Niedlov's Breadworks expects to save a few thousand dollars this year as a result of a federal program that provides tax incentives for businesses in distressed communities.
"What it's actually saving us is what we would have to pay in taxes," said John Sweet, Niedlov's owner. "Nobody is writing me a check, but it's saving me from writing a check to someone else."
Sweet is among more than 70 business owners in Chattanooga who have benefited from the Renewal Community Program since it started in 2002.
But the program ended in December 2009, and unless new legislation is passed, new businesses won't have the opportunity to take advantage of the tax savings next year, said Maria Noel, Renewal Community Program manager.
"You're losing a recruitment tool to get businesses into distressed communities," Noel said. "What do you think it would take to get a grocery store in East Chattanooga? You have to give investors incentive. The Renewal Community [Program] serves that purpose."
According to the Ochs Center for Metropolitan Studies, the program provided Chattanooga $12 million in tax incentives annually from 2002 through 2009 to encourage private development of commercial properties, business recruitment and jobs.
"If all of the savings through depreciation were reinvested in the region, total economic impact of the Renewal Community Program would exceed $198.7 million in economic activity and more than 1,600 years of employment -- an average of approximately 200 jobs per year," according to a new report from the Ochs Center.
Pending legislation in the U.S. House of Representatives (HR 1677) and U.S. Senate (SB 1222) could extend the program to 2015 and allow it to be expanded to more communities, Noel said.
U.S. Rep. Zach Wamp, R-Tenn., has co-sponsored legislation to continue the program.
"(The Renewal Community) has been an important piece of revitalizing Chattanooga and turning blighted areas into productive, safe areas," Wamp said.
Chattanooga Labeling Co. owner Marvin Smith said the tax benefits helped attract his business to the Old Anchor Glass site near Alton Park. Smith spent about $2.5 million at the site, tearing down buildings and renovating others.
"We totally did a rehab project," he said. "I know Renewal Community did a lot of good for that area."
Other businesses that have benefited from the Renewal Community Program include Southern Saddlery and Two North Shore.
Noel said she would like to expand the program into the Rossville Boulevard and East Lake areas if it is continued.
BY THE NUMBERS
* 40 -- Number of communities across the nation, including Chattanooga, that were designated Renewal Communities
* 200 -- Number of jobs a year in the Chattanooga area created as a result of the Renewal Community Program
* $12 million -- Amount of annual tax incentives
Source: Ochs Center for Metropolitan Studies