Tuesday, May 22, 2018

Colorado Springs City Council considers cash incentive for manufacturer

Posted By on Tue, May 22, 2018 at 7:15 PM

Here's something you haven't heard in awhile: The city offering cash incentives to retain existing business or attract new business.

On May 21, City Council was to be briefed on a plan to forego $50,000 in city sales tax revenues in exchange for a guarantee of adding 10 new jobs in four years by Relius Medical, a manufacturer of orthopedic medical devices and custom, non-orthopedic related products.

From the Council's supporting documentation:
Relius Medical, LLC is a medical device manufacturer that engineers and manufactures orthopedic and non-orthopedic products. Relius purchased previously held assets of another company and was able to retain many of the previous employees, ultimately saving over 100 jobs.

Since commencing operations in 2014, Relius employs 135 people and has been committed to developing and growing its workforce through collaborative efforts with community organizations such as Pikes Peak Community College, Pikes Peak Workforce Center, and Mount Carmel Veterans Service Center....

The Executive Branch is recommending that the City provide certain performance-based incentives for investment and job creation.

Relius Medical, LLC has investment plans for business expansion and job creation. The company estimates that it will invest $5 million in machinery and equipment. The company expects to hire 25 new full time employees over the next 4 years at an average wage of $34,337.

The Executive Branch is recommending that the City enter into an Economic Development Agreement to provide certain performance-based incentives for the company to invest in business personal property and job creation. The proposed City incentive is:
Sales and Use Tax Rebate on Annual Purchases of Business Personal Property (50% of the City’s 2% General Fund Rate, or a 1% Total Rebate).
Here's how the city's investment shakes out over the longer term:
click to enlarge screen_shot_2018-05-21_at_2.34.29_pm.png
click to enlarge screen_shot_2018-05-21_at_2.34.50_pm.png

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