The city of Pickerington is exploring new ways of marketing itself as an attractive location for professional office development.
Director of Development Susan Crotty brought forth an ordinance during the June 16 service committee meeting that would allow the city to offer aperformance based incentive to specific industries and business types that Pickerington hopes to attract.
The incentive, which would come in the form of a grant, would target the healthcare, technology, research and development and financial services industries.
It would also attract some existing business expansion and the new development of corporate headquarters.
Competition to attract office development in Central Ohio is fierce, explained Crotty in a presentation given to council.
Crotty said several other surrounding communities such as Reynoldsburg and Gahanna offer incentives.
“When we are trying to attract professional offices here, were competing with everyone in the Central Ohio region, she said.Most communities are using a variety of incentives and they often combine different incentives in order to encourage the new business to locate, and so we need to become more competitive in the arena.
Crotty said the reason this type of development is important is not only because of the revenue that is generated from the income tax of the higher paying jobs that usually are equated with professional office space, but also because it would create jobs that are a good match for the residential population.
“We want to try and encourage the growth of jobs in the area that would benefit the residents and also we want to balance the development of the community overall, she said.
Reynoldsburg began a job creation tax credit program last year, which uses income tax credits as one of its incentives to attract better paying jobs to the city, said Lucas Haire, development director of Reynoldsburg.
Haire said one of the first instances where the city offered this type of incentive was with Associates of Central Ohio Obstetrics and Gynecology Incorporated.
That organization agreed to provide 17 jobs and in return received 33 percent of the income tax generated over five years, he said.
There are several factors in determining what rate of tax credit the business may receive including how many jobs will be created, the total annual payroll and projected employment numbers, he said.
Another factor taken into consideration is whether the business will lease or buy the property.
In the case of Associates of Central Ohio Obstetrics and Gynecology Incorporated, its purchase of the building demonstrated a long-term commitment to the city of Reynoldsburg, Haire said.
Although Reynoldsburg and Pickerington have the same overall goal of attracting new professional office users, the focus of their incentive programs vary.
Haire said although Reynoldsburg would like to attract new development, most of its focus has been on increasing occupancy in existing vacant office space.
Pickeringtons focus tends to be primarily on new development, Crotty said.
Pickeringtons performance-based incentive would mandate a specific amount of payroll be generated for consideration.
New businesses in the specified industries would need to generate a payroll with a minimum of $500,000.
Existing businesses that are looking to expand would need to expand substantially to qualify, must add new jobs to the city and generate a minimum payroll of $1 million.
New corporate headquarters looking to develop in Pickerington would need to be of a significant size and must generate a payroll of $5 million.
The ordinance also specifies that the grantee is a private entity establishing an office outside of a Community Reinvestment Area (CRA) or a Tax Increment Financing (TIF) area unless the CRA or TIF does not impact local school property tax revenue.
The jobs within the office must also be new to the city of Pickerington.
City council and the entity would set forth the terms of the grant, including performance goals, and each grantee would need to submit an annual progress report to the city with a request for grant payment.
If the grantee were to leave the city before the terms are met, then the grantee would be required to repay 100 percent of the grant money received.
The first reading regarding the performance-based incentive program will be heard by Pickerington City Council during the July 6 meeting.