The Virginia Enterprise Zone (VEZ)
The Virginia Enterprise Zone is a state and local partnership and one of the most effective methods of using incentives to stimulate economic development. Portsmouth boasts two of these highly coveted zones.
Portsmouth’s Zone #1 was designated in 2010, modified in 2012, and is centered on the commercial areas of Downtown, Midtown, Victory and the MAST Center as well as the Elmhurst Industrial Corridor, Greenwood Industrial Park, portions of Airline Boulevard and the Virginia Avenue Corridor. Zone #2 took effect January 1, 2014 and focuses on the City’s industrial waterfront areas of West Norfolk, Pinners Point, and the Paradise Creek/Elm Avenue Industrial Corridor along the Southern Branch of the Elizabeth River.
While both Zones offer identical state incentives each Zone’s local incentives are tailored to its specific land use and development strategy.
Business Personal Property Investment Grant (BPPIG)
A grant from the Portsmouth Economic Development Authority equal to 50% of the net increases in business personal property tax paid by a qualifying company over a 5-year period. The grant is only paid after the company pays its taxes to the City and the City transfers the grant funds to the Portsmouth Economic Development Authority. If the applicant's investment exceeds $500,000, the BPPIG equals 60% of the net new increase in business personal property tax paid by a qualifying company over a 5-year period.
Machinery & Tool Investment Grant (MTIG)
A grant from the Portsmouth Economic Development Authority equal to 50% of the net increases in machinery & tool tax paid by a qualifying company over a 5-year period. The grant is only paid after the company pays its taxes to the City and the City transfers the grant funds to the Portsmouth Economic Development Authority. If the applicant's investment exceeds $1,000,000, the MTIG equals 60% of the net new increase in machinery & tool tax paid by a qualifying company over a 5-year period. If the applicant's investment exceeds $2,500,000, the MTIG equals 75% of the net new increase in machinery & tool tax paid by a qualifying company over a 5-year period.
Real Estate Investment Grant (REIG)
A grant from the Portsmouth Economic Development Authority equal to 50% of the net increase in real estate tax on improvements paid by a qualifying company over a 5-year period. The grant is only paid after the company pays its taxes to the City and the City transfers the grant funds to the Portsmouth Economic Development Authority. If the applicant's investment exceeds $1,500,000, the REIG equals 60% of the net new increase in real estate property tax on improvements paid by a qualifying company over a 5-year period. If the applicant's investment exceeds $3,000,000, the REIG equals 75% of the net new increase in real estate property tax on improvements tax paid by a qualifying company over a 5-year period.
Development Fee Rebate (DFR)
Certain development and building permit fees will be rebated after a Certificate of Occupancy is issued for a qualifying projects, or a final inspection is performed, if applicable. Rebates apply to 90% of the fees for rezoning applications, use permit applications, subdivision applications and site plan reviews. Rebates apply only to 50% of building permits and plan review fees excluding the state levy as defined by the VA Uniform Building Code.
Environmental Restoration Site Tax Exemption (ERSTE)
This existing city-wide program provides for a 5-year real estate tax exemption for environmental restoration sites on the full assessed value of land and improvements up to a maximum of assessed value of $3,000,000. Any assessed value in excess of $3,000,000 is fully taxable. Within the proposed (second) Virginia Enterprise Zone, the maximum assessed value for the with the ERSTE applies will be increased to $5,000,000. Any assessed value in excess of $5,000,000 would be fully taxable but could leverage an REIG.
For additional details about these programs, please contact Economic Development Staff at 757.393.8804.