ELI Primary Menu

Skip to main content

Virginia's $30 Million Business Incentive Program Overlooks Land Use Impacts

March 2001

The Environmental Law Institute® today released a report entitled Virginia’s Economic Incentives: Missed Opportunities for Sustainable Growth. The report highlights Virginia’s failure to consider the impacts of its $30 million business incentive programs on sprawl, traffic, and agricultural areas.

The report summarizes a year-long research project that examined a number of Virginia’s economic incentive programs. The programs provide more than $30 million annually in grants and no-interest loans to businesses. The programs range from the Governor’s Development Opportunity Fund, which provides “deal closing” incentives to attract companies to Virginia, to the Virginia Investment Partnership Grant Program, which provides grants to existing Virginia firms to make capital improvements.

The report analyzes whether land use patterns and long-term development effects are considered when providing grant and loan awards to both attract business to Virginia or to support the expansion of existing businesses. Specifically, it explores the failure to link Virginia’s subsidy programs to potential impacts on land use, urban and exurban development, and sustainability of the economic and social investment.

“The Commonwealth is missing a significant opportunity to take into account growth patterns in its $30 million incentive programs,” said Linda Breggin, ELI’s Director of Regulatory and Information Policy. “The Commonwealth isn’t examining the sprawl, infrastructure, and growth impacts of these subsidies — it should be doing so.”

In fact, Virginia’s General Assembly created the Governor’s Economic Development Grant Fund to help local governments offset the “infrastructure stress” resulting from the state-sponsored economic development projects. “The Commonwealth could leverage the costs of development by tackling the potential growth impacts of these projects up front,” said James McElfish, Senior Attorney and Director of ELI’s Sustainable Use of Land Program.

The report recommends that Virginia consider land use impacts in administering current economic incentive programs by funding growth in locations that are designed to maximize benefits to the surrounding communities. Another recommendation is to establish new programs that are specifically aimed at fostering sustainable economic development. Such programs could provide incentives to companies to locate in Virginia, and for Virginia businesses to expand, in a manner that is consistent with principles of sustainable development.

Copies of the study are available to the media by contacting pressrequest@eli.org. Print copies of Virginia’s Economic Incentives: Missed Opportunities for Sustainable Growth are available by calling 1-800-433-5120. The report can be downloaded for free at the Institute’s Web site http://www.eli.org.