by Elaine Cain, CPA, Principal

Governor McDonnell recently designated four new Virginia Enterprise Zones (VEZ), including the City of Winchester.  The VEZ Grant program, administered by the Virginia Department of Housing and Community Development (DHCD), is designed to encourage private real estate investment and job creation in these targeted areas.  There are over 50 current designated VEZ’s eligible for grants in 2013, and the four new VEZ’s will be eligible for grants of up to $200,000 beginning January 1, 2014.  The program consists of two grant-based incentive programs available to VEZ’s:  the Real Property Investment Grant (RPIG) and the Job Creation Grant (JCG).

vez

To see this map larger, please click here.

The RPIG is granted for qualified investment in commercial, industrial and mixed-use buildings located in an Enterprise Zone, and qualifying expenditures consist mainly of all hard construction costs.   For rehab/expansion of existing facilities, only investments greater than $100,000 qualify, and investments in new construction must exceed $500,000 to qualify.  The Real Property Investment Grants are awarded at 20% of eligible costs over the minimum thresholds, up to $100,000 per building when less than $5,000,000 total investment.   If investment in the facility is greater than $5,000,000, the grant can reach $200,000.  The applicable grant year is based on the year the property is placed in service.

The JCG is awarded when an organization creates permanent full-time jobs offering wage rates that exceed 175% of the Federal minimum wage, currently $12.69, with some exceptions for high-unemployment areas that may offer lower thresholds.  Certain jobs do not qualify:  personal service, retail, and food and beverage.  The grant is awarded based on up to $800 per position per year for a five year qualifying period.

The VEZ grant year follows the calendar year, and detailed applications must be submitted by April 1st of the subsequent year.   For most applications, an agreed upon procedures report prepared by an Independent Certified Public Accountant must accompany the submission.

YHB plans to partner with VA DHCD to sponsor an informational workshop early in 2014 to review the specific requirements in greater detail and allow business owners and investors to plan their activities to maximize their opportunities for business development in Winchester.

Let us help you to evaluate your new investment or the expansion of your workforce within an existing or new Virginia Enterprise Zone, and explore the opportunities offered by this program.  Please contact Elaine Cain or Chris Pearson to get started.

Click here for more details:http://www.dhcd.virginia.gov/index.php/community-partnerships-dhcd/downtown-revitalization/enterprise-zone.html

To see the VEZ Matrix, click here to download the PDF.