Texas is unique from other states in many ways. In economic development, this distinction is most evident in incentives. In contrast to other states, the majority of incentives are offered at the local level rather than the state level. The following is an overview of economic development incentives and the local incentive programs offered in Schertz.

What Are Incentives?

According to the International Economic Development Council, “Incentives are tools used to influence business decisions about where new investment will take place . . . incentives can be either financial or non-financial, such as a tax exemptions and credits or workforce training and public infrastructure improvements.” For businesses, incentives are important because they reduce costs associated with expansion, relocation, and startup or operational costs. The value of an incentive is unique to each project and based on the overall value to the community. The amount of incentives offered is determined by the taxing entity providing the incentive. Lastly, because incentives are tools that influence business decisions, a company must secure incentives prior to making the commitment to locate in a specific community.

City Programs

In May 2017 the City of Schertz and SEDC approved the Schertz Incentive Policy. This policy acts as a guide and helps ensure consistency when providing incentives within the City of Schertz. The Schertz Incentive Policy has three major programs: The Assistance Center, SEDC Performance Agreements, and Chapter 380 Incentives.

(1) The Assistance Center – Knowledge is power and time is money. With this in mind, the SEDC and City of Schertz have created the Assistance Center, a series of resources to help businesses learn about the San Antonio-Austin market, find available Schertz properties, receive City development process assistance, locate information on applicable tax exemptions, and connect to regional partners that have targeted skillsets that can help your company.

(2) SEDC Performance Agreements – Most incentives within the City of Schertz come from the SEDC. All SEDC incentives must be tied back to what the Texas Local Government Code Chapters 501 Subchapter C and 505 Subchapter D authorizes as a qualified project. The SEDC has specifically targeted projects that create/retain Primary Jobs and infrastructure improvements. SEDC incentives can take the form of a cash grant or  annual reimbursement.

All SEDC incentives must be formalized though a performance agreement and approved by the SEDC Board of Directors and City Council. Under a performance agreement, companies must commit to additional payroll or jobs and a capital investment. Additionally, performance agreements include ‘clawback’ provisions which outline the terms of repayment if a company does not meet its performance requirements.

Although the specific amount of an incentive varies by project, the Schertz Incentive Policy provides additional consideration for existing Schertz businesses, small businesses, and those that make a significant investment within Schertz.

 

Additional Incentives

If you are interested in having a more in-depth conversation about which incentives are available for your business, contact our office at (210) 619-1070.