(312) 353-6236 ext. 2666
January 22, 2002
BUSH ADMINISTRATION ANNOUNCES RENEWAL COMMUNITY INITIATIVE
HUD Announces City of Hamilton Selected as Renewal Community - Eligible for $17 Billion in Tax Incentives
HAMILTON, OHIO - The Department of Housing and Urban Development today announced the City of Hamilton will be designated a "Renewal Community", eligible to share in an estimated $17 billion in tax incentives to stimulate job growth, promote economic development and create affordable housing. The 2000 Community Renewal Tax Relief Act established the Renewal Community Initiative that will encourage public-private collaboration to generate economic development in 40 distressed communities around the country.
As a result of this Renewal Community designation, Hamilton will receive regulatory relief and tax breaks to help local businesses provide more jobs and promote community revitalization.
"These tax incentives will help businesses grow in some of
our country's most challenging communities," said HUD Midwest
Regional Director Joseph Galvan. "By creating the incentives
that will promote job growth and economic development, we are joining
with the private sector to restore economic vitality and restore
whole communities in
"This Renewal Community status brings renewed hope for the
future of Hamilton. The designation is part of the partnership between
the federal government and local communities," said Senator
DeWine. "By working together,
we can transform the economic landscape of not just Hamilton, but the entire southwest Ohio region. I am pleased I was able to work with HUD to secure this important designation that will mean jobs and a revitalized downtown for Hamilton."
Renewal Communities will use the power of public and private partnerships to build a framework of economic revitalization in areas that experience high unemployment and shortages of affordable housing.
An estimated $6 billion in tax incentives are exclusively available for Renewal Communities across the country. As distressed areas, Renewal Communities will also be eligible to share in an additional $11 billion in Low-Income Housing and New Market Tax Credits.
These new RCs can take advantage of wage credits, tax deductions, capital gains exclusions and bond financing to stimulate economic development and job growth. Each incentive is tailored to meet the particular needs of a business and offers a significant inducement for companies to locate and hire additional workers.
Hamilton's population declined during the last decade, and the city lost approximately 3,000 jobs from 1999-2000 due to industries moving, including Ohio Casualty Group, Mercy Health Partners, and Thyssen Krupp Hoesch Suspensions. By cutting taxes, improving local services and reducing crime, the City hopes to attract businesses into the three-square mile area that will make up its Renewal Community. In addition, Hamilton will create an ombudsman who will meet with local businesses, provide information on available, valuable city services, identify issues important to small local businesses and establish an on-going relationship between government and local businesses.
- Wage credits are especially attractive to businesses looking to grow. These businesses are able to hire and retain RC residents and apply the credits against their federal tax liability. Businesses operating in the new Renewal Community will enjoy up to a $1,500 credit for every newly hired or existing employee who lives and works in the RC.
- Work Opportunity Credits provide businesses in Renewal
Communities with up to $2,400 against their Federal
tax liability for each employee hired from groups with traditionally high unemployment rates or other special employment needs, including youth who live in the RC.
- Welfare to Work Credits offer businesses a credit of
up to $3,500 (in the first year of employment) and $5,000 (in
the second year) for each newly hired long-term welfare recipient.
- Commercial Revitalization Deductions permit a State with one or more RCs to deduct $12 million per RC per year, up to $10 million per project for commercial or industrial buildings developed in the RCs. A business can deduct up to $5 million in the year the building is placed in service or deduct the full amount of eligible expenditures pro rata over 10 years.
- Section 179 Deductions under the tax code allow a qualified Renewal Community business to expense up to $35,000 of additional qualified property such as equipment and machinery acquired each year during the period of the RC designation, 2002 through 2009.
- Environmental Cleanup Cost Deductions allow businesses to deduct qualified cleanup costs in Brownfields.
CAPITAL GAINS EXCLUSIONS
Zero Percent Capital Gains Rate applies to an interest in, or property of, certain businesses operating in a Renewal Community, if the asset is acquired during the period of the RC designation and held for at least 5 years.