Port Orchard seeks ‘empowerment zone’

Port Orchard is angling for the establishment of special zone that will encourage new businesses as it rehabilitates the existing area, according to the city’s mayor and its state senator.

Called a “Community Empowerment Zone,” those living or working within its boundaries would qualify for tax credits and additional incentives.

“This is an additional tool cities can use to revitalize their economy,” said Sen. Derek Kilmer (D-Gig Harbor). “It will allow cities to specifically designate areas in need of economic renewal and build those areas with new businesses and other improvements.”

Kilmer has been working with Port Orchard Mayor Lary Coppola to qualify the city for the program, even though the law will need to be changed for this to happen.

There are only six zones allowed statewide, and one is in Bremerton.

Currently, businesses that seek incentives must be engaged in manufacturing, research and development or software development, apply for tax credits prior to groundbreaking or hiring, locate or expand within the designated geographic area and/or locate in a county having a designated zone and hire employees who are residents of the zone.

This provides Kilmer with the loophole he hopes will qualify Port Orchard for a CEZ by piggybacking the project onto Bremerton’s existing program.

“I will propose that any county that already has a CEZ can establish another in a nearby area that also meets the qualifications,” Kilmer said. “Since Bremerton has a zone, that would open the door for Port Orchard.”

Even before the city legally qualifies, Coppola has investigated creating a local CEZ.

He initially sought to turn the entire city into a zone but found that it does not qualify because the McCormick Woods annexation increased the city’s overall affluence.

As a result, any Port Orchard CEZ will be defined by specific geographical boundaries that would be in one of the city’s poorest areas.

Bremerton has its own CEZ in the downtown area but it is “too small to be very effective,” according to Kitsap Economic Development Alliance Executive Director Bill Stewart. “The benefits of this zone is the ability to host manufacturing and hire people who live within its boundaries. But the zone can’t accommodate manufacturing and not very many people live there.”

Stewart recommends that a Port Orchard CEZ be created “to be as broad as can be and include as much property within the city as possible. There are a lot of old buildings that can be rehabbed and used for businesses, that would qualify for this program.” 

“There are some significant advantages for Port Orchard if we create an empowerment zone,” Coppola said. “These tax credits are very appealing to businesses and will encourage many to them to locate here.”

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