In stating the case for a new consolidated Pulaski County middle school, proponents have touted the school board’s proposed project as economic development. At a recent board of supervisor’s meeting during public comments, resident Andrew Travis was described by The Patriot as supporting new school construction because he “doesn’t see it as a tax burden, but rather as economic development.” Similarly, in response to a Southwest Times Facebook post, Pulaski County Education Association stated, “We strongly support the construction of a combined new middle school. It is a critical need for the revitalization and potential economic growth of Pulaski County.” Realtor Donna Travis, in the Middle School Q&A series presented by Pulaski County Citizens for Education, made the most specific and plausible connection between the new school and local economic indicators. She noted that many young professionals relocating to the area do not want to see houses in Pulaski. Frequently, they cite the sad state of the middles schools as a factor. This negatively impacts the housing market and makes it harder for new retail and food service businesses to succeed.

It is fair to say that improving school facilities may have an ancillary connection to the housing market. It’s also important to remember that correlation does not imply causation. The current middle school facilities are an unequivocal quality of life issue. They also are an impediment for realtors and economic developers in selling the county to potential transplants and new business prospects. The buildings’ conditions are wholly inadequate and need to be replaced. However, for the proposed new middle school project to rise to the level of a comprehensive community economic development initiative, there would need to be more direct economic outcomes along with more collaboration and strategic intention from elected bodies.

While there’s certainly no pure definition of what is and what is not a comprehensive economic development project, it is usually the case that such projects result in one or more of the following – job creation or retention, infrastructure like sewer/water, improving affordable housing stock, commercial/industrial site development, or business district revitalization. The end result is economic growth that expands the tax base and creates tangible returns on investment. The Virginia Department of Housing and Community Development Vibrant Communities Initiative provides some good guidance on what such a project would entail.

In contrast, the current middle school project design, as envisioned using the school board’s top down approach, is a narrowly focused school building project. That’s not necessarily a bad thing. As Mrs. Travis stated in her Middle School Q&A, “The biggest reason that we should be concerned about the state of our middle schools is because protecting and preparing our children is the job all of us . . .” Our students and families deserve better than what our county currently provides. Replacing these crumbling facilities is urgent and the right thing to do. There is no harm in justifying a simple school replacement plan with that rationale. This is an educational facilities project.

What proponents of the current plan should be mindful of is not over promising and under delivering. Overselling the new middle school as a panacea to the county’s current economic challenges inflates potential economic impacts. It may sound compelling at the podium, on social media, and in the op-ed columns, but substituting sound bytes for the hard work of economic strategy and restructuring will not deliver substantive results.  That would require elected officials adopt a more strategic, visionary leadership approach that offers more stakeholders a seat at the table. It would also require the school board and board of supervisors to closely collaborate with each other, residents, economic developers, and planning commissions. Both boards need to work in the same direction to ensure the biggest investment the county makes since the high school has far reaching economic impacts. Taking these first steps would allow us to examine the current proposal’s weaknesses as an economic development project. This analysis may help us realize some potential opportunities for fostering greater economic prosperity.

Employment

On the one hand consolidation efficiencies will most likely result in fewer administration and support service personnel. Under one roof there won’t be a need for two principals, four guidance counselors, or two book keepers. It’s also likely that cuts to cafeteria and janitorial staff would be expected. On the faculty side, if the consolidated high school’s staffing model is any indicator, there would likely be cuts to exploratory positions. Unless the school board provides evidence to the contrary, it appears duplicative to maintain current band, choir, technical education, physical education, library, art, and family and consumer sciences positions. By restructuring the middle school curriculum from mandated exploratory periods into more flexible elective periods, the school could easily serve the same number of students with fewer exploratory personnel.

On the other hand, it’s possible a new middle school will make the county more competitive in attracting new employers. However, the philosophy of “build it and they will come” is not a real strategy. It’s more like throwing several things on the wall hoping you get lucky enough for one to stick. Economic incentive packages that win new employers are complex and take into account many factors. Unless the county has a prospect lined up who has already promised to locate here as long as a new middle school will be built, the project will not lead to direct job creation.

Similarly, unless one of Pulaski County’s major employers has threatened to pack up shop over the middle school issue, the project will not retain jobs. To the contrary, Pulaski’s major employers have been expanding and making major investments, implying they are committed to the area. Last month Phoenix Packaging announced a $48 million expansion plan that would add 145 jobs. Volvo is about to complete a $38 million investment announced in 2015 that will add a state of the art customer experience center. That’s on top of a $69 million equipment, process, and plant redesign project announced in 2014. Also in 2014 James Hardie announced a $25 million expansion that would add 69 jobs. Since 2005, around the same time Pulaski’s first round of school construction was completed (Pulaski Elementary School), Pulaski County has won competitions for at least five major employers – James Hardie (2005), Phoenix Packaging (2010), Red Sun Farm (2013), Falls Stamping and Welding (2013), and Korona Candle (2013). Despite the middle schools, Pulaski does not seem to have trouble competing and landing new industrial employers or retaining them.

Redevelopment and Housing

Let’s assume that a new middle school will be built, as it should. Using that assumption, the important point to consider is how site selection will impact the local economy. There are really two choices – build a new school on a developed property the county currently owns or develop land. Since the school board’s current plan appears to favor the later, let’s start there.

Building a new consolidated middle school on 50 acres of current farmland, as RRMM Architects has implied in previous meetings, will more than likely add to Pulaski’s inventory of vacant and blighted former public and commercial facilities.  If the Dublin and Pulaski Middle School properties sit vacant and become blighted for any typical period of time, they could negatively impact housing values in the surrounding neighborhoods. Additionally, a persistent “offline” economic state means the properties will not generate new tax revenues or direct, indirect, and induced economic growth. The results of lost economic growth from similar past school building projects still linger.

In Pulaski County two recent rounds of elementary consolidation are obvious examples. The three elementary school properties closed in 2004 when Pulaski Elementary opened (Claremont, Draper, and Northwood) along with the two closed in 2009 when the new Riverlawn Elementary opened (old Riverlawn and Newbern Elementary) remain offline. While Claremont and Northwood have found non-growth generating occupancy uses, neither have undergone major revitalization efforts designed to re-purpose them as residential housing or commercial real estate properties.

Montgomery County has experienced a long running quagmire on what to do with the former Blacksburg Middle and High School properties after building new schools on former agricultural land off Price’s Fork Road. The old middle school property, vacant since 2002, was finally sold for $1.75 million in 2016. During that time the property became blighted and a public health hazard infested by black mold. The building was demolished and the real estate was prevented from generating economic activity for almost two decades. The old Blacksburg High School, which became unusable in 2010 and was ultimately replaced in 2013, was just sold last month. It will take a another few years for the developer to re-purpose the property for single family or senior residential housing as proposed.

Land use is another economic factor to keep in mind. Acquiring a 50-acre undeveloped agricultural tract will influence the site’s economic output for 60-75 years. The economic opportunity cost of such a change in land use points to an important weakness in the current plan as economic development. Consider a typical real estate development alternative if the new school were built on redeveloped county owned property. That same 50 acre agricultural tract could be sold and developed into 48, 1 acre single family housing units (leaving two acres for roads and commons). Assuming an average square footage of 2,500 per unit, the project would generate estimated gross annual tax revenues of $72,890 and long-term housing sector annual economic activity of $280,000. This means that over the course of 65 years the school could operate, that same real estate property could produce $4.7 million in tax revenues and $18.2 million in annual economic growth.That’s according to Housing Virginia’s  Sourcebook Residential New Construction Economic Impact Calculator sponsored by Wells Fargo, Virginia Association of Realtors, and Union Bank. For purposes of this analysis, the short-term economic stimulus effects have been ignored. Both a school construction project and residential housing development would provide  short-term stimulus. The long-term economic return on investment is more significant.

Economic Leakage

The assumption is that Pulaski County is experiencing a certain amount of housing, in-migration, and associated service sector economic leakage. It is also assumed that it is due in large part to the middle school. On the surface there seems to be some reasonable thinking behind such assumptions. There are people who commute in and out of Pulaski for work but do not live here. One of primary reasons cited are the schools and perception that neighboring communities, particularly Blacksburg and Salem, have better schools. When those individuals, particularly upper management at places like Volvo, buy homes elsewhere a certain amount of economic spending leaks into neighboring communities. As the saying goes, “businesses follow rooftops,” and when fewer existing rooftops are being bought or new ones built, there is less economic growth. Several high profile instances, such as former Volvo Vice President and General Manager’s children going to school in Salem, have been cited to support the theory. Similarly, Pulaski Community Hospital’s CEO has publicly supported the new school plan as a way to help solve the hospital’s physician recruiting problem. Realtors report hearing this from prospective home-buyers.

Unfortunately, the leakage analysis has some problems. There have not been any credible studies, economic impact reports, or surveys conducted to confirm the assumption. We lack data quantifying exactly how many people and how much money is leaking outside our borders because of the middle schools. In the absence of a study, the primary supporting evidence remains anecdotal. Most economic development projects, by contrast, are built around data and group visioning sessions. Take the Town of Pulaski’s recent Pulaski Community U process and Community Improvement Grant initiative. It brought stakeholders together to identify priorities and craft a bottom up plan. In order to identify retail leakage from the downtown business district, survey data was collected and analyzed. These are the foundations on which economic development projects are built. Without further study, the problem statement is not well supported, and it is unclear if a school building project will solve the stated problem.

Given the lack of evidence it is entirely possible that the reasons more affluent young professionals and upper management don’t want to live in Pulaski has as much to do with who their children would go to school with as it does the facility where they’d attend middle school. Public policy work from the Brookings Institution has found that the “tipping point” at which a school’s overall poverty rate brings down achievement for all students may be as low as 50%. The United States Department of Education considers schools with a free/reduced lunch rate of 40% or higher to have a high concentration of students in poverty. Furthermore, in a report prepared by the University of Iowa School of Urban and Regional planning examining the intersections of education and community economic development in Dubuque, Iowa’s school district, the authors noted:

The United States Department of Education concluded that when half the student body lives in poverty, all students’ achievement will be depressed, and when 75% live in poverty, then all students’ achievement will be “seriously” depressed.

Because of the way school divisions rely on property taxes to fund their local share, it’s no secret that in the U.S. more affluent areas have higher performing schools. This fact largely supports parents’ perceptions that schools in more upper and middle income neighborhoods are considered “good schools” while those in lower income areas, such as Pulaski, are perceived as “bad schools.” Comparing Pulaski County’s poverty rates to those of Blacksburg and Salem give reason to question whether a new school facility by itself will be enough to change this perception. As a division Pulaski’s free/reduced lunch rate for the recently completed school year was 55%. Pulaski Middle School’s rate was 59%, and Dublin Middle’s rate was 41%. As a combined middle school the rate would have been 48.5%. Contrasted with Blacksburg Middle School at 19% and Salem’s Andrew Lewis Middle School at 32%, it is clear that Pulaski’s middle school students are in a much lower socioeconomic environment than their peers.

There are also some concerns that site selection could actually increase out-migration for middle school employees. This final question regarding economic leakage has to do with the law of unintended consequences. Changing the schools’ locations could also create changes to school employee’s commuting patterns. Specifically, how could the new school’s potential site selection influence faculty member’s housing decisions? Placing the school on available agricultural property in close proximity to I-81, such as Pulaski County High School, could increase the likelihood that new middle school faculty and staff would purchase homes in surrounding localities. At this time, unfortunately, an economic impact analysis looking at this factor and others has not been undertaken. To help better understand this element, it would be useful to compare home address zip code data for all faculty at Pulaski and Dublin Middle schools, which are more rooted in the community, versus those at Pulaski County High School’s institutional campus.

The school board’s current proposal will be hard pressed to produce the economic growth a typical comprehensive economic development project would. Further, contrary to prevailing wisdom, the construction of a new middle school facility by itself does not guarantee that economic growth will occur. Given these facts, proponents of the school board’s middle school proposal would be well served to underscore clear, direct benefits. These may include improving our children’s educational experience, enhancing the work environment for current faculty, and helping recruit and retain highly qualified teachers.  It is more accurate to say that a new middle school will improve certain economic quality of life factors that may make Pulaski County more competitive in larger, more strategic economic development projects. There’s nothing wrong with that.

At the same time, actual and fairly obvious opportunities to extend the middle school project as comprehensive community-based economic development do exist. Re-examining the project further could help spread the benefits across economic sectors, thereby ensuring the projected $40 million investment creates greater, long-term economic impacts. Regardless of how the project is justified and if it is re-examined, the first step is for both the Board of Supervisors and School Board to reassure the public they will work closely together and ensure the best results for all constituents. After clearing that hurdle, constituents and elected officials could push the project toward greater economic heights.

Next Up: In part two we’ll look at comprehensive community economic development opportunities and the proposed middle school.