Members of the Odessa City Council want more tax incentives to go to small businesses, but since March, they have delayed considering changes to economic development sales tax guidelines that would enable the city to provide them.
Today those guidelines limit the taxpayer funded grants funded through the city’s Odessa Development Corporation to companies that invest at least $5 million or provide 10 jobs.
In March, the ODC approved changes that included simplifying the way grant totals are calculated and opening the grants to smaller businesses. The proposed revisions lowered jobs requirement to the minimum required by the state and allowed the city to provide incentives to businesses investing at least $100,000.
But the City Council, which must ratify ODC decisions for them to go into effect, tabled discussing the changes that month, and during a year of turmoil that included controversy over incentives, they never picked it back up.
ODC board members on Thursday asked the city’s legal staff to bring the proposal back to the City Council, which they are expected to do in the coming weeks.
“The council, we met with them face to face: These were issues that they were bringing up,” ODC board member Gene Collins said. “They wanted something that was more friendly to small businesses.”
In planning sessions over the summer, City Council members told the ODC they wanted to see incentives offered to small businesses as the changes sought to accomplish.
“This has just kind of fallen in with some very political discussions,” City Attorney Larry Long told the ODC board Thursday. “But there’s no reason for it not to move forward at this point.”
The ODC is also revising its general development plan, outlining goals of the economic development board and the organizations it funds.
Mayor David Turner attributed the delay in changing the incentives guidelines to that review.
“We need to sit down and look at it as a total package,” Turner said. “It’s a great idea to support smaller businesses but you also want to have money in the bank . . . for a larger project too.”
The city awarded grants to smaller businesses after the ODC began meeting in 1998. The incentives were relatively small but supported significant expansions for the businesses that received them, such as Bear’s Machine and Manufacturing Company.
In 2001, the local Odessa machine shop received a $28,600 grant and agreed to hire and retain six new workers. The company remains in business.
But years later the ODC and City Council approved changing the incentive guidelines to focus on larger companies that bring more jobs and greater investments.
“We just need something that’s different than what we have now, because what we have now cuts out the little guy completely, pretty much, and then doesn’t give any flexibility to work with some of these other big projects,” said Wes Burnett, the city’s director of economic development at the Odessa Chamber of Commerce.