Building Connectivity in Suburbia

Building Connectivity in Suburbia

Sunnyvale, Calif., wants to reinvent a 60's-era industrial office park as an innovation district. It's making progress but suburban sprawl is not an easy habit to break.

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The Great U.S. 460 Swamp

The Great U.S. 460 Swamp

VDOT had loads of warning that wetlands could kill the U.S. 460 project but the state charged ahead with a design-build contract that everyone knew could explode.

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Coming up: Car-Lite Burbs

Coming up: Car-Lite Burbs

A California developer is teaming with Daimler AG to bring buses, shuttles and ride sharing to an Orange County community -- with no government subsidies.

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Putting the “Garden” in Rain Garden

Putting the Garden in Rain Garden

Soon Virginians will start spending billions to meet tough storm-water regs. Lewis Ginter Botanical Garden wants to show how we can save the bay – and look really good doing it.

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Tech Insurrection

Tech Insurrection

Smart cities, says Anthony Townsend, will be forged by geeks, activists and civic hackers through bottom-up technological innovation.

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Redefining Richmond: Arts! Culture! Food!

ICTby James A. Bacon

Richmonders berate themselves (and outsiders mock them) for their inability to decide where and how to build a baseball stadium for a AA baseball team. If the region’s political and civic leadership can’t pull off this most basic of regional tasks, one might legitimately wonder if they can accomplish anything useful at all. But it turns out that Richmonders can mobilize behind civic projects — it just has to be the right kind.

A case in point is Virginia Commonwealth University’s Institute for Contemporary Art, which has raised $33 million of its $37 million funding goal. Construction of the facility, designed by an award-winning New York architect, is located at Belvidere and Broad, one of the region’s busiest intersections and a gateway to downtown. This project, which will showcase art from VCU, one of the nation’s leading art schools, has not been controversial at all. Funds were raised through contributions by local philanthropists. With help from a construction loan from the VCU Foundation, construction began in June.

A city and region define themselves by the long-term investments they make in civic infrastructure. To pick a very different example: Buffalo, N.Y., a region of comparable size to Richmond, has poured money into a pro football complex downtown more magnificent than anything than Richmonders could conceive of erecting in their own city — and locals still aren’t satisfied. Buffalo groups are exploring an even more grandiose facility. Richmond has nothing to compare. But it does have arts and culture out the wazoo. And we locals like it that way.

Speaking to the Richmond chapter of Commercial Real Estate Women, Institute Director Lisa Freiman outlined the vision. As reported by Virginia Business, the institute will  showcase a changing array of exhibitions not only by VCU artists “but the best of contemporary art from around the world.” Freiman predicts that the facility “will create opportunities for cultural tourism and community revitalization.”

The tie-in between contemporary art and economic development is stronger in Richmond than it would be in many other regions. The advertising industry is remarkably vibrant for a region Richmond’s size. Local companies serve national clients, and they employ artists, graphic artists, videographers and the like. There is a easy, natural cross-over between the art world and the advertising world. Supporting one supports the other.

rappahannock

Travis Croxton (left) and Ryan Croxton, owners of the Rappahannock restaurant. Photo credit: Times-Dispatch.

Meanwhile Richmond — and Virginia as a whole — is developing the reputation as an up-and-coming foodie region. Esquire Magazine has just named Virginia “The Food Region of 2014″ in its 2014 Food and Drink Awards. “The Old Dominion has seemingly overnight exploded into one of the country’s greatest gastro regions,” writes the magazine, as reported in the Times-Dispatch. While the recognition goes to Virginia as a whole, Richmond is a vibrant part of the state’s foodie scene. Rappahannock restaurant won recognition as one of the 12 “Best New Restaurants” in the country.

The article cited Virginia’s diverse geography and the ability to source fresh, locally grown produce and artisinal food products from the mountains to the Chesapeake Bay as a big plus for restaurants aspiring to national quality. I’m sure that’s a factor, but I think the story is bigger than that. Richmond and Virginia produce great restaurants because the local marketplace supports them. People are willing to pay premium prices that restaurants must charge in order to recruit and pay chefs of national caliber.

New Yorkers and Washingtonians may laugh at Richmond’s pretensions in the worlds of art and cuisine — to many we’re still a hicksville backwater still fighting the Civil War. What they don’t see is how the region is steadily reinventing itself. Once the city prided itself on being a regional center of corporate headquarters. That prop to the economy suffered heavy damage during the recession of 2007-2008 and has been slow to recover. But there has been tremendous activity beneath the surface. Redevelopment along the downtown canal. The Richmond Folk Festival. Converting the James River into the region’s “Central Park.” The boom in downtown living. The French Film Festival. The gentrification of Church Hill and Scotts Addition. The creation of a fantastic network of mountain biking trails. The rise of the foodie movement and the renaissance of locally grown food.

Unconsciously, Richmond has been building the foundations of the “creative class” economy. It’s becoming the kind of place where creatives want to live, work and play. When creatives settle here, they start new businesses. In time, some of those businesses become success stories and economic dynamos that will propel regional growth. VCU’s Institute for Contemporary Art symbolizes how Richmond is redefining itself as something very different and very new.

The Forbidden City Comes to Virginia

forbidden cityBy Peter Galuszka

The Forbidden City has come to Virginia and it’s definitely worth a look.

Rarely-seen works from the Palace Museum in Beijing’s Forbidden City, the imperial residence of Chinese emperors from the Ming to the end of the Qing Dynasty (roughly from about 1406 to 1912) go on display tomorrow at the Virginia Museum of Fine Art in Richmond.

Putting the exhibits together took lots of work and diplomacy, VMFA Alex Nygeres told guests and the news media Wednesday at a morning event. There were plenty of visits back and forth and there are plans for the VMFA to reciprocate by sending its famed Faberge Egg exhibit from the Russian Romanov era to China. The Ambassador from the People’s Republic of China to the U.S. attended a gala, $10,000 a table event the evening of Oct. 14.

I’m no expert of Chinese art, but the exhibit was highly impressive. The many works included court paintings, religious artifacts and costumes, including an early form of body armor for soldiers which consisted of layers of tough cloth protecting vital organs and appendages.

The exhibit opens at a time of unsettled relations between the U.S. and the People’s Republic. China has been torn by pro-democracy protests in Hong Kong. Workers’ expectations are rising as China’s economy is slowing. Beijing is becoming more aggressive as a regional military power and its efforts to censor Web-based information and launch cyber spying are worrisome.

Another issue is that given the tough, expansionist diplomacy of Russia’s Vladimir Putin and the negative reaction from the West, Moscow is looking for more links with China. Relations between the two have always been up and down. Not that long ago, experts believed that if there were a nuclear weapons attacks, it might occur between those two countries. Now, peace has returned and both may be able to exploit their close geography and relative strengths in energy and population in a way based on economics and not Communist ideology.

On the bright side, China does have money and is fast developing expertise. China’s Shandong Tranlin paper company is investing $2 billion in a modern paper plant in eastern Chesterfield County that will employ 2,000. It won’t use trees, but leftovers from farm fields and is supposed to be less polluting than paper mills most Americans are familiar with. What’s more, Gov. Terry McAuliffe is off on a trade mission to China in a few days.

In any event, the Forbidden City is worth a look. It runs until Jan. 11.

Woo hoo! Giving Money to Rich, Out-of-State Capitalists Is Fun!

Richmond Mayor Dwight Jones (left) and Governor Terry McAuliffe.

Capitalist benefactors: Richmond Mayor Dwight Jones (left) and Governor Terry McAuliffe.

Richmond is home to numerous craft brewers: Legend Brewing, Triple Crossing, Richbrau, Strangeways and Hardywood Park, just to name five that show up on the first page of a Google search. But when it comes to rolling out the red carpet, state and local government is lavishing its favors upon Stone Brewing, of Escondido, Calif. — $23 million in City of Richmond bonds to build the brewery, $8 million to build a restaurant, $5 million from the Governor’s Opportunity Fund and potentially $250,000 from the Governor’s Agriculture and Forestry Industries Development Fund.

Admittedly, none of the local brewers have achieved the scale of Stone Brewing, which announced last week that it would invest $74 million in Richmond, creating 300 jobs. In a state economy struggling for traction, Stone’s announcement is the fifth largest economic development deal (ranked by investment) so far this year.

But the massive loans and subsidies raise a number of issues of equity and fairness, as Bart Hinkle noted one such issue in his Times-Dispatch op-ed this morning:

Stone executive Steve Wagner says other factors determined its final decision: water supply, wastewater capacity and proximity to suppliers. If that’s true, then Richmond should have been able to land the brewery without the handouts. It’s bad enough to think officials felt they had no choice but to offer Stone public inducements. It’s even worse to think the inducements were necessary.

Hinkle also wonders, as I do, how the home-grown brewers feel about the special treatment accorded their potential competitor. While the Stone Brewing brewery will serve a wider East Coast market, its restaurant will compete more directly with local brew-pubs. And, really, how many brew pubs can a city Richmond’s size support? Will Stone Brewing’s presence crowd out local players? Nobody knows but it’s a risk worth pondering.

There’s one other issue: Richmond apparently will be issuing $31 million in municipal bonds to help finance construction of the brewery and the restaurant. The city has finite borrowing capacity. If it borrows $31 million to back the Stone project, that’s $31 million it cannot spend elsewhere without endangering its AA+ (Standard & Poors) bond rating. This is a city, mind you, that wants to issue bonds for an $80 million baseball stadium and redevelopment project in Shockoe Bottom, $8 million to create a Bus Rapid Transit system along Broad Street, spend millions more to the city bicycle-ready for an international bike race in 2015, push ambitious housing-redevelopment and neighborhood-revitalization goals the city’s East End, support a new children’s hospital, and presumably pursue other capital improvement projects and economic development opportunities as opportunities arise.

Its good that Mayor Dwight Jones has a can-do attitude. But the city needs to pick its projects wisely. It needs to leverage its public investment to the max. And it needs to keep some powder dry for other opportunities that may appear. The best criteria to adopt when investment public dollars is this: Would I invest this money if it belonged to me? Am I maximizing  risk-adjusted Return on Investment? I have seen no evidence that the Stone Brewing deal would pass that test.

– JAB

Virginia Tech: What a Difference a Decade Makes

Tech_robotics_lab

Virginia Tech robotics lab

It’s probably been a decade since I’ve been to Virginia Tech. I spent a year living in Blacksburg about 30 years ago and I visited with some frequency during my tenure as editor and then publisher of Virginia Business magazine, but I haven’t had much cause to return to Hokieland recently until this weekend when the Bacon family visited to expose the Bacon male progeny, who has expressed an interest in pursuing an engineering career, to the top engineering school program in Virginia. (Sorry, Wahoos, but it’s true, Tech engineering is No. 1 in Virginia.)

It is remarkable what has transpired in Blacksburg in a mere decade — both in Virginia Tech and the surrounding town. Slowly but surely Virginia Tech continues to gain ground against other engineering schools in the hyper-intense competition for resources, cutting-edge programs and prestige. Tech ranks in the top 50 nationally for total R&D expenditures but the College of Engineering ranks among the Top 10 undergraduate engineering programs in the country.

The College of Engineering also has generated considerable spin-off economic activity. We’re not talking Boston or San Francisco-style impact, but Tech’s Corporate Research Center — in essence, a corporate park for companies interacting with the university — has grown to 31 buildings employing 2,700 employees. That’s small potatoes compared to, say, Northern Virginia, but it’s pretty darned impressive for Southwest Virginia. Indeed, the performance is all the more impressive considering the fact that Tech is not situated in a major labor market, is geographically remote and has lousy airline service.

One benefit of Tech’s isolated location is that the physical setting of the New River Valley is stunningly beautiful. And I’ll say this about Tech’s campus: It may not have the world-heritage quality of the Thomas Jefferson-designed Rotunda and Lawn of the University of Virginia, my alma mater, but university leadership has done a superb job of maintaining architectural continuity over the years — all buildings are built of Hokiestone. I hesitate to say so but the Virginia Tech campus overall is more aesthetically pleasing than the hodge-podge of UVa outside of the Rotunda-Lawn core. Furthermore, the Hokies have paid close attention to the art of “place making” over the past couple of decades. The campus is much more inviting in many small ways than it was when I saw it last.

Another virtue is that the town of Blacksburg has been evolving in a positive way. County planners have permitted developers to increase the density of buildings around the perimeter of the campus. Far more apartments and commercial establishments are within walking and biking distance of the Virginia Tech campus than there were when I last visited. The town has replaced two busy signalized intersections with roundabouts, and I spotted a couple of tandem buses rolling through town.

My main concern is that Blacksburg’s prosperity is built upon a mountain of student indebtedness. But rising tuition is hardly unique to Virginia Tech.  Indeed, the College of Engineering probably could do just fine catering to out-of-state students willing to pay significantly more than in-state students do. The College of Engineering does not charge what the market would bear, to the benefit of thousands of Virginia students. All things considered, I’d be delighted if the Little Porker ended up at Virginia Tech.

Update: The densification of downtown Blacksburg continues apace. Town Council approved 4 to 3 yesterday (Oct. 15) construction of a 37-bedroom, four-story condominium on the edge of downtown. The project had stirred controversy because it bordered a neighborhood of single-family houses. The developer argued that the condo would be located within walking distance of Virginia Tech and downtown.

There’s plenty more room for Blacksburg to densify without impinging upon old neighborhoods — just up-zone the Main Strip commercial strip. Vast acreage there is dedicated to parking lots and low-rise shopping centers. If the town council encourages mixed use and runs those tandem buses down Main Street, it can accommodate the town’s population growth for many years to come.

– JAB

Virginia Tech campus -- very bike friendly

Virginia Tech campus — very bike friendly

Why We’re Being Railroaded On “STEM”

 csx engineBy Peter Galuszka

When it comes to education, a constant mantra chanted by the Virginia chattering class is “STEM.”

How many times have you heard that our students are far behind in “STEM” (Science Technology Engineering and Mathematics)? We have to drain funding from more traditional areas of study (that actually might make them better human beings like literature, art or history) and give it to STEM. The two types of popular STEM are, of course, computer science (we’re all “illiterate” claims one journalist-turned computer science advocate) and biotechnology.

But how important is STEM, really? And if Virginia joins the STEM parade and puts all of its eggs in that basket, will the jobs actually be there?

The fact of the matter is that we don’t know what jobs will be around in the future and like the famous generals planning for the last war, we may be stuck planning for the digital explosion of Bill Gates and Steve Jobs that is like, so, 25 years ago.

To get an idea where markets may be, look at today’s news. Canadian Pacific is making a play for CSX railroad (headquartered in Richmond not that long ago) because of the unexpected explosion in fracked oil.

CP handles a lot of freight in the western part of Canada and U.S. where some of the most impressive new fracked shale oil are, namely the Bakken fields of North Dakota and Alberta. CP wants access to eastern U.S. refineries and transshipping points, such as a transloading spot at the mouth of the York River. CSX is stuck with dirty old coal where production and exports are down, although it has an extensive rail network in the Old Dominion.

The combined market value of the two firms is $62 billion — a far bigger potential deal than the $26 billion Warren Buffett paid for Burlington Northern Sante Fe in 2010. There are problems, to be sure. CSX isn’t interested and the Surface Transportation Board, a federal entity, nixed a matchup of Canadian National and Burlington a little while back.

But this isn’t really the point. The point is that the Old Steel Rail pushed by new sources of oil and to some extent natural gas has surprisingly turned domestic economics upside down. Many of the new oil fields are in places where there are not pipelines, so rail is the only answer. In 2008, according to the Wall Street Journal, six or so American railroads generated $25.8 million in hauling crude oil. Last year that shot up to $2.15 billion.

So, what does that mean for students? A lot actually, especially when we blather on about old-style STEM that might have them inventing yet another cell-phone app that has a half-life of maybe a few months. Doesn’t matter, every Virginia legislator, economic development official and education advocate seems to be hypnotized by the STEM genie.

A piece I just did for the up-and-coming Chesterfield Observer on vocation education in that county:

“The recent push to educate students in so-called STEM (Science, Technology, Engineering and Mathematics) may be case in point. The goal is to churn out bright, highly trained young people able to compete in the global economy with their counterparts from foreign lands.

“A subset of this area of concentration is computer science, which goes beyond knowing the basics and gets into the nitty-gritty of learning code and writing computer languages. By some accounts, such skills will be necessary to fill more than 2 million jobs expected to become open in the state by 2020.

“Critics question, however, if overspecialization in technology at earlier ages prevents students from exploring studies such as art and literature that might make them better rounded adults. And, specialization often assumes that jobs will be waiting after high school and college when they might not be.

“Peter Cappelli, a professor of management at the Wharton School of the University of Pennsylvania, has written about such problems of academic overspecialization in national publications such as The Wall Street Journal. He recently responded to questions from the Chesterfield Observer via email.”

“Not many science grads are getting jobs in their field,” Cappelli says. “The evidence suggests that about two thirds of the IT (information technology) grads got jobs in their fields, about the same for engineering. There is no guarantee in those fields. It’s all about hitting the appropriate subspecialty that happens to be hot. There are still lots of unemployed engineers and IT people.”

So there you have it. In my opinion, the over-emphasis on STEM training has the unfortunate effect of producing young adults who have one goal in mind – getting a job and making money, not helping humankind. And, if you insist on STEM, why not branch into something where there are actually jobs namely petroleum engineering, geology and transportation engineering.

I’ll leave the dangers of added petroleum cargoes in trains to another post.

Zydeco Comes to Richmond

 

Dopsie3Another reason why I love this town: The Richmond Folk Festival. When my wife and I arrived in downtown Richmond last night, an infectiously fun Dominican merengue band was playing, and I wondered how the final act could possibly top it. I need not have worried — the final act was Dwayne Dopsie & the Zydeco Hellraisers, a New Orleans legend. Accordionist Dwayne Dopsie is one of the great live musical performers in the United States. For Dopsie, playing the accordion is a physical workout. By the end of the show, he was drenched, literally wringing sweat from his shirt. He and washboard player Paul LaFleur descended from the state into the audience to play the final song and engage in some foot-stomping fun. The Folk Festival is a fantastic event and every Richmonder should support it.

– JAB

The Uphill Climb for Virginia Schools

by James A. Bacon

Why aren’t we making more progress improving the academic performance of Virginia’s school children? Many reasons have been advanced. Some say that school divisions don’t get enough money or that the money is unfairly distributed between schools. Others say that the public school system is over-regulated, bound by bureaucracy and resistant to innovation. Yet others blame society at large (sliding work ethic, the distraction of electronics) or point to the different emphasis on education among different racial/ethnic groups.

But there is another explanation that gets very little attention. Could the root of the problem be demographic? Could Virginia schools be struggling to raise academic achievement scores because school children increasingly are drawn from the ranks of the poor?

The correlation between poverty and socioeconomic status is well known. The challenges of poverty and economic insecurity — homelessness, frequent moves between school districts, family dysfunction, domestic violence, inadequate nutrition — distract poor children from focusing on school work. There is a cultural overlay as well: Because poor children tend to come from less educated parents, they grow up in households where reading is not emphasized and academic achievement is not stressed.

It is an indisputable demographic fact that poor women bear more children than middle-class and professional-class women. According to “Fertility of American Women: 2008,” published by the U.S. Census Bureau in 2010, the breakdown by income category looks like this:

fertility_by_income

The poorest women, typically unmarried women, have the most children. Not only do they tend to have more children, they tend to have them at younger ages than higher-income women who typically wait until they complete their educations and get married before bearing children. Thus, to cite an extreme example, a poor family in which successive generations of women give birth at age 18 produce two generations of offspring in the same length of time as a more affluent family in which a woman has her first child at 36.

When poor women give birth to more children and they do so at an earlier age, the result is that the student body of school systems is significantly poorer than the population at large. Here is a list of the 10 Virginia school divisions with the largest gaps between general poverty rate and poverty among children under 18 (a proxy for the poverty rate of children in the school system):

largest_poverty_gaps

Source: 2012 U.S. Census Bureau data

The same pattern prevails in every school division in Virginia with the exception of five small localities with large university populations in which the number of “poor” is skewed by the presence of college students. (To see the poverty gap for all Virginia school divisions, click here.)

Even with a fair amount of upward economic mobility — poor people lifting themselves out of the ranks of the poor — the tendency of the poorest women to bear more children at a younger age continues to fill up school houses with their poor progeny, with all the economic and cultural disadvantages they suffer. I subscribe to the idea that many school divisions could be doing a better job with the resources they have — the horror stories I could tell you about the City of Richmond school system! But the problem is bigger than bad schools, bad teachers or inadequate funding.

The question that should concern us all: Will the trend of schools filling up with poor children get better or worse over time?

Bonus question: What does this mean for the ongoing debate on the war on poverty? Does the persistence of widespread poverty in the U.S. represent a failure on the part of U.S. institutions to foster upward economic mobility? Or does it reflect the fact that poor people replenish their ranks faster than people can raise out of poverty?

“The Icy Elegance of Arthur Ashe”

Arthur-Ashe-2 By Peter Galuszka

 Arthur Ashe is one of the finest athletes Virginia ever produced and is well known for his work in social and social justice. There have been been many books written about him, including his autobiography, but here’s one of the latest, written by a professor at Georgia Southern University. Here’s a book review I did for Style Weekly:

The Life magazine cover photo from Sept. 20, 1968, nails it.

In traditional tennis whites contrasting against his dark skin stands a lean, intense, Richmond-born athlete at the net clutching a tennis racket. The headline reads: “He topped the tennis world. The Icy Elegance of Arthur Ashe.”

Ashe was all that and more. He spent his childhood hitting the ball about segregated Brook Field Park in Richmond’s North Side and endured decades of racism at home and abroad. By 1968, he was using his vicious backhand and killer serve — 26 aces in one match — to become the first black player to win the U.S. Open. It was just one rung on a marvelous tennis career in a sport that had been almost completely closed to members of his race.

Ashe was anything but conventional. His father, Arthur Sr., was a strict disciplinarian who taught him courtesy and responsibility. As a gentlemanly young player in the 1950s, he quietly endured insults from the likes of the Country Club of Virginia, where he was unwelcome to play in city tournaments. He ended up working the all-black American Tennis Association circuit before finally escaping Richmond’s racism to St. Louis and then the University of California at Los Angeles, where he emerged as a top U.S. Davis Cup team member.

Along the way, he slowly developed a sense of social justice that burned in him until his death in 1993 from AIDS, which he acquired in a blood transfusion during heart surgery. Ashe’s rise as an activist against racism is well documented in Eric Allen Hall’s new book, “Arthur Ashe: Tennis and Justice in the Civil Rights Era,” (Johns Hopkins University Press). It should be of special interest locally, with Ashe’s statue standing in marked contrast just down Monument Avenue from the Confederate generals.

To read more, click here:

Burbs Beware: Office Jobs Moving Back to D.C.

dc_office_spaceNot only are Millennials migrating to the Washington metropolitan region’s urban core, it seems that businesses are, too, in a reversal of the decades-long trend of businesses moving out of the central city to outlying counties.

Vacancy rates have risen in Washington, D.C., due to the contraction of legal services and government contracting tied to federal government spending. But according to commercial real estate firm JLL, private-sector tenants from Maryland and Washington accounted for 300,000 square feet of new leasing activity in the District. Reports Virginia Business magazine:

Doug Mueller, a senior vice president at JLL, noted that the migration is heavily populated by associations, technology companies and professional services firms. “The quality and location of office space with easy access to mass transit, abundant amenities and housing options also has a visible and tangible impact on attracting and retaining top talent,” he said in a statement.

According to JLL’s Office Insight report for the third quarter, since the start of 2014, a total of 21,200 private-sector office jobs have been added to the metro D.C. economy.

In an office market with tens of millions of square feet of space, 300,000 square feet is a rounding error. What’s significant is not the volume of space being occupied — although 21,200 office jobs is nothing to sneeze at — but the trend: jobs migrating back to the urban core. For decades, Virginia enjoyed a huge competitive advantage over the District with its dysfunctional government, poverty, crime and decaying neighborhoods. Now, despite bad schools, high taxes and expensive real estate, D.C. has something that educated Millennials and the businesses that employ them are looking for — walkable urbanism.

Next question: Is this trend unique in Virginia to the Washington metropolitan region or is it occurring in Hampton Roads, Richmond and the smaller metros as well?

– JAB

How to Revive a Lagging Regional Economy

Graphic credit: James V. Koch and Gary W. Wagner. Click to enlarge image.

Graphic credit: James V. Koch and Gary W. Wagner. Click to enlarge image.

by James A. Bacon

Dr. James V. Koch’s “The State of the Region: Hampton Roads 2014” report probably won’t get much attention outside of Hampton Roads, but it should. Not only is Hampton Roads the state’s second largest metropolitan economy, which means that its fortunes and misfortunes send large economic ripples across the state, but Koch’s observations about the region’s antiquated approach to economic development apply to many places in Virginia.

The message delivered by Koch and co-author Gary A. Wagner to an audience of more than 1,000 at the Norfolk Waterside Hotel was none too encouraging. After getting clobbered during the recession of 2007-2008, the Hampton Roads economy has been slow to bounce back. Employment growth has trailed state and national averages by a wide margin, as shown in the graph above. The stagnation in job growth can be explained in large measure by the impact of defense cutbacks on the region’s largest industry, the military. Comparing Department of Defense procurement awards 16 months pre- and post-sequestration (March 2013), Hampton Roads was down 24.4%. Moreover, sequestration will continue to squeeze as the military downshift continues and the Pentagon shifts its strategic focus to Asia.

“I think the Hampton Roads region is just starting to feel the effects of sequestration,” Wagner said in his presentation, according to an ODU recap.  “And as bad as things are (because of forecast freezes in DOD spending for the next two years) it could get worse. It’s a bumpy couple of years ahead for Hampton Roads.”

The Port of Virginia is a bright spot. After losing market share following the recession, the port reversed course and regained market share for three years running and now commands 17.2% of the East Coast market, a new peak. The expansion of the Panama Canal, which will encourage the use of more big ships, will confer a competitive advantage to the deep-channeled Virginia ports for a few years at least. But another traditional industry, tourism, remains stuck below its 2007 apex, as measured by hotel revenue. And housing prices have recovered less than a third of the value lost during the housing bust; the number of distressed homes, while improved,  remains historically high.

There are no “quick fixes” for what ails the Hampton Roads economy, Koch said. The region needs to adopt a long-term perspective.  “The bottom line is that economic development is a long-term process.” The region needs to invest more in projects with a long-term payoff like K-12 education, infrastructure and research and less in high-visibility projects like convention centers, hotels, arenas and entertainment centers. “We delude ourselves if we think we can short-cut [the economic-development] process by constructing flashy facilities that primarily redistribute income within our own region.”

The conventional wisdom on economic development “is no more,” he declared.  For decades, “economic development” in Hampton Roads, as across Virginia,  focused on attracting new firms and to do what it took — offering land, tax incentives, etc. — to attract them. But abundant research indicates that 80% to 85% of locational decisions are not influenced by such give-aways. “Incentives” amount to a wealth transfer to businesses that would have made the same decision anyway.

The hot idea in economic development today is growing businesses locally — economic “gardening,” to use a term coined by David Birch in the 1980s. Make life easier for small businesses by giving them access to high-speed Internet connections, providing cheap or temporary space, and connecting them to academic, financing, engineering and marketing resources. While most small businesses stay small, some become growth stars that account for immense investment and job creation.

Hampton Roads, always a laggard, recorded the lowest level of business start-ups among nine Virginia regions from 2010 to 2012. Rather than subsidizing selected businesses, Koch advocates an approach of identifying impediments to growth and helping firms overcome those impediments. “What would it take for one of our new, small microbreweries to grow and access new markets? For Liebherr to develop and implement a new cost-saving technology? For BAE Systems to become a major player in off-shore wind generation? Let’s find out! Let’s garden our regional economy.”

Among other ideas Koch explored: creating “innovation districts,” where knowledge-based start-ups are clustered geographically, often in proximity to a research university, where easy interaction stimulates innovation;  promoting university Research & Development at ODU, Eastern Virginia Medical College and the College of William & Mary; and supporting job and skill development programs and apprenticeships.

Bacon’s bottom line: Koch is spot-on about the need to think differently about economic development in Virginia. At the top of the list of bad public investments — let’s call a spade a spade… of stupid public investments — are glitzy convention centers, arenas and sports centers. For the most part, all they do is redistribute entertainment dollars within a region at great public cost. If a region is prosperous and a market exists, the private sector will build those facilities on its own. Second on the list of bad public investments are “incentives” for attracting new businesses. Most of that money is wasted. Better to invest in helping citizens gain the education and skills they need to compete in a knowledge-based economy.

Now, if only we could persuade Koch to apply his keen analytical insights to understanding the pervasive effect of human settlement patterns on a region’s economic competitiveness. Then we’d really be getting somewhere.