NEWBERRY – Newberry City Council passed first reading of an ordinance for a commercial economic development incentive rider that would benefit new businesses coming into the City of Newberry – more specifically, a potential grocery store.
If approved, this economic development rider could act as a partner to a policy approved by Newberry County Council that gives property tax incentives to grocery stores that locate within Newberry County.
Available only at the city’s option, Utility Director Tim Baker said this proposed economic electric utility rate would be for nonresidential establishments receiving electric service from the city under the commercial customer’s monthly rate.
While the rider would not specifically be for grocery stores, Baker said most grocery stores would fit the criteria of the rider by having at least 250 kW at one metering point. The policy would not solely refer to grocery stores as other big box stores could qualify, and the city would also be able to explore those options.
Mentioned in the economic development rider is that the applicant must make a new capital investment of $1 million and this investment must occur following Newberry City Council’s approval for service under the rider.
The economic development rider is available for load associated with initial permanent service to new establishments, expansion of existing establishments, or new customers in existing establishments who make application to the City of Newberry for service under this rider, and city council approves the application.
Those meeting the above qualifications and having gained approval from Newberry City Council after applying would be eligible for the following credits to the electric portion of their bill, including the basic facilities, demand charge, energy charge, or minimum bill, but excluding Wholesale Power Cost Adjustments as outlined in the ordinance:
• Months 1-24: 20%.
• Months 25-48: 15%.
• Months 49-72: 10%.
• Months 73-96: 5%.
No credits would be received following month 96. Baker said the first two years of a new business were critical and he felt the 20% incentive on the customer’s bill would be an advantage to new customers.
“The customer will receive a commitment letter if approved,” Baker said.
If the customer fails to comply with any of the rider’s criteria or it is otherwise determined by the city that they violated a provision or covenant of the ordinance, then the credit shall be terminated immediately and without recourse by the customer.
During the April 13 meeting, Mayor Foster Senn clarified before council that a current city business would not be eligible on their current bill; however, if they made any additions to their property, those additions could potentially be eligible for the rider’s assistance.
“Ideally, we will attract a new grocery store or another big box store that we would like to see,” he said.
City Manager Matt DeWitt said the city was doing everything they could to recruit businesses that the city needs, and he thought partnering this with Newberry County’s economic development incentives is a great step for economic development for the city.
Lawrence Flynn, municipal attorney with Pope Flynn, LLC, spoke on behalf of their firm as they have drafted similar ordinances for other municipalities across the state.
Flynn said, from a protection standpoint, when rate concessions are offered, a municipality must make sure they are treating the situated classes of persons equally.
“In laying out your very particularized criteria – the size of the load, type of investment and the type of businesses that qualify, the application effectively becomes a rubber stamp for anyone that checks all of those boxes,” Flynn said of the city’s ordinance.
The distinction is that anyone that qualifies will receive the benefits of the rate, which is what Flynn said needed to be done when offering up a rate consideration.
Flynn said city staff did a really good job of identifying the margins in their power cost, realizing it is more beneficial to have that investment in the community versus giving away more than the actual power cost for the electric utility incentives that are being provided.
“That’s a really important thing. It really is a win-win for both the city and the customer,” he said.
Motion to approve first reading was made by Councilperson David DuBose and seconded by Councilperson Carlton Kinard.
Elyssa Haven is the Public Relations Coordinator at the City of Newberry.