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HomeMy WebLinkAbout03-03-26 EDA MinutesEconomic Development Authority Meeting Minutes March 3, 2026 Chairwoman, Ms. Cox called the meeting to order at 10:00 a.m. and asked for a roll call. Marlin Reeves- Absent Collette Hash- Aye Sabrina Cox- Aye Jefferey Worrell- Aye Peter Huber- Aye Christopher Conner- Aye Lisa Webb- Absent Adoption of January 6, 2026 Meeting Minutes The motion was made by Mr. Conner and seconded by Mr. Worrell to adopt the minutes as written. The motion passed unanimously. Financial Review It is noted that Mr. Day, who would normally present the financial information, is not present, and if members have any questions about the financials, they may contact Mr. Day directly or relay questions through Ms. Hale, who can forward them. The chair asks if anyone has questions regarding the financial report at that time. No questions are raised by the board. Business Incentives- Shannon Ainsley, Economic Developer Ms. Ainsley began a presentation on the topic. She explained that this discussion will be the first in a series of sessions focused on incentives. The purpose is to examine why incentives are necessary, how they can attract businesses, and how the locality’s current incentives might be improved so they can be used more effectively. She explained that incentives are fundamental economic development tools used to recruit new businesses, support expansions, and encourage reinvestment. She emphasized that offering incentives is a common practice across the country and that communities often compete with one another for businesses. If a business cannot find suitable incentives in one locality, it may choose to locate elsewhere. Ms. Ainsley outlined several reasons why incentives are important. First, they help close financial gaps that businesses may face when starting or expanding operations. Initial costs can be significant, and while incentives do not eliminate the financial risks involved, they can help businesses overcome barriers to entry. She also explained that incentives allow local governments to shape the types of businesses they want in their communities. For example, if the town lacks a particular service, such as a coffee shop, it could design incentives specifically aimed at attracting that type of business. In this way, incentives can help create the kind of business environment the community desires. Another benefit of incentives is that they signal to potential investors and entrepreneurs that the community is open to business and willing to work collaboratively. Offering incentives indicates that staff and leadership are proactive and prepared to partner with businesses during the development process. Finally, she noted that incentives ultimately generate a return on investment for the community. By bringing in new businesses, the tax base expands, which can provide additional revenue and resources that benefit local residents. The discussion then shifts to the incentives that already exist within the town. Ms. Ainsley explained that although several incentives are technically available, they are rarely promoted or utilized. She noted that it took her considerable time to even determine what incentives existed, where they were located in policy, and whether they were being used. According to her findings, most of the incentives are not currently being used by businesses. She explained that she includes a very general reference to incentives in a welcome packet for businesses, but the information remains vague because the current incentives are not the ones the town ultimately wants to promote. She indicated that the town plans to go through a process of revising and improving these incentives before actively promoting them. She then listed the current incentives available, which include: building permit fee rebates, water and sewer availability fee rebates, a job creation grant, a real property investment grant, a rehabilitated property tax incentive, a BPOL (Business, Professional, and Occupational License) tax rebate, and a meals tax incentive. Some of these programs are state incentives. Ms. Ainsley explained that the meals tax incentive is the one incentive that has seen some limited use. However, it applies only within the historic district, roughly between Third Street and First Street. Because of this geographic restriction, only a small number of businesses qualify. At the time of the meeting, approximately two businesses, and possibly a third with the recent opening of a brewery, are using the incentive. Mr. Huber asked whether the job creation and real property investment grants are part of the enterprise zone program. Ms. Ainsley confirmed that they are. She explained that enterprise zones are state-designated areas that often extend through both town and county jurisdictions. These zones must meet certain requirements, including geographic continuity, which can lead to oddly shaped boundaries designed to connect specific areas. The enterprise zone incentives are generally targeted toward larger manufacturing or industrial companies, such as James Hardie, rather than small local businesses. When asked whether a map of the enterprise zone exists, Ms. Ainsley confirmed that one is available in her office. Returning to the topic of local incentives, Ms. Ainsley reiterated that very few businesses use the existing programs. Aside from one individual using the building permit fee rebate and the few businesses using the meals tax incentive, most programs remain unused. She also raised concerns about how the meals tax incentive works. The town manager, she explained, is not particularly supportive of the current structure, and she shared some of those concerns. Because the town cannot simply waive taxes, the incentive operates as a rebate. Businesses must first collect and pay the meals tax, and then the town reimburses a portion of it quarterly. This creates an unusual situation where the customers, through the meals tax they pay, are effectively funding the incentive that the business receives later as a rebate. In her view, this structure is somewhat problematic and may not be the most effective way to support businesses. Ms. Ainsley explained that incentives do not have to be limited to tax rebates. They could also support revitalization efforts, such as encouraging investment in vacant properties. Incentives could take several forms, including grants, fee waivers, or rebates. She also noted that some incentives could be procedural rather than financial. For example, the town could provide a “VIP route” for new businesses by guiding them through permitting and administrative processes more quickly and efficiently. This kind of assistance could reduce bureaucratic hurdles and make the town more attractive to entrepreneurs. Chairwoman Cox asked about the length of the meals tax incentive. Ms. Ainsley explained that it runs over a five-year period, beginning with a 100% rebate for the first two years, followed by reductions to 75%, 50%, and finally 25%. She noted that five years is a long time for businesses to operate without fully adjusting to paying the tax, which may not encourage long-term financial independence. She added that while the town could revise the program for future businesses, it would likely not change the terms for businesses already participating. Ms. Ainsley clarified that the town is not currently promoting the existing incentives because they no longer align with the town’s economic development goals. The programs have been in place for many years without a formal process or consistent promotion. She emphasized that the town’s current focus is on attracting small businesses not only to Main Street but also to other areas of town. At present, the meals tax incentive is the only meaningful small-business incentive, and it applies only within a small portion of the town. Additionally, there are no incentives specifically aimed at retaining existing businesses. She stressed the need to develop incentives that encourage both the attraction of new businesses and the retention of existing ones. Ms. Ainsley explained that staff already have some ideas for potential incentives but want to gather input from the board before making recommendations. Because the EDA interacts directly with the business community, its members are seen as an important source of feedback. The plan is to collect ideas and suggestions from the board and then return later with more formal recommendations for revising the incentive programs. Mr. Huber offered a key principle for designing incentives: they should apply equally to both existing businesses and new businesses whenever possible. He explained that if current business owners believe their tax dollars are being used to help competitors move into town, it could create resentment and controversy. To avoid that perception, any incentive structure should be available to existing businesses as well as newcomers. For example, if incentives are based on job creation, they should apply to existing companies that add new employees just as much as to new companies establishing operations in town. Ms. Ainsley responded that some incentives can indeed apply to both new and existing businesses. For instance, job retention or job growth incentives could be based on increasing employment levels above a business’s baseline workforce. However, some incentives, such as the meals tax incentive, are designed primarily to attract new businesses rather than support those already operating. The conversation then turns to the broader purpose of incentives. Chairwoman Cox questioned what the primary objective should be: whether the goal is primarily job growth, or whether it is to expand the range of businesses and amenities that make the town more attractive to residents and potential newcomers. Ms. Ainsley suggested that incentives could be used to improve the community’s offerings, making it a more desirable place to live and work. She noted that the goal is somewhat circular and interconnected, indicating that multiple objectives, such as economic growth, job creation, and quality of life improvements, are likely involved. The discussion continued with clarification about the overall purpose of economic development incentives. Ms. Ainsley explained that business growth is necessary to support the residential growth the town is experiencing. As new residents move into the community, they require services and amenities provided by local businesses. Therefore, attracting businesses is essential not only for economic activity but also for sustaining population growth and making the town an attractive place to live. She also noted that incentives can play a role in encouraging reinvestment in the town, particularly in vacant buildings. While incentives could theoretically apply to residential properties as well, she suggested that the EDA should focus primarily on business-related incentives since that aligns with the board’s purpose. Chairwoman Cox emphasized that it is important to clearly define the primary objective of the incentives before designing them. Ms. Ainsley responded that the main goal is to attract business and stimulate overall growth in the community. She again referenced the meals tax incentive as an example, noting that if the town offers a stronger or longer incentive than neighboring localities, a business might choose to locate in this town rather than elsewhere. She explained that localities compete with one another for businesses, and if the town does not offer competitive incentives, businesses may instead choose nearby places such as Wytheville. According to Ms. Ainsley, she has personally seen situations where businesses chose other locations because incentives were more attractive there. Ms. Ainsley reiterated that many of the current incentives have been in place since around 2017 or 2018 and no longer reflect the town’s current needs. The goal is to update and refine these programs so they better support current economic development priorities. Ms. Hash asked staff to share some of the ideas they already have under consideration so the board can respond to those ideas rather than starting entirely from scratch. Ms. Ainsley outlined several ideas already under consideration. One proposal involved creating a rental incentive for property owners with vacant commercial buildings. Under this concept, if a property owner invests money into renovating a vacant property, the town could provide an incentive to the property owner. In exchange, the property owner would offer reduced rent to a new business tenant. She explained that property renovations often result in higher rents in order to recover the renovation costs. By offering an incentive, the town could help lower the rental burden for new businesses moving into those renovated spaces. Another idea is to create a comprehensive “new business welcome” incentive package. This could include assistance with signage, a membership to the local Chamber of Commerce, support in navigating the permitting process, and possibly waiving the initial business license fee. The goal would be to create a supportive onboarding process for new businesses entering the community. Ms. Ainsley noted that the town does not necessarily need a large number of incentives. Instead, it may be more effective to focus on a small set, perhaps three strong programs. She also reminded the board that some incentives are controlled by the state, and the town cannot modify those programs. The conversation shifted to available properties that could potentially be marketed for development. Mr. Worrell asked what sites exist that the town can promote. Ms. Ainsley explained that a list of available properties is maintained on the economic development page of the town’s website, although availability can change frequently and the list is not updated daily. She noted that most of the property owners are in communication with the town regarding their plans. Some owners are open to tenants but are waiting until they have a committed occupant before investing in renovations. As a result, many buildings are not actively marketed for lease even though they remain vacant. Mr. Worrell asked whether any of the vacant properties are owned by the town. Ms. Ainsley explained that most town-owned properties are residential rather than commercial. Those properties fall under a separate initiative known as “Project Revitalize,” which is focused on residential redevelopment. Because most commercial properties are privately owned, the town cannot directly renovate or redevelop them. Instead, the town can only assist property owners by pointing them toward resources such as tax credits, grants, and other incentives that could support renovation projects. The discussion expanded to whether demolition could sometimes be a better option than renovation. Mr. Worrell stated he recalled a developer saying that there are limits to what can be done with an old building, but a vacant lot offers more flexibility for new development. Ms. Ainsley explained that demolition is already occurring in certain cases, particularly with residential properties where safety concerns require it. However, commercial properties are more complicated because the town does not typically own them. In cases where buildings are severely deteriorated, such as having structural failures or major code violations, the town may be able to intervene and require demolition, but those situations are relatively rare among commercial buildings. Mr. Huber raised the idea that the town or the EDA could potentially purchase strategically located commercial properties in order to redevelop them. He referenced a specific property at a prominent intersection that currently serves as an eyesore and could potentially be improved through redevelopment. He noted that the EDA appears to have approximately $100,000 available according to the most recent financial report and suggests that purchasing and redeveloping a property could be considered as an investment strategy. While acknowledging that commercial properties may cost more than that amount, he suggested that even a lower offer could sometimes prompt a property owner to consider selling. Ms. Ainsley agreed that if the board identified specific properties of interest, she could help gather information about them or facilitate conversations with the property owners. Mr. Huber continued discussing the particular property mentioned earlier, noting that it sits near a well-traveled intersection and is adjacent to other developments that have been improved. He pointed out that while nearby properties have been renovated, the deteriorating building creates a negative visual impression for the area. Ms. Hash added that the condition of the building likely affects nearby housing developments as well, since residents have to see it regularly. Ms. Ainsley reiterated that without ownership, the town’s ability to act is limited to maintaining communication with property owners and helping or resources that might encourage redevelopment. Mr. Conner suggested that the board should approach the issue step by step rather than trying to solve everything at once. If attracting businesses and addressing vacant buildings on Main Street are the primary concerns, the board could begin by focusing on incentives that encourage property owners to rehabilitate their buildings. Ms. Ainsley agreed and noted that many of the remaining vacant buildings on Main Street are quite large and would require significant investment, often millions of dollars, to renovate. Because of these high costs, property owners would likely need outside investors or developers to make such projects financially feasible. Board members discuss the need for incentives that are meaningful enough to encourage investment. Ms. Ainsley noted that small incentives, such as a $500 permit fee waiver, may not be significant when renovation costs exceed a million dollars. However, she also acknowledged that every contribution can help, and the town must find the right balance between providing support and recognizing the scale of these redevelopment projects. The board agreed that incentives must be thoughtfully designed to ensure they actually influence development decisions. Mr. Huber cautioned that incentives should not be so large that they become the primary reason for a project to occur. Businesses must still have strong underlying economic fundamentals to succeed. If incentives are too generous, they might encourage projects that are not financially sustainable, leading businesses to fail or seek additional subsidies later. Therefore, incentives should complement viable projects rather than replace the economic rationale behind them. The discussion concluded this segment by noting that the town currently has positive economic momentum. Recent developments, including new apartments and the opening of a brewery, have generated increased activity in the community. Ms. Ainsley observed that local businesses were particularly busy over the recent weekend because visitors came to the brewery and then dined at other establishments around town. They emphasized that the town should capitalize on this momentum and continue encouraging further economic growth rather than allowing progress to stall. The discussion concluded with Ms. Ainsley noting that the recent surge in activity, including a particularly busy weekend for local businesses, is a positive sign for the town’s economic momentum. One business owner reportedly told her it had been their busiest night since opening, which participants view as encouraging evidence that new developments, such as the brewery, are helping drive customer traffic throughout the community. Ms. Ainsley explained that she will take the comments and suggestions shared during the meeting and incorporate them into a set of potential incentive ideas. She plans to review the concepts already under consideration and refine them based on the board’s feedback. She invited board members to email her any additional ideas they may have after reflecting on the discussion, since the topic involves a significant amount of information and may require further thought. She intends to return at a future meeting with more formal recommendations for the board to review. Mr. Huber asked whether Ms. Ainsley could provide a written summary of her proposed incentive ideas and distribute it to the board before the next meeting. He explained that reviewing the proposals in advance would give members time to think carefully about them and develop feedback. Ms. Ainsley agreed to prepare and send a written outline of the potential incentives. Mr. Huber suggested that receiving the information a couple of weeks ahead of the next meeting would allow members to review it, consider their responses, and potentially communicate additional thoughts privately before the next formal discussion. Ms. Ainsley confirmed that she can do this and noted that the draft ideas she already has developed will serve as a starting point for further discussion. Chairwoman Cox asked whether staff have examined incentive programs used by other towns, noting that it may not be necessary to “reinvent the wheel” if successful models already exist elsewhere. She suggested learning from communities that have demonstrated success in attracting and retaining businesses. Ms. Ainsley explained that her current ideas have already been informed by research and conversations with other localities. She has looked at what similar communities are doing and used those approaches as a foundation for developing potential programs for the town. Mr. Huber discussed some potential complications with the proposed rental subsidy incentive. He raised concerns about determining the true rental value of a property and how to ensure that any subsidy benefits the business tenant rather than simply increasing profits for the property owner. Because every property is different, establishing fair rental values could be difficult. Additionally, rents often increase periodically, which could complicate the structure of a subsidy program. Mr. Conner suggested that any rental incentive might need to involve a tiered structure, a sliding scale, or a defined multi-year agreement to maintain fairness and transparency. Another suggestion is to structure incentives around renovation costs rather than rent, possibly offering a subsidy based on the number of square feet renovated. The goal of the concept remains to help businesses entering a space by reducing their financial burden, but members acknowledge that the details would require careful design and further discussion. As the discussion concluded, Chairwoman Cox thanked Ms. Ainsley for the research she has already conducted regarding economic development incentives and for presenting potential ideas for the board’s consideration. Ms. Ainsley reiterated that she will refine the proposals and return with additional information at a future meeting. Board Member Comments Mr. Huber expressed appreciation to the town staff for organizing a recent tour of Claremont School. He described the tour as a meaningful experience, particularly because former teachers and administrators were invited to attend as well. According to Mr. Huber, it was moving to watch former educators reconnect with each other and revisit the classrooms where they once taught. Many attendees shared stories about their time at the school while seeing how the building has been renovated and repurposed. Some participants, including elderly former staff members, found the experience especially meaningful as they revisited a place that had been a central part of their professional lives. Ms. Hale also shared personal connections to the school. She mentioned sending photographs of the renovated building to a former kindergarten teacher, who was excited to see how her classroom looked now. She also recounted running into a former second-grade teacher and sharing pictures from the tour, which generated excitement among former staff members who hoped to attend the event. Mr. Worrell continued discussing the redevelopment of Claremont School and its positive impact on the community. Ms. Hash shared that their spouse also visited the site and was impressed with the renovation, describing it as a positive development for the community. Overall, the board members express pride in the project and appreciation for the role town staff played in organizing opportunities for the community to reconnect with the building’s history. Ms. Hash then raised a separate question unrelated to the earlier discussions. She asked about the status of a project located at Jefferson School involving a vegetable-growing initiative. Ms. Ainsley explained that the project is currently on hold until additional funding can be secured. Ms. Hash expressed concern about the project’s progress, recalling that when representatives previously presented to the board, they discussed hiring employees despite limited development activity. She questioned the decision to hire staff before making more substantial progress, noting that many business owners would typically prioritize advancing the project itself before drawing salaries. Ms. Hale attempted to recall details about the project, identifying it as “Veg Inc.,” which focuses on vertical growing in a controlled indoor environment. Ms. Ainsley mentioned that the group conducted a test run growing lettuce and possibly other crops, although activity has been limited since then. There is uncertainty among members regarding the financial structure of the project, including whether the county provided funding or whether public resources were used to acquire the building. Ms. Ainsley noted that they are not fully familiar with all aspects of the project’s current status and mentioned individuals associated with overseeing the initiative. Because details about the project are unclear, staff suggest that rather than speculating, they should review the meeting minutes and available records to determine what commitments or updates have been made previously. Ms. Hash recalled that the project may have requested an extension during a prior meeting but she cannot recall the specifics. Staff agreed to research the issue further and provide a more accurate update after reviewing documentation related to the project. Reminder of Next Meeting Date Tuesday, April 7, 2026 at 10:00 a.m. With no further business, Chairwoman Cox adjourned the meeting at 10:40 a.m.