Suffolk’s enterprise zone will expire at the end of the year, and the city faces some stiff competition to get it reinstated.

The enterprise zone program, administered by the Department of Housing and Community Development, was created in 1982 to assist depressed and distressed communities with revitalization, creating jobs and attracting business. Businesses and industries located within enterprise zones are eligible for a number of state incentives, as well as any local incentives the community establishes.

Enterprise zones are established for a period of 20 years, after which time the zone expires and the community must re-apply for consideration if it wishes to continue the zone. Suffolk’s enterprise zone encompasses most of the downtown area and some industrial parks.

During Gov. Mark Warner’s administration, he changed the maximum number of enterprise zones to 35 and set a deadline of 2016 for the year that the current 57 zones must be pared down to 35. The change means that 27 enterprise zones will lose their spots between now and then.

“We’ll be one of five or six communities vying for four spots,” said Cynthia Cave, the economic development director for the city.

Suffolk faces competition from other communities throughout the state for one of the four spots. Norfolk and Portsmouth have a joint zone together, which also expires this year, and Cave suspects they may be filing separate applications this time, increasing the competition even more.

“Realistically, I’m hopeful, but I have my doubts as to whether we’ll get re-designated, because we’re not a distressed community,” she said.

The good news, according to Cave, is that the current enterprise zone has been successful in the last 20 years. Having a history of successful use of the zone is a boost on an application, she said.

Businesses within enterprise zones are eligible for two major types of grants – job creation grants and real property investment grants. To qualify for the job creation grant, businesses must create at least four new permanent full-time positions that pay at least 175 percent of the federal minimum wage ($11.46 per hour) with health benefits.

Businesses that do so receive $500 per year for each position, and $800 per year for each position if the positions pay 200 percent of the minimum wage ($13.10 per hour). Each payment lasts for five years after the job is created.

The real property investment grant awards up to $125,000 per building for real property investments of less than $5 million, and up to $250,000 for investments of $5 million or more.

In addition to these grants, Suffolk has its own package of incentives, including tax credits, for new or expanding businesses.

Cave will begin the application process this summer for a new enterprise zone. Even if Suffolk loses its zone, Cave said, she doesn’t believe it will have much effect on existing businesses, because most are past the five-year threshold. The effect could be on the city’s ability to attract new business.

“It’s one less positive thing to have in our bag of tricks to have new business,” she said. “It’s a good deal, but the success that Suffolk has had in the last few years has sort of been the blessing and the curse.”