The U.S. Department of the Treasury approved areas of James City and Williamsburg to participate in a federal economic development program that is intended to make the areas more attractive to private investors.
The Grove community of James City was one of 901 low-income census tracts eligible for the program in Virginia. Grove was among 212 areas nominated and approved for the opportunity zone designation, according to a James City news release.
The program, which spurs economic development by providing tax benefits on investments in qualified census tracts, will be a boost to economic development in the southeastern part of the county, James City Economic Development Director Amy Jordan said.
“It will allow opportunities to encourage investment there,” Jordan said.
Grove was the only area in the county to be approved for the program. An adjacent census tract in the Lee Hall area of Newport News and another in the northeastern part of Williamsburg were also designated as opportuntiy zones.
“The designation of a federal opportunity zone in the city of Williamsburg provides another economic development tool to encourage private investment in the city's tourism and hospitality district,” Williamsburg Economic Development director Michele Mixner DeWitt wrote in an email.
The census area included in the program overlaps with the city’s tourism and hospitality district, which includes the upper part of Second Street and along Capitol Landing Road south of Interstate 64. The area has numerous hotels and restaurants.
Jordan said there are a number of opportunities for new businesses to set up in the Grove area’s industrial parks, such as James River Commerce Center, Greenmount Industrial Park and the now-vacant BASF property. The program could also bring reinvestment to existing businesses.
While the program will likely benefit Grove, the type of economic development projects that may qualify has not been determined. The program’s guidelines for project qualification aren’t complete, though they’re expected to be finalized later this year.
The program could be an avenue to attract affordable housing projects to the area, Jordan said.
County officials determined too few housing options exist for low- and moderate-income residents through a 2016 housing study. Twenty-nine percent of county workers earn $7.81 per hour ($1,354 per month), or $16,248 per year if they work full-time. In 2016, the median gross rent (rent plus utilities) was estimated at $1,148 per month in James City, according to the study.
Likewise, there could be potential for the program to encourage a grocery store in Grove, though whether such a project would qualify is unclear, Jordan said.
The U.S. Department of Agriculture considers Grove a food desert because the area lacks fresh foods typically found in large grocery stores. Grove doesn’t have a large grocery store.
About 4,300 people live in Grove, where about 21 percent of the population lives in poverty, according to the county planning department. Grove Christian Outreach Center provided food to about 1,524 people through its distribution services in 2017.
The Federal Tax Cuts and Jobs Act of 2017 allowed every state to nominate qualified census tracts, which included the opportunity zone and opportunity fund revitalization program. The Virginia Department of Housing and Community Development worked with localities and the Virginia Economic Development Partnership to determine nominations, the release states.
“The opportunity zone program is another tool for the commonwealth to encourage economic development and revitalization in all regions of Virginia,” Secretary of Commerce and Trade Brian Ball said in a governor’s office news release, which announced the program’s approvals on Thursday. “With the designation as qualified opportunity zones, they will be poised to attract additional private investments.”
Jacobs can be reached by phone at 757-298-6007.