Davis secures GO Zone designation
Published 12:00 am Thursday, May 29, 2008
The Selma Times-Journal
If the U.S. Senate approves, Dallas County could become a part of the Gulf Opportunity Zone Program.
U.S. Rep. Artur Davis (D-Ala.) secured the designation for Dallas County just before Congress took off for its Memorial Day break.
“Dallas County should never have been omitted from the original GO Zone designation for Alabama,” Davis said.
“Securing GO Zone status would boost the county’s ability to attract new businesses.
At a time when the unemployment rate in the Black Belt is soaring, the Selma area needs these extra resources.”
But what that means is about anybody’s guess.
Nobody knows how much of the $2.1 billion allocation for the GO Zone is committed and how much can be spent.
Davis told CQ Politics last week when the bill passed the House he sought designation for Dallas County because other members of the delegation pushed Colbert County, nearly 300 miles from the coast, for the designation.
The GO Zone comprises those parishes in Louisiana and counties in Mississippi and Alabama that were declared major disaster areas by President George W. Bush as a result of Hurricanes Katrina and Rita.
The law allows Louisiana, Mississippi and Alabama to issue two types of tax-exempt bonds for private development projects, according to tax experts at Phelps Dunbar Law Firm in Tupelo, Miss.
The GO Zone Act of 2005 was signed into law in December 2005. It provides major tax incentives to business development inside the zone.
Tax-exempt facility bonds are used for non-residential real property for projects such as shopping centers, hotels, restaurants, office buildings, warehouses, industrial plants, medical facilities and almost any commercial facility.
Tax-exempt bonds also may be used for qualified residential rental projects that include moderate-income apartment complexes.
The Alabama Housing Finance Authority issues Alabama residential bonds. Economic development authorities at the county level issue non-residential bonds.
The move to add Dallas and Colbert counties to the bill drew little notice to the $55.5 billion tax bill in the House last week.
The Colbert County designation would allow a $300 million allocation for a National Steel Car plant near Muscle Shoals.
The congressional delegation wrote a letter earlier this month to Ways and Means Chairman Charles B. Rangel (D-N.Y.), saying inclusion into the GO Zone would “enable us to attract large projects that might otherwise be lost for this economically depressed area.”
Wayne Vardaman, president of the Centre for Commerce in Dallas County, said none of the economic development leaders in Dallas County asked for the designation.
In some ways, the designation could help projects in Dallas County. However, the projects would depend on the money available from the state’s allocation and if Dallas County could receive approval, Vardaman said.
The designation provides low-interest bonds, and some start-up firms look for those bonds. “That becomes a good tool in your bag to have,” Vardaman said.
On the other hand, Dallas County is a Renewal Community. A Renewal Community is a geographically defined area in which businesses can claim certain federal income tax savings and other advantages to bolster economic development, stimulate job growth and create affordable housing.
The Renewal Community designation became effective on January 1, 2002 and expires on December 31, 2009.
“I have seen cases where the Renewal Community is a better deal than the bond issue,” Vardaman said.