The City of Flagstaff is interested in attracting sustainable companies that will provide high quality, career oriented, opportunities for its residents that further commerce in the region. As part of these efforts, the City is providing economic incentives to meet its goal of attracting businesses to the following key industries:

• Astronomy
• Bioscience & Healthcare
• Education
• Environmental Technology
• Manufacturing
• Research and Development
• Software and Information Based Technology

Development Reinvestment Incentive – A new business in Flagstaff may receive a reimbursement for local construction contracting taxes paid for constructing new improvements or developments. This reimbursement must be used to pay for specified uses. This incentive is available for up to five years from when
the application is approved to enable phased construction.

The amount of the reimbursement will be up to the amount of a 0.5% local sales tax rate on construction contracting for improvements for the new business locating in Flagstaff. The local sales tax rate is currently 2.281%. The construction contracting tax is found in Sections 3-05-004-0415, and 0417 of the City Code, as amended by state laws.

For example: A $1,000,000 million-dollar taxable value project, net of deductions, will create a reimbursable amount of up to $5,000 of construction contracting taxes that may be used for the below qualifying expenses.

The reimbursement is limited to expenses that provide direct community benefit and may include:

1. Employee Relocation Expenses
2. Job Related Training
3. Workforce Development
4. Various site improvements: Beautification improvements, energy efficiency items, public roads and lighting, code required land scaping, public water, and wastewater.

Submissions

Any applicant that is interested in applying for this available incentive must submit the following information.

1. Written narrative of the venture which includes:
   • Explanation of how all necessary criteria will be met.
   • What City incentives you are applying for and how these incentives will be used to strengthen your ability to locate to Flagstaff.
   • General proposal of how incentive funds will be used.
   • If incentive is not received how will this impact your ability to locate to Flagstaff.
2. Budget, schedule, and business plan for the potential venture.
3. A narrative of the impact of the applicant’s businesses relative to water and energy usage, and to the community waste stream (this does not need to be elaborate).
4. A detailed description of any proposed direct benefits to the community (not just applicant’s business) such as infrastructure, workforce development opportunities for residents or students, volunteer work, or some other benefit that the business is able to offer to the community.
5. An accounting of the applicant’s private investment relative to the requested grant (Can be submitted confidentially).

Please submit all proposals for incentive requests to Creag Znetko at cznetko@flagstaffaz.gov. 

Scoring

Economic Vitality staff and various city offices will review and rank applications. Each complete application will be ranked based upon an overall tally of available points for three separate criteria:

Wages (20pts): A comparison of the wages of the jobs being created relative to the Coconino County median wage and relative to the average sector wage.

Environmental Impact (30pts): A narrative of the impact of the applicant’s businesses relative impacts to water and energy usage, and to the community waste stream.

Direct Community Benefit (50pts): A description of any proposed direct benefits to the community (not just the applicant’s business) such as infrastructure, workforce development opportunities for residents or students, volunteer work, or some other direct benefit that the business is providing to the community.

The review team will determine awards after considering the submitted application and final score. Successful applicants may then request reimbursement for approved uses. A successful applicant may be reimbursed for a variety of approved uses but will not exceed the 0.5% generated by the local sales tax rate on construction contracting.

Successful applicants will provide a final report if an incentive is awarded, describing in detail any items related to section four of the submittal requirements and how the incentive was used. Successful applicants will meet with City of Flagstaff economic development staff quarterly during the first year. Successful applicants may be included in future marketing efforts for the program and for the economic development efforts of the City of Flagstaff in general.