This article first appeared in the August 21, 2016 Daily Progress
By Neil Williamson
Imagine being in the banana business — and you have no way to obtain fruit.
That is Albemarle County’s current economic development sales position: “Yes, we have no bananas.”
“If a manufacturer calls interested in locating near a highway, we tell them, ‘We have nothing for you,’. Prospect businesses are looking to move within three to six months if they are not looking to build. We tell them, ‘We have no product ready to go today.’” – Faith McClintic, Albemarle County’s economic development director
The “product” Albemarle is lacking is available, properly zoned land. McClintic’s comments to a joint meeting of Albemarle Board of Supervisors, Planning Commission and Economic Development Authority paint a very dark picture for Albemarle County’s economic future.
During the Fiscal Year 2017 budget cycle, the county budget summary stated:
“Other communities for a larger commercial tax base have been able to keep their real property tax rates more stable over the past several years.”
Despite the great recession, other Virginia localities with more vibrant business sectors have not been forced to raise property taxes to balances their budgets.
Currently 80 percent of Albemarle’s local tax revenue is from property taxes; only 20 percent is from business taxes. Other communities are closer to a 70/30 ratio.
If there was one lesson the community learned from losing the Deschutes Brewery opportunity (regardless of whether we were ever really in the game), it was that this community is ill prepared for the very economic development that the Comprehensive Plan envisions.
But it doesn’t have to be that way.
Over the years, Albemarle has spent millions of dollars setting aside parkland and open space to make sure nothing happens on selected properties. Isn’t it time Albemarle invests in making something happen in economic development?
Solving Albemarle’s economic development problem is not about the Planning Commission and Board of Supervisors holding a plethora of focus groups and multiple public work sessions to determine the types of jobs (and salaries) they would like to see. The elected and appointed bodies should instead focus on what they do control: the regulatory environment (planning, zoning and procedures).
Albemarle does not have enough land properly located and zoned for new business development or business expansion. The fundamental problem is that Albemarle’s Comprehensive Plan map and zoning maps do not agree.
Absent new land for development, Albemarle’s annual projected property tax increases are only just beginning. As the tax rates grow, businesses will stop expanding here, choosing instead more business-friendly (and lower-tax-burdensome) localities. Fleeing commercial tax revenue exacerbates the situation, further increasing reliance on the property taxes.
There is a simple answer: Make more.
The two ways to “make more” are to expand the development areas (currently around 5 percent of land mass) and/or proactively rezoning development area land.
Proactive rezoning is when a locality (with owner consent) takes the initiative and rezones land to match its Comprehensive Plan designation. In practice, this makes it easier to develop to the uses and the specific densities expressed in the community-vetted Comprehensive Plan. Since the locality is the applicant, misnamed “voluntary” proffers are eliminated.
Community involvement and education are key in any proactive rezoning. The idea that the community can weigh in on the concept of the rezoning rather than seeking specific site-plan information for a potential applicant keeps the discussion on the macro rather than micro level.
Political will and an understanding of development desires are required for proactive rezoning to be successful. Such rezoning can’t be significantly restricted by onerous form-based zoning codes.
Albemarle has proactively rezoned one region, the Downtown Crozet District (DCD). Due to the highly restrictive form-based code that accompanied this proactive rezoning, thus far only one new private businesses has located in the DCD zone.
The Free Enterprise Forum believes strongly in property rights; therefore, the concept of owner consent to any proactive rezoning is critical. Such consent can easily be established with an opt-out provision prior to the final zoning change enactment.
If a countywide, comprehensive, proactive rezoning is not possible, perhaps Albemarle can look at those areas it has already determined to be the so-called “priority” development areas and start there. Pantops and the new Berkmar Extended both seem ripe for consideration.
Development area expansion
Due to the political work in Richmond of those who came before us, Albemarle has Interstate 64 cutting through the county. Later political activity produced the 1979 development area boundaries (approximately 5 percent for development, approximately 95 to remain rural). Because of the 1979 decision (and little adjustment to it), Albemarle County is woefully behind other communities in land designated for growth.
Based on new environmental restrictions (protecting stream buffers, preserving slopes) and the creation of Biscuit Run State Park (where development once had been approved), the 5 percent land mass of the development areas has been shrinking for more than a decade.
Let’s face it: 1979 had a number of bad ideas (pet rocks, disco, Ford Pinto, etc.). It is far past time to reconsider this nonsensical notion about growth and, at a minimum, open economic development near interchanges to both commercial and industrial opportunities.
Expecting less than 5 percent of your land mass to generate enough positive business revenue to pay for increasing service demands from residents is not feasible. Albemarle will never catch up to its so-called “peer” communities if it does not dedicate, designate and zone more land to jobs.
Fractured board vision
A secondary but equally important problem is a lack of unity within a one-party-dominated Board of Supervisors regarding economic development goals. While Chairman Liz Palmer has stated that her desire for new business is to increase tax revenue, White Hall Supervisor Ann Mallek is concerned about the lack of job opportunities for the 440 families in her district living below self-sustainability (according to the Charlottesville Regional Chamber of Commerce’s Orange Dot Report).
Planning Commission Chairman Tim Keller raised the idea of seeking jobs that paid enough for residents to afford homes costing $600,000-plus. Such price points generate “breakeven” property taxes [when the taxes generated equal the cost of services demanded]. He questioned the fiscal responsibility of seeking to grow lower-paying jobs.
Supervisor Rick Randolph took exception to the concept of looking toward advanced manufacturing as the job sector on which to focus. Charlottesville Tomorrow quoted Randolph as saying:
“I am feeling a disconnect [regarding] the need for manufacturing, when what we really need to focus on is the underemployment situation. I am looking at a target sector for employment that is missing our biggest need.”
Over the past five years working with the Central Virginia Partnership for Economic Development, Albemarle has identified and focused on four target industry sectors for growing and expanding business [ bioscience and medical devices, business and financial services, information technology/defense and security, and agribusiness].
Despite this concerted effort, the results have not followed. The most recent job statistics indicate a loss of 324 jobs in those segments that have been their focus. It does not take a rocket scientist to see that either we need to realign the targets or rework the opportunities we are presenting to the targets.
The Free Enterprise Forum appreciates all of these different perspectives on the types of jobs needed, but we continue to believe all the navel-gazing in the world will not promote a new paradigm in Albemarle where land is readily available and businesses are welcomed by the community rather than being seen as a threat to our way of life.
Who will champion the Albemarle Board of Supervisors coming together to lead the charge for improving the business climate?
Until significant changes are made in the county government’s staff culture and development structure (initiating proactive zoning, expanded development areas, and streamlined approval process, etc.), Albemarle will continue to lose new job opportunities, as well as losing existing businesses that chose to move to more welcoming localities.
When a new or existing business calls the county wanting to expand Albemarle’s employment opportunities and the business tax base, there should be a better answer than “Yes, we have no bananas.”
Neil Williamson is president of the Free Enterprise Forum, a privately funded non-profit public policy organization focused on local governments in Central Virginia. For more information visit freeenterpriseforum.org.