In search of a bigger worm

 

Surpluses—the difference between amounts budgeted and revenues received—that Goochland County has enjoyed for the past few years are shrinking. While assessed values for existing real estate and new construction seem to grow ever upward, so do county expenses.

The cost of everything county government uses, from salaries to electricity, is rising. Hard choices are made during the annual budget process about which items are funded and which are relegated to a wish list.

The 53 cents per $100 of assessed valuation tax rate that has been the norm for more than a decade may be in jeopardy as the county struggles to find enough money to pay the bills.

For years, the county has strived for a tax base that is 30 percent commercial, 70 percent residential. Currently, that ratio is approximately residential 81.35/18.65.commercial Attracting private sector tax paying businesses to the county will take some of the pressure from landowners. Sounds simple, but it is complicated.

On Saturday, August 24, the supervisors and Economic Development Authority held a daylong joint workshop at the Central High Educational and Cultural Center to discuss the current state of economic development, and strategies to bolster commercial investment in Goochland. This was a follow up to the strategic planning session the supervisors held in January. It was an informal session; no votes were taken. Discussions went into some detail about economic development. The meeting was long and substantive. This post will attempt to offer an overview of highlights.

The vision of economic development is to attract, cultivate, and retain diverse businesses for commercial and industrial development while preserving Goochland’s agricultural heritage. Its mission is to “create vitality and quality of life for Goochland citizens through recruitment of new business; retention and expansion of existing business; tourism; and workforce development.

A video and transcript of the entire meeting is available on the county website https://www.goochlandva.us/ under the “watch county meetings tab” for BoS meetings.

The board and EDA convened a joint closed session during the lunch break for discussions “concerning a prospective business or industry locating in the community where no previous announcement about its plans has been made and discussion or consideration of the acquisition of real property for a public purpose, or of the disposition of publicly held real property, where discussion in an open meeting would adversely affect the bargaining position or negotiating strategy of the public body, as permitted by Virginia Code Sections 2.2-3711  (A)(3) and (A)(5).”

Economic Development Director Sara Worley explained the role of the EDA, a five-member body appointed at large by the Board of Supervisors for four-year terms. Considered a political subdivision by the Commonwealth of Virginia, the EDA acts independently of the county and is not funded by it. Currently, Goochland EDA has current liquid assets of $750k.

The powers of the EDA include entering into contracts; the ability to sue and be sued; acquire and sell land; have employees; operate certain facilities; acquire and develop industrial parks; issue bonds; borrow money; and make grants and loans. It can do things that the supervisors cannot.

Worley presented a chart comparing Goochland’s EDA to neighboring jurisdictions, our competitors for business. For instance, Henrico has an active EDA that runs the county’s economic development department, is funded by the county and EDA, owns land, makes loans, and provides incentives.

Goochland’s EDA, in contrast, has a limited role, no land assets, uses county staff, and its ability to grant loans, establish unique programs, and provide incentives are “to be determined”.

EDA financing tools include contributions from the county’s general fund. The sale of its last parcel in the Midpoint Industrial Park near Hadensville also provided some funds. The EDA can serve as a conduit bond issuer for an administrative fee for businesses with interests in Goochland. It may also buy, develop, sell, and lease land.

The last time these two bodies met for a workshop was June 2018. Since then, there has been significant turnover in county administration, staff, and supervisors.

The 2018 meeting discussed what kind of business is appropriate for Goochland to “go after”. There was general agreement that private sector business growth was preferable to more residential growth. One supervisor pointed out that Goochland’s location and access to major highways makes it an ideal site for a transshipping cargo facility—sounds a lot like the now defunct “Project Rocky”—and data centers. Six years later we’ve got lots of houses and not nearly enough businesses.

Things are improving. Since 2018, a hotel, Audi dealership, senior living facilities, and chain businesses were added to the commercial tax base. In 2014, said Worley, Capital One provided 3.36% of the county’s taxable revenue; by 2023, that number declined to 2.63% as other commercial revenue sources came online.

Apartments and senior communities like Avery Point are assessed at commercial rates. When Avery Point was approved, the supervisors touted the investment it would make in the county. However, the increased demand they place on Emergency Medical Services does not seem to have been considered.

Many pieces of the economic development puzzle were discussed.

Existing Goochland businesses include “mom and pop” shops; large corporations including Capital One, CarMax, and Performance Food Group; auto dealerships; chain establishments; event venues; breweries and wineries; and a meat processing plant. Agricultural enterprises, including equine operations, are also considered businesses. We need more.

Neil Spoonhower, District 2 supervisor said that the board fully supports “a push” for commercial development while preserving the county’s rural nature.  He contended that the effort should be a collaboration among the supervisors planning commission, and EDA to be competitive in the region.

Site selection is the first step in attracting companies to Goochland. Worley outlined criteria used by site selection teams to determine if a specific will work for their clients. While the mantra “location, location, location” applies, there are other important factors involved in landing a new business. Developers want detailed, accurate, and current information about a site, including needed improvements, availability of roads, water, sewer, power and internet; zoning; environmental risks; topographical challenges; identification of wetlands; presence of endangered species; investigation of archeological or historical sites; geotechnical surveys; restrictive covenants: and recorded property boundaries. “Sweeteners” include fee reductions, utility rate reductions; and expediting permitting processes.

Industries “targeted” by Goochland are finance and insurance; corporate services; construction; logistics; healthcare and life sciences; and food and beverage manufacturing. Worley also added technology and related data centers, which can be robust revenue generators. Solar facilities, Goochland has one near Shannon Hill, generate little revenue because they are eligible for land use taxation.

In site selection, time is money. Ideally, sites ready to develop, with roads, utilities, and zoning in place for a particular use are most attractive.

Goochland Economic Development maintains a database of available sites and buildings in the county with only basic information. Our “inventory” of buildings and commercial/industrial/retail land is limited. Worley said that residential encroachment on land designated for prime economic development is an impediment to business growth.

The designated growth area has 18,953 acres, but only approximately 1,878 acres have development potential.

Worley explained where county investment could improve marketability and provide a significant return on investment for land whose owners are willing to sell and provide due diligence on their property.

The first is the Markel property in West Creek that is currently home to the Richmond Strikers’ soccer complex. To increase the attractiveness of this 227-acre parcel Worley requested $154,000: $95k for a topographic survey; $2.5 K for a threatened and endangered species database review; $5k for a Phase I environmental site assessment; $18k for a waters of the US delineation; $8.5 k for a site characterization report; and $25k for a conceptual layout and marketing plan. This is due diligence.

This site has water, sewer, and road access. It is assessed at about $23 million. Originally slated for a Motorola computer chip plant, site specifics have not been updated for decades.

The next example was 152 acres on the east side of Oilville Road roughly bisected by I64. Power lines there have drawn the attention of technology companies. However, bringing water and sewer to the parcel is problematical. Worley estimated that a study for this would cost about $250k and outline costs and mechanism to make this happen.

Mechanisms to mitigate risk associated with using public money to market private property could include repayment to the EDA/county at time of sale; marketing the site only for specific uses, like advanced manufacturing, approved by the county; and adjusting the sale price to make it more attractive to a buyer.

Many large parcels in the designated growth areas have landowners who are not interested in developing their land.

Three office parcels in Courthouse Village next to Goochland Cares are for sale and sitting vacant because they lack sewer access. Finding a way to connect these properties to sewer could attract more business there.

Worley advocated creating “technology zones” under which state law allows localities to offer incentives to stimulate development in specific geographic areas. The incentives apply only to “technology businesses and allow waivers of permit and utility connection fees. Louisa County did this and it is believed it played a big part in its landing billions (yes with a b) of dollars of investment from Amazon.

Designating technology zones does not change zoning, allow special uses, and, most important in Goochland, does not waive the ad valorem tax in the Tuckahoe Creek Service District.

A technology business derives its gross receipts from the design, manufacture, development for sale, lease or license of technology-based products, process or related services.

The discussion was thoughtful. Board Chair Charlie Vaughters, District 4, asked the EDA and Economic Development to come to the Board with a detailed action plan request that includes outcomes, future steps, and be able to estimate how Goochland can estimate what is needed to get property to a highly developable state much faster than is the current state.

 

Just released “Goochland County Economic Development received three 2024 Excellence in Economic Development Awards from the International Economic Development Council (IEDC). The awards were bestowed specifically for the organization’s work in the following categories: Paid Advertising Campaign, Special Purpose Website, and Multimedia Promotion.”

Kudos to our economic development department, Worley and Chance Robinson, Economic Development Coordinator, for this achievement.