Chris Graham: Silence

That’s what I’ve noticed. An unexpected silence on the $3.5 million land grab being contemplated by Waynesboro City Council.

I’ve heard from two people – one by e-mail and one by phone. We’ve had a couple, literally, comments on our AFP website. I’ve seen a relative handful of comments on the two local newspaper sites, all from the familiar CB handles who comment on any- and everything under the sun.

Outside of that … silence.

Don’t think City Council members aren’t testing the airwaves with me. There’s an election coming up next year with three of the five seats on Council up for grabs.

Four years ago, swirling controversy over another economic-development deal reversed several years of gains by the moderate-progressive wing of the city power structure in one fell swoop. That tide resulted two years later in an effective clean sweep of all five seats on City Council by the conservative-libertarian alliance that now holds sway in the Yancey Building.

That deal, a million dollars tied to a performance agreement for the redevelopment of the Wayne Theatre, is pennies on the dollar to the one on the table right now. The city is not only on the hook for the $3.5 million purchase of the property off South Delphine being envisioned as a business park, but also for more than $7 million in infrastructure improvements to the property to make it marketable to developers.

If a million dollars can swing the pendulum in one direction, surely $10 million can swing it back in the other. Right?

Except for that silence. The bloggers who so throatily denounced moderates and progressives for backing city money for the Wayne have been making a similar case against the Opportunity Park deal, but are they the tip of a summer iceberg of discontent?

We shall see. It’s hard to imagine that City Council won’t go through with this deal, as bad as it is (based on the current terms, though I can easily make a case for it being a good deal, provided we get a couple of million shaved off the asking price, and get the owners to participate in the financing).

It’s just as hard to imagine that the deal won’t become an anchor around the necks of those up for re-election next year.

Those making plans for 2012 might want to consider that as they try to make sense of the eerie silence that has enveloped the river city.

I’d bet that things get noisy between now and the next election.

More columns at TheWorldAccordingToChrisGraham.com

City Council tables land deal

Waynesboro City Council has tabled for two weeks its consideration of a land deal that would put city taxpayers on the hook for $3.475 million to purchase land for a business park.

Without comment, the City Council voted unanimously Monday night to table a resolution that would authorize City Manager Mike Hamp to close a deal to purchase a 170-acre property located off South Delphine Avenue at the interchange of Exit 96 on Interstate 64 now known as Waynesboro Opportunity Park.

The matter will next come up for consideration by the Council at its July 25 meeting.

An informal poll of City Council members reported in the News Virginian over the weekend had found three of the five members of the Council – Mayor Frank Lucente and City Councilmen Mike Harris and Jeff Freeman – were planning to vote in favor of the resolution.

Waynesboro Economic Development Authority Chairman Tom Reider gave his endorsement to the deal at Monday’s Council meeting.

“This is the right thing to do for our future. I call on you to seize this moment so that future generations have similar opportunities that we have here today,” Reider said.

Questions have been raised since details of the proposed deal first became public late last week regarding the purchase price and the cost to get the property into a marketable state. A presentation by Economic Development Director Greg Hitchin told City Council Monday that the projected cost to the city for infrastructure improvements in the business park at $7.3 million – pushing the overall cost to the city close to the $11 million mark.

Presentations by Hitchin and Assistant City Manager Jim Shaw both referenced a projected 20-year buildout for the park.

The property is owned by attorney Roger Willetts of Afton and Staunton auto dealer Charlie Obaugh and his son, Eric. Willetts and a company in which he is an officer were major contributors to Lucente and Vice Mayor Bruce Allen in their 2008 City Council campaigns.

A way to finance the land deal

Here’s how Waynesboro City Council can close the deal on a proposed industrial park without breaking the bank. Three words, two hyphenated: low-interest, back-ended loan.

The idea – the city agrees to purchase the land, approximately 170 acres located off South Delphine near the Interstate 64 interchange at Exit 96, and the property’s owners, Afton attorney Roger Willetts and Staunton auto dealer Charlie Obaugh, agree to finance the purchase with a low-interest loan.

The loan would be structured so that the city wouldn’t pay its first payment on the loan until it had sold the first parcel in the industrial park. (Thus the back end.)

The rationale there: A city official told me last week that it could take five years just to get the property on the market in terms of having infrastructure (roads, water, sewer) in place.

(Contrary to assertions in local media reports that have claimed the property to be ready for development now. Far from it – we’re talking about land whose best current use is the planting and harvesting of soybeans.)

The advantages:

- The current owners no longer pay taxes on property that they have not been able to sell. They also find a buyer, which is not insignificant. One developer told me today that it’s his opinion that the property isn’t likely to sell at anywhere near its assessed value for 15-20 years.

- The city can begin in earnest to obtain help from the state (and as appropriate from Washington) to take care of infrastructure needs at the location. And it’s able to do so without having to assume the risk inherent in any speculative land-development deal. (Added bonus: We avoid having to go through the costly bond issuance process.)

- If all works out, the owners get their money back within 20 years, and the city gets new industries and thus jobs. (Likely also down the road, probably 10 or years more down the road.)

Column by Chris Graham

Business park: A good idea*

You might notice the asterisk. More on that in a moment.

Before we get there, let me just say – oh, yeah, this business park is no question a good idea with great potential to add to the economic base for Waynesboro.

I’ve been saying that since my own campaign for City Council in 2008, when I included in my platform a proposal to have the city work with the current property owners of Waynesboro Opportunity Park to develop the location as a center for industry and technology.

Located right at the Exit 96 interchange accessing Interstate 64, the business park is located 22 miles from the Fontaine Research Park at the University of Virginia – less than 25 minutes driving time from a spur to local economic development.

The location has immense potential for Waynesboro.

Now to the asterisk – we don’t need to pay $3.5 million for the land to make this work.

OK. so we’re being told that we do, that there’s no way the current owners can come up with the millions needed to fully develop and market the property on their own, but that the city can because it can access grant monies that are available to government entities.

I don’t buy that. Not that I’m saying it would be easy, but … this deal can and should be done as a public-private partnership, with a private developer partnering with the city, the state and the federal government to put the land in the best possible position for future development.

A big chunk of the $6 million-plus that I’ve been told would be needed to complete infrastructure work at the location would go into the road network. The city has been working on plans for the extension of Shenandoah Village Drive to connect Rosser Avenue to Delphine Avenue in recent years. No matter who owns the property, that’s going to be key to opening up development potential, and no matter who owns the property, it’s going to require state and federal assistance to get done.

Water and sewer are two other big chunks. This is an area where the city and the developer will have to take the lead, but we see this be the case every day on development projects big and small.

The final big chunk – marketing. The city doesn’t have to own the property to have its economic-development office market it. The city, the Shenandoah Valley Partnership and the Virginia Economic Development Partnership all already aggressively market on behalf of private developers on a regular basis.

The deal being considered by City Council tonight makes sense in every respect aside from the $3.5 million purchase price that would be borne by city taxpayers. Whether we, the city, own the property or not, we’re going to be on the hook for water and sewer, for working with the state and the federal government on the extension of Shenandoah Village Drive and for the marketing.

Putting another $3.5 million onto that bottom line doesn’t make bottom-line sense.

Column by Chris Graham

A $10 million-plus gamble?

If you build it, they might come. If you don’t, they can’t. That could be one way to sum up the rationale behind the anticipated move by Waynesboro City Council to buy approximately 170 acres of land on the southeast edge of the city for future development as an industrial park.

“We’ve not hidden from this issue. If you engage essentially in the development business as a locality, then you’re taking some kind of risk. Your task, then, really, is, How do you manage risk? How do you gauge what the level of risk is? Having done that, you get to the flip side of, well, if you don’t have something, then you’ve assured your failure. You may indeed fail at this, but if you don’t try at all, you’re assured because you’re not in the game,” Assistant City Manager Mike Hamp told AugustaFreePress.com on Friday.

City Council will vote Monday night on a resolution that would authorize City Manager Mike Hamp to close a $3.475 million deal with Waynesboro Opportunity LLC on the property.

Negotiations between the city and property owner Roger Willetts have reached a point where a closing date has been arranged to take place between Aug. 18 and Sept. 18, according to a staff report on file with the City Council Clerk’s office.

The project is being looked at internally as a “legacy” project, according to Shaw, referring to the projected 20-year buildout, the first five years of which would be spent on engineering and infrastructure development needed to get the property pad-ready.

The city is looking at $5.7 million in additional monies to complete that engineering and infrastructure work and more costs in the low seven-figures that would be associated with the extension of Shenandoah Village Drive to connect Rosser Avenue to Delphine Avenue parallel to Interstate 64.

The final cost to buy and then get the property ready for development will stretch into the $10 million-plus range when all is said and done – a pretty set of pennies against a backdrop of budget cuts that have hamstrung city departments and even cut a day off the city’s Summer Extravaganza this weekend.

Another risk for the city – that they won’t be any more successful in marketing the property than its current owners, who have, to their credit, been trying to land industrial and commercial interests at the location over the past several years.

“Your question is a good one. It’s been one I’ve been asked by City Council members. If Roger Willetts hasn’t been able to develop it by now, why do we think we can? I think to some extent it’s because the model for localities doing an industrial or business park is different than the model for private developers doing it,” said Shaw, detailing how localities have access to certain types of grants and incentive packages that private developers don’t have access to.