AGENDA CAPTION:
Title
Receive a Staff presentation on the City of San Marcos Economic Development Incentive Policy, and provide direction to Staff.
Body
Meeting date: March 1, 2022
Department: City Manager’s Office - Economic Development
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Fiscal Note:
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City Council Strategic Initiative: [Please select from the dropdown menu below]
Choose an item.
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Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
☒ Economic Development - Fiscally Responsible Incentives for Economic Development
☐ Environment & Resource Protection - Choose an item.
☐ Land Use - Choose an item.
☐ Neighborhoods & Housing - Choose an item.
☐ Parks, Public Spaces & Facilities - Choose an item.
☐ Transportation - Choose an item.
☐ Core Services
☐ Not Applicable
Master Plan: [Please select the corresponding Master Plan from the dropdown menu below (if applicable)]
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Background Information:
The current economic development policy for incentives was adopted in December 2013, amended in January 2016 to add a criterion for living wage, and amended in February 2016 to add the Economic Development Supplemental Fund. An updated policy is desirable to ensure the City has guidelines that reflect the economic climate and community values of the City of San Marcos.
City staff presented in the June 1, 2021, work session on the economic development policy for the City of San Marcos and was directed to research and incorporate changes. Staff solicited input from the Economic Development San Marcos (EDSM) Board, Greater San Marcos Partnership, San Marcos Area Chamber of Commerce, and other city departments.
The proposed policy expands the tools available for the City of San Marcos to attract and retain businesses. Proposed additions include Chapter 312 Agreements, expanded Business Improvement & Growth Grants, Downtown Co-Marketing Fund, Fee Waivers, Infrastructure Assistance, Legacy Business Program, Main Street Incentive Grant, Process Incentives, Small Business Retention Incentive, Sustainable Resources Grant, and Utility Fee Reductions for commercial users.
This policy does not guarantee an applicant will receive any of the aforementioned incentives, but it gives the City different options to attract and retain both large and small businesses in different industries to support growth throughout the city.
Council Committee, Board/Commission Action:
City Council provided feedback on items for City staff to research and bring back into an updated policy for consideration at the June 1, 2021, Work Session. City staff also received direction to receive talk with the Economic Development San Marcos Board, Greater San Marcos Partnership, and Chamber of Commerce.
Economic Development San Marcos (EDSM) passed 6-3 recommendation resolution 2022-01RR-EDSM with suggestions for incorporation in the updated policy. Votes against the resolution were by Councilmember Baker, Commissioner Ingalsbe, and City Manager Lumbreras. Comments mentioned for voting against the resolution were not against the policy as a whole, but because a la change was made to remove the limitation of the tax incentive only being for the Maintenance & Operations portion of the tax rate and instead allow for the whole tax rate to be considered. Comments mentioned for voting for the change were that it could put San Marcos at a disadvantage compared to other cities and that the City Council always has the opportunity to consider the entire tax rate but can choose case-by-case to limit the available incentive to only the Maintenance & Operations portion.
Alternatives:
City Council can move forward with the policy as recommended, or the City Council can direct staff to make changes.
Recommendation:
Staff recommends moving forward with the policy as presented.