Conway considers incentives program to spur business growth

Conway leaders hope to encourage businesses to move into some of the city’s underdeveloped corridors by eliminating an infrastructure fee.

That charge — known as the capital recovery fee — can amount to tens of thousands of dollars in some cases.

The move would impact areas that have for years struggled with economic development, including the U.S. 701 South, U.S. 378 and U.S. 701 North corridors. It would also cover downtown.

“We have had several complaints from businesses that were looking at opening up downtown,” said Adam Emrick, the city’s planning director. “Specifically, [those business owners] decided not to or really hesitated because of those fees.”

The capital recovery fee is based on the impact a business has on the existing infrastructure. For example, if a restaurant is built in Conway the city pays Grand Strand Water and Sewer Authority a fee based on a formula that factors in the number of seats in the restaurant. The city then passes that fee on to the restaurant owner.

But under the plan Conway leaders are considering, the city would eat that cost, with the hope of spurring more commercial development.

“This is [a] way to say this is a priority to the city,” City Administrator Bill Graham said.

One case that stands out to Emrick is that of the Dilly Beans cafe, which closed late last year, although not because of the fee.

When the restaurant opened, the owner used just a small section of the building. As her business grew, she expanded into another area of the facility. Because that space had not previously served as a restaurant, the expansion triggered the fee.

“She was hit with an enormous amount of capital recovery fees,” Emrick said. “And that’s where the biggest concern is. Are we stifling expansion of existing places and potentially new redevelopment because of this fee? And that’s what they’re going to try to gauge by offering this incentive.”

Businesses in the city pay a variety of taxes and fees, including hospitality fees, a business license charge, and, of course, property taxes.

Council members had considered reducing some of the other taxes and fees to attract more businesses, but they ultimately settled on cutting the capital recovery fees in designated areas.

During a workshop last week, city leaders discussed eliminating the fees citywide, but some officials said their intent is to focus on specific communities.

“If it’s everywhere, what’s the draw?” Mayor Barbara Blain-Bellamy said.

Council members acknowledged that they aren’t sure what impact the fee reduction will have, if any. However, they said that if a company is on the fence about where to move, this might help sway the firm.

“If we get tons of people vying for this, I’m going to be shocked,” councilwoman Jean Timbes said. “But I’m going to be pleased.”

This story was originally published April 11, 2016 at 10:43 AM with the headline "Conway considers incentives program to spur business growth."