PBMares Accounting Blog

Boost Your Not-for-Profit’s Revenue While You Build Upon Your Future

Posted by Shawn Middleton, CPA on Apr 23, 2018 9:02:30 AM

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Many people have heard the saying “location is everything.” While it may be debatable that location is everything, location is very important in the Commonwealth of Virginia and can have significant benefits for nonprofit organizations looking to expand or rehabilitate their facility or building, or even looking to relocate their operations.

Choosing to locate on one side of the street over the opposite side of the street could put an extra $100,000 in your organization’s operating revenues. Choosing to rent and rehabilitate a building on one corner versus the opposing corner could give you the opportunity to receive a check in the mail the following summer.

The Commonwealth of Virginia has chosen certain areas in the state, via the designation of Enterprise Zones, to encourage private investment in those areas. The goal behind the program is to encourage rejuvenation of certain localities, and the state is willing to award funding to those that invest in the designated areas. The Real Property Investment Grant is an incentive provided to qualified investors (including nonprofit organizations) that construct new facilities or buildings or rehabilitate existing ones in a designated Enterprise Zone. For the 2017 grant year, the General Assembly has allocated approximately $13,000,000 to be awarded to Enterprise Zone grant applicants.

These grants are available for qualified real property investments made to a commercial, industrial, or mixed-use building or facility. If the project is a rehabilitation or expansion, the grant award is 20% of qualified investments made that exceed $100,000 with a maximum grant award of $100,000. If the project is new construction, the grant award is 20% of qualified investments made that exceed $500,000. For projects that exceed $5,000,000, the maximum grant is increased to $200,000. The grant awards are capped per building or facility in a five consecutive year term.

So what does an organization need to do to receive the grant award?

  • Construct a new building or facility or rehabilitate an existing structure in an Enterprise Zone and exceed the above described investment amounts. Your organization can be the owner, tenant, or developer.
  • Obtain a certificate of occupancy, final inspection, or third party inspection to show that the project is completed in the grant year and nothing is pending.
  • Capitalize the assets.
  • Pay the bills related to the project.
  • Contact a CPA to assist you with the application process and to perform the attestation procedures required by the Department of Housing and Community Development.

Applications are due every year by April 1. There are no exceptions for late applications and no extensions for filing are allowed. Grant awards are usually received via mail during July.

Maybe your organization has not done any investing recently, but you want to in the future and are considering locations or when it might be the best time to build or expand. Your CPA can help you maximize the financial benefits by providing information to put your organization in the best position possible to maximize any potential opportunities that can be received from this program. Don’t leave money on the table. Your mission is worth it.

Topics: Not-for-Profits

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Shawn Middleton, CPA is a Manager at PBMares, LLP, an accounting and business consulting firm serving clients throughout the Mid-Atlantic. For more information, please contact the author at  smiddleton@pbmares.com or visit: www.pbmares.com

 

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