The Business Incentive Fund is a significant and unique tool for Denver to provide support that directly sustains and grows the local economy. As a competitive incentive employed by OED, the fund is one of the city’s approaches to recruit and retain business activity that creates local jobs and/or revenue. This fund has existed in its present form for more than 12 years. In recent budgeting cycles, the City has allocated $1.2 million annually for this purpose through the General Fund.
On behalf of the City, OED will make a small number of strategic incentive investment offers a year. The Mayor and CFO are directly involved in final incentive decisions based on recommendations and calculations presented by OED, and City Council approval is sought for all contracts larger than $500,000.
Calculations are intentionally conservative and based only on direct economic and fiscal benefit, even though each project often brings significant indirect benefits to the economy; an important standard for Denver to extend such an incentive is that the direct fiscal benefit dollars can be estimated to return to the City on at least a 2:1 ratio over a defined period—generally not more than 10 years.
All funds are dispersed only on performance. Every negotiated incentive offer is unique and each has a defined criteria and payout terms, which link directly both to the business decisions and the direct fiscal benefit to the city. While job creation is a primary goal of such incentives, the nature of the business may dictate a different measurable factor upon which incentive funds are dispersed.