ABINGDON, Va. – The $1 million cash incentive that Washington County is providing to K-VA-T Food Stores is only a small piece of the pie.
Altogether, the parent company of regional grocery chain Food City is to receive a $6 million incentive package for building its new corporate headquarters in Abingdon.
That incentive package consists of a $3 million grant from the Virginia Tobacco Commission and another $3 million worth of incentives from Washington County and the town of Abingdon.
The county, in addition to $1 million in cash, is providing a special $650,000 redevelopment tax credit over 15 years.
The new corporate headquarters is to be built on the site for the former Johnston Memorial Hospital, which is being demolished.
The Washington County Board of Supervisors voted in the fall to create the tax credit, which applies exclusively to the 19 parcels that make up the former hospital campus, in light of the K-VA-T project.
At the time, County Attorney Lucy Phillips said state law allows for a partial tax exemption for properties like the large, pieced-together hospital complex, “where there’s a risk of blight setting in or where blight has already set in, for the property to be used for commercial or industrial purposes.”
In discussing the tax credit and incentive package, county leaders have cited the importance of K-VA-T as one of Washington County’s largest employers.
According to a resolution passed by the board of supervisors in December, in exchange for the $6 million incentive package, K-VA-T’s investment in the building must top $20 million, and the company must continue to employ at least 375 people, with a quarterly payroll of more than $4 million.
In a recent interview, K-VA-T President and Chief Executive Officer Steve Smith said the response to the headquarters project on the old hospital site has been very welcoming, from the community as well as from local officials.
He has said construction is expected to begin in March on the new, four-story building, which will be roughly 140,000 square feet. It is expected to open in 2013.
“There’ll be some consolidation [of existing offices],” Smith said, “but there will be some new jobs created as we move forward.”