2018-01-24 / Featured / Front Page

Amid megasite concern, bill challenges role of economic development authorities


State Sen. Amanda Chase has introduced a bill that would require government approval of expenditures by economic development authorities. 
ASH DANIEL State Sen. Amanda Chase has introduced a bill that would require government approval of expenditures by economic development authorities. ASH DANIEL Members of the Chesterfield Economic Development Authority are accustomed to conducting business in relative anonymity. But when they convened for their first meeting of the year last Thursday, they encountered an audience of keenly interested citizens.

When Chairman Art Heinz gaveled the meeting to order shortly after 3 p.m., there wasn’t an empty seat to be found in the conference room at the county’s economic development offices at the intersection of state Route 10 and Courthouse Road.

Assembled around a square table were Garrett Hart, the county’s economic development director; Heinz; and six other local business leaders who make up the EDA board. Seated in armchairs around the room’s perimeter, 12 members of the Chester-based citizen group Bermuda Advocates for Responsible Development listened intently as Heinz led the board through its brief meeting agenda.

Former Gov. Terry McAuliffe with Garrett Hart, Chesterfield’s economic development director, at the county’s historic courthouse on Aug. 31, when the governor announced plans for an industrial megasite in south Chester. 
ASH DANIEL Former Gov. Terry McAuliffe with Garrett Hart, Chesterfield’s economic development director, at the county’s historic courthouse on Aug. 31, when the governor announced plans for an industrial megasite in south Chester. ASH DANIEL Increased scrutiny is the new normal for the EDA since last August, when then-Gov. Terry McAuliffe announced the authority’s plans to purchase 1,675 acres in south Chester for an industrial megasite.

In addition to sparking protests by citizens who live nearby, the proposed megasite attracted the attention of state Sen. Amanda Chase, a Republican whose 11th District includes southern Chesterfield. After fielding inquiries about the megasite from her constituents, Chase this month proposed a bill to the General Assembly that would require government approval of all EDA expenditures.

Among the questions that she and members of BARD are asking is one that seems to challenge the legitimacy of economic development authorities: Why should a small group of unelected business leaders be entrusted to initiate and oversee lucrative deals that require the investment of millions of taxpayer dollars?

Mike Uzel founded BARD in 2007 to galvanize citizen opposition to Branner Station, a massive mixed-use development off Route 10 that was expected to bring nearly 5,000 residential units and more than 450,000 square feet of commercial space to south Chester.

Its efforts were unsuccessful – the Board of Supervisors approved the rezoning for Branner Station on a controversial 2-1 vote – but the recession of 2008 crushed the local housing market and scuttled the project before it got off the ground.

Now BARD is back and organizing resistance to the proposed megasite, which the EDA wants to develop to attract an automobile manufacturer or other large industrial operation, at the former Branner Station site.

By doing so, Hart said, Chesterfield effectively would be “trading 5,000 houses for 5,000 jobs,” seemingly a no-brainer for a county desperate to attract new commercial development and shed its status as the Richmond region’s bedroom community.

But Uzel and his cohorts want to know why a quasi-governmental board of unelected business leaders is initiating taxpayer-funded economic development deals.

“I had never heard of [the EDA] until this megasite thing came up,” said Wayne Virag, a BARD leader and a former dean at Virginia State University.

BARD has found a sympathetic ear in Sen. Chase. As a rookie legislator, Chase voted against a new statewide economic development initiative, Go Virginia, championed by McAuliffe in 2016, because she opposes the government “picking winners and losers” through the use of taxpayer-funded incentives.

Now Chase is pushing a bill to hold economic development authorities to account.

“I’m a stickler for transparency and elected officials being accountable to the citizens who put them in office,” she said during a recent interview.

“As Republicans, we’re pro-business. What does that mean? Creating an environment where business can thrive, reducing regulation and cutting taxes. I don’t think it’s the role of government to act as a developer and give companies millions of dollars. That’s crony capitalism.

“I also don’t think the government should be making risky investments with the taxpayers’ money. We should allow the free market to determine which projects are economically viable. If conditions are right, companies will locate their businesses here. If they don’t come, they probably wouldn’t have been successful anyhow, and taxpayers wind up on the hook.”

Hart maintains the megasite proposal doesn’t exist in a free market vacuum. Instead, he says the project would simply put Chesterfield on a more level playing field to attract much-needed commercial development.

“Projects with large capital investment and job creation have thousands of locations to choose from, so they simply will not wait for a site to be rezoned or have someone figure out how it will be served by infrastructure. That is why the EDA works with private sector developers to get their sites positioned and ready to go,” he said.

Preparing and marketing sites to large-scale manufacturers, or other industry, requires some degree of confidentiality, Hart says, especially when similar privacy is afforded by competing states and jurisdictions.

As University of Mary Washington political science professor Stephen Farnsworth told the Observer in November, the alternative to pursuing economic development projects is “unilateral disarmament.”

Chase, who said she is taking a “wait and see” view on the proposed Chesterfield megasite, conceded that “unilateral disarmament” isn’t likely to happen despite negative PR from failed deals and lost taxpayer money.

“Sometimes I feel like I’m in the minority in the room,” she added. “We all want to bring jobs to Virginia. I just don’t agree with the way we’re doing it.”

The General Assembly in 1968 passed a law that allows Virginia localities to create industrial or economic development authorities with wide-ranging powers not otherwise available to local governments.

The Chesterfield EDA works in conjunction with Hart and his staff to buy, sell and develop land for various economic development projects. It can also build facilities for sale or lease to private companies, as it did with the 1 million square foot building in Meadowville Technology Park currently under lease by online retail giant Amazon.

County leaders also note with pride that the EDA purchased the blighted former Cloverleaf Mall property and redeveloped it as a thriving mixed-use project known as Stonebridge.

Upon recommendation of the county’s economic development staff, the EDA can provide financial incentives to new or expanding companies to entice them to locate in Chesterfield.

Perhaps most significantly, the EDA can issue taxable and tax-exempt industrial revenue bonds to fund its own projects or provide financing for private companies’ facilities and machinery. This debt is carried on the EDA’s balance sheet, meaning it doesn’t negatively impact the county’s debt ratio or limit the county’s ability to issue its own bonds for public infrastructure projects.

The Board of Supervisors appoints the seven members of the EDA board and has final say over most of its actions, including the use of economic development incentives and the sale or purchase of land.

Most of its operating budget comes from application fees and commissions on the sale of bonds, but the county also can allocate taxpayer funds to support various economic development projects.

BARD members have filed dozens of requests under the Freedom of Information Act for financial documents related to the proposed megasite.

“It’s hard to tell what is county money and what is EDA money,” Virag said. “I’m disturbed by the lack of transparency.”

Some of the citizens who attended last Thursday’s EDA meeting suggested that their interests are not being adequately represented on the megasite development because no members of the EDA board live in the Bermuda District, where the megasite would be located.

They were also frustrated that the EDA board didn’t publicly discuss the megasite during last week’s meeting, which lasted just 10 minutes, despite the fact that its option to purchase the 1,675 acres expires in early February and likely will have to be extended for a second time.

“This board is driving all these different projects, and they meet once a month for 15 or 20 minutes. That’s ridiculous,” Uzel said. “What are they talking about when the citizens aren’t watching?”

Added Chase: “It’s hard to trust something you don’t know about. It’s like, ‘What else aren’t you telling me?’ If we want to keep the trust of the people we represent, we have to conduct business in a transparent way.”

Leslie Haley, vice chairwoman of the Board of Supervisors, acknowledged the need for transparency but said the EDA must comply with companies’ demands for confidentiality during negotiations over incentives and site selection.

“Otherwise,” she said, “good luck getting anything done.” ¦

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