Is the stimulus stimulating things in Hampton Roads?

The antiquated repair shop where mechanics once worked on Norfolk's street cars is gone. In its place, Hampton Roads Transit is building a maintenance shop, fueling-and-washing facility, and garage to care for its bus fleet.

The $58 million complex taking shape on 18th Street had been on the drawing boards for years. What gave it a boost was $14 million in economic-stimulus funds from the U.S. Department of Transportation.

In Portsmouth, contractors are replacing aging water lines in the Prentis Park neighborhood, a project covered partly by $4.8 million from the American Recovery and Reinvestment Act.

Almost $1 billion in stimulus-related contracts, grants and loans have arrived in Hampton Roads since the Recovery Act took effect in February 2009. The money is helping pay for an array of projects, including renovations of military facilities, expanded research labs and measures to improve the productivity of local shipyards.

The sluggish pace of recovery, however, has prompted some in the business community, particularly contractors and building-material suppliers, to question whether the stimulus program is having a measurable impact in the region, and even nationwide.

Doubts about the effectiveness of Recovery Act programs come at a time when Congress is debating whether to extend some of its provisions, including unemployment and tax benefits. Despite the slow pace of job growth, worries about a soaring budget deficit have dampened support for more stimulus spending.

Even with stimulus-funded projects under way, several Hampton Roads construction firms have scaled back operations because of the reduced amount of work available, said Phil Davenport, executive director of the Builders & Contractors Exchange in Norfolk, a clearinghouse for construction work put out for bid.

"I hear it all the time: 'Can't you find some more work for me?' " he said.

Some exchange members expect an upturn in the availability of work later this year, Davenport said, but they don't expect it to come from stimulus programs.

Stimulus spending preserved jobs in the region, including many in the school systems and universities, but "it's very difficult for the average person to detect that," said Gilbert Yochum, acting dean of Old Dominion University's College of Business and Public Administration and head of its Economic Forecasting Project. The stimulus program, he said, "has kept us out of a much, much deeper recession."

Between 2009 and 2011, Hampton Roads is likely to receive $1.4 billion of stimulus spending and tax benefits, according to predictions by ODU's forecasting project. That's likely to generate or preserve more than 20,100 jobs by the end of 2010, the university's economists predicted.

The biggest source of Recovery Act funds has been $288 billion in tax benefits, and slightly more than half of these have been paid out, according to the Recovery Accountability and Transparency Board, the government entity responsible for tracking the funds.

Another major source is $224 billion in entitlements, including extended unemployment benefits and expanded eligibility for food stamps. Sixty percent of these have been distributed.

Drawing on state and federal data, the Commonwealth Institute for Fiscal Analysis in Richmond determined that more than $594 million of benefits have been distributed directly to households in Hampton Roads.

The third major source is $275 billion designated for federal contracts, grants and loans. As of late June, only 43 percent of this money had been distributed, according to the Recovery Board's Web site, www.recovery.gov.

Still, parts of the Hampton Roads economy have benefited from stimulus-related contracts.

For example, Jefferson Lab, the Department of Energy facility in Newport News engaged in nuclear physics research, received $85.6 million in stimulus contracts, including $65 million to upgrade its electron beam accelerator. So far, the funds have generated or preserved 239 jobs at the lab and for its contractors and subcontractors, said Dean Golembeski, a Jefferson Lab spokesman.

Also, five of the region's shipyards received a $7.85 million slice of $98 million in grants from the U.S. Maritime Administration designed to foster greater productivity at small shipyards.

Davis Boat Works Inc. in Newport News received slightly more than $612,000, which will cover most of the $800,000 cost of building a temperature-controlled structure for sandblasting and painting boats, said Frank Wagner, the yard's president. Like other yards that received the grants, Davis Boat Works has to commit 25 percent of its own funds to the productivity improvements. The structure will enhance the yard's efficiency, but it's not clear when it might generate additional jobs, Wagner said.

Associated Naval Architects Inc. in Portsmouth won a $476,893 grant to upgrade its facilities but decided not to use it because it lacked the work to justify spending its own money, said Brandt Everhart, Associated Naval Architects' treasurer.

Scores of small companies throughout the region took advantage of a stimulus program that reduced borrowers' fees for Small Business Administration-guaranteed loans and raised the guarantees for lenders. In Hampton Roads, 188 SBA loans, amounting to $60 million, were made under the program, according to the Recovery.gov site.

A type of long-term, fixed-rate SBA loan that enables businesses to buy real estate, heavy machinery and other fixed assets was particularly attractive to borrowers, including some physicians' groups, said Melissa L. Burroughs, chief lending officer and executive vice president at Old Point National Bank in Hampton.

However, stimulus funds to reduce borrowers' fees for SBA-guaranteed loans ran out in May, and the fees returned to their earlier levels. Legislation that would restore funding has not yet emerged from Congress.

One issue in the region and the state is the speed with which Virginia is acting on stimulus contracts and grants. In a nationwide ranking of states according to their success at winning contracts and the speed with which they distribute them, the Seattle firm Onvia Inc. last month designated Virginia as a "laggard." Michael Balsam, Onvia's chief strategy officer, said he couldn't address the specifics of Virginia's situation but remarked that too many people expected jobs to materialize from the Recovery Act faster than was possible.

"What I know is that lots of states were not prepared to spend this kind of money" when stimulus funding became available, he said.

Of the $201 billion in stimulus projects nationwide that the firm is monitoring, only $66 billion has been awarded to contractors, Onvia said.

The local construction industry, meanwhile, continues to wrestle with slack demand. Employment in Hampton Roads' construction sector totaled 37,100 in May, down by almost 12,000 jobs, or about 24 percent, in three years. That compares with a 4.6 percent falloff in employment in the region during the same period.

Hampton Roads' jobless rate of 7.3 percent in May was down from 8 percent in January and February but was still higher than the year-earlier rate of 6.7 percent.

Work on the Hampton Roads Transit complex, which began with the demolition of older maintenance facilities in November, has enabled its contractors to add or preserve 227 jobs so far, said Tom Holden, an HRT spokesman. It took much more funding than just the $14 million of Recovery Act funds to accomplish that, but "it's safe to say the jobs would not have been there without the stimulus money," he said.

Winning some of the Portsmouth contracts to install new water and sewer lines in Prentis Park enabled Precon Construction Co. to hold on to employees, but it wasn't sufficient to justify adding workers, said Jimmy Sisson, vice president of the Chesapeake -based company. He and others in the region's construction sector expected more when the Recovery Act was touted early last year.

Because of the concentration of military facilities in the region, "we felt pretty strongly that southeastern Virginia would get a significant amount of work," Sisson said. "We haven't seen it."

Because of heightened competition, slim profit margins and risks involved with underground-utility work, "my fear is that, over an extended period, a number of firms are going to go out of business," he said.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com