Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, August 22, 1993 TAG: 9308230306
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Long
Roanoke's gas war may long be remembered for the alliances it smothered.
Behind the news conferences, away from the telephone hot lines and media campaign, personal and political relationships are being tested for their strength and resilience.
Longtime comrades - City Manager Bob Herbert and Roanoke Gas Co. executive John Williamson - are haggling over one of the most contentious public issues to hit the Roanoke Valley in decades.
Close friends - Roanoke Vice Mayor Beverly Fitzpatrick and Roanoke Gas vice president Robert Glenn - have privately grappled with the pain of a public confrontation that, for a time, pitted them against each other.
Fragile political alliances forged to reached a common goal - the redevelopment of Hotel Roanoke - could be torn apart by a deal many consider to be City Hall's "hostile takeover" of a longtime corporate citizen.
What's going on here?
No one really knows. The public spectacle that has seized the Roanoke Valley for the past week, tying up phone lines and filling mailboxes, has astounded city officials. They never guessed, they concede, that the gas company would mount such an effective public relations campaign; nor did they think public sentiment would rally so heavily behind the 110-year-old utility.
"This is a real piece of work," Herbert said with a sigh late Friday. "I've never been so battered. I'm tired and our people are tired, but we've got to keep plugging."
City Council, which meets Monday, is expected to vote to take the next step toward acquisition of the gas company's assets within the city boundaries - petitioning the State Corporation Commission to value the gas pipes and fittings snaking beneath city streets.
Filing the petition - which must be done before the 20-year franchise agreement between the two sides expires Aug. 30 - does not necessarily mean the city will buy the gas company. But it does mean, city officials say, that the city then would have the option to buy a portion of the company if it wants to.
Folks still are wondering, more than a week after the first salvo, how the city could have so misjudged the public's reaction to a possible takeover of Roanoke Gas. City officials were told repeatedly - council was told - that securities law would almost certainly require the company to make a public announcement on Friday, Aug. 13.
Key players from both sides discussed the likelihood several times during the preceding days; Roanoke Gas promised to inform the city of any public announcements. But because securities laws prohibited the company from telling anyone before a Form 10-Q - a quarterly report of any significant event that could affect a company's stock value - was filed with the Securities and Exchange Commission, City Hall learned of the public announcement a few hours after the news media.
Within hours, Roanoke Gas had defined the issue, spinning its version to the public. The next morning, customers had postcards in their mailboxes. The $50,000 campaign, orchestrated by public relations consultant John Lambert, was put together in just 48 hours, company officials said.
The city's counterattack didn't come for another five days, not until Herbert cut short his vacation and returned to work. The city aired its side, gave what it called corrections of misinformation, and even took the uncommon step of releasing private correspondence to back its position.
Trouble is, legal nuances often are the first casualties in political battles fought through newspapers, radio and television. Try as they have, city officials appear to be having a hard time convincing business leaders and state and county politicians that Monday's vote is just procedural.
"Right now, they ought to fish or cut bait, not draw this thing out," said state Del. Clifton Woodrum of Roanoke. "If you drag it out, you put yourself on the cross all the much longer. I don't want to be guilty of piling on, but they have to make their case and they haven't done it yet."
The city's $16,000, taxpayer-financed public information campaign was designed to neutralize the gas company's barrage that began on Friday the 13th, a perhaps cruel coincidence. Herbert wrote business leaders last week and visited with the Roanoke Regional Chamber of Commerce; it denounced the effort anyway, and on Friday the Salem-Roanoke County Chamber of Commerce followed suit.
Understandably, business interests don't look kindly on government efforts, however preliminary, to acquire private businesses. And in a time when the quest for jobs and other forms of economic development often hinges on a locality's public image, acquiring a gas company that doesn't want to be acquired doesn't seem right.
"It would be my hope that council realizes the damage this vote would do to public-private cooperation in the Roanoke Valley," Vice Mayor Beverly Fitzpatrick Jr. said, expressing similar fears for relations between the city and the county.
So far, Fitzpatrick is the only council member to publicly announce his intention to oppose the city taking the next step toward acquiring Roanoke Gas. "It sends a horrible message to anyone who owns a company or owns stock," he said. "I take any effort to acquire it as the wrong message."
Long considered the business community's council member, Fitzpatrick - Dominion Bankshares Corp.'s former vice president for economic development - already has paid the price for his stance. Friday, Mayor David Bowers accused Fitzpatrick, his longtime rival, of breaking his word and shirking his duty as a councilman.
That's ironic, given public charges a few years ago that Bowers reneged on a back-room agreement to close the Hunter Viaduct to make room for the Dominion Tower. When it came time for a vote, Bowers voted no, eliciting a stinging rebuke from then-Dominion chairman Warner Dalhouse. Bowers denied having made any promises.
The Bowers-Fitzpatrick rift, going public after long being conducted in private, may not be repaired soon. Nor may the damage city council appears to be doing to important relationships - and an important project - it holds dear.
In July, five days after city officials handed Roanoke Gas officials a consultant's report exploring the acquisition of their company, nine men met on the second floor of the Central Fidelity Bank building in downtown Roanoke to discuss the funding future of Hotel Roanoke - the city's pet project.
How could the state help close a $2 million funding gap dogging the project, its planners wanted to know?
State House Majority Leader Richard Cranwell of Vinton, joined by the balance of the valley's General Assembly delegation, sketched the "dynamics . . . they needed to do to get the money from the legislature," he said.
Ultimately, they concluded, it could be done - provided the right people were approached the right way.
Barely two weeks later, Cranwell learned through news reports that the city was considering a play to acquire Roanoke Gas, which serves thousands of customers in the district he represents. Already irritated by Bowers's forays into Roanoke County to discuss consolidation, Cranwell was livid.
Last Thursday, he joined county supervisors at a hastily called news conference to announce his strategy to stop any attempt by the city to acquire Roanoke Gas.
"If they undertake to take over Roanoke Gas, they aren't going to get 'em," he said later, discussing his strategy. "I know how to do it legislatively. More importantly, the General Assembly can [make sure] they can't run a gas company, by statutory law.
"You can rest assured that if they try to take over the gas company, I intend to be a thorn in their side . . . and an architect of their failure," he said. That's tough talk from one of the most powerful legislators in Virginia - who, among other things, is chairman of the House Finance Committee.
Cranwell doesn't make such threats idly. It wasn't just talk a few years back when he in effect forced the city to relinquish sole ownership of the Roanoke Regional Airport before state money could be used to build a new terminal.
And, he insisted, it isn't just talk now.
Woodrum and Roanoke state Del. Victor Thomas, both Democrats, oppose meddling with the gas company. So does state Sen. Brandon Bell, R-Roanoke County. The county supervisors unanimously oppose it.
Valley citizens by the thousands are registering their opposition to the mayor's office, council members' homes, to hot lines set up by both sides. It's the talk being overheard in restaurants over breakfast, in stores, at dry cleaners.
"They're crazy as hell," Edgar Wheeler, president of Fast Service Laundry and Cleaning, said Saturday of council's possible action. "Of all the problems the city has - water problems, sewer problems, school problems - they're trying to fix a problem that doesn't exist. I haven't seen people this upset since integration came in."
All of which prompts the question: Why are city officials - who are desperate to renovate Hotel Roanoke, create jobs, attract new industry - picking a fight with Roanoke Gas? And don't they think they'll pay a political price for doing it?
Cranwell, the kingpin they've turned to for help with the hotel, is hopping mad; Thomas Robertson, president of Carilion Health System and architect of the fund-raising campaign for the hotel, sits on the Roanoke Gas Co. board; influential players in the business community are said to be appalled, even amused, by the spectacle.
"All of this should have been done behind closed doors," said John Clarke, a longtime valley banker who's now managing director of Catawba Capital Management Inc. "It just proves Roanoke doesn't have its act together."
Cranwell and his legislative savvy could be the margin of difference for council's hotel and conference center. But he detects a troubling pattern. The city, he says, uses a "fist-in-the-face" approach to problem-solving, talking consolidation and threatening to acquire the gas company.
"There is no cohesive dynamic . . . no cohesive view of the future" among city officials, Cranwell laments. "The problems we have with cooperation are a direct result of the Lone Ranger tactics of David Bowers."
Robertson was tapped last fall by Virginia Tech President James McComas to spearhead a fund-raising campaign for renovation of Hotel Roanoke. Kicked off just before Thanksgiving, the effort was intended to raise $5 million by year's end. It raised $7 million in seven weeks.
Bowers praised the results at a news conference choreographed for the 6 o'clock television news shows. The city's "No. 1 economic development project" would become a reality.
But when Robertson used the Roanoke Valley Business Council to float plans to craft an "economic vision" for the Roanoke and New River valleys - without the full participation of elected officials - Bowers chafed.
More than once, Bowers publicly told anyone listening that he would not be "summoned to the table after the decision was made." He called for a coalition between Roanoke's new political leadership - Bowers most prominent among them - and the business community, now led by Robertson.
Yet Friday, as he blasted Fitzpatrick for allegedly changing his position to suit "big business interests," Bowers wasn't talking about coalitions. He was talking trust; he was talking about political principle; he was saying City Council must vote to explore the purchase of Roanoke Gas for "the people of Roanoke."
If anything, the people of the Roanoke Valley appear to be telling council just the opposite: Don't mess with the gas company.
City officials complain that Roanoke Gas' intense media campaign was too much and too fast and wasn't fair. But, then, its architect is someone they know well - public relations consultant John Lambert.
Lambert has helped promote efforts to fund the Montgomery County "smart road," a favorite of Roanoke players determined to forge closer ties to Virginia Tech. Some years back, he handled media relations for the fledgling Hotel Roanoke project.
He was also behind the 6 p.m. news conference where Bowers proclaimed the Renew Roanoke campaign a success. The timing had TV news directors fuming for its evident effort to grab free, unedited air time from their evening newscasts.
More recently, he's been helping Robertson, the Business Council and Tech put together its New Century Council, a twin-valley attempt to create a cohesive economic vision for the future.
Then came the Aug. 13 salvo by Roanoke Gas Co. The evening before, after the stock markets had closed for the day, Lambert alerted reporters that Roanoke Gas would be holding a 10 a.m. news conference.
There the company announced that City Hall was exploring acquisition of the company. The next morning, postcards appeared in mailboxes across the city; letters went to shareholders; senior company officials stood ready to answer an endless stream of questions.
"I congratulate them on this because they've had a very successful public relations effort," Bowers said a week later. "For one reason or another, the city's case has not been presented to the citizens."
\ ROANOKE GAS COMPANY\ Board of directors\ \ Lynn D Avis President, Avis Construction Co.\ \ Frank A. Boxley President, Southwest Construction Co.\ \ Edward C. Dunbar Chairman of the board.\ \ Frank T. Ellett President, Virginia Truck Center, Inc.\ \ Frank A. Farmer, Jr. President and chief executive officer.\ \ Wilbur L. Hazlegrove Partner, law firm of Woods, Rogers & Hazlegrove.\ \ W. Bolling Izard President, W. Bolling Izard Surety & Consulting Agency, Inc.\ \ J. Allen Layman President and chief executive officer, Botetourt\ Communications, Inc.\ \ John H. Parrott President, John H. Parrott Associates.\ \ Thomas L. Robertson President, Carilion Health System and Roanoke Memorial Hospitals.\ \ S. Frank Smith Executive vice president, Coastal Coal Sales, Inc.
by CNB