The City of Covington has a number of incentive programs available for small businesses and all types of development projects — new construction, rehab, residential, commercial and industrial.

 

Small Business Revolving Loan

Funds are available to loan to small businesses for working capital, inventory, leasehold improvements, or fixed asset purchases. To be eligible, a business must create new jobs, increase the City’s tax base or eliminate blight. Terms are negotiable and available for commercial projects only. Click here for more information.

 

Vacant Property Payroll Tax Reimbursement

Property owners who rehabilitate vacant property for commercial reuse are eligible to apply. Fifty percent of the 2.5% payroll tax collected from the new jobs created in the previously vacant building is paid annually to the property owner for a period of five years. Twenty five percent of the 2.5% payroll tax collected from any existing Covington jobs relocated to the previously vacant building also qualifies for the reinvestment program. This reimbursement will be paid for five years. The property must have been substantially vacant for the previous 36 months and be at least 50 years old. There is no payroll cap for this incentive. Click here for more information.

 

Grow Covington Fund

The Grow Covington Fund is designed to provide financing for small businesses that need expansion capital. This fund is a unique partnership between the City of Covington and the Grow America Fund, Inc, the non profit lending arm of the National Development Council. The Grow Covington Fund can make loans ranging from $35,000 to $2 million at or below market rates, for terms up to 25 years depending on proposed use of funds. All loans must be adequately collateralized. This program does not fund start up businesses. Click here for more information.

 

Architectural Assistance Grant

A $2,000 grant is available to pay for the assistance of a registered architect in mixed-use buildings located in downtown Covington. Architectural assistance should address obstacles related to converting upper floors of downtown commercial buildings for residential use. Available for mixed-use projects. Click here for more information.

 

Assessment Moratorium (Property Tax Freeze)

Covington will freeze City property taxes at the pre-rehab level for a period of five years. Applications must be made 30 days before any work has begun on a building. The program is available for the repair, rehabilitation or restoration of existing commercial and residential buildings 25 years or older. Click here for more infomation.

 

Historic Rehabilitation Investment Tax Credits

A 20% Federal Rehabilitation Investment Tax Credit is available for substantial rehabilitation of certified historic buildings that are income producing (either commercial, industrial, or rental residential). The project must meet the Secretary of the Interior’s Standards for Rehabilitation and then be certified through the State Historic Preservation Office and the National Park Service. A 10% credit is available for buildings built before 1936 that are not certified as historic. This credit is also available for income producing properties. The State of Kentucky also offers a 30% credit against state income tax liability for the rehabilitation of historic owner-occupied residential and a 20% tax credit for the rehabilitate of other properties. Eligible projects must meet the Secretary of the Interior’s Standards for Rehabilitation and other program requirements.

 

Other Incentives

More specialized incentives are available for certain projects. These include:

• Kentucky Development Finance Authority Loan
• Small Business Administration Loans
• Covington Jobs Development Incentive (minimum new payroll of $2.0 million)