Beachwood is considering implementing a tool that could provide incentives for companies to relocate to or expand in the city.
If approved by city council members, the Beachwood Job Creation Incentive Program would give an annual grant to businesses that create new full-time jobs. The grant amount would be based on a percentage of the annual payroll withholding taxes generated by the new jobs. Such an ordinance would represent the first-ever, on-the-books program to incentivize companies in the city's history.
"I think it'll be easy for us to market this, both as a retention and an attraction tool for the city to use," Economic Development Director Jim Doutt said.
Doutt mentioned that "the economic development landscape is quite competitive," and that seemed to be the thinking behind the ordinance originally being presented as an emergency measure at the city council meeting Monday night. Instead, council decided to place the job creation program on first reading, with the next reading coming in early February.
Council members seemed comfortable with program, though a couple questioned why items like stock options wouldn't be included in requirements for companies to receive the grants. A take-it-slow approach ultimately prevailed.
"I think it needs to be carefully considered," Doutt said. "The questions we got tonight were legit, and I'm not the least bit surprised that it went to first reading tonight. I'm going to work with the mayor and members of council to get this right.
"We want to do this right the first time."
In order to be eligible, a company moving or opening a new business in the city must create a minimum of 30 full-time jobs within three years or a minimum annual payroll of $1 million. Firms already in Beachwood must meet the same requirement while maintaining the current workforce and payroll at the time of an application filing.
The grants would be awarded with non-tax revenues like interest income, permit and activity fees and service charges. Each grant would need approval from city council and the mayor.
Doutt said he tried to tailor the program to fit Beachwood, but he talked to Solon, Hudson, Medina, Twinsburg and other communities with similar ordinances in place. By comparison, Beachwood will require fewer jobs than those cities, but will expect potential grant recipients to have higher payrolls.
"I came into this meeting fully expecting it to go to three readings," Doutt said. "This is the first step that the city has taken with incentives.