EDA backs incentives for developers
WINCHESTER — The slate of development incentives for the city’s soon-to-be enterprise zones has been endorsed by the Winchester Economic Development Authority (EDA).
At their meeting Tuesday, authority members voted 7-0 to recommend approval of 14 city incentives to be made available to developers undertaking projects in two sections of the city. The package is forwarded to City Council, which could approve them as early as its Jan. 14 meeting.
Winchester was one of five localities to be awarded enterprise zone designations in October, and they go into effect Jan. 1. The program’s goal is to stimulate private investment and job creation within the zones.
Jim Deskins, the authority’s executive director, said the city worked with a consultant to study incentives offered elsewhere in Virginia and used that information to create Winchester’s incentive program.
“We’ve been looking at what everybody else in the state’s doing and what’s been successful and what’s not successful,” he told authority members.
The two targeted areas are around the Winchester Industrial Park in the south end of the city and a swath running along Berryville and National avenues to Old Town Winchester and northward from Old Town. The sections total about 400 acres.
Some of the incentives outlined in the program exist in the city in one form or another.
Revolving loans for business growth and real estate development already are offered. Incentives such as business development grants for vacant properties and a real estate tax exemption for substantially rehabilitated residential properties — which involve refunds or exemptions from new taxes created — have been extended to the zones from the Winchester Historic District.
Other programs, however, are new.
A major economic development project could qualify for a rebate of 100 percent of net new taxes paid by the company to the city over three years. New or expanding technology-based businesses can receive a 50 percent rebate of new taxes it pays to the city over five years.
A retail mix incentive grant — which provides a refund of half of the local business taxes generated by a new retailer — is available to stores locating downtown or along Berryville Avenue to reimburse marketing expenses through the first year of operation. Public financing for infrastructure on a development site can be provided for mixed-use projects involving a private investment of at least $5 million.
Other incentives include grants for the creation of knowledge-based professional jobs, money for website design and construction contracted with a city-based business and micro-loans of $1,000 to $10,000.
The state also offers two incentives — up to $200,000 over five years in Real Property Investment Grants and up to $800 per position per year for five years for Job Creation Grants.
While most of the incentives target commercial and/or industrial activity, Deskins said residential improvements are sought in neighborhoods in the zones. Developers even will be allowed to demolish a residential structure outside the Winchester Historic District and build a new one in its place.
“We want to incentivize people to think about going into some neighborhoods, tearing down what’s there and build new (housing),” he said. “It’s a way to incentivize the improvement of the housing stock.”
According to the state news release that announced the zone recipients, more than $1 billion in investment has been made and more than 40,000 jobs have been created in the targeted areas since 1995.
Authority members also voted 6-0 to provide a lien waiver for Boscawen Properties to pay down its primary loan for renovations to the Graichen Building at 25 E. Boscawen St.
The company is owned by City Council President John Willingham. Authority Vice-Chairman Bill Buettin abstained from the vote because of his professional relationship with Willingham.
Deskins told authority members that three condominiums in the building have been sold, and Willingham wants to use the sale proceeds to pay down its primary loan so a flood-insurance requirement can be lifted. He’s renting the other three apartments created on the second and third floors as well as the first-floor office space.
Willingham applied for and received a $180,000 low-interest loan from the EDA to close a project funding gap. Authority financial records indicate that about $175,000 remained due as of Nov. 30.
Deskins told the authority members that Willingham still will owe $450,000 to the EDA and the Bank of Clarke County, but those loans are secured by property worth $600,000.
Attending the meeting at the Downtown Welcome Center were Chairman Ron Mislowsky, Vice-Chairman Bill Buettin and authority members J.P. Carr, Suzanne Conrad, Joseph Kalbach, Doug Toan and Dan Troup.
— Contact Vic Bradshaw at firstname.lastname@example.org