A state lawmaker last week introduced legislation that would change the state constitution to allow counties to limit property taxes within so-called “enterprise zones.”
New Mexico currently doesn’t allow enterprise zones, a designation used in many states to provide incentives for new developments in blighted and urban areas.
Local developers and real estate executives say the zones have allowed cities to be more economically competitive, and if enacted here, would encourage more private sector development. In some states, enterprise zones allow for other incentives, including job creation tax credits, investment tax credits, lower utility rates, low interest loans, and sales and franchise tax reductions.
“Other cities of like size as Albuquerque, such as Des Moines in Iowa, have done this with tremendous results,” said Joe Farr, a senior vice president with Gemini Rosemont Realty.
Jim Dobbie, a senior vice president of Hunt Cos. who was involved in the development of ABQ Uptown, said enterprise zones “absolutely work” and would spur new development here. He said Hunt has a project in Houston spurred by similar government incentives.
“I have a 360-unit, 27-story residential tower under construction that was a direct result of an initiative that Houston has to bring more housing Downtown,” Dobbie said.
“Although it won’t be the single determining factor or incentive for a project, it would be another economic tool in the toolbox to help maybe make some of these deals viable,” Browning said. Titan does projects in other states, including Texas.
If the proposed constitutional amendment is approved by lawmakers this legislative session, the resolution would go before the voters during the next general election cycle.
Lawmakers would then be required to pass a bill that would define what an enterprise zone would look like, and how it would function. Ultimately, counties would decide whether or not to create and participate in the enterprise zones.
The legislature would also have to address what qualifies for an enterprise zone, and how many would be allowed throughout the state. Some states, including Arkansas, Kansas and South Carolina, have enterprise zones applied throughout the entire state.
Browning and Dobbie cautioned that how enterprise zones are defined, and the process to create them, would need to be clearly stated in future legislation.
“A lot of times municipalities will offer enterprise zones, but then put a lot of restrictions or requirements on those things,” Dobbie said. “Often they will put so many restrictions and requirements that it more than mitigates the benefits.”
By: Stephanie Guzman (Albuquerque Business First)
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