ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, December 31, 1996 TAG: 9612310132
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: WINCHESTER
SOURCE: Associated Press
WINCHESTER WANTS technology- based companies because they tend to be clean, with high-paying jobs, and don't drain public services.
City officials and local technology companies have begun a campaign to bring high-tech businesses to this Northern Virginia city.
As part of that effort, Winchester has become the first to take advantage of a new state law that lets localities give tax breaks to technology-based businesses.
City council's recent decision to designate the historic district a technology zone was designed to bring relatively high-paying companies downtown, which has been losing stores to the suburbs for years.
``This is the comparative advantage we will have in attracting a larger amount of jobs,'' said June Wilmot, executive director of the Winchester-Frederick County Economic Development Commission.
Patrick Clawson, president of TeleGrafix Communications Inc., an Internet software developer on the downtown mall, was a vocal proponent of providing the financial incentives.
``We have no illusions that Microsoft is going to set up their East Coast headquarters in downtown Winchester,'' he said. ``What we're going after are Internet, multimedia and software companies between three and 25 employees.''
The Winchester council voted this month to approve the technology zone. Companies that qualify can get substantial breaks in the business, professional and occupational license tax, the utility tax and city fees.
The breaks generally last five years, and the city will ask the General Assembly whether they can extend to machinery and tools, personal property and real estate taxes as well.
Companies, in return, must invest at least $10,000 and employ at least three workers. Start-up firms are exempt from those requirements.
Council member Jerry Partlow, who opposed the zone, said he approves of the ordinance's goal, but said too many types of businesses qualify.
Retailers that sell via the Internet qualify, as do computer or telephone sales and service companies and airline or hotel reservation centers.
``I could take my business downtown right now, and save several thousand dollars,'' said Partlow, an insurance agent. ``That's not necessary.''
The technology zone needed to include a wide variety of companies in order to work, said City Council President Harry Smith. ``I think the economic benefits ... will offset any perceived loss of revenue,'' Smith said. ``You can't lose something you don't already have.''
The Apple Blossom Mall and other suburban sites started drawing businesses away from downtown Winchester in the early 1970s.
Winchester wants technology-based companies because they tend to be relatively clean, with high-paying jobs, and don't drain public services.
LENGTH: Medium: 62 lines ILLUSTRATION: PHOTO: APby CNBPatrick Clawson (left) and Jeff Reeder of TeleGrafix
Communications Inc., an Internet software development company based
in Winchester, hope that the city's tax incentives will lure other
software developers. color.