For many businesses, the recent economy has presented opportunities for growth, but unexpected challenges may still be standing in the way. Whether a company is a brand-new small business looking to get started or an established giant needing to expand quickly to meet new needs, local municipalities have a surprising number of resources dedicated to helping businesses in their communities overcome challenges and grow.
Across Arizona, cities make economic development a priority. From strategies designed to create more high-wage jobs to tax and development incentives, as well as economic aid, each city has a host of offerings to help businesses grow. A stronger local economy benefits everyone and leads to a more balanced workforce, a stronger housing market and, ultimately, more growth and revenue for the municipality. For this reason, city economic development departments offer a full range of resources dedicated to keeping businesses in their jurisdictions thriving.
For example, a brand-new small business may need help figuring out what permits it may need to operate. Many cities have training workshops available to help new business owners navigate regulatory compliance, connect with local suppliers and even provide help with funding. Post-COVID, many cities offer small business grants to help new businesses get started and can connect business owners with organizations providing micro loans and other sources of funding.
For mid-range companies, a partnership with the city can help address workforce shortages. Many cities have their own workforce development departments, or have existing partnerships in place with nonprofits that can assist develop a pipeline of qualified applicants to meet immediate growth needs. If a company is short on space, an economic development team can quickly help identify temporary office space, perhaps at another office site where employees may be working remotely and extra space may be available. Often, city staff can aid in finding a quick solution to an unexpected challenge due to their understanding of the local market as a whole.
For large companies, relocation is a major challenge. Before committing to a new site, large companies should meet with city leadership to explore potential incentives available. Cities want to create strong local economies with quality employment opportunities for their constituents. As such, there are often a host of incentives available for large companies looking to relocate — from tax incentives and infrastructure investment aid to fast-tracking building permits in order to avoid traditional delays. The local economic development team can also share demographic data to help the company find the right area of town. Additionally, city staff can help identify which sites are best suited for the company depending on how a site is zoned or the infrastructure available. Finally, economic development staff can advise businesses with permitting or regulatory compliance to ensure a quick and successful opening.
The public resources available range from city to city. However, most municipalities have economic development departments focused on business assistance. Even in cities with limited resources, access is available to statewide or federal funding. Overall, Arizona provides a business-friendly atmosphere and cities welcome the opportunity to work with companies.
Here are a few examples to help understand the range of resources available to businesses in Arizona:
Site Selection Assistance
For those looking for a new or better location for their business, local municipalities offer a host of data and demographic information to make the decision easier. For example, the City of Phoenix will prepare a site selection report of locations that match any given criteria provided by a prospective business. More importantly, city staff can help business owners better understand the future of a specific site by providing information about future uses or projects around the potential site. Site selection assistance from cities can be even more immediate and custom tailored. In Peoria, business development staff will facilitate partnerships between local businesses that have excess commercial or office space with those that are short on space and need additional square footage quickly but don’t have the time or resources for a full lease. This assistance helps businesses pivot and adjust rapidly to changing needs.
In addition to traditional funding methods, many cities offer alternative sources of funding to new or small businesses. The City of Tucson partners with many nonprofits to provide bonds, grants or loans to new and expanding businesses. In partnership with Growth Partners, an Arizona-based Community Development Financial Institution, the City of Tucson offers opportunities for small businesses to gain access to and qualify for Small Business Success Loans and other technical or capital assistance. For larger loans, the Tucson Industrial Development Authority (IDA) helps small businesses secure community-based loans up to $500,000. Businesses in search of funding of more than $3 million may be eligible to secure tax-exempt funding from Tucson IDA for the purchase or lease of land, buildings or equipment that enhances the local economic landscape.
While growth has remained steady, labor shortages have plagued Arizona businesses. Select cities have developed robust workforce development strategies to help meet local labor needs. For example, the City of Phoenix has a team fully dedicated to workforce services. According to the City of Phoenix, the Business and Workforce Development Center can “coordinate customized services, and programs, tailored to meet the special needs of specific employers.” Through a partnership with Arizona@Work, assistance includes anything from recruitment and hiring to on-boarding, training and retention.
Several jurisdictions provide tax incentives to attract economic development. For example, the City of Buckeye has a variety of potential tax advantages for businesses located in the city. First, significant areas within Buckeye are designated as Federal Trade Zones and Opportunity Zones. According to the City of Buckeye, “In addition to federal benefits, Foreign Trade Zones can reduce real and personal property taxes by 72%.” Additionally, Buckeye contains more than 100 square miles of land within the Opportunity Zone, which “provides tax incentives on capital gains monies invested into the zone.” For qualifying manufacturers, the City of Buckeye is also the only city in Arizona to “eliminate the city sales tax” and has “one of the lowest sales tax rates on items over $2,000 in Maricopa County,” according to Buckeye Economic Development. Partnering with a city to maximize tax relief could yield significant tax benefits for local businesses.
Fast Track Permitting
As many in the construction industry know, permit delays can cause significant hardships for businesses in the current market. But for qualifying companies, cities offer concierge-like services to help navigate the development review process. The City of Peoria has Priority Track, which provides reduced time frames on development plan review at no additional cost to the business or industry prospect. City of Peoria Economic Development Director Jennifer Stein tells me that “business growth is the economic driver for any community, and maintaining a dedicated team that engages with businesses, opens lines of communication and builds those ties can help local businesses grow and expand in Peoria.”
Rana Lashgari is an attorney and president of Arizona Municipal Strategies, LLC, a government relations law firm dedicated to helping businesses build stronger municipal relationships and better navigate local government policies.
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