Carolina North: Two Years of Diminishing Economic Expectations

Wednesday, May 30th, 2007

Yesterday’s Carolina North outreach, once again, was heavy on promises – the vast possibility of grey goo, the escalating energy efficiencies of blue sky projections – light on details.

As a NC taxpayer, I’ve been waiting for UNC to produce a real, updated business plan reflecting 2007’s economic realities. Hey, we’re plunking down billions at the Carolina North craps table – it would be nice to have a quantitative, verifiable analysis of the project’s risk-reward profile.

Chancellor Moeser, you owe us NC taxpayers a reality-based report on our expected rate of return for our vast collective investment.

And, please, not another self-serving 2004 Market Street Services economic impact analysis report [PDF], which, to be charitable, was a fluffy confection spun from dreams of an enduring legacy, chunks of ad hoc economic observations and community boosterism of the worst calibre.

Your Carolina North quarterback, Jack Evans, reset the economic expectations yesterday (May 29th). Your team, with barely two months left of your self-imposed deadline, will have to drive hard to produce a believable economic impact report.

To give a small bit of perspective on how far we’ve come, here is UNC’s May 25, 2005 PR trumpeting the benefits of Carolina North:

Study shows Carolina North will be catalyst for jobs, tax revenue

CHAPEL HILL – Carolina North, the proposed living and learning campus of the University of North Carolina at Chapel Hill, will generate 7,500 local jobs and about $48 million in annual tax revenues by 2020, according to an economic impact study released today. It also has the potential to position Carolina as a leading national center of research and public-private partnerships, according to Market Street Services of Atlanta, which conducted the study for the university.

“Carolina North will expand Carolina’s multiple missions, boost innovation and redefine our engagement with the region, state and world,” said University of North Carolina at Chapel Hill Chancellor James Moeser. “The great news from this study is that Carolina, through Carolina North, can continue to be a catalyst for the economic transformation of our state.”

The Carolina North draft conceptual plan outlines concepts for mixed-use development at a 900-plus-acre tract of UNC-owned property one mile north of the main campus off Martin Luther King Jr. Boulevard (formerly Airport Road). The draft plan proposes to develop only about 25 percent of that total site over the next 50 to 70 years. Carolina North would include classrooms, labs, housing, schools, community spaces, offices and limited commercial space in a campus-and-village setting.

Carolina North would attract private companies to Chapel Hill to partner with university faculty to transform faculty research into products and

services to improve quality of life. Public-private partnerships would allow the university mission to grow at a time when state and federal funding are no longer growing at previous rates.

The Market Street study will be presented at Thursday’s (May 26) meeting of the university’s Board of Trustees. The study includes analysis of the projected economic impacts at the end of the project’s second phase (15 years) and at full build-out (50 years).

Other study highlights include:

· In the first two phases alone (15 years), the gains in the local and state economies reflect similar numbers to a medium-sized firm building new headquarters in the area year after year.

· By the end of phase 2 (approximately 2020)

Tax Impact: About $48 million in tax revenue annually
$26 million in state income tax
$14.6 million in state sales tax
$2.8 million in local sales tax
$5 million in property tax

· Employment Impact:

7,500 full-time, ongoing jobs (non construction)
$433 million in annual salary and personal income
8,876 construction-related jobs
$353 million in salary and personal income (construction)

· Business Revenue:

$600 million in annual business revenue (non construction)
$979 million in business revenue (construction)

Plans for Carolina North are still in the conceptual design phase. Before the university can move forward to collaborate with the towns of Chapel Hill and Carrboro on the plans, it must resolve issues related to the university-owned Horace Williams Airport, which occupies part of the Carolina North tract.

The university announced in April 2002 that it would close Horace Williams Airport. In September 2002, the N.C. General Assembly passed legislation requiring the university to keep the airport open until January 2005. In July 2004, the legislature adopted language requiring the university to keep the airport open until an accessible replacement facility could be found for Medical Air, which serves the university’s Area Health Education Centers program.

The N.C. Senate recently passed a special provision that would allow the university to close the airport, provided that Medical Air operations have access to, or utilize, the Raleigh-Durham International Airport to serve the needs of patients, physicians and passengers associated with AHEC’s statewide programs.

The university’s Board of Trustees also will hear a report at its Thursday meeting about a consultants’ study to help the university identify an alternative site for an airport.

-30-

For a copy of the full economic impact study report, please go to: http://cn.unc.edu/economic_impact.pdf

Interviews with Market Street consultants can be arranged through News Services. In addition, for comment about the economic impact of Carolina North on the local community, reporters may call Aaron Nelson, executive director of the Chapel Hill-Carrboro Chamber of Commerce, at 919-967-7075.

I wonder if the Chamber’s Aaron Nelson, today, would give that report a passing grade?

Hard to believe given that today’s paucity of detail, the changing nature and scope presented yesterday and the rather obvious flaws ($5 million in property taxes? Really?) in Market Street’s Carolina North sales brochure.

Hazardous Consequences: No Official Word, Yet, On Lot #5’s Hazardous Waste Issue

Thursday, March 29th, 2007

[UPDATE] As of April 3rd, the Town has provided part of what I asked for in the following petition, the environmental report [PDF]. In the Town’s announcement of a conclusion to negotiations, the figure of $232,000 for a remediation was thrown out. This figure, of which I haven’t found a full justification, would supposedly include removal of 13,000 tons of material to either a hazardous waste landfill or some other remediation facility.

More to come.

[ORIGINAL POST]

A quick follow up on my previous post Lot #5 Development: “…up through the ground come a bubbling crude…”.

I’ve sent Chapel Hill’s Town Council a petition (Mar. 29th) asking for a postponement of any further approvals for Special Use Permits, extending or adding new consultancies, preparing the lot for construction, etc. until the financial liabilities attendant to environmental remediation are fully and timely disclosed.

Further, to avoid the recent mess involving the Rogers Road community, siting a trash transfer station on Eubanks and the Orange County Board of Commissioner’s apparent lack of any discernible specific, detailed and publicly revealed process for making their analysis and decision, that the methodology, data and assumptions are published by Council fully seven (7) business days prior to any approval.

A call from the Daily Tar Heel spurred me to take this action. I was hoping the environmental report, which, from my experience, should’ve taken a short time to prepare, would be published for public review by now. According to the DTH’s reporter, it hasn’t.

My concern is that the “clock” would be “run out” on the hazardous waste remediation issue – that Council would move ahead amassing further public (taxpayer) obligations without adequate background.

To help encourage a full, timely, open and responsible discussion of the hazardous waste issue, I’ve submitted the following petition:

Mayor and Town Council,

I’m petitioning Council to postpone ANY further approvals for the Lot #5 Downtown Development Initiative:

1) until the environmental assay of Lot #5 is 100% completed. This would include any recommended
follow up tests, such as monitoring wells, further core sampling, ground-radar location of
tanks or other structures, etc.

2) until the results of the environmental assay have been independently reviewed.

3) until the results, the independent review, the methodology, data, assumptions, geologic maps
and any other factors used to derive the results have been published 7 days prior to the
approval meeting.

4) until an initial estimate and plan for the environmental remediation, if necessary, has been
developed.

5) until the estimate, the methodology, data and assumptions going into that cost estimate have
been published 7 business days prior to the approval meeting.

6) until a financial impact statement, including additional costs, borrowings and wider effects
on the Town’s financial well-being has been developed.

7) until the estimated financial impact and methodology, data and assumptions going into that
evaluation have been published 7 business days prior to the approval meeting.

It also appears that the underlying geology of Lot #5 might be rockier than expected. If this is so,
Council should also postpone further approvals pending an evaluation of increased costs to the
developer and taxpayers of Chapel Hill.

Considering that an expensive environmental remediation might significantly and adversely impact our
Town’s finances, and, in combination with Lot #5’s current taxpayer obligations, possibly necessitate
either a substantial tax increase or reduction in services or both, the fiscally prudent course of
action is to wait until the facts are reported and the conclusions reviewed by the wider public.

Finally, I would like to highlight the importance of giving the public at least 7 business days of
notice. Our citizens are already concerned about the trajectory this project has so far taken.
Some of the greatest concern has come from financial, urban planning, environmental, energy and
commercial real-estate experts.

Let’s give our talented citizenry the opportunity for a careful, measured evaluation of the
Town’s reports and extend the courtesy of providing a reasonable amount of time to draft a
response.

Rushing the project forward without disclosing further anticipated financial obligations does
our citizenry a disservice.

Thank you,

Will Raymond

I’ll post the response as it comes in.

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