The state of Virginia has renewed 15 enterprise zones, which provide incentives for private businesses to invest in certain regions of the commonwealth through taxpayer-funded grants and subsidies.
The program is a partnership between state and local governments. In 2018, Virginia paid out about $13.5 million in Real Property Investments Grants and Job Creation Grants to the regions designated in these zones, Amanda Love, the public relations director of the Virginia Department of Housing and Community Development, told The Center Square in an email.
The state estimates that these zones have incentivized more than $1.5 billion worth of investments, which have created about 50,000 jobs within the zones.
Virginia does not track how much money is returned via tax revenue from these investments.
“The Virginia Enterprise Zone program is one of our most valuable tools for supporting local economic growth,” Gov. Ralph Northam said in a news release. “Providing state and local incentives for new investments and higher-wage jobs makes these communities more competitive when a business is deciding where to locate or whether to expand in our Commonwealth.”
For a business or a zone investor to be eligible for one of the subsidies, he must meet certain criteria. The Job Creation Grant considers permanent full-time job creation over a four-year period, wage rates that are at least 175 percent of the federal minimum wage and health benefits. Retail jobs, personal service jobs and food and beverage jobs are not eligible. To be eligible for the Real Property Investment Grant, the state considers investments to commercial, industrial and mixed-use buildings and other facilities.
Zone renewals are chosen based on several criteria: the continued need for a zone, the effectiveness of a zone in creating jobs and providing capital investment, and the locality’s performance on enterprise zone responsibilities.
Four of these zones were initially designated in 2000, five were designated in 2005 and the other six were designated in 2010. Earlier this year, the General Assembly passed legislation that allowed zones designated in 2000 to apply for a fourth five-year renewal and allowed zones designated in 2005 to apply for a third five-year renewal if the regions were determined to still require incentives for economic development.
“This program attracts many investments to Virginia’s localities,” Secretary of Commerce and Trade Brian Ball said in a news release. “In the last five years, firms receiving VEZ incentives in the 15 renewed zones created 354 net new jobs and invested over $63 million in real estate improvements, and there is more investment to come with the renewal of the zones.”
These zone renewals will expire again in five years.