Category Archives: Economic development

Could Surry Be an 80-Year Nuke?

Surry1By Peter Galuszka

Here’s a new twist on the carbon emission debate: Dominion Virginia Power is considering seeking federal approval run its 40-plus year-old Surry nuclear power station for another 40 or so years.

The arguments in favor are that keeping the two-units at Surry (1,600 megawatts) going would be a lot cheaper than building a brand new plant. Nukes do not contribute much at all to greenhouse gases and climate change compared to coal or natural gas plants.

The huge issue, however, is safety. Can you really expect a nuke whose design dates back to the 1960s to run until 2054? Surry’s plants near Jamestown were once the most heavily fined in the nation because of their repeated safety problems. Constant use can affect any number of crucial components such as making reactor metal brittle, pulverizing concrete and becoming more susceptible to earthquakes and storms.

According to the New York Times, Dominion hasn’t decided whether to apply to extend Surry’s life span. Other possible extended life reactors are Duke’s three Oconee units near Seneca, S.C. and Exelon’s Peach Bottom not that far from Three Mile Island in Pennsylvania.

Dominion is also pushing ahead with a third new unit at North Anna, but the price tag for that apparently would be many times what extending Surry would be. But there are no hard figures about the cost of the new nuke ($10 billion to $14 billion, maybe) or how much Surry would cost.

The news is curious coming just as the staff of the State Corporation Commission came out with a curious report slamming proposal EPA rules on cutting carbon emissions. Although the SCC’s opinions are murky and badly-documented, it raises fears that a bunch of coal-fired generation in Virginia will be shut down due to EPA regs. Hot flash: a bunch was going to be shut down anyway because it dates back to the 1940s and 1950s.

I don’t know enough about the current Surry operation to know what and how extending its life would proceed and whether it would be safe.

That said, I refer to my own reporting past – the 1979 when I was a reporter at The Virginian-Pilot. Another reporter and I spent weeks at the Nuclear Regulatory Commission’s archives in Bethesda, Md. poring over safety documents. This was back when newspapers had the money to do that kind of reporting.

Our result was a big investigative piece that made banner headlines on the front page one Sunday with two full pages inside. I’d include the cite since it is too old to have one. We found a multitude of issues at Surry ranging from faulty radiation monitoring for workers to faulty snubbers which are rod-like shock absorbers to mitigate earthquake-like movements.

Dominion, then Vepco, hated the story and tried to tear it down. But Vepco was undergoing a corporate sea-change away from its institutional arrogance related to some extent by the former Navy submarine officers were not used to being questioned by outsiders. Vepco was getting hit by Wall Street because its sloppy nuclear program resulted in extended outages. They ended up hiring a ringer engineer who cleaned up their act and later the company transformed into something more modern.

Even so, a decade after we did our story, there were still plenty of concerns about safety at Surry.

The big question is how can you keep a car designed in the 1960s going strong nearly 100 years later? Maybe they have the answers in Havana.

More Coal Industry Propaganda

coal woman By Peter Galuszka

If you read a blog posting just below this (the one with the coal miner with an intense look on his grit-covered face), you will see how hyperbole, confusion, misunderstanding, ignorance and one-sided arguments twist something very important to all Virginians – how to deal with carbon dioxide and climate change – into a swamp of disinformation..

The news is that the State Corporation Commission has responded to the federal government’s proposed rules that carbon emissions be cut 30 percent below 2005 levels by 2030 by complaining that it would cost ratepayers up to $6 billion.

This is because Virginia utilities may have to shut down 2,851 megawatts worth of electrical generation with only 351 megawatts (at present) of “unreliable” wind power to replace it.

The image one gets from the presentation of the blog post is that it is “The EPA’s War on Virginia” with the haggard-looking miner thrown in, we are given the impression that it is more of the “War on Coal” that the coal industry has been promoting in recent years to blunt much-needed mine safety laws and moves to police highly destructive mountaintop removal practices.

The author does not address any of this. But since he’s handing us the “War on Coal” propaganda line, let’s take his arguments apart. This won’t take too long.

  • The author fails to note part of the Richmond Times Dispatch story upon which he bases his opinions. There is a very important comment: “It appears the staff has misread the rule,” said Cale Jaffe, director of the Southern Environmental Law Center’s Virginia office. “Analyses that we have reviewed show that Virginia is already 80 percent of the way to meeting Virginia’s carbon pollution target under the Clean Power Plan. “Almost all of those reductions are coming from coal plant retirements and natural gas conversions that the utilities put in place long before the Clean Power Plan was even released,” Jaffe said.
  • That said, let’s take a look at coal-fired plants in the state which are the biggest carbon offenders. For starters let’s look at Dominion Virginia Power, the state’s largest utility. It has already converted three coal-fired plants – Altavista, Southampton and Bremo Bluff – to biomass. The 50-plus-year-old Yorktown plant (335 megawatts) is due to retire in 2015. Another aging plant – Chesapeake (609) megawatts — is also due to retire by 2015. The point here is that these plants are being closed because Dominion realizes that it is just too hard to keep 50 or 60 year plants operating efficiently and cheaply. It would be like keeping that 1960 Corvair because you don’t want to put oil workers out of work.
  • Dominion’s biggest problem and the biggest single air polluter in the state is the Chesterfield station with 1380 megawatts. Yes, it does need more controls. Then there’s Clover (882 megawatts) and Mecklenburg (138 megawatts). That brings us up to 2400 megawatts that might need upgrades. Let’s see. The two nuclear units at North Anna put out a little more than 1,700 megawatts just so we get some scale here. Dominon also has Virginia City (585 megawatts) which just opened, uses coal and biomass and has advanced fluidized bed burning methods.
  • Out west, Appalachian Power has 705 megawatts at Clinch River and 430 megawatts at Glen Lyn. Two of those three units there were built in (my God!) 1944 so I guess the blog author wants to keep those great granddaddies running to save miners’ jobs. Actually they are so unneeded that they have been on extended startups.Besides these Cogentrix has a couple small, modern plants in Portsmouth and Hopewell.
  • One reason there so little renewable generation (6 percent) is that the utilities do not have mandatory renewable portfolio standards to force them into wind and solar, etc. Virginia’s neighbors do.

All of this gets back to Jaffe’s point that the blog author so easily ignores. A lot of the carbon cuts are going to come from plants that are aging and are going to be closed anyway.

The SCC may complain about the $6 billion but guess what, you beleaguered electricity users? If Dominion puts a third nuke at North Anna, that’s easily $10 billion. Is that going to raise rates sky high? Where’s the outcry? It’s almost double what helping save the planet from carbon dioxide will cost.

The blog author’s hyperbole about the poor coal industry shows his ignorance of the topic. Virginia’s rather small coal industry (No. 12 in production) reached its peak in 1991. Natural gas has displaced a lot of expensive coal. Gas prices would have to triple to make Central Appalachian coal competitive again. There’s lots of metallurgical coal for steel, but the Asian economic slump has dropped prices maybe 60 percent.

I won’t comment on the author’s lame and misunderstood point about climate change not happening.

The blog author may want to blame that on Obama and the EPA but that would be almost as ridiculous as his blog post. I decline to name him because I don’t want to embarrass him.

Redefining Richmond: Arts! Culture! Food!

ICTby James A. Bacon

Richmonders berate themselves (and outsiders mock them) for their inability to decide where and how to build a baseball stadium for a AA baseball team. If the region’s political and civic leadership can’t pull off this most basic of regional tasks, one might legitimately wonder if they can accomplish anything useful at all. But it turns out that Richmonders can mobilize behind civic projects — it just has to be the right kind.

A case in point is Virginia Commonwealth University’s Institute for Contemporary Art, which has raised $33 million of its $37 million funding goal. Construction of the facility, designed by an award-winning New York architect, is located at Belvidere and Broad, one of the region’s busiest intersections and a gateway to downtown. This project, which will showcase art from VCU, one of the nation’s leading art schools, has not been controversial at all. Funds were raised through contributions by local philanthropists. With help from a construction loan from the VCU Foundation, construction began in June.

A city and region define themselves by the long-term investments they make in civic infrastructure. To pick a very different example: Buffalo, N.Y., a region of comparable size to Richmond, has poured money into a pro football complex downtown more magnificent than anything than Richmonders could conceive of erecting in their own city — and locals still aren’t satisfied. Buffalo groups are exploring an even more grandiose facility. Richmond has nothing to compare. But it does have arts and culture out the wazoo. And we locals like it that way.

Speaking to the Richmond chapter of Commercial Real Estate Women, Institute Director Lisa Freiman outlined the vision. As reported by Virginia Business, the institute will  showcase a changing array of exhibitions not only by VCU artists “but the best of contemporary art from around the world.” Freiman predicts that the facility “will create opportunities for cultural tourism and community revitalization.”

The tie-in between contemporary art and economic development is stronger in Richmond than it would be in many other regions. The advertising industry is remarkably vibrant for a region Richmond’s size. Local companies serve national clients, and they employ artists, graphic artists, videographers and the like. There is a easy, natural cross-over between the art world and the advertising world. Supporting one supports the other.

rappahannock

Travis Croxton (left) and Ryan Croxton, owners of the Rappahannock restaurant. Photo credit: Times-Dispatch.

Meanwhile Richmond — and Virginia as a whole — is developing the reputation as an up-and-coming foodie region. Esquire Magazine has just named Virginia “The Food Region of 2014″ in its 2014 Food and Drink Awards. “The Old Dominion has seemingly overnight exploded into one of the country’s greatest gastro regions,” writes the magazine, as reported in the Times-Dispatch. While the recognition goes to Virginia as a whole, Richmond is a vibrant part of the state’s foodie scene. Rappahannock restaurant won recognition as one of the 12 “Best New Restaurants” in the country.

The article cited Virginia’s diverse geography and the ability to source fresh, locally grown produce and artisinal food products from the mountains to the Chesapeake Bay as a big plus for restaurants aspiring to national quality. I’m sure that’s a factor, but I think the story is bigger than that. Richmond and Virginia produce great restaurants because the local marketplace supports them. People are willing to pay premium prices that restaurants must charge in order to recruit and pay chefs of national caliber.

New Yorkers and Washingtonians may laugh at Richmond’s pretensions in the worlds of art and cuisine — to many we’re still a hicksville backwater still fighting the Civil War. What they don’t see is how the region is steadily reinventing itself. Once the city prided itself on being a regional center of corporate headquarters. That prop to the economy suffered heavy damage during the recession of 2007-2008 and has been slow to recover. But there has been tremendous activity beneath the surface. Redevelopment along the downtown canal. The Richmond Folk Festival. Converting the James River into the region’s “Central Park.” The boom in downtown living. The French Film Festival. The gentrification of Church Hill and Scotts Addition. The creation of a fantastic network of mountain biking trails. The rise of the foodie movement and the renaissance of locally grown food.

Unconsciously, Richmond has been building the foundations of the “creative class” economy. It’s becoming the kind of place where creatives want to live, work and play. When creatives settle here, they start new businesses. In time, some of those businesses become success stories and economic dynamos that will propel regional growth. VCU’s Institute for Contemporary Art symbolizes how Richmond is redefining itself as something very different and very new.

The Forbidden City Comes to Virginia

forbidden cityBy Peter Galuszka

The Forbidden City has come to Virginia and it’s definitely worth a look.

Rarely-seen works from the Palace Museum in Beijing’s Forbidden City, the imperial residence of Chinese emperors from the Ming to the end of the Qing Dynasty (roughly from about 1406 to 1912) go on display tomorrow at the Virginia Museum of Fine Art in Richmond.

Putting the exhibits together took lots of work and diplomacy, VMFA Alex Nygeres told guests and the news media Wednesday at a morning event. There were plenty of visits back and forth and there are plans for the VMFA to reciprocate by sending its famed Faberge Egg exhibit from the Russian Romanov era to China. The Ambassador from the People’s Republic of China to the U.S. attended a gala, $10,000 a table event the evening of Oct. 14.

I’m no expert of Chinese art, but the exhibit was highly impressive. The many works included court paintings, religious artifacts and costumes, including an early form of body armor for soldiers which consisted of layers of tough cloth protecting vital organs and appendages.

The exhibit opens at a time of unsettled relations between the U.S. and the People’s Republic. China has been torn by pro-democracy protests in Hong Kong. Workers’ expectations are rising as China’s economy is slowing. Beijing is becoming more aggressive as a regional military power and its efforts to censor Web-based information and launch cyber spying are worrisome.

Another issue is that given the tough, expansionist diplomacy of Russia’s Vladimir Putin and the negative reaction from the West, Moscow is looking for more links with China. Relations between the two have always been up and down. Not that long ago, experts believed that if there were a nuclear weapons attacks, it might occur between those two countries. Now, peace has returned and both may be able to exploit their close geography and relative strengths in energy and population in a way based on economics and not Communist ideology.

On the bright side, China does have money and is fast developing expertise. China’s Shandong Tranlin paper company is investing $2 billion in a modern paper plant in eastern Chesterfield County that will employ 2,000. It won’t use trees, but leftovers from farm fields and is supposed to be less polluting than paper mills most Americans are familiar with. What’s more, Gov. Terry McAuliffe is off on a trade mission to China in a few days.

In any event, the Forbidden City is worth a look. It runs until Jan. 11.

Woo hoo! Giving Money to Rich, Out-of-State Capitalists Is Fun!

Richmond Mayor Dwight Jones (left) and Governor Terry McAuliffe.

Capitalist benefactors: Richmond Mayor Dwight Jones (left) and Governor Terry McAuliffe.

Richmond is home to numerous craft brewers: Legend Brewing, Triple Crossing, Richbrau, Strangeways and Hardywood Park, just to name five that show up on the first page of a Google search. But when it comes to rolling out the red carpet, state and local government is lavishing its favors upon Stone Brewing, of Escondido, Calif. — $23 million in City of Richmond bonds to build the brewery, $8 million to build a restaurant, $5 million from the Governor’s Opportunity Fund and potentially $250,000 from the Governor’s Agriculture and Forestry Industries Development Fund.

Admittedly, none of the local brewers have achieved the scale of Stone Brewing, which announced last week that it would invest $74 million in Richmond, creating 300 jobs. In a state economy struggling for traction, Stone’s announcement is the fifth largest economic development deal (ranked by investment) so far this year.

But the massive loans and subsidies raise a number of issues of equity and fairness, as Bart Hinkle noted one such issue in his Times-Dispatch op-ed this morning:

Stone executive Steve Wagner says other factors determined its final decision: water supply, wastewater capacity and proximity to suppliers. If that’s true, then Richmond should have been able to land the brewery without the handouts. It’s bad enough to think officials felt they had no choice but to offer Stone public inducements. It’s even worse to think the inducements were necessary.

Hinkle also wonders, as I do, how the home-grown brewers feel about the special treatment accorded their potential competitor. While the Stone Brewing brewery will serve a wider East Coast market, its restaurant will compete more directly with local brew-pubs. And, really, how many brew pubs can a city Richmond’s size support? Will Stone Brewing’s presence crowd out local players? Nobody knows but it’s a risk worth pondering.

There’s one other issue: Richmond apparently will be issuing $31 million in municipal bonds to help finance construction of the brewery and the restaurant. The city has finite borrowing capacity. If it borrows $31 million to back the Stone project, that’s $31 million it cannot spend elsewhere without endangering its AA+ (Standard & Poors) bond rating. This is a city, mind you, that wants to issue bonds for an $80 million baseball stadium and redevelopment project in Shockoe Bottom, $8 million to create a Bus Rapid Transit system along Broad Street, spend millions more to the city bicycle-ready for an international bike race in 2015, push ambitious housing-redevelopment and neighborhood-revitalization goals the city’s East End, support a new children’s hospital, and presumably pursue other capital improvement projects and economic development opportunities as opportunities arise.

Its good that Mayor Dwight Jones has a can-do attitude. But the city needs to pick its projects wisely. It needs to leverage its public investment to the max. And it needs to keep some powder dry for other opportunities that may appear. The best criteria to adopt when investment public dollars is this: Would I invest this money if it belonged to me? Am I maximizing  risk-adjusted Return on Investment? I have seen no evidence that the Stone Brewing deal would pass that test.

– JAB

Why We’re Being Railroaded On “STEM”

 csx engineBy Peter Galuszka

When it comes to education, a constant mantra chanted by the Virginia chattering class is “STEM.”

How many times have you heard that our students are far behind in “STEM” (Science Technology Engineering and Mathematics)? We have to drain funding from more traditional areas of study (that actually might make them better human beings like literature, art or history) and give it to STEM. The two types of popular STEM are, of course, computer science (we’re all “illiterate” claims one journalist-turned computer science advocate) and biotechnology.

But how important is STEM, really? And if Virginia joins the STEM parade and puts all of its eggs in that basket, will the jobs actually be there?

The fact of the matter is that we don’t know what jobs will be around in the future and like the famous generals planning for the last war, we may be stuck planning for the digital explosion of Bill Gates and Steve Jobs that is like, so, 25 years ago.

To get an idea where markets may be, look at today’s news. Canadian Pacific is making a play for CSX railroad (headquartered in Richmond not that long ago) because of the unexpected explosion in fracked oil.

CP handles a lot of freight in the western part of Canada and U.S. where some of the most impressive new fracked shale oil are, namely the Bakken fields of North Dakota and Alberta. CP wants access to eastern U.S. refineries and transshipping points, such as a transloading spot at the mouth of the York River. CSX is stuck with dirty old coal where production and exports are down, although it has an extensive rail network in the Old Dominion.

The combined market value of the two firms is $62 billion — a far bigger potential deal than the $26 billion Warren Buffett paid for Burlington Northern Sante Fe in 2010. There are problems, to be sure. CSX isn’t interested and the Surface Transportation Board, a federal entity, nixed a matchup of Canadian National and Burlington a little while back.

But this isn’t really the point. The point is that the Old Steel Rail pushed by new sources of oil and to some extent natural gas has surprisingly turned domestic economics upside down. Many of the new oil fields are in places where there are not pipelines, so rail is the only answer. In 2008, according to the Wall Street Journal, six or so American railroads generated $25.8 million in hauling crude oil. Last year that shot up to $2.15 billion.

So, what does that mean for students? A lot actually, especially when we blather on about old-style STEM that might have them inventing yet another cell-phone app that has a half-life of maybe a few months. Doesn’t matter, every Virginia legislator, economic development official and education advocate seems to be hypnotized by the STEM genie.

A piece I just did for the up-and-coming Chesterfield Observer on vocation education in that county:

“The recent push to educate students in so-called STEM (Science, Technology, Engineering and Mathematics) may be case in point. The goal is to churn out bright, highly trained young people able to compete in the global economy with their counterparts from foreign lands.

“A subset of this area of concentration is computer science, which goes beyond knowing the basics and gets into the nitty-gritty of learning code and writing computer languages. By some accounts, such skills will be necessary to fill more than 2 million jobs expected to become open in the state by 2020.

“Critics question, however, if overspecialization in technology at earlier ages prevents students from exploring studies such as art and literature that might make them better rounded adults. And, specialization often assumes that jobs will be waiting after high school and college when they might not be.

“Peter Cappelli, a professor of management at the Wharton School of the University of Pennsylvania, has written about such problems of academic overspecialization in national publications such as The Wall Street Journal. He recently responded to questions from the Chesterfield Observer via email.”

“Not many science grads are getting jobs in their field,” Cappelli says. “The evidence suggests that about two thirds of the IT (information technology) grads got jobs in their fields, about the same for engineering. There is no guarantee in those fields. It’s all about hitting the appropriate subspecialty that happens to be hot. There are still lots of unemployed engineers and IT people.”

So there you have it. In my opinion, the over-emphasis on STEM training has the unfortunate effect of producing young adults who have one goal in mind – getting a job and making money, not helping humankind. And, if you insist on STEM, why not branch into something where there are actually jobs namely petroleum engineering, geology and transportation engineering.

I’ll leave the dangers of added petroleum cargoes in trains to another post.

Burbs Beware: Office Jobs Moving Back to D.C.

dc_office_spaceNot only are Millennials migrating to the Washington metropolitan region’s urban core, it seems that businesses are, too, in a reversal of the decades-long trend of businesses moving out of the central city to outlying counties.

Vacancy rates have risen in Washington, D.C., due to the contraction of legal services and government contracting tied to federal government spending. But according to commercial real estate firm JLL, private-sector tenants from Maryland and Washington accounted for 300,000 square feet of new leasing activity in the District. Reports Virginia Business magazine:

Doug Mueller, a senior vice president at JLL, noted that the migration is heavily populated by associations, technology companies and professional services firms. “The quality and location of office space with easy access to mass transit, abundant amenities and housing options also has a visible and tangible impact on attracting and retaining top talent,” he said in a statement.

According to JLL’s Office Insight report for the third quarter, since the start of 2014, a total of 21,200 private-sector office jobs have been added to the metro D.C. economy.

In an office market with tens of millions of square feet of space, 300,000 square feet is a rounding error. What’s significant is not the volume of space being occupied — although 21,200 office jobs is nothing to sneeze at — but the trend: jobs migrating back to the urban core. For decades, Virginia enjoyed a huge competitive advantage over the District with its dysfunctional government, poverty, crime and decaying neighborhoods. Now, despite bad schools, high taxes and expensive real estate, D.C. has something that educated Millennials and the businesses that employ them are looking for — walkable urbanism.

Next question: Is this trend unique in Virginia to the Washington metropolitan region or is it occurring in Hampton Roads, Richmond and the smaller metros as well?

– JAB

How to Revive a Lagging Regional Economy

Graphic credit: James V. Koch and Gary W. Wagner. Click to enlarge image.

Graphic credit: James V. Koch and Gary W. Wagner. Click to enlarge image.

by James A. Bacon

Dr. James V. Koch’s “The State of the Region: Hampton Roads 2014” report probably won’t get much attention outside of Hampton Roads, but it should. Not only is Hampton Roads the state’s second largest metropolitan economy, which means that its fortunes and misfortunes send large economic ripples across the state, but Koch’s observations about the region’s antiquated approach to economic development apply to many places in Virginia.

The message delivered by Koch and co-author Gary A. Wagner to an audience of more than 1,000 at the Norfolk Waterside Hotel was none too encouraging. After getting clobbered during the recession of 2007-2008, the Hampton Roads economy has been slow to bounce back. Employment growth has trailed state and national averages by a wide margin, as shown in the graph above. The stagnation in job growth can be explained in large measure by the impact of defense cutbacks on the region’s largest industry, the military. Comparing Department of Defense procurement awards 16 months pre- and post-sequestration (March 2013), Hampton Roads was down 24.4%. Moreover, sequestration will continue to squeeze as the military downshift continues and the Pentagon shifts its strategic focus to Asia.

“I think the Hampton Roads region is just starting to feel the effects of sequestration,” Wagner said in his presentation, according to an ODU recap.  “And as bad as things are (because of forecast freezes in DOD spending for the next two years) it could get worse. It’s a bumpy couple of years ahead for Hampton Roads.”

The Port of Virginia is a bright spot. After losing market share following the recession, the port reversed course and regained market share for three years running and now commands 17.2% of the East Coast market, a new peak. The expansion of the Panama Canal, which will encourage the use of more big ships, will confer a competitive advantage to the deep-channeled Virginia ports for a few years at least. But another traditional industry, tourism, remains stuck below its 2007 apex, as measured by hotel revenue. And housing prices have recovered less than a third of the value lost during the housing bust; the number of distressed homes, while improved,  remains historically high.

There are no “quick fixes” for what ails the Hampton Roads economy, Koch said. The region needs to adopt a long-term perspective.  “The bottom line is that economic development is a long-term process.” The region needs to invest more in projects with a long-term payoff like K-12 education, infrastructure and research and less in high-visibility projects like convention centers, hotels, arenas and entertainment centers. “We delude ourselves if we think we can short-cut [the economic-development] process by constructing flashy facilities that primarily redistribute income within our own region.”

The conventional wisdom on economic development “is no more,” he declared.  For decades, “economic development” in Hampton Roads, as across Virginia,  focused on attracting new firms and to do what it took — offering land, tax incentives, etc. — to attract them. But abundant research indicates that 80% to 85% of locational decisions are not influenced by such give-aways. “Incentives” amount to a wealth transfer to businesses that would have made the same decision anyway.

The hot idea in economic development today is growing businesses locally — economic “gardening,” to use a term coined by David Birch in the 1980s. Make life easier for small businesses by giving them access to high-speed Internet connections, providing cheap or temporary space, and connecting them to academic, financing, engineering and marketing resources. While most small businesses stay small, some become growth stars that account for immense investment and job creation.

Hampton Roads, always a laggard, recorded the lowest level of business start-ups among nine Virginia regions from 2010 to 2012. Rather than subsidizing selected businesses, Koch advocates an approach of identifying impediments to growth and helping firms overcome those impediments. “What would it take for one of our new, small microbreweries to grow and access new markets? For Liebherr to develop and implement a new cost-saving technology? For BAE Systems to become a major player in off-shore wind generation? Let’s find out! Let’s garden our regional economy.”

Among other ideas Koch explored: creating “innovation districts,” where knowledge-based start-ups are clustered geographically, often in proximity to a research university, where easy interaction stimulates innovation;  promoting university Research & Development at ODU, Eastern Virginia Medical College and the College of William & Mary; and supporting job and skill development programs and apprenticeships.

Bacon’s bottom line: Koch is spot-on about the need to think differently about economic development in Virginia. At the top of the list of bad public investments — let’s call a spade a spade… of stupid public investments — are glitzy convention centers, arenas and sports centers. For the most part, all they do is redistribute entertainment dollars within a region at great public cost. If a region is prosperous and a market exists, the private sector will build those facilities on its own. Second on the list of bad public investments are “incentives” for attracting new businesses. Most of that money is wasted. Better to invest in helping citizens gain the education and skills they need to compete in a knowledge-based economy.

Now, if only we could persuade Koch to apply his keen analytical insights to understanding the pervasive effect of human settlement patterns on a region’s economic competitiveness. Then we’d really be getting somewhere.

Petersburg’s Renaissance

PetersburgBy Peter Galuszka

Petersburg has been a special place for me.

Years ago, when I’d pass through, I always felt I were driving onto the set of a 1950s or 1960s movie set in the South such as “Cape Fear” starring Gregory Peck and Robert Mitchum. A somnambulant ease pervades the place as does the down-home friendliness you don’t get in pretentious Richmond 30 miles to the north up Interstate 95.

I got to know Petersburg a lot better when my two daughters went going to high school there at the Appomattox Regional Governors School for the Arts and Technology. Drawing from localities from Richmond to Isle of Wight and Franklin, the school body was bright, diverse and creative.

Driving my children if they missed the bus from Chesterfield was a pain but the effort was worth it since they had some fine teachers and avoided the White Toast trap of entitlement one gets into in more affluent suburban schools.

That’s when I was introduced to Petersburg’s nascent arts community. I went to plenty of “Fridays for the Arts” celebration and hung out at Sycamore Street with the kids.

Returning again recently, I found that the arts scene is really taking off. They  seem to be at a sustainable critical mass.

It is due primarily to the city’s policy of remaking itself by setting up an arts district that is nationally recognized as historic and offering tax credits and abatements for newcomers to renovate properties they buy from the city. The big expansion at the Fort Lee military base in 2005 really helped (although it’s due for a cut).

I wrote about it in a cover story in Style Weekly. The heroes and heroines are far-sighted city officials, arts willing to risk a lot remaking some truly historic buildings and the next wave, restaurants that aren’t owned by franchises, coming in.

Not everything is wonderful. Petersburg still has a weak public school system and a poverty rate of 28 percent, a point higher than Richmond’s. But it also doesn’t have the in-fighting among powerful interest groups that far bigger Richmond does. There’s no endless debate over building a baseball stadium in Shockoe Bottom (to line pockets of developers) or keeping it at the Boulevard.

There’s no high level brinksmanship about where to put a Children’s Hospital.

In Richmond, you see, ball fans and sick children are the last ones to be worried about. What matters is Mayor Dwight Jones, Bill Goodwin, Michael Rao, the Timmons Group and the editors of the Richmond Times Dispatch. They are important and you are not.

You don’t get that in Petersburg. The little city (population 32,000) that has a historical richness than rivals Richmond’s doesn’t think it is better than anyone else.

McAuliffe Dodges Mandatory Renewable Energy

coal plant burnsBy Peter Galuszka

It seems like two steps forward and one step back. That’s about the best I can come up with for Governor Terry McAuliffe’s new energy plan for Virginia.

On the two steps forward side, McAuliffe is pushing for more wind power and relaxing regulations to make it easier to back solar, such as allowing towns to create their own solar panel farms near their city limits.

The one step back is the usual commitment to energy sources of days before, such as a nuclear, offshore drilling for oil, coal and natural gas. That’s what former Governo Bob McDonnell wanted with his pipe dream of making Virginia “The Energy Capital of the East Coast.”

The biggest problem with the McAuliffe plan is that it dodges the issue of making Virginia’s Renewable Portfolio Standards (RPS) mandatory. I asked Brian Coy, his press spokesman about this, and he said that the governor sees that as something for the future.

Maybe better late than never, but the fact that Virginia has always bowed to the power of Big Energy and declined to make mandatory the conversion of a certain amount of electricity generation to renewable sources such as wind, solar, geothermal and hydroelectric.

Plain and simple, that is why Virginia gets an embarrassingly low six percent of its power from renewables and is far behind states like Maryland and North Carolina that have mandatory standards. One wonders why Virginia seems so exceptional. The only answer that I can come up with is that Old Energy firms such as utility Dominion and coal baron Alpha Natural Resources are huge contributors to political candidates of both stripes.

Dominion praised the governor’s efforts and the Sierra Club had lukewarm approval.

The problem with shifting to renewables is that not making it mandatory by law gives Big Fossil and Nuclear an immediate price advantage. Coal is deadly, messy and is a major contributor to climate change. A few years ago, there might have been a greater push towards wind and solar to replace it. But hydraulic fracking came along, bringing a big boost to natural gas from hard-to-reach geologic formations.

Thus, gas pushed out coal (although conservative Big Fossil types claim it is Barack Obama’s over-regulation but that just ain’t so) on economic terms. It has probably delayed advanced nuclear technology and most certainly has delayed solar and wind. They are expensive now but won’t be in the future, so fracked gas’s great advantages won’t last forever.

Don’t believe me? Check out historical data on gas prices.

McAuliffe, meanwhile, is pushing such dubious projects as a 550-mile-long gas pipeline running over the tops of pristine and sensitive mountaintops and through lots of small towns that don’t have big corporate clout to change pipeline routes.

One more step back.