2016-12-21 / Front Page

Fixer-uppers: County extends tax abatement


The county is making changes to its little-used tax abatement program in the hope it will spur investment in older residential and commercial properties.

Following a public hearing last week, the Board of Supervisors unanimously approved amendments to several local ordinances related to the rehabilitation tax exemption, which is seen as a potentially significant piece of the county’s overall revitalization strategy.

“I would say this is a great move forward,” said Jim Holland, supervisor of the Dale magisterial district.

The program targets owners of residential and commercial buildings that are at least 25 years old. It encourages citizens to spend money to improve their properties by allowing them to avoid paying taxes on the increased value for a specified length of time.

Among the changes approved by the board last week, the tax exemption period was expanded from 8 to 15 years for residential properties and from 5 to 7 years for commercial.

The updated ordinances also allow citizens to apply for the tax exemption up to a year after they receive a building permit. Previously, in order to qualify, citizens had to apply prior to the start of construction – a requirement that prevented many from taking advantage of the program.

Clover Hill Supervisor Chris Winslow described the prior regulations as “obtuse.”

“This is really, really good,” he said. “I think it’s going to encourage investment in our housing stock.”

It’s not a new concept. The county has offered a tax exemption for the rehabilitation of residential properties since 1997. A similar exemption was created for the commercial sector in 2004.

But unlike the city of Richmond, which made changes to its historic tax abatement program in 1995 that fueled a residential reconstruction boom and helped spark commercial apartment building across the city, Chesterfield’s tax abatement program has been little more than a blip on the radar.

According to Carl Schlaudt, the county’s revitalization manager, only 84 tax exemptions – 56 residential, 28 commercial – have been granted in Chesterfield over the past two decades.

“That’s crazy,” Winslow said.

Schlaudt acknowledged the program has been “underused.”

Why? As county resident Freddy Boisseau noted during last week’s public hearing, “people don’t know about it.”

Tom Jacobson, the county’s former planning director, recalled that when the rehabilitation tax exemption was first approved, staff conducted a campaign to promote it to community groups, homebuilders and real estate agents.

Beyond that initial effort, there wasn’t enough personnel available to continue marketing the program.

“Consequently, its use was minimal,” Jacobson said via email.

There’s also a sense that the county government didn’t get serious about revitalizing its older areas until the economy collapsed in 2008 and new home building slowed to a crawl.

For the better part of the last 40 years, county leaders have scrambled to address westward suburban sprawl as developers rushed to meet residential demand for new housing. The new housing required new infrastructure, such as schools, fire stations, water and sewer.

In Chesterfield, which long has been dependent on real estate taxes to pay for public services, there was no political consensus to forego a chunk of annual revenue to encourage rehabilitation of properties in the county’s eastern half.

That began to change in 2012, when the Board of Supervisors approved a comprehensive plan that had community revitalization as one of its central themes.

The following year, county voters approved a $304 million bond referendum for the renovation or rebuilding of 11 aging school buildings.

Now the board is encouraging private investment to provide a similar facelift to some of the county’s older, less affluent areas.

“We think this is an important part of rehabilitation and revitalization that we’re working toward,” said Kim Marble, vice president of the Jefferson Davis Association, a nonprofit group of civic and business leaders that seeks solutions to economic challenges along Chesterfield’s stretch of historic U.S. Route 1.

The county plans to launch an aggressive marketing campaign about the changes to the rehabilitation tax exemption program. According to Schlaudt, the campaign will include newspaper advertising, social media and email blasts, improved content on the county website and presentations to community groups – including the Empowering Neighborhoods Forum in February.

The county already has been in contact with representatives of the Home Building Association of Richmond and the Richmond Association of Realtors. There will be similar outreach to other industry groups, Schlaudt said.

Recognizing the need for ongoing communication after the initial media blitz, staff also will be trained to inform citizens about the tax exemption program when they apply for building permits.

“In Henrico and Richmond, which I would say have very successful programs, staff are well-trained and aware of the program,” Schlaudt added. “That’s the first thing we intend to do. Anyone who touches or is involved with a building permit should know about the program’s benefits and be able to market it.

“That’s word of mouth at the point of contact. I think that’s the best thing we can do.” ¦

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