Town Council Regular and Study Session


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  Item # 1.       
Meeting Date: 07/01/2020  
Requested by: J.J. Johnston
Submitted By: J.J. Johnston, Community and Economic Development
Department: Community and Economic Development  

SUBJECT:
PRESENTATION AND DISCUSSION REGARDING THE ORO VALLEY PRIMARY EMPLOYER INCENTIVE PROGRAM
RECOMMENDATION:
This item is for discussion purposes only. No action requested. Based on Town Council input and direction at the study session, it is anticipated that this policy will be placed on the July 15 Council agenda for possible action.
EXECUTIVE SUMMARY:
The purpose of the Primary Employer Incentive Program is to help enable long-term financial sustainability in Oro Valley through the creation of new primary job opportunities and the generation of new capital investments in the Town. In accordance with the economic development goals embodied in the voter-approved General Plan, the Town Council's Strategic Leadership Plan and the Council approved Comprehensive Economic Development Strategy, this program is proposed to assist Oro Valley in its efforts to attract high quality primary job opportunities and new capital investment to the community. If approved by Council, the Town of Oro Valley may offer different incentives such as fee reductions or reimbursement of other eligible expenses, depending on the nature of the project. Reimbursement amounts will be restricted to the amount of construction sales tax and related fees collected by the Town in association with the project.

These incentive reimbursements will help offset qualifying expenditures by the primary employer such as required new public infrastructure improvements, which could include partial offsets to impact fees, employee relocation and qualified job training programs, exterior building aesthetics and renovation expenses. The program aims to encourage the retention and expansion of existing primary employers. Additionally, the program will help attract new primary employers to the Town.
 
BACKGROUND OR DETAILED INFORMATION:
Oro Valley is without a primary employer incentive program which puts our economic development efforts at a significant competitive disadvantage in the region. The Town's economic development team has generated dozens of new primary employer projects; however, winning new primary employer projects is extremely competitive. Oro Valley is in the 'final four' phase of the site selection process with several high quality prospects and all prospective employers are requesting incentives. Companies and their consultants frequently engage in a compare and contrast financial analysis of Oro Valley in comparison with competing communities. The proposed primary employer incentive program will enable Oro Valley to 'catch-up' with the surrounding communities who are already providing these incentives.

The Oro Valley Primary Employer Incentive program goals, its administration, employer and project qualifications, proposed incentives, and other considerations are detailed in the attached program document. The Council-approved Comprehensive Economic Development Strategy (CEDS) for 2019-2024 further details what is needed to protect and expand primary employers in the community. The Council incorporated several of the CEDS recommendations into their Strategic Leadership Plan. If approved, the Oro Valley Town Council, Town Manager and ED staff will implement the program in accordance with SLP Goal 1A: Expand Economic Vitality. 
FISCAL IMPACT:
Fiscal impacts will be determined after negotiations are finalized by the Town Manager, on a project case-by-case basis. In every Town Manager-approved project, a Council-approved contract is required. It should be noted that the primary employer will earn the incentive (via its capital investment, job creation, etc.) before the incentive reimbursements are realized back to that employer. Even with 100% incentive applications, the primary employer will still generate direct, indirect and induced net new revenue in the community. The economic and fiscal impacts will be prepared by an independent third party service provider and will be part of the final documentation prior to Council-approved contract execution.
SUGGESTED MOTION:
This item is for presentation and discussion only.
Attachments
Proposed Primary Incentive Program
Primary Incentive Program Presentation


    

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