Louisianans considering starting a business may be interested to hear the recent decision made by the Industrial Development Board of New Orleans: developers hoping to begin construction in the South Market District may be getting a tax break in the form of a payment in lieu of taxes deal worked out by the IDB.
The first phase of the project is expected to cost nearly $91 million dollars, and would involve the construction of 195 rentals areas and 67,200 square feet of new retail space. It would also include two new parking lots in the area. The second phase would add an expected 364 apartments, 111,000 square feet of new retail space and an additional parking garage.
The details of the tax break include the city freezing property taxes for two years during construction, as well as implementing a progressive tax that works its way from 0% to 100% of the tax burden over 10 years. This means that the developers will not pay full property taxes on the area until 2025, should the deal be approved. One rationalization provided for the deal was that the increased sales tax revenue from the new retail area would hopefully provide a counter-balance to the loss of revenue from the tax break.
The board, which unanimously approved the PILOT on August 22, will need to reconvene at a later date to work through the last details and then finalize the agreement. The developers are in the process of selecting potential retailers to fill the locations, but no final decisions have been made.
Opportunities such as this may be encouraging for those who want to start a new business. To do so, however, requires significant knowledge of the inner workings of licensing, regulatory compliance, as well as other important considerations. Anyone considering opening a business should be sure to get the right information to help avoid problems in the future.
Source: NOLA.com, “Industrial Development Board approves tax break for South Market District,” Rebecca Mowbray, Aug. 23, 2012