City of Clovis
March 3, 2011
For more information, contact:
Tina Sumner
City of Clovis
(559) 324-2082
[email protected]
THE CITY OF CLOVIS OFFERS ENTICING INCENTIVES FOR BUSINESS
The City of Clovis has implemented three different incentive programs that will create an
even more business-friendly environment for companies who locate to the area. The first is a
Sales Tax Rebate Program targeted to businesses that locate in existing vacant commercial
buildings. The building must have been vacant as of January 1, 2011, and the application period
for the program will run until December 31, 2012. Businesses meeting at or above an annual
threshold of generated sales tax revenue per year to the City of Clovis will be eligible to receive
a rebate of 50 percent of the City’s share of sales tax generated for up to 12 quarters.1
The second incentive program is a Fee Suspension Program that entails the temporary
suspension of sewer and water major facilities impact fees for office and industrial development
projects submitted between January 1, 2011 and June 30, 2012. Office and industrial
development zoning would include C-P Professional Office, M-1 Industrial, M-2 Heavy
Industrial, M-P Industrial Park, C-M Commercial and Light Manufacturing, and in some cases PC-C, Planned Commercial Center. These fee suspensions can be applied to new development as
well as to the expansion of existing office and industrial development.2
The third incentive program is a Statewide Community Infrastructure Program
(SCIP). This generous loan program can be financed for 30 years at a 5.25% interest rate. SCIP
was instituted by the California Statewide Communities Development Authority (CSCDA) in
2002 to allow owners of property in participating cities and counties to finance the development
impact fees that would be payable by property owners upon receiving development entitlements
or building permits. The program has since been expanded to include financing of public capital
improvements directly. If a property owner chooses to participate, the selected public capital
improvements and the development impact fees owed to the City will be financed by the
issuance of tax-exempt bonds by CSCDA. CSCDA will impose a special assessment on the
1
2
Source: City of Clovis – Report to the Council, February 7,2011
Source: City of Clovis – Report to the Council, December 13, 2010
owner’s property to repay the portion of the bonds issued to finance the fees paid with respect to
the property. The benefits to the property owner include:
Only property owners who choose to participate in the program will have
assessments imposed on their property
Instead of paying cash for public capital improvements and/or development
impact fees, the property owner receives low-cost, long-term tax-exempt
financing of those fees, freeing up capital for other purposes.
The property owner can choose to pay off the special assessments at any time.
For home buyers, paying for the costs of public infrastructure through a special
assessment is superior to having those costs “rolled” into the cost of the home.
Although the tax bill is higher, the amount of mortgage is smaller, making it
easier to qualify. Moreover, because the special assessment financing is at taxexempt rates, it typically comes at lower costs than mortgage rates.
Owners of smaller projects, both residential and commercial, can have access to
tax-exempt financing of infrastructure. Before the inception of SCIP, only
projects large enough to justify the formation of an assessment or communities
facilities district had access to tax-exempt financing. 3
3
Source: City of Clovis Staff Report