Category Archives: Economic development

Richmond’s Next Chapter

by Jon Baliles

The Times-Dispatch Editorial Board printed a piece this week entitled “The city’s Lost Cause statues are all gone. So what now?” While it recaps the events and protests of 2020 and the fact that all of the former Confederate statues have been removed, it offers a bit more foresight by looking at what will be required of our City and our leaders in the future.

The piece points out that the removal of the A.P. Hill statue was characterized by Mayor Stoney as an opportunity to “start writing a new chapter for the city” and to make the accident-prone intersection more safe. “That’s the blocking and tackling of running a government,” Stoney said. The editorial, however, goes a little deeper than the Mayor:

Charting a new chapter for Richmond, however, requires something more than “blocking and tackling.” In the summer of 2020, a broad coalition of Richmond citizens and public officials — including Stoney — embraced a newfound commitment to breaking down systemic racism and creating a more inclusive, equitable Richmond. In the winter of 2022, we still have little to show for it.

It runs down the list of things that you constantly hear Stoney talking about but providing very little in the way of policy solutions that are implemented and working.

City schools are struggling with a leadership crisis, a teacher shortage and a student population that’s been devastated by pandemic-induced learning challenges. The affordable housing crisis, especially for the poorest Richmonders, has only grown worse. Evictions and homelessness are spiking, with no comprehensive plan to address it. The Richmond Police Department is grappling with more than 150 officer vacancies as gun violence surges — disproportionately impacting Black families, of course — as it begins the search to replace yet another departed police chief.

It talks about the housing crisis, and that apartments are going up with lightning speed in Manchester and Scott’s Addition and (soon) in the Diamond District, while “South Side and the East End are left to fend for themselves. Redevelopment of public housing complexes remain stuck at the starting gate. The new Richmond takes priority over the old.” It does point out some of the positive news we have seen, like poverty dropping to 18% (lowest in two decades) and our “urban cool” is on the rebound as the pandemic years are more in the rearview mirror.

But the thing that struck me the most about this piece is that it is really the first marker of issues that are and will be on the table and need to be addressed in 2024 when the City elects a new Mayor and City Council (in which, I will not be a participant). We have heard lots of talk and seen lots of tweets over the years from the Mayor and others about all they are doing for the City. But we can no longer afford trading real political solutions (including listening, compromise, and common ground) for self-promotion on social media just to rack up more clicks, likes and retweets and counting that as a measure of success.

As Denzel Washington once said, “Just because you are doing a lot more, doesn’t mean you are getting a lot more done. Don’t confuse movement with progress.” Continue reading

Tumblin’ Dice

by Jon Baliles

The casino project proposal in Petersburg was unveiled this week and it is a big one. In poker terminology, it could be considered an “all-in” proposal. The ProgressIndex reports that The Cordish Companies propose a $1.4 billion “‘city within a city’ of entertainment, retail, office and residential property. Its centerpiece would be Live! Casino & Hotel Virginia, a 670,000-square foot complex that would include more than 200 hotel rooms, an entertainment arena, and more than 2,000 slot machines and 60 gaming tables.”

The proposal got the nod from Petersburg City Council this week as they formalized the partnership, but it still has to run the gauntlet at the General Assembly, and then a referendum of the voters in Petersburg. It also has to survive a chess-match of lobbying against Richmond as they try to get their casino off of life support and back to the ballot for the third time after it was rejected by voters in 2021, and then blocked by legislation in the state budget, and then withdrawn from consideration in 2022. Third time is the charm!

The Petersburg project location at Wagner Road and Interstate 95 has a lot of room to grow and the proposal even has a few (but smaller) similarities to the Green City Project in Henrico, except with a casino instead of an arena as its focal point. It, like Green City, will be built in phases and have two hotels and a large retail and residential component.

Cordish envisions building out the development in three phases, with the casino and hotel going up first. The second phase would be growing more retail businesses and possible entertainment amenities such as movie theaters around the casino and hotel. The third phase, according to Cordish, would be development of around 1,300 residential units and an eventual second hotel toward the back of the property. Continue reading

The Trophy in the Middle of the River

by Jon Baliles

Some great news this week about the one thing most everyone can agree on: the James River is awesome, and the heart of the City just got a LOT more awesome. Or at least it is pointing in that direction. Mike Platania at Richmond BizSense reported that The Capital Region Land Conservancy (CRLC) is under contract to buy Mayo Island with the ultimate goal to create public green space. The “CRLC has made an initial security deposit on the island and is currently in the due diligence phase” and expects to close on the property next year.

“If successful … Mayo [Island], that has been long-discussed and long-envisioned for a public space, can now become that in the future,” CRLC Director Parker Agelasto said. “…Mayo is truly going to be the green space that everybody has been yearning for, with a nice walkability from the Hull Street corridor.”

Agelasto added that the CRLC is waiting to hear back from the Virginia Land Conservation Foundation about a grant it applied for that would help fund the purchase. The grant money would come from the state’s Community Flood Preparedness Fund.

“It’s not a guarantee,” Agelasto said. “[But] we feel very good about where we are at the moment.” Continue reading

RVA 5X5: Enrichmond and the City’s Radio Silence

Photo credit: Flickr

by Jon Baliles

I won’t do a “Top Stories of 2022” list for this newsletter, but if I did, one of them would surely be the collapse of the Enrichmond Foundation and the radio silence on all fronts concerning its finances, the groups that depended on it, their assets, and the two historic Black cemeteries in its portfolio — Evergreen and East End Cemetery.

The important question is not so much what happened in 2022 (although that is important); the critical next steps — should anyone decide to take them — are what will happen in 2023?

A brief recap from the October 14 newsletter: “The Enrichmond Foundation was founded in the early 1990s and had grown to support more than 80 small, local, all-volunteer groups that worked to help Richmond in various ways, many of which focused on keeping the City green and clean. Enrichmond allowed the groups to use their insurance coverage and raise tax-free donations, served as a fiduciary for the funds each group raised, and distributed those funds as directed by the groups.

Suddenly in June, the Foundation announced a cessation of operations, leaving no transition plan. The Board voted to dissolve the Foundation but left no accounting of the funds it had in its accounts, and then within weeks the lawyer representing the Board stepped away from his role as counsel.

None of the “leaders” at City Hall has said anything about this. Not. A. Word.

The City’s Parks & Recreation Department has been able to assist some of the organizations, but there are so many they can’t do it all themselves. That’s why the Foundation existed. It is known that the amount of money held in trust for the various “Friends Of” groups is anywhere from $300,000 to $3 million, though I have been told recently that it is closer to the lower estimate.

While the City dawdles, how are these small “Friends Of” groups to do the important work they do (much of it is environmental) if they can’t access their donations? How can they raise money if they have no place to put it? The more this drags out, it is a safe bet those groups will lose volunteers, who will put their time toward other causes. Continue reading

Suggestions to Ease Virginia’s Housing Crisis without Additional State Money

Courtesy californiahumandevelopment.org

by James C. Sherlock

The Richmond Times-Dispatch, on cue, wrote in an editorial the other day that more state money was needed to fund local housing.

Maybe.

But that is not the first place to look.

The governor wants to condition development aid to local communities on their reforming land-use policies to permit more construction.

I have a few ideas along that line.

Proffers, also known as conditional zoning, are a recognition that real estate developments have impacts on other properties and on services provided by the local jurisdiction. Fair enough.

The money for roads, sewers and schools has to come from somewhere. Proffers make the developers and their customers pay for a share of capital improvements deemed necessary by city/county planners.

Wielded unpredictably, and sometimes unethically, they are also part of the problem. See the excellent article Politics and Proffers by Matt Ahern for the games played with proffers and their cost to the housing economy.

Then there is low-cost housing.

The Commonwealth by law permits but does not require localities to waive fees for low-cost housing. That law, originally and curiously restricted to only non-profit developers, was updated in 2019 to permit the same waivers to for-profit builders.

Send state housing funds only to jurisdictions that do so. Require in law a limit to the costs of proffers for low-cost housing.

Finally, tax Virginia’s astonishingly profitable non-profit hospitals to help them with their mission of caring for the disadvantaged — in this case in low-cost housing. Continue reading

Are Virginians Putting the State’s Economy on Their Credit Cards?

by James C. Sherlock

Royalty-free stock photo Courtesy Dreamstime.com

I wrote the other day about efforts to increase housing in Virginia. That story is very complicated at the levels of the federal, state and local governments.

But at the end of that pipeline is the economy.

We have read in many places that consumers are spending the savings they built up during COVID, keeping the economy out of recession.

Perhaps.

But it turns out that consumers have been putting the economy on their credit cards as well. Continue reading

Virginia Business Tax Ranking Falls Again

Source: Tax Foundation

Virginia continues its long side in tax competitiveness this year with a No. 26 ranking in the Tax Foundation’s “2023 State Business Tax Climate Index.” That’s a decline from 25th place last year, 24th place in 2021, and 23rd place in 2020. As recently as 2017, Virginia’s business tax climate ranked 16th.

After eight years of political dominance by Democrats, Virginia has been transmogrifying slowly into New Jersey, which ranks 50th in the country on business taxes. It’s hardly a surprise that the Old Dominion’s middle-of-the-pack tax policy and dramatic fall-off in worker freedom (from A+ to C, according to the Commonwealth Foundation) has coincided with domestic population out-migration and sub-par economic growth over the decade.

On the other hand, Virginians can console themselves that the Commonwealth ranked No. 1 in Site Selection Magazine’s 2022 Business Climate ranking based on key site-location criteria selected by site-selection executives. Workforce skills was the top criterion, while workforce development resources and… wait, what?… tax climate were tied for the second most important factor. Continue reading

Virginia Beach, Where Nothing Changes

Pharrell Williams

by Kerry Dougherty

I told you the cronies were back in charge in Virginia Beach.

On August 22 four city officials including Councilmen Aaron Rouse and Linwood Branch — the latter was one of the original “Three Amigos” who were, ah, mighty friendly with local developers decades ago — flew to New York City for a meeting with rap legend and Beach native Pharrell Williams.

Williams yanked his “Something In The Water” festival from his hometown in a huff over what he called a “toxic” Beach environment in the aftermath of an oceanfront orgy of violence and gunfights on March 26, 2021. That bloody Friday night left the Beach resort area looking like a “war zone” and saw 10 people shot, two fatally, including William’s cousin, Donovon Lynch.

Angry knee-jerk rhetoric in the media and elsewhere over Lynch’s death fueled anti-cop fever in the city.

Yet it turned out Lynch was shot by an African-American police officer who was cleared of wrongdoing by a special grand jury that found the officer acted in “justifiable self-defense.”

So what was discussed in Manhattan’s tony Mark Hotel this week where a cheeseburger goes for $41, French fries for $17 and a Margarita will set you back $25? Nothing you peasants should concern yourselves with, say the people who jetted there on your dime. Continue reading

A Chance for Petersburg

Credit: Urban News Weekly

by James C. Sherlock

The Youngkin administration is doing an unalloyed good thing the exact right way. In partnership with two Democrats.

The Governor, in an extraordinary joint presentation with his cabinet secretaries and Democratic Mayor Samuel Parham, laid out a plan for broad state help to Petersburg.

Standing on the stage with Democratic State Senator Joe Morrissey.

Parham, speaking to reporters, said

Governor Youngkin is the first to step down here and say that he is going to put all of his resources in a city to move the dial to create prosperity here in the city of Petersburg. Democrats and Republicans working together — that’s what makes Virginia special.

Occasionally. Continue reading

An Innovative Initiative from UVa Shows A Way to Increase Low Cost Housing

Courtesy UVa

by James C. Sherlock

In July I published a series of reports here on the lack of sufficient low-cost housing.

The University of Virginia is addressing that problem head on in Charlottesville and Albemarle County. The innovation at the core of the program can be applied by Redevelopment and Housing Agencies (RHAs) across the state.

The idea came from the fact that 30% or more of the cost of developing housing is land cost. If a government, university foundation or any landowner would lease — long-term — underutilized land to a private property developer at a negligible land rent, the developer can make a profit with rents that are 30% below market.

This is how the University is building workforce housing for police, firefighters, nurses, school teachers and university blue collar workers. The idea, introduced by Jim Murray, a member of the Board of Visitors now also on the Affordable Housing Advisory Group at UVa, has been around for at least six years.

The concept will soon be reality.

The University program details can be found here.

Every city and county has an inventory of land, some of it forfeited in lieu of tax payments or seized in civil or criminal proceedings. In combination with zoning actions, it can be used for low-cost housing.

The UVa program is replicable. I hope the RHAs will consider it.

The Great Realignment, Best-State-for-Business Reprise, Housing Drags, and Youngkin Popularity

by Chris Saxman

If you read one article this week make it this one from Axios – The Democratic electorate’s seismic shift. Just about every presentation I have given over the last 6 or 7 years begins with a statement or slide that says we are living in a historic political realignment and it’s global. From the article:

Democrats now have a bigger advantage among white college graduates than they do with nonwhite voters, according to a New York Times/Siena College poll.

Why it matters: We’re seeing a political realignment in real time.

Democrats are becoming the party of upscale voters concerned more about issues like gun control and abortion rights.

Republicans are quietly building a multiracial coalition of working-class voters, with inflation as an accelerant.

Continue reading

Regulations and the Costs of Doing Business in Virginia

Courtesy of Mercatus Center George Mason University

by James C. Sherlock

About the only category I found interesting in the “Top States for Business” rankings by CNBC, other than the progressive metrics that are featured in many of the categories, is “Cost of Doing Business.”

Virginia’s worst score among the six categories of metrics is that one. The methodology used for costs of doing business is defined, but vaguely:

As inflation ravages company balance sheets, we measure the strength of each state’s business tax climate. We also measure wage and utility costs, as well as the cost of office and industrial space. And we consider incentives and tax breaks that states offer to reduce business costs, with special emphasis on incentives targeted toward development in disadvantaged communities.

So, in this category, CNBC is grading government-imposed taxes and incentives as well as market-driven costs.

On the government side, the rating favors lower taxes and higher incentives. The “special emphasis” item may skew the results, but we do not know how much.

Lower taxes are conservative priorities. Government incentives which skew market forces and reward both politically trendy operations and big donors are not. Continue reading

Wind Farm Threat to Whales is Next Big Argument

Source: NOAA

by David Wojick

The massive offshore wind (OSW) project proposed by Dominion Energy may pose a serious threat to the endangered North Atlantic Right Whale population. A comprehensive environmental impact assessment is required to determine the extent of this threat and the mitigation it might require. The same is true for the other proposed Mid-Atlantic OSW projects.

The North Atlantic Right Whale is reported to be the world’s most endangered large whale, with an estimated population of just a few hundred critters. They winter off of Florida and Georgia, but summer off New England.  They migrate through the coastal waters off of Virginia twice a year, including that year’s baby whales. They can grow to over 50 feet in length and weigh more than 70 tons. Protecting them is a major challenge.  Continue reading

CNBC Top-States-for-Business Ranking Is Worthless

by Chris Saxman

CNBC’s Top States for Business Ranking is quickly becoming synonymous with Major League Baseball’s best known worst umpire Angel Hernandez.

Why? Like Hernandez, CNBC’s Ranking keeps moving the strike zone and they are fast becoming the best known worst ranking.

Here is their explanation :

We assign a weight to each category based on how hard the states are pushing it in their economic development marketing.

They base their rankings on the marketing of the states? Not what works, mind you, but what the sales departments THINK will work. Not where people and capital are actually going, but what the collective thinking is of economic development officials. Hence CNBC added CRYPTOCURRENCY and CANNABIS as metrics. Continue reading

The Costs of Avoidable Hospital Visits in Virginia and a Proven Solution

by James C. Sherlock

I have written often of the costs of (1) avoidable emergency care and (2) avoidable hospital admissions for chronic diseases.

Each type of excess costs could be prevented by timely visits to primary care practitioners and following their prescriptions for treatment.

The avoidable costs are largely paid by Virginia’s Medicaid program run by Virginia’s Department of Medical Assistance Services (DMAS). DMAS pays Managed Care contractors to diminish these costs and improve the health of the communities in which its clients live. That program has not worked as well as it should.

There is a proven better way: Maryland’s Health Enterprise Zones (HEZ) program.

Virginia needs better financial data to support budget impact assessments for legislation to go down that path. The VDH data contractor has proven with its calculation of avoidable emergency department visits that both the data and the methodology are available to accomplish that same approach to avoidable hospital admissions.

We did not have those calculated figures when then-Delegate Jason Miyares and I tried and failed to establish a HEZ pilot program in Virginia a few years ago. Then, we had just rough estimates. The bill was passed overwhelmingly in the subject matter committees but buried in the House Appropriations Committee.

VDH should direct its contractor to make the calculations soon that are required to support 2023 legislation. Continue reading