NC Department of Commerce Missed $200 Million in Costs to State Taxpayers for Bio-Lab, Decides its Economic Analysis Doesn’t Work for NBAF

Homeland Security Says Bio-Hazard Lab Issue Still Live for North Carolina

RALEIGH:     Early this fall, Senator Doug Berger, who represents the area in which Homeland Security seeks to build the National Bio- and Agro Defense Facility, asked the North Carolina Department of Commerce to update the economic analysis for the bio-hazard lab to incorporate new information from Homeland Security about the actual economics for the proposed lab.  The earlier analysis, which predicted a $1.6 billion upside to the lab over 20 years of operations, relied on numbers provided by the North Carolina Consortium for the NBAF, which seeks to bring the bio-hazard lab to this state.   Now, the most recent information indicates that Commerce’s estimate rested on extensively faulty premises,

The original calculations by Commerce failed to include any of the costs that State taxpayers would have to pay to bring the lab here.  In Homeland Security’s “Site Cost Analysis,” which was released with much of the data blacked out, this number appears to be the difference between the total project cost of $705,363,565 and the lower cost of $523,711,811 that Homeland Security is budgeting. [1]   That difference equals $181,651,754 in up-front costs to taxpayers.    

Documents (attached to this press release) obtained from the North Carolina Biotechnology Center provide some details about this number.  In addition to the Consortium’s offer to transfer state land appraised at $12.4 million, Homeland Security requires the host state to pay for site preparation, internal roadways and a central utility plant with an estimated cost of $102,316,210.  The North Carolina Consortium has also offered Homeland Security a State taxpayer contribution of $5 million in faculty recruitment and retention, up to $35 million for program support and enhancement in connection with the NBAF, and an undetermined amount for “workforce training programs”.  Homeland Security also requires the host state to pay for “mobile non-fixed program specific scientific equipment” in an amount which has been redacted from Homeland Security’s public documents. Finally, it appears that neither Homeland Security nor the Consortium has estimated the cost to train area first responders regarding the specific risks and situations presented by the bio-hazard lab. 

Recently, Commerce Department officials have concluded that “the NBAF case may not be an appropriate candidate for the Walden model” which Commerce used to generate the widely touted $1.6 billion estimate.[2] In addition to the omission of the costs to state taxpayers, that estimate rested on assumptions now contradicted by Homeland Security’s own numbers.  For example, Homeland Security has consistently estimated that it will employ between 250 and 350 individuals at the NBAF, far below the 400 direct jobs used as the basis for Commerce’s calculations.   Of those jobs, only 63 are expected to go to NC residents, according to Homeland Security’s Draft Environmental Impact Statement (“DEIS”).  And, although Commerce relied on estimates that 1000 to 1500 construction jobs would be generated by the NBAF, Homeland Security estimates that the construction of the NBAF will only require 612 jobs.  Commented Judy Winters, a member of the steering committee for the Granville Non-violent Action Team, or GNAT, which has led opposition to the lab in North Carolina, “what’s the upside for North Carolina taxpayers?  The NBAF, as a government facility, will not pay taxes.  Why should we pay so much up front for 63 jobs?”

Commerce’s analysis also fails to account for the economic impact of a disease release for the lab.  According to Homeland Security’s DEIS, the consequences of a release of Rift Valley Fever would be approximately $50 billion, continuing as the disease is expected to become established in the environment much as West Nile Virus has done.

Despite recent reports that the NBAF will not be built, or that North Carolina has been eliminated from consideration, Homeland Security’s program manager for the NBAF stated on October 16 that “The NBAF project is not on hold,” and that the final environmental impact statement, which will announce Homeland Security’s preferred site, is expected late this year.  





               See NBAF Site Cost Analysis, at section 4, page 3

 and section 5, page 1.

               October 9, 2008 email from Stephanie McGarrah, Assistant Secretary for Policy, Research and Strategic Planning, N.C. Dept. of Commerce.


Go to GNAT’s website for more information or contact Bill McKellar or Kathryn Spann for more information.