City considering incentives for tech businesses

Published 10:56 pm Saturday, July 11, 2009

An incentive plan for new or expanding technology businesses in Suffolk is in the works.

The Economic Development Authority discussed the plan this week. The proposal would establish two technology zones in Suffolk, one in the North Suffolk area and one covering the greater downtown area.

“It’s always good to have tools in the toolbox (to help attract businesses),” said John Smolak, president of Franklin Southampton Economic Development, Inc., a public/private partnership with the city and county to Suffolk’s west. Franklin is one of about 20 localities throughout the state that have technology zones.

Email newsletter signup

Technology companies have flocked to the North Suffolk area, especially, because the military’s Joint Forces Command, one of the city’s largest employers, is located there.

Technology zones can be established in Virginia to help attract businesses that deal primarily in technology — such as modeling, analysis and simulation, computer systems design, scientific research, software publishers, telecommunications, computer and electronics manufacturing, and more.

Once the technology zone is established, it would provide incentives such as rebates on business licenses and personal property taxes for new or expanding tech businesses. To qualify, an existing business would have to be increasing its building space by 2,500 square feet or more. New businesses would have to be occupying a previously vacant space or constructing a new space of 2,500 square feet or more. Either a new or existing business must have a minimum of five employees, and not be a home-based business.

Having a technology zone is one incentive a community can use to attract businesses, Smolak said.

“You never know when they’re going to be of potential use for a company that makes you more competitive compared to other cities, other states, other regions.”

“You can never have enough incentives to remain competitive,” he added.

Authority members and Suffolk city officials discussed tweaking some of the requirements during the meeting. One suggestion was that the minimum expansion for an existing business be a certain percentage of the original building, rather than a fixed number.

The plan will again be discussed at the EDA’s next meeting, Aug. 12. The authority could pass a resolution endorsing the technology zone. The City Council also must vote on the plan before it will be in effect.

In a separate vote Wednesday, the EDA approved its fiscal year 2009-2010 budget unanimously. The $1.59 million spending plan has $914,316 coming from the city’s lease of the Health and Human Services building, which is owned by the authority. The same amount of money will be spent on bond interest and maintenance expenses related to the building.