Palestine — City council members gave the green light to the Palestine Economic Development Corporation’s updated tax abatement policy Monday night, but not without some discussion over how much help to extend to new businesses.  PEDC Director Brian Malone told the council that the new version would allow the city to look at a wider range of businesses that could be eligible for tax abatement.

For instance, one change would allow hotels to be considered for abatement. Businesses still would have to add at least $500,000 to the value of their properties, and create at least five jobs, to qualify for abatement, according to the policy.  

“I’m looking at several other cities we regularly compete with,” Malone said. “We’re really in the ballpark. We’re not at a disadvantage, nor are we giving up more (with the changes). It gives a lot of latitude.”

Councilman Vernon Denmon Jr. expressed concern that the policy still would not extend the possibility of help to very small businesses in the downtown area.  “How is this abatement going to go for that business at $100,000?” Denmon asked Malone.   Malone replied that the tax abatements generally were geared more toward businesses that are more capital intensive. He also said that the city could run the risk of offering too much assistance to businesses that might not be able to live up to the abatement agreement, and the city would thus incur legal expenses in trying to regain some of the funds lost in the broken agreement.

Councilwoman Billie Dyer, who runs a bed-and-breakfast, said she would like to see the city pursue other avenues of assistance for small businesses besides the tax abatements designed more for larger operations.  “I would be the first person to say yes, to encourage the support of small business people, but there are other avenues,” Dyer said. “For small businesses, let’s help in other directions.”