FRONT ROYAL — In a report given to the Warren County Board of Supervisors this week, the Front Royal-Warren County Economic Development Authority outlined some potential industrial development along the Route 522/340 corridor north of Front Royal.
Route 552/340 is home to many businesses, including but not limited to KTS Solutions, InterBake and the InterChange facility, as well as the Virginia Inland Port. It is also a designated “Enterprise Zone,” which gives companies certain incentives for locating there.
The authority is working with the Virginia Economic Development Partnership to secure two expansions of existing companies on the corridor, which when combined will bring $27 million in investment and 64 new jobs to the county.
Jennifer McDonald, director of the authority, said while it is too early to announce just which facilities are expanding, they will receive certain incentives for the move. She said the companies would receive grants for job training through the Virginia Economic Development Partnership, as well as an exemption on sales and machinery tax for any new equipment purchased for the expansion.
“For one of these companies, that exemption will save them $188,000,” McDonald said.
Doug Stanley, county administrator, said he is excited about the move.
“Additional employment is always good,” he said. “It’s been 10 years since Cisco came to the corridor and we really haven’t seen expansions of this size, adding this many employees, since. So this is real encouraging for the local economy.”
Also in the works is the proposed building of a manufacturing facility called Project Bottle. Project Bottle will bring with it a $60 million investment, employ between 200-300 people and require 50 acres to accommodate a 450,000-square-foot facility.
McDonald said she received news of the project from the Virginia Economic Development Partnership about two weeks ago and nothing has been settled on it. She said one of the biggest issues with the project is the town will have to upgrade its water system to accommodate the facility.
McDonald noted any industrial user out on the corridor pays double the town water rate than it would pay if it were located in within town limits.
“That’s part of what people don’t get about that scenario,” she said. “Industrial users are paying for that water at a cost … it’s not the town residents paying for that water. They are paying double … they have to pay double to get it.”
McDonald added, “If you need to upgrade something for a business, the cost should be at the expense of the business.”
Front Royal Town Manager Steve Burke said the town has talked to the authority about upgrading the system if the project comes to fruition. He said the “two-time multiplier” for industrial users is to cover the additional cost of running water under Interstate 66 to the corridor.
“Our residents in town have gravity fed water, but to get that water out to the corridor, we have to push water through our pumps harder, which results in additional electrical cost,” he said.
Burke said the town would assess how much demand “Project Bottle” would need from the water system and strike a cost sharing deal similar to the one with the Dominion Power Plant.
“We sat down with Dominion and worked together to arrive at a cost for the rate, that was less than the two-times multiplier, but required they put up money upfront for the improvements,” he said. “We reduced the rate to help them recuperate some of the upfront cost.”
The other development in the works is called “Project Impact,” which would be a $22.5 million distribution center employing 50 people, requiring 50 acres or more to accommodate a 500,000-square-foot building. “Project Impact” will also require easy access to the Inland Port, with shipping 300 containers per month.
McDonald said the feelings around an additional distribution center on the corridor are mixed.
“There’s some thought there’s already enough out there, however, others like it because those facilities pay taxes at a steadier rate,” she said. “With manufacturing facilities, the machinery tax depreciates from 70 percent to 30 percent, so there’s a boost for a few years in revenue for the county, but then it drops … distribution centers stay relatively the same.”
With both projects requiring 50 acres or more, McDonald said the authority could be “selective” with which one to go with, due to industrial land scarcity in the county.
“On the corridor, there’s only one site in the Stephens Industrial Park that can accommodate that,” she said. “There’s other sites, like in Happy Creek, but that area can’t accommodate truck traffic … and the Avtex site can’t be used for either manufacturing or distribution.”
McDonald said the fate of the projects is dependent on which company pays the better wage. She said manufacturing pays higher than distribution, which starts at $12-$13 an hour. According to an industrial profile by the Virginia Employment Commission released last week, manufacturing in Warren pays about $25 an hour.
Stanley said while he is excited for these developments, it is “just too early to tell.”
“You only land about one out of 50 of these companies looking to establish facilities,” he said. “The EDA needs to be real careful handling this.”
It takes a company about 12 to 18 months to create a short list of sites, then another six to nine months to decide if the incentives, the labor pool and the area’s assets are a right fit for the operation, McDonald said.
Contact staff writer Henry Culvyhouse at 540-465-5137 ext. 184, or firstname.lastname@example.org