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Home My WebLink AboutII. A. ECONOMIC DEVELOPMENT INVESTMENT PROGRAM (EDIP) POLICY UPDATE AND PROPOSED SMALL BUSINESS GRANT PROGRAM 9.3.24Economic Development Investment Policy Amendments AMANDA JARRATT, DEPUTY CITY MANAGER I September 3, 2024 1 Purpose •Provide an overview of the EDIP Program •Provide an overview of recommended changes adopted by the City of Virginia Beach Development Authority (VBDA) •Seek City Council Direction on next steps 2 VBDA – EDIP Policy Background The Economic Development Investment Program (EDIP) is a resource the VBDA administers. It provides discretionary grants to qualifying businesses that are relocating to or expanding in Virginia Beach in support of projects that create new jobs and capital investments. Last revised in 2020 3 Grant Disbursement VBDA EDIP Policy Background •Part A –qualifying new businesses to locate and existing businesses to remain or expand operations •Awards based on (i) jobs created or retained and/or (ii) capital investment •Part B –covers development or redevelopment of properties in Strategic Growth Areas, Special Economic Growth Areas, Economic Redevelopment Areas, or Opportunity Zones. •Awards based on capital investment •Part C –covers the development or redevelopment of properties in APZ-1 or Clear Zones •Awards based on capital investment •Part D –covers general provisions applicable to Parts A, B, and C. 4 EDIP – Policy Amendments •February 20, 2024 – VBDA approved the amendments to the EDIP Policy: 1.More closely align with the State policies; 2.Adjust the thresholds for job creation awards to be at or above the Average Annual Wage; 3.Clarify the required documentation for the disbursement of awards; and 4.Remove Part E from the Policy as the local pandemic emergency justifying the inclusion of Part E has ended. •June 18, 2024 - VBDA approved the addition of Part F to the Policy: •Part F would provide for grants, in an amount up to ten thousand dollars ($10,000) each, to increase access to funding for historically underserved and marginalized small businesses 5 Proposed EDIP Policy Amendments 1. Capital Investment Definition and Coordination with State •When the Project is being incentivized by the State, VBDA may approve an EDIP varying from the Policy to ensure it matches the requirements provided by VEDP •Cost of the acquisition of land and existing buildings will not count toward the required capital investment, unless being purchased from a governmental entity and being returned to the tax rolls •Add Qualifying Jobs definitions such as •Remote Jobs -Residence not to exceed 115 miles •Contractors -located in Virginia Beach and provide dedicated full-time service to the Applicant 6 Proposed EDIP Policy Amendments Cont.1 2. Wage Levels for New or Retained Jobs Incentive above the Average Annual Wage (AAW) •Tier 1: $1,000 for an employee paid at least 1.2x the AAW •Tier 2: $3,000 for an employee paid at least 1.7x the AAW •Average Annual Wage determined by Virginia Employment Commission's Quarterly Census of Employment and Wages report. Currently $58,032 –equating to Tier 1 at $69,638.40 and Tier 2 at $98,654.40 7 Proposed EDIP Policy Amendments Cont. 3. Clarify the Required Documentation for Disbursement of Awards: •Funds based on capital expenditure must include invoices and evidence of payment •Funds based on Jobs must include the Applicant’s Virginia Employment Commission Quarterly Tax Report •Funds based on remote worker jobs, must include: •Individual titles and salaries •Hire Date •Zip code of residence or remote work site 4. Remove Part E from the Policy that was adopted in 2020 for temporary emergency assistance during the COVID-19 pandemic. •All awards made under Part E have been fully administered 8 EDIP Addition of Part F: Small Business Grant 1 In response to a 2023 City Council Winter Retreat request for small business assistance, staff is proposing a Small Business Grant Program to qualifying small, women-owned, minority-owned, veteran -owned, and service-disabled veteran-owned businesses. •Size of Grants and Funding:grants up to $10,000 per approved business •Available funds for first round: $150,000 •Future rounds dependent on performance and direction by VBDA and City Council •Source of Part F program will be funds remaining from Part E,emergency fund program enacted during the COVID-19 pandemic 9 EDIP Addition of Part F: Small Business Grant12 Qualifying Businesses: •Micro-business with fewer than twenty-five (25) employees •Hold a valid Virginia Beach business license •Operated in the City for at least one year •Current on the payment of all local taxes and fees •Have not received any other grant from VBDA or the City for the past 12 months •Does not employ an officer, official or employee of the City of Virginia Beach, VBDA, and the Minority Business Council 10 EDIP Addition of Part F: Small Business Grant13 The Proposed Application and Program Schedule •Interested Businesses must attend a pre-application workshop and submit a complete application •City Council Authorizing Vote: September 17, 2024 •Press Release and Marketing Kickoff: September 18, 2024 •Pre-Application Workshops: September 30, October 2, 8, and 10, 2024 •Eight sessions (four in-person and four virtual) •Begin Accepting Applications: October 21, 2024 - until funds are depleted, at least 10 days’ notice will be given before subsequent rounds open 11 EDIP Addition of Part F: Small Business Grant 14 Selection Committee •Four members, with one representative from VBDA, The Minority Business Council, The Department of Economic Development and the City Manager's Office •Selection Committee will review applications and score based on points system of eligibility criteria stated in the application •Businesses must commit to attending business counseling sessions at the HIVE if awarded the grant 12 Use of Funds Permitted Uses: •Working capital (purchase of inventory or renewables) •Marketing & advertising •Development of online or mobile presence •Equipment/supplies purchase •Business expansion •Real estate acquisition •Other business development purpose approved by VBDA Not Permitted Uses: •Payroll •Salaries •Insurance •Lease payments •Personal expenses 13 Recommendation The VBDA requests City Council adopt an ordinance approving the Amended Policy, to include the February 2024 Amendments and addition of Part F as presented. 14 Questions? 15