The Virginia Collaborative Economic Development Performance Grant program is designed to encourage regional collaborative economic development initiatives.

Participating localities may enter into a CED plan identifying the commitments of the participating localities to implement a collaborative approach to economic development.  A CED Grant is available to participating localities that can demonstrate that such an initiative led to a company’s location or expansion in the participating localities and the company’s creation of at least 200 new jobs and capital investment of at least $25 million in the participating localities.

Contacts

Kara Hart

Eligibility

“Participating Localities” means two or more localities – a combination of counties, cities, towns in conjunction with the surrounding county or counties, political subdivisions and/or public bodies corporate and politic.

The Participating Localities must file for approval by the Virginia Growth and Opportunity Board (Board) of a CED Plan approved which includes:

  • The type of collaboration - to implement general economic development and diversification efforts, or to address a specific economic development need, including infrastructure and workforce training, of a company.
  • The commitments made by each of the Participating Localities to implement the collaborative approach - including the sharing of costs and local tax revenues.
  • All public and private parties involved in the implementation and administration of the CED Plan and an outline of responsibilities of each party.
  • A description of how the CED Plan will help achieve the Participating Localities’ priorities and is complementary of the prioritized needs and opportunities of the applicable Growth and Diversification Plan approved by the Board pursuant to the Virginia Growth and Opportunity Act.  
  • A description of how CED Grants will be distributed among and used by the Participating Localities.

The Participating Localities must demonstrate that the CED Plan led to a company’s location or expansion in the Participating Localities and the company’s creation of at least 200 New Jobs and Capital Investment of at least $25 million in the Participating Localities:

  • “New Jobs” means basic employment of an indefinite duration at the company with a facility located in the participating localities, created as a direct result of the capital investment, for which the standard fringe benefits are provided by the company for the employee, requiring a minimum of either (i) 35 hours of the employee's time a week for the entire normal year of the company's operations, which "normal year" must consist of at least 48 weeks or (ii) 1,680 hours per year.  New Jobs must be created on or after the date the CED Plan is approved and by the fifth anniversary of such approval date.
  • “Capital Investment” means investment in real property, tangible personal property, or both, or any other directly related expense that is capitalized by the company within the Participating Localities.  Capital Investment must be placed in service on or after the date the CED Plan is approved and by the fifth anniversary of such approval date.

Note that if the Board has made a finding of significant fiscal distress or extraordinary economic opportunity for the Participating Localities, the New Jobs and Capital Investment requirements may be modified to at least 25 New Jobs and at least $1 million in Capital Investment.

Upon the demonstration of the required New Jobs and in Capital Investment in the Participating Localities as a result of the CED plan, VEDP will certify the company as a “Certified Company.”

Based on the presence of a Certified Company in the Participating Localities, the Participating Localities are eligible for a CED Grant in an annual amount generally equal to no more than 45% of the total annual amount of personal income tax withheld from employees holding New Jobs at the Certified Company.  A CED Grant may be paid annually for up to six years.

The Certified Company must maintain at least 90% the New Jobs and the entirety of the Capital Investment throughout the payment period and the Participating Localities must continue to implement any relevant provisions of the CED Plan.  If there has been a substantial reduction in the number of New Jobs or the amount of Capital Investment, then no further grant payments will be made.

Prior to each annual grant payment, the Participating Localities must report to VEDP and the Board on the status of the collaborative efforts described in the CED Plan, describing the contributions made by each Participating Locality and the revenues shared between the participating localities in the prior calendar year.  If one or more of the Participating Localities has not performed its obligations, no further grant payments will be made until all obligations are met.  However, in the case where a CED Plan is among three or more Participating Localities, the other two Participating Localities may step in to perform the required obligations.

Process

  • The Participating Localities will file an Application Requesting Approval of Collaborative Economic Development Plan (CED Plan Application) with VEDP, with a copy to DHCD and the Virginia Department of Taxation (TAX).  Such applications may be filed on a rolling basis.
  • VEDP, DHCD, and TAX will evaluate the CED Plan Application for the criteria set forth in the Virginia Collaborative Economic Development Act (Act) and the Virginia Collaborative Economic Development Act Guidelines (Guidelines).
  • VEDP will make a recommendation of approval of the CED Plan Application to the Board.
  • The Board will consider and approve the CED Plan Application at its next scheduled Board meeting.
  • Once a company is eligible for certification as a Certified Company and by December 31 of each calendar year, the Participating Localities may file an Application Requesting Certification as Certified Company Pursuant to Collaborative Economic Development Plan (Certification Application) with VEDP, with a copy to DHCD and Tax.  The Certification Application also will serve as the basis for the award of a CED Grant.
  • VEDP, DHCD, TAX, and other stakeholders as may be determined by the Board will evaluate the Certification Application for the criteria set forth in the Act and Guidelines and alignment with the CED Plan.
  • By March 31 of the calendar year following the filing of the Certification Application, VEDP and TAX will determine whether the company met the required New Jobs and Capital Investment requirements for certification as a Certified Company.  Upon such verification, VEDP will make a certification to the Participating Localities and the Board that the company is a Certified Company.
  • By March 31 of the calendar year following the filing of the Certification Application, VEDP and TAX will compute the moneys available to be disbursed as a CED Grant to the Participating Localities. 
  • VEDP will make a recommendation of approval of a CED Grant to the Board. 
  • The Board will consider and approve the CED Grant at its next scheduled Board meeting. 
  • The first annual payment of the CED Grant will be paid in the fiscal year following certification as a Certified Company and Board approval of the CED Grant. 
  • Prior to each annual payment thereafter, the Participating Localities will report to VEDP and the Board whether the Certified Company has maintained at least 90% of the New Jobs and Capital Investment or if there has been a substantial reduction in the Certified Company’s New Jobs or Capital Investment during the preceding calendar year and on the status of the CED Plan.
  • The verification of all New Jobs and Capital Investment reported will be in accordance with VEDP Policies and Procedures for Verification of Capital Investment, Employment, and Wage Level Reporting.

FAQ

What does basic employment mean?

Basic employment means employment in an industry sector or function that directly or indirectly derives more than 50% of the its revenue from out-of-state sources.

What capital expenditures do not count as Capital Investment?

Capital Investment does not include expenditures for the maintenance or repair of existing machinery and tools and real property.  However, expenditures for the replacement of property may be eligible as Capital Investment if it results in a measurable increase in productivity.

The value of real or personal property leased under a capital lease will count as Capital Investment. 

The value of real or personal property leased under an operating lease may count as Capital Investment if (i) the operating lease is for at least ten years, (ii) the real property would not be constructed or improved “but for” the company’s interest in leasing some or all of the facility, and (ii) if, for an improvement project, the improvements will significantly increase the taxable value of the property. 

Generally, the value of used equipment transferred by the company to the project site will not count as qualifying capital investment. 

Capital expenditures funded by proceeds of a grant from the Commonwealth or other contributions by local or regional government entities do not count as Capital Investment.

What positions do not qualify as New Jobs?

Seasonal or temporary positions, positions created when a job function is shifted from an existing location in the Commonwealth, retail positions, and positions with construction contractors, vendors, suppliers, and similar multiplier or spin-off jobs do not qualify as New Jobs.

Are contract employees allowed to count as new jobs?

Dedicated, full-time, Virginia-based contractor employees may be considered as New Jobs so long as such employees meet the requirements of a New Job.

When must a CED Plan be updated?

If a CED Plan relates to general economic development and diversification efforts, the CED Plan must be updated at the time of the Application Requesting Certification as Certified Company Pursuant to Collaborative Economic Development Plan to indicate the company eligible for certification as a Certified Company and for which the Participating Localities may be awarded a CED Grant.

When will a CED Grant be paid?

The first annual payment of the a CED Grant will be paid in the fiscal year following certification as a Certified Company and Board approval of the CED Grant.  Any additional CED Grant payments will be in each fiscal year thereafter.  The Board may approve a CED Grant for up to six years.

Is there a maximum aggregate amount of annual CED Grants to Participating Localities?

The aggregate amount of the annual CED Grants awarded to the Participating Localities may not exceed 50% of the total investment or contributions by the Participating Localities in the CED Plan.

If the Board has made a finding of significant fiscal distress or extraordinary economic opportunity for the Participating Localities, the aggregate amount of the annual CED Grants may be up to 100% of such total investment or contributions.

When the Board is considering the aggregate amount of annual CED Grants, what is the required form of the investment or contributions by the Participating Localities in the CED Plan?

Such investment and contributions may take the form of cash, revenue sharing, the dedication of locally-owned or controlled assets to the project, reallocation of existing funds, in-kind contributions, or other local resources.

What can a CED Grant be used for?

A CED Grant must be used for economic development activities aligned with the CED Plan including:

  • Public and private utility extension or capacity development on and off site; public and private installation, extension, or capacity development of high-speed or broadband Internet access, whether on or off site; road, rail, public transportation, or other transportation access costs beyond the funding capability of existing programs; site acquisition; grading, drainage, paving, and any other activity required to prepare a site for construction; construction of publicly or privately owned buildings or build-out of publicly or privately owned buildings; training; grants or loans to an industrial development authority, housing and redevelopment authority, or other political subdivision for purposes directly relating to any of the foregoing;  workforce training initiatives, or career and technical education at the secondary education level that assist targeted industries identified in the Economic Growth and Diversification Plan of the associated region; environmental costs such as nutrient trading credit trading, permit costs and so forth; workforce housing; small business assistance to assist with local supply chain and services; or other uses approved by the Board that will enhance broad based economic cooperation. In no case may funds be used, directly or indirectly, to pay or guarantee the payment for any rental, lease, license, or other contractual right to the use of any property.

A CED Grant may not be used to provide a grant back to the company.

When must a CED Plan be approved and/or updated?

If a CED Plan relates to general economic development and diversification efforts, the CED plan may be submitted for approval prior to the identification of a specific economic development project or potential Certified Company.  Otherwise, the CED Plan may be submitted upon the identification of a specific economic development project or potential Certified Company.

A CED Plan must be updated at the time of the filing of a Certification Application if it relates to general economic development and diversification efforts

How does the Board make a determination of significant fiscal distress or extraordinary economic opportunity for Participating Localities?

Such a determination will be made on a case-by-case basis.  Participating Localities will be required to submit documentation as to why the Participating Localities are fiscally distressed or why the Participating Localities believe a project is an extraordinary economic opportunity.

When the Board is considering the aggregate amount of annual CED Grants, what is the required form of the investment or contributions by the Participating Localities in the CED Plan?

Such investment and contributions may take the form of cash, revenue sharing, the dedication of locally-owned or controlled assets to the project, reallocation of existing funds, in-kind contributions, or other local resources.

What does substantial reduction in New Jobs or Capital Investment mean?=

Substantial reduction means either (i) the Capital Investment remaining at the end of the reporting calendar year is less than the Capital Investment remaining at the end of the previous calendar year because the Capital Investment was either removed from the Certified Company’s facility or idled, (ii) the Capital Investment was sold or otherwise disposed of, without an offsetting additional Capital Investment, or (iii) the number of New Jobs remaining at the end of the reporting calendar year is 10% less than the number of New Jobs remaining at the end of the previous calendar year.

What happens if Certified Company has a substantial reduction in New Jobs or Capital Investment, or if one or more of the Participating Localities has not continued to perform any relevant portions of the CED Plan?

No further grant payments will be made if there is a substantial reduction in new Jobs or Capital Investment.  No further grant payments will be made until all such obligations have been met.  Please note that in the case where a CED Plan is among three or more Participating Localities, the other two Participating Localities may step in to perform the required obligations.