Franklin, Southampton fail in bid for Enterprize Zone

Published 12:00 am Tuesday, January 29, 2008

RICHMOND-Gov. Timothy M. Kaine passed over Franklin and Southampton County in targeting four Virginia communities for special state and local economic development incentives.

Designating the cities of Galax and Waynesboro and the counties of Halifax and Wise as Virginia Enterprise Zones, the governor effectively declined a joint request by Franklin and Southampton to be added to the program.

“It’s more a disappointment than a surprise,” said John J. Smolak, president of Franklin Southampton Economic Development Inc., which put together the application for the two local communities. “I knew the competition was going to be tough.”

Smolak said the application process was heavily weighted in favor of economically distressed communities. Half the points awarded for each application were based on an applicant community’s level of distress. The other half was based on the community’s plan for the enterprise zone if it was awarded.

In the end, he said, “We were not that distressed” when compared to some other Virginia localities, such as those that ultimately won the designation.

Nevertheless, he added, it was important to try. “You never know who’s not going to apply.”

The Enterprise Zone program supports job creation and private investment through grants based on real property investment and the numbers of jobs created, according to the governor’s office. For example, businesses can earn up to $250,000 based on Real Property Investment Grants, and as much as $800 per position created, depending on the wages offered.

“The Virginia Enterprise Zone program, through both the real property investment and job creation incentives, has been an effective economic development instrument in bringing business and investment to disadvantaged areas of the Commonwealth,” said Secretary of Commerce and Trade Patrick O. Gottschalk.

As part of their application, Franklin and Southampton had put together their own package of incentives to offer businesses in their proposed enterprise zones, including local wage and property investment grants, waivers of building permit and utility connection fees, reductions in electric rates and lower machinery and tools taxes. The communities were also prepared to offer reduced prices for municipally owned properties within their three proposed enterprise zones.

Those zones included property in the Southampton Business Park, on Route 58 west of Franklin; the Turner Site and industrial corridor, south of Route 671 just outside of Franklin; and a combination site that would include the Cypress Cove Industrial Site and the Pretlow Industrial Park, straddling Route 58 on the border of Franklin and Southampton County.

Although only four of the 56 enterprise zones available under state law were up for designation this year, Smolak said the Virginia Department of Housing and Community Development, which administers the program, constantly reevaluates those areas that have received the designation for their effectiveness.

Also, the designations are allowed for only a limited time. As some communities fall out of the program, others could get a chance to join, he said.

“We certainly will reapply again, should be process be opened up for other applications.”