Commonwealth of Virginia Tourism Development Financing Program
The Commonwealth of Virginia has established a financing program for qualified Virginia tourism development projects. The purpose of the program is to provide a gap financing mechanism for projects in partnership with developers, localities, financial institutions, and the state. This program provides a method of financing to compensate for a shortfall in project funding not to exceed 20% of a qualified project’s total cost.
Section 58.1-3851.1 of the Virginia Code details the requirements for eligible tourism projects.
For those tourism projects that are eligible, (A) one percent of the state sales tax, (B) one percent of the local sales tax and (C) a developer access fee equal to 1% of the state sales tax are used to pay the debt service on the project.
As required in the legislation, localities that are interested in pursuing the financing program will need to complete the following steps.
Review and print this TDFP overview for more information >> TDFP Overview 2012 - pdf
(1) PERFORMANCE AGREEMENT
The first and key components to applying for the Tourism Development Financing Program is the securing of development, financial local economic development partners, as well as insuring that 80% financing is in place. Localities should structure its debt and equity financing and enter into a performance agreement with the appropriate political subdivision in the locality and confirm participating project developers will pay an access fee equal to one percent of the sales tax revenue generated and returned to the tourism project. > See more
(2) TOURISM ZONE IDENTIFICATION OR ESTABLISHMENT
Localities that are interested in pursuing the financing will need to have a defined tourism zone(s) enacted by ordinance within which the proposed project is contained. Virginia cities, counties, or towns can establish such tourism zones as allowed for in the Code of Virginia. This section of the Virginia Code can be found at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+58.1-3851. Interested localities are encouraged to begin development of the required tourism zones. > See more
(3) TOURISM DEVELOPMENT PLAN IDENTIFICATION OR ESTABLISHMENT
Localities that are interested must have a Tourism Development Plan approved by the Virginia Tourism Authority dba Virginia Tourism Corporation (VTC). A clear understanding and proof of how a proposed tourism project will meet an identified deficiency is required in the plan. Upon approval by VTC the locality must adopt an ordinance authorizing the tourism project. Upon approval of the Tourism Development Plan by VTC, the locality must adopt such plan by ordinance. VTC will advise localities throughout the approval process. Localities should be aware that there is a $500 application and processing fee paid to the Virginia Tourism Corporation upon submission of their plan for approval. > See more
(4) SUBMISSION AND ADMINISTRATION FEE
After complying with all the stages of the application process, outlined in Section 58.1-3851.1 of the Virginia Code, all necessary documentation supporting a locality’s application will be submitted to the VTC. VTC, on behalf of the locality, will submit the application to the Virginia State Comptroller for certification. > See more
