Retirees, Restaurants and Boutiques

Julien Patterson and Terri Wesselman in their art gallery. Photo credit: Virginia Business magazine.

Julien Patterson and his wife Terri Wesselman spent two decades building their Chantilly-based company, Omniplex World Services, into a security and investigative services firm employing more than 3,500 and generating annual revenue of more than $100 million. After selling the company in 2012, they “retired,” dividing their time between Florida and Virginia’s Northern Neck.

But it wasn’t in their temperament to spend their free time playing golf or mahjongg. According to Virginia Business magazine, the couple has started four small businesses in the Northern Neck: an art gallery, a home decor store, a coffee shop, and a clothing boutique.

“For me, I think retirement is the change in venue that allows you to do the things you want to do that benefit others and brings you satisfaction and a sense of well being,” says Patterson, now 65.

As Virginia Business notes, Virginia, like the United States as a whole, is on the verge of a retirement wave. Virginia is home to 1.4 million people who are over the age of 65. By 2030, the over-60 crowd will reach 2.3 million. Thousands of them will be successful corporate executives, entrepreneurs and professionals. And, like the Pattersons, many might be ready to slow down, but they’re not prepared to drop out.

Rural economic development has been a recurring theme of Bacon’s Rebellion. It’s clear to most people that the traditional strategy of clinging to Virginia’s mill-town roots has done little to reverse the decline in jobs and opportunity in Virginia’s rural economy. There’s nothing wrong with recruiting light manufacturing, but economic developers need to look at other strategies as well. One such strategy is exploiting the retirement boom.

Retirement represents a stage of life when people are more willing to consider relocating to a rural community than when they were pursuing career and raising families. Quality of life matters more than career opportunities or good schools. Retirees are drawn to scenery — waterfronts, rolling hills and mountains — all of which Virginia has in abundance.

But wealthier retirees can’t live on scenery alone. They also want amenities — precisely the kind of amenities that the Pattersons were providing in their Northern Neck community. (Virginia Business did not identify the specific town where they live.) Coffee shops and art galleries don’t create a lot of jobs, or even especially high-paying jobs, but they do provide employment that didn’t exist before. Affluent retirees also create a market for personal services such as handyman repairs, landscaping and the like, which locals can turn into business opportunities. Equally important, retirees and small businesses bolster the tax base of local jurisdictions — without adding to the burden of local school districts.

One nice thing about the retiree market is that you don’t have to bribe newcomers with subsidies and tax breaks. What a retiree-focused economic development strategy does require is a sharp focus on place making — creating the kinds of places where affluent people like to hang out. It gets old staring at the mountains or sailboats all day long. People crave places to go and interact with others. More specifically, they want charming, walkable/bikable places — not roads lined with gas stations and fast food joints where there aren’t any sidewalks and cars whiz past at 40 miles per hour.

The good news is that it doesn’t take a lot of money to create charming, walkable/bikable  places — sidewalks and bicycle trails are not expensive — but it does require zoning codes and comprehensive plans that don’t mandate rural sprawl. In my profile of Aspen, Colo., last year, I described the virtuous cycle that can take place when small towns invest in walkable/bikable places, attract visitors and second homes, stimulate the restaurants-and-boutiques economy, and boost property values and the tax base. Virginia communities really need to give this strategy a look.

UVa’s Invisible Research Subsidies

David S. Wilkes, dean of the UVa schools of medicine

The Trump administration’s proposed budget cuts to the National Institutes of Health will make it harder to find new cures — and harder to create new jobs, contends David S. Wilkes, dean of the University of Virginia’s School of Medicine. In 2016 UVa received $126 million in NIH funding, accounting for about 60% of its research funding.

NIH backing allowed UVa researchers to discover a link between the brain and immune system, potentially leading to treatments of neurological diseases such as autism and Alzheimer’s. An NIH-supported clinical trial is providing the final tests for a UVa-developed artificial pancreas that can help people with Type 1 diabetes. Meanwhile, scientific research at UVa is stimulating the rise of a job-creating innovation ecosystem in the Charlottesville area. Writing in the Richmond Times-Dispatch op-ed page, Wilkes says:

In 2016, the National Venture Capital Association ranked Charlottesville as the fastest-growing venture capital ecosystem in the U.S., and medical start-ups are [an] important part of that boom.

U.Va. Innovation, which helps bring U.Va. research discoveries to the marketplace, has identified more than 50 active companies advancing U.Va. discoveries. Many of those companies were founded to develop U.Va. medical research breakthroughs.

A study conducted by the research firm Tripp Umbach found that in fiscal year 2015, U.Va. School of Medicine’s research generated an economic impact to Virginia of $425.4 million. That economic impact would be greatly diminished if NIH funding were slashed.

Bacon’s bottom line: One can pick at these numbers, but let us accept them as valid for the moment. Wilkes is making the argument that what’s good for UVa research is good for Virginia economic development. Advocates of investing in life sciences are employing similar logic for life-science initiatives in Northern Virginia, Richmond, Norfolk and Roanoke.

UVa is playing a hyper-competitive industry sector, however, and it starts with big competitive disadvantages as it tries to build a biomedical ecosystem from scratch in a small metropolitan area. According to the 2016 Jones Lang Lasalle study, the Boston, San Francisco, Raleigh-Durham and San Diego metropolitan areas have the nation’s leading life-sciences clusters. None of the top 16 clusters are located in Virginia. The closest geographically is the “Maryland suburbs/D.C. metro.” It takes a lot more than a research university to play in this sandbox. A large labor pool is a necessity for recruiting top scientific and entrepreneurial talent, and UVa’s location in little Charlottesville presents a big handicap.

If UVa were investing only its endowment dollars in competing for NIH grants and other life-science research, that would be UVa’s business and nobody else’s. As long as the money for this initiative comes exclusively from wealthy alumni and philanthropists, and as long as Virginia taxpayers, tuition-paying families, and bill-paying patients of UVa’s medical system are held harmless, no one has grounds for complaint.

Unfortunately, UVa isn’t relying solely upon wealthy donors to fund its ambitions to build a world-class medical research center. UVa has developed mechanisms to extract wealth from others — patients, students, taxpayers — to underwrite its efforts. Because these mechanisms are so opaque, however, no one in Virginia sees them.

Wilkes does mention one of these funding sources, UVa’s controversial, $2.1 billion Strategic Investment Fund, in a positive light. The fund was cobbled together from various pots of money which were generating minimal investment returns. By combining these pools of money and handing them over to the University of Virginia Investment Management Company, the university hopes to generate an estimated $100 million a year in investment revenue. The Board of Visitors has approved using most of this money for institutional advancement, including R&D. But that is a choice. Alternatives include using the money to reduce tuition, bolster financial aid, or build non-research programs. Accordingly, students and parents who pay tuition, and the Commonwealth of Virginia, which pays millions of dollars in state support, have a direct interest in how Strategic Investment Fund proceeds are allocated.

According to the National Science Foundation, a third of UVa’s R&D expenditures are internally generated (classified as “institution funds” in the table to the left). Institution funds amounted to $74.8 million for life sciences and $122.6 million for all R&D in 2015 — before the Strategic Investment Fund existed.

I could not find a definition of “institution funds” on the NSF website, but I expect that it includes monies flowing from one or all of the following: (1) the university’s endowment, which is funded by philanthropy; (2) discretionary academic monies, which are funded through tuition and state support; and/or (3) surplus revenues (profits) from the UVa Medical Center, which is derived from patient revenues. To the extent that UVa research is funded by tuition, tax dollars, and patient revenues to cover buildings, faculty, grad students administrative overheard, and the like, it is fair to say that students, taxpayers, and patients are subsidizing research. The size of that subsidy remains a mystery. I don’t believe UVa (or any other Virginia public university) publishes such a number. It may not even calculate a number.

While R&D-generated economic development might be a good thing for Charlottesville and Virginia from the perspective of creating high-paying research and technology jobs, much of the funding ultimately comes from populations who have no idea what they’re subsidizing. Students are paying higher tuition (and accumulating more debt) and patients are paying more for medical services. The system is so opaque, the accounting so arcane, that no one sees or understands these wealth transfers. Perhaps the economic development is worth the cost of higher tuition and patient fees, but who can say unless we have an open and honest conversation?

VCU Graduation Rate: A Peek Behind the Numbers

Virginia Commonwealth University 4- and 6-year graduation rate.

Virginia Commonwealth University 4- and 6-year graduation rate. (Click for larger image.)

However skeptical I’ve been about Virginia Commonwealth University’s aggressive tuition increases, I’ve always given the university credit for one thing: improving the graduation rate of its students. As seen in the chart above, the four-year and six-year graduation rate of undergraduate degree seekers increased steadily between 2001 and 2010.

Graduation rate is a crucial metric of university performance in an era of increased student indebtedness and rising defaults on student loans — no more so than at VCU where 51% of students receive financial assistance from Uncle Sam. Debt accumulation is disastrous to students who fail to graduate and acquire the means by which to pay off their loans. When such a fate befalls millions of students across the country, personal misfortune morphs into a social and economic crisis.

I’ve often wondered how VCU has improved its graduation rates. Is the university more selective about admitting students likely to complete their courses of study? Has it made more counseling resources available to students? Has it bolstered financial aid to lower-income students?

Hopefully, I’ll find the time to answer those questions. Until then, I think I have uncovered an important contributor to VCU’s improved numbers. By transforming itself from a “commuter college” into a residential institution, VCU has boosted the percentage of full-time students and reduced the percentage of part-time students, as seen in the chart below:

By definition, students who take fewer courses will take longer to complete their degrees than students who take full course loads. Also, they are less likely to persist in their studies. Indeed, data from the National Center for Educational Statistics (NCES) shows that 86% of full-time students at VCU who initiated their studies in the fall of 2014 returned in the fall of 2015 compared to only 33% of part-time students.

Clearly, the shift to a full-time student body accounts for much of VCU’s undergraduate degree-completion rate. It should be possible to estimate from these numbers what percentage of the gain in degree completions can be attributed to the changing composition of the student body, but I don’t have the mathematical chops to do it. (Pretty sad, huh?) If any readers are up to the challenge, please let me know.

Government’s War on the Poor: College Loans

Chart credit: Mercatus Center

Students graduating in recent years are defaulting on student loans at a significantly higher rate than earlier age cohorts, finds Mark J. Warshawsky, a senior research fellow with the Mercatus Center at George Mason University, in a posting on the Mercatus website.

“Some students, particularly from nontraditional backgrounds, seem to have been harmed by the increase in federal funding of student loans,” he says. “They have not seen increases in their incomes as workers, have often not completed their education, are more likely to default on their loans, and miss out on job-related income and training.

Click for more legible image.

Warshawsky does not offer an explanation of why loan default rates are climbing. But the answer is obvious: Uncle Sam has been shoveling out more and more loans without any consideration of credit risk. As the percentage of high school graduates enrolled in two- and four-year institutions of higher education has increased over the years (see chart immediately above), we have seen an increase in the number of students who (a) are not academically prepared for college-level work, (b) lack the family resources to complete college, even with loans, or (c) both.

These college drop-outs and defaulters are disproportionately poor and minorities. The federal government cannot issue loans on the basis of credit quality, for that would mean discriminating against the poor and minorities, a political impossibility. So, instead, Uncle Sam dishes out loans indiscriminately, and the poor and minorities are the ones who wind up defaulting disproportionately on student loans and suffering the adverse consequences of ruined credit scores and debt they cannot discharge.

Thus the price of misguided compassion…

Do you want stronger proof? The percentage of high school graduates attending college has ticked down slightly since 2009, while the total of state and federal grants and loans has dipped since 2010. If I my logic above is correct, and absent an economic downturn and widespread job loss, at some point we should see a reversal of the trend shown in Warshawsky’s chart and a decline in the rate of defaulting students.

Virginia Ranks 6th in Tech Employment

From the “Cyberstates 2017” research report…

Virginia tech employment (2016): 291,312
National rank: 6
Increase from previous year: 4,145 jobs
Percent of overall workforce: 7.7%

Average tech industry wages in Virginia (2016): $112,014
National rank: 7

VCU Ponders Risky 5.3% Tuition Hike

VCU President Michael Rao: Hard choices ahead

Last month I wrote how Virginia Commonwealth University was eyeing an undergraduate tuition increase of 3% to 5% to make up for cuts in state support. Well, it appears that VCU is now looking at the upper bound of that estimate. VCU students would need to pay about 5.3% more in tuition and fees next year to close an estimated $19.1 million funding gap, Karol Kain Gray, VCU’s vice president for finance and budget, said at Board of Visitors budget workshop yesterday, according to the Richmond Times-Dispatch.

Clearly, VCU is between a rock and a hard place. As I noted in March, VCU already has the third-highest tuition of any public, four-year institution in the state. In contrast to the University of Virginia and the College of William & Mary, which are perceived as elite institutions with ample leeway to increase tuition, the VCU brand might not be strong enough to push through higher charges without suffering a drop in applications.

“Being new here, I can tell you we are lean and mean,” Gray said. But if the board members want VCU to be as competitive as its peer institutions, she added, they need to fund a tuition increase. In the latest U.S. News & World-Report ranking of the “best” colleges and universities, VCU ranks 164th nationally among all higher-ed institutions and 87th among public institutions.

The board discussion brought to light one of VCU’s big problems in the consumer-perception game: the low percentage of tenured and tenure-track faculty.

The fact that the university has fewer tenured and tenure-track professors is a sign that VCU is operating at a “lower” level than its peer institutions like the University of Virginia, Virginia Tech and the College of William & Mary, Gray said. Adjunct and non-tenured professors tend to not cost as much to employ.

Only 35 percent of VCU’s professors are tenured or tenure-track, compared with 57 percent at U.Va., 62 percent at Virginia Tech and 65 percent at the College of William & Mary.

This brings out a weakness in the VCU business model that had not been readily apparent before. VCU charges a high tuition (by the standards of a public Virginia university) even though its academic cost structure, and by extension the relative prestige of its faculty, is low.

As we’ve discussed elsewhere on Bacon’s Rebellion, the percentage of tenured and tenure-track faculty may be overrated as a metric of educational quality. Speaking of higher-ed generally, tenured faculty members enjoy sweet deals that allow them to teach less and and pursue more research, writing and outside income-generating opportunities. So, a low percentage of tenured faculty does not necessarily imply that VCU students are getting a worse education. But when it comes to pushing through big tuition increases, what matters is perception.

In the U.S. News & World-Report rankings methodology, “undergraduate academic reputation” counts for 22.5% of the score. Reputation is derived from the results of two surveys: an “academic peer assessment,” which counts for 2/3 of the 22.5%, and a high school counselor survey, which counts for 1/3. I am making an assumption here, but I expect that the academics who respond to the US News & World-Report survey base their responses on the scholarly reputations of their peers — books, articles, papers published, conferences attended, etc. — and not their prowess as teachers. If I’m right about that, VCU, with only 35% of its faculty on the tenure track, probably does not score well in this category. (Unfortunately, U.S. News & World-Report does not publish this number, so I cannot say for certain.)

As high school graduates weigh cost, academic reputation and educational value, an aggressive tuition increase at VCU can have only a dampening effect on applications. The 2015 fall acceptance rate at VCU was 72%. Declining applications can set into effect scoring dynamics that could impact the university’s reputation, thus driving down rankings and starting a vicious cycle.

“Student selectivity” counts for 12.5% of the U.S. News & World-Report ranking. One-tenth of that 12.5% is determined by the acceptance rate. A lower acceptance rate is considered more prestigious, a higher rate less prestigious. Assuming VCU accepts the same number of students to fill the same number of slots, a decline in applications would push the acceptance rate even higher. Likewise, as the university becomes less selective in accepting students, it tends to accept students with lower SAT scores. Standardized test scores count for 65% of the student selectivity component.

A 5.3% tuition increase can get VCU over the fiscal hump next year. But the board will need to pay close attention to the market consequences. Will fewer students apply to VCU? Will VCU become less selective in whom it accepts? Will average SAT scores decline? Will its U.S. News & World-Report rankings fall? A big tuition hike creates a big risk.

Virginia Tech OK’s Intelligent Infrastructure Initiative

Bringing intelligent infrastructure to Virginia

Bringing intelligent infrastructure to Virginia

The Virginia Tech Board of Visitors voted Monday to approve a $78 million plan to make the university a leader in “intelligent infrastructure.” The term encompasses everything from self-driving cars and drones to smart construction and energy systems — areas, in the words of President Tim Sands, that are “related to energy systems for the cities of the future and the way that people move in and around those cities.”

“We set … aggressive philanthropy and industry targets and were able to meet them quickly,” Sands said. “It was ready. … We already had industry and philanthropy champing at the bit.”

Intelligent Infrastructure is a fascinating field of endeavor, and one that is well suited to Virginia Tech’s engineering strengths. Further, the concept, while hardly original to Tech, has yet to become a trendy buzzword that every university in America is chasing, so Tech may have an opportunity to establish a leadership position in the field.

As an economic development initiative that stimulates the growth of R&D and, potentially, the spin-off of new technologies and business enterprises, intelligent infrastructure is an exciting idea. There is a double benefit for Virginia if the initiative helps state and local governments in the Old Dominion devise solutions to chronic problems such as traffic congestion and aging, ill-maintained infrastructure. Strategically, the initiative makes sense.

In other action, the board also approved a 3.5% hike for in-state tuition & fees in the next academic year, bringing the full-year cost to $13,329. That increase exceeds the 2% increase in Virginia’s median household income (2015-2016 numbers) by a hefty margin, but Tech remains a relative bargain compared to other Virginia’s other public, four-year institutions.

Here’s my question: Where does the $75 million come from to finance this significant new initiative? Tech officials say the money comes from corporate sponsorships, philanthropy and other sources but not from tuition & fees. In political terms, Tech is claiming that the project is not being financed on the backs of students and their families.

Here’s what the Roanoke Times has to say:

The … funding will come from non-general funds, which comes from revenue streams other than tuition and mandatory fees.

University officials previously vowed to put about $75 million into the intelligent infrastructure destination area. Millions in private dollars were in the plans since last year, and now Tech has $25 million. The donors include John Lawson, president and CEO of W.M. Jordan Co., and a former board of visitors rector; the charitable foundation controlled by the Hitt family of HITT Contracting Inc., in Washington, D.C.; and two other donors who Virginia Tech declined to name.

A briefing report included in the board briefing materials provides a few more details (my bold face):

At this time, the university is requesting to move forward with a $6 million planning authorization for the $69.5 million of outstanding capital projects and capital lease components. The planning authorization will cover establishing a scope, schedule, delivery method, and complete design documents for each capital component. As with all self-supporting projects, the university has developed a financing plan to provide assurance regarding the financial feasibility of this planning project. The funding plan calls for the use of private gifts, overhead funds, revenues derived from the Dining Services auxiliary, and future external support.

If Tech can make the Smart Infrastructure initiative essentially self-funding, then it would seem to be a win-win all around and a model for Virginia’s other research universities.

Two sets of questions, though. First, how much of the project will be paid through “overhead funds?” What overhead are we talking about? Who’s paying for that overhead now? Does that amount to an indirect subsidy?

Second, how certain are we that “future external support” will materialize, and how contingent is the Intelligent Infrastructure initiative upon obtaining that support? Is there any chance that Tech will spent $70 million+ on the project and the external support might not appear? If so, who gets left holding the bag? In other words, who bears the risk?

Bacon’s Rebellion…. asking the questions no one else will ask.

Update: “Overhead funds” come from sponsored research. “When an outside organization sponsors faculty research (e.g. NIH, General Motors, DOD, etc.) the university collects an overhead fee, in addition to the actual costs associated with the research (such as salaries or equipment costs),” says Larry Hincker, retired associate vice president for university relations. “This is a good example of how sponsored research leverages new activities without using any state funds.”

Josh Lief Releases Album

Josh Lief, an economic development official in the Gilmore administration, was in the starting line-up of Bacon’s Rebellion columnists when I started publishing in 2002. He moved on to run the Virginia International Raceway and, then, five years later, to practice law. I lost track of him, but he has resurfaced with the roll-out of his solo album. I’ve listened to several of his songs on YouTube, and they’re all worth listening to, but I like “Redemption” the best. Support a Virginia artist. Buy Josh’s music on iTunes!

Property Tax Assessments Could Sabotage Virginia’s Solar Industry

Outlook murky.

A quirk in the way the state treats the value of solar energy projects for tax purposes could throttle Virginia’s solar industry in its infancy, according to an analysis prepared by SolUnesco, a Reston-based developer of solar energy projects.

In theory, a major investment in solar energy should benefit the jurisdiction where the project is located by generating significant new property tax revenues. But under current practice, any gain in revenue for a locality would be more than offset by cuts in state support for public schools. If local governments calculate that solar projects will cost them revenue rather than boost their tax base, they will have a strong incentive to deny necessary permits rather than approve them.

“Bureaucratic bookkeeping might grind solar development to a halt,” states a SolUnesco white paper, “The Composite Index and How It Relates to Solar Development in Virginia.”

SolUnesco has proposed building an 11-megawatt solar facility in Albemarle County, but the county zoning code prohibits solar farms. The Board of Supervisors has asked the county planning commission to study the issue. A repeal of the restriction might encounter opposition from NIMBYs intent upon protecting the rural character of the county, as I blogged here. Albemarle’s decision could well hinge on its calculus of whether the project will benefit or hurt the county fiscally.

Under state law, solar energy projects are assessed for property tax purposes as “certified pollution control equipment.” That qualifies solar farms for an 80% reduction in property taxes. That exemption improves the economics of solar projects but it reduces the tax benefits to local governments.

By contrast, the state Department of Taxation counts the full market value of solar farms when calculating the Composite Index (CI), which is used to measure local governments’ relative fiscal health and ability to support public K-12 education. The state distributes state support for education on a sliding scale that gives a higher share to localities with a low CI (a smaller real estate tax base per capita) and a smaller share to wealthier jurisdictions. As SolUnesco summarizes: “Increased taxable property increases the Composite Index, which reduces the share paid by the state.”

So, how does that work out in practice? SolUnesco provides the hypothetical example of a solar project that creates taxable value of $100 million. Here’s how the numbers work out for a “representative county.” The county generates $80,000 in new tax revenue on $20 million of assessed value. But the county would lose $147,597 in state funding for schools based on the full $100 million added to the Composite Index. The net loss: $67,597.

If the Department of Taxation used the same value as the local government in calculating the Composite Index, our hypothetical county would experience a $52,083 revenue gain.

“Counties that have permitted utility-scale projects may regret their decision if they believe these projects will result in a net revenue loss,” states the white paper “Many projects have received their county [conditional use] permit, but many have yet to file for their building, electrical and other construction permits.”

“The state is aware of this inconsistency in their treatment of tax exemptions,” says SolUnesco. The Department of Taxation, Department of Education, and the State Corporation Commission “are all working together on a resolution.”

Will NIMBYs Thwart SolUnesco Solar Plan?

SolUnesco CEO Francis Hodsoll addresses the Albemarle County Board of Supervisors

SolUnesco CEO Francis Hodsoll addresses the Albemarle County Board of Supervisors. Photo credit: Charlottesville Tomorrow.

Not all barriers to solar energy emanate from Richmond. Take Albemarle County, for example. The county zoning code outlaws solar farms, we learn from Charlottesville Tomorrow.

“The current zoning ordinance allows for the transmission and distribution of energy, but not the generation of energy,” said county planner Margaret Maliszewski at Wednesday’s Board of Supervisors meeting.

The issue arose because Reston-based SolUnesco wants to submit an application to develop an 11-megawatt photovoltaic solar energy generation system in southern Albemarle. “Our project is for the wholesale supply of energy that goes onto a wholesale network of transmission and distribution lines and that allows people to buy energy from our project or for a utility to buy energy directly from us,” said SolUnesco CEO Francis Hodsoll.

Albemarle Supervisors directed the planning department to study the issue. But, while the Charlottesville-Albemarle area may be home to many solar-loving greenies, don’t take it for granted that county planners will roll over for SolUnesco.

“As a member of a rural neighborhood, the first thing that comes to mind is protection of the rural areas,” said Phillip Fassieux at the board meeting. “We all love solar power, but at what cost? … “How will residents of Albemarle benefit specifically from turning over part of our rural county to its use? Will we see reductions in electricity rates?”

Everyone loves solar in theory, but opposition frequently surfaces locally when someone proposes building a solar farm near them. Others object to the idea of vast solar farms displacing agricultural uses of the land. SolUnesco’s proposed 11-megawatt solar farm, big enough to supply demand for about 2,000 households, would require between 70 and 80 acres of land. Typically, solar farms include vegetated buffer zones to screen the solar panels from view.

(Another potential objection to solar is that, given the state formula for distributing school aid, a big capital investment in solar could actually hurt a county financially. I’ll deal with that issue in a separate post.)

Bacon’s bottom line: Call me a Neanderthal, but I support private property rights. I see no justification for Albemarle County — or any county — to impose zoning restrictions prohibiting solar farms. If a property owner decides that installing solar panels represents a use of land preferable to agriculture or timber, that should be his decision to make. Counties have no business intervening unless the land use creates a nuisance to neighbors. Unlike wind turbines, solar panels create no noise, are easily hidden from view, and don’t harm wildlife. NIMBYs need to get a life.

And one more thing… The SolUnesco pitch to landowners asserts that its 25-year leases will generate above-market returns for landowners with an inflation escalator. The company assumes all costs and risks associated with developing the project — the landowner just collects checks for 25 years.

Rural Virginia is hurting. It has few resources of value in the knowledge economy. One thing it does have is land. Solar energy represents a rare opportunity for Virginia’s rural economy. There are many complex issues surrounding the integration of solar into the electric grid that need to be resolved before we see widespread deployment, but land use should not be one of them.