In the September 15th edition of the Virginia Gazette, Rodrigo Arriaza wrote an article about Peninsula Ace Hardware’s move to the Monticello Shopping Center. I’m glad to see that Ace Hardware is staying close to their original location. But as I read further, Rodrigo states that the Williamsburg Economic Development Authority unanimously approved a $50,000 no-net-loss tax incentive to Peninsula Ace Hardware after discussion the option during a closed door session. From the article:
“Economic Development Director Michele Mixner DeWitt said the no-net-loss tax incentive will return a portion of the taxes that Ace Hardware pays for a period of five years or up to $50,000, whichever comes first. She said the taxes involved in the agreement are the 1 percent local portion of the sales tax and the store’s business license fees.
In the first and second year of the agreement, the city will return 100 percent of the local sales taxes and business licensing fees to the business. In year three, the city will return 95 percent of tax revenue to Peninsula Ace Hardware, and that return will drop by 5 percent for the remainder of the five-year contract.
“They project that their sales are going to increase enough to lead to new tax revenue for the city of over $50,000,” DeWitt said. “We get $50,000 but this is only on the new revenue. The revenue that the city currently collects from Ace based on their current sales is held harmless, and this is sharing (tax revenue) if they increase sales after the move.”
DeWitt said the EDA approved the tax incentive on the basis of the increased sales and resulting tax revenue that Ace Hardware is expected to generate by moving to a more visible storefront in the recently redeveloped shopping center. As an existing city business, Ace also falls under one of the targeted industries that the city outlines in its incentive targets and guidelines, DeWitt said. Other targeted business sectors include distilling/brewing, destination retail and tourist attractions.”
So what exactly does this mean you may ask? Peninsula Ace Hardware asked for a tax break and got it. Now why should one business be singled out as the “golden child” to receive such favor? Because chances are that the president of Ace Hardware, Terry Deaver, happened to see a previous Virginia Gazette article about how Precarious Beer Project in Merchant’s Square got $220,000 in tax incentives to open a new business in the area that previously housed Seasons Cafe. Any good business owner should be asking the same question . . . why them and not me? Is my business not worthy of a tax break? Shouldn’t my business be valued as highly as the others? You’d be right to question the seemingly anointed few who are receiving favor. But just remember . . . if you don’t ask, you won’t receive. What’s good for the goose, is certainly good for the gander, or in this case, any business in Williamsburg. So let Williamsburg City Council and the Williamsburg Economic Development Authority know that you deserve a tax break too!