Old Town

Generous incentives to reward investment

The City of Winchester, Virginia offers an extensive array of incentive programs to support growing businesses that strengthen the local economy and create jobs. Available programs include loans, grants, exemptions, and reimbursements, each created to support specific objectives. Some programs are available throughout the city, while others are limited to Winchester’s Enterprise Zone.

What is the Enterprise Zone Program (EZ)? The Virginia Enterprise Zone (VEZ) program is a partnership between state and local governments that encourages job creation and private investment. The Commonwealth of Virginia authorized the creation of these local incentives and tools for property developers and business owners to encourage real estate development, business expansion, and job growth in targeted areas of the City. In 2013, the Commonwealth of Virginia designated the City of Winchester as an Enterprise Zone Community, acknowledging the strong connection between successful business growth and positive community development.

We are amending our current Enterprise Zone (EZ) boundaries. The City’s Economic Development staff is taking recommendations for possible property additions to the program and which properties to delete from the program. Click here to review a map of the existing zone boundaries and the proposed additions and deletions.

A public hearing will be held on Tuesday, September 27, 2022 regarding the application to amend the EZ local boundaries. The meeting will be held during the regular City Council Meeting in the Rouss City Hall Council Chambers (15 N Cameron Street) at 6 pm. You are welcome to provide your feedback in-person at this meeting.

Questions on the Enterprise Zone Program may be directed to the Economic Development Department at 540-667-2330. This office is open Monday through Friday, 8 am to 5 pm.

Do you have any feedback you would like to share with us before the public hearing? Please submit it here

For a detailed guide on the incentives available, please see our EZ Booklet. To see if your business is within the Enterprise Zone, search for your address using our GIS map. Check out our How to Apply Checklist to see how you can apply for one of our incentives. Please contact us to learn more about specific programs and eligibility requirements.

Click on the incentive programs below for more information.

Local Grant Programs

Professional Job Creation Grant

The purpose of the Professional Job Creation Grant is to provide an incentive to businesses that are creating full-time, professional jobs within the Enterprise Zone. One-time cash grants will be awarded to businesses that have created qualifying jobs that have been in existence for at least twelve months. The jobs eligible for the grant must have been created no more than two years from the date of the application submittal.

  • Must be within the designated Winchester Enterprise Zone
  • Application should be submitted AFTER the job has been in existence for at least twelve months.
  • Grant value will be a one-time payment from a minimum of $1,500 to a maximum of $25,000
    • $1,500 for each position created between 1-10, then increases to $2,000 for each additional job created (max. 15 positions)
  • Jobs created that qualify:
    • Determined by WEDA that position is within a targeted growth industry sector in the city
    • Full-time (35 hours per week)
    • Offered health benefits
    • Paid minimum of the City’s median annual income
    • Must be in existence for 12 months before receiving the grant and created no more than two years prior
    • Positions must be over their base employment number
    • The ultimate determination of whether an applicant meets the grant criteria will be at the sole discretion of the Economic Development Authority Board.
  • Grants payments will be made after the job has been in existence for at least twelve months.
ApplicationChecklist

Exterior Improvement Grant

This incentive provides a matching grant to eligible property owners who complete qualifying exterior improvement projects to their building.

  • Must be within the designated Winchester Enterprise Zone
  • Application needs to be submitted AFTER work has been completed.
    • Note: All work must have been completed no more than six months prior to submitting a grant application.
  • Grant funds will be available to qualifying property owners who complete exterior improvements to their commercial, industrial, or mixed-use building*. The grant will be equal to half of the project cost or a maximum payment of $10,000, whichever is less.
    • Example: A property owner making exterior improvements to their building totaling $22,000 may be eligible to receive a $10,000 grant.
    • Example: A property owner making $16,000 worth of exterior improvements to their building may be eligible to receive an $8,000 grant payment.
    • “Mixed-use” is defined as a building incorporating residential uses in which a minimum of 30% of the usable floor space is devoted to commercial, office, or industrial purposes.
  • Projects that Qualify:
    • Exterior, street-facing facade improvements
    • Hard costs such as painting, awnings, and signage.
  • Projects that DO NOT Qualify
    • Soft costs include purchasing inventory, promotions, or business venture expansions.
    • Interior rehabilitation
ApplicationChecklist

Entrepreneurship Grant

Provides funding (up to $1,700) for half the cost of website design and construction or up to $1,000, (paid to a city-based design provider), half the cost (up to $500) of website hosting or high-speed internet access, and a 200-basis point interest rate reduction on a Winchester Enterprise Zone Micro-Loan.

  • A start-up business is defined as a business that has existed in the City of Winchester for less than one year. A branch office or franchisee of a larger company does not qualify as a start-up business.
  • Submit an application upon the creation of the required number of jobs (or must verify that the required number of jobs have been created prior to receiving disbursements, but, no more than 12 months prior to the application date.
  • A business may be deemed to offer a product unique to Winchester if residents of Winchester/Frederick County must currently travel more than 50 miles to purchase the product being offered. The unique product or products must constitute at least 51% of the applicant’s sales in order for the business to be deemed to be offering a product unique to Winchester.  A branded product line does not constitute a unique product
  • Must create at least 1 new job (not including the owner(s)) and up to 9 jobs in the first year of operation.
  • The applicant must remain in the City of Winchester for at least five years following receipt of the Grant or return the Grant proceeds to the EDA.
  • A grant equal to 50% of the cost of website design and construction, up to $1,000, paid to a Winchester City-based design provider; 50% of the cost of website hosting or high-speed internet access, up to $500; and a 200-basis point interest rate reduction on the Winchester Enterprise Zone Micro-loan.
  • Financial Value of Incentive:
    • Up to $1,700
ApplicationChecklist

Commercial/Industrial/Mixed-Use Property Rehabilitation Grant

The Economic Development Authority of the City of Winchester will provide a cash grant for qualifying rehabilitated real estate within the designated Enterprise Zone. The grant will be based on the post-rehabilitation assessed value for properties that qualify.

  • The property must be located within the designated Winchester Enterprise Zone and outside the Historic District.
  • Application should be submitted PRIOR to purchasing items and starting the project
  • Property must be located in the Enterprise Zone. Where rehabilitation is achieved through demolition or replacement of an existing structure.
  • The exemption shall not apply when any structure demolished is a registered Virginia landmark, or is determined by the state department of conservation and historic resources to contribute to the significance of a registered historic district; or is a local, state, and/or federally designated historic structure.
  • Existing structure must be no less than fifteen (15) years old.
  • Improved Value Requirement – The structure must be improved so as to increase the assessed value by no less than forty percent (40%) for residential and 60% for commercial.
  • The amount of the grant will be $10,000 for an improved assessed value of at least 40% that yields a post-rehabilitation assessment of under $150,000. The grant amount will increase to $15,000 with a minimum value of $150,000, including a 40% improvement for residential and 60% for commercial.
  • For commercial or mixed-use properties, no more than 40% of the building may be occupied by not-for-profit entities in order to qualify for the exemption.
ApplicationChecklist

Low-Interest-Rate Loan Programs

Commercial Façade Loan (Within Enterprise Zone)

Low-interest loans of up to $35,000 are available for businesses and property owners that wish to make exterior improvements such as signage, masonry repair, painting, awnings, window repair/decals, and landscape costs.

  • This incentive is available in the Enterprise Zone and the Historic District.
  • Application needs to be submitted PRIOR to any purchases or renovations
  • The Commercial Façade Program offers a 2.5% interest rate on loans with a one-year deferral of payments provided to the business. The term of the loan shall be five years. The maximum loan amount of $35,000 may be awarded.
  • Details of the proposed project, including specifications of material type and contractor’s bid, must be enclosed with the application.
  • Eligible projects include exterior rehabilitation and restoration, as well as painting, awnings, and signage. Interior rehabilitation, purchase of inventory, promotions, or business venture expansions do not qualify.

ApplicationChecklist

Micro-Loan (Within Enterprise Zone)

Loans at 7% for $1,000 to $10,000 are available to help new or existing businesses fund working capital, minor leasehold improvements, and small equipment and furniture needs.

  • Must be within the designated Winchester Enterprise Zone and Historic District, not including non-profit organizations.
  • Application needs to be submitted PRIOR to any purchases or renovations
  • The interest rate is set at 7%, and the term, amortization, and repayment schedule period will be 24 months unless otherwise negotiated and approved by the EDA. Terms for equipment loans will be extended to 36 months.
  • Micro-Loans are available for the following activities:
    • Small equipment and/or furniture needs, including acquisition, delivery, and installation.
    • Working capital for new sales growth to include accounts receivable and inventory.
    • Small leasehold improvements and façade renovations

ApplicationChecklist

Revolving Loan (City-Wide)

The purpose is to provide below-market-rate gap financing to stimulate the growth of new and existing small-to-medium sized businesses in the City of Winchester. The RLF provides below-market-rate gap financing to qualifying businesses based on determination of need, where the applicant is unable to finance fully the proposed project with equity, bank financing and other private and public financing.

  • Available outside of the designated Winchester Enterprise Zone. Must be within the City of Winchester limits.
  • Application should be submitted PRIOR to starting any purchasing or work.
  • All projects shall be completed, all funds expended, and all jobs created and/or retained within 24 months from the loan approval date.
  • ELIGIBLE BUSINESSES: Include wholesale and retail trades, service enterprises, commercial and industrial businesses, healthcare and life science enterprises, advanced technology concerns, and manufacturing. For Real Estate Development RLF applications, applicants may also include vacant or under-utilized property owners.
  • INELIGIBLE APPLICANT Banks, savings and loan associations, non- independently owned gas stations, used car lots, bars, adult entertainment establishments, beer distributors, non-profit organizations, check-cashing outlets, and furniture and appliance rental shops
  • INELIGIBLE ACTIVITIES: Refinancing or consolidating existing debt; Leveraged buyouts; Distribution or payment to owners, partners, shareholders, or beneficiaries of the applicant; Other activities that the EDA may identify as inappropriate for the RLF program.

Business Growth

Below-market gap financing for small-to-medium sized businesses that are unable to fully finance their proposed projects with equity and other public and private financing sources.

  • ELIGIBLE ACTIVITIES: Machinery and equipment, including acquisition, delivery, and installation, limited to items directly related to the operation of the business, Working capital for new sales growth. This will primarily include accounts receivable and inventory; leasehold improvements, including façade renovations; and other activities that the EDA may identify as appropriate for the BGRLF program
  • Financial Value of Incentive: Minimum loan of $10,000 to a maximum of $75,000 or 40% of total project cost, whichever is less. However, in the Winchester Enterprise Zone, the maximum loan amount shall be $100,000 or 45% of the total project cost, whichever is less. Reduced interest cost. 5-year loan term

ApplicationChecklist
Real Estate Development 

Below-market gap financing for small-to-medium sized mixed-use or non-residential real estate projects where vacant or underutilized property will be put to productive use and that cannot be fully financed with equity and other public and private financing sources. May be used for land costs that include acquisition and site preparation, building costs, soft costs associated with development, and bridge financing where other sources of capital are expected to flow into the project at a later date.

  • ELIGIBLE ACTIVITIES: Acquisition, construction, and site preparation of vacant or under-utilized land or buildings; Soft costs related to property development, including legal, architectural, engineering, surveying, and other related costs; Bridge financing where other sources of capital are expected to flow into a near future project; Other activities that the EDA may identify as appropriate for the REDRLF program.
  • Financial Value of Incentive: Single real estate project shall range from a minimum of $25,000 to a maximum of $200,000 or 40% of the total project cost, whichever is less. However, in the Winchester Enterprise Zone, the Real State Project loan amounts to a maximum of $250,000 or 45% of the total project cost, whichever is less. Reduced interest cost. The interest rate shall not exceed the rate of the private lender—loan term at five years or less.

ApplicationChecklist

Tax-Exemption/Fee Reimbursement Programs

Major Economic Development Project

A grant equal to the present value of 100% of net new taxes paid by a company over three years, paid annually in arrears or as an upfront incentive secured by a forgivable deed of trust, requiring a capital investment of at least $2.5 million and the creation of at least 25 new jobs paying at least the City’s median income.

  • Application needs to be submitted PRIOR to making the investment.
  • Must be within the designated Winchester Enterprise Zone and the Historic District.
  • Must make a capital investment of at least $2.5 million and create at least 25 new jobs that pay at least the City’s median income.
  • The company must remain in Winchester for at least five years after receiving the last grant.

ApplicationChecklist

Major Mixed-Use Development Incentive

Provides part or complete public infrastructure financing (based upon limits) for a mixed–use development with private investment of at least $5 million.

  • Must be within the designated Winchester Enterprise Zone.
  • Application needs to be submitted PRIOR to investment and must sign an agreement with WEDA.
  • Recipient must make a private investment of at least $5 million in a mixed-use development/ project in which the developer has fully executed a development agreement with the EDA.
  • Specification of the infrastructure improvements to be financed by the MMUDI, which may include, but are not limited to:
    • parking structures
    • plazas, fountains, sidewalks, and another hardscape
    • public art
    • public facilities (e.g., conference center)
    • internal streets; and
    • utilities.
  • Financial Value of Incentive:
    • 35%-65% of net new taxes paid to the city

ApplicationChecklist

Substantially Rehabilitated Commercial/Industrial/ Property Tax Exemption

Provides a tax exemption for a period of ten years for improvements of at least 40% to substantially rehabilitated real estate within the Enterprise Zone.

  • Application should be submitted PRIOR to purchasing items and starting the project
    • Option 1: One-time Grant Upon Project Completion.
      • The property must be located within the designated Winchester Enterprise Zone and, if a residential property, outside the Historic District. The grant will be based on the post-rehabilitated assessed value for properties that qualify.
    • Option 2: Multi-Year Partial Real Estate Tax Exemption.
      • The City of Winchester will grant partial exemption from real estate taxes for qualifying rehabilitated real estate within the designated Enterprise Zone. For properties that qualify, the increase in value due to rehabilitation will be exempt from real estate tax for ten years commencing on January 1 of the succeeding year. For further information, including the provisions for qualification, see Sections 27-29 through 27-29.2 of the City Code.
  • This application must be completed and transmitted to the Commissioner of the Revenue with a fee of Twenty Dollars ($20.00). No property shall be eligible for the incentive unless the appropriate building permits have been acquired and verified by the Building Official, and the Office of the Commissioner of the Revenue has inspected and valued the structure upon receipt of the application and before the rehabilitation has started.
  • Where rehabilitation is achieved through demolition or replacement of an existing structure, the exemption shall not apply when any structure demolished is a registered Virginia landmark; or is determined by the state department of conservation and historic resources to contribute to the significance of a registered historic district; or is a local, state, and/or federally designated historic structure.
  • Property must be located in the Enterprise Zone, and if a residential property, outside the Historic District. Where rehabilitation is achieved through demolition or replacement of an existing structure, the exemption shall not apply when any structure demolished is a registered Virginia landmark; or is determined by the state department of conservation and historic resources to contribute to the significance of a registered historic district; or is a local, state, and/or federally designated historic structure.
  • Existing structure must be no less than fifteen (15) years old.
  • Improved Value Requirement
    • RESIDENTIAL (SINGLE OR MULTI-FAMILY): The structure must be improved so as to increase the assessed value by no less than forty percent (40%)
    • COMMERCIAL/INDUSTRIAL: The structure must be so improved as to increase the assessed value by no less than sixty percent (60%)
  • Square Footage Requirement: If the total square footage of the rehabilitated, replaced, or renovated structure exceeds that of the original structure by more than fifty percent (50%), the excess above 50% shall not be entitled to the exemption. In the event of a complete replacement, the qualifying increase in square footage shall be no more than 150% of the original square.
  • Any commercial, industrial, or mixed-use property that possesses or will possess not-for-profit enterprises that amount to more than 40% of total space shall not be eligible for this exemption.

ApplicationChecklist

Exemption from Land Development Fees

Expedited development and building permit review. Refund of building permit fees, zoning application fees and subdivision plat for both non-residential and residential projects.

  • The property must be located within the Enterprise Zone Boundaries or inside the Winchester Historic District.
  • Application should be submitted AFTER/PRIOR to the project. See information below
  • A non-residential improvement project must have a minimum new construction cost of $500,000 or, if completing a renovation, a cost equal to at least 60% of the pre-renovation assessed value of improvements.
  • A residential project must result in an assessment of improvements 140% or higher than the average residential improvement within the North Loudoun Street District.
  • Financial Value of Incentive:
    • Non-Residential: Cost of building permit, zoning application, or subdivision plat fees.
    • Residential: Cost of building permit, zoning application, or subdivision plat fees.

ApplicationChecklist

Business Development Grant for Vacant Properties

Provides a grant to eligible businesses in the amount equal up to a maximum of 100% for new City business tax revenues generated, as determined by the Commissioner of Revenue, based on the incremental increase over a five-year period, paid annually in the arrears. Qualifying taxes include business personal property tax, which is due December 5th of every year, local option sales tax which is due monthly, and food, beverage, and admissions taxes which are due monthly. The grant size will be based on the following criteria:

  • Property must be located in the Enterprise Zone.
  • Application needs to be submitted PRIOR to starting any work.
  • Property must have been vacant for 2 years or more prior to the rehabilitation.
  • The property must be a “substantial rehabilitation” equaling 75% of the assessed value of the property.
  • Qualify as a brownfield as defined in Section 10.1-1230 of the code of Virginia (1950, as amended)
  • Must be commercial property or mixed-use in the B1, B2, CM-1, or M-1 zoning districts.
  • Must be a new business to the city or an expansion location within the City.
  • Provides a grant to eligible businesses for new City business tax revenues generated, as determined by the Commissioner of Revenue, based on the incremental increase over a five-year period, paid annually in the arrears. Qualifying taxes include business personal property tax, which is due December 5th of every year, local option sales tax, which is due monthly, and food, beverage, and admissions taxes which are due monthly.
  • The grant size will be based on the following criteria:
    • 100% of all business taxes for rehabilitation of vacant structures that are larger than 40,000 square feet.
    • 50% of all business taxes for rehabilitation of vacant structures between 20,000 and 40,000 square feet.
    • 25% of all business taxes for rehabilitation of vacant structures between 5,000 than 20,000 square feet.
  • Financial Value of Incentive:
    • 25%-100% of taxes paid
  • Funds will be transferred to WEDA from the city after recipients pay all taxes to the city annually.
ApplicationChecklist

New or Expanding Technology-Driven Business Grant

Provides a series of grants, in arrears, equal to 50% of net new taxes paid to the City over a 5-year period for high-tech firms making a capital investment of at least $1 million.

  •  Must be within the designated Winchester Enterprise Zone.
  • Must be a high-tech firm making a capital investment of at least $1 million.
  • Application needs to be submitted PRIOR to work being completed.
  • Grants shall be made in arrears of the payment of qualifying taxes and shall be equal to fifty percent (50%) of the Net Increase in such taxes over a five-year period. Maximum of $500,000 over a five-year period.
  • The company must remain in Winchester for at least five years after receiving the last grant.
  • NETBG cannot be combined with Business Development Grant Program for Vacant Properties.
  • Qualifying Taxes. Taxes qualifying to form the basis for the calculation of the NETBG include:
    • real estate taxes
    • business personal property taxes
    • machinery and tool taxes and/or
    • business license fees
  • Projects that Qualify:
    • Any Technology-driven Business defined as a firm engaged in advanced manufacturing, classified in the bio-information or bio-medical industry, that is a knowledge-producing federal government contractor, or that has been determined to be technology-driven by the EDA
    • If the applicant is qualified for the Major Economic Development Project Incentive (MEDPI), the amount of the NETBG may be capped according to the terms of the MEDPI.
  • Projects that DO NOT Qualify
    • Any company that is a Qualified Business Development Grant for Vacant Properties Recipient
    • Technology-driven firms do not include firms, other than described above, that use technology or that sell or distribute technologically advanced goods.
ApplicationChecklist

State Incentives

The Virginia Enterprise Zone is administered by the Virginia Department of Housing and Community Development. There are two state incentives available to businesses and /or property owners located in the Winchester Enterprise Zone.

For a list of zones, see the VEZ map

For the online applications, see the VEZ submission system.

VEZ State Incentives are available to businesses and zone investors who create jobs and invest in real property within the boundaries of enterprise zones.

CONTACT:

ezone@dhcd.virginia.gov

804-371-7171

Job Creation Grant

Qualification for the Job Creation Grant (JCG) is based on permanent full-time job creation over a four-job threshold, wage rates of at least 175 percent of the Federal minimum wage (150 percent in HUAs*), and the availability of health benefits. Personal service, retail, food, and beverage positions are not eligible to receive job creation grants. **As of 2010, firms located in High Unemployment Areas (HUAs) may qualify for the JCG at the reduced wage rate threshold of $10.88 (150 percent of the Federal minimum wage). A list of HUAs is provided below in the Helpful Links section of this page.

More Info

Real Property Investment Grant

Eligibility for the Real Property Investment Grant (RPIG)is based on qualified investments made to commercial, industrial, and mixed-use buildings or facilities located within the boundaries of an enterprise zone. To be eligible for the RPIG, an individual or entity must invest at least $100,000 for rehabilitation or expansion projects and at least $500,000 for new construction projects.

More Info

Historic Tax Credit

Through the federal and state rehabilitation tax credit programs, property owners are given substantial incentives for private investment in preservation, resulting in enormous advantages to the public.

State tax credits are available for owner-occupied, as well as income-producing buildings. If your property is income-producing, you may also be able to take advantage of federal tax credits. Additional information and assistance with tax-credit projects may be requested from DHR’s Richmond office.

Technology Zone

The Technology Zone is comprised of 125 acres in downtown Winchester where specific businesses benefit from tax advantages and an environment where they can grow.

Existing companies within the boundaries of the technology zone which qualify under any of the criteria set forth below may be qualified as a technology company. A company meeting the criteria which move into the technology zone may also qualify.

In no case shall the use of computers or telecommunication services by a business in its internal operations qualify the business as a technology business.

  • Application should include forms W-OTTZ 1-3 as required and any documentation required to show the business qualifies for the tax exemption or fee reimbursements.
  • Business Type: A business which derives its gross receipts from computer hardware, software, or telecommunications sales, leases, licensing, or services, and for which the computers or telecommunication is used to provide sales, leases, licensing, or services directly to the customer.
  • Business Qualification: To qualify, the company must have a minimum of 3 employees and an investment of at least $10,000. The investment may be established by the value of personal property; real estate owned; or the value of a lease of real property for the operation of the technology business.
  • The business must be within the designated Winchester Technology Zone.
    • The technology zone shall be that area located within the following boundary lines:
      • Commencing on East Lane at National Avenue;
      • thence south along East Lane to East Cork Street;
      • thence west along East Cork Street to South Cameron Street;
      • thence south along Cameron Street to East Cecil Street;
      • thence west along Cecil Street to the intersection of West Cecil Street and South Braddock Street;
      • thence north along South Braddock Street to Cork Street;
      • thence west along Cork Street to South Washington Street;
      • thence north along Washington Street to the intersection of North Washington Street and West Fairfax Lane;
      • thence east along Fairfax Lane to the intersection of Fairfax Lane and North Loudoun Street;
      • thence north along North Loudoun Street to Baker Street;
      • thence east along Baker Street to North Cameron Street;
      • thence south along North Cameron Street to East Fairfax Lane;
      • thence east along East Fairfax Lane to the beginning at East Lane and National Avenue
  • Incentives:
    • Ten-year exemption of business, professional, and occupational license tax;
    • Ten-year rebate of utility taxes for telephone, electricity, and cable
    • Water and sewer connection fee rebate
    • Building code fee rebate
    • Zoning ordinance fee rebate
    • Subdivision ordinance fee rebate
  • If most of the gross receipts of qualified technology business are derived from the operations which qualify the business, all its gross receipts shall be included in the rebates and exemptions.
  • Year 1 is the calendar year in which the business becomes a qualified technology business if it qualified prior to December 31 June 30 of the year. Otherwise, year 1 shall be the year following the year in which the business becomes a qualified technology business. Any business established within 12 months of the establishment of a new technology zone or boundaries qualifies for technology zone incentives.
  • If a minority of a business’s gross receipts is derived from such operations, the rebates or exemptions shall be applied only to that part of the gross receipts which is based on the sales or services via such qualifying operations
Technology Zone ChecklistTechnology Zone W-OTTZ-1 FormTechnology Zone W-OTTZ-2 FormTechnology Zone W-OTTZ-3 Form

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Past Incentive Recipients

 

Taylor Hotel             –            Bonnie Blue           –          Winchester Book Gallery           –      Oakcrest Realty