Commissioners move forward into "The Elephant" business, a.k.a: a free gift of the VOA site | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer.

    The media and public have been notified that there will be a special called meeting of the Beaufort County Board of Commissioners on Friday (9-26-14) at 8:30 a.m. to consider "property matters" including the Voice of America site. The U. S. Government owns some 2822 acres of land in the northwest corner of Beaufort County. It was a short-wave radio transmitting facility for the Voice of America (VOA). VOA operated a broadcasting program to get America's message to people stuck in communist countries during the Cold War that controlled their media. So our government chose to broadcast "the Truth" from facilities such as the one in northwest tip of Beaufort County off of Cherry Run Road. But because of the changes in recent years in both geo-politics and the internet, the facility has become obsolete. So the General Services Administration has taken it on as "surplus property." GSA has proposed to give it to Beaufort County, with certain strings attached.

    The property is valued on the tax books at $12,829,995. There is a large building that housed radio transmitters along with a number of radio towers scatter across the site. The County would have to pay to remove the towers.

    So the question becomes: "What is the County to do with this White Elephant?"

    County Manager Randell Woodruff reported at the last Commissioner meeting that the GSA is proposing to restrict, in perpetuity, what the County can do with the land. Woodruff reported that the GSA envisions the land being used for "recreation."

    Hood Richardson has been adamant that the County negotiate an agreement that would ultimately be incorporated into the deed that allows for the County to use part of the land to generate revenue at least sufficient to insure that the facility would not be a fiscal liability to the taxpayers of the county. Mr. Woodruff opined that "maybe we can get some grants" to help develop the property and operate whatever is put there.

    One county official was heard to remark "this is a tremendous opportunity for Beaufort County. It is a free gift..."

    And that is where the article referenced in our lead-in comes into play.

    Had our county officials read Hoppe's treatise they would not think this such a good deal. Here's why:

    Basically, this "gift" is analogous to the old story of the little boy who went to the circus and came home with an elephant. When the boy's father asked him where the elephant came from the boy replied: "The man at the circus gave it to me. He said all I needed to do was promise him I would take care of the elephant. I promised him. He told me an elephant was worth a lot of money if we went out and bought one." You know the rest of that story.

    But it is worse than the county simply taking over 2800 acres of land that it must manage according to what the Federal Government dictates. The worst part of this "deal" is, as Hoppe explains, is that the land will be taken out of productivity as far as the economy of Beaufort County is concerned. This 2800 acres has in fact been more or less taken out of productivity since the Federal Government acquired it. They have paid no property taxes on the land or improvements on it. Theoretically that is a "cost" of the loss of taxes on $12 million dollars. The reality is that the actual cost was what a private owner would have paid in property taxes had the land not been owned by the government. County ownership will continue that cost to the county.

    But even more than the lost property taxes is the opportunity cost of government ownership of this land for all these years. What else could it have been used for? More to the point, what else could it be used for in the future that would generate economic wealth for Beaufort County were it put back into private enterprise?

    And to the opportunity costs, one would have to add what the impact was of the money the government confiscated from the taxpayers (or borrowed from holders of U. S. debt) that could have been used for, had it not been spent on this piece of property and facilities.

    It should be noted that the facility "created" very few jobs. VOA did operate an office in Greenville that employed a number of people but most of the production work on the broadcasts was done outside North Carolina, with only a handful of technicians on this site as well as the other two sites in the area and the Greenville office.

    As Hoppe points out, a useful way to look at it is by weighing the "profit" that was generated. While government ownership of property does produce various forms of profit, typically it produces much less than does private enterprise.

    So the question Beaufort County should be debating is not at all what they are talking about. Hood is trying to craft an agreement that will allow the county to use some of the 2800 acres for timber production and perhaps some of it for electricity generation (solar or wind). But even those things raise red flags. Timber is a "low use" of land. Much of the "profit" generated by growing trees is actually sucked out of the local economy and sent out of state, just as with Wal-mart, Lowes and other enterprises owned by outsiders. And there is a growing body of research that shows that wind and solar power are net "losers," especially when you factor in what they do to the cost of electricity. So maybe the land might support a solar farm or a windmill farm but do we really want to pay for it with higher electrical bills?

    But beyond all that, the County has no business getting into business and competing with private enterprise. No good conservative can support government ownership of the means of production that competes with private enterprise. That is communism in its classic sense.

    What is so outrageous is that the County staff is not even doing the research to properly advise the County Commission on what the true implications are of taking ownership of this property and what the relative costs will be to the restrictions the Federal Government puts on the land. There is no business plan. It is the same old malfeasance we've seen with the duds called "industrial parks," the school bond issue, the jail, the U. S 17 By-pass, with a rest area that will suck commerce out of the downtown of Washington, etc. etc.

    And to add insult to injury, now Al Klemm is trying impose an additional tax under the guise of soaking tourists. He appears to be ignorant of the fact that it is the local businesses that pay the tourism taxes, not the tourists. Tourists are typically going to spend a finite amount of money in a community visited. If they pay more for a motel room that is less they will have to spend in restaurants and local stores. A tax on motel rooms or any other service or product is nothing more than an increase in the price of that service or product and increasing prices decreases demand. It is a self defeating proposition Mr. Klemm is once again dumping on our economy and exposing his business ignorance.

    We're not arguing whether the VOA site would be a good or bad thing for the people of Beaufort County. We don't know. But neither do the County Commissioners. They don't have solid data with a valid assessment of the options. They are blundering into this thing just like they have blundered into so many other things.

    And then there is the equity issue. As Commissioner-candidate Frankie Waters is heard to say often: "all of the current commissioners have a 27889 (Washington) address." None are from the northeastern or southeastern sectors of the county, or even Chocowinity. This site is about as far away from the people in the Aurora and Belhaven areas as you can get and still be in Beaufort County.

    We have also not heard any discussion of the utilities planning on this piece of property. Presumably it has high voltage electrical service, which would be a plus for industrial development. In addition, the site is upstream from the current sewer line that runs out U. S. 264 so presumably it could be serviced with a gravity flow outfall. We don't know, because there apparently has been no utilities assessment done.

    So it appears that all of the negotiations with the GSA about what kind of restrictions the deed would contain have not taken all these factors related the highest and best use of the property.

    But the real problem here is the restrictions that would come with this "free gift." There should be none. The Federal government should actually not give this land to anyone. It should put it on the market to be sold to the highest bidder. The proceeds of such a sale should restore the land to its original condition before the government "improved it" and if any proceeds are left they should be applied to the benefit of the People in the form of reduction of the debt the original confiscation of private property caused. The property was, before government confiscation, privately owned. It should be returned to private ownership.

    If that is not to be, then the property should be conveyed to the county in such a manner that it allows the county to use it as it deems fit, with no restrictions whatsoever, but if there are restrictions they should only be such that they facilitate the county not using the property for what Hoppe calls an unjust purpose. Notwithstanding the injustice of the Federal Government removing this property from its productive potential as private property, the Federal Government has no right to continue to control the use of the property after the original purpose for owning the property has been fulfilled.

    If any county commissioner truly believes in the virtue and value of private property rights they will not, in good conscience, agree to anything except the return of the property to private ownership. Private ownership ultimately serves the public benefit better than for seven men (actually only four) substituting their wishes for the market's determination of the highest and best use of the property.