Front Royal and Warren County aren’t depressed enough to qualify for an enterprise zone at the Avtex site, a state agency says.

Gov. Terry McAuliffe announced five new Virginia enterprise zone designations for Tazewell County, the cities of Lynchburg and Hampton, and joint zones for Henry County and the city of Martinsville as well as Brunswick and Mecklenburg counties.

The Front Royal-Warren County Economic Development Authority applied to the Virginia Department of Housing and Community Development for the designation of Avtex and the surrounding area as an enterprise zone.

Town Council and the Board of Supervisors adopted resolutions of support for the request after spending time discussing the potential local incentives for new businesses that might develop in the Avtex site. Council also tried to create local incentives to go along with such a zone but then voted them down after hearing concerns voiced by members and business owners.

EDA Executive Director Jennifer McDonald warned council and the board that the state might not grant the request.

“We were hopeful we would get selected for the enterprise zone, but not surprised that we did not,” McDonald states in an email Monday. “Because our community has been so successful with business recruitment and business retention we scored low on the application.”

The state took away Front Royal’s original designation of the Avtex site in the early 2000s because no new development activity had taken place in the zone for years.

The state designates the zones for communities considered distressed or suffering from high unemployment rates, McDonald notes. The town and county have low unemployment, McDonald added.

“We will continue to seek any and all incentive programs that may help Front Royal/Warren County recruit additional business to the area,” McDonald states.

The Virginia Department of Housing and Community Development administers the program aimed at supporting job creation and private investment through incentives such as grants to qualified businesses and investors in enterprise zones.

A locality’s degree of distress makes up about 50 percent of the score on an application, department spokeswoman Amanda Pearson explained Monday. Out of the 13 applications submitted, Warren County showed the lowest distress level, calculated using unemployment figures and poverty data that includes the percentage of public school students receiving free or reduced lunches.

“When you’re comparing them to all the other applicants, the distress level of the community is much, much lower than compared to the others,” Pearson said.

The General Assembly changed the rules for the program in 2005 to limit the number of zones to 30. The department this year could only designate five zones, said Jordan Snelling, program administrator. Approximately 14 zones are slated to expire at the end of their 20-year limit, Snelling said. The department received applications from new applicants as well as communities whose designations were set to expire, he added.

“Unless we see any changes to the legislation as it is now, we won’t see another round of designations until another, post-2005 zone expires,” Snelling said. “So that could be either due to inactivity or it would just be at the end of their 20-year designation.”

The next round of designations likely won’t occur until 2023, Snelling said.

Data from the Virginia Employment Commission shows Warren County had an unemployment rate of 4.6 percent in August compared to Martinsville with 9.4 percent, Tazewell County at 7.3 percent or Lynchburg at 5.5 percent. Department of Education data shows approximately 41.2 percent of Warren County Public Schools students were eligible for free or reduced lunches in fiscal 2015 compared to 52.4 percent in Tazewell County and 78 percent in Martinsville.

McAuliffe announced designations at an event in Lynchburg, where he noted that the program serves as a tool to help build Virginia’s economy through local and state incentives.

Secretary of Commerce and Trade Maurice Jones said more than 1,300 jobs were created and $245 million in qualified, real property investments were made across Virginia through the program in the last grant year.

Enterprise zones are designated for a 10-year period followed by two, performance-based, five-year renewals for a total of 20 years. The department received 13 applications for the competitive cycle. The five new designations bring the total number of zones to 46 as of Jan. 1.

Businesses can earn up to $200,000 during a five-year period in real property investment grants. Businesses also can receive up to $800 per position per year in a five-year period for job creation grants depending on wages offered.

The program has supported more than $1 billion in investment and the creation of more than 40,000 jobs since 1995.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or