West Virginia’s Rush to Cash In on Land Raises Hopes, Concerns : Development: Property is being snapped up at a pace that has experts predicting a repeat of last decade’s boom. Commuters are lured to region as affordable alternative.

John Cushwa spent years pruning peach and apple trees in the rolling hills near the Potomac River. These days he is raising $180,000 houses on 100 acres his family had farmed since 1810.

“I can’t say I’m happy about doing it,” Cushwa said. “At one time I used to be against this type of development. But I have to do it to survive. I guess you can say we’re growing houses instead of apples.”

Along the Potomac and Shenandoah rivers in West Virginia’s Eastern Panhandle, farmland and woodland is being snapped up at a pace that has experts predicting a repeat of the boom that swept through northern Virginia a decade ago.

West Virginia is among the nation’s poorest and most economically depressed states, thanks in part to decreasing employment in the coal industry. Some towns dependent on coal are drying up. But the three-county Eastern Panhandle, less than 80 miles from Washington, D.C., is luring commuters as an attractive alternative to traffic-choked northern Virginia and southern Maryland.

Housing priced nearly half that of Maryland and Virginia is attracting federal employees, retirees and middle-class workers employed at the growing number of companies moving to the area.

“After paying 21% interest on loans to cover (orchard) operating costs, we just decided there had to be another way,” said Cushwa, 42, whose Duchess Estates features homes priced from $130,000 to $180,000.

“My father wouldn’t be too happy if he was still alive,” he said. “It’s good for business. It’s good for employment. But it gets to you when you drive through and see all those houses instead of apple trees.”

Struggling orchard growers, hit hard by a drought and killing frosts this spring, aren’t the only ones cashing in.

Batman Corp., headed by Iranian-born developer Bahman Batmanghelidj of McLean, Va., has bought or plans to buy 2,500 acres near Charles Town in Jefferson County, West Virginia’s eastern tip.

Batmanghelidj’s company is one of the largest developers in the Virginia corridor between Washington and Dulles Airport.

“Our development will include a residential area, shopping area and provide employment as well as recreation,” said Batman Corp. Vice President Alex Vahabzadeh.

Hap Holladay, vice president of Holladay Corp. of Washington, D.C., whose company recently bought 885 acres nearby for $7.2 million, plans 3,500 units of townhouses and single-family homes. Eighty acres have been set aside for light industry.

The federal government is interested in West Virginia as a high-tech alternative to Washington.

The U.S. Coast Guard is moving its computer division to Berkeley County and funding for a new Department of Interior training center has been approved for Jefferson County.

The federal General Services Administration recently announced plans to buy up to 15 acres near Martinsburg. GSA officials refused to discuss the deal but indicated more government agencies are considering the area.

The Defense Department and the National Aeronautics and Space Administration have expressed interest in a private research park proposed by a Texas-based developer.

McDonnell Douglas Space Systems Division, Grumman Aerospace Division, General Dynamics, Rockwell, Martin Marietta Corp. and Geostar Messaging Corp. also sent representatives to an informational meeting about the park last year.

United Airlines plans a maintenance facility that would employ 7,000 people, and a ski resort has been proposed by a Pennsylvania developer.

The building boom is fueled by land prices as low as $4,400 an acre, almost a giveaway when compared to prices up to $340,000 an acre in neighboring Fairfax and Loudoun counties in Virginia.

State officials say low taxes and few restrictions on development also interest developers and bankers.

“I think West Virginia has been ignored for quite a long time,” said Henry A. Berliner Jr., chief executive officer of Second National Federal Savings Bank, which operates 36 branches in Maryland, Delaware, Pennsylvania, the District of Columbia and northern Virginia.

“It’s more important than ever for people to live in places where they can get away from stress,” Berliner said. “You used to go to the mountains or the beach to get away. Now people are saying: ‘Look, you don’t have to do that anymore. You can live here in a vacation area and drive a little farther to work.’ ”

Vahabzadeh says the biggest barrier to development in the area is psychological.

“If you ask people in Washington how far away West Virginia is, they typically say two or three hours,” Vahabzadeh said. “They don’t realize that it only takes 45 minutes to get to the Eastern Panhandle from Dulles Airport.”

The influx of people and jobs has transformed the area into a showcase for a financially troubled state that has had one of the nation’s highest unemployment rates since the early 1980s.

Much of West Virginia never recovered from the recession of 1981-82. Unemployment in the state’s southern coal fields is running at more than twice the 4.6% rate for the three Eastern Panhandle counties in March, the most recent statistics available.

“The Eastern Panhandle used to be like the rest of the state, either stagnant or declining economically,” said William Miernyk, an economics professor emeritus at West Virginia University.

“You can’t put a specific date on it, but the spillover from metropolitan Washington into West Virginia has been going on for some time,” Miernyk said.

The transformation hasn’t always gone smoothly. Rush-hour traffic jams are now common on some of the area’s narrow, two-lane roads. Classrooms are filled to capacity, and county officials are pressed to keep up with demands for extended sewer lines and additional street lights and trash collection.