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. 

Investment Questions about Attracting Data Centers to Page County

Some alert readers on the new Page County blog site found a recent article out of Roanoke about the negotiations that surrounded the announcement that Microsoft would be investing $500 million in a data center in Mecklenburg, Virginia. It turns out that the town of Christianburg, Virginia was also considered, but events conspired against that town’s bid. All of this is chronicled in an article titled, “Christianburg’s Miss Brings Pricey Lessons,” located at http://www.roanoke.com/news/nrv/wb/269714.


This article says that the figures aren’t official, but were gathered a review of emails and other communications regarding Christianburg’s pursuit of that deal suggests that “While the county grappled with finding money for basic services such as education, the localities offered to forgo $62 million to $117 million in taxes to attract the facility.” Typically, these deals involve upfront cash, discounts on land and utilities infrastructure, and rebates on tax payments.

What we do know about the eventual deal is that Microsoft will receive upfront payments of $2.1 million from the state, another $4.8 million from the tobacco related community revitalization money, state sales tax exemptions, $50,000 in state hiring and training benefits, $2 million in real estate, $3.95 million for local water and sewer connections, and a 20-year rebate on personal property taxes – the first three years of this benefit were valued at $12 million. All of this for a company whose June 2010 balance sheet shows current assets of $56 billion, including more than $5.5 billion in cash on hand.

Leaving aside for a minute questions about how the Page County data center will bring nearly 100 good paying job to the county, while the Microsoft operation, a 4th generation facility (Page County’s is a 3rd generation facility) will bring 50 jobs estimated at $50,000 annually, imagine how these benefits would impact established businesses in the county that have to pay local taxes. According to this article, the state expects that it would break even on the project by 2021 – but due to the personal property tax waiver, the county would still be paying for these jobs on into the 2030 decade!

Then there are other benefits at the Mecklenburg location: the high-wattage electricity is in place, there is premium broadband already built, other utilities (water and sewer) are ready, and the site is located next to a US highway. If these are the features of a location that Microsoft values, it leaves the suggestion that Page County’s Project Clover site is acceptable open to question. We currently don’t have these assets to offer; they will have to be built.

Christianburg’s story doesn’t end well – we know that Mecklenburg was eventually selected, for one thing. Apparently, during the finalization of the discussions, a small sink hole opened up at the selected site, and the site engineering that would be required to offset these risks were estimated to cost up to $30 million. Christianburg is in karst terrain, just as Page County is. The sink hole will make this site a challenge to market to other businesses.

Using these figures, it’s easy to say that turning down Fibrowatt was an excellent move on the part of our board of supervisors, since it would have required us to compete on these financial terms, with a broader impact to our quality of life, for fewer jobs that probably wouldn’t have paid as well.

But I would also like to find some kind of encouragement for Page County in its pursuit of this kind of industry and those much needed jobs, something I’ve heard referred to as “Page 2.0”. I have limited insight into whether we could make some of the required investments to attract outside business, and the marketing emphasis on the Project Clover land as a potential site seems to miss the mark.

The whole thing has to start with a plan, though – and for now, that is not something we have from current EDA leadership. Our board of supervisors would do well to consider that as the terms for some current EDA members are coming to an end – lengthy service is much appreciated, but at last, it’s simply time for a change in leadership.

The new Page County blog site is http://pagecountyblog.com/,  and of course, my past posts on this topic can be found by clicking the Page County Data Center, Fibrowatt, Project Clover, or Page County EDA labels at the end of this post.

Doubling Down on the Data Center?

A friend recently sent me some news about a prospective new data center in Mecklenburg County, Virginia. A few months ago, when I was researching data centers more extensively, I'd read that there were several counties - all similar economically to Page County, and not doing so well by most measures – who had jumped on this thought that data centers might be a good route for future development. My reading showed that a lot of initiative was focused on the former tobacco regions in Virginia.

The news my friend sent me is summarized below:

Governor McDonnell Announces Microsoft to Locate Major Data Center in Mecklenburg County

• Will be Largest Investment Project in History of Southern Virginia
• Company to Invest up to $499 million and Create 50 New Jobs
• Virginia Beats out North Carolina and Texas for Company’s Most Advanced Data Center

RICHMOND- Governor Bob McDonnell announced today that Microsoft Corp. will invest up to $499 million to locate their latest generation data center (Gen4) in Mecklenburg County, in what will be the largest economic investment in Southern Virginia history. Using modular technology and advanced cooling mechanics, the center will be Microsoft’s most advanced data center. The project will create 50 new jobs and Virginia successfully competed against North Carolina and Texas to secure this sought after facility.

From: http://www2.timesdispatch.com/news/2010/aug/27/datacentergater-ar-476140/

When I think about this news, the first thing I want to analyze is location – which is strategic in Mecklenburg County:  power coming off the Kerr Lake Dam (Wikipedia: John H. Kerr Dam currently produces over 426 million KWh), easy access to Interstate 85 and rail corridors, located between the two state capitals, and positioned between the financial sectors in Richmond and Charlotte. With rail cutting through there, a good communications infrastructure already exists.

The reference to modular data centers is also interesting. It’s an approach that makes the building as flexible as possible, allowing for easy changes to technology. In fact, as I read the press releases, the only potential negative I see is the use of modular data centers in a hurricane prone area. Then again, it's Microsoft, and they'll have that figured out.

This news once again brings to mind some rhetorical questions about Page County as the potential location for a large scale data center:

• What's our current communications bandwith at Project Clover?
• What is the power capacity, and where does the power come from?
• And mechanical capacity (water for cooling)?
• What major roads get us there?
• What data intensive industries are nearby?
• This $500-million investment in a Gen4 data center will create 50 jobs...how will the Page County Data Center, a Gen3 facility, create 96 jobs?

The headline in the Page News and Courier said something our data center project doubling down. Call me a skeptic, but until we see more information, basic math applies: two times zero is still zero.

Themes or Memes on Vacation...and Project Clover

For the last two weeks leading up to my vacation, things started falling into place for me to wrap up a number of projects and other initiatives.  For example, in one case, the final report for a long-running project was published while I was away, and in another, we finished a series of cost estimates and sent them along to the client on my last day in the office.

This trend of completing things also was a theme during my vacation - I finished the remaining hikes in my copy of "Best Easy Day Hikes in Shenandoah National Part" and will write about those.  But the hot topic of the day has to be outcomes of the June 1 Page County Board of Supervisors meetings, which I touched on very lightly last week - the Page News and Courier headline has it "Project Clover put on Hold."

The meeting was attended by more than 150 people; there is a photo of the packed meeting hall, as well as a gathering on the courthouse steps featuring signs that say "EDA: Where are the Jobs?" and the like.  Among many local citizens, there is a view that EDA's long-running focus and funding priority on the Project Clover land deal has come at the expense of other important goals and objectives - I share that opinion and have said so here on the blog. 

Other important issues at this BOS meeting were concerns over a school closing in Page County, and recent job cuts at the County level.  Revenues are down, and County leaders are looking at hard choices.  My opinion was that in a ranking of priorities, you'd look at a boondoggle like Clover as a lower priority than other items - it is a project that might even make sense in better economic times, but that's not where things stand today.

As the PNC reports, at one point in the meeting, Chair Johnny Woodward held up the deed and said, "...The EDA budget does not have this in it.  Let's clarify this, the budget they had two weeks ago does not have that payment in it.  Notice how I said two weeks ago.  Their new budget does have it in it.  They think I don't know that, but I do."

Supervisor Jeff Vaughan said," ...This board has considered all the pros and cons, the timing, and the true impact on Page County.  To me, what we have is a mistake - but we have to draw the line sometime and not continue the misery in which we put our County in."

And finally, Supervisor J.D. Cave added,"I'm the lone one here that voted for this project in the beginning.  There are many things in my life that I've done that I'd like to go back and change, but I can't.  This one I can."

These are all rational decisions, and these speeches, along with the BOS vote to postpone the project, were very brave moves by these leaders.  I congratulate the board on their efforts to do the right thing for the County.  The final outcome of the meeting was a vote not to fund Clover, to look for ways to keep from closing the school, and look for funds that will help prevent some of the proposed job cuts. 

As far as the EDA goes, this was a pretty significant no-confidence vote for the current leadership and direction.  A referral to the 2009 EDA plan shows a range of initiatives that attention could now turn to - things that can have both an immediate impact and would set the stage for longer-term growth.  To the extent that's possible, that seems like the right next step for EDA. 

A Quick Note on Some Page County Items

Just time for a brief post today.  I understand that at the BOS meeting last night there was some resolution about Project Clover, the land deal I've written about several times here.  While I don't have full details yet, it does appear the land deal has been ended.

There will be some review and I am sure there are quite a number of loose ends to tie down.  But I think this is a move in the right direction - let's work together and find the best way forward.

Other matters dealt with at the BOS meeting were some school board funding issues, and reconciling some of the County's staff cuts.  I hope these things are also going to work out for the best.

In the meantime, I know these things mean a lot to my friends and neighbors.  I am very glad to hear how they've worked out.  More to come!

Page Co. EDA "Action Spectacular" - Part 5 - final, for now

We are still waiting for our PN&C this week, but I see that there is some news about the Rainwater letter already on line, where Benjamin Weathers reports on Lowell Baughan’s response via interview and written statement. For the final post in this series, let’s take a look at what Baughan had to say about Project Clover and the arguments presented in the attorney letter.


First, while defending the EDA’s authority to defend the land, Baughan disputes the appraisal of Project Clover’s value, which was pegged at $2.5 million versus the negotiated price. The article reports that (emphasis added) Baughan said there was no appraisal conducted before the authority made its decision to purchase the 210 acres. It goes on to say that the price paid was derived from other appraisals.

Baughan’s own comments show how subjective the appraisal business can be: “We based our purchase price, in part, on appraisals of properties in the same general area that were considerably higher,” he said. So on the one hand, Baughan confirms that his actions in this case are irresponsible - no appraisal was conducted before committing to a $7.5 million purchase – and on the other, he wants to debunk a legitimate appraisal based on his own reckoning of the valuation used in this deal.

Honestly, it’s not hard to see anymore why so many Page County citizens and residents have lined up against this transaction!

The paper also reports that Baughan has conceded that the county has “no legal obligation to move forward with the land purchase, but argued as he has in the past that defaulting on the payment would significantly impact the county's credit rating.” Also:

“There is no legal obligation for the county to keep its word, but if they don't, there are serious ramifications,” Baughan said. “If you renege on a pledge of moral obligation, the next time you try to borrow money, you either won't be able to, or the interest rates will be much higher.”

Baughan defends the decision to disenfranchise the County’s citizens, saying that “because no bond was ever issued for the property, no public hearing was ever required.”

These comments won’t do anything to quiet the questions that continue to be raised about Project Clover.  With these responses Baughan seems to suggest that he sought no counsel during the episode leading up to the purchase agreement – that he felt he was smart enough to wrangle an agreement that would be good enough despite all the signs pointing to a bad deal. Although it is unlikely that the Commonwealth Attorney would look into this matter with so many other pressing issues at hand in the State, a civil lawsuit from several parties – not just Rebecca Hudson – just might be justified, as Rainwater's attorneys say in the letter.

The paper closes with another quote, “The allegations made in the attorney's letter regarding actions taken by the EDA are non-specific and without merit,” Baughan said. Actually, it is clear that the attorneys who wrote this letter have a lot of material in their hands, and that material is very specific. In my mind, Baughan’s comments confirm the validity of the questions and opposition to Project Clover.

It will be interesting to see what’s next in this case.  Lowell Baughan should start taking these questions seriously - it's irresponsible to respond these comments so lightly. 

Page Co. EDA "Action Spectacular" - Part 4

In the last couple of posts I mentioned a letter that was recently sent to the Page County Board of Supervisors by attorneys for Charles Rainwater, a Page County resident who apparently owns property near Project Clover. I thought I might take a moment to outline Rainwater’s four concerns as discussed in this letter.


His first issue is a fear that Project Clover will have a negative financial impact on the County. This is due to an “excessive price” of $7.5 million for the acreage. I posted on this topic yesterday – apparently the EDA is going to commission its own appraisal to address this concern. Unfortunately, that will be the fourth appraisal…they are getting to be quite the subjective topic at this point, so how would you reconcile them? Take an average?

Coupled with concerns about the price are concerns about the process that was used to secure the land. I have friends who tell me this is a done deal and it is time to move on. I have also heard that Lowell Baughan has provided a lengthy but curious explanation in the PN&C this week, but I’ll have to wait for my copy.

With reference to the debt obligation, or whatever we should call it, which finances the Project Clover purchase, the County documents say the instrument is not a debt or pledge on the part of the County or even EDA. Who the hell is it a pledge by then? And who really would be foreclosing if it weren’t paid?

As a common citizen, this is very confusing to me, the manipulation that has apparently gone into this situation to get us here. How hard would it have been to have put this to a vote? I’ve heard that this may be partially answered in a PN&C article this week, but I have to wait for my copy.

The attorney argues that the Virginia Constitution requires a public vote on a public obligation of this sort – assuming there really is a public obligation at the heart of this transaction, there is some legal wrangling ahead to figure it all out. In short, this puts the County in deep kimche, whether laws were broken or not. The taxpaying public is going to pay for all of this at the end of the day.

The second concern the letter goes into is the process used to get to this point. The letter discusses frequent closed sessions that were part of the process for negotiating the Project Clover purchase, highlighting the legal procedures that justify these closed sessions – and allegedly were not followed here. The attorney closes this discussion with examples of where the law was supposedly violated, and the recourse and penalties available should Rainwater pursue the matter further.

The third concern is also about closed EDA/Board sessions, except this time, after the purchase was negotiated. The fourth concern is about a possible conflict of interest – maybe several of them – involving the parties involved. The attorney’s letter closes with a request for clarification, a request that the Board of Supervisors take steps to stop the controversial aspects of this situation; it then advises that there may be a recourse to civil action.

So what to make of a letter like this? In truth, the choices to be made about what to do and the roads ahead on this matter are difficult ones. The taxpayers of Page County are going to be stuck with the expenses for Project Clover no matter what happens at this point. And the whole debacle is going to keep any kind of economic recovery away from there for years.

Page Co. EDA "Action Spectacular" - Part 3

First a note about this series.  To the extent I can, I am using public information for the basis of these posts - for example, I quoted extensively from the PN&C yesterday under the assumption that they have done their own fact finding.  I also quote extensively from past EDA strategic plans, which I have downloaded from the Page County site and read for myself.  I've added analysis - just simple math really, since I have avoided learning calculus all my life - where I needed to.  On top of that are anecdotes about my attempts to do business in the County, and then there are my opinions.

This background was necessary because today I want to talk about the valuation of Project Clover.

There is some news on WHSV about a letter that was sent to the Board of Supervisors by an attorney that has been retained by a local Page County citizen who is concerned about Project Clover.  I will post more on the substance of the letter tomorrow, but an appraisal of the value of Project Clover was also included.

The letter mentions an appraised valuation of $2.5 million for the Project Clover land, based on its recent zoning reclassification.  Recall that the EDA/Page County has agreed to pay $7.5 million for this property. 

I've heard that there were other appraisals done, including one by the current owner, as the property was being brought to market.  I understand this showed a lower value, based on the then-current agricultural use of the land.  I haven't seen that appraisal, so I can't state the published value.

I understand that EDA also had an appraisal done; I haven't seen this appraisal either so won't offer the value that was evaluated.  However, it is reasonable to think it must have justified the purchase offer of $7.5 million and provided the basis of the USDA loan application process.

So here we have three valuations, that widely vary.  You could take the high one and justify the $7.5 million.  Or you could take the low one and be exposed for making a bad deal.  Or this new one, which suggests the overpayment was around $5 million.  All of this comparison - the wide range of values - introduces an element of risk to the financial proposition for the County.  If it is a bad deal, the taxpayers are going to be left hanging - either because they have to pay, or in the case of a default, because future projects won't get financing.  How do you resolve a problem like this?

I understand that Lowell Baughan gave a talk at a local fraternal organization following the receipt of the attorney's letter and the appraisal.  He questioned the appraisal methodology and valuation.  He states a preference for a type of appraisal endorsed by MAI, one of several professional associations that advise on appraisal processes and offer a certification for appraisers.  He also questioned the comparables listed in that appraisal, which is fine, they're fair game.

This called to mind some discussions I had recently with a bank when I was thinking about some commercial property in Page County.  The bank had set a price on this property of $1.4 million, and they shared with me a list of a half dozen or so similar properties that they had used as the basis of this price. 

When I did my due diligence on this, I came up with a purchase price of $1.1 million, based on 2x property revenues (an industry standard I found during my research) and the price of a very similar property on the market in another county. 

The bank questioned my findings - they said that comparable properties had to be within 20 miles of the commercial property I was looking at.  That had kept the list small, limited the comparisons to properties that didn't exactly match the one I was looking at, and probably was the source of the inflated valuation.  In the end, the bank ended up buying this property from itself at the asking price of $1.4 million since no bidders came forward at their reserve price...a pity, because that place will sit vacant now until it sells, hardly doing anybody any good, least of all the Page County community.

This annecdote is what came to mind immediately when I learned about Lowell's comments to his fraternal organization.  Comparing values is a fairly challenging proposition - there should properly be a geographic restriction on the search for comparable properties, and allowances need to be made for amenities available on the property being evaluated for comparison purposes. 

I'd suggest this takes industrial properties in H-burg, Woodstock, New Market, Elkton, and Front Royal out of the question for comparison for Project Clover.  They have easy access to good highways, important since the only way into Clover is by truck - rail transport there is transient on the way to the inland port, and no business is going to pay to transfer goods on and off a train unless there is a market at the siding, or raw materials are processed and added to the goods there. 

All this to say, if Lowell Baughan has questions about this valuation, he should get a new one done.  The request for this appraisal should be via public RFP so that it is done on a transparent basis.  The appraisal should evaluate and reconcile the previous ones that come to disparate conclusions.  Questioning this latest one and speculating on the methodology doesn't add any facts that will help the community one way or another in its quest to evaluate whether Clover is a good deal.

If Lowell is the kind of business person he wants us all to believe he is, he needs to take steps like these to repair his credibility with a large share of the County who apparently don't agree with him.     

Page Co. EDA "Action Spectacular" - Part 1

Since I covered the PN&C letter about Lowell Baughan, written by Jay Dedman, a couple of weeks back, it’s fair that I should take a look at the responses that appeared in last week’s paper. First, there is a letter written by Baughan about his role with the EDA, and a couple of letters of support, including one from Baughan’s son. A second item to take a look at is the PN&C editorial this week, which encouraged the Page County Board of Supervisors to invest in people and education.


For a third item related to this topic, I also received news about an updated series of arguments regarding the Project Clover deal, which are contained in a letter to the Board of Supervisors. So my plan is to have a sort of “EDA Action Spectacular” series of posts this week – doing what I can to cover these items. It’s my opinion that EDA and Baughan have probably brought this criticism upon themselves since their identity has become so closely tied to Project Clover – a project I have opposed since first learning about it.

Baughan’s letter, which was headlined “EDA operates only with the approval of supervisors,” argues that the Authority is an arm of County government. He says that the organization develops projects that must be approved by the supervisors, as opposed to taking rogue actions on its own. He proceeds to categorize the actions the EDA took under his chairmanship as full and open, and even specified in the 2004 and 2007 strategic development plans (I have been calling the 2007 plan the “2008 update” on the blog).

I’ve reviewed these documents before and published summaries here. I recall that after reading them I was confused at how these plans can be considered a road map to a speculative* real estate venture such as Project Clover has turned out to be. In 2004, there was an emphasis on six guiding principles:

• Business attraction
• Existing business retention/growth
• Community infrastructure
• Education and workforce development
• Government economic development programs and services
• Transportation

In the update to the plan, published in 2008, there is a note in the executive summary that says, “…the County needs ready-to-go sites complemented with the ability to process permits, licenses, etc. within short turnaround times” in order to attract companies that fit in with the rural character of the County and diversify the economic base.

As I wrote at the time, it’s my opinion that:

‘To me, this is “cart-before-horsing” – among other things, the previous version of the plan called for an assessment to determine what kinds of businesses to target. Was there follow-up on these objectives and initiatives? Without them, I don’t think it’s prudent to land bank this property, betting it is a panacea to future economic development requirements; squirreling it away in a quasi-government EDA that may not have followed up on its own previous goals and objectives is another thing.’

As the letters of support that accompanied Baughan’s letter demonstrate, he has provided valuable service to the County in the past; however, I’d like to learn more about his role as an advocate for the Project Clover purchase – business that, according to him, was conducted in broad daylight with unanimous board approval. How did the board come to the decision that a price of almost $36,000 per acre for Page County farmland was a fair deal for the citizens? Why weren’t the other objectives in the 2004 plan and 2008 update given any attention or priority, when they have been completed at very low costs and would have provided the board with the necessary insight to decide whether Project Clover would be successful. These questions are even more urgent, since Baughan’s letter discloses that the EDA was given authority to spend as much as $9-million on the deal, another $1.5-million over and above the reported purchase price.

Unfortunately, Baughan’s letter does get personal in one section, where he claims that EDA has been “unfairly maligned in various blogs and letters generated by the uninformed.” Dedman’s letter was pretty direct with the questions and criticism, but still, I was surprised by the personal nature of Baughan’s comment, because he serves the taxpayers of this County in a responsible role. The opportunity to serve is a privilege, not a bully pulpit for name calling – the questions and comments he refers to are simply the taxpayers asking for more information so that they can evaluate whether or not to support the EDA.

Here on Hawksbill Cabin, I seek to publish a logical, intelligent and informed discussion about the county lifestyle, framed by my own 30 years of experience in business. But I’m not going to shy away from giving an opinion here and there too. I don’t question Baughan’s integrity, but I do question his judgment and his failure to execute those strategic plans as they were written and approved.

As far as the two letters of support that are included here, they speak to Baughan’s accomplishments as a private citizen. One is written by his son, who lives in Charlotte, NC, and another, by a parishioner at his church. They both reinforce the claim that Baughan is motivated to do the right thing, as exhibited in his commitment to charity and civic organizations. These have an important role in the community, but none of them has the potential to obligate each man, woman, and child member or participant to a $2,100 debt obligation, as Baughan has championed in his role as EDA Chairman.

* speculative – relating to an act of speculation, assuming unusual business risks in hopes of obtaining commensurate gains.

Reprinting the PN&C letter - re: Mr. Baughan

While I've been on the road this week, yesterday I rec'd news on-line about a letter that was in the Page News and Courier, reprinted on the Lurayva blog (link in the blogroll on the right).  It gives voice to a lot of questions I've had over the last couple of years as I've thought about the EDA role.  Kudos to Jay for putting them so straightforward and succinct!  And a tip of the hat to Keith for putting it up on the blog...
---letter follows
 
Last week I opened paper to see a man’s face on front page. Lowell Baughan. I see his name in the paper connected with so many county dealings.

Who is this man? I don’t remember voting for him or hearing he was elected.

A friend told me he’s been head of the EDA for 30 years. He seems to have the ability to spend taxpayer money without direct citizen input.

Why? Is this some kind of untouchable second leadership?

Let’s just be clear. Mr. Baughan wants to spend $7.5-million for 210 acres of farmland (a.k.a Progject Clover), while the county is already struggling to balance it’s budget for this year. Remember the landfill fiasco that we’re still paying for? Clover will weight us down like the new landfill, if we allow it to be purchased. Everyone gets rich but the Page County taxpayers, who will pay for the next 40-years.

So let’s default. We don;t need to borrow more money. Each of us must live within our means and so should we as a county. We’re cutting the school budget to the bone, as well as other necessary services. There are already too many empty industrial parks along I-81. Let’s not add another one.

A friend told me that Lowell’s father was part of the “Byrd Machine“ (look it up on Wikipedia.org) when VA politics was run by a tight group of insiders. As a member of the new generation, those days of crony politics are over.

Mr. Baughan says we can’t default on this proposed loan to Rebecca Graves Hudson. But we only default if Mrs. Hudson sues. As a citizen who’s family has lived here for generations, she could also realize this purchase is a bad deal for the community. She could be a hero. As is, Rebecca will still be paid over $1-million for 38 acres of farmland. Do the math. She’s no victim.

We elect leaders. They make the decisions for us. If I don’t like their decision, I help vote them out of office. So who is Lowell Baughan? I can’t vote him out of office because he’s never been elected. Lowell simply has power to spend $7.5-million of taxpayer money that taxpayers don't want.

Jay D., Rileyville

The Clover Deal...again

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

More thoughts on Fibrowatt impacts

Following up on the discussion of potential emissions from a power plant in the Valley, today I wanted to think about some different supporting infrastructure that will need to be constructed. The starting point for this analysis is Homeland Renewable Energy’s website, Fibrowatt’s parent company, specifically the technical data sheet about the Minnesota plant, which is the first reference link at the end of the post.

There are two points to call out specifically, both of which will require specialized infrastructure: (1) the stack height of 300 feet, and (2) the voltage that power generated at the plant is delivered to the grid – 115kV.

Starting with the stack height, it’s hard to get a perspective on how tall 300 feet is in Page County, since the Valley is surrounded by two mountain ridges. The nearby peaks in Shenandoah National Park, notably Stonyman and Hawksbill, are 4,000 feet tall. Two easily identifiable peaks in the shorter Masssanutten ridge are Kennedy peak and Duncan Knob, at between 2,500 and 2,800 feet tall.

There are numerous photographs of panaoramic views from these summits on the Hiking Upward site (www.hikingupward.com) or from Google Earth. From those heights, tall constructed objects are visible, but for the time being there are none over 150 feet tall, these being cell towers. As I drove through Luray last weekend I made a mental inventory or a few of them – the Tannery stack, at about 50 feet, the Luray Caverns Bell Tower, also about 50 feet tall, the cell tower on the ridge above downtown about 100 feet, and the tower near Wal-Mart, about 120 feet tall.  There are also water towers in Luray and Stanley, both of which are well below 100 feet.

Three hundred feet is pretty hard to quantify in Page County, because there is simply nothing that tall here – roughly equivalent to a 30 story building. This stack is five or six times as tall as the tannery stack, and nearly three times as tall as the tower near Wal-Mart. A smoke stack of that height would immediately draw attention from all of the panoramic vistas along the Shenandoah National Park ridge, including several of the historic overlooks on Skyline Drive. Hikers on the Appalachian Trail, when they are on the west side of the ridge, would see it from a few miles south of Big Meadow all the way up to the Rileyville area, perhaps as far as Compton Peak – four or five hiking days.

Down to earth, in the Valley, this smokestack would easily be visible from the Luray Caverns parking lot, where 500,000 tourists a year would take in the view. And families and kids at the Hawksbill Recreation Center in Stanley, which is very close to the proposed location at Project Clover, would also have a very clear perspective on the stack. The bike crowd in for state qualifiers – about a thousand of them, would see the stack from all along their route, and it would surely be a topic of conversation for the thousand-plus tri-athletes in June and August, putting an end to these emergent tourist activities.

The second infrastructure issue that draws my attention is the electrical transmission equipment that will be required. The voltage that will be delivered to the grid – 115kV, is considered high voltage and will require high voltage transmission lines. The Valley already has a few of these – but none running through the center area at Project Clover.

A Google search for pictures of high voltage towers to me to a Minnesota state permitting site, which is linked below. There are photos with a couple of examples like this one, and there are some images of big open country towers in the Wikipedia article cited in the references. A string of these (smaller ones!) will be needed to transmit the power to the national grid and to the end customer – a quick note here that that customer could be anywhere in the United States that is connected to Fibrowatt’s entry grid.

As indicated by this simple graphic from the Department of Energy (also found on Wikipedia), there will also need to be a substation, or transformer, built in proximity or on the grounds of the power plant. There's a photograph of a typical transformer station below.  While altitude won’t be significant here, the necessary towers will begin from there, radiating out through the Valley. I suspect that the transmission line will impact the Massanutten Ridge in some form, as I doubt that clearing space for this construction would be allowed in the Park. On the other hand, there are lines in Thornton Gap, so this may be the point of entry for the power to the grid.

In the research I’ve been doing, I have tried to keep an open mind to Fibrowatt and the opportunity to have a biomass plant in Page Valley. The proposed location, as I understand it, at Project Clover is my major point of concern. It is dead center in the Valley with prevailing winds to the northeast and southwest, which means any emission particulate matter will fall on the neighboring towns of Stanley and Luray. The height of the building and smokestack will be visible from throughout the Valley, including prime tourist attractions.

I’ve always been against the use of the Project Clover land for any industrial use, but I am against it even more when that use will require obtrusive construction such as this. If the plant were to come to the Valley in a location with less impact, I might support it – but since the Page County EDA has pushed this site into consideration, I have to make a stand against it.

At this point, I’ve done enough research on Fibrowatt to have an opinion. I foresee devastating economic impacts to the tourism and agriculture industries in the Valley, and the potential for significant environmental degradation. To put it simply: I’d rather not see a plant here.

http://homelandrenewableenergy.us/pdf/fibrominn-tech-data.pdf

http://www.mnpower.com/regulatory_matters/transmission/tower_fact_sheet.pdf

http://en.wikipedia.org/wiki/Electricity_pylon

Fibrowatt - a point of clarification

Had the chance to speak with Fibrowatt's Terry Walmsley today, and that turned out to be a good opportunity for me to learn a bit more about the company and their goals.

In my first post on the topic, last Friday, I had associated the Fibrowatt opportunity with Project Clover in Page County. Mr. Walmsley told me that Fibrowatt's site selection activities haven't yet begun, so I wanted to go back and fact check where I'd gotten that idea.

There's a quote in the NVDaily article that I cited on Friday: "Officials in Page have been in discussions with Fibrowatt for some time, but have agreed not to speak publicly about the project, according to Gilbert. The county already has a site picked out in an industrial park that is in close proximity to a transmission line, he said." I may have jumped to a conclusion there, but that is the connection I made.

Also, in last week's Page News and Courier, Luther Johnson's front page piece talks about the Page County Economic Development Authority's public meeting in Luray last week. Within the context of a discussion about Project Clover, the article concludes, "...Baughan confirmed that there is another business looking at possibly moving into Page County, but nondisclosure agreements prevent any further details from being shared."

So again, I may have jumped to conclusions about the Project Clover property being the destination for a potential plant.

From my research so far, Fibrowatt is proactive in community outreach, and we'll look at some examples shortly. But they are still on the front end of evaluating Page County as a destination - they'll do their own due diligence on site selection and developing the plant.

For Page County readers, Mr. Walmsley tells me the company will do its best to respond to any questions. There is a link to their website for contact information in this morning's post.

Fibrowatt - an Overview

This is the first of several posts that will go up this week about Fibrowatt, the company that proposes to build a plant that will turn chicken litter into electricity, at Page County’s Project Clover site. You’d expect that there would be challenges from both sides (the community and the company) in negotiating a site, constructing, and operating a plant like this – and that’s exactly the reason why the Hawksbill Cabin blog is looking into this topic.

On the face of it, the estimated impacts – 300 construction jobs and 100 plant jobs after the plant is up and running – all sound like great investments for Page County. But this is an industrial process and it won’t be without its impacts, so on the blog we’ll also take a closer look at the technology that is used, the history of community relations, and some of the controversies that are related to this technology.

The Basics

The company, Fibrowatt LLC, is owned by a New Hampshire-based holding company called Homeland Renewable Energy. Homeland Renewable Energy (HRE) was founded in 2000 by a management team that built and later sold three litter conversion electricity plants in the UK in the 1990’s. Their selling point on the idea: responding to the poultry industry’s need for a litter disposal alternative, by using it to generate renewable energy. HRE claims to be the only firm in the world with experience developing these types of plants.

The entrepreneurs behind the UK plants were Simon and Rupert Fraser, a father and son team. After developing the plants, they sold them in 2003 and started HRE, and subsequently Fibrowatt to market the technology in the US.

The Board

HRE has a five-member board. I’ll profile Rupert Fraser, one of the developers of the UK plants, and John Clarke, Chairman. The other board members are Robert Keller, Richard Constant, and Derek Hasbrouck.

Clarke, as noted, is the Chairman of the Board and the cofounder of HRE with Fraser. He is an investment banker, founding Baldwin & Clarke, which completed $2-billion in M&A and capital raises since 1984. He has other interests, including a small cap community banking enterprise with Keller.

Fraser is listed as President and CEO, cofounding HRE in 2003 when Fibrowatt was acquired from its UK parent. His background includes work as a chartered accountant with KPMG, investment banking, and past leadership in renewable energy trade groups.

Fibrowatt’s US Projects

Just as with the summaries above, we’ve drawn from the HRE and Fibrowatt web pages (linked below) for background on other Fibrowatt projects. In addition to the Page County project that NVDaily posted last week that started us on this research, there are plans for projects in Arkansas, Georgia, Maryland, and Mississippi. There is an established 55-Megawatt (MW) plant in Benson, Minnesota (easily found with a Google search for “Fibrominn,” the operating company name). And there are plans for three plants in North Carolina, in Montgomery, Surry, and Sampson counties.

During the next posts on this topic, the blog will focus on the Minnesota project, which is active, and the North Carolina projects, which are in development. We close with URLs for HRE and Fibrowatt:

http://www.homelandrenewableenergy.com/
http://www.fibrowattusa.com/

Fibrowatt - in depth

Following up on the NVDaily article about the potential of Fibrowatt LLC locating an energy plant at Page County’s Project Clover, I am planning to post a series on the company and its projects next week. Broadly outlined, I’ll research and post on the following:

1) Fibrowatt company overview and its projects in Minnesota and North Carolina, and the UK if that is possible;

2) Review of the press releases on their website, and anything else that is reviewed by following these;

3) An overview of what I find out about local citizen's concerns, some EPA matter’s that turned up in a Google search, and also research into one of Fibrowatt’s own press releases about “alleged non-compliance in Minnesota”;

4) A break-even analysis from a report on a similar plant in Arkansas, and other operators of similar projects in the US; and

5) A wrap up, with some abbreviated profiles of Fibrowatt’s board members.

This is going to keep me busy next week, and the posts may tend to be on the longer side…but I am looking forward to it. I'll leave you with this paragraph, cut from the article linked below. If it’s true that Fibrowatt only builds where they have been invited, one has to conclude that Page County somehow invited them here:

"Locating these plants near to major poultry producing centers is critical to the model’s long-term success. But Fibrowatt is sensitive to the needs of the communities it would like to enter. Although it is exploring potential future projects in Arkansas, Georgia, Maryland, Mississippi, North Carolina, Alabama, Texas, and other states, the company’s philosophy is to only go where it’s invited."

That’s from: http://www.energytodaymagazine.com/index.php?option=com_content&task=view&id=7006&Itemid=101

A Letter to the USDA regarding Page County's Project Clover

This week was the deadline for public comment on a prospective USDA loan to fund a large land purchase in Page County. Here is the letter I wrote; I would like to see industrial development but I disagree with the purchase that is currently being considered.
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October 14, 2009
James H. A. ,
USDA Rural Development Office1934 Deyerle Ave Suite DHarrisonburg, VA 22801

Dear Mr. A.:
I am writing in response to the request for comments advertised in the Harrisonburg Daily News Record on September 16, 2009, regarding the USDA loan request for Project Clover in Page County, Virginia. There are several land use, environmental, alternative locations, and due diligence reasons that this loan should be denied.

Land Use: The location and character of the project is not a use that fits the nature of the agricultural setting where it is now planned. Converting prime farmland to industrial use is in conflict with the mission statement of the USDA, especially when there are alternative sites available for this purpose.

As far as transportation access goes to this site, it has no road frontage to a major highway and is separated from the US interstate highway system by a mountain range. The parcel is accessed by a steep two-lane road that exits off of the US 340 South Business bypass. To the north, US 340 is not expandable to four lanes due to the terrain it passes through; to the south, the road passes through a town before joining US 340 or access to US 211. It is very difficult to see how the transportation of any industrial output from potential industrial operations could be economically transported to market; it is equally doubtful that input/component goods could be delivered economically to this location.

Finally, the needed utilities for development on this scale are not in place, and are not planned to be built in the near future. The neighboring town of Stanley is known to have function and capacity problems with its utilities, especially sewer, and this site’s location within the Shenandoah River watershed make this an even more important consideration.

Environmental: The Project Clover parcel is located in an area identified as Karst geology. To the public’s knowledge, no investigation of this condition has been made to assess potential impact of industrial development and use on this type of geology. At the minimum, an assessment of potential aquifer impacts and future impacts to the Shenandoah watershed should be conducted to determine whether there are existing underground problems, to identify potential undesirable impacts, and mitigating steps that should be taken in case this development is pursued in the end.

Alternative Locations: Within the central part of Page County, there are several other large parcels on the market that offer better access to transportation networks and utility infrastructure, and there are existing industrial/brown field sites that can be reprogrammed for these purposes, likely at a much lower cost and risk than this parcel.

I agree with the insight offered by long-term residents that the selection of a location closer to the town of Luray is more suitable. Utility infrastructure, including water and sewer, are in place and there is access to US Route 211, a four- lane highway that links to Interstate 81. Rail access is available there as well, with an existing spur for potential businesses. This capacity sits unused. Additional land along the Rte 211 corridor is available, and land along the juncture of Rte 211 and Rte 340 is available.

Due Diligence: The petition of nearly 2,000 local citizens and their attendance at so many public hearings on this matter demonstrate that there is a broad consensus disapproving this purchase and the idea of developing this site for this purpose. There is general agreement that something should be done to encourage industrial development, but there is general recognition that this site is not a good choice.

Other than the reasons land use and environmental issues listed above, this concern boils down to financial and fiscal issues: simply that county’s involvement in this loan is not justified due to the lack of a business case, no appraisal of the land’s value to secure the loan, and no alternative sources of funds to repay the loan. By Page County EDAs own assessment, there have only been five or six inquiries about relocating to the County in the last three years, and Page County was not selected in any of those cases. In my opinion, these decisions are driven by basic economics of the location here rather than the lack of developable sites; to purchase this land for future development seems to me to be putting the cart before the horse, especially when no known relocation prospects are currently in the pipeline.

For additional background, I am enclosing a letter to the editor of the Page County News and Courier that was recently published. In this letter, I reviewed and analyzed the County’s strategic plan for development, and found that this rushed decision to purchase Project Clover actually conflicts with the findings and recommendations of that plan.

Please consider these factors and deny this loan. Failing that, I ask that you recognize that meaningful public comment requires public access to information, which has been lacking in this case. While non-disclosure agreements are frequently an element of business negotiations, there must be a limit to their purview and application when it comes to committing public funds for a use such as this, and Page County and the EDA have made access to relevant public documents such as the following difficult:

1. Lists and analyses of other sites, evaluation criteria and site evaluations.
2. Documents relied upon to establish a price for the relevant property and comparisons to other potential sites.
3. All purchase documents and amendments.
4. RDA loan application documents
5. The fiscal impact statement and analysis of total project costs over its lifetime, if any.
6. Traffic studies
7. Cultural resource study

This documentation should be made readily available to the concerned citizens of Page County, and once that step has been taken, the RDA 30 day comment period should be reset to begin after the last document is posted.

Thank you for the opportunity to contribute to your consideration of this loan request. If you would like to discuss the content of this letter further, please contact me by email at jt@.com.

Sincerely,

J. Turner

Visiting the Page County Heritage Festival

Author's Comment: If you are reaching this page from the Page County Watch Blog, welcome and thanks for reading! This blog provides a weekender's view of Page County living...there are some posts here that fit with the spirit of the Watch blog - click the "Page County Economy" label in the right hand column for those. I've also got a series on "Project Clover" and the potential Fibrowatt plant - both are labels in the right hand column (and below). If you would like to go to the most recent posts, click http://www.hawksbillcabin.blogspot.com/ . Also, you might check Keith Stoneberger's lurayva.com blog, which is one of the links on the Watch blog page. Best, Jim

Original Post:
On Sunday we had a wonderful fall day so Mary and I decided to head over to the Page County Heritage Festival. We haven't missed this event since we started coming out to the Hawksbill Cabin - this festival is a celebration of the traditional rural lifestyle that has made up the county since its founding.

The festival is one fundraising activity of the Page County Heritage Association (http://www.pagecountyheritage.com/), which oversees the preservation of Calendine, a local historic residence of William Randolph Barbee - a notable classic sculptor, the Mauck Meeting House , originally Union Church - built of pine logs and chestnut shingles, and the Massanutten School, which dates to the Civil War era.

We divided our time at the fest between searching out lunch and watching the sawmills at work. For lunch, we had carolina-style barbeque pork sandwiches and peach cobbler, finishing it off with some kettle corn. Then we settled in to watch the antique sawmills working on a large oak log, as shown in the highlight photos here.

The Land Deal is too Controversial

It just keeps coming up, this land deal for Project Clover in Page County. There is a lot of energy around the discussion about whether this is a prudent move: the plan to purchase 200+ acres south of Luray for $7.5 million and use it as an industrial park - and with a Page County Board of Supervisors meeting this week, it was a topic of discussion again. The BOS has signed a contract for purchase on this land.

In previous posts about the Page County Economy, I've mentioned the County's economic development plan, which outlines three goals - develop industry, build tourism, and look at sustainable agriculature - as pathways to the future. No doubt the BOS thinks the land purchase will contribute to one of these goals, for industrial development.

In casual conversations at the Farmers' Market, last weekend at the Triathlon, around town with neighbors and acquaintences, 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, 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.

Among the public there appears to be widespread concern about the cost and timing of the deal. In the BOS meeting of this week, local Jim Turner, who is managing a petition protesting the deal, gave a talk (full text at http://pagecountywatch.wordpress.com/2009/08/19/jim-turners-response-to-tommy-lafrance/) which outlines the concerns and asks the BOS to reconsider.

From their reaction, the BOS is pretty dug in on their position. They don't seem to be willing to engage the dialog and find a positive way forward in the discussion.

I still need more information before I'll understand their reactions, but from the weekender point of view, something just doesn't seem right.

A Letter to the PN&C Editor

After blogging here and talking with neighbors and acquaintences in Page County about various aspects of the economic development plan, and after avidly following the discussion about the land deal for industrial development and the ensuing controversies, I decided to write a letter to the editor about components of the plan that don't seem to be getting any attention.

There is well-founded concern regarding the purchase of the farmland for Project Clover, and while the county supervisors have begun to address the concern publicly through interviews and articles in the paper, to me their responses don't seem to be hitting the mark for many citizens - who seem to be asking "why now" and "why so much for the land?"

They've responded that being "ready to go" is important, but I recall reading that only six businesses have approached the county about locating there in the last three years, and none of them decided this was the right place for them. Bottom line, there just doesn't appear to be much of a business case for the purchase.

Since a review of the plan suggests that two economic areas, sustainable agriculture and tourism, merit at least as much attention as the industrial sector; and within the industrial sector, the county's plan says that retaining business is far more important than recruiting new ones, my opinion is that these sectors would be better investment targets, and the cost would be far less than the land deal.

That's the essence of my letter to the editor, reprinted below. Hopefully it will appear in this week's or next week's edition.

====

Dear Editor:

Although I’m currently a weekender, I’ve been enthusiastically following the economic development discussion and recently reviewed the 2004 and 2008 Strategic Economic Development Plan. Project Clover’s creation of “ready-to-go” sites isn’t the only business concept in the plan. The tourism and sustainable agriculture sectors are given equal importance to the industrial sector; and, in fact, the plan makes retaining existing business a higher priority than attracting new ones: “…business retention is even more critical than business recruitment to the economic viability and growth of the County.”

There are four business retention goals, including: developing educational programs, building partnerships, surveying the needs of these businesses, and identifying companion businesses for future recruitment. The placement of these goals in the plan is significant, appearing as they do before the discussion of any goals rel ated to recruiting new businesses or ready-to-go sites.

The first three goals are given high priority in the 2008 plan, while the last is rated less important. All were to be done with current staff resources – Chamber of Commerce, EDA, or Board of Supervisors resources – and some with current funding. The middle two above – the “relationships building” goal and the existing business survey – require new program funds for implementation; they are unfinished and in roughly the same status they were in the 2004 version of the plan.

These goals have been on the table for five years. With all the valid points being raised on both sides of the land deal, why can’t such a small investment that would contribute to future growth of existing business be justified, especially when the strategic plan makes it a higher priority? Seems to me, it’s a case of low-hanging fruit, where a small funding commitment, along with a better understanding of the tourism and agriculture sectors as possible development investment targets, could be leveraged in a powerful way. I’d love to see a revisit of these items as part of the way forward for the County.

Best regards,
Jim (“Cabin Jim”) T
Stanley and Alexandria

That Land Deal...

I’ve recently been reading, and posting on, Page County’s strategic economic development plan. There was a version published in 2004 – which was a topic of previous posts – that outlined an overall vision for the County that emphasizes preserving the rural and picturesque nature of the county, supporting existing businesses and attracting investment, creating new jobs, building infrastructure, and encouraging “green” industry.

Now I’ve moved on to the 2008 update of the plan, and in the midst of reviewing this document, I’ve learned more about the County’s pending purchase of some farm land with the intent to develop it for future, unspecified, industrial use.

Several elements of the plan are controversial, including: the intended transfer of the land to the Economic Development Authority (EDA), which effectively relinquishes the County’s responsibility as land owner; and questions about the negotiated purchase price of the land in relation to its assessed value and the current real estate market – the down payment of $1 million alone obligates each man, woman and child resident of the County to a $300 contribution, while the purchase price in excess of $7 million results in County debt equivalent to $2,100 per resident.

There is broad sentiment for getting more information out to residents about the purchase and the strategy behind it, there is also a petition designed to call attention to the matter – more details on the purchase can be found at http://www.pagecountywatch.org/id71.html , or by reading back copies of the Page News and Courier. Even though we are weekenders, we feel like we are stakeholders in these matters because of the property taxes we pay on the Hawksbill Cabin.

After reviewing the economic development plan, I have questions, and don’t seem to be easily able to find answers. The biggest in my mind is, why the rush to procure this land, especially in light of the economic burden this seems to place on Page County residents.

The only driver for the decision I have found is in the executive summary of the 2008 strategic plan, which says, “…the County needs ready-to-go sites complemented with the ability to process permits, licenses, etc. within short turnaround times” in order to attract companies that fit in with the rural character of the County and diversify the economic base.

To me, this is “cart-before-horsing” – among other things, the previous version of the plan called for an assessment to determine what kinds of businesses to target. Was there follow-up on these objectives and initiatives? Without them, I don’t think it’s prudent to land bank this property, betting it is a panacea to future economic development requirements; squirreling it away in a quasi-government EDA that may not have followed up on its own previous goals and objectives is another thing.

At least, this is my first impression about the controversy – but I’m going to do a couple of posts on the 2008 Strategic Plan in the next couple of days, comparing it with 2004, checking out unfinished business from the prior plan. I’ll be taking the perspective of a venture capitalist deciding whether or not I would invest in the plan – I hope that readers find the questions smart, hard, and to the point.

While I am not a voter in Page County, I am a concerned - property owning - stakeholder who wants to see the best thing done – and that means improving the economic conditions for everybody out there, with jobs and a good quality of life.