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Economic Development Overview

Table of Contents

I. Summary ...................................................................................................1 II. Geographic Profile ...................................................................................3 III. Community Profile....................................................................................5

a. Population and Labor Force ....................................................5 b. Employment ..............................................................................6 c. Income .......................................................................................9 d. Education ................................................................................10 e. Housing ...................................................................................11

IV. Coal Industry Profile ..............................................................................13 V. Recent Trend Analysis...........................................................................15

VI. Economic Development Profile.............................................................18

a. Industrial Development..........................................................20 i. Existing Industrial Parks........................................21 ii. Developable Land...................................................22 iii. Modal Transportation Network..............................22

b. Economic Diversification.......................................................22 c. Tourism ...................................................................................23

VII. Projections..............................................................................................26 VIII. Regional Viewpoints ..............................................................................32

a. Personal Interviews................................................................32 b. Public Meetings ......................................................................33 c. Media stories ..........................................................................33 d. Personal Interview Contacts..................................................35

IX. References List of Tables Table 1. Existing Conditions – Households and Employment .....................29 Table 2. 2020 No-Build Scenario – Households and Employment...............30 Table 3. 2020 Build Scenario – Households and Employment.....................31

Coalfields Expressway Location Study HSMM, Inc. i


I. Summary

The purpose of the Coalfields Expressway is to reverse the current population and

employment decline, stimulate economic development, open the region to increased

tourism, improve highway safety and reduce travel time within and through the region.

The alternative locations being considered for the Coalfields Expressway cross rugged,

mountainous terrain through three counties, primarily Buchanan and Dickenson and a

small portion of Wise, located along the western edge of the state of Virginia bordering

Kentucky.

These counties represent residents with the lowest incomes in the state of Virginia. The

socio-economics/demographics of the study region compare poorly against state and

national levels. Population levels are declining while median ages are increasing.

Educational attainment levels are not keeping pace with the rest of the State and

unemployment levels are consistently among the highest in the State. Income growth,

already well below the state and national averages are also not keeping pace. The

number of people below the poverty level remains high. Housing values are depressed

and inexpensive manufactured homes comprise the primary new type of residential

structure.

For the past fifty years, this area has depended on coal mining for its livelihood. Any

growth or decline in the use of manual labor by the coal industry has directly led to the

growth or decline of the study area’s employment, population, and overall economy.

Since the early 1980’s, the coal industry has experienced cutbacks and downsizing with

dramatic negative effects on the area’s economy. The future health and potential for

the coal industry in these counties is a subject of much debate and disagreement.

However, there is little disagreement over the fact that this region desperately needs to

diverse its economy away from mining. The success of those ongoing efforts to diversify

the region’s economy will be heavily influenced by whether efforts to improve

transportation access are successful.

Coalfields Expressway Location Study HSMM, Inc. 1


Traffic and transportation access is one of the fundamental components that support

economic development. Road conditions in this mountainous region create tremendous

barriers to growth in industry and tourism recruitment and in stimulating population

growth. Industries other than coal have been slow to locate their operations in these

counties because of the accessibility obstacles, minimal amounts of developable land,

and the limited access to a skilled workforce. These counties are located within a day’s

drive to a number of major cities containing a ready-made market for outgrowth of

industry and tourism given major improvements in roadway conditions.

Congress recognized the importance of promoting economic development in this region

through improved vehicular transportation systems when it authorized the Appalachian

Development Highway System (ADHS). The ADHS with its 26 corridors will provide

over 3,000 miles of new or improved roads. The importance of these new roads were

highlighted in a 1987 report by the Appalachian Regional Commission (ARC) which

found that 81% of total job growth in Appalachia between 1980 and 1986 occurred in

those counties served by an Interstate and/or an ADHS corridor.

Congress recognized that typical highway corridor studies depend on travel demand,

safety, and roadway conditions. In contrast, road corridors through Appalachia, have

economic development and quality of life enhancement objectives.

In its report to Congress in 1964, the ARC stated that, “economic growth in Appalachia

would not be possible until the Region’s isolation had been overcome and that the

Interstate System had largely bypassed this region going through or around its rugged

terrain as cost-effectively as possible”. These 1964 conditions remain largely intact in

1998 in the counties of the Coalfields Expressway. Through this expressway the

isolation of this region will be reduced bringing necessary economic benefits with it.



II. Geographic Profile

The locations being considered for the Coalfields Expressway cross rugged,

mountainous terrain through three counties, primarily Buchanan and Dickenson and a

small portion of Wise, located along the western edge of the state of Virginia bordering

Kentucky. This region is in the Appalachian Highlands along the crest of the

Cumberland Mountains and covers about 1,258 square miles.

These counties are located within a day’s drive of a number of major cities containing a

ready-made market for outgrowth of industry and tourism. These distances illustrate the

value and need for an improved transportation system. Listed below are distances to

various cities within Virginia and beyond.

Bristol, VA/TN 89 miles Atlanta, GA 350 miles

Blacksburg, VA 147 miles Chicago, IL 575 miles

Knoxville, TN 220 miles New York, NY 585 miles

Roanoke, VA 180 miles Norfolk, VA 360 miles

Richmond, VA 280 miles Pittsburgh, PA 385 miles

Lexington, KY 190 miles Washington, DC 350 miles

The rough, mountainous terrain forced the early settlers to locate along the streambeds

of the area. The best farmland was found along the flat bottomlands and the streams

provided a good water supply. As the bottomlands became occupied, more settlers

began locating on the numerous ridges. This pattern still exists today.

The physical characteristics of the study region such as topography, climate and soils

heavily dictate as to the type, location and nature of development. In this region, the

physiographic conditions are highly restrictive with the valley floors and ridge tops being

the only lands suitable for development. This fact brings to the forefront the

developmental problems of the region. The lowlands are susceptible to flooding and the

ridge tops create access and water difficulties. In many instances, the cost of

development is often beyond the range of economic feasibility. As this topography



makes developing roads and land difficult, surface mining for coal could provide some

opportunities for development if the areas are made accessible.



III. Community Profile

These counties represent the lowest income section of residents in the state of Virginia.

The socio-economics and demographics of the study region compare poorly against

state and national levels. Population levels are declining while median ages are

increasing. Educational attainment levels and unemployment rates continue to rank

poorly. Income levels, already well below the state and national averages, are falling

further behind. The number of people below the poverty line remains too high. Housing

values are not increasing and inexpensive manufactured homes comprise the primary

type of new residential structure.

a. Population and Labor Force

During the 1980’s, Virginia was one of the fastest growing states in the nation, but within

Virginia exists a major growth disparity. Virginia’s growth was concentrated in

metropolitan areas, primarily those in Northern Virginia. Northern Virginia Planning

District Commission during the 1980’s saw an increase in population by 32.3 percent

while Dickenson, Buchanan, and Wise Counties all suffered significant reductions in

population.

Population Data: 1970 - 1990

1970

1980

1990

% Change 1970-1980

% Change 1980-1990

Buchanan County 32,071 37,989 31,333 18.5% -17.5%

Dickenson County 16,077 19,806 17,620 23.2% -12.4%

Wise County 35,947 43,863 39,573 22.0% -9.8%

Virginia 4,648,494 5,346,818 6,187,358 15.0% 15.7% Source: US Department of Commerce, Bureau of the Census, 1970-1990



The age of a population can be used as a rough indicator of the level and type services

that are needed and desired in an area. The national trend of aging population is

influenced by the demographic group known as baby-boomers. As such, the

composition of the study region’s population is also growing older – however, to a

higher level than the state of Virginia’s median age. Another reason for the increase in

median age is the out-migration of younger residents to obtain employment or higher

education and then, subsequently, not returning to the region because of a lack of

employment opportunities.

Median Ages: 1970 - 1990

1970 1980 1990

Buchanan County 21.5 25.9 32.2

Dickenson County 28.5 28.0 34.0

Wise County 28.3 29.7 33.9

Virginia 26.8 29.8 32.6 Source: US Department of Commerce, Bureau of the Census, 1970-1990

The region has a primarily white population with minority groups in 1990 comprising less

than one percent of total population.

b. Employment

High unemployment rates have plagued the study region since the early 1980’s

mirroring the cyclical progression in the coal industry. The coal boom of the 1970’s

correspondingly increased population and employment levels. In the 1980’s, however,

the combination of increased mechanization, overseas competition, and tighter

environmental controls, reversed the trend of the previous decade. Since then, the

region’s unemployment rates have been significantly higher than the state level – as

much as five times more in some years.



Unemployment Rates: 1992 - 1996

1992

1993

1994

1995

1996

% Change 1992-1996

Buchanan

County

13.6% 11.8% 15.6% 13.5% 15.1% 11.0%

Dickenson

County

17.6% 13.9% 15.7% 19.3% 20.5% 16.5%

Wise County 13.2% 11.1% 10.8% 17.0% 15.9% 20.5%

Virginia 6.4% 5.2% 5.0% 4.5% 4.4% -31.3% Source: Virginia Employment Commission

In conjunction with these high unemployment levels, the region’s labor force

participation rates are relatively low indicating a disproportionately large number of

people in the working age population who are neither employed nor actively seeking

employment. It is believed that the primary reason for these exceptionally low

participation rates is a large number of discouraged workers, defined as those who have

given up looking for work because they do not believe they can find a job. Potential

workers join the ranks of discouraged workers due to a lack of opportunities in the

region, sometimes called a “job famine.”

Labor Force Participation Rates - 1990

1990

Buchanan County 46.2%

Dickenson County 43.9%

Wise County 49.4%

Virginia 68.9% Source: Virginia Employment Commission

Due to the nature of the region’s industry and other limited employment opportunities,

the participation of women in the labor force is also substantially lower than that of the

state average. This low level of female labor force participation places a heavy burden

upon those who are employed, reducing per capita and family income levels.



Female Labor Force Participation Rates - 1990

1990



Wise County 38.0%

Virginia 60.7% Source: Virginia Employment Commission

The coal industry and government employ the largest number of workers with the

manufacturing sector unfortunately ranked near the bottom. These employment

distribution concentrations emphasize the volatility of the mono-economy and the need

for economic diversification.

Employment Distribution: Second Quarter 1996

Buchanan Co.

Dickenson Co.

Wise Co.

Agricultural, forestry, fishing 0.18% Not reported .40%

Mining 30.59% 15.36% 16.6%

Construction 4.52% 2.49% 4.64%

Manufacturing 3.95% 7.37% 6.79%

Transportation, comm..,

utility

5.04% 8.17% 6.11%

Trade 19.78% 19.04% 24.20%

Financial, insurance, real

estate

2.41% 2.28% 2.60%

Services 13.58% 16.34% 17.26%

Government 19.99% 28.13% 21.40% Source: Economic Information Services Division, VEC



c. Income

These high unemployment rates for the region as a whole and lack of economic

diversity contribute to the relatively low median and per capita income levels. The

extent of the economic decline is illustrated by comparison to the state averages. Per

capita income for the three-county region increased 67.5% from 1980 to 1990. This

rate, however, pales against the state gain of 123.7%.

Per Capita Income: 1980 - 1990

1980 1990 % Change 1980-1990

Buchanan County $8,279 $13,944 68.4%

Dickenson County $8,617 $13,530 57.0%

Wise County/Norton $7,699 $13,734 78.4%

Virginia $8,483 $18,979 123.7% Source: Center for Public Service, University of Virginia; US Bureau of the Census

Median Family Income: 1990

1990

Buchanan County $22,464

Dickenson County $19,498

Wise County $23,007

Virginia $38,213 Source: US Bureau of the Census, 1990

The extent of the economic depression in the study region is evident in the number of

residents living below the poverty level. Persons living below the poverty level comprise

22.5% of the three-county population, more than double that for the state of Virginia at

10.2%. In 1989, for example, the poverty rate for a single person was $6,311 while for a

family of five it was $14,990.



Persons Below Poverty Level: 1989

1989



Wise County 21.6%

Virginia 10.2% Source: US Bureau of the Census, 1990

d. Education

Lack of educational attainment has been and is still a serious detriment to future

development in this region. Dropping school enrollment mirrors local population

decreases. The average High School graduation rate for the region lags far behind the

state average.

High School Educational Attainment Levels: 1990

1990



Wise County 52.1%

Virginia 75.2% Source: US Bureau of the Census, 1990

Low educational attainment for residents of the region is indicative of a labor market that

is not participating in the growing technology segment of the state and national

economy and does not encourage young people to return to or remain in the area once

they have received their college education. While the level of formal education lags



behind state averages, many labor force participants have mechanical and electrical

skills needed by industries such as manufacturing. Current employment positions,

however, for these types of jobs are limited and future opportunities depend on new

industries and companies relocating to the region.

e. Housing

Physically, socially and economically, housing is one of the most important elements of

quality of life. Housing values in the study region have actually declined and new

development is relatively stagnant. However, the number of households has increased.

This reflects a national and state trend of lower numbers of people per household.

In 1990, median housing values in Dickenson County and Buchanan Counties were

$39,300 and $41,700, respectively, as compared to the state median of $91,000.

Between 1980 and 1987 in Dickenson County, housing values dropped 25 to 30 percent

in value.

Since investment in housing is so highly leveraged, the availability of money has the

most significant impact on construction. The declining income of residents in this region

has prompted a shift in demand away from single family homes toward the less-

expensive alternative of a manufactured home. In Wise County, 25.4% of the year

round housing units were manufactured homes. In contrast, manufactured homes

represented only 6% of total housing stock in Virginia and just over 7% in the United

States.

According to the Virginia Division of State Planning and Community Affairs publication,

Survey of Substandard Housing in Virginia, the best overall indicator of substandard

housing is the number of occupied units lacking complete plumbing facilities. In 1990

for example, four percent of Wise County’s housing units lacked complete plumbing

facilities down from eight percent in 1980. While a number of deficient units across the

study region have been replaced by manufactured homes, thus providing plumbing

facilities, sewerage problems may have resulted. In an area unsuited as this region for



septic fields and with a general lack of public sewage disposal, the new problem of

wastewater disposal may be as great as the original problem of the lack of plumbing

facilities.



IV. Coal Industry Profile

For the past fifty years, this area has depended on coal mining for its livelihood. Any

growth or decline in the use of manual labor by the coal industry has directly led to the

growth or decline of the study area’s employment, population, and overall economy.

Since the early 1980’s, the coal industry has experienced cutbacks and downsizing with

dramatic negative effects on the surrounding economy. An economy based on a single

industry, such as coal, creates problems that are difficult to correct. Dependence on

one basic industry makes the economy of an area susceptible to changes in that

industry. Industry diversification, however, is not possible without significant

improvements in the region’s transportation infrastructure and education.

The national demand for coal during the 1960’s decreased, as oil and natural gas

infiltrated coal’s major markets as home and industrial heating fuel. To further impact

employment in the coal mining industry, greater mechanization allowed for higher

production rates with fewer people. However, the coal boom of the 1970’s brought a

short-lived boost to the economy of the area. In the latter part of the 1970’s,

environmental controls were tightened and over time influenced several of the smaller

marginally profitable companies. These companies were able to withstand this burden

until the market price of coal began to decline in the early 1980’s. During this time

economic decline became apparent by the high rates of unemployment and the

relatively low levels of family income for the area.

Conventional wisdom has long held that resources can support current production for

100 years or more. While there is uncertainty about the actual remaining recoverable

reserves, recent studies have indicated that conventional wisdom may be wrong. The

U.S. Department of Energy has estimated that there are 1.609 million tons or

recoverable reserves in Virginia at present. Based on the Static Reserve Index

(Reserves less current annual production), the reserves would be depleted in 36 years.

The Virginia Center for Coal and Energy Research, however, predicts that there are

2.16 million tons of coal which could last up to 50 years. The Virginia Division of



Mineral Resources gives a range of recoverable reserves of 1.995 to 4.393 million tons,

which would last from 44 to 98 years.

These projections, however, do not take into account many variables such as less

profitable operations, a volatile market, and overseas competition. Some of the most

profitable mines may be nearing depletion. Mines in the western United States and in

other countries have large, easy to reach seams with high quality coal. With this type of

competition, the coal market is highly unpredictable. For example, production in Virginia

dropped from 46 million tons in 1988 to 42 million tons in 1991. Because of the

dramatic peaks and valleys in coal mining and in the uncertainty about its long term

health, any projections in this report about employment in coal mining assumed that the

number of jobs would remain steady at current levels for the design year of 2020.

The West Virginia Department of Transportation Purpose and Need Study (October

1994) for its portion of the Coalfields Expressway discussed other issues to consider in

evaluating the need for improved vehicular access to and from the coal mines. Their

report documented a telephone survey of West Virginia coal companies adjacent to this

region revealing the following:

• “The trucking of coal is restricted to a moderate or great extent due to

roadway constraints.”

• “Workers are exposed to long response times for emergency medical

services in an industry that is more hazardous than many others.”

• “There is a need for safer and more efficient access to destinations and

highway systems located outside this region.”

The proposed Coalfields Expressway can also be an integral support mechanism for the

Virginia coal industry, which is projected to remain one of the largest components of this

area’s economy. Without improved levels of vehicular service and access in the study

area the opportunity to realize those items listed above will be lost.



V. Recent Trend Analysis

Unless the economic base of the region is expanded, the negative trends in population,

unemployment, income, and poverty levels are expected to continue. The goals of

increasing educational attainment to provide a more diverse skilled work force for

industry, and a competitive transportation system will remain elusive goals for the

region.

Economic factors are interrelated. If employment is to increase, sales and production

must expand. If sales and production are to expand, there must be an increase in

demand. If demand is to increase, there must be an increase in income, in the size of

economic base, or both.

Stabilizing and/or stimulating population growth is an essential component of any

successful economic development strategy. The Woods and Poole Economics Inc.

(Woods and Poole), is a national company that was hired in 1995 to provide new

population and employment projections. Their work was to supplement the Virginia

Employment Commission projections, which showed a steady decline in this region.

Since they were hired by the Cumberland Plateau Planning District their work only

covered Buchanan and Dickenson Counties. However, the largest part of the study area

for locating the Coalfields Expressway is within these two Counties anyway. Woods and

Poole’s comprehensive population study covering Buchanan and Dickenson Counties,

predicted that the population decline in these two Counties would bottom-out and their

population would begin to increase slightly. In addition, the Woods and Poole report

stated that areas in Virginia with strong manufacturing economies and/or regional

centers for retail trade, transportation and services will have high population and

employment growth in the future. In contrast, Woods and Poole projected that regional

economies dependent on mining will have the slowest economic growth. Despite past

fluctuations in mining employment Woods and Poole predicted that the mining industry

would stabilize resulting in slight changes in mining employment.



The Woods and Poole study predicted that employment growth for the study area is

likely to occur in industry sectors such as state and local government, services,

manufacturing and retail trade. In Dickenson County, for example, when the twenty

year population growth is forecasted and compared to the forecasted growth in

employment, the result is an expected 830 jobs versus an increase of 410 people by the

year 2015.

Woods & Poole Population Forecast

1995 2000 2005 2010 2015

Buchanan County 31,700 32,100 32,520 32,990 33,500

Dickenson County

17,650 17,730 17,810 17,920 18,060

Source: Woods and Poole Economics, Inc.

Woods & Poole Employment Forecast

1995 2000 2005 2010 2015

Buchanan County 16,030 16,990 17,960 18,970 20,070

Dickenson County

5,220 5,370 5,540 5,770 6,050

Source: Woods and Poole Economics, Inc.

Based on the current trends and in contrast to the Woods & Poole study, the Virginia

Employment Commission report, Virginia Population Projections 2010, shows continued

population decline in the region through 2010.



Virginia Population Projections 2010

2000 2010

Buchanan County 28,064 25,913

Dickenson County 16,397 15,702

Wise County 37,754 36,316

Virginia (000) 6,897 7,451 Source: Virginia Population Projections 2010, VEC

The median age for the region’s population is expected to increase, due to several

factors such as the current lack of job opportunities for young adults and the resulting

outward migration as graduates leave and do not return. Also contributing to the aging

population is the influence of the nationwide group of baby-boomers. As the population

ages and people begin to leave the labor force, labor market pressures will be eased

further, with the changes most keenly felt in 2015 when the bulk of the baby-boom

generation enters retirement. As this segment of the nation’s population grows old, no

county will be left unaffected and many adjustments will need to be made to support

their needs.

In the analysis completed for this report related to the economic impact of a new

Coalfields Expressway, the Virginia Employment Commission and Woods and Poole

forecasts for population and employment were averaged.



VI. Economic Development Profile

In 1965, Congress established the Appalachian Regional Commission (ARC). The

intent of the ARC was to assist in bringing economic development to this previously

isolated Appalachian Region. ARC officials stated that “ the Interstate System largely

bypassed the Appalachian Region going through or around the Region’s rugged terrain

as cost-effectively as possible.” In recognition of the need to provide better vehicular

access, the Appalachian Development Highway System (ADHS) was created to

supplement the Interstate system for this region of the country. Subsequently, 26

corridors were approved within a 3,440-mile network of highways.

The proposed Coalfields Expressway would run through Appalachia and through

counties that remain largely isolated because of the lack of major highway systems. It

is important to try and understand if and how new major road corridors can impact

economic development in a region.

Several relevant studies have been conducted that support the importance of providing

competitive road systems through economically depressed areas such as the one that

the Coalfields Expressway would serve. In 1987 an ARC job survey report found that

81% of the job growth in Appalachia occurred in those counties served by an interstate

and/or ADHS corridor. In addition, a 1995 study by Professor Andrew Isserman of West

Virginia University found “that Appalachia counties with ADHS corridors grew 69%

faster in income, 6% in population and 49% in earnings than those equivalent counties

without such corridors.”

The most comprehensive look at whether new and/or improved road systems in

previously relatively isolated areas had an impact occurred in the summer of 1998. The

ARC commissioned Wilbur Smith Associates (WSA) to study this issue (Appalachian

Development Highways Economic Impact Studies, July 1998). They looked at

Appalachian counties where 12 largely completed ADHS corridors passed through and

the impact those corridors made, if any. WSA found that for each dollar invested in an

ADHS road, the benefit was $1.32 in economic development impacts. This is a

significant benefit. WSA estimated that Appalachia counties with these corridors would



realize a net gain in jobs of over 42,000 by the year 2015. WSA stated that,

“Investments in highways contribute to economic development in that they lower

transportation and/or logistics costs and/or improve people’s perceptions of the corridor

thereby causing them to want to settle/invest there, and/or divert and induce traffic.”

WSA found that investments in roads in the Appalachian region “increased employment,

wages and population.” It made the counties with these corridors “ more competitive, it

increased roadside industry and had a great effect on tourism.”

Several other national studies in the past have found similar results. Distinguished new

research by Ishaq Nadiri of New York University, document that infrastructure

investment plays a considerable role in a region’s, as well as the nation’s, economic

health. The new work by Professor Nadiri, in addition to a wide range of historical and

international studies, finds that social rates of return on infrastructure investment are

significant and positive. The research concludes that infrastructure investment has

helped raise the nation’s productivity and reduce its costs of doing business.

According to a 1996 report by the Eno Transportation Foundation on Professor Nadiri’s work:

There are several implications of these results for future transportation policy. The objective of public investment in infrastructure is not simply to solve a locality’s immediate transportation problem – be it potholes or congestion. Rather, it is to enhance the general prosperity of a region and the nation as a whole.

As evidenced by the community profile, the economies of the study region are relatively

stagnant. The recent downsizing in the coal industry and the lack of economic

diversification have contributed to this stagnation.

Traffic and transportation access are fundamental components that support economic

development. Road conditions for the region are primitive and create tremendous

barriers for industry, tourism, and resident population. Industries other than coal have

been slow to locate their operations in these counties because of the accessibility

obstacles, developable land, and the limited scope of the workforce.



The region’s approach to economic development problems has taken on far greater

importance due to the coal mining employment decline. It is well documented that

service sector development and employment follows the creation of basic employment.

Consequently, the region’s efforts have focused primarily on the creation of basic

employment opportunities with the realization that service sector jobs will follow.

Each county now has full-time economic development personnel and the increased

recruitment of these offices has paid off in recent years in new industry or expansion

announcements. In addition to local efforts, the regional entity, the Virginia Coalfield

Economic Development Authority (VCEDA), has administered an economic

development fund capitalized by 25% of the seven coalfield counties’ Coal and Tax

Fund receipts since 1988. Financial assistance (loans and/or grants) is offered for the

purchase of real estate, shell buildings, utilities and other improvements to support

“basic” economic development in the service area.

A number of successes have been achieved through the economic development efforts

of the area. However, the rate of new industry is not enough to counter the recent

layoffs and plant closings in the mining industry and beyond. In 1997 alone, 740 jobs

were lost in just four company closings, one mining and three textile operations.

The tourism industry offers considerable potential for diversifying the economic base of

the region. The scenic attributes and outdoor recreation opportunities are virtually

untapped resources. The primary impediment is ease of access. The quality of the

current transportation system within the study area is a critical obstacle to the

development of the tourism industry or the development of associated support services

(e.g. hotels, restaurants, etc.) that would help diversify the economy.

a. Industrial Development

Topography and access have been and still are the primary impediments to

development. Roads are difficult and expensive to build, industrial sites are hard to find

and expensive to buy and develop, and public utilities such as water and sewer



systems, are costly to construct. There are three major elements critical to the success

of attracting new industry: 1) existing industrial parks, 2) developable land and 3) an

effective modal transportation network.

i. Existing Industrial Parks

As a result of recent regional economic development efforts, there are existing industrial

parks and available buildings in the study region. However, despite this progress, the

lack of sufficient access continues to hamper the ability to sell these existing sites.

These parks present some opportunity for a broader range of industries and companies

if better road access can be provided.

A representative list of existing sites is below.

Facility County

Grundy Industrial Park Buchanan

Council Industrial Site Buchanan

Slate Creek Industrial Site Buchanan

Esserville Shell Wise

Wise County Industrial Park Wise

Lonesome Pine Industrial Park Wise

Haysi Economic Development Project

Dickenson

Dickenson County Technology Park Dickenson

According to the region’s economic development personnel, without adequate road

access they will continue to struggle in their attempts to lure additional industries to

these sites. In addition, many of the parks have relatively small sites available for

development which severely limits the recruitment of many types of industry.



ii. Developable Land

There are several identified areas within the corridor that could provide sizeable new site

alternatives for industrial development. Initial estimates from Buchanan County state that at least

two sites could provide between 75 and 150 acres of property to house an industrial park

resulting in significant new development opportunities for the County. Additionally, there are

several sites that could be used for housing and/or commercial development. Public water service

may also be available to portions of the certain routes .

iii. Modal Transportation Network

The effects of a community’s transportation system upon the successful recruitment of

new industry is vital. A transportation plan must take into consideration topography,

population density and distribution, land development policies and the overall planning

objectives of the community. Greater cooperation is needed among state and local

officials to ensure continuity, safety, and access at intersections or primary and

secondary roads. U.S. Route 460, for example, is the lifeline of economic development

for Buchanan County, and this system has several hazardous intersections, crossovers,

and turnouts which need immediate state attention to avoid accidents and promote

commerce.

If construction of the Coalfields Expressway occurs along the mountaintops, the

potential is for thousands of acres of land to become accessible for the first time. That

land can be used in part to develop industrial and commercial parks which will greatly

enhance the region's ability to attract industry into the area.

b. Economic Diversification

One area of ‘diversification’ that has found favor in the region in recent years is the

placement of correctional facilities. Three state prisons have been located in the study

region – the Red Onion State Prison project, the Wallens Ridge Facility, and the Keen

Mountain Correctional Center, and a federal facility is under construction in nearby Scott



County. Combined these facilities have brought and will bring more than 1,650 direct

jobs and well over a 1,000 service jobs.

In addition, Call Centers, which need little land have also begun to be attracted to the

area. These are Centers that employ telephone order takers. It will be important that the

region continue to find alternatives to diversify its economy.

c. Tourism

Another alternative for diversifying the region’s job and revenue base is tourism – both

through the further development of existing attractions and the creation of new ones.

Numerous studies have identified trends in the travel and tourism industry that point to

the growing potential for tourism development in this region.

Given the change in times and in demographics, travelers will seek more “back to

nature” and personally enriching experiences according to data collected by the Virginia

Tourism Partnership. Cultural and heritage attractions are also becoming more popular.

This translates into increased popularity for the types of attractions that are found in

rural as opposed to urban areas.

The American traveler is taking more destination trips versus tourism trips – going to

one destination rather than spending vacation time traveling or touring from place to

place – and is increasingly price sensitive to the cost of travel. This bodes well for

areas that are easily accessed by car and are in close proximity to major population

concentrations – two attributes that these counties are lacking.

There are limited numbers of major roads to travel within the study area. Access is

difficult both in terms of the quality of the roads and topography. The roads in this area

are extremely narrow and spiral through the Appalachian Mountains. The topography,

while scenic, has rough and rugged mountains which makes driving difficult –

particularly for increasingly popular recreational vehicles (RVs). In addition, there are

no major state or federal highways passing through the area, which makes the trip to

the site more arduous. The roads in this region are primarily two-lane local roads.



Regional access ranges from poor to fair, depending on point of origin and point of

destination.

With “The Grand Canyon of the South” in Dickenson County’s Breaks Interstate Park

and the John Flanagan Dam and Reservoir, this region has two primary existing

resources on which to build its tourism industry.

The Breaks Interstate Park is a recreational and scenic area encompassing 4,500 acres

located on the Virginia-Kentucky border. This 1,000-foot canyon carved by the Russell

Fork River is the deepest gorge east of the Mississippi River. Currently under study, the

Breaks Master Plan identifies various opportunities for leveraging the unique attributes

of the gorge – Breaks Parkway, tram, chair lift etc.

The John Flanagan Dam and Reservoir is responsible for flood control, low-flow

augmentation, fish and wildlife enhancement, water supply, and recreation such as

fishing and white water rafting. Designed and supervised by the U.S. Army Corps of

Engineers, the Dam is 250 feet high and 916 feet long.

In 1994, Economic Research Associates (ERA) conducted a comprehensive study

evaluating the potential for tourism growth in the Buchanan and Dickenson Counties.

Their findings detailed significant potential to increase regional visitation. Their

assessment was based on the strength of the area’s natural resources, potential for

outdoor recreation, and availability of potential visitors in the regional marketing area.

However, ERA stated that while growth is possible, given the existing quality of access

and visitor support facilities, the full potential of the area would not be realized without

greatly improved regional access.

Estimating the number of visitors to an area is difficult at best. Estimating potential

growth is even more difficult. Using market penetration analysis and looking at

assumptions regarding the mix of visitors from outside the resident market, ERA

estimated that the total visitation potential for the area ranges from a low of 870,000

visitors to a high of 1,050,000 visitors. This growth will build on the base of some



635,000 visitors, most of whom are local. Therefore, numerical growth will generate

most new visits to the area’s resources by non-local residents.

This represents the largest single opportunity to increase visitation for the region. If

870,000 to 1,050,000 visitors can be attracted to the Breaks Park with better vehicular

access it would have a tremendous economic impact on the region. New jobs and local

taxes at the Park as well as at the supporting motels, restaurants and retailers would

follow. New strategic economic diversification plans could be drawn identifying other

additional supporting attractions once the tourism market soared.



VII. Projections

The study area includes all of Buchanan and Dickenson Counties and the northern

portion of Wise County. In order to project future traffic volumes and patterns within the

study area, it was necessary that projections be made about future employment and

household statistics and patterns.

The study area was evaluated for current traffic patterns and terrain that effected traffic

patterns. Based on this analysis the corridor was divided into 39 traffic zones.

These traffic zones were created solely for this corridor study thus no existing

employment or population information for these zones was available. Information was

available for this area in Census tracts. Maps of the corridor which showed the location

of towns and other pockets of residential and business structures were then used to fit

each zone within one or more Census tracts.

The 39 traffic zones were located in the following Census tracts:

Buchanan County – 9901, 9902, 9903, 9904, 9905, 9906, 9907

Dickenson County – 9901, 9902, 9903, 9904

Wise County – 9907, 9908, 990998, 991498

The following projections to the year 2020 were developed for each zone:

1. Number of Households

2. Employment by category – Non-retail, Retail, Mining, and total employment

Information was developed for three scenarios; 1) Existing Conditions, 2) No-Build for

2020 and 3) Build for 2020.

The 1990 Census provided information by tract for population, the number of

households and the required employment categories. In addition, employment

information by Census tract for 1996-1997 was available. Population projections to the



year 2010 were available from the Virginia Employment Commission (VEC) for all three

counties. Population projections to the year 2015 for Buchanan and Dickenson Counties

were available from a previous report obtained by the Cumberland Plateau Planning

District from the Woods & Poole Company (W&P). Recent trends in smaller numbers of

people per household and population projections were used to project the number of

households. Percentage changes projected in population for the counties through the

year 2010 and 2015 were used to project population through 2020. VEC projection’s

showed continued decreases in population while the W&P projection’s showed slight

increases. For the purposes of this analysis the average of the two sources of

projections were used.

Recent trends and projections in employment categories were used to project

employment by the three categories (non-retail, retail, mining) to the year 2020.

Because of the severe ups and downs of employment in the mining industry and

because of the conflicting reports about the future capacity of Virginia coal mines,

employment in mining was left at current levels for all of the projections in this analysis.

The Build-2020 scenario assumed that 500 acres of useable land for new business

locations would be generated because of this new road. The assumption was that this

land would yield 8 direct jobs per acre or 4,000 jobs. In addition, 1.5 indirect jobs per

direct job would be created in the community. These 6,000 additional jobs would go to

support the direct jobs.

Economic Research Associate’s (ERA) studied the impact of improvements to the

Breaks Interstate Park and other tourist attractions in the region combined with

improved vehicular access. ERA projected that up to 1,000,000 visitors could be

attracted to the region. Based on ERA’s study an additional 155 tourism related jobs

would be created in the region by the year 2020.

The additional 10,000 plus jobs projected for the year 2020, if the road was built, were

divided among the non-retail and retail employment categories and assigned to the

various traffic zones based on current job location patterns.



Table 1 shows the existing number of households, non-retail employment, retail

employment and mining employment by traffic zone. Table 2 shows the impact of not

building the road for the year 2020 and Table 3 shows the impact of building the road

for the year 2020.

Under the No-Build option employment levels are expected to actually decrease

between now and the year 2020. Under the build option employment levels are

expected to increase by 60 % between now and the year 2020. In addition, the number

of households are 67% greater for the build scenario compared to the No-Build.



Table 1. Existing Conditions – Households and Employment Zone #

Zone Name

Households

Non-Retail

Jobs

Retail

Jobs

Mining

Jobs Total Jobs

B01

Vicey

415

206

58

114

378

B02 Deskins

410

224

35

113

372

B03 Leemaster

1310

555

192

262

1009

B04 Southwest

705

299

104

141

544

B05 Vansant

713

355

100

175

630

B06 Pearly

531

264

75

145

484

B07 Harman

1564

634

107

425

1166

B08 Grundy

895

391

146

198

735

B09 Paterson

1332

736

230

221

1187

B10 Southeast

779

426

65

214

705

B11 Oakwood

860

472

72

236

780

B12 Northeast

224

98

37

50

185

B13 Slate

199

87

32

44

163

B14 Mateney

497

217

81

110

408

B15 North Grundy

670

293

110

148

551

B16 Pilgrim's Knob

750

313

56

210

579

D01 Norland

321

113

41

24

178

D02 Freeling - Isom

148

52

19

11

82

D03 Flemingtown - Tandy

247

87

31

18

136

D04 Blowing Rock

309

109

39

23

171

D05 Baden

210

75

26

15

116

D06 Darwin

844

334

108

51

493

D07 Clintwood

723

286

93

44

423

D08 Caney Ridge

603

239

78

37

354

D09 McClure - Nora

727

280

63

65

408

D10 Fremont

240

96

31

15

142

D11 Counts

397

153

34

36

223

D12 Clinchco

481

139

97

36

272

D13 Haysi West

444

128

89

34

251

D14 Birchleaf

198

76

17

18

111

D15 Haysi

647

187

130

49

366

D16 Breaks

277

80

56

21

157

W01 Almira - Phipps

224

119

44

29

192

W02 Pound East

247

131

49

32

212

W03 Pound

337

178

66

43

287

W04 Two Forks

636

367

136

89

592

W05 Mullins - Dotson

314

167

62

40

269

W06 Birchfield

331

186

69

45

300

W07 Riner

159

92

34

22

148

Totals

20,918

9,244

2,912

3,603

15,759



Table 2. 2020 No-Build Scenario – Households and Employment Zone #

Zone Name

Households

Non-Retail

Jobs

Retail

Jobs

Mining

Jobs Total Jobs

B01

Vicey

491

181

64

114

359

B02 Deskins

485

201

39

113

353

B03 Leemaster

1551

687

211

262

1160

B04 Southwest

834

262

114

141

517

B05 Vansant

845

314

110

175

599

B06 Pearly

628

252

83

145

480

B07 Harman

1852

565

118

425

1108

B08 Grundy

1060

339

161

198

698

B09 Paterson

1577

654

253

221

1128

B10 Southeast

922

384

72

214

670

B11 Oakwood

1018

426

79

236

741

B12 Northeast

264

85

41

50

176

B13 Slate

235

76

35

44

155

B14 Mateney

588

189

89

110

388

B15 North Grundy

793

254

121

148

523

B16 Pilgrim's Knob

888

278

62

210

550

D01 Norland

387

100

45

24

169

D02 Freeling - Isom

178

46

21

11

78


298

72

34

18

124

D04 Blowing Rock

372

96

43

23

162

D05 Baden

253

66

29

15

110

D06 Darwin

1017

298

119

51

468

D07 Clintwood

871

256

102

44

402

D08 Caney Ridge

727

213

86

37

336

D09 McClure - Nora

876

254

69

65

388

D10 Fremont

289

86

34

15

135

D11 Counts

478

139

37

36

212

D12 Clinchco

580

115

107

36

258

D13 Haysi West

535

106

98

34

238

D14 Birchleaf

239

68

19

18

105

D15 Haysi

780

156

143

49

348

D16 Breaks

334

66

62

21

149

W01 Almira - Phipps

269

105

48

29

182

W02 Pound East

296

115

54

32

201

W03 Pound

404

228

73

43

344

W04 Two Forks

763

323

150

89

562


377

148

68

40

256

W06 Birchfield

397

164

76

45

285

W07 Riner

191

82

37

22

141

Totals 24942 8449 3206 3603 15258



Table 3. 2020 Build Scenario – Households and Employment Zone #

Zone Name

Households

Non-Retail

Jobs

Retail

Jobs

Mining

Jobs Total Jobs

B01

Vicey

677

347

146

114

607

B02 Deskins

671

367

80

113

560

B03 Leemaster

2233

1227

477

262

1966

B04 Southwest

1206

470

257

141

868

B05 Vansant

1217

563

253

175

991

B06 Pearly

876

440

185

145

770

B07 Harman

2658

1022

261

425

1708

B08 Grundy

1556

630

366

198

1194

B09 Paterson

2259

1194

560

221

1975

B10 Southeast

1356

675

154

214

1043

B11 Oakwood

1452

758

181

236

1175

B12 Northeast

450

168

102

50

320

B13 Slate

359

118

76

44

238

B14 Mateney

836

355

191

110

656

B15 North Grundy

1165

462

264

148

874

B16 Pilgrim's Knob

1260

486

144

210

840

D01 Norland

512

184

78

24

286

D02 Freeling - Isom

228

80

38

11

129


397

122

59

18

199

D04 Blowing Rock

497

180

76

23

279

D05 Baden

328

116

54

15

185

D06 Darwin

1317

533

210

51

794

D07 Clintwood

1146

457

185

44

686

D08 Caney Ridge

952

381

152

37

570

D09 McClure - Nora

1151

455

127

65

647

D10 Fremont

364

153

59

15

227

D11 Counts

628

256

70

36

362

D12 Clinchco

755

199

190

36

425

D13 Haysi West

685

190

172

34

396

D14 Birchleaf

314

118

36

18

172

D15 Haysi

1005

273

259

49

581

D16 Breaks

434

116

112

21

249

W01 Almira - Phipps

399

183

87

29

299

W02 Pound East

439

193

101

32

326

W03 Pound

599

402

133

43

578

W04 Two Forks

1127

567

279

89

935


559

261

128

40

429

W06 Birchfield

592

286

140

45

471

W07 Riner

282

143

67

22

232

Totals 34941 15130

6509

3603 25242



VIII. Regional Viewpoints It was felt to be extremely important to gauge the view of the need for the Coalfields Expressway from the people of the region. They would know best as to its relative importance. They would also have first hand experience in detailing the negative impact the current lack of such an expressway has on economic development efforts in the region.

Three primary methods were used to gather this information. The first involved

telephone or personal interviews with dozens of individuals involved in economic and

community development in the region. The second method involved a series of public

meetings which were culminated by a meeting with over twenty leaders in the

community involved in economic development. The third method involved monitoring

media accounts of the corridor study and the relative need for the road.

a. Personal Interviews

Dozens of regional leaders in community and economic development were interviewed

to obtain their views on the need for the Expressway. The interviews were conducted by

telephone and in person. Each person described the twin obstacles to successful

economic development for the region; 1) the lack of available, competitive, sizable sites

for development and 2) the lack of a major highway through the study area that provides

quality access to surrounding population centers and other substantial road systems.

Many of these leaders recounted stories of the difficulty they have in selling prospects

on locating in the region because of the lack of such an expressway. Some even told of

instances where they not only offered buildings and/or land free but were willing to pay

companies to locate on the property. Again, because of the lack of a quality access they

could not pay someone to take the site or building. Without exception, the community

and economic leaders in the region that were interviewed thought the Coalfields

Expressway is the most important economic development project facing the region.



b. Public Meetings

Two sets of public information meetings have been held to exchange information

regarding the Coalfields Expressway and the status of the location study. Two

meetings at different locations within the study area were held each time. Hundreds of

citizens have attended each meeting. Without exception, the dominant theme

expressed at each meeting is the importance of this road for successful economic

development. In addition, comment sheets were provided at the meetings. The first

meetings produced 300 written comment sheets. When asked, “do you believe the

proposed Coalfields Expressway would benefit the region”, 289 respondents said “yes”

and one respondent said “no”. The following comments were given; 44 important to an

increase in tourism, 135 important to an increase in economic development, 61

important to an increase in area’s accessibility, 35 important to making it more

marketable to new industries, 24 important to bringing additional jobs to the area and 21

other varied comments (some offered more than one comment and some none).

Different questions were asked on the comment sheet used in conjunction with the

second series of meetings, which were attended by approximately 650 persons.

A meeting was held at the Breaks Interstate Park conference center with a group that

represented a broad cross section of those involved in economic development in the

region. Typical of the comments received during that meeting were, “ I serve on the

Coalfields Economic Development Authority and am aware of the numerous prospects

we lost because of poor vehicular access.” Or “ We have visitors to the Breaks

Interstate Park or Flanagan Reservoir who are not coming back because of the poor

access”. When asked do they have a preference for a location for the Coalfields

Expressway, there was strong consensus in the room that the road needs to be built

and there was much less concern over its exact location.

c. Media Stories

As would be expected, a project of such importance to a region would receive a great

amount of media coverage. The media of the region has fulfilled this expectation by

giving this story a tremendous amount of coverage. From these print stories comes the



deep sense of urgency given to this Coalfields Expressway. The following are

representative quotes from a variety of individuals in several newspapers:

“This project will help the region attract new industry and will open the Breaks Interstate

Park to greater tourism use”, said Congressman Rick Boucher.

Brad Rakes of Clintwood High School said, “the construction of the Coalfields

Expressway is vital to the continued economic existence of Southwest Virginia.”

Claude Crigger of the Virginia Coalfield Economic Development Authority noted that the

coalfield region is currently fighting for survival in an all out effort to attract new job

opportunities and a diversified economy. “It will link two highways and one interstate

system and will aid in reversing current population and employment decline”.

Breaks Interstate Park Superintendent Car Mullins said, “the road is critical to attempts

to open up the Breaks park and make it more successful.”

Buchanan County Chamber of Commerce director Mary McClanahan said, “the

improved road system will open up flat lands necessary for large-scale industrial

development.”

“If we’re ever going to make the transition from being dependent on coal, we have to

open up the area to the outside world with new roads and bring in some manufacturing”,

said Willard Owens, a Chamber of Commerce leader in Grundy. “We either have to

change or die and I don’t want to see us die.”

“The Coalfields Expressway is an important and vital key to draw outside industry”, said

Donald Baker, Clintwood Mayor. “ No major road means no major industry and no

reason to visit the County.”

“ The Coalfield Expressway has the same meaning for these counties as Interstate 81

had for what we now call the I-81 corridor,” said State Senator Jackie Reasor.



d. Personal Interview Contacts

Contact Company/Organization Subject

Larry Carr Cumberland Plateau Planning District

Buchanan County Comprehensive Plan Dickenson County Comprehensive Plan

Frank Kibler LENOWISCO Planning District Commission

Wise County Comprehensive Plan

Mary McClanahan Buchanan County Chamber ERA report on Breaks Interstate Park

Patrick Owens Private consultant Internet article

Sandy Ratliff Virginia SouthWest Promise Industrial site availability; Employment

Andrew Chafin Cumberland Plateau Planning District

Cumberland Plateau OEDP Update

Jean Jordan Virginia Coalfield Economic Development Authority

Prospect activity and plant closings and openings

Charles Yates & staff

Coalfield Economic Development Authority

Site and building information

Shelia Kuzzko Coalfield Tourism Authority Overall tourism efforts and opportunities

Jerry Fouse Virginia Tourism Corporation Regional Office

Existing destination locations

Carl Mullins Breaks Interstate Park Proposed plans and attendance

Charlotte Mullins Dickenson Development Current and future site plans

Claude Crigger Virginia Coalfields Economic Development Authority

Potential Industrial Development Sites



X. References

Appalachian Development Highways Economic Impact Studies, Wilbur Smith

Associates. July 1998.

Bristol Herald Courier, “Coeburn Buster Brown Closing.” February 28, 1997.

Bristol Herald Courier, “Mine Layoffs Coming.” August 26, 1997.

Buchanan County Planning Commission, Buchanan County Comprehensive Plan,

1994.

Coalfield Progress, “Haysi Donnkenny Garment Plant to Close.” September 25, 1997.

Cumberland Plateau Planning District, Overall Economic Development Program, 1997

Update.

Dickenson County Planning Commission, Dickenson County Comprehensive Plan,

1994.

Economic Research Associates. Assessment of Tourism Development Potential in

Buchanan County and Dickenson County, Virginia. March 1994.

Eno Transportation Foundation, Inc. “Economic Returns from Transportation

Investment.” Lansdowne, VA. 1996.

LENOWISCO Planning District Commission, Overall Economic Development Program,

1997 Update.

Owens, Patrick. Mountain Internet, “Coalfields Expressway – Highway to the Future.”

1997.



US Department of Commerce, Bureau of the Census, 1990 Census of Population and

Housing Characteristics.

Virginia Employment Commission. Virginia Population Projections 2010. 1993.

Virginia Employment Commission. Virginia State Data Center, Economic Information

Services Division.

Virginia Mountaineer, “Diversified Apparel Closing Will Leave 115 Jobless in

December.” October 24, 1996.

Virginia Southwest Promise. Available Sites and Buildings Report. October 15, 1997.

West Virginia Department of Transportation. Coalfields Expressway Purpose and Need

Study. October, 1994.

Wise County Planning Commission. Wise County Comprehensive Plan.

Woods and Poole Economics, Inc., “Economic Forecast for the Cumberland Plateau

PDC”, 1996.


Working Paper

COALFIELDS EXPRESSWAY

ECONOMIC

DEVELOPMENT

OVERVIEW

Prepared by HAYES, SEAY, MATTERN & MATTERN, INC.

Architects Engineers Planners

For Coalfields Expressway Location Study

January 1999

Working Paper

COALFIELDS EXPRESSWAY

ECONOMIC

DEVELOPMENT

OVERVIEW

Prepared by HAYES, SEAY, MATTERN & MATTERN, INC.

Architects Engineers Planners 1315 Franklin Road, S.W. Roanoke, Virginia 24016

For

Coalfields Expressway Location Study

From: Route 23 at Pound To: Virginia/West Virginia State Line

Buchanan, Dickenson, and Wise Counties

Project No. R000-961-101, PE-100 Virginia Department of Transportation

economic development overvie...economic development overview iii. community profile these counties...

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