In this Section

Business Incentive Scheme Policy - Drogheda Borough Council

Drogheda Borough Council Economic Development

Business Incentive Scheme Policy

Business Incentive Scheme To Encourage The Use Of Vacant Commercial Premises Policy

Background

The change in the economic climate over the past 2 years has been both swift and drastic. Following a decade of relative stability and strong growth, Ireland was one of the first Eurozone countries to officially enter recession.

Drogheda Town Centre, like many town centres throughout the country, is suffering because of the general credit crunch, footfall is at an all time low and we have unfortunately seen shops closing on a fairly regular basis for some time now. Consequently the Council's rate collection is also at an all time low. The Council has been more than accommodating if retailers approached it by offering payment plans and whilst a minority are using the economic downturn as an excuse not to pay, the vast majority are genuine and are suffering badly. We cannot wait for the county's rateable valuation to be overhauled, we need to act now and act in a decisive way.

Commercial Rates

Drogheda Borough Council is particularly conscious of the difficult times that many of the town's businesses continue to face in these recessionary times. However it is essential that competitiveness is not undermined.

Drogheda Borough Council implemented modest increases in commercial rates for 2008 and 2009 and followed this with a 3% reduction in 2010. There were many factors which contributed to this happening in 2010, including buoyancy of the rate base, a significant tightening of expenditure and efficiencies in the delivery of key services.
Our budgeted income from commercial rates in 2010 is €11.78m. The relative buoyancy in commercial rates over the last number of years continues to be a factor in allowing this Council to continue to maintain services at a satisfactory level for the citizens of Drogheda. However during 2009 the collection of commercial rates proved much more difficult with a collection rate of 79% for the year.

There are significant pressures facing Drogheda Borough Council in the year ahead. However, as indicated at the outset, Drogheda Borough Council is acutely aware of the difficulties facing the business sector in the current economic climate. While funding from other sources has decreased, it is not the intention to "bridge the gap" through commercial ratepayers.

Proposal

With limited resources it is difficult for Councils to implement incentives to encourage new businesses to establish in commercial areas which are suffering from economic decline.
Having considered the commercial reality of business in Drogheda and having taken all factors into account including the national economy and the provision of maintaining services, Drogheda Borough Council is pleased to announce a "Business Incentive Scheme to Encourage the Use of Vacant Commercial Premises in Drogheda Town Centre".

An effective way to encourage/assist businesses to occupy vacant shops is to offer a rates incentive scheme based on a phased implementation of charges. This can provide the financial assistance that makes it attractive for new business to consider setting up in areas where there are several vacant shops.

The intent of this policy is to provide an incentive for new businesses to locate in premises that have been vacant for a period exceeding two years and encourage diversity of retail opportunities within a designated area of the town centre.

There are many vacant premises at these locations at present and for the foreseeable future they are very unlikely to be yielding any rates income for the council.

Objectives of Scheme

To actively promote the development and enhancement of retail floor space in key areas of Drogheda Town Centre most visibly affected by the economic downturn.
To enhance the vitality and viability of the Town Centre and commercial well-being of the town.
To support the continued role of the town centre and its primacy in the retail hierarchy.
To encourage new businesses to occupy commercial premises/shops which have been vacant over an extended period of time.
To encourage diversity of retail opportunities within the principal streets affected within the town centre of Drogheda as defined in the Draft Drogheda Development Plan 2011-2017.
To provide limited financial assistance to make it more attractive for new businesses to establish in areas where there are several vacant shops.
To provide rates income to Drogheda Borough Council that otherwise will be written off.
Job Creation and Employment

Eligibility Criteria for the Grant Assistance against Commercial Rates

Any premises which have been vacant for more than two years would be eligible for a grant of 50% of rates in year one and 25% in year two.
Two years would be the maximum allowed for the grant regardless of the time the premises has been vacant.
In year 3 the full amount of the rates due must be paid in that financial year
Conditional on a minimum of a three year lease being signed by the new occupier. Evidence of lease to be provided to Drogheda Borough Council.
Landlord/Agent must offer to match reduction on buildings rent for first 2 years.
The scheme shall not apply to any business or person who owes money to Drogheda Borough Council at a previous location.
The scheme shall apply to the authorised use of a premises only (i.e. where there is unauthorised development or ongoing enforcement under planning legislation this should be regularised in advance of any incentive being applied).
All applications will be reviewed and decided on an individual basis

History of being vacant

The building must be an existing building that has been vacant continuously for a period of more than twenty four months. Council may ask for evidence that a building has been vacant for the specified period. A building may be deemed to be vacant if the building has not been used for any retail, commercial or other business activity.

Proposed use

The grant awarded to successful applicants rated under this policy shall only apply to the following types of premises associated with establishing a new business:

Use as a shop as defined under Class 1 of the Planning & Development Regulations 2001 (and any subsequent amendments).
Office use as per class 2 and 3 of the aforementioned regulations
Use for medical or health professional clinics
Use as a crèche, day nursery or day centre

Uses not covered by the Scheme

Takeaways
Amusement arcades or premises with gaming machines
Head shops
Betting offices
Nightclubs
Premises where unauthorised development has taken place or which are subject to enforcement proceedings.

Payment Method

All businesses approved must sign up to payment of rates by direct debit.

Other Charges

It should be noted that this policy only makes provision for a grant towards Commercial Rates and does not apply to fees associated with other approvals which may be required to be obtained from Council. i.e. planning fees, s.254 licences, commercial water and development contributions.

Review

This policy shall remain in place for a trial period of 2 years. After the expiry of the 2 year trial period Council shall review this policy.

This initiative shows a further commitment from Drogheda Borough Council towards the business communities and will stimulate growth and sustain employment in Drogheda and reflects a desire to support Drogheda's competitiveness as an attractive location in which to do business.