The city of Durango is opting into a state program to boost economic growth by attracting new businesses to town by offering promising tax incentives.
The program is Colorado’s Rural Jump-Start program, which was introduced in 2016 and offers tax relief, grants up to $40,000 per new business and up to $5,000 per new hire, according to the Colorado Office of Economic Development & International Trade.
Durango Economic Opportunity Manager Tommy Crosby said the program focuses on “strengthening local economies through, specifically, job creation.”
The program is aimed at new businesses and businesses relocating to Colorado within “economically distressed” Rural Jump-Start Zones as identified by the state economic development office.
In an email to The Durango Herald on Wednesday, Crosby said new businesses are concerned with five significant expenses when they are starting up or relocating: Commercial real estate costs; equipment and infrastructure expenses; labor costs and salaries; inventory and supply chain; and marketing and branding costs.
Adding up those expenses, plus potential other costs, can be “intimidating and burdensome,” he said.
“If that business has the option to start up or relocate to a city that does not offer tax incentives (versus) Durango where they can receive tax incentives, the decision would favor Durango (versus) the other city not offering incentives,” he said.
Currently, the state counts 32 Colorado counties as Rural Jump-Start Zones. In addition to La Plata County, Alamosa, Montezuma and Yuma counties are among the counties classified as Rural Jump-Start Zones.
Some businesses such as Higher Purpose Homes in Montezuma County, Sasquatch Campers in San Juan County and Cold Case in Archuleta County are examples of businesses eligible for the program, Crosby said.
He described the program as a partnership between the state, counties, municipalities and businesses. La Plata County signed a resolution in March to participate in the program.
“The city’s participation would look like a waiving of business personal property tax for four years,” he said. “This is specifically tied to use tax.”
The city projects it would have one to three participating businesses per year and about $3,300 in tax incentives would be offered to each business, with an estimated fiscal impact to the city of about $10,000 annually.
Crosby said to qualify for the Rural Jump-Start Zone program, a business must be a startup or relocating to Colorado and must offer a “non-duplicative business product or service.”
The business must provide at least five jobs at or above the county area median income, and the business must also have a local liaison, such as Region 9 or Fort Lewis College, to aid with the program application, he said.
“We’re lucky to have a really active Region 9 Economic Development District of Southwest Colorado that has taken a really proactive approach to inviting areas, counties and municipalities into this program and letting them know that they are more than willing to help guide eligible businesses through that application process,” he said.
cburney@durangoherald.com
