Nearby localities use sites  to lure business, investment

Posted: March 29, 2014

The Winchester Star

WINCHESTER — If you want to see the results of Virginia’s enterprise zones, two Shenandoah Valley communities provide a glimpse of what can be accomplished.

About 95 miles south on Interstate 81, Staunton’s 24-year-old program is comparable to Winchester’s.

Staunton’s zone encompasses land in the city’s central business district and a business park.

Its aim is to attract businesses that provide high-paying jobs, to stimulate investment to diversify the tax base and to encourage revitalization in targeted areas.

Courtland Robinson, Staunton’s assistant director of economic development, said the state grant for investment in real property is the incentive most often used.

Interest in the program has grown since 2010, when the city’s original zone designation expired and grants became available upon its redesignation.

From 2010 to 2012, Staunton’s annual reports on its enterprise zone indicate that about $290,000 in local incentives was paid to businesses in those years. Private investments in the zone totaled some $26 million, and 200 to 300 jobs were created.

Cadence Inc. — which makes blades and needles used for medical, research and manufacturing purposes — was a major player during that time, investing $15.9 million on facility expansion and equipment and filling 100 new positions. Staunton competed against Costa Rica for that business.

A pleasant surprise of the program for Staunton officials is the level of value they can provide businesses at minimal cost to the city.

Because several local incentives involve tax rebates or the temporary exemption of new taxes generated by investment, many of the incentive payments have not affected the city’s base budget.

“We’ve been really pleased,” Robinson said, “with the bang for your buck for both the city and for the business.”

Industrial magnet

Closer to home, Warren County gained an enterprise zone designation in 1996.

Its goals are far different from Winchester’s, but its results are very visible just outside Front Royal.

North of Interstate 66 and east of Winchester Road (U.S. 522), the Cedarville enterprise zone was created to lure industrial users to vacant land.

Interbake Foods and Toray Plastics now call the zone home, as do distribution operations for Family Dollar Stores, Ferguson Enterprises and Baugh Northeast Co-Op (for SYSCO Corp.).

Jennifer McDonald, executive director of the Warren County Economic Development Authority, said private investment in the zone by companies receiving its incentives has totaled $220 million, and 2,300 jobs were created.

“We’ve been one of the most successful enterprise zones in the state,” she said.

In 2008, the last year for which data were collected, Warren County netted $1.8 million in real estate, machinery and tools, and personal property taxes from companies in the zone.

Activity in the zone, McDonald said, cannot be credited solely to the incentives. Factors such as interstate access, proximity to the Virginia Inland Port and access to railroad and natural gas lines put Warren on those companies’ radar, but the enterprise zone helped to close deals.

“I think when we first got the enterprise zone we were not in the best economy at the time,” McDonald said, “so having those incentives to offer prospects was the last piece they may have needed to make their decision.

“Once they were able to nail down their logistics and what area they wanted to be in, the enterprise zone helped them make their final decision to locate here.”

— Contact Vic Bradshaw at