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City woos new business with incentives program

POSTED January 18, 2011 9:26 p.m.

The City of Turlock, like all cities in this down economy, is going to extraordinary lengths to attract new businesses, fill vacant storefronts, and increase sales tax dollars.

The latest step in the plan to establish Turlock as a business-friendly city? A new, Turlock Partnership Incentives program, approved Jan. 11, which eliminates most fees new businesses must pay before opening in existing, vacant storefronts.

“I think this is a very bold move, I think this is a very positive move for Turlock and I think that the benefit for this will go way beyond the development of the business community here,” said Bill Bassitt, president and CEO of the Stanislaus Economic Development and Workforce Alliance. “I think it will be symbolic, and carry forward the pro-business attitude Turlock has.”

The program, championed by new Vice Mayor Amy Bublak, will reduce city fees charged to new businesses by a maximum of $5,000. According to City Manager Roy Wasden, in many cases those fees are as low as $500.

But every penny counts to new small businesses, says Turlock Downtown Property Owners’ Association CEO Trina Walley.

“As I talk to businesses who are considering moving into the downtown, they are watching their P’s and Q’s and they are measuring it down to a dime,” Walley said. “It really does make a difference.”

The program eliminates capital facility fees, occupancy and fire inspection fees, zoning certificate fees, building inspection fees, and grading and encroachment permit fees up to that $5,000 maximum for new businesses opening in vacant buildings. The program does not cover tenant improvements, new construction, county or school impact fees, and entitlement fees.

According to the City of Turlock, had the program been in place for the 2009-2010 fiscal year, when 129 new businesses were established, $303,000 in fees would have been waived.

As performing inspections will still cost the City of Turlock money in terms of staff time, the program calls for costs to be backfilled from Turlock’s $13.5 million general fund reserve. A maximum of $150,000 will be allocated from the reserve for an initial six-month trial of the Turlock Partnership Incentives Program, at which point the council will reexamine the program’s success.

To ensure that money is well spent on businesses that can survive – and thrive – in the down economy, the program has a few requirements of applicants.

Participants must work with the Alliance to develop a comprehensive business plan, using free resources available at the Downtown Turlock Entrepreneur Center. Business owners must also identify an appropriately zoned location, with city staff available to help, and participate in a predevelopment meeting with city staff. Quarterly sales and job creation reporting are required for the first year, so the city can ensure a return on investment.

“The safeguards are in place, and I think you’ve done everything that is necessary to secure the success of these businesses,” Bassitt said.

The city still faces a few hurdles before beginning the program, chief among them Proposition 26.

The proposition requires new fees in certain categories to have a 2/3 vote of approval from the public. Without existing case law, it remains unseen if Turlock could eliminate a fee for six months for certain qualified businesses, and then bring the fee back later without a vote.

Staff will tackle that problem, as well as the development of procedures, application forms, and monitoring forms for the program in the coming weeks. The City Council action calls for the program to be implemented within 30 days, at which time the council will receive a report back.

Mike Lynch, chair of the Turlock Chamber of Commerce, thinks that once those hurdles are cleared, the program is going to be good for the City of Turlock.

“Our board unanimously and enthusiastically supported it,” Lynch said. “And it did so because it’s really a sign of good faith, it’s a sign the City of Turlock wants to say to small business people we want you to have a chance, and we want you to succeed.”

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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