An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation. - Steven Levitt
Customized Incentive Packages Available for Businesses in El Dorado, Kansas
El Dorado is an ideal location for companies looking for a rich and pristine industrial water source and abundant accessibility to transportation, land and talent.
With an approach to customizing portfolio of business incentives for the creation of higher-than-average wage jobs, land assembly and infrastructure assistance, El Dorado can offer a variety of state and local incentives, aid in workforce development and address transportation and infrastructure improvements.
Local Incentives
Property Tax Abatement:
The City of El Dorado can abate 85% property taxes for up to ten years either through the issuance of Industrial Revenue Bonds (IRBs) or through an Economic Development Exemption (EDX). IRBs also allow for building materials and equipment permanently installed to be exempt from state and local sales taxes, subject to local governing body approval.
Community Improvement District (CID):
Community Improvement Districts (CID) allow the governing body to levy additional taxes to fund improvements in the district. The taxes are derived from retail sales or special assessments on real property. CIDs can be used for commercial, industrial, or mixed-use projects. CID tax revenue can be used to pay for a wide range of capital costs and certain ongoing operating costs. CIDs may impose a retail sales tax of up to 2% or special assessment taxes on real property for up to 22 years.
Tax Increment Financing (TIF):
Tax Increment Financing (TIF) districts are used to fund the revitalization of deteriorating or distressed areas. TIF uses the increased property value resulting from redevelopment to help pay the upfront costs of the redevelopment project. The portion of new tax revenue representing the "tax increment" is used to pay for eligible redevelopment costs. TIF reduces the higher costs associated with the redevelopment of property in blighted areas
Housing Incentives
Reinvestment Housing Incentive District (RHID):
RHID is a program designed to aid developers in building housing within communities by assisting in the financing of public infrastructure improvements. RHID captures the incremental increase in real property taxes created by a housing development project for up to 25 years. The revenue can be used for reimbursement for incurred costs or to pay debt service on bonds.
The property tax increment can be used to reimburse costs such as for the following items:
Land acquisition
Site preparation
Sanitary / storm sewers
Drainage conduits
Channels and levees
Street grading
Paving
Street lighting fixtures
Connections and facilities
Gas, water, heating, and electrical services in public right of ways
Sidewalks
Water mains and extensions
Moderate Income Housing Grant (MIH):
The Moderate Income Housing (MIH) program serves the needs of moderate-income households that typically don’t qualify for federal housing assistance. MIH grants and/or loans are awarded to cities and counties with populations fewer than 60,000 to develop single or multi-family properties for homeownership or rentals. Projects can be for new construction, rehabilitation, or conversion from another use.
Learn more about the MIH program.
Neighborhood Revitalization Program (NRP):
This plan is intended to promote the revitalization and development of certain areas within the City of El Dorado in order to protect the public health, safety, and welfare of the residents of the city. More specifically, the city will offer property tax rebates for certain improvements or renovation of property within the designated areas in accordance with the provisions of K.S.A. 12-17, 114 et seq.
State of Kansas Incentives
Promoting Employment Across Kansas (PEAK)
PEAK is a business incentive where companies may retain or be refunded 95% of the payroll withholding tax of qualified employees for new jobs created in Kansas. Basic projects that create at least five new jobs in non-metropolitan areas within two years may be eligible for up to seven years of payroll withholding tax savings. Larger, high-impact projects that create at least 100 new jobs within two years may be eligible for up to ten years of payroll withholding tax savings. Minimum qualifications for companies include paying new FTEs above Butler County median wage of $17.40/hour and commit to hiring at least 5 new employees within two years. The company must provide adequate health care coverage for full-time employees and pay at least 50% of the health insurance premium.
High Performance Incentive Program (HPIP)
HPIP was created to incentivize high-performance companies choosing to invest in significant capital investments and paying above average wages for their industry. If the company invests over $50,000 of capital investment, it qualifies for a 10% income tax credit above the first $50,000. This benefit also provides an employee training credit and sales tax project exemption. Minimum qualifications of capital investment and paying above average wages apply.
Other State Benefits of Note:
The State of Kansas has no Inventory, Franchise Taxes, or Local Income Taxes. Reimbursable training grants available for certain company expansions.
Utility Incentives
Evergy Economic Development Rider (EDR)
The purpose of the EDR is to encourage industrial and commercial business development in the Evergy service territory. This rider provides a qualifying company savings through a discounted rate over five years (25% discount during the first year of use; 20% in the second year; 15% the third year; 10% in the fourth year, and 5% during the last year). Criteria for the EDR include the following:
• Load minimum of 200 kW
• There must be creation of net new jobs
• New or expanded load must be separately metered
• A company cannot be involved in any retail activity at the facility
• The company must receive a separate government incentive for the project
• A completed Economic Development Rider application needs to be returned before any public announcements are made
Gas Economic Development Rider (applies to Kansas Gas )
The purpose of the EDR is to encourage industrial, commercial, and military development in the state of Kansas. This rider provides a qualifying company savings through a discounted rate over five years (a 50% discount during the first year of use; 40% in the second year; 30% in the third year; 20% in the fourth year, and 10% during the last year). To qualify, annual usage must exceed 25,000 MCF for new customers or be 25,000 MCF in excess to base period usage for existing customers who are expanding.
Federal Incentives
Opportunity Zone:
Federal tax advantages are provided by the Opportunity Zone program, including permanent exclusion from taxable income of capital gains from the sale or exchange of an eligible investment in an Opportunity Fund if held for 10 years. The Greater Wichita Region offers 16 census tracts that provide Opportunity Zone benefits. The City of Wichita offers nine. More information on Wichita’s Opportunity
Zones can be found at: bit.ly/OpportunityZonesWichita
HOW OPPORTUNITY ZONES WORK
The Opportunity Zone program offers tax incentives for investors including the deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund (QOF) and maintained for a period of at least five years.
Investors can defer tax on any prior gains invested in a QOF until the earlier of the date on which the investment is sold or exchanged by December 31, 2026.
If the QOF investment is held for longer than five years, there is a 10% exclusion of the deferred gain with that increasing to 15% after seven years.
If the investor holds the QOF investment for at least 10 years, the investor is eligible for permanent exclusion from taxable income of capital gains accrued on the QOF investment.
For additional information, please visit the KS Department of Commerce website.
Opportunity Zone Area in El Dorado
Workforce Development Incentives
Workforce Alliance of South-Central Kansas offers multiple programs that can provide up to $4,500 per worker benefit to employers, depending upon type and industry. All participants must be eligible prior to hire date and the training plans must be approved by Workforce Alliance prior to the beginning of the training period.
On-the-Job Training (OJT)
With OJT, employers can cut the cost of hiring and training workers in half. OJT reimburses directly to employers half of a trainee’s gross wages for the duration of the training period. OJT is a program of the federal Workforce Investment Act (WIA). OJT employers use their own system to teach trainees the new skills necessary for successful permanent employment within their companies.
With On-the-Job Training:
Employers get pre-screened applicants
Up to 50% reimbursement of the trainee’s wage rate during the training period
Prompt monthly payments with a minimum of paperwork
Trained and professional OJT Representatives to assist through all phases of the OJT program
Employers can combine OJT with other incentives, such as Work Opportunity Tax Credit (WOTC)
Programs can be developed for most skilled and semi-skilled jobs
Contact: Amanda Duncan, Workforce Centers of South Central Kansas
Work Opportunity Tax Credit
The Work Opportunity Tax Credit helps people move from welfare to work and gain on-the-job experience by encouraging private employers to hire within one of several targeted groups of job candidates who traditionally face significant barriers to employment, reducing employer’s federal income tax liability for qualified new workers in the first year of employment.
Contact: Ashla Stowe, Kansas Department of Commerce
Registered Apprenticeship
Registered Apprenticeship is poised to meet the demands of the 21st-century workforce. Registered Apprenticeship is education and training that allows businesses to respond immediately to rapidly changing economic conditions, including the need for skilled workers in many industries. Registered Apprenticeship trains more workers for high-skilled, high-wage careers than any other public workforce investment program in the nation, and at a fraction of the cost.
Contact: Melody Head, Workforce Alliance of South Central Kansas
Kansas Industrial Training Program (KIT)
The KIT program may be used to assist firms involved in both pre-employment and on-the-job training. Pre-employment training may be used to allow the company and prospective employees an opportunity to evaluate one another before making employment commitments.
Prospective employees are given the knowledge and specific skills necessary for job entry. On-the-job training is conducted after hiring. Trainees may receive instruction on the company’s own production equipment on the plant floor or on similar machinery in a classroom setting.
Contact: Wiley Smith, Kansas Department of Commerce
Kansas Industrial Retraining Program (KIR)
The KIR program is a job retention tool that helps employees of restructuring companies who are likely to be displaced because of obsolete or inadequate job skills and knowledge.
Eligible industries include basic enterprises that are restructuring operations through incorporation of new technology, diversification of production, or the development and implementation of new production activities. At least one current employee must be trained to qualify for assistance.
Contact: Marla Canfield, Kansas Department of Commerce
Incumbent Worker Training Program
The Incumbent Worker Training Program provides grants to employers to assist with certain expenses associated with skills upgrade training for full-time employees of the company.
Priority will be given to projects that:
Address a strategy to avoid a significant layoff
Identify a model that will make Kansas’ current or future workforce more competitive
Allow employees to achieve significant upgrade in skills
Operate industries or programs that have been targeted by the Local Workforce Investment Board
Address a significant occupational demand, and/or
Demonstrate strong partnerships with a Local Workforce Investment Board in the identification, development and delivery of the project
Contact: Amanda Duncan, Workforce Centers of South Central Kansas