A new state program that aims to stimulate economic activity in areas that surround higher education institutions or certain nonprofits is now up and running.
Businesses that relocate or expand into one of the designated areas would be able to take advantage of certain benefits, such as tax credits and priority consideration for other incentive programs from the Maryland Department of Business and Economic Development.
But the RISE (Regional Institution Strategic Enterprise) Zone program, which was created earlier this year by the General Assembly, does not emphasize economic development across the board. Rather, each zone will target a specific industry or sector, such as cybersecurity or engineering, depending on the expertise of the nearby anchor institution.
Only businesses within the specified industry would be eligible for the benefits. The goal is to entice desired types of companies to move closer to the anchor institutions, where they could drive job creation and create a community-within-a-community, DBED officials said.
The program was designed to leverage the expertise of the state’s colleges, universities and federal research hubs, and amplify their potential to create new jobs and activity in their own backyard, said Mark Vulcan, DBED’s program manager for tax incentives.
Three types of “qualified institutions” are eligible to apply for the program: colleges and universities; regional higher education centers; and nonprofits affiliated with a federal agency.
In the first step of the two-step application process, those institutions simply apply to be recognized as a “qualified institution.” That’s the part of the application that is now available on DBED’s website.
In the second step, which will begin in July, each institution partners with the local government in the area to pitch a detailed strategy and vision for what its RISE Zone would look like.
It’s up to each institution to decide what kind of activity they would like to encourage, whether it be medical device research or mobile technology development.
“There’s a lot that’s undefined [about the program],” Vulcan said. “It’s really up to the qualified institution to come up with the strategy, present the application to [DBED Secretary Dominick Murray] and hope to get the designation to make their plan work.”
And, Vulcan said, because each applicant gets to determine the size of the tax credits it wants to offer, the local governments must agree to the plan. Companies that hire more people in the area can receive a credit toward state income tax, while companies that expand physically in the RISE Zone can receive a credit toward local property taxes.
“The other important part is to have the local jurisdictions sign off, because they’re the ones giving up the tax revenue,” Vulcan said, adding that it’s possible some jurisdictions may not be interested in that idea.
But, he continued, state officials have seen a lot of interest in the program, and they expect a sizable number of applicants.
For example, University of Maryland, College Park President Wallace Loh and University of Maryland, Baltimore President Dr. Jay Perman have both expressed their support for the program.
In Baltimore, Vulcan said, there are so many eligible institutions within a small geographical area that it might make sense for several of them to partner on an application.
According to the statute that created the program, no more than three RISE Zones may be created in each of Maryland’s 24 jurisdictions. The RISE Zone designation will last for five years, with the potential for a five-year renewal.