Henrico supervisors to consider measures for incentivized revitalization in county

Henrico supervisors are seeking to incentivize redevelopment in the county with the consideration of multiple programs that could benefit small and large revitalization projects.

Changes to the county’s commercial rehabilitation tax credit service will be considered following recommendations made by the Henrico Economic Development Authority.

The tax credit is a working program that has been used successfully by 71 redevelopment projects since 2004. A recent example includes the Altria Headquarters on 6601 W. Broad St., which saw its pre-renovation building assessment of $25.7 million almost double in value to $49 million in its post-renovation assessment.

Possible changes to the service include:

• clarifying language to exclude “dwellings” as an acceptable end use for commercial and industrial properties;

• increasing the maximum allowable square footage change to 125% of the original square footage for buildings greater than 20,000-square-feet;

• allowing credit to apply to a building if the final structure is no larger than 20,000-square-feet regardless of the initial size.

The current maximum allowable building size change is 100%, or doubling the size of the building, said Henrico EDA Research and Real Estate Coordinator Abigail Patterson at the board’s July 27 work session. This could disqualify redevelopment projects with significant improvements if the project passes the 100% mark even if by a few square feet, she said.

Considerations regarding allowable building size change would also allow for flexibility in building design, Patterson noted.

For smaller businesses, allowing the tax credit to apply to buildings if the final structure is no larger than 20,000-square-feet would support those businesses in making big changes without an immediate tax burden increase, Patterson said.

The changes will be brought forward to the board as ordinances this fall.

Henrico Investment Program would offer additional benefits

Supervisors also were introduced to the Henrico Investment Program, which could expand the county’s revitalization efforts under the Virginia Enterprise Zone Program in a localized plan.

The enterprise zone program provides benefits for businesses such as permit fee waiver, landscaping grants, off-site improvement grants and design assistance. However, the county's zone is limited by state regulations, Patterson said.

Henrico’s current zone reaches 3,840 acres and will expire in December 2022, Patterson said. A 5-year extension application is available, but the county would be unable to reapply after 2027, she added.

The Henrico Investment Program could take the enterprise zone – which the county has had success with – one step further, County Manager John Vithoulkas said.

The purpose of the program would be to provide incentives to property owners and businesses within and outside of the current enterprise zone to promote redevelopment along maturing corridors for commercial and industrial uses, Patterson said.

Initiatives would include retaining and expanding enterprise zone incentives to the Henrico program, in addition to establishing new programs in corridors where re-development hasn’t happened naturally, Patterson said. Specific incentives include signage, demolition and building façade grants, she said.

The Henrico EDA recommended five locations to start as a pilot in January 2022:

• Mechanicsville Turnpike: City line to Henrico Plaza;

• Staples Mill Road: Parham Road to Dumbarton Road;

• Patterson Avenue: Starling Drive to Goochland County line;

• West Broad Street: Hungary Spring Road to Pemberton Road;

• Williamsburg Road: Laburnum Avenue to Nine Mile Road.

Next steps for the Henrico Investment Program will involve the introduction of an official measure to supervisors and seeking of $750,000 from the board to launch the pilot.