The Jefferson City Council on Monday approved the first steps to providing tax incentives for Jefferson City Medical Group.
JCMG is considering construction of a new, 28,000-square-foot outpatient facility which could have a $17 million price tag, JCMG President Jeffrey Patrick previously told the News Tribune.
For the project, JCMG approached the city to request a tax incentive - 75 percent tax abatement for the first five years and 25 percent for the next five years.
On Monday, the council approved a resolution of intent to move the process forward.
City Attorney Ryan Moehlman said approval of the resolution does not officially approve the tax abatement or $17 million in Industrial Development Revenue Bonds, but approves the beginning of the process which would lead to it.
"The easiest way to think about it is the formal first step in beginning the tax incentive project," Moehlman said.
The resolution directs city staff and the city's bond counsel, Gilmore &. Bell P.C., to pursue issuance of Chapter 100 bonds for the project.
Chapter 100 of state statute allows a city to finance costs of distribution facilities or industrial plants, purchase equipment, then lease the equipment to the company, while also providing tax abatement on the new equipment.
The proposed Chapter 100 bonds would provide real property tax abatement for the outpatient surgery facility and for the machinery and equipment purchased by JCMG for the facility.
Moehlman said tax incentives are available for JCMG, because it is a for-profit organization which pays taxes.
The resolution passed Monday does not approve the bonds. The $17 million in Industrial Development Revenue Bonds would come before the council at a later time as a city ordinance.
The bonds will be payable only out of the project's revenue.
When asked, Moehlman said the precedence on this type of resolution is to follow up with final approval of the tax incentives at a later date.
The council approved the resolution unanimously, with Ward 1 Councilman Hank Vogt being absent.
Patrick said the group hopes to begin construction on the project early next year.
JCMG estimated the new facility would create 15-20 new jobs, including three to five physicians, one or two mid-level providers and 13-16 staff members.
JCMG anticipates its gross wages to increase by $3 million annually.
Mayor Carrie Tergin said she appreciated the vision JCMG has to grow in the community.
"We want to continue to remain a very strong hub for health care, and by incentivizing that through the council level, it shows our commitment to offering the best health care services here in Jefferson City," Tergin said.