The Bryan County Board of Commissioners is hoping to lure new businesses with the creation of “military zones” and save some money by refinancing loans on the county’s industrial park in North Bryan.
Commissioners unanimously agreed last week during their regular monthly meeting in Pembroke to apply to have two areas, one in the northern end of the county and one in the southern end, designated military zones for job-creation incentives.
The areas are made up of census tracts, with boundaries assigned by the U.S. Census Bureau, that border Fort Stewart.
“Any business within those designated areas that are classified as a military zone, if they grow their business or if they are a new business that creates two (or more) new jobs, they get $3,500 per new employee for five years,” County Administrator Ray Pittman said. “So it is a giant incentive for businesses that are growing and for businesses that are trying to open up in Bryan County.”
The $3,500 per new employee is a state tax credit. The county’s application goes to the Georgia Department of Community Affairs. The DCA website states that a census tract must have at least a 15 percent poverty rate to qualify.
But after an area is designated as a military zone, any legal business can earn the credit by hiring two or more people. A business can use the credit to eliminate up to 100 percent of its income tax liability and its withholding taxes. More information is available at www.dca.state.ga.us.
Interstate Centre, the industrial park on Interstate 16 in Black Creek, was previously part of a military zone, but Pittman said this designation was lost when census tracts were redrawn for the 2010 census.
The county is attempting to have an opportunity zone — also with job incentives but distinct from a military zone — created for Interstate Centre. That effort is going slower than anticipated but is still progressing, Pittman said.
Neither Interstate Centre nor the new Belfast Commerce Centre is in a proposed military zone, but the zones include portions of Richmond Hill and a large area around Pembroke.
In related action, the Richmond Hill City Council last week designated military zones for areas along highways 144 and 17.
Interstate Centre loans
The $5.3 million refinancing move covers two loans the Development Authority of Bryan County took to add 596 acres to the Interstate Centre. These loans for “Interstate Centre II” matured this month. The county advertised for proposals for refinancing, and received offers from five banks with options for fixed-interest-rate periods ranging from three to 15 years.
The Savannah Bank offered the lowest interest rates for loans of all durations, noted County Finance Director John Grotheer.
Burnsed, who is CEO and chairman of First Bryan Bank, which is owned by the same company as the Savannah Bank, recused himself during this discussion and vote and left the room. Infinger, as vice chairman, then led the meeting.
Only the Savannah Bank offered a seven-year rate, which at 1.53 percent was the same as the second-best offer for five years, from BB&T. Savannah Bank also agreed to pay the closing cost up to $20,000.
Grotheer and Pittman said the refinancing would save between $500,000 and $900,000. The old loans had a 4 percent rate.
The remaining commissioners unanimously selected the seven-year, 1.53 percent rate from the Savannah Bank. However, the loans are amortized to 15 years, so the county will need to refinance the remaining principal after seven years.
The commissioners then voted to seek bank offers for refinancing a $5.1 million loan spent on the third phase of the Interstate Centre. That loan would not mature until May 2015, but county officials hope to take advantage of the current interest rates, which are near historic lows.
With the old Interstate Centre II rates, the Development Authority had been paying only interest but will now be able to begin paying off the principal, Pittman said.
The authority owes a total of about $21 million on the Interstate Centre, including about $13 million on the park and $8 million for the water and sewer systems, county officials said during the meeting.
“Everything that has gone on out there has been more debt,” said Commissioner Noah Covington. “Just because we bought the property, then we wound up having to put infrastructure in, which was more debt.”
So, he said, for several years, with the amount of funding the county provides, the Development Authority has not been able to work on debt reduction. The refinancing will help, and the development authority hopes to sell property and apply that money to the loans, Covington said.