By
all accounts, the Hampton Roads Economic Development Alliance has
seen better days. Perhaps the mission of the region's marketer is
irrelevant. Perhaps the Alliance is irrelevant.
In
2015, Alliance officials quelled a rebellious constituency and fought
to gain legitimacy again, despite a stormy beginning. And there are
more than two months left in the year.
Darryl
Gosnell, the Alliance's CEO and president, departed in January.
Whether he was forced to resign is still up for debate.
Three
municipalities – Williamsburg, York County and James City County –
left the Alliance earlier this year.
Emails
sent to Tom Elder, the Alliance's executive vice president, were
flagged as undeliverable. Nor is Elder listed on the organization's
website under staff directory, though his LinkedIn profile still
lists him as the Alliance's executive vice president.
Steven
Cook no longer works for the Alliance. The former vice president of
the Alliance now works for Opportunity Inc. of Hampton Roads as the
vice president of Workforce Innovation.
During
a City Council meeting earlier this year, Mayor Paul Fraim demanded
an accounting of the Alliance's return to the city of Norfolk. He
vowed to withhold funds until he was satisfied with the Alliance's
efforts to bring more business to Norfolk.
In
Jan., Virginia Beach Economic Development director, Warren Harris,
said the Alliance should focus on research, targeting industries
compatible with the area, collecting data and analyzing the market,
according to an article in local business publication Inside
Business.
Harris
said at the time that the alliance hasn't delivered a project to the
city in at least five years.
"Re-evaluation
of full support will take place after confirmation of return on
investment," Norfolk spokeswoman Lori Crouch told The
Virginian-Pilot in the same article.
The
Alliance is funded in part by a head tax of 90 cents per person for
each municipality. Prior to the recession, the tax was a $1.00.
Private firms fund the balance of the Alliance's budget.
The
money pays for advertising and marketing campaigns, salaries and
trade missions to other US cities and overseas. Often, Alliance
business managers are accompanied by city economic development staff.
The
role of the Alliance is as the region's chief marketer. The Alliance
can woe investment and firms to the region, but it can't offer
incentives to potential customers, such as grants, the waiver of fees
and other subsidies to land them.
Municipalities
can and do offer incentives, often to the chagrin of other
municipalities whose tight budgets may prevent subsidies or whose
subsidies can't match the payouts, grants and other monetary
assistance of wealthier municipalities.
Municipalities
often question the Alliance's efforts. It has often been criticized
for favoritism based on how much each city pays. The fee schedule
based on population appears to favor municipalities that donate the
most to the Alliance. Yet a more democratic and equitable model has
yet to be introduced and employed.
Virginia
Beach, having the highest population in the region, pays the highest
amount of fees to the Alliance.
According
to figures from the Alliance and the Virginia Economic Development
Partnership, the state's economic development arm, Virginia Beach
outscores every other municipality in the region based on jobs,
investment, openings and expansions.
The
Alliance released a report Sept. 11 showing the “spillover
benefits” of one city on another city, arguing that all cities
benefit from the economic impact of a company opening or expansion.
Economists James Koch and Vinod Agarwal of Old
Dominion University compiled the study, commissioned by the Alliance. The analysis is based on an estimation of income and consumption, not on actual income and consumption.
Virginia
Beach and Norfolk officials seem satisfied with the Alliance for the
present.
“Both
public and private sector investors have worked hard during this
reset period to enhance the value added proposition that the Alliance
can offer to expand our economic development goals,” Harris said in
an email.
Harris
said he received 20 leads from the Alliance during the last fiscal
year, which ended June 30. Virginia Beach, according to Harris, paid
the Alliance the full amount of its commitment last fiscal year.
Norfolk
has paid the entire $230,000 for the last fiscal year commitment to
HREDA, Norfolk spokeswoman Lori Crouch said in an email.
“This
other half was only agreed to following discussions with the interim
head of HREDA, Kevin Sweeney, that real progress on improvements are
being implemented.”
Norfolk
received 47 leads and seven project visits through September, Crouch
said.
"The
marketing of the Hampton Roads region, like all regions, is done best
with a muscular, effective marketing entity funded with the support
of private industry and the cities/counties contained within agreed
upon geographic borders,” Crouch
said.
“Norfolk,
along with our respective municipal neighbors and, more importantly,
the region's private sector, remains committed to working with
HREDA's leadership team to making needed changes ensuring our
investment gives us a greater return. “
“Future
funding at proper levels, based on the right balance of
public/private sector support, is being hammered out among all
parties, with Norfolk playing a key role in these discussions,”
Crouch said.
The Economic Development Scorecard
Openings
and Expansions
| City | 2013 | 2010 |
| Norfolk | 1 | 2 |
| Portsmouth | 1 | 2 |
| Virginia Beach | 21 | 15 |
| Chesapeake | 6 | 15 |
| Newport News | 8 | 3 |
| Suffolk | 5 | 3 |
| Hampton | 7 | 7 |
Investment, Jobs and Openings/Expansions By City
2010-2015
| City | Investment | Jobs | Openings/Expansions |
| Norfolk | $101M | 1,923 | 17 |
| Portsmouth | $39 M | 511 | 13 |
| Virginia Beach | $259M | 5,012 | 108 |
| Chesapeake | $117M | 1,635 | 37 |
| Suffolk | $260M | 1,154 | 33 |
| Newport News | $365M | 1,152 | 17 |
| Hampton | $94M | 1,881 | 29 |