5 Benefits of Eliminating the Business Personal Property Tax

City of Frederick Passes Legislation to Eliminate Business Personal Property Tax

UPDATE: The Mayor and Board of Aldermen voted on Thursday, April 16, 2015 to eliminate Business Personal Property Tax with an immediate exemption for new manufacturing investment and a phase-out approach for all businesses over a 10-year period. 

First, A Little History

Personal property tax dates to Colonial America and was levied on individuals. Imagine a tax assessor showing up at your home annually to review your personal belongings such as rings and jewelry, furniture, household goods, paintings, and silverware. These items are known as tangible personal property. According to the Tax Foundation, "tangible personal property (TPP) is property that can be touched and moved, such as equipment, furniture, and other possessions." 

Today, no tax collector rummages through our homes to assess the value of our possessions for tax collection purposes. However, in many areas, this tax is assessed on businesses. 

"Because most states have exempted personal property used for personal reasons, most citizens are not aware that the tax on personal property exists. TPP tax is invisible to most individuals, although it is a significant expense for businesses," states a report issued by the Tax Foundation. 

Taxing businesses on personal property has remained in many jurisdictions, including the City of Frederick, but a proposed change is under way. 

What is the Current Situation of This Tax in The City of Frederick?

Frederick County as a whole does not have a Business Personal Property Tax, but municipalities can assess this tax.  The City of Frederick currently is one of the jurisdictions within Frederick County that does. Only a handful of companies pay the majority of this tax. 

What is Being Proposed? 

The City's Economic Development Advisory Council (EDAC) has recommended a fiscally sound phase-out of this tax, and City officials agree. According to the Tax Foundation, the elimination of business personal property tax improves the business competitiveness of a jurisdiction and encourages reinvestment in a business.  

"The types of businesses that are hardest hit by this tax are also the same businesses that provide family-supporting jobs in Frederick," said Bobby Baumler, Economic Development Manager for The City of Frederick. "We want to attract and retain these companies and their jobs in our community."

The proposed ordinance would:

1. Exempt manufacturers (as a business category) from paying business personal property tax on NEW investments.  The tax credit only applies to manufacturers that are expanding or locating to the City. All business personal property, including items such as computers, printers, shelving, etc., would be eligible for the tax credit.
     
2. Implement a 10-year phase out of all business personal property tax. This includes both manufacturing personal property (currently 77.5% exempt) and non-manufacturing personal property (currently 62.5% exempt).  This portion will be achieved by gradually raising each exemption percentage until at the end of year 10 (and moving forward), the exemption percentage is 100%. The proposed ordinance does not exempt utilities or railroads.

According to the Tax Foundation, "Localities that choose to exempt the TPP base, even in part, have an advantage over neighbors with regard to the location of business personal property due to their lower tax costs." With a phase-out approach over 10 years, the increased real property, new investment, and new development generated is expected to replace the revenue stream that this tax historically provided the City. 

"Businesses can choose to locate, relocate, or expand in a number of jurisdictions in the region," said Bobby Baumler, Economic Development Manager for The City of Frederick. "There are many reasons to choose Frederick, and eliminating this tax gives them one more." 

5 Benefits of Eliminating the Business Personal Property Tax

1. It levels the playing field. Elimination of the tax places The City of Frederick on a level playing field with Frederick County and regional jurisdictions with lower overall business costs. 
2. It encourages investment and reinvestment. Businesses won't be penalized for reinvesting in aging infrastructure such as manufacturing equipment.
3. It gives Frederick a regional competitive advantage. Many nearby jurisdictions still assess this tax on businesses. This change allows both the City and County to market this advantage to businesses looking to locate or expand in the Frederick region.
4. It attracts new business. When a businesses is looking to open or relocate a business, every expense matters. This can tilt the scale between Frederick and another jurisdiction. 
5. It helps small businesses. 95% of all businesses in Frederick are small businesses. The plan to eliminate this tax doesn't just assist large corporations. It also assists small, locally-owned restaurants, retailers, and business owners that have invested in equipment, shelving, and fixtures. 

For more information about business in Frederick, visit www.businessinfrederick.com. 

Originally posted April 15, 2015 by Michelle Kershner

Meet Spring Intern Nick Masucci

Nick Masucci, Spring Intern for the Department of Economic Development.

The City of Frederick's Department of Economic Development frequently has interns from local colleges. They assist with anything from data analysis to writing content, depending on their interests and skills. Students bring a fresh perspective to our office, and in return, we seek to provide them with hands-on project experience. This spring, we have welcomed Nick Masucci. Take a few minutes to get to know Nick. 

Tell us about yourself.
I am a sophomore at Hood College from Berkeley Heights, NJ currently studying Business Administration and Public Relations. Outside of school, I play midfield on Hood’s Varsity Lacrosse Team and am a member of Tau Beta Eta, Hood's first fraternity. In my spare time I listen to and collect vinyl records. I also love watching The Office and Friday Night Lights.

Why were you interested in this opportunity?
I was interested in this internship because of the marketing and social media aspects of the internship. I want to work in public relations after college, and I think social media and marketing experience are very important for people trying to work in PR. Social media is becoming a big part of our society so I think it is definitely important to get real world experience working with social media and learning how to use it in a corporate setting. 

What will you be doing?
This spring I will be posting a series of short feature stories, called “Made in Frederick,” which will showcase different products that have been made here in Frederick. I will be speaking with the local businesses that make these products to get a better understanding of how these products are made and what kind of impact they have on the local community.

What do you enjoy about going to college in Frederick?
I enjoy going to college in Frederick because of how much there is to do in the city. I love going Downtown and going to The Record Exchange or getting food at Pretzel and Pizza Creations. There's a lot to do Downtown, especially for college students. I'm also a big fan of going to Baker Park when the weather is nice. Whenever I get the chance, I like to go running in Baker Park.

What do you hope to do after graduation?
After graduation I hope to work in public relations, either to work for a firm or to be part of a business's PR team. I would also like to try and coach high school lacrosse part-time.

Growing our Region to Become a Top 3 Biotech Hub by 2023

Maryland Regional Biotech Forum Discusses Growing the Biotech Ecosystem

The City of Frederick's Economic Development Director Richard Griffin recently participated in the Maryland Regional Biotech Forum held on March 30-31, 2015 at the MedImmune campus in Gaithersburg, Maryland. The first event of its kind, the forum included private sector companies; federal, state, and local government; nonprofit institutions; investors; and academia. Griffin was on a panel entitled "The Role of State and Local Government in Increasing the Return on Our Biotech Assets." 

"It was an honor to participate in this forum and discuss the role of local municipalities as the region grows this industry," said Griffin. The importance of collaboration and building the biotech ecosystem is essential to our success, said Griffin. "The rising tide lifts all boats." 

Follow the #MDBiotech15 Twitter hashtag to see tweets from the event. 

The DC Metro area is a biotech hub with more than 800 life sciences companies, 70 federal labs, and numerous world-class academic and research institutions. The focus of the forum was to chart the future of growing the regional biotech ecosystem.

Forum discussions focused on how the MD/DC/VA biotech cluster can become a Top 3 Biotech Hub by 2023. Currently, the region is ranked in the Top 10 and frequently ranks between 5th and 7th depending on the source. 

Frederick is the northern anchor of the I-270 Technology Corridor with approximately 80 biotech companies in and around the city. It is an integral part of the regional biotech ecosystem and is poised to grow this industry. To learn more, visit the Business in Frederick website. 

This Week on Carroll Creek: March 18, 2015

The snow is melting, revealing the progress on Carroll Creek Park.  With warmer weather ahead, work will continue to build the shared use paths and Phase II improvements. These images show recent work and progress along the creek.  

Connect with Us for Updates

Be sure to follow us on Facebook and Twitter for the most recent news and updates on this project and others. 
 
About the Next Phase of Carroll Creek Park

This next phase of park improvements will include new and widened multi-use paths, landscape planters, lighting, water features and crosswalk improvements. The work will occur primarily between Bentz and S. Market Street and between the Delaplaine Arts Center and East Patrick Street. More than $100M in new and renovated private construction is planned along the new park/path sections which will eventually result in hundreds of new jobs and increased state and local tax revenue. 

City of Frederick Day 2015 Showcases Frederick Projects

View all photos from this year's City of Frederick Day in Annapolis: http://bit.ly/cofpics. 

Thursday, March 12, 2015 marked City of Frederick Day in Annapolis. Each year, the City of Frederick and its partners update legislators and state leaders on City projects and reports on the key infrastructure and growth projects underway. 

"This provides a unique opportunity for Frederick to really showcase our community and the projects that are moving Frederick forward," said Richard Griffin, Director of Economic Development for the City of Frederick. The Department of Economic Development coordinates with the Mayor's office and city departments each year to plan the event.

The attendance for 2015 was strong, with representation from state delegates, senators, legislative aides, and cabinet secretaries. This year, the event had a visit from Congressman John K. Delaney (MD-6), who was in Annapolis that day. He addressed the group and emphasized the importance of the proposed new hotel and conference center in Downtown Frederick.
  

Projects highlighted at City of Frederick Day 2015 included the Downtown Hotel and Conference Center / Parking Deck 6, Weinberg Center for the Arts HVAC Replacement, Frederick Municipal Airport expansion, Monocacy Boulevard/US 15 Interchange, Culler Lake Renaissance in Baker Park, Waste Water Treatment Plant Upgrades, and Carroll Creek Park Phase II. To learn more about these projects, visit http://bit.ly/cofday2015. 

This event was made possible by a number of sponsors and partners, including The Frederick County Chamber of Commerce, the Tourism Council of Frederick County, Leidos Biomedical Research, Inc., Fort Detrick Alliance, Frederick County Office of Economic Development, The Golden Mile Alliance, Tech Frederick, and Downtown Frederick Partnership.  

Gift bags were provided to elected officials thanks to support from McCutcheon's and The Perfect Truffle. 

View the photo album with photo highlights from this year's City of Frederick Day in Annapolis: http://bit.ly/cofpics. 

Thank you to our 2015 City of Frederick Day Sponsors

International Documentaries Showcase Frederick's Entrepreneurial Spirit

Sam Delgado, 21, Founder and Creative Director of The Surge Agency, discusses their creative work for the media team from Niger. The team was in Frederick filming a documentary on business development for youth and young entrepreneurs on March 8-10, 2015. 

Across the globe, developing countries are working towards building an entrepreneurial business climate, and some are looking to Frederick as an example. The City of Frederick’s Department of Economic Development works collaboratively with the State Department to host media teams from developing countries to film documentaries on topics such as entrepreneurism, business development, and government support for start-up businesses.

To date, Frederick has worked with teams from Iraq, Tajikistan, Kuwait, Romania, and most recently, Niger. 

"Frederick is an ideal location for this type of documentary," says Richard Griffin, Economic Development Director for the City of Frederick. "We have a growing business community, strong entrepreneurs, and programs in place to assist businesses at all stages of growth."   

The most recent media team from Niger was in Frederick March 8-10, 2015, and focused on business development for youth.  During their visit, they met with organizations that have programs that help youth prepare for business opportunities and interviewed young entrepreneurs in our community.

Frederick businesses on their itinerary for interviews included The Surge Agency, Zach's Auto Clinic, and Cakes to Die For. All three of these business owners have launched their businesses at a young age and are examples of the entrepreneurial spirit that is in the Frederick community.

Sam Delgado of The Surge Agency about to begin his interview.

Youth development programs and entrepreneurial support organizations on their itinerary included My Bank! First United Bank & Trust on small business loans, Frederick County Workforce Services on their youth services and summer jobs program, The City of Frederick Economic Development Department, the Frederick County Chamber of Commerce, Seeds of Life youth development program, and Frederick County Public School's Career and Technology Center and Finance Academy at T.J. High School. 

"The seek to tell the whole story of what it takes to have a healthy business community - from an individual's personal drive to the small business loans needed to launch a company," said Griffin.  

If you are a business located in the City of Frederick and are interested in being featured in future documentaries or other opportunities to discuss your business, please contact the City's Department of Economic Development. 

 Kuwait TV Documentary Film

View the documentary that was filmed in Frederick in 2014 and broadcast on Kuwait TV: http://www.youtube.com/watch?v=NEo3Z7OC-Sg. 

City of Frederick Day in Annapolis Highlights Priority Projects

Thursday, March 12, 2015 is City of Frederick Day in Annapolis. Each year, the City of Frederick updates legislators and state leaders on select City projects and reports on the key infrastructure and growth projects underway.

Below are the projects that will be highlighted at this year's City of Frederick Day in Annapolis.

Together We Can Grow Frederick’s Future

Building a Stronger and Safer Maryland

Downtown Hotel and Conference Center / Parking Deck 6

The City of Frederick is partnering with a hotel developer, selected through a competitive RFP process, to construct a privately owned and operated $64M full-service hotel and conference center in Downtown Frederick. The public on-site improvements, including public parking, will cost approximately $20M. This is the top priority of the Frederick County Chamber of Commerce’s Major Employers Group, and projected to offer many benefits, including:

• 207 rooms with 24,000 square feet of meeting space
• Public Parking Garages: 750 spaces (100 on-site/650 off-site)
• 280 total jobs
• $1.5M annually in State taxes
• $25.8M in direct, indirect, and induced spending

Weinberg Center for the Arts HVAC Replacement

HB0364/SB0024

The Weinberg Center for the Arts is a 1,100 seat historic performing arts theater that generates 70,000 patrons and $7M in economic impact annually. The facility is in need of a HVAC replacement to continue providing programming throughout the year. After analysis by a HVAC engineering company, full replacement was recommended. The new system will provide:

• Operational and maintenance savings in the future
• Control of separate areas of the theater
• Efficient and environmentally-friendly design
      

Frederick Municipal Airport

Increasing Airport Safety and Capacity

Frederick Municipal Airport (FDK) is the second busiest airport in Maryland and well positioned to become the preferred executive airport in the region. It is seeking funding to support Phase I of a multi-year project to improve airport safety and capacity. 

This phase will include:

• Design and demolition of aviation obstructions along Bailes Lane, etc.
• Washington gas line relocation
• The project will ultimately result in added capacity with corporate hangar space and extend the runway.

Monocacy Boulevard/US15 Interchange Improves Safety and Relieves Congestion

The #1 Infrastructure Priority for Frederick City and County for over 5 years

The Monocacy Boulevard and US15 Interchange will provide a full-diamond interchange, improving safety by eliminating at-grade intersections on US15. Design is complete, and construction is scheduled to begin in 2015.  The project provides:

• Congestion relief from pass through traffic, local development, and Fort Detrick growth
• Hiking and biking tails, sidewalks, on-street bike lanes, lighting, landscaping, and pedestrian accommodations
• Park and Ride with 390 spaces connects to future Rails With Trails
• This improvement complements other road improvements, such as Monocacy Boulevard Center Section Phase II, which will add 14,000 linear feet of a 4-lane roadway, alleviate congestion, create safe routes for emergency access during flood events, and add hiking/biking trails, sidewalks, and trees

Culler Lake Renaissance in Baker Park

Restoring water quality and aesthetic character

Culler Lake, in the heart of Baker Park, was established 90 years ago. Today, the park is in need of restoration to improve water quality and the aesthetic character of the lake. In partnership with Friends of Baker Park, a two-phased plan is in place to address the restoration. The project will:

• Dredge and restore Culler Lake (Phase I)
• Install wetlands and stormwater infrastructure to treat approximately 60 acres of untreated impervious area (Phase I)
• Add new shared use paths and fountains (Phase I)
• Add a pavilion and overlook, additional paths, benches, signage, pedestrian crossing and entrance features, and skate house improvements (Phase II)

  

Cleaner Water Starts Here: Waste Water Treatment Plant Upgrades

Phase II Brings Enhanced Nutrient Removal (ENR) Upgrade

Phase I Upgrades— Complete

Frederick is in the Chesapeake Bay Watershed, and our waterways impact the bay’s health and local sustainability. Phase I upgrades to the city’s Wastewater Treatment Plant (WWTP) have:

• Improved solids digestion component of the plant
• Enabled the harvesting of methane gas while virtually eliminating reliance on landfill for waste sludge
• Reduced the city’s energy costs through co-generating electricity

Phase II Upgrades—In Progress

Phase II of the project brings an enhanced nutrient removal (ENR) upgrade to the system. Already designed, construction is expected to start in March 2015 with completion in December 2016. These upgrades:

• Bring the waste water treatment plant into compliance with recent EPA mandates for ENR
• Will reduce nitrogen and phosphorus discharges to the Chesapeake Bay and tributaries

Carroll Creek Park Phase II Completion on Target for Fall 2015

A thriving world-class, mixed use urban park in Downtown Frederick

This public-private partnership has spanned six administrations. Carroll Creek Park, as a  flood control project, effectively removed Downtown Frederick from the 100-year

floodplain and restored economic vitality to the historic commercial district.

Today, more than $100 million in private investment is underway or planned in new construction, infill development, or historic renovation along the park. Phase II provides:

• Extended park improvements totaling $15.7M in construction
• 1 mile of new and widened multi-use paths
• Landscape planters, lighting & water features
• Crosswalk improvements
• More than $100M in new and renovated private construction is planned along the new park/path sections, which will eventually result in hundreds of new jobs and increased state and local tax revenue