ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, June 16, 1996 TAG: 9606140016
SECTION: BUSINESS PAGE: 1 EDITION: METRO MATT CHITTUM STAFF
DATELINE: FINCASTLE
That means wooing potential clients with golf, pricey dinners, fancy hotels, the Botetourt County administrator explains.
"We don't do a lot of that in Botetourt."
When companies are interested in locating in Botetourt, Burgess said he doesn't mess around. From the West Point-perfect crease in his pants to the meticulously neat stacks of papers on his desk, Burgess personifies a no-nonsense style of doing things.
"They're going to spend a lot of money," Burgess said, "and they could just as easily spend it someplace else."
Recently, they haven't.
Over six weeks this spring, new companies agreed to invest $77 million in new plants, creating 525 jobs in the county. Between April 4 and May 15 - Meadville Forging Corp., York International Corp. and Dynax America Corp. - announced new plants in Botetourt.
Those latest announcements bring the total to 15 new locations, expansions and modernizations since 1993, with a total projected investment of nearly $170 million and 1,560 jobs. Consider those figures in a regional context. In that time period, Roanoke, Roanoke County, Salem and Franklin County were aided by the Roanoke Valley Economic Development Partnership in landing a combined 33 new locations and expansions by 30 companies worth $203 million and about 3,400 new jobs. The partnership did not work on all of Botetourt's projects, and there may have been others elsewhere in the valley in which it was not involved.
Industry is popping up all over, but why is Botetourt piling up more than its equal share?
The "driving factor" in Botetourt's success is the availability of plenty of ready-to-go land - lots with roads and utilities already waiting, if not a shell building like the one York is occupying, says Beth Doughty, executive director of the Roanoke Valley Economic Development Partnership.
But others in the economic development field add that it's more than just having available land; it's the county's ability to market it.
The Richmond area has been grabbing big headlines with new industries like Motorola and Toshiba, each promising thousands of jobs. But Botetourt County's track record has people from state government to business leaders calling Burgess and his staff the current star hitters in the game of economic development in Virginia.
"There's a number of good people in Virginia, but Jerry and his staff really stand out," said Don Boothe, a project manager for the Virginia Department of Economic Development. "They understand what economic development is all about."
Having product helps with any sales pitch.
The county owns two industrial parks - EastPark Commerce Center and Vista Corporate Park - totaling about 180 acres. Also, the board of supervisors has just approved rezoning for Botetourt Center at Greenfield, a park on U.S. 220 about four miles north of Interstate 81 which will include about 600 acres for industrial development along with an elementary school and a recreation area.
EastPark, the proposed sites of York International and Dynax on Alternate U.S. 220 near Cloverdale, is full at the moment, but Tuesday, the Board of Supervisors is expected to rezone about 30 acres to allow for its expansion.
Two sites are still available in Vista Corporate Park on U.S. 11 south of the I-81 interchange, and the county also has two privately owned business parks in Simmons and Botetourt industrial parks.
Consider that most of this land is within a 20-minute drive of Roanoke and its airport and near the intersection of I-81, U.S. 11 and U.S. 220, and it's got a location that, as Burgess says, "shows well."
There's good land elsewhere in the region, the country, and in the case of companies like York International and the Japanese-owned Dynax, the world, but those companies say its Burgess that sets Botetourt apart.
Many leads on moving and expanding businesses typically come through the state economic development office. Boothe says the prospects are usually shown several sites in Virginia, and if Botetourt is one of them he feels confident that's where the company will wind up. Meadville, York International, Dynax and A.O. Smith all began with Boothe's office.
If Burgess has a secret, it's that no-nonsense approach. It probably comes from his days at West Point and during Army service in Vietnam and elsewhere. He earned a master's degree in urban studies from Old Dominion University in 1975.
Julian Hirst, a former Roanoke city manager, hired Burgess to work as a municipal program analyst in Norfolk in 1977. Within a few years, Burgess, a Norfolk native, was involved in economic development and in 1983 left to become economic development director for the city of Portsmouth.
Talking to Hirst and Burgess' Portsmouth boss, George Hanbury, it's clear Burgess comes from their school of economic development. Burgess, now 48, calls the two his mentors.
In an interview in his office, which is so clean it hardly looks used, Burgess talks of his methods in terms that Hirst and Hanbury also used in interviews - phrases such as "business orientation" and "comfort level."
"We want to be waiting on [industrial prospects]. We never want them to be waiting on us," Burgess says.
Site selection people from A.O. Smith, an automotive parts maker that announced its new plant in Vista Corporate Park last year, Meadville Forging and York International all praised Burgess' high degree of organization.
According to Boothe, J.M. Mullis, a national site selection consultant who worked with A.O. Smith, the presentation put on by Burgess and his staff was among "the most professional he's ever seen."
When people praise Burgess, they usually mention Doughty and Assistant County Administrator Ned McElwaine in the same breath. Burgess works with Doughty and the Roanoke Valley Economic Development Partnership to put together a team that can give business prospects information they need, often regarding particulars such as utilities and the area's work force.
That team usually includes Burgess; McElwaine; David Moorman, development services manager for the county; representatives from utilities like American Electric Power Co. and Roanoke Gas Co.; experts on the area work force; and training and business executives from around the Roanoke Valley.
The idea is to be able to answer any questions a prospect has, and to answer them quickly.
A.O. Smith looked at several sites, but the company's plant manager and point man for the site search, Dale Hemberger, said "from the very first visit, [Botetourt] was the most organized. ... They were the most efficient at getting back to us with what we needed." In all, 20 different companies and organizations participated in getting A.O. Smith into Botetourt.
Jim Erdly, who headed York's site selection team, said if he had questions, he usually got an answer within minutes, and he rarely left town with an unanswered questions.
When questions are answered quickly, it gives companies confidence in what Botetourt County can do for them.
"We sensed from the beginning that we could count on Botetourt County being ready to assist us in whatever we needed," Hemberger said. "As I look back now, in almost every way, this area has equaled or exceeded our expectations."
Hemberger is so enthusiastic about Botetourt that he now serves as a reference for the county when other companies consider locating here.
Companies rarely reveal who they are on the first, or even the second, visit to a possible location. Companies start with a simple look at the property that Burgess called "kicking the tires." The whole process of closing the deal on a site for a new plant usually takes several visits by a company.
A.O. Smith, the story goes, started with a visit to the site by Hemberger, who was then just a mysterious guy known only as "Dale." It proceeded through several meetings, including a fancy dinner at the now-defunct Jefferson Club in downtown Roanoke. And it finally ended about nine months later with a few beers at the Hollins Tavern across U.S. 11 from where the plant is now being built.
York International looked at the shell building in EastPark one month, and three months later closed a deal on it.
The Meadville deal, at the other extreme, dragged on for two years. Botetourt County obtained an option to buy from a private owner on the 35 acres Meadville was eyeing and had to renew it several times. Then the industrial zoning for the land lapsed and had to be rezoned again.
But Botetourt County will not court just anyone.
The county declined even to show a piece of land to 13 different companies that showed interest last year, Burgess said. It illustrates what economic developers outside Botetourt say is another element of the county's success. Focusing on a limited category of industry means Burgess and his staff aren't wasting time with just anyone who comes along and offers a few, or even several hundred, jobs.
Burgess said the county seeks clean, quiet, high-tech manufacturers. They don't want anyone requiring special air or waste permits, and they don't want low-paying jobs.
Among those turned away in 1995 were a plastics manufacturing company; telemarketing, distribution and data processing operations; and a galvanizing plant. Though some offered as many as 450 jobs, Burgess said the county passed on their interest because of environmental questions, outside storage needs, and especially low wages, usually under $8.50 per hour.
"We don't need lots of jobs," Burgess said. "We need high quality jobs."
A.O. Smith has promised wages better than $11 per hour, while Meadville will pay $12 to $15 per hour. Dynax and York have not determined exact salaries yet, but both have said they will pay competitive wages for similar work in the area. |n n| Also helping Burgess is the fact that Botetourt County's Board of Supervisors is as focused on attracting new industry as he is. The board often votes in unison on rezoning issues for new business, and has welcomed Burgess' economic development initiatives.
"How many boards of supervisors would lay down $4.5 million at once for a piece of land?" Burgess said, referring to the Greenfield project. "That's bold."
"We hired Jerry and pointed him in a direction," said board Chairman Bill Loope.
That direction was to balance the county's tax base with more industry. According to Burgess, after the county's residential real estate boom in the 1970s and early 1980s, Botetourt drew 90 percent of its real estate and property taxes from residential development. Residents pay taxes, but they also require services that often cost more than they yield in public revenue. Industry, however, pays taxes and does not use services like schools, which account for better than half of most counties' budgets.
Burgess and his employers are in sync about where the county ought to head, but that hasn't always been Burgess' experience.
After seven years of heading up Portsmouth's economic development plans, Burgess was asked to resign. He recently called it a political action, adding it was the result of a personality conflict.
The firing came at the start of the tenure of a new city manager, V. Wayne Orton, who just three months earlier had expressed full confidence in Burgess and flatly denied Burgess would be sacrificed, according to newspaper accounts.
But in asking Burgess to leave, Orton called the city's economic development sluggish.
Burgess, meanwhile, was already a finalist for an economic development job in Fort Lauderdale, Fla., working under Hanbury, the man Orton replaced. According to Burgess, Orton was upset that Burgess had sought work elsewhere, and that's why he was let go. Burgess landed on his feet in Fort Lauderdale with a $22,000 pay increase. Two years later, he came to Botetourt for slightly less than what he made in Portsmouth.
What he found here was an area primed for industrial development. Under his predecessor John Williamson, now a vice president at Roanoke Gas Co. the county had already purchased the first phase of EastPark Commerce Center. Thanks to years of fiscally conservative policies, Burgess said, the county was in good financial shape. The pump was primed for him to start his work. Williamson, meanwhile, often helps in recruiting business to Botetourt by answering companies' questions about gas service.
Since then, the county was come a long way toward balancing its tax base, but it hasn't come cheaply.
Part of that is the cost of land. The asking price for land in EastPark is $20,000 per acre, according to Burgess. In Vista Corporate Park, an acre goes for $25,000. But the county rarely gets that price, because the land is often discounted as part of the incentives offered to companies that occupy the sites.
Hydraulic and Pneumatic Systems paid $44,200 for its 2.2 acres in EastPark, but VFP Inc., which makes transportable communications buildings, paid only about $16,000 per acre for its 13-acre site. Arkay Packaging paid even less, at $6,200 an acre.
The 100-plus-acre Vista Corporate Park cost the county $750,000, plus the cost of putting in roads, water and sewer for the park. A.O. Smith got its 41 acres in Vista - valued at about $300,000 - for free, as part of the incentive package.
Burgess called the A.O. Smith deal "incentive driven." Besides the land, the county kicked in $11,000 for waiver of water and sewer connection fees, and $50,000 to match $150,000 in rail access funds from the state. A.O. Smith also got $300,000 in state Governor's Opportunity Funds and a $64,000 rail access fee waiver from Norfolk Southern Corp.
In all, the projected 1,500 new jobs have cost Botetourt County $1.7 million in incentives, according to figures provided by Burgess. The state has kicked in about another $750,000. That's roughly $1,600 per job.
In all, six companies received incentives, with the county's payback coming as soon as one year and as late as 31/2 years on individual deals. Each incentive deal is protected by a "performance agreement," Burgess said. Often called a "clawback" agreements, the contracts are designed to force companies to live up to the jobs and investment they've promised, or pay back the incentives. Incentives are just part of the cost of doing business, Burgess said.
For all its success in economic development, the county - and therefore, Burgess - are not without critics, who say Botetourt is too focused on industrial development.
The Greenfield project met with strong and lengthy opposition, but ultimately critics, like Bob Bagnoli and David Mankin, of Citizens for Responsible land use in Botetourt County, said their complaints fell on deaf ears. The supervisors were going to vote for Greenfield no matter what, they said.
For his part, Bagnoli said a lot of the money spent on economic development would be better spent on education.
Other critics have asked where the money from all this industry is going to go. They point to the supervisors' decision to cut $1.4 million from the School Board's budget, though the board knew there would be a heavy increase in funding needed this year because of the implementation of the county's new middle school program.
And, critics have asked, where it will end? Nearly all of the county's industry is located in the south, but many worry about preserving northern Botetourt's rural character.
"I can't see a lot of expansion to the north for the next 15 years or so," said Loope, the board chairman. "I know I would hate to see a factory on my family farm."
Burgess is not so sentimental.
The four-laning of U.S. 220 all the way north to Iron Gate is on the Virginia Department of Transportation's six-year plan, he says, and that will open up areas north of Eagle Rock for development. And anywhere along an interstate is easy to sell, he said.
Will there come a time when Botetourt's tax base is balanced, and no more industry is needed?
"Personally speaking, I hope so," said Loope.
Burgess pondered the question a minute.
"Perhaps."
LENGTH: Long : 272 lines ILLUSTRATION: PHOTO: Wayne Deel. The EastPark Commerce Center (background)by CNBhad only one tenant when Jerry Burgess became Botetourt County
administrator. Now it's full. color. Graphic: Map. color. Chart:
Major Economic development announcements in Botetourt: Jan. 1,
1993-May 20, 1996. color. KEYWORDS: MGR