Tag Archives: Rural development

There’s Gold in Them Thar… Press Releases?

by Jock Yellott

It seems there is a vein of quartz underground in Buckingham County sparkling with gold. The General Assembly almost prohibited mining it, but then backed off. This time.

A string of historic gold mines going back to the 19th Century appear as red dots on the county geological survey map like chigger bites on the skin of the land. Exploratory drilling by a Canadian company, Aston Bay Holdings, found significant new quantities of gold there.

From about the depth of a water well — 150 to 300 feet– Aston Bay’s diamond drills pulled up broken columns of translucent white quartz flecked with yellow metal. They drilled and drilled again for about 200 yards, two dozen holes, rarely drilling without finding more quartz glinting with gold. Continue reading

What Is a Farming Landowner to Do?

by Jim Kindig

My 3rd great grandfather came to Augusta County in the 1820s, cleared land and established crops on land that is still in our family. Several of my neighbors could tell similar stories. We love farming, but it’s a hard life. Incredible increases in productivity have kept agricultural commodity prices depressed for 80 years. To keep up with the latest and greatest agricultural machinery and technology, farmers have borrowed heavily, using their ancestral lands as collateral. One or two bad years, and they go broke. Many see no way out of their cycle of indebtedness.

Today there is light at the end of the tunnel, so to speak, and that light comes from the sun. Large-scale solar farms offer landowners a low-risk means to keep their farm land. They can lease acreage to a solar developer for a guaranteed income over 25 years. At the end of the lease, they can easily convert the land back to agricultural production with no degradation of soil quality or health. Continue reading

How Hillsboro Reinvented Itself… with Government Grants

“Downtown” Hillsboro. Photo credit; Washington Post

by James A. Bacon

Hillsboro in western Loudoun County is a rural success story, reports The Washington Post. Over the past couple of years, the town of 120 has transformed its main street, a 0.7-mile stretch of Route 9. The addition of sidewalks made the community’s main drag inviting to pedestrians after having been rendered untraversable by the 17,000 vehicles, many of them conveying West Virginians to jobs in the Washington metropolitan area, that passed through every day.

Foot traffic at the Stoneybrook Farm and Market has more than doubled since early 2020. Kids can walk to class. Residents stroll instead of drive to the town’s Friday night concerts. The tiny shopping district is more inviting to the many visitors to the area’s wineries and breweries. Residents are upgrading their homes, and local businesses are expanding.

“It was hard to walk anywhere before. It felt like all you could do is drive to your house, get in your car, get out of your car, get in your car and drive somewhere else,” said Paul Hrebenak, who moved to Hillsboro a year ago. “Now you can walk across the street to your neighbor. You can walk the dog up the street and run into people and sit and chat on the sidewalk, rather than on the side of a busy highway.”

Hillsboro is the perfect illustration of what Bacon’s Rebellion has long advocated as a central part of any rural revitalization strategy — turning hamlets and small towns into walkable communities. There’s just one problem: The Hillsboro model is not replicable anywhere else — unless other communities can figure out how to raise the equivalent of $280,000 per resident in state, federal and local grants. Continue reading

Coal Counties Make Bid for Data Centers

Coal mines as source of geothermal cooling. Shown here: Will Payne, director of InvestSWVA. Credit: Virginia Business.

by James A. Bacon

Six localities in far Southwest Virginia have agreed to offer big tax breaks in a bid to recruit more data centers to the economically depressed region. The Project Oasis initiative will dangle the lower taxes as well as geothermal cooling from old coal mines as enticements that no other region can match.

The localities in the Lonesome Pine Regional Industrial Facilities Authority — Dickenson, Lee, Scott, and Wise counties and the City of Norton — have agreed to tax data-center equipment at a rate of $0.24 per $100, almost half the rate of the $.40 rate, the previous lowest rate in the state, that enabled Henrico County to attract a $1.75 billion Facebook data center.

As a kicker, Project Oasis offers industrial sites located near former coal mines filled with water naturally cooled to a temperature of 51 degrees. Energy consumption for cooling is a major expense for data centers. Project Oasis claims that geothermal cooling could save data centers more than $1 million annually in reduced electric costs and municipal water purchases. Continue reading

The Logic for Rural Broadband Subsidies

Source: “Bringing Broadband to America”

by James A. Bacon

Reputable estimates of the cost of making high-capacity Internet service universal across the United States run in the $80-billion to $85-billion range, but the society-wide benefits may be worth the outlay, argues Alexander Marré, a Baltimore-based regional economist with the Federal Reserve Bank of Richmond in a recent paper.

There are multiple benefits, Marré contends. Broadband has positive effects for business-location decisions and employment growth in rural areas, research data shows (although effects can be stronger in rural areas that are closer to metropolitan areas than more remote regions). Broadband also enables rural consumers to choose from a wider array of goods and services, potentially saving more than $1,000 per household. High-speed Internet also can improve the efficiency of rural labor markets. It can improve access to healthcare via telemedicine and distance learning. And, as a desirable amenity, it can boosts home values.

The  low density of businesses and households makes deployment of broadband infrastructure costlier than in metropolitan areas, and for-profit telecom companies can’t justify the low return on investment. But if the social benefits are as extensive as Marré contends, rural communities have a different cost-benefit calculus. His article explores several alternatives for bringing broadband to rural communities, including a Shenandoah Telecommunications (Shentel) projectin Virginia. Continue reading

The Political Economy of Solar Farms

by James A. Bacon

I have consistently supported the expansion of solar energy in Virginia, at least up to a point where it doesn’t compromise the reliability of the electric grid. When up-front capital costs and fuel costs are taken into account, solar is the lowest cost source of electricity in Virginia. Furthermore, as a supporter of property rights, I believe that rural landowners should be free to contract with developers to build solar farms on parcels that might otherwise lie fallow or go underutilized. Building solar farms potentially could put hundreds of millions of dollars in the pockets of rural landowners.

But I understand why people in rural Virginia get up in arms when big solar developers want to blanket thousands of acres with solar panels. I don’t necessarily agree with their proposed remedies, but I do understand.

Virginia’s urban/rural divide is becoming more pronounced than ever. That divide is most visible in voting results and electoral maps that show a vast geographic expanse of “red” Virginia compared to concentrated, highly populated clusters in “blue” Virginia. Views differ on a wide range of issues from gun rights and abortion to taxes and climate change. Continue reading

COVID, Urban Flight, and Rural Revival

by James A. Bacon

In announcing the creation of three new conservation easements in Henrico County, a recent press release from the Capital Region Land Conservancy made an eye-catching statement. The easements, said the Conservancy, act as a bulwark against rising pressure to develop agricultural land across Virginia “driven most recently by shifts in COVID-era lifestyles and soaring housing prices.”

This was the first time I recall anyone in Virginia making an explicit connection between the COVID epidemic, urban flight, and rising property values for agricultural land. The notion is worth exploring

The conversion of farmland into subdivisions is a long-standing concern. As the Conservancy notes, more than 339,000 acres of farmland were developed in Virginia between 2001 and 2016. In the Richmond region, more than 87,000 acres of farmland have been lost. By 2017 Henrico County had fewer than 100 farms and 10,000 acres of farmland.

The urban renaissance of the 2010s decade blunted the trend toward metropolitan sprawl. The center of gravity in development shifted back toward urban cores in Virginia and the U.S. generally. Now that momentum seems spent. Perhaps the COVID-19 epidemic is driving the reversal, but I suspect that the reality is more complex. It is also possible — consider it a  hypothesis — that after a year of protests, riots and rising violent crime rates in many cities, many urban dwellers, concerned about social breakdown, fear for their personal safety. The main thing holding them back is the paucity of rural broadband and connectivity. That barrier soon may fall. Continue reading

Vacation Homes as Virginia Rural Resource

Vacation-home share of housing, 2018. Credit: StatChat blog

by James A. Bacon

Virginia has more than 88,000 vacation homes, about 2.5% of all homes in the Commonwealth, according to the University of Virginia’s Demographics Research Group. These “seasonally vacant homes” intended mainly for recreational use are overwhelmingly located in amenity-rich rural locales along the Chesapeake Bay, the Blue Ridge and Allegheny Mountains, or man-made lakes.

Moreover, reports StatChat, the vacation share of housing has increased since 2018 in most jurisdictions — more than 7.5 percent in some cases.

Bacon’s Rebellion has argued that Virginia’s rural counties should position themselves as destinations for retirement and vacation housing as an economic development strategy. Retirement and rental properties boost the tax base and create service jobs in localities where employment opportunities are otherwise scarce. Continue reading

Solar Mega-Project Proposed for Pulaski County

by James A. Bacon

Developers of solar energy projects in Virginia often encounter resistance from rural communities where residents worry about the impact of vast solar farms on viewsheds, the tax base and the rural way of life. In Pulaski County, Hecate Energy LLC is dangling a new incentive to make its project palatable — the chance to attract lucrative data centers.

Hecate has proposed investing $400 million in a 280-megawatt solar project in three phases on 2,700 acres of land near the Town of Dublin, reports the [Pulaski County] Patriot. Hecate would pay leases to landowners, who currently use the land for low-value pasture and hayfields. The project is anticipated to generate $392,000 annually in added county tax revenue for a total of $13.7 million over the 35-year life of the project. As a bonus, the project would create 130 jobs during the construction phase. The new sweetener, never mentioned in press accounts of other solar projects I’ve seen, is the chance to vie for data-center projects.

“Approval of this project instantly makes Pulaski a player in the high-stakes game of Data Center recruitment,” said Hecate spokesman Jay Poole. “Companies which build Data Centers and other high-tech companies which demand sufficient quantities of renewable energy, go to places which make renewable energy more available.” Continue reading

The New Secret Weapon in Economic Development: Mine Water

Map credit: InvestSWVA “Project Oasis” report

by James A. Bacon

I don’t know if the latest scheme cooked up by Southwest Virginia’s economic developers is crackpot or genius, but it certainly is intriguing. As the coal industry of the state’s coal counties continues to bleed out, regional leaders are looking for ways to diversify the economy. And they think they might have identified a unique resource in the region — geothermal cooling — that will make it attractive to data centers.

Data centers are energy hogs. Massive banks of servers generate a lot of heat, which takes a lot of energy to cool. As a consequence, electricity is one of the biggest cost components of every data center.

A data center in Pennsylvania uses an limestone cave, which has continually replenished supply of 52° water, to cool a data center. As it happens, Southwest Virginia has limestone caves. Moreover, the region is riddled with underground coal mines that have flooded with water. According to an InvestSWVA report, “Project Oasis: Market Analysis for Data Center Investment in Southwest Virginia,” using mine water for cooling could reduce the electricity required for cooling the data center by 90%. The annual savings would be more than $1 million annually. Continue reading

Coal Severance Tax Credits Obsolete, JLARC Says


by James A. Bacon

Virginia’s coal tax credits are obsolete, cannot forestall the decline of coal mining in the state, and should be eliminated, finds the Joint Legislative Audit and Review Commission in a new report, “Infrastructure and Regional Incentives.”

The state provides two tax credits to encourage coal production: The Coalfield Employment Enhancement Tax Credit and the Virginia Coal Employment and Production Incentive Tax Credit. The two programs have saved coal companies and electricity generators $291.5 million in income taxes between FY 2010 and FY 2018, according to the report on the cost-effectiveness of economic development incentives. But the credits ranked at the bottom of JLARC’s list of incentives based on economic benefits per $1 million in spending.

The  coalfield credit is not needed because Virginia’s remaining mines are competitive with mines in other states based on a labor productivity basis (tons per employee hour), JLARC contends. The credit targeting electricity generators is fast becoming irrelevant when the state is moving towards a 100% renewable electric grid and phasing out its remaining coal-fired power plants. Continue reading

Is There a Government Role for Rural Development?

A scene from Dollywood, near Knoxville, Tenn.

by James A. Bacon

John Accordino, a planning professor at Virginia Commonwealth University, has been giving extensive thought to a perennial problem, the nation’s urban-rural divide. As author of a newly published article and State and Local Government Review, he provides a broad overview of his thinking in a Richmond Times-Dispatch column.

Accordino sees the urban-rural divide — the divergence in incomes and job growth — as unhealthy for America’s economy, society and politics. And he thinks it is something that government intervention can address.

I know John, and I think he is a very thoughtful guy. And I agree that there may be a limited role for government. But I am skeptical that the federal and state governments can be very helpful. The solutions, such as they are, must come from the bottom-up — from rural communities and local governments themselves.

But before I get into that, let’s see what Accordino has to say. Continue reading

Good Schools as Rural Development Magnets

The Duncansville One-Room School Museum in Washington County.

by James A. Bacon

An enduring question in Virginia’s economic development community is how to revitalize the state’s rural counties. Traditional rural industries such as farming, mining, timbering, and light manufacturing are shrinking. Young people are leaving to seek better career opportunities elsewhere, and few people are moving in to replace them. A contracting workforce is not conducive to recruiting entrepreneurs and corporate investment.

Some commentators (I’m one of them) have suggested that rural counties build on their natural amenities such as bays, lakes, and mountains, to attract retirees and tourists. But not all counties are blessed with scenic beauty and recreational resources.

There is one policy lever that rural leaders do control, however, and that is K-12 education. Newly published research by Alexander Marré with the Richmond Federal Reserve Bank and Anil Rupasingha with the U.S. Department of Agriculture concludes that good schools encourage in-migration.

“Our results suggest that for the 2005–2009 time period, the quality of schools—as measured by the share of high school dropouts and nationally benchmarked mathematics and reading test scores—had a positive pull effect on migration to nonmetropolitan counties,” write the authors in an article published in the Journal of Regional Science. “Schools with better outcomes appear to draw in new in‐migrants, even after taking into account the fact that higher‐quality schools are more likely to be located in areas with higher median incomes.” Continue reading

Strategies for Growing the Rural Population

Source: “Rural Population Loss and Strategies for Recovery,” Federal Reserve Bank of Richmond

In a recent article, the Federal Reserve Bank of Richmond highlighted strategies for bolstering the population of rural counties in the Fifth Federal Reserve District. Some ideas will prove familiar to readers of Bacon’s Rebellion, such as identifying amenities that will attract retirees and second-home buyers. But the article makes some suggestions we haven’t heard before.

Population growth, or at least population stability, is critical for the economic health of Virginia’s rural counties. A shrinking workforce makes it more difficult to attract outside employers, a shriveling population makes it harder to support health services and retail amenities, and a declining tax base undermines the ability to pay for government functions. Population stagnation and/or decline is a problem across the five states of the 5th district, and Virginia is no exception. (Virginia’s rural counties actually saw a small net in-migration, but that was more than offset by “natural” decrease of deaths exceeding births.)

To my mind, the most fascinating strategy is focusing on people’s personal ties to family, friends and communities. One study used 300 interviews in 21 towns at rural high school reunions to learn why some attended decided to return to the rural community where they grew up. Continue reading

Dominion, Apco Leverage Grid Investments to Promote Rural Broadband

Virginia broadband availability map. Source: Dominion Energy “Broadband Feasibility Report”

by James A. Bacon

Virginia’s investor-owned utilities, Dominion Energy and Appalachian Power Co., could become key players in the Northam administration’s push to extend broadband access to rural communities.

A State Corporation Commission ruling is expected today on an Apco proposal to extend “middle mile” broadband in partnership with Bluefield-based GigaBeam Networks, which will provide “last mile” connectivity to retail customers in Grayson County.

And last month, Dominion announced a partnership with Prince George Electric Cooperative’s RURALBAND subsidiary to provide Internet connectivity to 3,600 customers in Surry County. Dominion’s “middle-mile” service would link Prince George local network with high-capacity fiber-optic trunk lines.

The logic behind these partnerships is that, spurred by the Grid Transformation and Security Act of 2018, Dominion and Apco are already spending tens of millions of dollars to install broadband in their electric distribution systems. They can add enough additional capacity to serve nearby rural communities at marginal additional cost. Continue reading