Harrisonburg Economic Ordinance

By: Kelly Creswell Email
By: Kelly Creswell Email

In its past session, the Virginia General Assembly cleared the way for localities to offer incentives for new construction projects that would revitalize a specific economic zone.

Harrisonburg may now be taking advantage of the privilege by offering it to developers in the downtown area. While some developers feel this will be a great way to get some tax breaks, others feel that this proposed ordinance is discriminatory and unfair.

Once the Harrisonburg City Council considered creating an ordinance that would offer partial tax exemption for new construction in its downtown, Forbes Development sent a letter requesting the council instead look at the whole city.

"I have no tax break for any assessments or any improvements that have been done for the betterment of the city. I'm not getting any tax breaks and I've got property that is sitting vacant," says Kathy White, the Forbes Development General Manager.

On the other hand, developer Barry Kelley believes this is a great idea.

He says, "It's a lot less expensive to build out on an open field than it is in a dense, existing downtown corridor and you're also crammed in by the existing buildings that are there. So it makes it more challenging for developers to do anything."

White says her company still has about 35,000 square feet of empty retail space available for rent she can't fill because of taxes.

"Either oppose the waiver on the Harrisonburg annual real estate tax assessment, that waiver for Downtown Renaissance, or broaden the boundaries for the whole entire city," says White.

But Kelley believes, by allowing developers to postpone their taxes, the city is likely to see more businesses downtown.

"In the future we will gain the revenues from those developments. It's only a short term you know, five years or ten years that we wouldn't be getting revenues, but that's certainly better than it never happening at all," says Kelley.

In the proposed ordinance, the more a business invests, the longer their taxes will be postponed. But the ordinance still has to go through a public hearing before it will be voted on.

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