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Bad luck, poor choices: The economic decline | Buena Vista

by Olivia Hampton and Frank Diez

Buena Vista City Council member Steve Baldridge remembers when department stores, restaurants and groceries crowded Sycamore and Magnolia Avenues downtown, and industries including Bluebird, Bontex and Dana kept hundreds of workers busy making school bus bodies, cushioned insoles and axles for four-wheel drive trucks and SUVs.


Former site of Bontex. Photo by Olivia Hampton

But that was then, and this is now. A series of setbacks – some of them acts of nature – have left the city gasping for jobs that pay well and struggling with huge municipal debts. Bluebird, Dana and Bontex are all gone. A push to move to a tourism-based economy is off to a rocky start.

“Part of what caused the downfall were the … floods that happened” toward the end of the 20th century, Baldridge said. “It caused people to leave, which left the downtown vacant.”

City officials say other businesses were sent packing by the 2008 recession and its aftermath.

“The city has had some very, very big challenges.” City Manager Jay Scudder acknowledged.

Smaller businesses in the downtown area are scarcer now. But according to U.S. Census data, the population hasn’t changed much in the past four and a half decades, hovering around 6,700.

Director of Economic Development Brian Brown said that when he arrived in 2012, unemployment in Buena Vista was at 10.6 percent and the commuter rate — people leaving the city to go to jobs in other areas — was more than 900. Brown, a Buena Vista native, had left the city himself after college for better job opportunities.

City officials point to recent trends as reasons for optimism. According to the U.S. Bureau of Labor Statistics, the city’s unemployment rate is 5.4 percent. That’s still above the state figure of 4.7 percent, but it’s substantially lower than Lexington’s 7.7 percent and a couple of ticks under Rockbridge County’s 5.6 percent.

The only problem, they acknowledge, is that the jobs residents have are often lower-paying service jobs, such as working for local schools and colleges as custodians and maintenance people.

The city shares its other major challenge with states and municipalities nationwide – too little revenue, too much debt.

It owes more than $2.6 million on a loan for Parry McCluer High School, completed in 2001; more than $4.5 million on its Dickinson Well project, which upgraded the city’s water supply; $15 million on the Vista Links golf course, and millions more on other projects. The total debt adds up to almost $29 million – more than $4,000 for every man, woman and child in the city. That’s nearly six times the state average of about $700.

Baldridge says earlier city councils made some bad decisions when it came to property taxes and other revenue sources.

When the city opened Vista Links, Baldridge said, it lowered residential property taxes from 95 cents per $100 of valuation to 80 cents. City officials expected revenue from the course and anticipated surrounding development to replace that money. But that didn’t happen.

The golf course project began costing the city money rather than making money. And when the 2008 recession hit, property values dropped and other revenues declined.

Because the city lost more revenue, officials had to make tough decisions. The city decided to default on the golf course loan and raised the property tax rate sharply, to $1.10.

As for hopes of economic recovery and higher-paying jobs, Brown is trying to figure out how to get ready for the future.

“Our work force needs to be ready for the next set of jobs that come in,” he said. “We need to have a community that’s prepared for the industry of the future. I think the metals manufacturing and I think the wood manufacturing will always be opportunities for us, but there’s also aspects that we’re missing out on the greater global economy.”

Brown said Rockbridge County has attracted Devil’s Backbone Brewing Co. and Heatex America, which manufactures parts for ventilation systems. In Lexington, the recent expansions at Washington and Lee University and Virginia Military Institute have provided construction jobs.

But he worries that Buena Vista residents won’t have the training they need for the jobs that become available.

“You have to think about what’s your greater area of work force opportunities,” he said. “And that’s why work force is so important and why I’ve spent so much time on it. It’s getting people prepared for the opportunity that may come here.”

Gaps in education

Washington and Lee University Economics Professor Tim Diette says one challenge Buena Vista faces is the perception of the quality of its schools.

Diette says the lack of jobs and the perceptions of school quality discourage better-educated residents from staying in the area. Like many localities in Virginia, the city maintains its own school system, comprising just four schools, and local funding can be a struggle. But the city refuses to merge with schools in Rockbridge County, fearing loss of independence and identity.

“There is a great deal of community pride from having the independent school system, but I do think it is a challenge to attracting new residents,” Diette said. “Education could serve as a growth engine if Southern Virginia University [in Buena Vista] can grow to generate more jobs, both directly at the university and outside businesses.”

Diette said he knows it is not a great time within higher education, but SVU has a specific niche, so job growth might still happen. The university has a reputation for preparing its students for professional careers and community leadership. City officials hope the school’s emerging reputation will help promote growth for the city.

Property problems

Baldridge was elected to city council in 2012. He says his priorities included looking at the city’s situation in detail and thinking of ways to generate revenue while cutting certain costs. That included raising the real estate tax to $1.10 per $100 of value, and raising fees for certain services.

Revenues had become stagnant under the city’s prior leadership, he said.

“The charges to open up a grave or set up space in a campground [hadn’t changed],” he said. “Sorry, but there’s been inflation. We need to set up fees in a realistic way.”

City Manager Scudder acknowledges that to catch up, Buena Vista has had to set some tax rates higher than anybody would like.

“As we get out of the woods, my goal and council’s goal is to maintain competitiveness in the tax and rate structure,” he said.

Preparing for the future

Scudder says he’s not blaming local officials directly, but he thinks that the people in charge before he became city manager didn’t understand how to run the city properly.

“From my perspective in local government, I don’t think the city had the depth and the leadership that could see and analyze that this is probably not a good idea, or that we shouldn’t do things the same way over and over …,” Scudder said. “Local government is a process with people, decision making and an accomplishment of goals.”

Diette agrees that the creation of the golf course was a bad investment, and he isn’t sure what will happen in the city’s future.

“I recall when [Vista Links] was just opened that my father, a retired commercial banker, happened to play golf with the mayor of Buena Vista,” Diette said. “When he heard about how it came about and how it was financed he told me at the time that it would go bankrupt.”