Sean Belk
Staff Writer
The Long Beach City Council last week agreed to set aside up to $200,000 in one-time revenues from the General Fund to provide incentives for new and growing small businesses in the city by waiving their business-license fees for at least one year.
The Council voted (7-0) at its meeting on Tuesday, Feb. 17 to direct the city attorney to prepare a draft ordinance that would outline the parameters of the proposed “Incentives for Small Businesses Program.” First District Councilmember Lena Gonzalez was absent.
The ordinance, which is expected to come back for Council approval in the coming weeks, would sunset after one year of going into effect and renew at the beginning of the City’s fiscal year, which starts on Oct. 1, the Council agreed.
Third District Councilmember Suzie Price, 5th District Councilmember Stacy Mungo and 7th District Councilmember Roberto Uranga collaborated on bringing the agenda item forward while working with the City’s financial management, according to city staff.
During the Council meeting, Price requested that the pilot program, if approved by Council, be sent to the City’s newly established, 11-member Economic Development Commission for further review and to establish marketing strategies.
“What we don’t want is to have a policy that is not being utilized or that many business owners are unaware of,” Price said.
Mungo said the program is being proposed as a new tool for businesses to take advantage of, adding that it won’t “infringe” on other programs, such as business-improvement districts (BIDs), that are already established in the city.
“This ordinance demonstrates to our businesses that Long Beach will take the steps to become a leader in supporting our local businesses and incentivizing them to grow more jobs for our residents,” she said. “These are the types of programs that, along with the Economic Development Commission, really will go a long way in demonstrating to businesses that: we’re a new Council; we’re here to be business friendly; Long Beach is the place you want to come to partner; and Long Beach is the place you will grow and strive as a business.”
According to a city staff report that provided a draft of the program that was established by John Gross, the City director of financial management, the program would provide incentives to small businesses relocating to or expanding in Long Beach, manufacturing businesses, businesses creating new jobs, and businesses making renovations or under construction.
According to city staff, the incentives apply to “a small business that is defined as a non-home business that is located in Long Beach and has 10 or fewer employees as certified on the original business-license application or any updates to that information.”
In addition, a manufacturing business is determined “based on the description that the business provides on its business license and the associated code that city staff assigned based on the description and any updates to that information,” according to the staff report.
Gross noted that the $200,000 figure is a “scientific guess” of how many businesses may take advantage of the program. However, city staff notes, in the staff report, that the costs in Fiscal Year (FY) 2015 are expected to be “much lower and relatively nominal due to the lateness in the year when the pilot program could begin. Because of the improving economy and the anticipated low cost of the program, it is believed that there will be enough unbudgeted one-time revenue to fund the program for the balance of FY 15, subject to the impacts associated with the decline in oil revenues,” the city staff report states.
Gross noted during the meeting that the program would be “simple” for businesses to understand and apply.
The Council agreed to amend the original proposal at the request of 9th District Councilmember Rex Richardson to reduce the qualification amount for incentives for renovation and construction for one year to $2,000 from $4,500.
The incentive amount is equal to the amount of one year of the current business license taxes for the business if the total value of the renovation or construction exceeds $2,000, or an amount equal to two years of the business license tax if the total value of the renovation or construction exceeds $4,000, according to city staff.
In a phone interview with the Signal Tribune, Blair Cohn, executive director of the Bixby Knolls Business Improvement Association (BKBIA) who is a member of the Economic Development Commission and chairs the Council of Business Associations (COBA) in Long Beach, said the program, if approved by Council, should be tweaked a bit to eventually provide incentives to business large and small.
Cohn said he looks forward to working with the Economic Development Commission on marketing and promoting the program to notify businesses of the upcoming incentives.
“I can’t wait to talk about it more with the rest of the commissioners,” he said. “We might want to look at it, and take it up to the next level so that it makes sense and attracts businesses large and small. It’s a good start, but it needs a little more polishing.” ß
