Financing and incentives for sustainability
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Transcript of Financing and incentives for sustainability
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FINANCING & INCENTIVES FOR SUSTAINABILITY PRIORITIES Session: Finance and Added Value Makeover Montgomery II May 9, 2014
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Incentives Basics A working definition of incentives: • Tools to influence business decisions in order to spur the
growth of companies and jobs in specific locations • Taxpayer-financed programs that support individual
businesses Development finance: • Fostering job creation and economic growth through the
use of tax-exempt and other public-private partnership finance programs
Blurred lines between the two categories
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Incentives Basics • Categories
• Direct business financing • Indirect business financing • Community-oriented • Tax-related
• Types • Bonds • Grants • Investments • Loans • Tax abatements, credits,
deductions, exemptions
• Business Need • Capital access • Facility/site location • Infrastructure • Marketing • Product or process
improvement • Regulatory climate • Workforce
• Discretionary - Y/N • Targeted – Y/N
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Incentives and Sustainability • Support economic growth strategies • Environmental objectives
• Renewable energy projects • Brownfields redevelopment • LEED • Green tech/clean tech
• Social objectives • Job training and hiring • Distressed communities • Wages and benefits • Smart growth
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STAR Communities and Incentives • The STAR Community Rating System is a voluntary, self-
reporting framework for evaluating, quantifying and improving the livability and sustainability of US communities.
• 3 pillars & 7 goals, including built environment and economy & jobs
• Several incentives receive points within the framework • Property tax abatement, local sales tax rebates and TIF for
business expansion or retention • Supporting business development in special investment zones • Incentives for rehabilitation, reinvestment or redevelopment
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TBL Tool and Incentives • The TBL Tool is an online platform to help achieve and
describe triple bottom line performance in economic development.
• Industry-vetted, research-based framework to evaluate community projects
• Can be used to ensure incentives align with community goals and deliver a strong performance across economic, environmental and social factors • Prioritize proposals • Conduct due diligence • Communicate with stakeholders
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TIF/Special Districts and Sustainability • Special assessment districts and tax increment financing
(TIF) are 2 categories of “targeted tools to catalyze investment and transform the real estate values of a geographic area” (via CDFA)
• TIF, tax credits and incentives can be used for smart growth and sustainability initiatives
• Maryland’s Sustainable Communities Tax Increment Financing Designation and Financing Law
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Incentives and community development financing programs should help achieve community goals Using incentives – Can this incentive deal generate net benefits for your community?
• Project Benefits • Fiscal Impact • Economic impact
• Managing incentives – Did this incentive deal generate net benefits for your community? • Monitor compliance • Assess effectiveness • Reporting and policy feedback
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Examples Austin, TX
Rigorous analysis of incentive agreements, including criteria related to economic, environmental and social performance.
Atlanta, GA The Atlanta Beltline is sustainable redevelopment project along a 22 mile corridor circling downtown. Financing is “anchored” by a Tax Allocation District, a form of TIF.
Madison, WI Part of the NLC Sustainable Cities Institute. Committed to sustainable development, including Department of Planning & Community & Economic Development. TIF goals include several sustainability elements.
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Concluding Thoughts • Incentives and related tools can help close the financing
gap for sustainability priorities • Investment partnership approach • Create processes to make incentives and financing tools
work well for the community • Due diligence • Transparency • Accountability
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Contact Information Ellen Harpel President 571/212.3397 [email protected] www.businessdevelopmentadvisors.com www.linkedin.com/pub/ellen-harpel/a/448/266 [email protected] http://www.smartincentives.org/ Twitter: @SmartIncentives