Special to the Cape Charles Mirror by local business owner Loraine Huchler.
As a business owner in Cape Charles [since 2003] – I pulled out my calcular to understand the value of the “economic stimulus credits” offered by this new ordinance. Clearly the key driver for this ordinance is to bring more jobs to the town.
The requirements are pretty narrow:
· the applicant must be an existing business in the town PRIOR to the initiation of the ordinance
· the business must create and sustain a minimum of one (1) new full time or two (2) new part time jobs during the incentive period (5 years starting the date of approval, November 17, 2016)
· the business must make a capital investment of a minimum of $2,000 in building improvements and/or depreciable assets
· the business must hold a current business license, be current with all tax and utility obligations to the town and the county as well as in compliance with all town ordinances
So, that means that all of the existing businesses in Cape Charles who are in good standing could take advantage of this ordinance.
My first question for the town council is: “How many businesses could take advantage of this ordinance?”
Businesses like mine, who manage a few rental properties, use contractors rather than employees. And there may be other businesses that have the same practice, or are sole proprietorships. My second question is: “How many of those businesses currently have employees (besides the owner or managing partner)?”
Finally, “Why doesn’t this ordinance apply to new businesses established during the 5-year period?”
Let’s review the expenses that qualify for the credit:
· Capital improvements and/or purchase of depreciable assets ($2,000 – $1 million)
· Cape Charles fees: building permits, wastewater facility connection
· Cape Charles taxes: real estate, Business, Professional and Occupational License (BPOL) tax
Purchase of real estate is not a qualified expense.
If I’m a business renting a space in Cape Charles, I can accrue credits by investing in capital improvements, purchasing depreciable assets or increasing my revenues (which increases my BPOL tax). The other expenses (building permits, wastewater facility connection fees, real estate property taxes) accrue to my landlord, the building owner. “How many existing businesses in Cape Charles own the real estate that they occupy – allowing them to maximize the amount of credit and incentive to hire new employees under this ordinance?”
What about the calculation of the amount of economic stimulus credits?
The first three categories are objective metrics.
· 25% of capital improvements
· 50% of net increase in Cape Charles real estate and BPOL taxes
· Up to 50% of building permit and wastewater-facility-connection fees
The last category gives complete authority to an as-yet un-named “administrator” to determine the remainder of the credit based on the following subjective criteria.
· Preserves or enhances retail sales tax base
· Fills a vacant storefront
· Eliminates blight
· Prevents demolition by neglect
· Increases payroll by at least 44 hours per week
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