Montgomery County officials have agreed to provide an economic development incentive grant of up to $2.5 million toward the redevelopment of the old Blacksburg Middle School site.
The grant approval, which the county board of supervisors passed on a 7-0 vote Monday, comes months after the county was approached about providing some funding for the long-debated project. It remains unclear if the county was approached by the town of Blacksburg or the developer.
Supervisor Chris Tuck said he was initially hesitant about the county providing funding toward the project because the locality’s money was being sought at that time to help pay for a parking garage on the site.
The incentive supervisors approved this week, however, is contingent on the creation of skilled jobs by the site’s future tenants, Tuck said.
“I believe it’s consistent with what the county has done for other folks and companies who want to bring in employment and invest tens of millions of dollars in Montgomery County,” he said. “And it’s going to provide a tax base.”
Nearly two decades of speculation over the future of the old middle school site came to an end in May when the Blacksburg Town Council finally approved the rezoning to allow an ambitious mixture of commercial and residential developments on the roughly 20-acre site.
For the site, the town also approved an agreement with the developer — Midtown Redevelopment Partners — that dictates exactly which parts of the property the town will develop, finance and own.
The town agreed to foot the construction of a parking garage, a $9.1 million project the town plans to cover with tax revenue earned from the site’s redevelopment.
Among the town’s future streams for paying off the parking garage is a special services district on the site that will add 20 cents to the real estate tax rate — currently at 26 cents — that Blacksburg property owners already pay.
The recently approved incentive from Montgomery County will act as a 75% rebate that will be available for up to 10 years, according to documents provided to supervisors.
“This is an economic development incentive grant,” Midtown partner and Blacksburg attorney Jim Cowan wrote in an email. “The grant cannot exceed $2.5 million, and will be used to help pay back some of the costs of these public improvements over time.”
Those public improvements are the plaza, event space and park that are each slated to be built on the site.
The grant’s source will come from the new real estate tax revenue that the county earns from one or more “professional office buildings” — measuring a minimum of 20,000 square feet — that Midtown plans to build on the property.
The grant itself will become available in the tax year following the completion of one office building. The grant will be available until either it runs out or the 10-year period ends.
The county’s deal, however, includes a stipulation requiring the site’s development result in the creation of at least 40 full-time jobs — with average annual salaries of $50,000 — within three years.
If those jobs requirements aren’t met, the county may either suspend the grant payment until those conditions are met or reduce the incentive proportionally by the percentage that the job creation is below the goal.
Other supervisors touted the incentive.
“I believe that it’s going to be an excellent economic driver for our community and county,” Supervisor Sara Bohn said. “If we can help incentivize positions, businesses there, our incentive should be beneficial to getting the whole development underway.”
Midtown has estimated that the site’s redevelopment will exceed $100 million.
The development partnership was once in serious talks to bring in an information technology firm, the 1901 Group, as an anchor tenant, but the company — when Blacksburg and Midtown were still trying to reach a development agreement — since announced plans to expand to the Virginia Tech Corporate Research Center.
The county owned the old middle school site until 2016, when it sold half of the land to a firm partnered by developer Jeanne Stosser. The county sold the remaining half more than a year later to Midtown, which is also partnered by Stosser.
Midtown has since handled the entire property’s redevelopment plans.
The $2.5 million incentive still needs final approval from the county’s Economic Development Authority, which is slated to vote on the matter on Aug. 20.
The grant itself is slated to go through the EDA.