In an effort to attract and retain high-performing companies, the San Diego City Council this week revamped its 25-year old Business and Industry Incentive Program, which provides substantial development and business incentives for private capital improvement investments. Entrepreneurs throughout the region will want to make themselves familiar with the new program.
The original program—which helped incentivize larger companies like Ballast Point Brewing Company and AleSmith Brewing Company to keep their businesses in San Diego—was intended to attract and retain major revenue and job-generating projects throughout San Diego. However, in light of significant changes within the local economy, concerns about the program’s effectiveness for small and mid-sized start-ups, and new research in economic development best practices, the San Diego City Council voted to replace the original program with a new economic growth program called the Business Incentive Program (“BIP”). The BIP is a significantly different approach to helping San Diego retain and recruit high-performing companies, including small and mid-sized start-up companies, with strong potential for business growth while prioritizing companies committed to supporting San Diego’s workforce, sustainability and economic goals.
When implemented, the BIP will authorize the Mayor to award qualifying businesses one or more of the following development and/or business incentives:
To qualify for BIP incentives, a company must, among other things, be considered a “Base Sector Firm.” Base Sector Firms are companies in an industry that produces goods, services, or both, that are customarily sold outside of the region. In the City’s view, a key characteristic of a Base Sector Firm is its ability to move all or a significant portion of its operations to another region without impacting the company’s revenues or negatively impacting its customer base. Companies that demonstrate a viable plan to possess these key characteristics within a two-year period following the date of the company’s application for a BIP incentive may also be considered a Base Sector Firm.
In addition to being a Base Sector Firm, the company must demonstrate a viable plan and commitment to accomplish one of the following goals:
In addition to the incentives outlined above, the City will consider providing an increased level of incentives to any qualifying company that meets additional criteria to help reach the City’s goal to support workforce, sustainability and economic goals.
To be eligible for the BIP, an application must be submitted and reviewed by the City’s Economic Development Department staff. City staff will then make a recommendation to the Mayor based on consideration of certain public benefits including (1) the cost of the incentive(s) compared to the economic benefits that the project is expected to produce; (2) the impact of the project on the City’s tax base and revenue; (3) a determination the project is not expected to shift economic activity from one area of the City to another; and (4) analysis of whether the project would proceed if the Incentive(s) were not provided. Incentives in excess of $100,000 must also be approved by the City Council.
Patrick Ross, Senior Manager of Marketing & Communications
EmailP: 619.906.5740
Suzie Jayyusi, Events Planner
EmailP: 619.525.3818