Virginia named best state for business
Virginia has been ranked the top state for business by Forbes magazine for the third year running.
But the Rockbridge area’s approach to business is less consistent than the state’s, and County Administrator Claire Collins says the county needs to make a plan about what types of business it wants to pursue.
“We don’t have a product truly developed that could be marketed for businesses, nor have we identified what types of businesses to be targeted,” said Collins. “It depends on what the residents of the county and the two cities truly want – do they want to ensure there are jobs for the future?”
Tim Reamer, Buena Vista’s director of economic development, has a plan for his city. Fifteen new businesses opened in Buena Vista in the last fiscal year alone, thanks in part to Reamer’s push to bring in more businesses through an incentives program that the city started in July 2006. Of the 15 businesses, four have closed in the economic downturn, but four new ones have also opened.
In Buena Vista, businesses can apply for loans through the city for up to $15,000 with an interest rate of about 3 percent. And they have access to money from the Intermediary Relending Program, a federal program run by the state, where businesses can receive loans of up to $250,000. Reamer says that Buena Vista’s economic development department has recently started to focus primarily on small industry, which generally employs fewer than 150 to 200 people. The city offers incentives for those industries as well, tied to capital investment and job creation.
“It seems like we have an opportunity to be more competitive, and there’s kind of a gap in recruitment activities [for smaller industry],” he said.
Reamer added that he doesn’t need to rely only on incentives to bring in business because of Virginia’s skilled workforce, good government and low corporate tax rate. According to the Tax Foundation, a tax research group based in Washington, D.C., Virginia’s corporate tax is in the low half nationwide at a flat rate of 6 percent on all corporate income.
“Virginia is a great state to do business,” Reamer said.
Meanwhile, downtown Lexington doesn’t have much space available for new businesses, said City Manager Jon Ellestad, so the city government doesn’t offer business incentives.
“We’re always willing to sit down and talk to somebody who would like to bring a business here,” he said.
A new restaurant, Macado’s, opened in downtown Lexington in January. General Manager Russell Putney told The Rockbridge Report shortly after it opened that it was immediately successful.
Lexington-Rockbridge County Chamber of Commerce Executive Director Sammy Moore agrees that the city doesn’t need to provide business incentives. The area is already attractive to business, he said, because of the two universities, the horse center and tourist destinations such as Lee Chapel.
“The dialogue is good between the Chamber and the government,” said Moore. “I think it can be better and I’d surely welcome the opportunity to work with the government.”
Members of the City Council and the Rockbridge County Board of Supervisors make up the Rockbridge Partnership, an organization promoting economic development in Lexington and the county.
The partnership is currently reevaluating its plan after losing its second director in two years.
But the state government is what sets Virginia apart from the rest of the country, according to the Forbes analysis.
The Commonwealth was highly ranked because of its regulatory environment and its incentives program, which is the second best in the country. Christie Miller, with the Virginia Economic Development Partnership, said she thinks Virginia’s regulatory environment is more welcoming than others.
“We tend to be more flexible in our regulations,” she said.
Virginia also offers incentives that any industry can qualify for, unlike many state incentive programs, said Miller. She cited the Governor’s Opportunity Fund, which offers money to an area for business infrastructure if the area matches the amount. The state also offers the Virginia Economic Development Incentive Grant, a grant for service businesses, and the Virginia Investment Partnership Grant, which is given to existing businesses in the Commonwealth.
“[Forbes] saw that as a definite strength,” she said.
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