Board also amends commercial rehab tax credit program to provide flexibility
Henrico County is creating a program that will provide incentives to encourage development and redevelopment on qualified properties in designated areas, including in long-established business corridors.
The Board of Supervisors on Tuesday voted unanimously to authorize the Henrico Investment Program (HIP), which is expected to begin in January and will offer new or enhanced incentives for reinvestment along portions of Mechanicsville Turnpike, Staples Mill Road, Patterson Avenue, West Broad Street and Williamsburg Road.
In a separate action, the Board amended the county’s commercial rehabilitation tax credit program to allow more buildings to qualify, even if they get larger during a renovation.
“With the new Henrico Investment Program and amended commercial tax credit program for rehabilitated buildings, Henrico and the Board of Supervisors show once again their commitment to encouraging reinvestment in the county’s mature areas and to helping businesses, particularly small businesses, to grow and thrive,” said Anthony J. Romanello, executive director of the Henrico Economic Development Authority.
Under Virginia’s Enterprise Zone program, Henrico and other participating localities offer grants and other incentives to support building demolitions or improvements to facades, parking lots or landscaping, on properties in designated areas. But with HIP, Henrico will be able to offer additional incentives and extend them to areas not currently within the 6 square miles of its Enterprise Zone. HIP became possible after the 2017 General Assembly adopted legislation allowing counties to create their own economic revitalization zones.
While some details are being finalized, HIP is expected to offer the local incentives currently available in the Enterprise Zone program as well as:
- Allowing the sign grant to include the removal, refurbishment or replacement of signs attached to buildings;
- Increasing the demolition grant to a maximum of $100,000 based on the building’s size; and
- Expanding the building facade grant to include building system improvements and roof repairs or improvements.
“While there is some overlap between Enterprise Zone and Henrico Investment Program areas, applicants will be able to take advantage of the incentives from only one of the programs,” said Eric S. Leabough, director of the Department of Community Revitalization. “Because the incentives will vary slightly, businesses and property owners will be encouraged to determine which of the two programs best suits their needs.”
HIP’s designated areas consist of properties along Mechanicsville Turnpike from the Richmond-Henrico line to Henrico Plaza; Staples Mill Road from Parham Road to Dumbarton Avenue; Patterson Avenue from Starling Drive to the Goochland-Henrico line; West Broad Street from Hungary Spring to Pemberton Road; and Williamsburg Road from Laburnum Avenue to Nine Mile Road.
“The Enterprise Zone program has been very successful in priming investment in Henrico,” Romanello said. “As we looked at establishing the Henrico Investment Program, we identified key commercial areas that are either struggling or have emerging development opportunities. Our hope is that this program will provide a tipping point to generate private investment and revitalization.”
Since 2004, Henrico has allowed a seven-year partial real estate tax exemption when rehabilitated buildings increase in assessed value by at least 40%. Before the amendments were adopted Tuesday, rehabilitated buildings were ineligible for the exemption if they were more than twice their original size.
To allow more flexibility in design, Henrico now allows nonresidential buildings greater than 20,000 square feet to qualify for the exemption if the expanded portion is 125% or less of the building’s original size. Rehabilitated nonresidential buildings up to 20,000 square feet can qualify regardless of their original size. Seventy-one projects have received the exemption since 2004, resulting in improved buildings assessed from $150,000 to $72 million.
