The Economics of Place: Warren County’s Unique Advantages

Note: This is the first of a five-part series that expands on the April 22 presentation (1:56) on economic development to the Board of Supervisors and the subsequent Town Talk interview with Mike McCool.

As Warren County stands at an economic crossroads, we face fundamental questions about our future. What kind of economy should we build? What assets do we have? What investment capabilities do we have? And perhaps most importantly, what economic development path honors our community’s unique character and advantages?

Recent debates have seen newer opportunities like data centers brought up for consideration as major revenue generators for the county. Some candidates have characterized tourism as merely a “trickle” of economic opportunity while implying that really meaningful industrial development (potentially including data centers) is the path to serious revenue growth. This characterization fundamentally misunderstands our county’s distinctive position and current economic situation.

The Economics of Place

Successful communities don’t pursue generic economic development strategies. They build on their unique assets and advantages – what economists call “place-based development.” Warren County possesses something extraordinary that cannot be replicated elsewhere: we are the northern gateway to Shenandoah National Park, one of America’s natural treasures.

This is not a romantic notion but an economic reality. The National Park Service reports that 1.4 million visitors to Shenandoah National Park spent $104 million in nearby communities in 2022, supporting 1,240 jobs and generating $145 million in economic benefit. This is hardly a “trickle” – it’s a substantial economic engine that many communities would envy.

The Multiplier Effect

Tourism dollars multiply through our economy in ways that other industries cannot match. When visitors stay in our hotels, dine in our restaurants, shop in our stores, and hire our guides, those dollars then circulate again as workers spend their wages locally and businesses purchase supplies from other local vendors.

Tourism also creates diverse employment opportunities across skill levels – from entry-level positions that provide valuable first jobs to management roles that can support families. Unlike industries that require specialized technical skills, tourism offers accessible employment to a broad segment of our workforce, which is a good fit for Warren County’s demographic.

Our Current Situation

Timing is everything, especially in industrial economic development. Significant industrial capital projects such as light manufacturing are very desirable. However, they entail many years and a persistent effort from an economic development team to land them, and then additional years moving from the drawing board through multiple phases of planning, investment, construction, and start of operations. Unfortunately for Warren County, the “pipeline” of potential industrial projects is empty because of at least 10 years, probably more like 15, of lost time due to the EDA scandal and the pernicious self-dealing activities preceding the actual arrests. For many years before and the 6 years since, that lengthy project development pipeline has had nothing going in, so there is nothing coming out any time soon. That is to say, there will be no revenue from new industrial development any time soon.

Priorities Must Be Established

While it is necessary to restart the industrial economic development process with our comprehensive plan and northern industrial corridor in mind, we must be clear-eyed about the time involved. Because the lead times are so long, we need to prioritize economic development strategy around what we can do relatively quickly, relatively inexpensively, and based on an existing skillset: tourism. In the meantime, we can resume the consistent effort of the economic development process of recruiting high-quality industrial prospects that would come online 5 years out and more.

However, all development decisions should be guided by a fundamental principle: new economic activities should enhance, not detract from, Warren County’s existing differentiation and advantages. The northern entrance to Shenandoah National Park is our defining economic asset. Any development that diminishes this advantage – whether through environmental impacts, degradation of scenic viewsheds, or changes to our community character – would be economically counterproductive.

Looking Beyond Tax Revenue

Some argue that data centers would provide substantial tax revenue without burdening county services. This narrow focus on tax receipts misses the broader economic picture. While tax revenue is important, sustainable economic development must also consider:

• Job creation across multiple sectors and skill levels
• Support for local business ownership and entrepreneurship
• Enhancement of community character and quality of life
• Long-term economic resilience and adaptability
• Infrastructure demands and environmental impacts

When measured against these comprehensive criteria, tourism-based development offers advantages that data center development cannot match.

Moving Forward

In the coming weeks, I will share additional perspectives on Warren County’s economic development opportunities. The path to prosperity doesn’t require us to become “anywhere USA.” It lies in becoming more distinctively ourselves – the proud gateway to one of America’s natural treasures.

Rich Jamieson
Warren County Board of Supervisors, North River District