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Fredericksburg City Council discusses changing business incentives.
Date published: 10/26/2011
Fredericksburg officials are considering changing the requirements of the incentive program for business recruitment.
In a work session last night, the City Council discussed the city's current business incentive plan and the state's incentive plan.
There will be two additional incentive zones and two reduced zones if the council decides to go along with what was presented.
One proposal was to add the State Route 3 corridor as a tourism zone. It would include Gateway Village, the Greenbrier and Westwood shopping centers and Woodlyn Drive.
The second would be a technology zone at the Battlefield Industrial Park.
However, the downtown tourism zone qualifications and the technology zone citywide would be reduced. For the reduced zones, a new business would be required to hire five full-time-equivalent employees or invest $75,000 in capital to qualify for the incentive.
An expanding business would have to hire three full-time-equivalent employees or invest $25,000 in capital to qualify for the incentive.
Economic Development and Tourism Director Karen Hedelt and Economic Development Director Richard Tremblay made the presentation to council.
They also proposed allowing administrative approval by the city manager of agreements up to $100,000 in value. Anything above that would require council approval.
Ten businesses take advantage of the city's incentive program, including Wegmans, Capital Ale House, and the proposed Eagle Village Hotel.
The council discussed the success of the program, which has seen the creation of more than 600 jobs and $41.9 million in capital investments. The council also tried to compare the city's incentive program to the state's program.
Sandi McNinch, with the Virginia Economic Development Partnership, told the council that the state's benefit-to-cost ratio is $10 to $1, That means for every $1 the state invests, the state gets $10 back through taxes.
Tremblay said that the city does not have its own benefit-to-cost ratio.
Council member George Solley suggested that there be different incentives for different types of businesses. Several council members agreed that it could be a good idea.