The Virginian-Pilot
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SUFFOLK
An analyst of world financial markets quit the city's Economic Development Authority board Tuesday, saying he was fed up with the city's focus on warehouses at the expense of higher-scale projects.
Dennis Gartman, publisher of The Gartman Letter and a frequent guest on financial news shows, said he resigned also because of how the city recently handled a deal with Old Dominion University and a developer in which he said the city got "screwed."
His greater frustration, though, was warehouse space. Gartman referred to the city's use of "expensive, wonderful land" for warehouses when it could be using it for high-rise, upscale office buildings to attract professionals and high-paying jobs, especially in Northern Suffolk.
"Instead we build warehouses!" he wrote in an e-mail. "I've had enough."
City spokeswoman Debbie George said Suffolk focuses on diverse developments. She noted that the city's last three business announcements involved modeling and simulation, interior decoration, and parts manufacturing for the aerospace and defense industry.
Port traffic has driven the demand for warehouse space in Suffolk in recent years. In the latest project, the City Council in January approved CenterPoint Properties' plan to build one of the region's largest distribution centers a few miles west of downtown. The project, to be built over a decade, is to feature 5.8 million square feet of space.
The other matter that upset Gartman regards how the city will be compensated for a $1.8 million economic development grant that helped land ODU's Virginia Modeling, Simulation and Analysis Center in 2006. Suffolk's proposal won out over Portsmouth and Chesapeake.
Gartman supported using the grant to lure the project. At the time, however, the city expected to recoup the money through real estate tax payments, Gartman said.
A recent deal between ODU and the developer, HRC VMASC, LLC, changed that. The university, seeking to save money, negotiated to buy the property from the developer, ending a 15-year lease.
The new arrangement means the property will become tax-exempt, ending the roughly $155,000 annual tax payments that Suffolk had just begun to receive.
On March 19, Suffolk's EDA board met for a special meeting to amend its original agreement with the university and the developer.
The amendment included a $285,000 cash payment from the developer and ODU to the economic development authority, as well as "in-kind services" from ODU. It passed 5-0. Gartman opposed the deal but did not vote because he said he had to leave the meeting early.
"I think we left the real estate developer off far too easily," Gartman said. "$1.5 million in in-kind services seems to me to be a farce."
The EDA is a political subdivision that is authorized to spend money to foster economic development, help existing businesses and create jobs. Gartman has served on the board for 10 years.
The city has not released details of the amended agreement on VMASC. A week after the special meeting, George said it "has not yet been executed by all parties." On Tuesday, it was still unavailable, she said.
Bill Hudgins, an official with the development company, said the move to change ownership came from ODU. The university wanted to buy the building because the General Assembly did not approve its second-year rent payment, he said.
"The developer did nothing to change the circumstances," he said.
Hudgins said the $1.8 million grant went to ODU's real estate foundation - not the developer. The city also is getting a good return on its investment from the nearby development that VMASC is helping to spur, he said.
Dave Forster, (757) 222-5563, dave.forster@pilotonline.com
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Hummmm
I totally agree Mr. Barrett however I do not think it's the citizens that need to acknowlege that we are one region. I believe it's several Mayors and Councils who have to mature and get all the cities of Tidewater working together.
New Ways
Actually, no. We have the HREDA which does international and national marketing, but each city/county has their own department of economic development and almost all cases, an EDA/IDA. They work together quite well; however, there has to be overlap and duplication. Some regions of the country have created a single economic development entity responsible for this function which may be combined with the area chamber of commerce or other private economic development entity. Perhaps someday our region will have matured to the point where our citizens will acknowledge that we are one region and that the region is the unit of economic competitiveness. When that occurs, we will be able to reduce duplication and increase the resources available for regional marketing, recruitment, workforce development, and economic development.
"The solution; form one EDA
"The solution; form one EDA for the entire region, appoint the best and the brightest, and realize that we will sink or swim as Hampton Roads, not as individual jurisdictions."
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You already have HREDA which markets Southside and Peninsula. Are you really saying that we should keep HREDA (or a similar effort) and eliminate the municipal economic development departments which operate in the same arena yet compete with HREDA?
Good post
Not a bad idea Mr. Barrett but isn't there already several "regional" groups that are designed to do what individual EDA are already doing?
Parochialism
Years ago, the cities in this region pledged that they would not use incentive money to lure projects that were already here to move to a different city in the region. Perhaps an argument can be made that the ODU center did not perfectly fit that category, but in some respects, it shows the folly of incentivization to win a project when in fact the fiscal impact of most projects is shared by all cities in the region, not just the host. Regretfully, many of us here still have a parochial streak that makes us feel that we must compete with each other instead of with the other regions of the nation and the world. Fact is, that is money entirely wasted and until we get over these silly games, we will lose out to Charlotte, Jacksonville, Richmond, the Research Triangle, or even regions overseas. The solution; form one EDA for the entire region, appoint the best and the brightest, and realize that we will sink or swim as Hampton Roads, not as individual jurisdictions.
What are the background of those voting members?
How many of them are lawyers?
The City of Suffolk
The City of Suffolk is run by a few individuals with their own ideas and preferences in mind. Never is their any input from the citizens and folks who will be directly affected. That is why there are large unused parcels of land which are prime locations for malls and such, which would save Suffolk residents time and gasoline and also generate jobs. All of these developers are given preferences with their projects because they are feeding the pockets of those who make the decisions. We have huge subdivisions with no services to feed them and all of the tax money and jobs are going to Chesapeake, VB and Norfolk. I say clean house and start an election to get some real folks in there with some sense.
Submitted by Redskin44 on
Submitted by Redskin44 on Tue, 04/07/2009 at 10:36 pm.
Have you seen the credentials of the other members of the Authority? This fella is the most qualified out of all of them. Apparently you do not have to have any background in the related field to serve on the EDA or Planning Commission in Suffolk. It is strictly political and Suffolk suffers for it which is a shame.
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I can't say that I do know the background of the rest of the Authority members, but you're point is well taken about the "politics" of such boards. They are often gift positions given to friends/supporters of appointing bodies. To be fair, that doesn't mean that you won't get a qualified well-meaning board member. But it CAN mean that you may get egotistical board members that quit in a huff of media attention if the board doesn't think their way. ;)
Jayd
You got a real nice restuarant called the River Stone surrounded by warehouses.
Actually Riverstone is surrounded by an office park and while there are some warehouses, I'd say the majority of buildings along harbour view blvd are in fact offices, many of them technology related businesses. Have you seen the hotels directly behind Riverstone? What about the Lockheed Martin "lighthouse" down the road--I guess you call that a waerhouse for scientists and engineers? Also, half a mile from Riverstone is a growing shopping complex. Western branch blvd heading towards smithfield is also experience rapid growth, most of it, seemingly some form of retail or entertainment-- just the sort of thing you're askng for. Not to say that Suffolk is a hip metropolitan city, but at least around riverstone there is the sort of growth you've just said isn't there. We can at least be honest about things that are obvious.
UDO
The City of Suffolk's Unified Development Ordinance is written to discourage high-rise buildings. Besides the City tried going upscale with the "fancy" hotel in "downtown". I don't think it has made Suffolk the grand destination they thought it would. They would have been better off with a small marina, restaurant, shops, and small hotel like in Smithfield.