JCC Officials Foresee Economic Growth Despite Enterprise Zone Loss

For 20 years, James City County could woo businesses to the area and support them with incentives as they made million-dollar investments, thanks to its state-designated enterprise zones.

A failed bid to renew that designation earlier this year will bring an end to the state program’s assistance in James City County.

While some say it was only in the past five years the county truly took advantage of its enterprise zones, JCC Economic Development Director Russell Seymour says the county’s economic growth has not depended on the program but it has been effective enough that a replacement program is in the works.

“I don’t see any reason why we’re not going to continue to be successful in our economic development efforts. I’ve been very pleased with what we’ve been able to accomplish working with the businesses,” Seymour said. “The enterprise zone replacement is by no means the only thing we’re looking at.”

In 1996, the county was awarded a Virginia Enterprise Zone designation to support a geographic area encompassing Grove. The designation applied for 20 years and expires at the end of this year.

The designation allowed the county to offer tax incentives, grants, fee waivers and reductions from the state to businesses willing to make capital investments in the enterprise zone. Capital investments include projects that promote the growth of a business, such as the construction of a new building or the purchase of equipment and supplies.

The distress level of an applicant, which factors in unemployment rates, median adjusted gross income and the percent of students receiving free and reduced lunches, is strongly considered when an enterprise zone is selected. Seymour said the area’s low distress level today “outweighed” the county’s history with the program when the designation was considered for renewal this year.

Seymour said the county did a good job with the land it could work with for the first 15 years, but parts of the enterprise zone sat on top of wetlands and residential areas, neither of which were suitable for commercial development.

When Seymour took over as economic development director in 2010, he learned the state would allow localities more flexibility with the placement of their enterprise zones.

Seymour said he “kept what they could” of the zone in Grove and began relocating some of the designated acreage to areas suitable for development, including the Busch Corporate Center, also known as McLaws Circle; Hankins Industrial Park and Jacobs Industrial Park in Toano; and the Stonehouse Commerce Park.

“I think if we didn’t use about every inch that was granted, it was close. We tried to use everything we could get, and it turned out to be very successful.” Seymour said.

He also lowered the minimum capital investment from $1 million to $500,000 to make the program more accessible to smaller businesses.

These modifications paid off: In 2013, nine businesses had finished or were in the process of completing more than $13 million worth of initial capital investments in the county, while in 2014 seven businesses had finished or were completing more than $12 million in county investments.

Seymour said the first capital investment a business makes can have a positive ripple effect through the county.

“That’s really what you want from an incentive program like that,” Seymour said. “We look at the return on investment. One of the things I have to do is say, ‘When will that money come back to the county?’”

Jon Liebler, owner of general contracting business LaRS Group Inc., said he was able to put about $100,000 in cash incentives from the enterprise zone program toward the construction of office buildings in the Busch Corporate Center.

He said the enterprise zone program has definitely helped LaRS Group and it encourages businesses to give back.

“I think it’s a really good program to incentivize the companies and help them build capital to reinvest in the county and into their companies,” Liebler said.

He said he was then able to reinvest that money into the TPMG building in New Town and now into the construction of the Edgeworth Park Senior Living building, both on Discovery Park Boulevard.

“TPMG is providing higher quality health care for the community,” Liebler said. “I think that plus the assisted living, I think there are some pretty clear benefits.”

Liebler said a program to replace the enterprise zone incentives would be great and is needed to combat the trend of “key larger firms” setting up shop in Newport News or Norfolk instead of James City County.

“The county needs to be more aggressive on incentivizing the businesses to keep them because all it is going to do is create more jobs and help our tax base,” he said.

Seymour said the economic development office is crafting a replacement program that could be ready as early as next spring, noting he didn’t want to “just throw something out there.”

He said this new program could offer the incentives most frequently requested by businesses and be open to new participants and existing businesses alike. The program would focus on the industries the county wants to attract and encourage them to invest in areas that make sense.

“We will be looking to make a replacement that will truly match the companies that we’ve been working with,” Seymour said.

Jim Kennedy, outgoing member of the JCC Board of Supervisors, said the enterprise zone designation benefitted Stonehouse but felt the zones were “underutilized” for many years. The loss of the designation is unfortunate, he said.

“I think it’s a tool. It’s an asset,” Kennedy said.

He said while a replacement program needs to be devised, the county needs address other weaknesses in its economic development: the county needs to attract businesses that can offer higher-paying jobs, do more to encourage JCC residents to work where they live and allocate more funds to the Office of Economic Development, he said.

He also advocated for the construction of a shell building, noting it would be an investment that could pay dividends down the road.

“I think you’re seeing more and more of that,” Kennedy said of quality construction in the county. “I don’t think we build junk in James City County.”

The county offers more incentives to businesses than just those afforded by the enterprise zone designation, Kennedy said. The Office of Economic Development provides services like fast-track permit approval, and the county as a whole can attract businesses with its public schools, green spaces, housing and overall quality of life, he said.

Seymour said the numbers show James City County remains an attractive place to work regardless of whether it has an enterprise zone designation. Between 2010 and 2014, James City County saw greater growth in the number of businesses established than the entire Hampton Roads area or the state of Virginia, while also seeing growth in average employment and average weekly wage.

Establishments

Average Employment

Average Weekly Wage

Source: Virginia Employment Commission, Quarterly Census of Employment and Wages (QCEW)

Seymour said the office is exploring initiatives to draw businesses that will be focused on geographic areas or connected with Launchpad, the Greater Williamsburg business incubator. He said any new initiative must take into account the business needs today and those in the future.

“I’m really glad to see things that have been put into place a year or two ago have paid off and are continuing to build,” Seymour said. “James City County is in a very good position. We’ve just got more to do though, and we’ll get there.”

Related Coverage:

• James City County, City Denied State Incentives Program
• Redevelopment Remains Priority for City’s Economic Vitality, Character
• City, County Applying for Joint Economic Development Zone
• Williamsburg, JCC Looking to Apply for Joint Enterprise Zone
• City, James City County Miss Cut for Enterprise Zone Designation