Buncombe commissioners set to buy vacant Volvo plant for $7 million; but should they?

“In a glimmer of good economic news,” a news story in the Asheville Citizen-Times says, “Buncombe County government is preparing to buy the former Volvo Construction Equipment plant for $7 million in hopes of luring another large employer to the property.” Commissioners are aiming to vote on the matter June 28.

Reporter Mark Barrett writes, “State and local officials have been talking to at least one unnamed company in hopes of convincing its officials to locate a facility in the area.”

It could be a good investment – or not — to invest taxpayer money in a real estate purchase to promote growth in the industrial sector.

Barrett quotes officials explaining why the purchase would be wise:

“Other people have been looking at the site for other purposes and we want that to remain as a manufacturing site,” said Commissioner K. Ray Bailey …
“We think that by owning it we’ll have more leverage in getting a plant there,” said David Gantt, chairman of the Board of Commissioners…
“[The Volvo plant is] one of the shiniest apples in our basket right now,” said Ben Teague, executive director of the Economic Development Coalition …

The 65.2-acre property includes 405,018 square feet of buildings.

With the economy in the doldrums and real estate market in the pits, this might a great time to pick up a bargain. But for a new industrial plant? And is real estate investment the proper role of government?

Barrett identifies the idea’s attraction: “[M]anufacturing employment in the area … still had the second-largest total payroll – the cumulative total of all paychecks—behind health care in Buncombe County last year. The typical manufacturing worker in the county made more than twice what the average retail worker did.”

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About Jeff Fobes
As a long-time proponent of media for social change, my early activities included coordinating the creation of a small community FM radio station to serve a poor section of St. Louis, Mo. In the 1980s I served as the editor of the "futurist" newsletter of the U.S. Association for the Club of Rome, a professional/academic group with a global focus and a mandate to act locally. During that time, I was impressed by a journalism experiment in Mississippi, in which a newspaper reporter spent a year in a small town covering how global activities impacted local events (e.g., literacy programs in Asia drove up the price of pulpwood; soybean demand in China impacted local soybean prices). Taking a cue from the Mississippi journalism experiment, I offered to help the local Green Party in western North Carolina start its own newspaper, which published under the name Green Line. Eventually the local party turned Green Line over to me, giving Asheville-area readers an independent, locally focused news source that was driven by global concerns. Over the years the monthly grew, until it morphed into the weekly Mountain Xpress in 1994. I've been its publisher since the beginning. Mountain Xpress' mission is to promote grassroots democracy (of any political persuasion) by serving the area's most active, thoughtful readers. Consider Xpress as an experiment to see if such a media operation can promote a healthy, democratic and wise community. In addition to print, today's rapidly evolving Web technosphere offers a grand opportunity to see how an interactive global information network impacts a local community when the network includes a locally focused media outlet whose aim is promote thoughtful citizen activism.

11 thoughts on “Buncombe commissioners set to buy vacant Volvo plant for $7 million; but should they?

  1. nathan ramsey

    I applaud our commissioners for this effort and trying to create high paying jobs in our community. In the competitive world of larger economic development projects, whether we like it or not, if we aren’t aggressive some other community will get the jobs.

  2. sharpleycladd

    The multipliers on these kinds of big-county to big-business wealth transfers are lousy, and such initiatives would yield better returns if investments were made in local, small businesses. Seven million bucks, for Pete’s sake! Our county is going to wind up paying over $60K a job.

    You could give away 16 food trucks, charge them rent to locate on city or county land, and net out comparable payroll and more in-community turnover in aggregate for one-third the cash.

    Or, you could electrify hulks at Speedy’s junkyard with a serious vocational-training component, get electric cars on our streets, and, again, turnover money in the community several times, for less than three million bucks.

    How did we get from property tax abatements to buying a parcel and handing it over?

  3. roy heath

    -Sell the Civic Center to a Condo Investor—Buy the Biltmore Mall, and turn it in to a Civic Center, .You will get more people coming there, because of easy parking and there won’t be so much crime.

  4. Lasereye

    This is what you call putting a giant egg in one basket and hope it hatches so we taxpayers don’t end with the yoke. There’s a big difference in being aggressive versus being stupid.

  5. sharpleycladd

    What crime? People really have some odd ideas about downtown. The only time my car got its window busted was at Biltmore Square Mall.

    The Biltmore deal would bail out some influential rich kids for their stupid investment, though, so by all means let’s do it.

  6. Barry Summers

    I’m curious who is getting bailed out here – does Volvo own the plant, or were they leasing it? What were the “other purposes” that “other people” were contemplating for the site, and what do they think about being shoved out of the market by deep government pockets? How much did the County spend to attract & keep Volvo here in the first place, and did that turn out to be a good use of taxpayer funds?

    Don’t get me wrong – I’m all for attracting manufacturing jobs to the area, and I might even support what the County is doing here. But 1) the devils is in the details (how much taxpayer money for what return, etc.), and 2) does this expose a certain amount of hypocrisy in the ‘government doesn’t create jobs, private innovation creates jobs’ mantra we always hear?

  7. Lasereye

    Wow – the County cries poor-mouth while further cutting funding for a once proven and successful community public access cable TV channel – while on the other hand they’re ready to blow $7,000,000 on a pig-in-a-poke facility in a commercial real-estate market that’s in the process of imploding. I’d love to see the returns on investment for this boondoggle if the taxpayers let this one slip through. Where is the guarantee and proof of performance for whatever shows up in this vacant facility? Will it be a good fit for the community? Will it be a a wise investment of taxpayer dollars who respect a return on their investment? Prove it – we’re listening!

  8. Jeff Fobes

    Thanks for the reactions above to my staff-opinion post. Here are my two cents:

    In 1988, county commissioners and Asheville City Council members unanimously favored adding a drinking-water treatment plant on the French Broad — because their collective vision said we needed a virtually unlimited volume of drinking water to supply hoped-for area industries.

    Twenty-three years later, those industries have not materialized, and the widespread emigration of industries out of the U.S. has become a diaspora. What’s more, projected demand for drinking water in Buncombe never materialized.

    Theoretical point: Governments of all sorts are typically prone to distortions in perception and decision-making because power-brokers by definition have inordinate impact on elections.

    In the case of whether to buy the old Volvo plant, our power-brokers are understandably seeing the historical importance of industries to our local economy. What’s more, there are benefits these influential folks themselves, or their associates, will derive from successful industrial recruitment. (Of course, such benefits are seldom mentioned; instead statements are made about the jobs that will be created.)

    Textbook capitalism calls for letting the markets figure out where to invest. Of course, real markets are continuously nudged this way and that via power-brokers and their governmental connections.

    The tricky question: Should we allow said power-brokers and their governmental connections to nudge us into buying the old Volvo plant?

    My bottom line: The public needs a good deal more information and open discussion before county commissioners opt to spend millions on this purchase — for two reasons: (1) We need as much wisdom as possible before we get government and large amounts of taxpayer money involved in actions that go well beyond the standard role of government; and (2) we must be sure we’re not being led by one subset of influential people who have some inevitable conflicts of interest involved in such a decision.

  9. Barry Summers

    we must be sure we’re not being led by one subset of influential people who have some inevitable conflicts of interest involved in such a decision.

    Sadly Jeff, that’s not been this community’s strong suit over the years.

  10. sharpleycladd

    “we must be sure we’re not being led by one subset of influential people who have some inevitable conflicts of interest involved in such a decision.”

    The best way to avoid this would be to pursue a micro-enterprise or very-small business solution instead of city/county initiatives that favor concentrated capital, a la 51 Biltmore. Assuming there’s backscratching involved, make sure there are a number of backs to scratch.

    An jobs initiative aimed at 50-60 entrepreneurial groups generating several hundred jobs would, in the long term, make more sense. It would be cheaper, it would be more transparent because there’s no single beneficiary shepherding the public around the piles of dung (“nothing to see here”), all of the businesses would not fail (though some certainly would), and the resulting commercial interest would generate tax revenues instead of being “too big to fail” and requiring further subventions/concessions.

    Buying a single shuttered plant in hopes of generating jobs cannot really be termed “investing.” Investing is about increasing probability of success and hedging risk. See above, re: eggs and baskets.

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