Virginia Enterprise Zone – Real Property Investment Grant

The Virginia Enterprise Zone (VEZ) program is a partnership between state and local government that encourages job creation and private investment. VEZ accomplishes this by designating Enterprise Zones throughout the state and providing two grant-based incentives, the Job Creation Grant (JCG) and the Real Property Investment Grant (RPIG), to qualified investors and job creators within those zones, while the locality provides local incentives. Contact Kate Pickett Irving & Mandy Archer Virginia Department of Housing and Community Development ezone dhcd.virginia.gov Eligibility Projects must meet the following eligibility requirements: The property must be located within the boundaries of a Virginia Enterprise Zone. The building or facility must be mixed-use. “Mixed-use” is defined as a building incorporating residential uses in which a minimum of 30% of the usable floor space is devoted to industrial use. For rehabilitation or expansion of an existing structure, the qualified zone investor must capitalize at least $100,000 in qualified real property investments. For new construction projects, the qualified zone investor must capitalize at least $500,000 in qualified real property investments. Investments in machinery and tools and business personal property are not considered real property and should not be included in RPIG calculations. For Solar: If the solar investment is more than $50,000, the threshold amount for the rehabilitation or expansion project is lowered to $50,000. If the solar investment is more than $50,000, the threshold amount for the new construction project is lowered to $450,000. If solar panels are the only investment made to the building/facility, the grant amount is calculated based on 20% of the amount made in solar installation; there is no threshold to be met. Applicant must be the entity that capitalizes the investment on their books for tax purposes. The investment used to apply for the grant must be taxed as real property by the locality in which the firm is located. The following entities are prohibited from applying for the RPIG: Units of federal government (typically FEIN 546) Any entity that does not capitalize the investment Grants are awarded in five-year periods beginning with the first qualification year in which a grant was awarded for the subject building or facility. After the conclusion of a five-consecutive-year period, the property begins another eligibility period and the grant cap is restored. By statute, Job Creation Grants (JCGs) receive funding priority over the Real Property Investment Grants (RPIGs). The remaining funding in the annual appropriation after JCGs are disbursed is then utilized to fund RPIGs. In grant years in which RPIG requests exceed the available appropriation, grants will be prorated. In the grant year 2020, grants were funded at a prorated amount of approximately 88 cents per dollar requested. In the grant year 2021, there was no proration and zone investors received the full amount for which they qualified. Proration will be applied to the calculations below to calculate a company’s RPIG award. Grants are available in amounts up to 20% of the qualified real property investment OVER the respective eligibility threshold, capped based on the following limits: Grant awards are capped per building/ facility over a five-year term based on the cumulative level of investment starting with the qualification year in which a grant was first awarded. Grants may not exceed $100,000 per building or facility in a five-consecutive-year period where the total investment is less than $5 million. Grants may not exceed $200,000 per building or facility in a five-consecutive-year period where the total investment is $5 million or more. Grants may not exceed $300,000 per building or facility in a five-consecutive-year period where the total investment is $20 million or more.

Eligibility Projects must meet the following eligibility requirements: