RD403 - Virginia Enterprise Zone Program 2017 Grant Year Annual Report
The Virginia Enterprise Zone (VEZ) program is a partnership between state and local government that promotes economic development and revitalization through job creation and real property investment. When used in conjunction with other local, state and federal programs, Enterprise Zones can leverage substantial private-sector investment in targeted areas throughout Virginia.
The Virginia Enterprise Zone program was first established in 1982 and has undergone several amendments over the years. The most significant change was in 2005 when the General Assembly passed the Enterprise Zone (EZ) Grant Act. It provided for the implementation of specific community and economic development policies: targeting zone designations to distressed localities, gradually reducing the number of zones statewide for deeper impact, and providing incentives for the creation of higher paying jobs with health benefits. The 2005 EZ Grant Act also replaced the former tax credit incentives with the Real Property Investment Grant (RPIG) and the Job Creation Grant (JCG). These grants are performance-based; firms must create jobs and/or place a real property investment into service before applying for grant awards. However, the 2005 act allowed pre-qualified firms to continue accessing the former General Income and Investment Tax Credit incentives. The tax credit program officially sunsets in 2019; however, each year the number of firms applying for tax credits continues to decline due to the expiration of firms’ 10-year qualification periods.
The grant incentives are explained in greater detail below and are the focus of this report.