The designation of a Harrisburg-West End Enterprise Zone was approved by the Augusta Commission on Tuesday.
The designation allows new or existing businesses that create five or more jobs inside the zone's boundaries to apply for an exemption from paying property taxes, Planning Commission Director George Patty said.
The exemption includes state, county and municipal taxes, but not property taxes levied by the Richmond County school system.
"The theory is that these are areas that are basically dead and that development wouldn't have happened without the stimulation, so you're not giving up taxes that you would have collected," Patty said.
Last year, the zone saw only two site plan applications filed, for a Krystal restaurant and the Kroc Center, while 124 were filed in the county.
The $100 million Kroc Center, built through a $67.8 million gift from the Kroc Foundation and local donations, is expected to open in June 2011 and employ 102 people.
The new zone stretches from Hickman Road and Lakemont Drive to portions of 12th and 13th streets. It is bounded on the south by Walton Way and on the north by the Savannah River.
Despite recent growth in the area, such as the redevelopment of Enterprise Mill into high-end apartments and offices, conditions remain depressed.
Poverty levels range from 30 percent to 58 percent, unemployment was twice the state average last year and the area was responsible for 8 percent of all 2009 criminal incident reports filed, according to information from the Augusta Planning Department.
The zone, created by Georgia law, is not Augusta's first. The city has a Rocky Creek Enterprise Zone that encircles the former Regency Mall and a Laney-Walker Enterprise Zone, bounded by Telfair and Fifth streets, Wrightsboro Road and Laney-Walker Boulevard.
The zones have been popular. They offer an additional incentive for owners who improve residential properties.
Last year, about 82 properties qualified for the tax break, according to data from Nancy Greer, an appraisal coordinator for the tax assessor's office.
The tax abatements exempt owners from 100 percent of state, county and municipal ad valorem taxes for five years, then drop annually down to 20 percent in the 10th and final year.