Manassas Park to use tax breaks to attract businesses

Manassas Park offi­cials want to attract more businesses to the city, so they’ve taken advantage of provisions of the Code of Virginia that allow them to offer tax breaks to busi­nesses that expand or move into the city.

The city council recently voted to set up areas where businesses could get temporary breaks on the Busi­ness, Professional, and Occupational License, or BPOL, tax and real estate property taxes, if they move into a defense production zone, an economic revital­ization zone, a technology zone or a redevelopment district, said City Attorney Dean Crowhurst.

“We’re just trying to get businesses to come to the city whether they ex­pand in the city or relocate from somewhere else,” Crowhurst said.

Companies moving or expanding in the redevel­opment districts can take advantage of reduced real estate taxes for quite some time, Crowhurst said.

“They can get up to ten years of exemptions. Every year it declines by a certain amount by formula in the ordinance, but it’s a pretty good deal,” he said.

Companies that move to the redevelopment zones to take advantage of the real estate tax exemptions would have to build a cer­tain amount to get the tax breaks, Crowhurst said.

“If they do expand in the redevelopment dis­tricts, then they can get tax exemptions from real estate property tax which is what we’re trying to take advan­tage of,” Crowhurst said. “The redevelopment area requires that you do a cer­tain amount of construc­tion within the district.”

Companies that relocate to the defense and technol­ogy zones would be able to take advantage of reduced BPOL taxes, Crowhurst said.

City documents show that if companies take advantage and expand or move to the city, the ex­pansions or moves could eventually have the effect of lowering residential property taxes.

Crowhurst said that’s the idea of creating the zones.

“We need to diversify our tax base and that’s what we’re trying to do,” he said. City Manager James Zumwalt said that even with reduced tax rates, new businesses in the city would help in that diver­sification since new busi­nesses would bring in taxes that the city wouldn’t be getting without them, Zumwalt said.

“The tax breaks, even at the maximum, aren’t all of the taxes they are paying and the tax breaks are not perpetual,” Zumwalt said. “They’re bigger and they get smaller in a fairly few number of years.”

So Zumwalt said that, overall, attracting business to the city is good.

“If the incentive makes somebody come to town, then it was unquestion­ably the thing to do,” Zum­walt said. So far, the move by the council has shown some results, Crowhurst said.

“We’ve already gotten nibbles on it. It wasn’t even a week and we got some calls,” Crowhurst said. 

Senior reporter Keith Walker can be reached at 703-369-6751.