RD98 - Virginia Coalfield Economic Development Authority 2016 Annual Report

Executive Summary:
2016 was another active year for the Virginia Coalfield Economic Development Authority (VCEDA). During the calendar year, VCEDA approved more than $10 million in new funding, closed over $16 million in loans and grants for projects throughout the region, participated in 47 prospect visits with businesses and organizations looking to locate or expand, and handled 112 inquiries about the region and its economic development programs. Twenty-one outreach marketing events were completed to promote the region for new and expanded business. There were four new projects and four expansions of existing businesses in the region involving a projected total of 811 new and retained jobs and over $50 million in investment.

Highlights of the year included the location of Frontier Secure in Wise County with plans to create at least 500 new jobs, NC Virginia in Scott County with plans to create up to 72 new jobs, Southern Gap Outdoor Adventures with plans to create 15 new jobs in Buchanan County, and the expansion of NorrisBuilt Fabrication in Norton with another 14 projected jobs. A groundbreaking was held on the Western Front Hotel in the Town of St. Paul with 15 jobs projected. AT&T Wireless and Sykes Enterprises also added jobs in 2016, and VCEDA was glad to be able to help the Appalachian School of Law in Buchanan County retain 39 jobs.

Ribbon cuttings were held on two advanced manufacturing centers of excellence in the region, a new ATV resort in Tazewell County, a new ATV connector trail in Wise County, and to celebrate the completion of a regional 4G wireless project. A groundbreaking was held on a new ATV and equestrian trail system in Dickenson County, CGI celebrated the 10th anniversary of its Southwest Virginia Center of Excellence, and TeleTech cut the ribbon on its new customer experience center in Scott County with plans to hire at least 300. A number of improvements also were made at the Breaks Interstate Park, with help from VCEDA.

This progress was possible despite the fact that VCEDA’s receipts from its primary revenue source of coal and natural gas severance taxes have fallen to the lowest levels seen in over 20 years. VCEDA’s receipts from the severance taxes were less than $3 million in FY2016. However, VCEDA approved over $14 million in funding during FY2016. With the phase-out of the Coalfield Employment Enhancement Tax Credit, VCEDA’s revenues from that source will be ending soon. VCEDA therefore is very closely monitoring the issue of declining revenues. VCEDA benefited from the coal industry’s boom of several years ago. However, those resources are diminishing, and there is little expectation that severance revenues will return to those levels.

With the impact of the coal industry’s decline on the economy of the region, the role of VCEDA now is more important than ever. VCEDA therefore remains committed to its important mission of helping to enhance and diversify the economy of the coalfield region of Virginia.