DATE: Sunday, April 6, 1997                 TAG: 9704070672

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY MEREDITH COHN, STAFF WRITER 

DATELINE: CHESAPEAKE                        LENGTH:  150 lines

TAX INCENTIVES OFTEN GO UNUSED RED TAPE, LACK OF KNOWLEDGE SLOW REQUESTS

On paper, South Norfolk homeowners and business people who renovate their buildings appear to have access to many tax incentives designed to rejuvenate economically depressed downtowns.

In reality, few of the benefits have made it past the desks of city, state and federal officials who administer them.

Consensus among local leaders is that people don't know they qualify or can't seem to navigate the system. New and changing rules at all levels of government contribute to the problem.

Allen Glanville, owner of Glanville Ironworks, has spent the three years his company has been in town trying to collect on tax breaks and job grants.

``I moved my business here because the city promised me tax incentives, but when it came down to it, no one seemed to know how to get me into the program,'' he said. ``I missed the deadline to get into it the first year because I didn't know there was one.''

Glanville said his accountant eventually took him to the state'sDepartment of Housing and Com- munity Development office in Richmond, which administers the pro- gram, and he expects the benefits now will come through.

Glanville will participate in the state Enterprise Zone Program, which offers tax breaks and grants to businesses that employ local people or improve their properties in the downtown area, which has been struggling for years to revitalize. State and federal programs also are open to South Norfolk homeowners who renovate their turn-of-the-century houses for residential or commercial purposes.

The programs, however, are administered through separate offices and have their own requirement procedures before renovations can be made.

Local leaders describe a hodgepodge of incentives they believe are available, and they fret about money lost to business owners such as Glanville and the rest of community.

``It's on the books, and it's not being used,'' said Gerald Johnson, president of the South Norfolk Civic League. ``We need more advertising through Realtors and others. I'm sure most people don't know about it.''

Johnson said there doesn't appear to be an established procedure for applying and qualifying for the programs.

Leo Johns, president of the Greater South Norfolk Business Consortium, said he had renovated his own office without realizing that tax incentives may have been available.

``There's no streamlined process,'' Johns said. ``No one place to go for information.''

Steven Wright, who works for the Chesapeake Economic Development Department but acts as the program manager for the state's Enterprise Zone Program, said 16 South Norfolk businesses have participated since it was started in 1985.

He acknowledged the number isn't high, but said his office finds South Norfolk is a tough sell for some businesses, even with tax abatement programs.

Wright said most of the companies considering a move to Chesapeake are requesting 15 acres of land or large office buildings, which cannot be found in South Norfolk.

And much of the space that is available in the area - predominantly small office fronts - needs to be ``rehabilitated or demolished,'' he said.

``Using it as a marketing tool can't be done because there are very few buildings and sites available,'' he said.

``Still, any opportunity we see to market Chesapeake in general - which is our goal - we make sure we market our Enterprise Zone.''

As for the space already occupied, ``Businesses there don't take advantage of the program,'' he said.

Two specific sites that area residents have been anxious to see filled with new businesses - the old Big Pig grocery store and the former J.G. Wilson manufacturing buildings - could qualify for benefits.

But neither is an easy space to pitch, Wright said. The Big Pig building was recently boarded up by code inspectors who considered it unsafe, and only the administration building on the manufacturing site lies within the enterprise zone boundaries.

Since a change in 1995, the state Enterprise Zone Program consists of four separate incentives. Businesses fill out one application due by May 1 and, once reviewed by a certified public accountant paid by the businesses, they are matched with benefits. They also can qualify for other city programs that help pay for permit fees or bend zoning rules.

``We'd like to see the area have a renaissance,'' said Karen Shaffer, assistant director of the city's Planning Department, which administers a program allowing some zoning exceptions for expanding businesses. ``But the activity is not great.''

Homeowners can apply for separate federal and state incentives when they restore their turn-of-the-century homes for residential or commercial purposes.

``That may make renovations easier, or even feasible,'' said Mary Ruffin Viles, architectural historian for the state Department of Historic Resources.

While a large block of homes in South Norfolk is already on the National Register of Historic Places, no one has applied for the state program, which began in January and targets those who live in their old houses.

Wright said there is a ``misconception'' that a lot of paperwork is involved in collecting on the incentives.

He said businesses in South Norfolk, or groups of businesses, can request a presentation from his office.

Other officials have made the same offer.

Civic and business leaders say they may try to serve as a clearing- house of information on the programs.

ILLUSTRATION: Color photo

Leo Johns didn't know of possible tax breaks in South Norfolk.

Photo

STEVE EARLEY/The Virginian-Pilot

Leo Johns, president of the Greater South Norfolk Business

Consortium, wasn't aware of possible tax breaks when he renovated a

turn-of-the-century house to use for his contracting business.

``There's no streamlined process,'' Johns said. ``No one place to

go for information.''

Graphic

HOW TO QUALITY FOR INCENTIVES

For more information on available incentives and how to qualify,

contact:

Chesapeake Planning Department at 382-6176 for requirements for

the Business Overlay District, which has some aesthetic

requirements but allows for zoning and parking flexibility for

those investing in their buildings.

Virginia Department of Historic Resources in Portsmouth, at 396-

6707, for a state program that began in January, along with an

existing federal program, which allows homeowners who fix up their

turn-of-the-century houses to apply for tax credits ranging from 10

percent to 20 percent. The programs have different criteria, but

all applicants must own a house - used as a single- family home or

for commercial purposes - that is on the national or state

registry of historic buildings or that qualifies for those lists.

Chesapeake Department of Economic Development at 523-1100 or the

Virginia Department of L Housing and Community Development in

Richmond at (804) 371- 7030 for incentives including:

A general tax credit that lasts for 10 years and applies to

existing businesses that increase full-time employment by hiring

some local employees;

A real property improvement credit that offers a tax credit of

30 percent of improvements that exceed $250,000;

An investment tax credit that is available to projects involving

more than $100 million and the creation of 200 or more jobs;

Job grants for new and existing businesses that pay employers

for creating permanent full-time positions for zone residents.

City benefits are added for businesses that qualify for the state

program. Specifically, the city offers to exempt or reduce fees

for building and use permits, license payments and sales tax. In

literature about the program provided by the Economic Development

Office, the city says it will enhance code enforcements, trash

pick-ups and transportation availability, and market tax benefits

and training programs.

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