SCOTT CITY WANTS ZONE TO DRAW BUSINESS

SCOTT CITY -- City officials plan to take another step toward making the Nash Road industrial area between Cape Girardeau and Scott City into a prime location for business and industry.

By declaring the area an enterprise zone, new and expanding businesses will receive tax breaks for locating in the area.

LaDonna Phelps, who heads the city council's planning and zoning committee, said the reduced tax rate given to new and expanding businesses through the state's enterprise zone law would result in economic growth.

She said making the area an enterprise zone will be an incentive for business owners.

"With all my research on the subject I cannot come up with any reason that would indicate `don't do it,'" she said.

The Nash Road industrial area is located along Interstate 55. Scott City annexed a portion of the property more than five years ago. Since then, city officials have taken steps to make the area into a center for industrial activity. Construction of city water and sewer lines was recently completed.

Missouri's enterprise zone law is intended to attract businesses to areas where jobs are needed. The city council must approve rezoning the area, and the state economic development agency must certify boundaries set by the council.

But once it is rezoned, new and expanding businesses can earn state income tax credits of up to $1,200 for each new job created. They also get tax credit for each $1 million of investment in their businesses, and half of their income is exempt from taxes.

The tax breaks would likely be effective for 10 years from the date the council approves rezoning the area, Phelps said.

Mayor Larry Forhan said the city looks to the Nash Road industrial area as a place of business expansion. The city has already spent hundreds of thousands of dollars installing city water and sewer lines to businesses already located in the industrial area.

Extension of Nash Road is also one of the designated highway projects made possible by the state's gas tax hike. The mayor said it is hoped several businesses will locate in the area in the coming years, providing needed jobs.

"It will provide jobs, and that's extremely important," Forhan said. "It's not only important for Scott City, but for the surrounding towns and the region.

"The enterprise zone is a real enticement for industries to locate here."

Phelps said enterprise zones have proven to be profitable for cities that have already enacted them.

"If we don't do this, I think it would hurt not only Scott City, but Cape Girardeau," she said. Cape Girardeau's enterprise zone is adjacent to Nash Road.

"I think the long-term effects are going to be the most important," she said.

She said the move would decrease by half the amount of city sales tax collected from the new businesses, because half their income is exempt from taxes. But she said the city would benefit financially in the form of jobs and a smaller increase in sales tax revenue.

"The way I look at it, 50 percent of something is better than zero percent of nothing," she said.

The council will likely consider making Nash Road an enterprise zone at its next meeting May 18, although final approval will come later, Phelps said.

She said City Attorney Frank Siebert is researching the legal aspects of the rezoning.