ENTERPRISE ZONE BIG BUSINESS FOR CAPE GIRARDEAU

The Cape Girardeau area has profited from an enterprise zone that has generated $191 million in new investment and nearly 2,400 new jobs, economic development officials say.

The zone wins high marks from Mitch Robinson, executive director of the Cape Girardeau Area Industrial Recruitment Association.

The zone's property tax breaks and state tax credits are tools Robinson uses in his efforts to attract new businesses and get existing ones to expand their operations.

Robinson said the community gets a good return in the form of added investment.

Cape Girardeau's enterprise zone was established in December 1986. It has been expanded twice since then.

Today, the zone covers a 24-square-mile area that takes in downtown Cape Girardeau, Nash Road, Cape Girardeau Regional Airport, Cape West Business Park and the Town Plaza area.

The state tax credits and local property tax abatements offered in the enterprise zone have sparked business growth: 40 new businesses and the expansion of 82 existing firms.

"These are lucrative tax credits," said John Kleindienst, manager of tax benefit programs for the Missouri Department of Economic Development.

Kleindienst explained the enterprise-zone law to more than a dozen economic development officials, business people and accountants at a workshop Thursday morning at the Osage Community Centre.

Over the past 11 years, the state has made available $14 million in tax credits for the enterprise zone.

But companies in the zone typically didn't use all the credits, Robinson said.

"Oftentimes it is difficult for businesses to qualify for various state tax credits," said Robinson.

There are various restrictions regarding the tax credits.

But all of the businesses benefit from the property tax abatement. In Missouri's zones, qualifying businesses receive at least a 50 percent property-tax abatement for at least 10 years.

In the Cape Girardeau zone, the abatement is 50 percent.

"Really to me, that is the biggest incentive that we have," Robinson said.

Such tools are vital to economic development, Robinson said.

The Cape Girardeau area is competing for industry with regions in Illinois, Kentucky, Tennessee and Arkansas.

"Without some ability to abate taxes and to provide incentives, a lot of that development wouldn't occur," he said.

Cape Girardeau has used the tool to attract and encourage expansion of manufacturing, wholesale distribution and warehousing businesses. Cape Girardeau officials also used the incentives to land the Blue Cross and Blue Shield of Missouri insurance facility.

Robinson said business hasn't been greedy.

"Cape Girardeau has been fortunate in having companies that have moved here that haven't asked for the moon," he said.

The state designates an enterprise zone for 15 years, after which it can be reauthorized for another seven years provided that eligibility requirements are met.

Cape Girardeau's enterprise zone is set to expire Dec. 4, 2001. With an extension, the expiration date would be delayed until 2008.

Robinson said the Cape Girardeau City Council next year could begin the process of filing for an extension.

Robinson said he hopes state lawmakers will change the law to allow Cape Girardeau and other communities to continue to use enterprise zones as an economic development tool.

In rural areas like Cape Girardeau, an enterprise zone must have at least 1,000 residents but not more than 20,000.

Enterprise zones are designed to promote economic development in blighted areas.

The unemployment rate must be 1.5 times that of the state average and 65 percent of the residents in a zone must have incomes below 80 percent of the state average.

The state has 61 enterprise zones, including three that were federally designated.

Cape Girardeau's zone was the 31st in the state.

The state first set up enterprise zones in 1984.

In all, Missouri's zones have resulted in the opening and expansion of 1,365 businesses, resulting in 48,000 new jobs and new investment of $4 billion, Kleindienst said.

For its part, the state made available $336 million in tax credits to businesses.