The Virginia Enterprise Zone (VEZ) Program provides businesses with exceptional opportunities to invest in property development and rehabilitation while benefiting from state government incentives. One of the most valuable components of this program is the Real Property Investment Grant (RPIG), which offers financial support to businesses making substantial investments in commercial, industrial, or mixed-use properties located within designated Enterprise Zones.

The RPIG provides 20 percent of the qualified real property investment (QRPI) beyond a certain minimum threshold. Specifically:

  • For projects up to $5 million, businesses can receive up to $100,000 in cash grants over a five-year period.
  • For projects exceeding $5 million, the maximum award increases to $200,000 over five years.

This grant helps businesses offset the costs of rehabilitation, expansion, or new construction, making large-scale projects more feasible while contributing to the revitalization of local communities. The RPIG also supports sustainable development, offering special provisions for solar energy installations, which can reduce both environmental and financial costs in the long term

Eligibility Requirements

To qualify for the RPIG, businesses must meet the following specific eligibility requirements:

Property Eligibility:

  • Investments must be made in commercial, industrial, or mixed-use properties located within Virginia’s Enterprise Zones. These zones are established by the state to encourage economic growth in targeted areas. (See Virginia’s Enterprise Zone Map.)
  • For mixed-use properties, at least 30 percent of the usable floor space must be designated for industrial or commercial purposes. This ensures the grant is primarily supporting business activities that generate economic development.

Minimum Investment Thresholds:

  • Rehabilitation or expansion projects must exceed $100,000 in qualified real property investments to be eligible for the grant.
  • New construction projects must exceed $500,000 in qualified real property investments.

Grant Cap:

  • For investments under $5 million, the maximum grant amount is $100,000 over five years.
  • For investments over $5 million, the maximum grant increases to $200,000 over five years.

Ineligible Funding Sources and Property Uses:

  • Real property investment expenditures funded by federal, state, or local grants are not eligible for an RPIG and must be excluded.
  • Properties used solely for residential purposes or those involving routine maintenance (e.g., minor roof repairs) do not qualify.
  • Additionally, soft costs, machinery, tools, and business personal property (such as furniture and office equipment) are ineligible for this grant, as the RPIG is focused on long-term capital improvements.

These eligibility requirements ensure that the RPIG is targeted toward businesses making substantial investments in the economic infrastructure of Virginia’s Enterprise Zones, driving growth and revitalization.

Special Provisions for Solar Projects

The VEZ Program includes special provisions for businesses investing in solar panel installations, encouraging the use of renewable energy and sustainable development:

  • For rehabilitation or expansion projects that include solar panels costing at least $50,000, the minimum investment threshold is reduced to $50,000 (from $100,000). This allows businesses to pursue smaller-scale projects focused on renewable energy.
  • For new construction projects with solar panel installations, the threshold is reduced to $450,000 (from $500,000), making it easier for developers to integrate solar energy into larger projects.
  • Solar-only projects costing between $50,000 and $100,000 are eligible for RPIGs with no minimum investment threshold. This means that even relatively small solar projects can qualify for grant funding, making clean energy more accessible to businesses of all sizes.

These special provisions make the RPIG an even more attractive option for businesses looking to invest in sustainable infrastructure while reducing long-term operating costs through energy savings.

Grant Amounts and Possible Proration

The allocation of RPIG funds depends on an annual appropriation by the General Assembly, with funding priority given to the Job Creation Grant (JCG). Once all JCG applications are fully funded, any remaining funds are distributed to RPIG applicants. If the total RPIG requests exceed the available funds for that year, grants may be subject to proration — meaning each applicant receives a proportional share of the remaining funds.

For instance, in Grant Year 2022, a total of 104 RPIG grants were awarded to 97 distinct investors and businesses, who collectively invested more than $466 million in qualified real property improvements. Due to increased program funding in 2021 and 2022, both JCG and RPIG grants were fully financed, resulting in a $5 million surplus—the first surplus since 2011.

The proration process ensures that even in years with high demand, businesses can still receive some level of financial support for their property investments.

How to Apply

The application process for the RPIG is straightforward but requires careful attention to deadlines and documentation. Applications must be submitted by April 1 of the year following the project’s completion. Late applications may be processed on a first-come, first-served basis if funds remain after all on-time applications are funded.

Key documents for the RPIG application include:

  • Commonwealth of Virginia W-9 Form
  • Local Zone Administrator (LZA) Review Form
  • Final Placed-in-Service Document
  • Proof of Qualified Real Property Investments (receipts, contracts, etc.)
  • CPA Attestation Report

It is essential that all documentation is accurate and complete to avoid delays in the grant approval process. Consulting with a CPA and other financial professionals can help ensure that the application meets all necessary requirements.

Maximizing the Benefits

The RPIG provides a powerful opportunity for businesses to reduce the costs associated with property improvements, expansions, and new construction. By understanding and leveraging this grant, companies can significantly lower their real estate investment costs, making large-scale projects more financially viable.

Additionally, businesses may benefit by applying for both the RPIG and the Job Creation Grant (JCG) for the same project, provided they meet the eligibility requirements for both. This dual approach allows businesses to receive financial support for both property development and workforce expansion, maximizing their return on investment.

Local governments often offer further incentives that complement the RPIG, such as tax abatements, business loans, job training programs, and development fee waivers. Combining these local incentives with state-level grants can make it even more affordable to develop and expand within Virginia’s Enterprise Zones.

Looking Ahead

The Real Property Investment Grant offers an exciting opportunity for businesses to invest in property improvements, expansion, and new construction while contributing to the economic revitalization of Virginia’s designated Enterprise Zones. Whether you’re planning to upgrade an existing property or build a new facility, the RPIG provides the financial support needed to bring your project to life.

By taking advantage of this grant, businesses can significantly reduce their investment costs while making a meaningful impact on the local economy. For assistance with the application process or to learn more, contact Shawn Middleton, Partner and PBMares’ Enterprise Zone Segment leader.