Board looks to save state EZ

Published 10:47 am Thursday, January 3, 2019

Prince Edward County supervisors voted unanimously at their regular December meeting to take steps in an effort to save the county’s state Enterprise Zone (EZ) designation, which expires Dec. 31, 2019.

Presently, “it will not be renewed, which would be a major blow for our economic development efforts,” Prince Edward County Administrator Wade Bartlett said at the meeting.

Wade Bartlett

The summary in the board meeting packet stated that the state EZ program “has been the single most effective state program the county has, incentivizing both local companies and new companies to locate in Prince Edward County.”

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“Many localities that have these designations really don’t use it,” Bartlett said. “We have used it.”

The board meeting packet summary continued by highlighting that “many local companies have benefited from this designation, which has helped defray the cost of investment in new or renovated buildings and the training to expand their workforce. Over the last 19 years, Prince Edward County businesses have received approximately $4 million in incentives and created hundreds of jobs.”

The summary noted how the county’s relationship with the state EZ program began and why its end appears to be coming.

“Prince Edward received an Enterprise Zone designation from the Department of Housing and Community Development (DHCD) in 2000 for a 20-year period that will expire at the end of 2019,” the summary cited. “Over the last 19 years, the regulations governing the EZ program have changed. Section 59.1- 542 of the state code limits the number of Enterprise Zones in the commonwealth to 30; this number was greater in the past.”

At the meeting, Bartlett said, “It used to be in the 60s and now it’s 30, so what they’re doing is slowly removing those that expire — they’re just not renewing them.”

The board meeting packet summary stated that the relevant section of the state code “also limits the time a locality can have an EZ to an initial 10-year period, with up to two five-year renewal periods for a total of 20 years.”

“We have been informed the reason our zone will not be renewed is that there are currently more than 30 such zones designated in Virginia, and DHCD must reduce the number of zones to meet this requirement,” the summary continued. “In addition, we will have reached the 20-year limit stated above.”

The summary then conveyed the key judgment that the restrictions on the overall number of designated EZ zones and on the length of time a locality can have them appears to be arbitrary and is not based on need. It then proceeded with an illustration of this point that relates to Prince Edward County.

“Section 59.1-545 of the state code lists three distress factors that will count for at least 50 percent of the consideration for a locality’s application for designation,” the summary noted. “These are (1) Average unemployment rate over the last three years, (2) Average median gross income over the last three years, and (3) Average percentage of students receiving free or reduced-price lunches over the past three years.”

At the board meeting, Bartlett echoed the summary when he said that Prince Edward, in all three distress factors, meets the criteria for being part of the EZ program, “so it doesn’t make a lot of sense that we would lose that designation.”

The action he said he was requesting of the board was to “ask Del. (James) Edmunds and Sen. (Mark) Peake to introduce legislation that would expand the number of the EZ zones, allow from 30 to 50, and then allow any existing EZ zone to be renewed as long as the locality scores at least two of the three distress factors listed above.”

He later added, “And I’ve talked to Del. Edmunds, specifically, on this, and his legislative assistant. They’re willing to make that request to the General Assembly. We’ll just have to see if the votes are there. But that would be our legislative agenda, basically, for this year.”

There was no discussion among the supervisors before their 8-0 vote to follow Bartlett’s recommendation.