James Bailey Story Archives - West Virginia Public Broadcasting

W.Va. Home Builders Desperate For BUILD WV Act Incentives

The BUILD WV Act was created in 2022 to grow communities across the state and attract new, workforce ready housing developments.

David Reitz is CEO of Marion County based Stella Construction. The veteran home builder has followed the state-incentive-laden BUILD WV Act.

Since it was passed into law last year. Reitz said he’s working to persuade Commerce Secretary James Bailey to create a BUILD WV certified district in his home county.

“We’re seeing a lot of growth from people that are working in Morgantown or working in Bridgeport, we’re kind of smack dab in the middle,” Reitz said. “There’s a convenience and a desperate need for middle income housing, here and everywhere.”

The BUILD WV Act was created in 2022 to grow communities across the state and attract new, workforce ready housing developments. BUILD WV offers up to three types of tax credits as incentives for housing developers, including a sales tax exemption for building materials, a 10-year property value adjustment refundable tax credit, and a potential municipal B&O exemption.

Secretary Bailey joined Gov. Jim Justice and others in Fayetteville Thursday to sign House Bill 3036 into law. The legislation increases the number of certified districts under the one-year-old BUILD WV Act and raises the limit on approved costs.

There was a limit of three undesignated certified districts within the act. The new legislation raises that limit without a number, including those who qualify under a set of economic development criteria within an annual $150 million overall threshold. The secretaries of Commerce, Tourism and Economic Development will make the district designations.

Bailey said the state has plenty of low income housing projects and there’s no limit to building expensive homes for those who can afford them. He said it’s the affordable, middle class homes that are in demand.

“There was not a program to help with affordable housing to meet workforce needs in many areas,” Bailey said. “This innovative idea from the governor really hit a sweet spot and the reception has been tremendous. We now have developers all across the state interested in it.”

Reitz said there are several constants for homebuilders across the state. He said land costs aren’t high, but excavation is costly, materials are very costly right now and it’s difficult for any developer to build that up at a lower price point, and just make the type of margin that you need to justify the effort. He said the tax credits this act makes available on building materials and property values could help turn a housing shortage into a boom.

“All those costs, municipal fees, B&O tax, all contribute to what the buyer is paying on the back end,” Reitz said. “Those costs just get passed on. The beauty of this bill is that it’s able to slate some of those expenses and make it more affordable and make it more appealing to do houses in that median price point.”

Reitz said as major corporations like Nucor and Berkshire Hathaway Energy build facilities that need hundreds of workers, housing challenges will increase – without some sort of change.

“It’s going to be a situation where, builders and developers are going to have to scramble to keep up because we just have such an older housing stock, at least up in our area,” he said.

Justice said the BUILD WV Act designates $150 million in certified district tax incentives for years to come, offering room for ultimate expansion.

“How in the world can we expect people to move here if we don’t have housing and affordable housing,” Justice said. “I mean, this isn’t rocket science. We’re going to expand this statewide.”

Small Business Federal Contract Eligibility Expands To Five Counties

Small businesses in Boone, Clay, Hampshire, Monroe, and Preston counties are now eligible for financial help through a federal program.

The counties are now designated as Historically Underutilized Business Zones, or HUBZones. Small businesses located in these areas are given exclusive federal contracting opportunities and preferential price evaluations for those contracts.

The program’s goal is to give three percent of federal contract dollars to businesses certified with the program.

Department of Commerce Secretary James Bailey says the program is meant to help businesses in these designated, underserved areas compete.

“It gives a tremendous opportunity to small businesses throughout the state to get into the game,” Bailey said. “It’ll help small businesses in West Virginia compete against huge federal vendors in other parts of the country.”

Gov. Jim Justice requested the counties be granted the designation by the U.S. Small Business Administration last month. In 2022, 59 West Virginia businesses located in areas automatically designated as HUBZones federally received almost $100 million in total funding.

The SBA will update its HUBZone map July 1, which shows where designated HUBZone areas are located nationwide. Bailey says once the map is updated, they’ll be able to identify additional HUBZones and add more areas designated by the governor’s office.

New Commerce Secretary Leads Diverse Agencies

James Bailey was appointed recently as the new Commerce Secretary for the state of West Virginia. He comes into the cabinet level position with extensive legal and leadership experience in the executive and legislative branches of state government.

Government Reporter Randy Yohe spoke with Bailey on the challenges of managing a diverse department that includes everything from forestry to rehabilitation services.

This interview has been lightly edited for clarity.

Yohe: What would you say is the most important tidbit of optimum job fulfillment, if you will, that you learned as you take on this cabinet position?

Bailey: Having the opportunity to take on projects and to have an impact on our state. The Department of Commerce is probably the most diverse department within state government. There’s agencies from our state Geological Survey, which is made up of geologists, to the Division of Natural Resources, to WorkForce West Virginia and the Division of Labor.

A spread of diversity over the subject areas is a huge plus to me. I love learning about completely different things all the time. The one thing they all have in common is they all play integral roles in our state’s economy and our workforce and the opportunities that our citizens have to provide a living for themselves.

Yohe: How do you manage 2,000 employees working in such different entities?

Bailey: It’s a very appealing challenge to me because of the opportunities that it presents, to be involved in so many different types of things. It gives me a lot of fulfillment just to go to work and know that what I’m doing makes a difference and it’s diverse enough to where I know I’m never going to be bored.

Yohe: Economic development is coming to West Virginia at a fast and furious pace. This development will need hundreds of workers. You lead WorkForce West Virginia. The state’s workforce participation rates are among the nation’s lowest, what plans do you have to grow that rate?

Bailey: That is one of our most pressing challenges as a state, to increase our workforce participation. That rate can be increased by adding people to the state. There are a number of things we hope will do that. We recently had, for the first time in recent history, a positive inward migration, which is a huge plus. That’s one of the more immediate ways to do it. We are undertaking efforts to increase our workforce participation rate by educating individuals who aren’t currently in the workforce as to the opportunities that are out there.

Yohe: Your office is over the Department of Natural Resources. Would you expand on what you recently told the Parks, Recreation and Natural Resources interim legislative committee about implementing House Bill 4408? This bill gives third party contracts to build and operate state forest and state park recreation and lodging facilities?

Bailey: What we’re trying to do is open up the opportunities that were there for the few, to all the state parks. What those agreements allow us to do is to go out and reach concessionaire agreements with private industry folks. Agreements from as big as multi-state developers that might develop a campground, to as small as an individual who wants to give horseback riding lessons.

It really opens up a broad array of possibilities that can only go towards increasing the recreational opportunities for the people that visit our parks. It’s something we’re excited about to expand and to increase, because there’s typically private investment in that as well. That way, the concessionaire has skin in the game and all the motive to run and operate whatever it is they’re doing. The things that we look to do are only things that will enhance and provide more opportunities for folks. As soon as we do anything that ruins what the appeal is, you ruin any incentive for anyone to come in and invest.

Yohe: Your predecessor, Ed Gaunch, told me that one challenge for commerce going forward is removing obstacles like 200 boards and commissions from things like occupational licensing to help entrepreneurs have more success and starting up a West Virginia business.

Bailey: There is no argument that they create barriers to entry for people to get into whatever that workforce area may be. You have to balance that with the public good that those boards provide making sure people are qualified. However, too often, those boards operate more like professional associations than they do regulatory boards, which results in protectionism. Those are the downsides, boards that have created unnecessary burdens to people getting into the industry.

There’s examples of licensing fees that folks have to pay in the hundreds and hundreds of dollars a year. All that does is fund employees at the board. It has to be done carefully and on a case by case basis, because there isn’t going to be a one size fits all for each of these different boards.

Yohe: The Fraud Task Force that was passed by the legislature — has that kicked into gear?

Bailey: Yes, in fact we had an investigation through that task force that resulted in an indictment in the Northern District Federal Court.

Yohe: What we’re referring to there is the Unemployment Fraud Task Force, which kind of peaked during the COVID-19 crisis. We saw that as a problem throughout the country. As COVID-19 has somewhat left us, I guess there’s still a situation?

Bailey: It will continue and people will try to defraud the government. It’s not things like these are victimless crimes, those are resources that are being taken away that can be used for people who are actually in need of those resources. It’s something we take very seriously and have put a lot of work into getting that task force up and running. The investigators are in place and we’re already seeing success. The work will continue far beyond the pandemic to be necessary.