Henrico County Manager John Vithoulkas discusses the budget proposal Wednesday alongside Henrico County Public Schools Superintendent Amy Cashwell. (Jonathan Spiers photo)
On top of a 2-cent reduction to its real estate tax rate and a comparable tax refund not seen before in the state, Henrico County is proposing a major tax cut aimed at attracting biotech and lab space investment in the county.
Henrico’s proposed budget for next fiscal year, which calls for lowering the county’s real estate tax rate to 85 cents per $100 of assessed value, would also slash – by 74 percent – the county’s personal property tax rate for equipment used by biotechnology companies.
The biotech rate reduction, from $3.50 to 90 cents per $100 of assessed value, would make Henrico’s rate the lowest in the state. Chesterfield and Prince William counties are currently the lowest at $1 per $100 for biotech and R&D equipment.
In a preview of his proposal this week, County Manager John Vithoulkas said Henrico has had success in attracting companies with lab space and wants to draw more with the tax rate reduction.
“These are companies that pay great wages, that have a significant return for the localities and states that they locate in,” Vithoulkas said Wednesday. “We aim to win in this space.”
The FY23 budget, to be presented to the Board of Supervisors on Tuesday, would lower the county’s real estate tax rate from 87 to 85 cents per $100 of assessed value – the seventh such reduction in the past 44 years for Henrico.
The reduction would add to a recently approved real estate tax credit, for taxes paid this fiscal year, that is equal to 2 cents per $100 of assessed value. Vithoulkas said the credit is the first of its kind in Virginia.
“We have not found another local government that has offered a refund of taxes paid,” Vithoulkas said, adding that the board earlier this year declared a surplus for real estate taxes paid this fiscal year.
“Last year we had the largest surplus in the county’s history, so our finances are on the most solid of footings,” he said.
Totaling $1.2 billion in projected revenues, the FY23 budget reflects an increase of $90.7 million, or 8 percent, over the current budget. It includes a 5 percent salary increase for all government and school employees, fully funds the proposed budget for Henrico County Public Schools and adds 22 new police officers, 11 firefighters and 84 teachers.
It also sets the stage for a $511.4 million bond referendum, to be held this fall, which would pay for capital projects over a six-year period including several new schools and infrastructure improvements.
On the economic development front, the budget includes a $2 million investment in neighborhood revitalization efforts through the county’s Community Revitalization Fund, as well as $750,000 for the Henrico Investment Program, an incentives program for development in older commercial corridors that the county rolled out last year.
Also planned is a new technology zone in Innsbrook, an idea that Vithoulkas credited to Innsbrook developer Sidney Gunst, who died last year. The program would offer incentives to foster development and location of tech businesses in the transitioning business park.
Medical lab company Genetworx is investing in an expansion of local facilities. (BizSense file photos)
Biotech property tax cut
Vithoulkas particularly emphasized the tax cut for biotech businesses, noting as an example the doubled investment of medical testing lab Genetworx, which recently announced an expansion of its office at 4101 Cox Road in Innsbrook.
Another example is the former Toys ‘R’ Us building near Regency mall, where PPD, a North Carolina-based pharmaceutical research firm, is converting the long-vacant retail building into lab space. Other R&D companies in the county include Clinical Research Partners, Exectus, National Clinical Research, Salveo Integrative Health and South River Compounding Pharmacy.
The biotech tax reduction stems from a discussion at the board’s annual retreat in January, when administrators initially proposed reducing the rate to $1 per $100.
Noting other business tax adjustments Henrico has made over the years, including increases to its BPOL tax exemption threshold, Anthony Romanello, the county’s economic development director, told the board at the retreat: “The strategy of lowering the tax burden on businesses to encourage private investment continues to work, and we believe that this also could be the case with respect to the business personal property (tax) on R&D.”
Romanello said demand for lab space has increased over the past two years, with the Virginia Economic Development Partnership receiving requests for nearly 1 million square feet of lab and R&D space in the Richmond region.
To help meet that demand, Romanello said the county is conducting a viability assessment for constructing a shell or framework building specific for so-called “wet lab” space, with additional HVAC, water and sewer, and power built in specifically for lab space users working in liquids and chemicals.
The former Toys ‘R’ Us building at 8700 Quioccasin Road, shown in September, is being rehabbed and expanded for PPD, a pharmaceutical research firm.
He said the effort could involve a lease at White Oak Technology Park, as well as a potential public-private partnership to share the risk of building on spec. He said such space costs approximately $400 per square foot to build, and because spec construction is risky, there’s little supply to meet demand.
Added Vithoulkas, “This has never been undertaken before by the EDA, by the county, but there’s an opportunity in an emerging field with lab space. We’ve had some success with Genetworx, PPD. But we’re a beacon, and the opportunity from VEDP is out there. This is something that has not been done before, but we think the upside is significant.”
Romanello also presented a list of existing office buildings identified as prime opportunities for conversion to lab space. Those include PPD’s existing facilities at 2240 Dabney Road, 5600 Cox Road in Innsbrook, the former Best Products building that’s part of the GreenCity development project, and the former Toys ‘R’ Us building at 8700 Quioccasin Road.
Referring to the latter, Romanello told the board, “That building is a great example of how we can repurpose big-box retail for R&D.”
The proposed FY23 budget will be posted on the county’s website once it’s presented to the board Tuesday evening. A public hearing on the budget would precede a board vote in April. The budget and related tax rate changes would take effect July 1, the start of the fiscal year.
Henrico County Manager John Vithoulkas discusses the budget proposal Wednesday alongside Henrico County Public Schools Superintendent Amy Cashwell. (Jonathan Spiers photo)
On top of a 2-cent reduction to its real estate tax rate and a comparable tax refund not seen before in the state, Henrico County is proposing a major tax cut aimed at attracting biotech and lab space investment in the county.
Henrico’s proposed budget for next fiscal year, which calls for lowering the county’s real estate tax rate to 85 cents per $100 of assessed value, would also slash – by 74 percent – the county’s personal property tax rate for equipment used by biotechnology companies.
The biotech rate reduction, from $3.50 to 90 cents per $100 of assessed value, would make Henrico’s rate the lowest in the state. Chesterfield and Prince William counties are currently the lowest at $1 per $100 for biotech and R&D equipment.
In a preview of his proposal this week, County Manager John Vithoulkas said Henrico has had success in attracting companies with lab space and wants to draw more with the tax rate reduction.
“These are companies that pay great wages, that have a significant return for the localities and states that they locate in,” Vithoulkas said Wednesday. “We aim to win in this space.”
The FY23 budget, to be presented to the Board of Supervisors on Tuesday, would lower the county’s real estate tax rate from 87 to 85 cents per $100 of assessed value – the seventh such reduction in the past 44 years for Henrico.
The reduction would add to a recently approved real estate tax credit, for taxes paid this fiscal year, that is equal to 2 cents per $100 of assessed value. Vithoulkas said the credit is the first of its kind in Virginia.
“We have not found another local government that has offered a refund of taxes paid,” Vithoulkas said, adding that the board earlier this year declared a surplus for real estate taxes paid this fiscal year.
“Last year we had the largest surplus in the county’s history, so our finances are on the most solid of footings,” he said.
Totaling $1.2 billion in projected revenues, the FY23 budget reflects an increase of $90.7 million, or 8 percent, over the current budget. It includes a 5 percent salary increase for all government and school employees, fully funds the proposed budget for Henrico County Public Schools and adds 22 new police officers, 11 firefighters and 84 teachers.
It also sets the stage for a $511.4 million bond referendum, to be held this fall, which would pay for capital projects over a six-year period including several new schools and infrastructure improvements.
On the economic development front, the budget includes a $2 million investment in neighborhood revitalization efforts through the county’s Community Revitalization Fund, as well as $750,000 for the Henrico Investment Program, an incentives program for development in older commercial corridors that the county rolled out last year.
Also planned is a new technology zone in Innsbrook, an idea that Vithoulkas credited to Innsbrook developer Sidney Gunst, who died last year. The program would offer incentives to foster development and location of tech businesses in the transitioning business park.
Medical lab company Genetworx is investing in an expansion of local facilities. (BizSense file photos)
Biotech property tax cut
Vithoulkas particularly emphasized the tax cut for biotech businesses, noting as an example the doubled investment of medical testing lab Genetworx, which recently announced an expansion of its office at 4101 Cox Road in Innsbrook.
Another example is the former Toys ‘R’ Us building near Regency mall, where PPD, a North Carolina-based pharmaceutical research firm, is converting the long-vacant retail building into lab space. Other R&D companies in the county include Clinical Research Partners, Exectus, National Clinical Research, Salveo Integrative Health and South River Compounding Pharmacy.
The biotech tax reduction stems from a discussion at the board’s annual retreat in January, when administrators initially proposed reducing the rate to $1 per $100.
Noting other business tax adjustments Henrico has made over the years, including increases to its BPOL tax exemption threshold, Anthony Romanello, the county’s economic development director, told the board at the retreat: “The strategy of lowering the tax burden on businesses to encourage private investment continues to work, and we believe that this also could be the case with respect to the business personal property (tax) on R&D.”
Romanello said demand for lab space has increased over the past two years, with the Virginia Economic Development Partnership receiving requests for nearly 1 million square feet of lab and R&D space in the Richmond region.
To help meet that demand, Romanello said the county is conducting a viability assessment for constructing a shell or framework building specific for so-called “wet lab” space, with additional HVAC, water and sewer, and power built in specifically for lab space users working in liquids and chemicals.
The former Toys ‘R’ Us building at 8700 Quioccasin Road, shown in September, is being rehabbed and expanded for PPD, a pharmaceutical research firm.
He said the effort could involve a lease at White Oak Technology Park, as well as a potential public-private partnership to share the risk of building on spec. He said such space costs approximately $400 per square foot to build, and because spec construction is risky, there’s little supply to meet demand.
Added Vithoulkas, “This has never been undertaken before by the EDA, by the county, but there’s an opportunity in an emerging field with lab space. We’ve had some success with Genetworx, PPD. But we’re a beacon, and the opportunity from VEDP is out there. This is something that has not been done before, but we think the upside is significant.”
Romanello also presented a list of existing office buildings identified as prime opportunities for conversion to lab space. Those include PPD’s existing facilities at 2240 Dabney Road, 5600 Cox Road in Innsbrook, the former Best Products building that’s part of the GreenCity development project, and the former Toys ‘R’ Us building at 8700 Quioccasin Road.
Referring to the latter, Romanello told the board, “That building is a great example of how we can repurpose big-box retail for R&D.”
The proposed FY23 budget will be posted on the county’s website once it’s presented to the board Tuesday evening. A public hearing on the budget would precede a board vote in April. The budget and related tax rate changes would take effect July 1, the start of the fiscal year.