FAILED MONTGOMERY DEAL MAY HAVE SPURRED NEW STATE BUDGET ITEM

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, January 25, 1992                   TAG: 9201250173
SECTION: CURRENT                    PAGE: NRV-4   EDITION: NEW RIVER VALLEY 
SOURCE: CATHRYN McCUE
DATELINE: BLACKSBURG                                LENGTH: Medium
FAILED MONTGOMERY DEAL MAY HAVE SPURRED NEW STATE BUDGET ITEM
Montgomery County may have played a key role in Gov. Doug Wilder's decision to include a $5 million deal-closing fund in his budget proposal to attract new business to Virginia
"I'd say Montgomery County has had as much to do with that part of the governor's budget as anything," said Jack Lewis, chairman of the county's Economic Development Commission, which met Thursday.
Last fall, the county lost out to West Virginia on landing a major Blue Cross and Blue Shield office that promised up to 1,300 jobs and an estimated $5.9 million in yearly tax revenue for the state and county.
But the county was hobbled by state laws that didn't allow officials to entice the prospect with financial assistance.
It was a close call, and county officials wanted to let state officials know why they thought the deal had soured.
Commission Director Don Moore wrote letters to or spoke with the state's highest economic development officials, delegates, senators and others about the Blue Cross deal.
He and several commission members also testified before a joint subcommittee studying business incentives and obstacles, and put their two cents' worth into the budget process.
Blue Cross was a real prospect, the best kind of employer that the county is trying to attract - an environmentally "clean" industry with above-average wages, Lewis said. "That's why we took so much time and energy to tell that story."
Commission member Tom Johnson, pointing out the urgency of Virginia being about to compete better, said West Virginia now has a policy to pursue similar types of business as the Blue Cross claims-processing office.
"They would like to be the place for all the future headquarters of those kinds of industries," Johnson said.
Moore said the best way to administer the governor's proposed fund would be to appropriate money only when Virginia is competing with another state for a business, not when Virginia localities are competing against each other.
The commission discussed several other matters Thursday, including:

Virginia Tech students will be studying the impact of an interchange that could be built in Ellett Valley as part of the proposed direct link from Blacksburg to Interstate 81, including what type of development and how much would occur in the valley.
The students want to present their findings to the Montgomery County Planning Commission in May. The state has said it's up to the county whether to build the interchange.

The Appalachian Regional Commission, a federal group that allocates money for community projects, will review Montgomery County's request to join. The criteria includes a per capita income no greater than 67 percent of the U.S. average, a poverty rate 150 percent or higher of the national average, and a three-year unemployment rate 150 percent or higher that the U.S. average.

The commission failed to get a grant from the Center on Rural Development to help plan and pay for start-up of a regional, high-tech industrial park.

by Archana Subramaniam by CNB