The East Baton Rouge Parish Metro Council on Wednesday created a long-discussed tax-abatement district in north Baton Rouge, though they added a sunset clause at the last minute.
The new North Baton Rouge Economic Opportunity Zone encompasses properties inside Baton Rouge city limits north of Florida Boulevard that don’t fall in the Downtown Development District or are owned by the airport, which has its own tax regulations. The proposal was introduced last year but deferred several times over boundary lines.
Developers within the district may apply to the Metro Council for exemption from paying taxes on business improvements for five years, after which the abatement can be extended five more years. Therefore, if a business owns or purchases a vacant lot, builds an office and clears the plan with the council, it would still pay only the millage for the lot, not the new construction. Proposition author John Delgado said because land in the area costs “next to nothing,” the abatement will encourage businesses to open up shop in the community.
Some wondered if the size of the district would be problematic.
“It sounds like we’re biting off a very big piece of the pie,” Councilman Joel Boé remarked.
He wondered if the large district would be financially sustainable in the long run.
“I don’t think we know what to expect from this particular ordinance. … I think we’d prefer a more targeted approach to economic development,” said William Daniel, Mayor-President Kip Holden’s chief administrative officer.
Councilman Ryan Heck asked about putting a limit on the life of the district after which it must be renewed. Boé moved to include a two-year sunset clause but allowed Delgado to talk him up to five years, after which time the district will be re-evaluated. The measure passed with nine votes. Scott Wilson and Chandler Loupe were absent, and Trae Welch abstained. Before the vote, Welch discussed his desire for a program with a narrower focus and wondered if the sunset clause would scare off developers.
Delgado specifically clarified after the meeting that if the district is dissolved in five years, it would prevent only new applications and that existing recipients may still reapply for their second five-year abatement.
In response to concerns about the size of the district, Delgado said the entire area needs help and even discussed the possible future expansion into nearby unincorporated areas. A tax break will lure businesses to north Baton Rouge, he argued, specifically using the example of a grocery store, as residents have long complained about access to fresh food in the area.
“We can’t just sit on our hands. This is a first step,” Delgado said.
Boé also expressed concerns about the way the program will be administered. The abatement is not automatic, and each recipient will have to apply for the exemption and get the council’s blessing.
“So the council picks winners and losers?” he asked Parish Attorney Lea Anne Batson.
Yes, essentially, she responded.
Nevertheless, Boé and the other voting council members approved the district with the sunset clause and a provision that the council get regular status updates.
“There’s no way that I won’t vote for this. … We need every ounce of help we can get,” said Councilwoman Tara Wicker.
However, she emphasized that the tax-abatement district alone would not be “the magic bullet” that sets everything right north of Florida Boulevard.
“Everybody and their mom has suddenly jumped on the bandwagon that we want to help north Baton Rouge,” she said, but the area will still need to be a priority.
A few council members remarked on the sheer number of entities creating districts and commissions aimed at improving the area. Councilwoman Donna Collins-Lewis counted a few off — Together Baton Rouge’s efforts, state Sen. Regina Barrow’s economic district, the new Blue Ribbon Commission spearheaded by Councilwoman Chauna Banks-Daniel, and now Delgado’s tax-abatement district.
“I don’t know why we can’t get on the same page,” she said.
Speakers from Banks-Daniel’s commission gave a favorable review of the new district but said it should be incorporated into a larger strategy for improving the area.
Follow Steve Hardy on Twitter, @SteveRHardy.