A town policy limiting when taxpayer dollars can be put toward private residential and commercial developments – depending on how broadly it’s worded – could affect Smithfield’s 18-year plan to gradually transform the former Pinewood Heights neighborhood behind Smithfield Foods’ meatpacking plant into an industrial park, according to a member of a Town Council committee tasked with writing the proposed policy.

Councilman Randy Pack brought up the issue of Pinewood Heights at the committee’s inaugural meeting on Sept. 6.

According to Town Manager Michael Stallings, the town has, to date, never used tax dollars to fund the buildout of infrastructure serving a private, purely residential development. Nor does it need to do so in order to entice developers, according to Pack, who at the meeting noted that Isle of Wight is already the sixth or seventh fastest-growing county in the state, according to differing data by the University of Virginia’s Weldon Cooper Center and the federal Census Bureau. Smithfield alone has more than 1,400 new homes planned across two approved and two proposed subdivisions.

“It goes back to supply and demand,” Pack said. “We don’t need to give anything away.”

But attracting commercial and industrial developers to areas like Pinewood Heights are another matter.

“We may want to lure companies to Pinewood,” Pack said.

According to Town Attorney Bill Riddick, the conversion of Pinewood Heights into an industrial park will likely require the use of public money to put in infrastructure that would serve tenants. Since 2006, the town has received multiple $1 million matching grants from the state to relocate Pinewood’s residents and rezone the land as industrial, and in 2007 raised its meals tax to the current 6.25% surcharge to pay for its share of the cost, according to past Smithfield Times reporting. By 2008, the first Pinewood residents began moving out, and by 2014, Robert Livengood of pier-building business L&L Marine Inc. had secured the first rezoning of land in Pinewood Heights to conditional industrial. More than 80 Pinewood lots remain under town ownership, according to Isle of Wight County’s online GIS map.

Pack serves on the committee alongside Councilmen Raynard Gibbs and Mike Smith, the latter  of whom serves as the group’s chairman. Mayor Steve Bowman appointed and tasked the three committee members with developing a written policy on subsidies for developers after Smith, at an Aug. 6 Town Council meeting, proposed the town adopt a formal resolution stating it would explicitly “not subsidize private development of any kind.”

“To put in a policy that we’ll never do this is too much,” Pack said at the committee meeting.

Smith said he has “no problem” with “what we do in our right-of-ways.” 

Former Smithfield Foods Chairman Joseph Luter III, in May, offered the town $6 million for the beautification of the western edge of its historic district, which, according to Bowman, would fund a brick wall and sidewalk in town-owned right-of-way fronting the 267-home Grange at 10Main mixed-use subdivision Luter’s son, Joseph Luter IV, is developing. Luter III’s offer is conditioned on the town matching the amount dollar for dollar and moving its farmers market to the Grange. The council and Isle of Wight County previously voted in 2022 to each commit up to $1.4 million toward building a brick structure at the Grange to house the market in exchange for Luter III’s offer of land and $1 million toward the building.

The farmers market structure is to be buffered on either side by a restaurant and retail space. Pack, who recused himself from last year’s Grange rezoning vote, is in negotiations with Luter IV to run the proposed restaurant.

The market building “will be constructed and donated to the town and the county; it will not be privately owned,” Stallings said.

A 2022 email thread between Luter IV and Smithfield-Isle of Wight Tourism Director Judy Winslow, obtained by the Times last year through a Freedom of Information Act request, states the plan at that time called for “the restaurant owning their own portion” and the county’s Economic Development Authority to own the rest.

According to Riddick, having a private developer build and then donate a structure for government use can often be less expensive and quicker than having the locality itself handle construction, which under state law must be handled using Virginia’s public procurement process.

Using taxpayer dollars to fund infrastructure inside a development is “where I have a problem,” Smith said. 

The still-unwritten taxpayer subsidy policy may or may not affect the proposed farmers market.

A 2022 fiscal impact study by Ted Figura Consulting included with Luter’s rezoning application for the Grange proposed that the town and county jointly provide an “economic development incentive” for a hotel in the development’s commercial phase, and that one or both governing bodies  “purchase the development’s infrastructure and utilities through a participation agreement.”  

According to Stallings, the town has since communicated to Luter IV that taxpayer funding for the Grange’s infrastructure is not on the table.

“That has been very clearly communicated,” Stallings said.

Pack said that taxpayer funding for commercial projects or as incentives to lure a large business to Smithfield has worked well in the past. Pack referenced the town’s 1996 decision to purchase and raze a former shopping center on North Church Street, and by 2000 build the town-owned Smithfield Center in its place with partial funding from Luter III in hopes of luring Smithfield Foods, which at that time had moved its corporate headquarters to Norfolk, back to the town. It worked, luring the town’s anchor employer to break ground in 1997 on its corporate campus on Commerce Street, according to reporting that year in the Times.

The committee plans to meet at least once more before presenting draft policy language to the full council. Gibbs said he was absent from the Sept. 6 meeting to attend his daughter’s wedding but had provided written input ahead of the scheduled meeting to the other committee members. The meeting drew several observers, including Vice Mayor Valerie Butler.

Editor’s note: This story was updated on Sept. 12 at 11:03 a.m. to correct that Vice Mayor Valerie Butler attended as an observer, and not as a member of the committee, and with comments by Raynard Gibbs.