Should developers continue receiving special tax breaks for locating their projects in north Baton Rouge?
It's a question the East Baton Rouge Parish Metro Council will answer this week when it considers extending another five years the economic development district it created in the area.
Councilman Cleve Dunn Jr., who's sponsoring the measure, says the North Baton Rouge Opportunity Zone not only spurs the revitalization efforts many in the area have spent years lobbying for, but it also helps curb the excessive crime rate that has crippled development on that side of town through job creation and community investments.
However, within the first five years of its controversial creation, there has been only $16 million in total investments logged in north Baton Rouge. That's a number Dunn says is low, but other leaders in the community applaud.
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"I don't think law enforcement are crime stoppers; they are crime responders," Dunn said. "Economic developments and jobs are crime stoppers. More jobs paying livable wages deters people from turning to crime. And we do that through incentives like this (Tax Increment Financing) program and the other things we've got going on."
The North Baton Rouge Opportunity Zone functions like several others throughout the city-parish. But unlike those, it doesn't fall under the umbrella of the federal and state programs. It was created independently by the Metro Council in 2016 and was more commonly referred to back then as an economic development district.
The special zone encompasses pretty much everything north of Florida Boulevard and within the Baton Rouge city limits.
Tax abatement programs within opportunity zones lock in pre-renovation assessments, allowing developers to avoid increased tax obligations that would follow as their projects increase the value of their properties.
Opportunity zones are usually overlayed on census tracts that qualify as "low income," as defined by the poverty rate or median family income benchmarks. Although they've been credited for spurring economic development, like in downtown Baton Rouge and in the southeast part of the parish, they've been criticized for rewarding developers who decide to build in areas that are already primed for new developments.
Former East Baton Rouge Parish Mayor-President Kip Holden initially vetoed the Metro Council's creation of the North Baton Rouge Opportunity Zone in 2016, saying the city-parish would be "bankrupt behind that scheme."
In his objections to it, Holden also said the district was too large and the city-parish would miss out on too much money because of it.
It took a supermajority of the council to override Holden's veto.
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According to the city-parish report, there have only been five developments that received the special tax incentives since it was created. All together, those projects created 21 permanent jobs, 124 construction jobs and netted a total investment of $16 million into the area.
Annual tax abatements totaled around $968,000 and an estimated total loss of about $100,000 to the city-parish's general fund over the course of the five years.
To James Gilmore, interim executive director for the Baton Rouge North Economic Development District, those numbers equal success for north Baton Rouge, despite how small they may be compared with what has taken place in other taxing districts across the city-parish.
"That's $16 million that wouldn't have to come to north Baton Rouge if we didn't have that TIF," Gilmore said. "There are no other ways to generate the revenue to spur economic development in places like north Baton Rouge, where there has been so much disinvestment."
Gilmore hopes extending the program another five years can double the total investments in the area. East Baton Rouge Parish Mayor-President Sharon Weston Broome said she has her eyes more trained on revitalizing north Baton Rouge than previous administrations.
In June, city-parish leaders cut the ribbon on a multimillion-dollar medical complex within Howell Place industrial plaza. Build Baton Rouge, the city-parish's redevelopment authority, in 2019 released its master plan for the Plank Road corridor, which included a mixed-use development with more than 40 affordable housing units, a grocery store and rapid bus line.
Dunn said if the Metro Council extends the opportunity zone another five years, he intends to meet with the parish's economic chamber and north Baton Rouge business leaders to amplify a campaign that would attract more developers — something he says was lacking the first five years of its existence.
"I do think we can do a better job of promoting and advertising it (but) we shouldn't let it die," he said. "This was something monumental when it got passed. There needs to be more of an internal push and us rejuvenating it."
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