Why is the enterprise zone going away?
Published 10:25 am Friday, October 20, 2023
It’s something you don’t exactly see every day. Charlotte, Lunenburg and Prince Edward counties are connected to each other through an enterprise zone, one that exists on each of their respective borders. But the problem is that enterprise zone, where specific incentives and other deals can be made for economic development, is going away unless something changes in the next 12 months.
The counties have until the end of 2024 to get a five-year extension on the zone. But to date, no state lawmaker has been willing to carry that bill.
County officials agree the enterprise zone makes the region more appealing to prospective business and industry.
“It’s been a great opportunity to be collaborative and really have a regional approach to economic development,” Prince Edward Director of Economic Development and Tourism Chelsey White said in a Monday interview.
The state’s enterprise zone program creates a local and state partnership that encourages job creation and private investment, according to the Department of Housing and Community Development. In addition to incentives offer locally, it provides access to job creation and real property investment grants in the designated zones.
In an email interview, Charlotte County Administrator Daniel Witt said “just makes sense to allow Zone 48 to retain its enterprise zone status for another five years.”
He said the three rural communities are challenged to compete for industry.
“We have higher poverty rates than the state average and less infrastructure,” Witt said. “Any advantages for development are most beneficial.”
Witt shared his responses to the email interview with White and Lunenburg County Administrator Tracy Gee and both said they agree with him on need for the enterprise zone’s extension.
“The Lunenburg Board is aware of the possibility of expiration of the zone and supports its continuation,” Gee said Monday.
SUPERVISORS GIVE THEIR SUPPORT
Witt added that the Heartland Regional Industrial Park is in the process of being up-tiered to make it more marketable.
“We are currently working on due diligence work and some site planning at Heartland Regional Industrial Park,” Witt said. “Once that is complete and utility capacity upgrades are considered, Heartland will be in a better position to compete if a competitive incentive package is also still available.”
Lunenburg Board of Supervisors approved a resolution supporting Charlotte County’s effort to incorporate additional property and incentives to the existing regional enterprise zone. The addition would include areas at Heartland Regional Industrial Park and the Charlotte County Industrial Park in Keysville.
The resolution said the move will “increase economic growth opportunities through a combination of state and local incentives to promote economic development.
“This proposed amendment and expansion will serve to benefit economic development and expansion will serve to benefit economic and industrial expansion in neighboring Charlotte County,” the resolution states. It provides authorize for officials there to apply for the amendment.
As the counties prepare to seek approval for a second five-year extension, Witt said in his opinion the multi-jurisdictional option is better than the counties each working separately.
“The state seems to prefer a regional approach to economic development and encourages it,” Witt said. “In addition, since the county’s industrial park and Heartland Regional Industrial Park are located near the Charlotte/Lunenburg/Prince Edward boundary, a joint zone makes sense.”
“Dan Witt shared his responses to your inquiry and I concur with his replies,” Gee said Monday.
White said Prince Edward’s industrial development authority and board of supervisors are business friendly and having the designation helps their efforts.
“Having an enterprise zone opens us up for a developer to be able to apply for funding that can help them with job creation and can help them recoup some of the money they have spent and invested in the actual structure they’ve built,” she said.
WHAT WOULD EXPANSION MEAN?
With an extension for another five years, Witt said his county would look to expand on the program to attract business and industry.
“It has been used in Charlotte County some, but not to its full extent,” he said. “State and local EZ (enterprise zone) incentives are associated with job creation and real property investment, so use depends on the development that is occurring. EZ incentives are an important component of the county’s incentive package available to new businesses and help ensure we can compete with sites in other jurisdictions.”
Witt said the enterprise zone incentives also benefit existing businesses that are expanding.
White also believes the state incentives encourage development.
“It’s definitely been beneficial in helping to attract interest in our business park and to kind of spur development,” she said.
Witt said the importance of an individual enterprise zone incentive to a business depends on its type and size, the anticipated real property investment, number of associated jobs and the development schedule.
“For this reason, it’s important to provide a variety of incentives,” he said.
In addition to the state benefits, he said Charlotte County provides real property and machinery and tools tax grans, fast-track permitting and site discounts to provide short-term development incentives as well as local tax incentives.
Prince Edward County also provides local benefits through its industrial development authority and the board of supervisors, White said.
“They do offer different incentives typically in the form of grants that are basically tax rebates,” she explained. Developers can receive some or all of their taxes paid back to them.
“It’s on a case-by-case basis,” White said. Additionally, she noted developers can get certain permit fees waived in Prince Edward County.
WERE ANY OF THE REBATES ACCEPTED?
White said Hotel Weyanoke and the Holiday Inn Express were able to use the local incentives, receiving rebates on some of the taxes they paid in addition to having access to the state grant programs.
Officials say they have seen successes in landing business and industry because of the regional enterprise zone.
In Charlotte County, Witt said the program’s biggest success is bringing Eastern Engineered Wood Products LLC to Heartland Regional Industrial Park in 2022.
White pointed to the new meat processing facility as one of the program’s successes.
“For us it’s been effective,” she said. “We have some new development that is coming to our Prince Edward Business Park, which includes Five Pillars of Meats. We do have other developers interested in various sites in the industrial park as well.”
The problem isn’t just the fact the current zone expires in 2024. Part of the state statute legalizing it goes away as well. No statute, no incentives.
“There are currently 45 designated enterprise zones in the commonwealth; however, under the 2005 Enterprise Zone Grant Act the total number of zones is to be reduced to 30,” Witt said.
Charlotte County has contacted both Sen. Frank Ruff and Del. Thomas Wright Jr.’s offices asking one or both to carry the legislation needed to extend the enterprise zone as it currently operates.
“State legislators did not seem to be aware of the local concerns but are open to our request,” Witt said.