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DOE self-sufficiency parcels

 
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Ellen
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PostPosted: Mon May 31, 2004 11:38 pm    Post subject: DOE self-sufficiency parcels Reply with quote

Today's Knoxville News-Sentinel featured an article about the City's intentions to ask DOE to transfer some land near Wisconsin Avenue for residential development. That's been in the news, and it's not the focus of this post.

Much of the article focuses on the notion that Oak Ridge is land-poor, and the implication that the Department of Energy has reneged on a commitment to turn over 10,000 acres of federal land for economic development. I believe that these are misrepresentations, but after years of repetition they have become part of our civic mythology. In this post and the ones that follow, I will present my views on some myths related to self-sufficiency parcels.

Self-sufficiency Myth #1: Oak Ridge is land-poor, and this has hampered the city's development.

My Answer to Self-sufficiency Myth #1: Oak Ridge isn't really land-poor. The city's non-DOE land area is very large, particularly when you consider there are only 27,000 people here. Using DOE data from 2002 (the city has published different data that can't possibly be correct) and updating to include the ~425 acres of the Horizon Center that went to CROET last year, I calculate that over 24,700 acres of former federal land (almost all of Oak Ridge is former federal land) has been conveyed to the city, TVA, other institutions, or private owners. That's over 38 square miles, and it doesn't include additional land that didn't previously belong to the federal government and has been annexed into the city. For comparison, Manhattan Island (population over 1.5 million) is less than 15,000 acres, but they use that land a lot more intensively. Wink From the data, I conclude that Oak Ridge actually has a large land area for a city its size, even if you only consider the non-DOE land. Difficult terrain conditions have necessitated a relatively low building density and the city has an admirably large amount of public open space, but if you look around it's not hard to find plenty of undeveloped and under-utilized land inside the city proper.

The news story says (this is a statement I've seen elsewhere) that Oak Ridge has almost as much land inside its boundaries as the City of Knoxville. I have assumed this was accurate, but I now think it's a bit of an exaggeration, probably based on inaccurate numbers. According to Knoxville Metropolitan Planning Commission information, the City of Knoxville has an area of 101 square miles. The City of Oak Ridge website says the City's total land area is 92 square miles, but that's inconsistent with other sources. I choose to believe the Census Bureau, which gives the area as 85.5 square miles.

[To be continued]


Last edited by Ellen on Sat Jun 05, 2004 8:05 pm; edited 6 times in total
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PostPosted: Tue Jun 01, 2004 10:25 pm    Post subject: Continued... Reply with quote

Self-sufficiency Myth #2 - DOE reneged on its commitment to turn over the self-sufficiency parcels for economic development.

My Answer to Self-sufficiency Myth #2 - DOE never promised that these lands were about to become excess to federal needs.

I've researched the history of the self-sufficiency parcels through a variety of sources.

The self-sufficiency parcels (see map) were first identifed circa 1980 in connection with a financial assistance agreement between DOE and the city, one of several intiatives aimed at weaning the city off annual federal assistance payments. To promote economic self-sufficiency, the city had asked for transfer of additional federal land to the city for industrial, commercial, and residential use. DOE determined that land excess to DOE's needs could legally be transferred to the city at fair market value rather than being handled through the U.S. General Services Administration (the normal method for disposal of excess federal property). Twenty-two parcels of land totaling approximately 10,405 acres were identified as possible candidates for transfer if they became excess. After the agreement ran out, the arrangement to bypass GSA and allow sale of these properties to the city was "grandfathered."

As near as I can determine, identification of these tracts as self-sufficiency parcels did not indicate that DOE thought they were likely to become excess to federal needs. Rather, it appears to me the city and the local business community initially identified these parcels based on their perceived development potential.

It is unlikely that DOE assembled the list, as it includes some waste-disposal sites (such as the White Wing Scrapyard) and other properties (such as the ORNL 0800 research area, which also includes some radioactively contaminated plots) that were in active use and unlikely to be suitable or available for commercial transfer. Rather, the agency merely said that if these lands became excess to federal needs, DOE could transfer them to the city at fair market value.
That's hardly a promise to convey them to the city.

For the record, DOE's official version of the story says:
Quote:
In 1979, the Secretary of Energy approved a program to permit DOE to make financial assistance payments to the City of Oak Ridge for a five-year period under the authority of the Atomic Energy Community Act of 1955. The city submitted a self-sufficiency plan which proposed that DOE sell land to the city for industrial and commercial development. ORO determined that the land could be transferred directly at fair market value to the city in support of the self-sufficiency program rather than being reported as excess to the General Services Administration for screening and subsequent disposal. When the self-sufficiency program ended, certain remaining designated parcels that had been in review at the time were "grandfathered," thus permitting DOE to consider those transfers should the land become excess to the needs of DOE.

[To be continued]


Last edited by Ellen on Mon Jun 07, 2004 12:18 pm; edited 4 times in total
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PostPosted: Tue Jun 01, 2004 11:28 pm    Post subject: Reply with quote

Self-sufficiency Myth #3: The City would benefit from getting more DOE land.

My Answer to Self-sufficiency Myth #3: Acquiring DOE Land Can Hurt Us More Than It Helps

The track record on the lands transferred for development is not good. I believe that past transfers have cost the city more than they have benefited it.

DOE has conveyed five of the self-sufficiency parcels (totaling 2,371 acres) to the city and one (a total of about 1000 acres, not all of which was deeded) to the Community Reuse Organization of East Tennessee (CROET). In chronological order, here are the stories of the transfers (see http://ellensmith.org/selfsuffmap.gif for a map of these properties):

Parcel F (119 acres) seems to have been a winner. DOE sold it to the city near the beginning of the 5-year contract. It became the site of Bethel Valley Industrial Park, which is near full occupancy and is considered to be doing well.

The record on Parcel B is mixed. It was conveyed to Martin Marietta Corporation in the mid-1980s when that company assumed the DOE operating contract for local facilities. The Commerce Park industrial park, which opened in 1987, occupies this site. A little less than two-thirds of this site (171 of 267 acres) is occupied. Interestingly, this is supposed to be an industrial park, but much of the occupied space is used for offices, and some observers think it's a pretty nice office park that shouldn't be dirtied up with industry. When industrial development at Commerce Park lagged, the city changed the zoning code to allow office uses in the IND-2 zone. That suggests to me that the demand for industrial land isn't as strong as we might wish...

Parcel C looks like a non-starter. This 12-acre tract was initially sold to the developers of Commerce Park, was later sold to Faith Promise Church for a new building, and now is vacant and on the market after the church decided to build elsewhere.

Parcel E (almost 1400 acres across the river from K-25) was sold to the city in 1987 for transfer to the Boeing Company, which planned to build an industrial facility. That project was related to a Defense Department program that ended up being cancelled, so the facility was never built. In 2001 Boeing sold the land to a real estate developer. In addition, DOE sold the same developer (for the shamefully low price of $54 an acre Shocked ) an adjacent strip of lakefront land that was not part of the original sale to Boeing. The developer is now building the Rarity Ridge residential-commercial development on the combined property. I have serious doubts about the viability of the project or its benefit to the Oak Ridge community (it is much closer to downtown Kingston than to Oak Ridge's commercial district) The Rarity Ridge development had better succeed because we are committed to spending a lot of the public's money to subsidize it. Oak Ridge utility customers are already paying for the interest on bonds to provide a water supply on the property, and the US EPA has kicked in almost a million dollars of federal taxpayer money to help with the water supply, which will have a total cost of more than $2 million in public money. When you add in the cost of sewer, other infrastructure for the property, fire and police protection (possibly including a new fire station to serve the property -- it's 11 miles from the nearest city fire station, but it possibly could be served from the K-25 fire station), school buses to carry the kids to school (it's about 11 miles to the nearest elementary school), the new school(s) that will be needed at Rarity Ridge if it attracts as many residents as are planned for, etc., etc., it's difficult to imagine how long it will take for this project to break even for us, much less benefit us economically.

The next transfer was Parcel A (more than 750 acres). It was sold to the city in the 1990s. The city's decision to establish a golf course and residential development on this land was controversial then, and it is still controversial. This was supposed to be a big moneymaker for the city, which would profit from land sales that would be boosted by the golf course. I won't rehash the whole history here -- I'll just try to describe the current status. The public-private partnership that was supposed to make all this happen was dissolved a few years ago. The city-owned Centennial Golf Course is operating but requires taxpayer subsidies. Some residences have been built on the property, but much of the residential land remained unsold until just recently, when the city sold much of the tract in a single transaction. The balance sheet on this project is not favorable. In my opinion, just the damage done to the city by the controversy over this project made it a net loser for us.

In the mid-1990s Parcel 1 became known as "ED-1" and was leased in 1997 to the CROET for industrial development. It's not a winner so far. In 2003 the title to the developable portion was deeded over to CROET. CROET has invested a lot of money (provided directly or indirectly by federal, state and local taxpayers) on building the Horizon Center industrial park on this property. So far there is still only one tenant (Theragenics), which early in 2003 was reported to have just seven employees (there are more employees there now).

Additionally, DOE has identified Parcel G for transfer to the city, but action has not been concluded. Also, as discussed in the newspaper article cited, the city now intends to ask for a portion of Parcel D.

Reviewing this history, it's pretty clear that the city's strategy of acquiring DOE land has not given the city increased tax revenues to replace federal assistance. I believe it has cost the local taxpayer more than it has gained for us.

Furthermore, due to the remoteness of these lands from the city proper, extending city infrastructure and services to most of the remaining self-sufficiency parcels would be particularly costly.

[To be continued]


Last edited by Ellen on Sat Jun 05, 2004 8:12 pm; edited 3 times in total
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PostPosted: Fri Jun 04, 2004 10:26 pm    Post subject: Conclusion to the series! Reply with quote

Not a myth, but another aspect of the self-sufficiency mythology that I find disturbing is that the City's request to DOE for special financial assistance to compensate for "undue burdens" apparently will rely in large part on the myth that the city is land-poor and the complaint that DOE has withheld the self-sufficiency parcels.

Considering the amount of non-DOE land in the city (including the amount of land that is currently undeveloped or under-utilized), our small population, and the poor track record of the past self-sufficiency transfers, I don't expect the city's complaints about land issues to impress the decision-makers in Washington, DC. I believe that the City does have a case for special burdens assistance, but that case should be based on burdens imposed on the city, such as legacy contamination, not the fact that DOE hasn't turned over all its land to the city.
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PostPosted: Sun Jun 13, 2004 8:07 pm    Post subject: Reply with quote

An interesting argument. One I have not heard.
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PostPosted: Mon Jun 21, 2004 11:50 pm    Post subject: Reply with quote

It's too bad these arguments have not been heard more often.

As I noted earlier, the City's argument for additional funding continues to be based on not getting enough land over the years. Federal officials apparently are countering it with information about how much land has been conveyed to the City in the past, and about DOE's continuing efforts to support local economic development organizations. See the June 14 Oak Ridger for some of the latest details.

I agree with Mayor Bradshaw that the 1986 "buyout" agreement with DOE needs to be revisited, but I do not share his view that this is because the City has not received enough DOE land. If anything, I believe the City has received more DOE land than we could absorb. The costs of hosting the federal presence and legacy should be compensated with cold, hard cash, not land.
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