Virginia Beach threatened to walk away from a regional economic development group. Now it wants to see a return on its investment.
Taxpayers in Virginia Beach are collectively paying half a million dollars a year to be part of an economic development organization that aims to bring jobs and business to Hampton Roads. But city officials have questioned whether Virginia Beach has been getting its money’s worth from the Hampton Roads Alliance.
Concerns about the nonprofit organization’s performance prompted the city to withdraw from a membership agreement that was expiring. The alliance, led by a former Virginia Beach deputy city manager, worked to get the region’s largest city to renew its commitment — and succeeded. But Virginia Beach wants more proof that its half-million-dollar investment is paying dividends.
“It costs us a lot of money to belong to that, and we just want to make sure we get the bang for the buck,” Mayor Bobby Dyer said at a City Council meeting earlier this year.
Thirteen local cities and counties make an annual contribution to the alliance. The amount is based on the populace, at $1 a head, making Virginia Beach — the region’s most populated city — the largest contributor.
In a last-ditch attempt to rescue the relationship, Doug Smith, president and CEO of the alliance, met with Virginia Beach city leaders this summer, including City Manager Patrick Duhaney, Economic Development Director Taylor Adams and Councilmen John Moss and Michael Berlucchi. The head-to-head negotiations worked, and Virginia Beach is back on the alliance’s municipal roster.
“We hammered out the nuts and bolts,” Smith said.
The organization, which has previously faced criticism about its effectiveness, is not out of the woods yet. It must meet certain metrics in its “master agreement” with localities, including bringing in 150 new business leads and 800 jobs for the region.
The Hampton Roads Alliance is funded by both public and private investments, totaling more than $3 million annually. It formed in 1997 to attract capital investment and create jobs in targeted industries. It currently has 11 staff members and a 13-member board of directors.
Williamsburg, James City County and York County rejoined the alliance in December after a hiatus. Portsmouth dropped out this year due to budgetary concerns, Smith said.
Private investors contribute between $5,000 to more than $100,000. Top members include the Port of Virginia, Sentara and TowneBank.
A 2018 analysis revealed that the region faced sluggish growth, had fallen behind and the alliance needed to do a better job of marketing Hampton Roads to outsiders and foster business retention and expansion.
The alliance makes recommendations about available land and labor force opportunities in Hampton Roads to a state economic development board that deals with corporations eyeing the commonwealth. The organization also networks directly with firms looking to relocate to Virginia.
“We nurture that relationship,” said Smith, who has led the alliance for three years and also formerly worked in high-level roles for Portsmouth and Norfolk city governments. “Our goal is to try to get them here for a site visit.”
He cited an international forum on offshore wind that was held locally last year. The alliance worked with Virginia Beach’s economic development department to bring the event here, Smith said.
In its 2021 annual report, the alliance listed Sunny Farms, a new hydroponic greenhouse producer in Virginia Beach, and Breeze Airways airline in Norfolk among its successes.
The alliance has committed to create jobs with average annual wages of more than $45,000. It will also increase its communication with Virginia Beach by meeting with city officials four times a year, according to a letter from Smith to the city manager.
Moss also wants Smith to provide insight that will make Virginia Beach more competitive in trying to attract businesses.
“What about the deals we didn’t get; why didn’t we get those?” Moss said.
Dyer praised the “robustness of the discussions” between the council liaisons and the alliance at the July 12 City Council meeting. The body then unanimously voted to stick with it for another year.
Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com
