Electric incentive talks revisited

Committee talks whether to offer discounts for new businesses of any size

LANSDALE » Borough officials are discussing whether to revise an ordinance that gives a discount on electric prices for businesses who set up shop in Lansdale.

“We should probably decide whether we think we should get behind looking at the current incentive we have: the electric incentive for new businesses,” said Councilman Jason Van Dame.

“Businesses that invest ‘X’ number of dollars, and meet a certain employee threshold, they are then provided a discount on their electric rate. I think we’re looking

to find ways to make that a little broader,” he said.

In 2010, council adopted an economic development incentive ordinance that was meant to encourage businesses to invest in the town, and gave discounts on the electricity purchased from the borough if the business met certain thresholds:

— Invest $500,000 or more and create or employ at least 15 positions: 5 percent discount on electricity for two years, and development fees reduced by 25 percent.

— Invest $1 million or more and create or employ at least 30 positions: 5 percent discount on electricity for five years, and development fees reduced by 50 percent.

— Invest $2 million or more and create or employ at least 60 positions: 7 percent discount on electricity for five years, and development fees reduced by 50 percent.

— Invest $10 million or more and create or employ at least 120 positions: 10 percent discount on electricity for 10 years, and development fees reduced by 50 percent.

Borough officials said in 2014 that a combined $15,000 in discounts were given to businesses worth over $1 million in annual revenue, and four local businesses had applied for and received the discount at that time, but none have filed since then.

Council’s Economic Development Committee and Electric Committee are restarting that conversation, and Assistant Borough Manager said this week that staff have been talking with the borough’s outside electrical consultant about new approaches.

“Instead of hiring certain thresholds of employees, maybe if you have existing employees. Maybe we can work the ordinance as an inventive for tenants or business owners to look at ways to just replace their existing, non-efficient lighting,” Ernst said.

“How can we offer different thresholds of incentives to existing business, along with new businesses coming in? What type of economic impact would that have on the borough? We are looking at that,” he said.

Van Dame said one possible solution could be a smaller discount that would apply to any new business, since getting any new tax and electric revenue would be better than no revenue from an empty building.

“It could be a good idea if we could somehow incentivize any new business coming to town, even if it’s a short-term incentive,” he said.

“Something to let them get their feet on the ground and get rolling, before they move to a standard commercial rate. I think it’s good we’re looking at it, and I’m looking forward to hearing more about it,” Van Dame said.

Committee member Richard Strahm said he would need to see how such a discount would be paid for, since the borough buys electricity wholesale and then sells it back to business owners — would there be a difference between those two costs?

“I certainly would like to see where the money’s coming from. Obviously, if we give them a discount, the money has to be made up elsewhere,” he said.

The electricity would still need to be purchased, Van Dame answered, but the borough would also be receiving more revenue than if the building was vacant.

“If they’re coming into a building that’s empty, it’s new revenue to begin with. The money has to come from somewhere, but it’s money we weren’t getting at all. Better to get them started than not,” he said.

Lansdale Borough Council next meets at 9 p.m. on Sept. 6, with various committees meeting starting at 7 p.m., and the Economic Development Committee next meets at 6:30 p.m. on Sept. 18, all at the borough municipal building, 1 Vine St. For more information or meeting agendas and materials visit www.Lansdale.org or follow @LansdalePA on Twitter.