Opportunity Zone Guide Mobile, Alabama Photo by Tim Ard Welcome to Table of Contents Mobile, AL Welcome to Mobile, AL 01 Opportunity Zones 02 Mobile’s Opportunity Zones map 03 Founded in 1702, Mobile is one of the oldest Incentives to Invest 04 cities in the United States. Our rich history is Mobile, AL Incentive Summary 05 matched with a fast-growing modern community Mobile’s Opportunity Zone Strategy 07 focused on the future. Definitions 09 Full of Southern charm and hospitality, Mobile Mobile Zones gives rise to countless business opportunities. Mobile Aeroplex at Brookley 10 Over the last decade, Mobile’s economic Mobile Airports 11 development efforts have garnered $3.9 billion Port of Mobile 12 in capital investment and added 10,713 jobs, Downtown Mobile 13 including 29 new businesses recruited and 60 expansions made at existing area companies. Mobile Area Chamber of Commerce/Statistics 14 Infrastructure 15 Covering 1,644 square miles, Mobile County Quality of Life 17 comprises most of the Mobile Metropolitan Employment 18 Statistical Area (MSA). Unemployment 20 With a 2018 estimated population of 414,328, Wages 21 Mobile is Alabama’s second-largest county, Real Gross Domestic Product 22 home to 8.5 percent of Alabama’s population. Since 2000, Mobile County has grown by 3.5 Mobile Area Industries 23 percent. Aerospace 24 Chemical 25 Educational attainment levels in Mobile County Entrepreneurship 26 continue to improve with 86.3 percent of the Healthcare 27 population (adults 25-plus) earning a high Information Technology 28 school diploma, and 23 percent of the International Trade 29 population (adults 25-plus) earning a bachelor’s Manufacturing 30 degree or higher. Mobile & Alabama Accolades 31 PAGE 01 Opportunity Zones The Opportunity Zone incentive is a new community investment tool established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. WHO BENEFITS? People or companies who have capital gains they would like to defer and developers who now have access to capital by a private third party investing in an Opportunity Zone fund. WHERE ARE THEY? Mobile’s 14 zones are primarily located in downtown, Africatown, the Port of Mobile, Mobile Regional Airport, Downtown Mobile Airport, one tract along Airport Boulevard and near I-65 West. HOW TO GET CONNECTED? Contact Shelby Glover Zaricor, the Mobile Area Chamber of Commerce’s Director of Business Development, at [email protected] or 251-431-8616. PAGE 02 PAGE 03 Incentives to Invest Incentives are designed to attract new and expanding industries to Mobile. It is necessary for companies to consider applying for abatements prior to making public announcements to avoid possible difficulties with the abatements being granted. Eligibility Benefits and Restrictions • An eligible site must have a deficiency in site preparation or public • Approved projects are funded when taxpayers make contributions infrastructure. to a local economic development organization. • An eligible site must have either (1) a potential project, or (2) an • Taxpayers receive a tax credit equal to their contributions. The tax identifiable reason that an industrial prospect did not select the credit may offset up to 50% of the taxpayer’s income tax liability. site in the past. • Credit can be carried forward for 5 years. • An eligible site must be owned by a local economic development organization, such as an IDA, IDB, chamber of commerce or other nonprofit economic development organization. • 25% of the Growing Alabama Funds are earmarked for sites located in Targeted Counties. • Projects must be approved by Commerce and the Renewal of Alabama Commission. Mobile, AL Incentive Summary SALES AND USE TAX 11-20 must be granted this abatement at JOBS CREDIT ABATEMENT the state, county, and city level. For the state non-educational portion of property taxes for Under the Alabama Jobs Act, qualifying Sales and use tax abatements are statutorily years 11-20, the granting shall come from projects are eligible for a jobs credit. The job available to qualifying projects. Qualifying the consent of the Governor. For the county creation incentive is an annual cash rebate corporations or entities may abate all of the non-educational portion of property taxes for up to 3% of the previous year’s gross payroll state and local non-educational portion of years 11-20, the granting shall come from the (not including fringe benefits) for eligible taxes associated with construction and consent of the Mobile County Commission. employees for up to 10 years. equipping the facility. Once the facility is For the municipality non-educational portion placed into service, this abatement will of property taxes for years 11-20, the grant- become null. The exception is for coal mining ing shall come from the consent of governing INVESTMENT CREDIT projects, in which half of the state sales and body of the municipality. Please note that use tax may be abated. The state, county, years 11-20 are used for used only for Under the Alabama Jobs Act, qualifying and city abatements on the sales and use larger projects. These projects are viewed on projects are eligible for an investment credit. tax is statutorily granted by the local granting a case-by-case bases for this abatement. authority. This incentive is approved by the • The investment incentive is a credit of up local granting authority. Please see the local Buildings or facilities that are refurbished, to 1.5% of the qualified capital investment questionnaire for incentives for a summary of upgraded, or placed back into service may expenses for a qualifying project for up to the process. qualify for the reinvestment incentive. To 10 years. This credit can be taken against qualify, the project must have a cost of at the Alabama income tax liability least $2 million. The qualifying project can be • and/or utility tax liability. granted abatements on sales and use taxes ALABAMA REINVESTMENT • The Investment Credit may be carried on forward for 5 years. AND ABATEMENTS ACT • At the discretion of the Alabama • Construction material; Department of Commerce, the Investment All of the non-educational state and local • Non-educational portion of the Credit may be transferrable for the first property taxes can be abated for up to 20 incremental increases of property tax; and 3 years to generate cash for the project. years. For years 1-10, the local granting • Exemption from taxes from increased Investment Credit transfers must be at authority can statutorily grant property utility services for the facility for up to 10 least 85% of face value and must be abatements to qualifying projects. Please see years. approved by the Alabama Department of the local questionnaire for incentives for a Commerce. summary of the process. Projects which are granted property tax abatements for years PAGE 05 JOBS AND INVESTMENT CREDIT INVENTORY AND RAW AIDT RESTRICTIONS MATERIAL EXEMPTION AIDT is a state workforce development • A project must create at least 50 new jobs Unlike many other states, the state of training program that is offered to qualifying (exception below). Alabama does not have a property tax on business that are looking to locate or expand • For engineering, chemical manufacturing, inventory of goods, wares, and merchandise in Alabama by recruiting and training data centers, design, and research that is offered for sale. Raw materials that are potential employees. There are many projects, there is no minimum number of to be used in the manufacturing process and customized programs offered by AIDT to jobs that must be created. are stocked at facilities for manufacturing meet specific, qualified company needs. • The project’s direct, indirect, and induced purposes are also exempt from any taxes must exceed the amount of tax property taxes. Likewise, raw materials that Some of these customized programs include incentives sought. are to be used in the manufacturing process • Comprehensive pre-employment selection are exempt from sales and use taxes. and training, The Governor has the final authority to • Leadership development increase or decrease the amount of credit for • On-the job training, • Continuous and process improvement a qualifying project. Once a completed POLLUTION CONTROL application is received, the Alabama assessments, Department of Commerce can normally have EQUIPMENT EXEMPTION • Maintenance assessments, and a letter of commitment on the Alabama Jobs • Industrial safety assessments and Any pollution control equipment and Act incentives within 30 days. training. materials purchased for the control, reduction, or elimination of air or water AIDT is consistently ranked as one of the top pollution are exempt from state sales and use workforce development training programs in ALABAMA VETERANS INCENTIVE tax. Likewise, any pollution control equipment the nation. and materials purchased for the control, For new or expanding corporations that reduction, or elimination of air or water employ a workforce of at least 12% of which pollution are exempt from property tax. ALABAMA TECHNOLOGY is veterans, an additional 0.5% jobs credit is NETWORK available in addition to the incentives under the Alabama Jobs Act. The Governor has The Alabama Technology Network (ATN) the final authority to increase or decrease helps solve the needs of industry and busi- the amount of credit for a qualifying project. ness through innovative, sustainable, cost Once a completed application is received, effective solutions. ATN can conduct detailed the Alabama Department of Commerce can needs assessments, outline potential solu- normally have a letter of commitment on the tions based on the results, and then provide Alabama Jobs Act incentives within 30 days. technical assistance to help you solve those problems or identify those who can. PAGE 06 Mobile’s Opportunity Zone Strategy In 2019, Gov. Kay Ivey signed the Alabama For Communities, Developers, Incentives Modernization Act (the AIM Act) and Businesses into law.