after the expansion, for example.
“There are a lot of different variables that come into play,” Brydon said.
If the referendum passes, Largo commissioners will consider the parameters of the city’s new program likely by the end of March, Brydon said. By then, city staff will provide comparisons of how the program has been implemented in neighboring governments.
“We will look into their programs, evaluate all of them and say, ‘Do we want to be consistent with everyone else in the county? Or do we want to set lower parameters than what the statue allows?’” Brydon explained.
In order to qualify for the exemption, businesses will have to reapply for it each year, supplying or updating the city with the amount of jobs the exempted improvement has created. Qualifying businesses must be a state “target industry,” which also are recognized in the Largo Economic Development Plan and include life sciences, specifically health care and medical manufacturing; financial and professional services; homeland security and defense; information technology; aviation or aerospace; manufacturing and corporate headquarter operations.
The minimum amount of jobs the qualifying improvement must create varies depending on the type of business, according to state law. Manufacturing businesses must provide 10 new jobs. An out-of-state or international sales business should create 25 new jobs. A new or expanding office has to create 50 new jobs to qualify.
Finally, the average wage of the new jobs created must be higher than the average wage of the area, which in Pinellas County was $40,382 as of Jan. 1 this year.
Aside from creating new businesses, the new program could provide incentive for Largo businesses to stay in the city and expand rather than move out of state in order to find more “bang for (their) buck,” Brydon said.
“This is an incentive that, for the first time, allows us to help existing Florida businesses grow and remain competitive in the world market. That’s how I look at it,” she said.
Of course, Largo has plenty of room for new businesses as well.
“We do have a lot of great opportunities for corporate offices and/or industrial or manufacturing sites,” Brydon said.
She added that any time the city looks to offer a business incentive, staff evaluates the value of the investment versus the eventual return, making sure the city will see that return within two years. The potential tax exemption program is a “great opportunity” because it meets that requirement, she said.
“We’re going to get our revenues back in a two-year period and after that we’re going to get more,” she said. “So it makes a lot of sense to leverage the city’s revenues to bring in new job opportunities to the community.”
The referendum will be listed last on most Largo ballots and is the only other Largo-specific decision to be made by citizens within the city. Seat 4 on the Largo City Commission is the only contested race this year, pitting James Robinson against Robert Hunsicker.
Brydon said if the referendum passed, she would welcome input from residents and businesses on what they think the parameters of Largo’s tax exemption program should be. To contact Brydon, call 586-7360 or email firstname.lastname@example.org.