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Local Enterprise Zone Incentive Information - Constitutional Oaks Business Park – Lee County, Virginia


Company building 362,000 sq.ft. plant in Constitutional Oaks Business Park

Building $ 27,700,000
Equipment $ 26,000,000
Land cost (20 acres) $ 500,000

Employment

Employ 195 (assumed) after first year of operation
Entry wage rate – not known
Tax incentives based on assumptions of various multiples of minimum wage

Value of various local Enterprise Zone incentives – Lee County Enterprise Zone

Reduction in land purchase cost (Lee County IDA)

@ 1.5 X minimum wage $ 75,000 (15% reduction in land cost)
@ 2.0 X minimum wage $ 150,000 (30% reduction in land cost)
@ 2.5 X minimum wage $ 225,000 (45% reduction in land cost)

Waiver of permit/other fees (Lee County)

Building permit $ 10,860 (square footage X $.03/sq.ft.)
Electric, mechanical, plumbing, occupancy $95  
Contractors fee $44,320 (contract amount X $.0016)
  $ 55,275  

Scale utilized for Real Property, Machinery & Tools tax incentives

Year
Minimum
Wage
1.5X
($7.73)
2.0X
($10.30)
2.5X
($12.88)
1-5
40%
60%
80%
100%
6
20%
40%
60%
80%
7
0%
20%
40%
60%
8
0%
0%
20%
40%
9
0%
0%
0%
20%
10
0%
0%
0%
0%


Constitutional Oaks Business Park – Lee County, Virginia

Real Property Tax
$28,200,000 value X .65% = $183,300/yr Real Property tax

@ 1.5 X minimum wage
$183,300 x 60% = $109,980/yr for years 1-5 ($549,900), yr 6 - $73,320, yr 7 - $36,660
Total real property tax savings thru year 7 = $659,880

@ 2.0 X minimum wage
$183,300 x 80% = $146,640/yr for years 1-5 ($733,200), yr 6 - $109,980, yr 7 - $73,320, yr 8 - $36,660
Total real property tax savings thru year 8 = $953,160

@ 2.5 X minimum wage
$183,300 x 100% = $183,300/yr for years 1-5 ($916,500), yr 6 - $146,640, yr 7 - $109,980, yr 8 - $73,320, yr 9 - $36,660
Total real property tax savings thru year 7 = $1,283,100

Machinery & Tools Tax
(assuming tax rate stays constant)

-
@ 1.5 X minimum wage
@ 2.0 X minimum wage
@ 2.5 X minimum wage
Year
Taxable
Amount
Depreciation
Schedule
(10% assumed)
Machine &
Tool Tax
($1.41/$100)
Tax Liability
After Local
Incentives
M&T Tax
Savings to
Company
Tax Liability
After Local
Incentives
M&T Tax
Savings to
Company
Tax Liability
After Local
Incentives
M&T Tax
Savings to
Company
1
$26,000,000
100%
$366,600
$146,640
$219,960
$73,320
$293,280
0
$366,600
2
$23,400,000
90%
$329,940
$131,976
$197,964
$65,988
$263,952
0
$329,940
3
$20,800,000
80%
$293,280
$117,312
$175,968
$58,656
$234,624
0
$293,280
4
$18,200,000
70%
$256,620
$102,648
$153,972
$51,324
$205,296
0
$256,620
5
$15,600,000
60%
$219,960
$87,984
$131,976
$43,992
$175,968
0
$219,960
6
$13,000,000
50%
$183,300
$109,980
$73,320
$73,320
$109,980
$36,660
$146,640
7
$10,400,000
40%
$146,640
$117,312
$29,328
$87,984
$58,656
$58,656
$87,984
8
$7,800,000
30%
$109,980
$109,980
0
$87,984
$21,996
$65,988
$43,992
9
$7,800,000
30%
$109,980
$109,980
0
$109,980
0
$87,984
$21,996
TOTAL
-
-
$2,016,300
$1,033,812
$982,488
$652,548
$1,363,752
$249,288
$1,767,012


TOTAL TAX SAVINGS to the company
IF 1.5 X minimum wage $75,000 + $55,275 + $659,880 + $982,488 = $1,772,643
IF 2.0 X minimum wage $150,000 + $55,275 + $953,160 + $1,363,752 = $2,522,187
IF 2.5 X minimum wage $225,000 + $55,275 + $1,283,100 + $1,767,012 = $3,330,387


 
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