West-side businesses that have enjoyed city sales and use tax exemptions for as long as 20 years will soon lose the privilege.
The Steamboat Springs City Council voted 6-1 on Tuesday to approve a resolution allowing the city's industrial enterprise zone program to expire as scheduled at the end of this year. Councilwoman Cari Hermacinski voted against the resolution, preferring to allow the program to continue.
Officially, the program was created to stimulate economic development in western Steamboat. Unofficially, City Council President Loui Antonucci said it was created to appease opposition to the city's annexation of the western Steamboat area in the 1980s.
Michael Kortas and his son Jeff, who own masonry businesses in western Steamboat, said earlier Tuesday that the program would be missed.
"It would be unfortunate," Jeff Kortas said before the City Council meeting. "It was just a nice convenience and a bonus for being over there. It was always the less desirable part of town, so it : made it worth it."
The two men said the program was an enormous help and allowed them to save big by not having to pay city sales tax on major equipment purchases such as trucks and forklifts. And while the program does not affect residential areas, Michael Kortas said the industrial enterprise zone aided affordable housing efforts.
"If you do a live-work unit, there's still really a benefit to affordable housing if you leave (the program) in," he said.
Businesses with industrial enterprise zone licenses are exempt from paying city sales and use taxes on the purchase or sale of parts, equipment, machinery and tools.
NAPA Auto Parts owner Sue Anderson said that although her business does not hold an industrial enterprise zone license, many of her customers do, including construction companies.
"They're hurting so bad now anyway," Anderson said Tuesday afternoon. "Boy, I would really like (the program to) continue."
At the council meeting, interim Finance Director Bob Litzau said the program had served its purpose and should be allowed to expire as scheduled. He noted that 86 percent of the zone has been developed.
"I think it's time for us to level the playing field again," Councilman Jon Quinn said.
Hermacinski argued that the program is used by some of Steamboat's most valued businesses and that the goals of the program - such as economic diversification and new employment - are still priorities today.
There are 244 industrial enterprise zone license holders in the city. Their identities are confidential, but they are thought to include businesses such as TIC, SmartWool and Moots. It was unclear as of press time late Tuesday night whether the Steamboat Pilot & Today holds an industrial enterprise zone license.
Noting that it is difficult to know to what extent businesses are taking advantage of their industrial enterprise zone licenses, a city staff report did not provide any estimates for how much additional tax revenue it will collect as a result of the program expiring.
Also Tuesday, council members gave preliminary approval to an ordinance regulating medical marijuana dispensaries in city limits. Council tabled plans for the redevelopment of Ski Time Square until January because of concerns such as how the demolished site at the base of Steamboat Ski Area will be used in intervening years.