Hampton Roads: Bad For Business? — Part 1

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PORTSMOUTH, Va. (WAVY) — When you think about all the positive assets in Hampton Roads such as the Port of Virginia, Naval Station Norfolk, the Oceanfront, tourism, quality of life, affordable housing, it is stunning that the area is so far behind in job creation. 

All you have to do is look at recent statistics from the U.S. Bureau of Labor Statistics to see what’s wrong.
 
When you look at chart of job growth in similar type communities since the first quarter of 2009, Hampton Roads is dead last. 
 
Hampton Roads is behind Nashville, Orlando, Raleigh, Charleston, Charlotte, Jacksonville, Detroit, Greenville, Richmond and Baltimore.  We are dead last, even behind Richmond, which takes many of our workers, and Detroit. 
 
There are two major factors for this:  The area has failed to create one new net job in 10 years. Job growth has flatlined since 2008.  It is a straight line, and Hampton Roads is actually slight lybelow where it was 10 years ago. 
 
Making matters worse, Hampton Roads’ bread and butter, the military, lost 29,280 uniformed jobs since 2003 due in part to sequestration.
 
Civilian job growth has also been anemic — there hasn’t been any.
 
Jim Spore is President and CEO of Reinvent Hampton Roads, and calls it “Lazy Region Syndrome.” 
 
He says Hampton Roads is too dependent on the port, military, tourism, “We’ve been vastly underperforming other regions around the country in terms of income growth, job growth, and just general prosperity.” 
 
Why is that? Experts say the top reasons include:
 
  • Being dependent for too long on federal defense spending
  • Being a splintered community, fragmented based on city and county boundaries.
  • An unwillingness to properly invest to diversify
  • A lack of enough adequately skilled workers
  • Local small firms aren’t spinning out enough more small firms
 
And perhaps most importantly, many believe the area has ineffective leadership.   
 
Rick Weddle is president of the Hampton Roads Economic Development Alliance.
 
He has turned around cities like Orlando, Raleigh, and Phoenix, but he calls Hampton Roads his toughest challenge due in part to our economic development culture.
 
“I don’t see public leadership being as engaged interactively at the regional level as they should be, and I don’t see business leaders really requiring and engaging and bringing about the kinds of things that need to be done.”
 
In a recent interview, Weddle compared the business leadership climate to the other places he’s worked in economic development.
 
“We would not have gone ten years without creating a job.  If we had just gone three or four years without a new job the business leaders in (Orlando, Raleigh, and Phoenix) would have had hair on fire. They would be here saying ‘get in this room, let’s get this done, let’s organize, we have to change this.’ ” 
Weddle does not see the same urgency here. 
 
Weddle also blames the water that defines us, Southside and Peninsula, as also a curse that divides us.
 
“There is insufficient trust between business leaders and government leaders on the Peninsula and Southside.”
 
Weddle calls our borders a “cone of silence.” 
 
“We don’t celebrate each other’s success.  It’s almost like we are in a zero-sum gain.  If they are winning, then it is at our expense,” Weddle said.
 
For an example, on March 15, 2016, ADP announced 1800 “high paying jobs” and it was called the largest economic development announcement in a generation.
 
It was not considered a regional win, only a Norfolk win.  According to the ADP invitation list, there was not one elected public official from another locality on that list, though there may have been other invite lists. 
 
10 On Your Side went back and looked at video of the event, and only Norfolk officials, and then Governor Terry McAuliffe, were spotted.
 
Weddle sums that up with this, “It was Bette Midler who said ‘the trouble with success is finding someone who is happy for you.’ Well, we are not happy in Hampton Roads if another community wins,” Weddle said.
 
Economically, these days everyone’s happy in Charleston, South Carolina. That is along way from 
1993, when BRAC shut down Naval Station Charleston. 
 
Weddle remembers that lesson learned in Charleston.
 
“They pulled together, and organized.  They funded,  and started working together.  They were not opposed to each other. They got on a plan, and worked the plan, and over a period of time they began to have success.”
 
Today, Charleston has a Boeing Plant and a Mercedes-Benz Vans plant, and Charleston’s job creation dwarfs the much larger Hampton Roads.
 
In March 2015, the head of Mercedes-Benz Vans  said why they chose to invest $500 million in a new manufacturing plant in Charleston, and some of those reasons we lack.
 
Vans Volker Mornhinweg said, “Charleston is an excellent location for our new plant.  The region has very highly-skilled workers, a dense network of reliable suppliers, and an outstanding logistics infrastructure that includes good transport connections to the nearby harbor. 
 
Just as important is the very good cooperation and support we’ve experienced at the local, municipal, and state levels.”
 
10 On Your Side ran that quote by Weddle and these were some of his responses to the reasons Charleston got the Mercedes-Benz Vans plant comparing Hampton Roads and Charleston: “We have highly skilled workers.  They are all working.  We have lost a lot of mid-level workers age 35-54 … we do not have dense cluster supporting the different industries.  We have much work to do with that … we do have an excellent port, but we do lack available developed properties along those infrastructures to locate in … we have not yet learned how to become competitive for commercial operations. Period.”
 
Norfolk did have a Ford Assembly Plant, but that closed down in 2007, with 2,400 employed at the time of the first announcement of closing.  
 
It appears Charleston is ready, and Hampton Roads isn’t.  Virginia does not have any land inventory of shovel ready sites larger than 100 acres to lure a company like Mercedes-Benz Vans. Weddle says these sites today must be ready in four months to get the deal done. 
 
John “Dubby” Wynne is Board Chairman of Reinvent Hampton Roads, “If you are looking for Port cities like Charleston and Savannah you have to be very aggressive in getting sites and locations with jobs.” 
 
10 On Your Side asked, “how come we aren’t doing that?  Why aren’t we doing that?”
 
“How do I know that?  We haven’t done it,” Wynne replied. “That’s the problem, we need to do it,” Wynne said.
 
By the way you might want to know this, the state marketing budget for economic development is zero dollars.
 
After two years leading the Hampton Roads Economic Development Alliance, Rick Weddle is frustrated.  
 
Economic development is not falling into place like he thought it would, “I feel a lot like the messenger that everyone wants to shoot.”  10 On Your Side asked if he feels alone.
 
“I do feel alone in calling attention to the problems as they are in a real world, not as we wish they were.”
 
10 On Your Side asked Dubby Wynne to paint a picture of Hampton Roads if we don’t fix what’s wrong. 
 
It appears dire and unimpressive, “We would continue to have declining out migration. (People continuing to leave to go to places like Charleston, Richmond, Northern Virginia.)  We would have some companies that would think about leaving that are significant.  We would have a declining economy, so there would be less to invest.  We wouldn’t be able to keep your children after they get out of school, and go to college, and so forth because there wouldn’t be any opportunity for them.  Is that a place you want to live? I don’t think so.”
 
10 On Your Side is not only finding what’s wrong with the area.
 

During the next two weeks we’ll look at what’s going right in Hampton Roads and what’s being done to fix things in Andy’s reports on Wednesday, May 16, and Wednesday, May 23. 

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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