The Data Center Grant Controversy

There’s been recent news about the data center that had been proposed for Page County.  It seems that the Page County Board of Supervisors have voted to discontinue their sponsorship of this proposal, setting the stage for a new round of sturm and angst about a $300,000 grant that was provided by the Commonwealth of Virginia to support its development.  At the heart of the current discussion lies the question, “Who will pay it back?”

Now, I’ve posted fairly extensively on this topic – 10 posts before this one, with the last in December 2010 (check the Page County Data center label at the end of this post if you’d like to read them), and in one of them there is even a link where the local radio show interviewed me on the topic.  I’d like to be able to say that my posts focused mainly on the feasibility of bringing that kind of industry and development to Page County.  I thought it was a folly then and still do, but it might be easy for the champion of the proposal and past county supervisors to think that my posts were personal and directed at them.

You see, in my mind, I can envision this brainstorming session way back when, where some supervisors, some economic development board members, and the new businessman in town got together and decided that tough times called for a big bet – and in their hubris, or naivete, or both, they decided that bringing cutting edge industry, like a data center, to Page County would bring a lot of good paying jobs that would save the local economy, and they talked themselves into it. 

It didn’t work out like they thought it would; there were simply too many factors at work against the concept.

I’ll leave other interested stakeholders – who have made valid observations about the unraveling of this concept – to dissect and distill the lessons that Page County needs to learn from this pursuit.  There are many, and we’ve only just begun that exploration.

Meanwhile, the controversy over the grant is percolating along, having made the front page of the local paper for two or three weeks running.  It seems there was a performance clause, where if the results – new jobs – were not delivered, the grant would have to be repaid.  The supervisors’ activities have accelerated the state’s action on this, and there has been a call for repayment.  The supervisors have passed that bill right along to the project’s champion, just like the mayor on that old show “Carter Country” might have handed something unpleasant along to the sheriff:  “Handle it, Roy!”

If there is a specific performance clause in this grant, someone’s got to pay, I suppose.  I know how important capital is to small firms, and it is likely that this particular infusion into the company at hand created a job or two, just not the ones at the data center.  More likely, they were administrative positions that help run the business and supported marketing activities related to the development of the data center concept.  Also, we know that there were a number of feasibility studies, design drawings and meetings, and engineering studies that were done – all of which seem to be logical expenditures that would have taken place during this adventure.

Now, I’m not apologizing on behalf of anyone here, but the wheels got in motion from group think – the county board, the economic development authority at the time, and the business.  Maybe the burden of repaying the grant is something that all of them are responsible for, not just the entrepreneur. 

That’s just my two cents this morning.  I know that many folks won’t agree with me on this one.