It just keeps coming up, this land deal for Project Clover in Page County. Today I am thinking about an EDA meeting that occurred in January 2010 – the meeting minutes are at http://pageforbusiness.com/archives/35/EDA%20Minutes%201-19-10%20Joint%20Meeting.pdf . For background, last year, the Page County Board of Supervisors authorized the purchase of a 200+ acre plot south or Luray. The BOS worked through EDA to make the purchase, and the price was negotiated at $7.5 million – which works out to roughly $40K per acre.
In previous posts about the Page County Economy, I've mentioned the County's economic development plans – the 2004 and 2008 editions, which outline three goals: develop industry, build tourism, and look at sustainable agriculture - as pathways to the future. Next week I’ll take a look at the 2009 update, which was prepared while the Clover negotiations were happening. From what I read, the BOS and EDA believe the land purchase will contribute to one of these goals, for industrial development.
When I posted on the topic of Project Clover in the past, I reported that I simply haven't found anyone who says buying the land was a good idea. Sure, there is an acknowledgement of the need to do something to attract jobs to the County, with a large share of the workforce commuting out for work in good economic times, but the sentiment seems to be that the price for this land, and the need to raise the money for the deal now - poor timing, may simply be a mistake.
I spent some time this morning trying to come to terms with this price of $7.5 million. I found references to two appraisals that were done in 2007 – the height of the economic boom that inflated prices. One valued the undeveloped farmland at $4,300, and the other speculated that a 20-year value of $105K per acre was realistic, assuming that a fully built out industrial park was a benchmark for land values in Page County. Of these two, you’d go with the lower value since nothing is built here yet.
Now, I also came across the assessment on this property, which includes some improvements, including a house. It values the 210 acres at $1.6 million – just more than $7,000 an acre. Even in the Alexandria heydays for real estate, as a rule of thumb, you’d add 20 percent to the appraisal to just values, yielding a price of about $8,400 per acre. The last reference I would make is a listing for 150 acres I found today on the United Country real estate site, for rolling pastureland in Elkton. The listing price is $1.5 million, or $10,000 per acre.
I just haven’t found anything on line that justifies the purchase price – either in remarks from the EDA, BOS, or these market comparisons. Everything I’m reading says this is a bad deal. Many people in the County agree.
I’m not saying this is the way to go, but at this point it seems the County could save itself a couple of million by bagging this purchase, paying the $1 million they are already obligated to – at least that’s how I understand it, paying a kill fee on the rest of the purchase, and buying the Elkton land. You’d come out $3 million ahead with a plan like this one!
Here’s a link to an old Hawksbill Cabin post, for additional background. You can also check out some of the labels: Page County Economy, Page County EDA, and Project Clover, if you are interested.
http://hawksbillcabin.blogspot.com/2009/08/land-deal-is-too-controversial.html
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