THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, October 30, 1996 TAG: 9610300395
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By MAC DANIEL, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: 50 lines
The city's Department of Economic Development wants to create an incentive program that would pay money and offer tax breaks to businesses that are considering making Chesapeake their home.
The program, which was unveiled at last Saturday's City Council retreat, would be the first in the city and the latest attempt by Chesapeake to compete for private companies.
``For the city of Chesapeake to remain in the competitive global, national and regional market, a business investment program must be available,'' said a report from a focus team that helped develop the proposal.
The report said that in the past year, the lack of an incentive program prevented Chesapeake fromattracting at least seven companies representing $77 million in capital investment and 2,850 jobs.
The City Council set no date for considering the proposal. The program could be funded through a 5-cent per pack cigarette tax. Chesapeake has the second-lowest cigarette tax in the region at 20 cents per pack.
Businesses would be paid to locate in Chesapeake based on a formula that assigns points for factors such as the number of jobs to be created and infrastructure investment.
In addition, the city is considering creating technology zones, properties of up to 125 acres throughout Chesapeake, where the city can offer high-technology companies tax cuts, exemptions from local regulations and fees and direct access to government services.
A Department of Economic Development report said that for every 100 jobs created within the high technology areas, $1.34 million in retail sales can be expected.
To get businesses thinking about Chesapeake, the city is considering weekly advertisements in the International Herald Tribune, an English-language daily newspaper published throughout Europe.
No decision has been made to go ahead with the ads.
Chesapeake has long been attempting to upgrade its number of commercial and industrial businesses.
About 68 percent of Chesapeake property is residential while 32 percent is commercial or industrial. City officials want to boost the commercial/industrial mix, which provides greater tax revenues.
This push for new businesses comes as the city prepares for several lean fiscal years. School building and other capital projects are expected to take up a large percentage of the city's capital budget over the next several years. Because of past borrowing for school, road and utility projects, the city is unlikely to incur more debt before 2000.
KEYWORDS: ECONOMIC INCENTIVE CHESAPEAKE CITY COUNCIL by CNB