Firms that provide professional and insurance services to international customers are being given added incentive to locate or expand here.


The Spokane City Council this week designated 20 census tracts in the city where such concerns will be able to qualify for state tax credits under a new law passed by the Washington Legislature earlier this year.


Those tracts, all of which fall within certain unemployment and poverty criteria, encompass downtown Spokane, Brownes Addition, Peaceful Valley, and the West Central neighborhood. They also include Historic Cannons Addition, the East Central neighborhood, portions of the Emerson-Garfield, Garry Park, Logan, and Nevada-Lidgerwood neighborhoods, and much of Hillyard.


The new law, which state Sen. Jim West, R-Spokane, helped amend so it would apply to Spokane, provides for a $3,000-per-year credit against state business-and-occupation taxes for each employee added by firms located in the designated eligible areas that provide international services. The credit, which also would apply to insurance-premiums taxes that insurers pay in lieu of a B&O tax, is good for up to five years.


The professional services eligible under the law are computer, data processing, information, legal, accounting and tax preparation, engineering, architectural, business consulting, business management, public relations and advertising, surveying, geological consulting, real estate appraisal, and financial services.


The newly established tax credit, combined with the tariff-related benefits of a foreign-trade zone established here last August, makes for a very nice marketing package for local economic-development organizations, asserts Erik Skaggs, community and government relations manager for Spokanes Metropolitan Mortgage & Securities Co. and a member of the downtown plan steering committee.


For large businesses (looking at Spokane), I think its a great recruitment tool. For small businesses, such as accounting firms and travel agencies (that do business in Canada and elsewhere outside of the country), it gives them an added advantage to expand, he says. It is not a final solution, but it certainly is a good economic tool. I think there will be a very positive benefit for the city.


Metropolitan, which has its own demography department, supplied information to West during the legislative process, and the city of Spokane drafted the appropriate ordinance language, Skaggs says. The West Central Community Development Association also was deeply involved in the process, as it kept up the drumbeat by sending off letters to Olympia, he says.


Metropolitan has a large development property, called Summit, in the West Central area. It would qualify for the tax breaks. Skaggs says Metropolitan hopes that the breaks could stimulate interest in the Summit project, which has been on the drawing board for some time.


The cooperative effort, between private business, local neighborhoods, city management, and the state Legislature, wasnt focused on the downtown core, he says. This supports other areas of the city as well. Theres not a lot of talk about economic development in Hillyard, but thats as important as anywhere else.


The new state law, patterned after a similar law adopted in Dublin, Ireland, originally was sought by a Tacoma-based financial services company and was to apply only to cities with established community empowerment zones, Skaggs says. Spokane doesnt have such a zone, but Seattle, Tacoma, Yakima, and Bremerton do.


The proposed state law was revised so that eligibility for tax credits also would apply to proposed, contiguous census tracts that met state-established unemployment and poverty criteria and were located in cities of more than 80,000 people that contained no community empowerment zones.


The law requires that the city or cities making the designations submit to the state Department of Revenue a certification letter and a map, describing the boundaries of the applicable census tracts, by the end of this year. This weeks unanimous action by the City Council sets that process in motion.


Mike Adolfae, the citys community development director, says he believes the tax credits provide an incentive both for businesses here that may want to expand their international trade as well as for new companies that might be interested in locating here.


However, he adds, I dont really know that the ultimate impact is going to be. Its something thats now available, and people are going to have to take advantage of it. Part of it is going to be getting the word out that its available and making people aware of it.