Consideration and Adoption of Resolution No. 2020-28:  A resolution of the Flagstaff City Council adopting a Flagstaff Business  Retention and Expansion Incentive program support small businesses and other targeted industries; and establishing an effective date.

The Business Retention and Expansion Incentive delivers a unique competitive program to retain and expand existing businesses within the City of Flagstaff. The program invites businesses in targeted sectors to apply for upwards of $30,000 to help them stay and grow in Flagstaff. Applications will be accepted between July 1st and August 31st, 2020. Applications will be scored on their wages relative to their given sector, their environmental impacts including water and energy usage along with their impacts to the landfill, their direct community benefit, and their private investment match. The program may fund one sole successful applicant, or six successful applicants, or none. Successful applicants will be notified by October 1, 2020. If not all grant funding is used at that time, then the City may issue a new solicitation seeking grant applications for the fund balance. Any fund balance will be carried into the following fiscal  year in order to build program capacity.

The Business Retention and Expansion Incentive is funded in the 2021-22 Budget in 052-07-213-0835-4-4290 as a one time funded line item. Depending upon future conditions, the program may be considered for continuous annual funding.

The Business Retention and Expansion Incentive works towards the Council Goal to grow and strengthen a more equitable and resilient economy.

Regional Plan Goal ED.1. Create a healthy environment for business by ensuring transparent, expeditious, and predictable government processes.
Policy ED.1.2. Steadily improve access to easily understandable public information.
Policy ED.1.3. Use economic best practices to promote quality and fiscally sound projects.
Regional Plan Goal ED.3. Regional economic development partners support the start-up, retention, and expansion of existing business enterprises.
Policy ED.3.1. Encourage regional economic development partners to continue proactive programs to foster the retention and expansion of existing enterprises and home based businesses in the community

No. Council has approved incentive programs in the past.This Business Retention and Expansion Incentive program is a new incentive program.

Option 1: Approve the resolution and the related policy as it is written.
Option 2: Approve the resolution with amendments.
Option 3: Reject the resolution and the related policy as written and provide guidance.

The City of Flagstaff has formally endeavored to incentivize economic development with programs in 2002 and 2009. Currently, no incentive program exists despite increasing economic constraints. Area businesses and economic development partners have often communicated that the lack of program to assist in the retention and expansion of existing businesses is a noticeable gap that works against many economic development efforts. This program will fill that gap and eventually will be seen as a resource for our local businesses to help them to stay here and grow here.

The City of Flagstaff Economic Development Offices are charged with improving the economic environment. Past efforts found similar programs useful in executing that charge. This proposed Business Retention and Expansion Incentive program will also support efforts to assist the economy in rebounding from COVID-19 prohibitions.

This program is currently funded as a one-time budget item at $30,000. As future economic conditions allow, Economic Development staff will seek to fund this program with an annual allocation of $30,000. 

All businesses that have located in our community, either by relocating from another community or if they grew from an idea to a business, employ our residents and contribute greatly to the local and global economies and everything in between. This program is an acknowledgement that running a business is challenging and risky, and that a viable and sustainable community needs a robust mix of businesses. Our investments in business incubation and acceleration serve the community well as an entrepreneurial resource. This Business Retention and Expansion Incentive program will help to retain and expand all local businesses. 

Economic Development staff have communicated with internal and external partners to develop this Business Retention and Expansion Incentive Program. Feedback provided by Coconino County Economic Development, the Coconino County Small Business Development Center, the Greater Flagstaff Chamber of Commerce, Moonshot@NACET (Northern Arizona Center for Entrepreneurship), and a number of private businesses helped to craft this policy into what is considered to be very helpful to area businesses.