Tag Archives: James A. Bacon

Trump Budget Bullet Barely Grazes NoVa

President Trump’s proposed budget would cost the Washington metropolitan region up to 24,600 jobs and billions in lost salaries and procurement spending, according to a new analysis by regional economist Stephen Fuller.

But Washington’s Virginia suburbs would get off easier than Maryland and the District of Columbia, reports the Washington Business Journal. The district would lose 14,000 to 15,000 jobs and Maryland would lose 5,500 to 6,000. But in Northern Virginia, where cuts to the federal bureaucracy would be partially offset by an increase in defense spending, would lose only 500 to 3,600 jobs.

Overall federal spending in the Washington region would drop between $4.2 billion to $5 billion, reducing growth in the region’s gross domestic product by 1%. If GDP tracks job losses, the impact on Northern Virginia will be even milder.

Bacon’s bottom line: Trump’s budget will not be enacted as submitted. Congress will tinker, undoubtedly sparing some non-defense programs on Trump’s chopping block. (I’m rooting for preservation of funds for Chesapeake Bay restoration.) But assuming that Fuller’s projections are in the ballpark, it doesn’t look like Virginia has much to worry about. The loss of 500 to 3,600 jobs in Northern Virginia’s dynamic economy will cause no more than a burp in growth.

Fix the Broken Regulatory Process

There must be a better way for federal agencies to review infrastructure mega-projects.

A few days ago, I asked why, after three-and-a-half years, the U.S. Army Corps of Engineers has yet to give a yea or nay on Dominion Virginia Power’s permit request for the Surry-Skiffes Creek transmission line. The issue I’m raising isn’t what the Army Corps decides but how long it takes to reach a decision. Because of the interminable time spent pondering the permit application, citizens and businesses on the Virginia Peninsula will be at risk of blackouts this year and next, if not longer.

Today, the Richmond Times-Dispatch highlights the frustrations expressed by Diane Leopold, CEO of Dominion Transmission (DT), sister company of Dominion Virginia Power and managing partner of the proposed $5 billion Atlantic Coast Pipeline (ACP).

“To make these beneficial investments we need certainty from federal agencies. Not a rubber stamp, but a rational path forward with clear processes, reasonable schedules and reasonable decisions,” said Leopold in testimony to the U.S. Senate Committee on Energy and Natural Resources.

The pipeline requires more than 18 major federal permits and authorizations from the Federal Energy Regulatory Commission, the U.S. Army Corps of Engineers, the National Parks Service, the U.S. Forest Service, the Environmental Protection Agency and the U.S. Fish and Wildlife Service. The most visible hang-up at the moment, as judged by Robert Zullo’s article in the T-D, appears to be with the Forest Service.

Dominion says it will use state-of-the-art technology and best practices that will minimize the risk of landslides and erosion on steep mountain slopes. But environmentalists claim that Dominion is under-estimating the landslide risk, and it appears that the Forest Service shares their concerns. Dominion is convinced that it’s right, and its foes are equally persuaded that they’re right. The debate will never be settled by having one side back down.

Why does this have to be so hard?

Instead of a time-consuming bureaucratic battle, why not just specify the desired erosion-and-sediment-control outcomes and require the pipeline to meet them? A reasonable approach would entail careful monitoring of land crossed by the pipeline to detect landslides and other forms of erosion — a cost that ACP would have to absorb. All monitoring data would be made available to the public so government agencies and environmental groups could inspect them to ensure the pipeline was fulfilling its responsibilities. ACP would be required to pay the full cost of restoring mountain slopes and compensate nearby landowners or water authorities for any damages. Perhaps ACP would be required to maintain insurance or post a bond sufficient to guarantee the damages are covered.

There should be one debate over the standards appropriate to steep mountain slopes, and those standards should apply to everyone who wants to build an interstate pipeline in comparable terrain. The purpose of regulation should not be to prescribe how pipelines do their jobs but to ensure that they achieve the desired outcomes. Finally, the review process should not require months and months of review. It should take no more than a week or two to ascertain that the pipeline applicant has the financial wherewithal to live up to its commitments.

Wouldn’t such an arrangement work better for everyone?

Loudoun County Never Bargained on This

Loudoun County doesn’t even have service on the Metro Silver Line yet, but potential liabilities are escalating beyond levels county officials ever imagined when they signed up to participate.

Metro’s capital needs and operating deficits are growing as the transit system grapples with a multibillion-dollar maintenance backlog, union featherbedding, and declining ridership.

The system’s operating shortfall of nearly $300 million by fiscal 2018 and could double by 2019, said Jim Corcoran, a Virginia representative to the Washington Metropolitan Area Transit Authority (WMATA) board. “If things don’t change, it will be impossible. … We’re at $300 million this year … but next year it’s going to be $500-$600 million.”

WMATA hopes to close the gap through some combination of help from the federal government, the states of Virginia and Maryland, Washington, D.C., and local governments served by the commuter rail system. There is nothing close to a consensus on how to apportion the costs. Many, including Corcoran, said that changes to the regional compact between Virginia, Maryland and D.C., may be necessary to reach a financial agreement.

Writes the  Loudoun Times-Mirror:

According to the Metropolitan Washington Council of Government’s latest projections from October, Loudoun will start to pay Metro around $12 million in fiscal 2019 in annual operating and capital costs. The next year, the number is slated to jump to $50.8 million, then to $58.4 million in 2024 and as high as $82.1 million in 2025.

Phase 2 of the Silver Line, which is still under construction, is scheduled to go into service in Loudoun in 2020. How much more the county will have to pay as its share of keeping the rail system solvent is not known, but it is sure to measure in the millions of dollars yearly.

Why So Long to Decide about Surry-Skiffes?

View of a Dominion transmission line crossing the James in Newport News downstream from the proposed Surry-Skiffes project.

View of a Dominion transmission line crossing the James in Newport News downstream from the proposed Surry-Skiffes project. Photo credit: Daily News.

Tick, tock! The April 15 deadline is fast approaching for when Dominion Virginia Power will have to shut down its Yorktown One and Two coal-fired units, leaving the Virginia Peninsula vulnerable to blackouts. That risk will hang over the region, home to a half million people, for a year-and-a-half or more — for however long it takes to gain regulatory approval for a solution and then build a replacement source of electric power,

The question every Virginian should ask: What is going on inside the U.S. Army Corps of Engineers? What is taking so long to make a decision, either yea or nay? Whatever the final outcome, it’s hard to avoid the conclusion that the regulatory process is badly broken.

Dominion has known for several years that it would have to replace the capacity of the Yorktown units. It conducted an alternatives analysis, and then considered running a transmission line down the spine of the Peninsula before scotching the idea because the line would cross too many wetlands, subdivisions and Indian lands. Then the utility settled on building a 500 kV transmission line across the James River near Jamestown. PJM Interconnection, the organization that runs the multi-state electric grid that includes Virginia, has repeatedly confirmed that that the Surry-Skiffes Creek route selected by Dominion is the most cost effective. Dominion obtained State Corporation Commission approval for the project in 2013 and survived a Virginia Supreme Court challenge.  The Environmental Protection Agency has given Dominion two one-year extensions on the operation of the Yorktown power stations.

The final regulatory hurdle was gaining a permit from the Norfolk office of the Army Corps of Engineers, which has to balance the economic justification of the project against environmental and conservation considerations. By August 2013, when Dominion submitted a revised permit request, the proposal had stirred up intense resistance from citizens and conservation groups on the grounds that the Surry-Skiffes line’s high steel towers would ruin views of a historically sacred stretch of river, which has remained largely unspoiled since English settlers landed at Jamestown.

For three-and-a-half years, the Corps has solicited public input, held public hearings, examined alternative solutions, and considered Dominion proposals — $85 million worth — to mitigate the loss of historical and cultural resources. (See the Corp’s regulatory time-line here.) All this time Dominion has been sounding the warning that after April 15 the Peninsula would be at risk of region-wide blackouts.

For roughly 60 days a year, during periods of peak electric load, the electric lines bringing in power from outside the region would be running at close to peak capacity. The system would be only one unplanned outage of a transmission line away from a crisis. National electric reliability standards require Dominion to maintain enough redundancy in the system to withstand two simultaneous contingencies. Rather than risk a cascading blackout like the one that knocked out electric power for 50 million Americans and Canadians in the infamous 2003 blackout, PJM would order Dominion to “shed load” to eliminate the risk. During hot summer months or cold winter months, controlled blackouts could become a frequent event on the Peninsula.

There is no question that the Army Corps has a hard decision to make with Surry-Skiffes — whether to risk economically disruptive blackouts until a new solution can be found or to mar an irreplaceable historical treasure. But the longer it waits, the longer it puts the region at risk. If it gives the OK tomorrow, it would still take Dominion a year and a half to build the transmission line. If the corps declines to issue the permit, the utility will take even longer to devise an alternative, gain the necessary permits and build whatever needs to be built. Either way, the interminable decision-making process has put the Peninsula economy at risk.

The scandal here is not the necessity of obtaining Army Corps approval. The country needs a mechanism to evaluate the merits of giant infrastructure projects against the harm they might pose to communities. The scandal is the length of time it takes to reach that decision. Three-and-a-half years is way too long. The system is broken. It needs to be fixed.

Have Richmond Schools Lost Control of their Kids?

The dark blue line indicates the dividing line between less than 7 and more than 7 unexcused absences in City of Richmond schools.

Adapted from graphic in Cranky’s blog. The dark blue line indicates the dividing line between less than 7 and more than 7 unexcused absences in City of Richmond schools.

John Butcher, writing on Cranky’s Blog, has been digging into Richmond Public School (RPS) data on unexcused absences and asking questions about the school district’s seeming negligence in enforcing state law. Of the city’s 26,000 students in 2016, he has found, some 28% had seven or more unexcused absences. As he summarized the findings in an email to me:

State law required that RPS either prosecute their parents or file CHIN (Child In Need of supervisor) petitions; RPS did so in only 226 of the 7,287 cases (3.1%). At the extreme, one student had 143 unexcused absences; another had 136. There’s no indication that RPS did anything about either.

Butcher is rightly concerned about what he terms “rampant, lawless truancy.” When a quarter of the school-age population has skipped school on more than seven occasions, we’re talking about a serious problem. It appears that the Richmond school system has lost control of its student population.

Bacon’s bottom line: What do we make of this finding? Is the pervasive truancy problem the fault of lax enforcement by Richmond school officials. Has the school-age population become unmanageable? Has parental authority over their children broken down to such an extent that it makes no sense to prosecute parents? These data alone don’t tell us.

However, the data do call into question the value of RPS high school diplomas. We can reasonably assume that a significantly higher percentage of high school students are skipping school than 2nd and 3rd graders. Thus we can reasonably assume that the percentage of high school truants (seven unexcused absences or more) in high schools is significantly higher than the 28% school-wide average. Yet the City of Richmond schools reported an 80.5% on-time graduation rate for its Class of 2016 cohort, according to Virginia Department of Education data. There is only one possible conclusion: Some chronic school-skippers are getting diplomas.

Here’s another question: What is the relationship between truancy and “acting up” in school? How many truants also are discipline problems, disrupting classrooms and making it difficult for other students to learn? I would conjecture that there is a high degree of overlap. The idea sounds perverse, but perhaps it’s a good thing that disruptive students are skipping school — when they’re on the streets, they’re making it easier for teachers to teach. Is it possible that school administrators are deliberately not trying to get them back into school? Or are they just overwhelmed with the magnitude of the job?

Butcher has done an excellent job of highlighting a critical issue facing Richmond schools (and many other school systems). But there’s a limit to what the data can tell us. We need enterprising reporters, citizens, or, heaven forbid, school board members to ask the tough questions and find out what’s really happening.

Update: Cranky keeps on digging into the truancy issue. “Last year, Richmond had eighteen attendance officers to deal with statutory requirements for 10,381 attendance plans, 8,502 conferences with parents, and 7,288 court filings. This year, they reduced the budget for truancy services. Can you spell “scofflaw”?”

Ed Gillespie Tax Plan Checks All the Right Boxes

Ed Gillespie addresses the GOP convention in Roanoke.

Ed Gillespie addresses the GOP convention in Roanoke. Photo credit: Washington Post.

Republican Ed Gillespie has issued a blueprint for tax cuts that could define the terms of debate for Virginia’s 2017 gubernatorial campaign. It is a fiscally credible plan. It offers a well-articulated vision for how to jump-start Virginia’s economy. That’s not to say the plan is unassailable, but it is too big and bold to be ignored. Indeed, Republican rival Corey Stewart rolled out his own tax cut plan just a few hours after Gillespie’s announcement. Democratic candidates likewise will be forced to respond.

There are two parts to the Gillespie plan. The first is an across-the-board cut of 10% to state income tax rates, which the campaign says will put nearly $1,300 per year back into the pockets of an average family of four. Gillespie would phase in the tax cut over a five-year period, paying for it out of an anticipated $3.4 billion in state revenue growth, leaving about 60% of the new revenue to fund core services.

The second part would sunset three anti-business, “job-killing” taxes levied by local governments: the Business and Professional Occupancy License tax (or BPOL), the machinery & tools tax, and the merchants tax. To replace lost revenues, he would allow local governments to utilize alternative revenue streams from an unspecified “menu of options” that will be “collaboratively developed.” One option the menu will not include is a local income tax. Localities would be free to re-enact the business taxes or choose from the options.

Not only will the tax restructuring boost disposable income for an average household for four when fully phased in, Gillespie claims, it will stimulate $300 million a year in new economic activity, create 50,000 additional private-sector jobs (25% more than would be created otherwise), and help recruit and retain talented workers. These economic estimates are based upon the work of the Thomas Jefferson Institute for Public Policy using economic modeling tools of the Beacon Hill Institute.

The vision. The underlying premise of the plan is that Virginia’s economy is sluggish and needs a jolt to get moving again. Says the plan overview:

Our approach to economic development is antiquated and tired, and Virginia is losing ground to other states. Our economic growth rate has trailed the national average for five straight years. … Virginia’s antiquated ta code was designed in a bygone era and our income tax rates have never been lowered since they were established in 1972. Our tax climate ranking fell to 33rd in 2017, falling behind neighboring states like North Carolina, Tennessee, and West Virginia. Our business rankings are falling, and more people are moving out of Virginia than moving in.

What won’t revive Virginia’s economy, says Gillespie, is picking winners and losers with subsidies, tax breaks and other preferences.

The plan will raise take-home pay for hard-working Virginians squeezed by stagnant wages and higher costs, orient our economy toward start ups and raise ups, entrepreneurs and small businesses, and make Virginia more competitive and attractive to businesses, retirees and veterans. …

Instead of solely focusing our efforts on throwing taxpayer dollars at big corporations and hoping they move to Virginia, this plan is crafted to foster natural, organic economic growth over the long term through a more patient approach that will help start ups, entrepreneurs, and existing small businesses. …

The path to diversifying our economy will be charted by entrepreneurs given greater freedom to invest and innovate. They will identify the new sectors, services and products to flourish in Virginia, not a top-down government approach that picks winners and losers in the marketplace, and too often makes the wrong bets with your tax dollars.

The fiscal math. Gillespie has structured the plan to fend off the inevitable criticism that his plan will crimp funding for critical government services. First, he says, he will offset revenue reductions by eliminating “special interest tax preferences, cutting wasteful spending, and conducting a full review of economic development programs.” Second, he will build in revenue triggers to protect critical investments in education, health care, transportation, public safety, and other core revenues.

Gillespie’s plan is vague about exactly which “special interest tax preferences” he would cut — and he’s vague about the “revenue triggers.” Virginia’s tax code is larded  with tax breaks, but the big ones are political popular and eliminating the small ones yield only modest savings. In effect, Gillespie is punting some of the tough political choices until later. As for the tax revenue triggers, presumably, they would limit the tax phase-out in any given year if revenues fail to meet expectations. Undoubtedly, there would be considerable discussion over how sensitive to revenue shortfalls those triggers should be. Continue reading

Peninsula Still Needs Surry-Skiffes Project, Says PJM

View from the Surry nuclear power station of where the proposed Surry-Skiffes transmission line would cross the James River.

View from the Surry nuclear power station of where the proposed Surry-Skiffes transmission line would cross the James River.

PJM Interconnection may have lowered its forecasts for peak electricity load on the Virginia Peninsula, but the regional transmission organization still contends that the proposed Surry-Skiffes Creek high-voltage transmission line is still needed to avoid the risk of blackouts.

“It is PJM’s determination that the current Skiffes Creek 500 kV project remains the most effective and efficient solution to address the identified reliability criteria violations,” wrote Steven R. Herling, PJM vice president-planning, to the Norfolk district commander of the U.S. Army Corps of Engineers earlier this month.

Dominion Virginia Power, which must obtain a permit from the Corps before it can commence construction, has encountered stiff opposition to the project. Preservationists say the highly visible power line will disrupt views of the James River little changed since the first English settlers arrived more than 400 years ago.

The project was precipitated by federal clean-air regulations that compels Dominion to shut down two of its aging, coal-fired generators at the Yorktown Power Station. Those units are scheduled to go offline next month, eliminating a major source of electric power on the Peninsula. The region is served by multiple transmission lines that can meet electric power demand under routine conditions. But the Peninsula grid lacks the redundancy to meet federal reliability guidelines designed to prevent another cascading blackout like the one that plunged 55 million in the Northeast and Canada into darkness.

Dominion selected the Surry-Skiffes route after examining numerous alternatives. Foes charged that the utility considered only a narrow range of options. Instead of building a 500 kV line across the James, it could have met reliability standards through a combination of measures: upgrade of existing lines, solar power, energy efficiency, demand-response, greater reliance upon the oil-powered Yorktown 3 unit, and/or building a less obtrusive, lower-voltage line across the James. Arguing that the 500 kV line was overkill, they also argued that Dominion forecasts for electricity demand were unrealistically high.

In October 2016, the National Trust for Historic Preservation, which has named the James River as one of the nation’s 11 most endangered historic places, published an alternatives report prepared by Richard D. Tabors, a consultant and former MIT professor. Using Dominion data and the same simulation model as PJM, Tabors outlined four alternatives.

Summary of four alternative scenarios prepared by Tabors Caramanis Rudkevich.

Tabors recommended upgrading existing 115 kV and 230 kV power lines feeding the Peninsula, getting greater use out of the Yorktown No. 3 oil-based generator, dropping load at selected feeders, and building new transmission lines, preferably along existing rights of way. Each scenario, states the report, “is generally less costly and can be implemented in a shorter period of time.”

Since publication of the Tabors report, PJM has backed off its earlier load forecasts. Reports David Ress with the Daily Press:

The latest PJM forecasts … suggest peak load demand during the summer would grow at an annual rate of 4 percent though 2027, to reach a total of 20,501 megawatts.

That’s 1,755 megawatts less than PJM’s forecast a year ago, nearly an 8 percent decline. Last year, Dominion’s summer peak was 19,539 megawatts.

But in Herling’s letter to the Corps, PJM stuck to its guns on the larger point, that the Surry-Skiffes line presented the optimum solution to the Peninsula’s needs. “PJM staff has reviewed the proposed alternatives and found that none of them resolved the identified reliability criteria violations that are being addressed by the Surry-Skiffes 500 kV project,” wrote Herling.

There are multiple, inter-related reliability violations, said the PJM planner.

Solving for a single violation does not address the panoply of reliability violations that are designed to be addressed through the Skiffes Creek project. For example, the continued operation of the Yorktown 3 generator as proposed by Dr. Tabors would not address thermal overload and voltage violations on the 230 kV and 115 kV bulk electric system that were identified by PJM. In addition, Dr. Tabors’ reliance on the Yorktown 3 generator as a solution ignores the significant environmental operating restrictions and limitations on plant operations associated with that plant.

Subsequent studies have re-confirmed the need for the Surry-Skiffes project even considering PJM’s updated load forecasts, Herling wrote.

Virginia Beach, Emerging World-Class Data Hub

Speaking of Virginia Beach…. Here’s a more promising approach to economic development than building arenas in the hope of wrangling big-name concerts and basketball tourneys for 30 years into the future. Reports the Virginian-Pilot:

A Dutch company wants to create a new data center park to draw the likes of Snapchat, IBM and Uber. NxtVn will spend $1.5 billion to $2 billion to build a hub off General Booth Boulevard to attract companies that seek high-capacity connections from the U.S. to Europe.

The company also plans to invest in a third trans-Atlantic high-speed data cable – Midgardsormen – that would link Virginia Beach to a data center park in Eemshaven, Netherlands.

This news follows an announcement made last year that a consortium including Facebook, Microsoft and Telefonica would build a 4,000-mile trans-Atlantic cable capable of transmitting 160 terabytes of data per second, the first transoceanic fiber cable station linking to the Mid-Atlantic. The existence of these two transoceanic cables, plus a third connecting Brazil and Virginia Beach, could spur development of the city into one of the nation’s largest data-center hubs.

How has Virginia Beach scored this economic-development coup? By handing out subsidies and tax breaks? No, by tending to basics. Writes the Pilot:

Over the past two years, the Virginia Beach Broadband Task Force has laid out steps that appeal to technology-driven companies, including advancements to a high-speed fiber optic network connecting municipal buildings and laying a fiber ring across the city, said Councilman Ben Davenport, chair and founder of the task force.

“We have worked with Dominion Virginia Power to make sure all power requirements could be met at these sites, which is very important because these data centers are huge power users,” said Davenport, who said that when NxtVn was told about the task force’s work on the fiber network, “this sealed the deal.”

There is no mention in the Pilot article of how much it cost to lay that fiber ring across the city. Perhaps the expenditure represents an implicit subsidy for broadband companies like NxtVn. If so, the project certainly appears to be paying off. I’m willing to wager that the Return on Investment is vastly superior to payback from an events arena.

(Hat tip: Paul Yoon)

More Great Moments in Virginia Governance: Election Fraud File

Waverly Mayor Walter Mason

Election irregularities in Virginia? No way. They never happen.

Except when they do.

A grand jury has indicted Walter Mason, mayor of the town of Waverly in Sussex County of a dozen felony charges of election fraud. Virginia Lawyers Weekly reports that Mason was accused of making false statements on absentee ballots and trying to help others violate absentee voting procedures in connection with his March 2016 election victory.

Michele Kathleen Brumfield (left) and James Hunter Higginbottom

Meanwhile, in central Virginia, two Altavista town council members, Michele Kathleen Brumfield and James Hunter Higginbottom, have been charged with prohibited activity at the polls, reports the News & Advance.

The newspaper did not spell out the exact nature of the activities. A copy of the state code section that lists prohibited activities at election polls can be viewed here.

Is Virginia Beach Arena Deal Good or Bad for Taxpayers?

Mayor Will Sessoms announces a $220 million Virginia Beach arena deal

Mayor Will Sessoms announces a $220 million Virginia Beach arena deal at a Chamber of Commerce function. Photo credit: Virginian-Pilot.

Virginia Beach City Council has approved a financing plan to build a $220 million sports and entertainment center near the Oceanfront, reports the Virginian-Pilot.

“Game on,” said Mayor Will Sessoms in announcing the deal. There is “a real possibility now” of hosting part of the NCAA basketball tournament. “Picture March Madness two years from now. Wouldn’t it be amazing to have that happening right across the street at our new Virginia Beach arena?”

I’ll tell you what would be amazing — if Virginia Beach taxpayers don’t take a drubbing.

The deal has gone through multiple iterations over more than a year. More than a year ago, City Council approved a plan submitted by the arena developer, United States Management involving $170 million in loans and $40 million in equity. A second plan would have entailed a $240 million loan. Under the latest plan, approved by City Council, the developer will borrow $150 million and invest $70 million in equity.

The city has committed to a $476 million in incentives over 33 years, as described by the Pilot: 1 percentage point of the city’s lodging tax, construction tax incentives, and tax revenue generated by the arena. Also, the city will shell out $76.5 million in hotel and discretionary taxes for infrastructure in the area.

Sessoms described the agreement as “a very good deal,” and other council members agreed.

Bacon’s bottom line: Maybe it is a good deal, I don’t know. There isn’t enough information in the Pilot article to tell. One positive sign: The developer is putting in $30 million more of its own money and borrowing $20 million less under the final deal than under the original deal. That puts the developer at greater financial risk, as is proper, and provides an extra financial cushion if, surprise, surprise, revenue projections don’t meet forecasts, the developer goes bust and the city has to step in. I hate to sound like Debbie Downer, but it’s been known to happen.

It’s more difficult to assess whether or not the city is giving away the store. We need to know how much tax revenue the Virginia Beach arena is expected to generate directly in property, sales, and hospitality taxes, and how much it is expected to generate indirectly through increased hospitality taxes at Virginia Beach hotels and restaurants. Then we need to match up those numbers year by year against the value of the incentives and give-aways. Presumably, that will yield a positive number, in which the city and its taxpayers gain each year more than they lose.

But, wait, what about the $76 million in taxes spent on infrastructure? Presumably, that will be front-end loaded. The city will have to build the infrastructure (street improvements, sidewalks, utilities, whatever) right away as part of the arena project, not phase it in over 30 years. Here’s how city council persons should be thinking about the deal: In exchange for an up-front investment of $76 million in tax dollars, the city will generate an increased stream of net tax revenue (gross revenues minus cost of incentives) from the project.

If the city’s return on investment is, say, six or seven percent, then taxpayers are getting a decent deal to compensate them for the risk they’re taking on. If the return is close to zero, one wonders why the city is pursuing the project when it could put its resources to work to better effect elsewhere. If the city is actually generating negative net taxes, then the developer took it to the cleaners.

In making the announcement, the mayor did not release any such numbers (at least none that were reported) and offered instead a lot of gassy talk about how great it will be if, maybe, just maybe, the NCAA tournament chooses Virginia Beach as a venue. That makes me suspect that either the numbers look shaky or, worse, Virginia Beach officials don’t even know what kind of return they’re getting. If I were a city taxpayer, I’d be demanding answers.