Hampton Roads lags in Virginia jobs push

Hampton Roads hasn't been the biggest beneficiary of Gov. Bob McDonnell's economic development push so far.

While Northern Virginia has garnered the largest number of new jobs during his time in office, Hampton Roads also lags slightly behind the Richmond area, which just before Christmas landed the state's single biggest jobs deal since 2004: two distribution centers for the online retailer Amazon.com Inc.

The company plans to spend $135 million on a 1 million-square-foot warehouse in Chesterfield County and a $50 million fulfillment center in Dinwiddie County, which together are to employ more than 1,350 people.

Multiple jobs deals have gone to the Southside and Southwest Virginia regions plagued by chronically high unemployment.

There have been local developments to cheer, though.

Regional projects announced in the past few months are expected to create more than 1,000 jobs, including 800 over five years at a planned Green Mountain Coffee Roasters plant in Isle of Wight County.

In all, the administration says it has brought 5,515 jobs to Hampton Roads. Of those, more than 2,100 came with pledges of government financial aid and other public assistance totaling nearly $5 million, according to a review of economic development announcements by The Virginian-Pilot.

Yet those anticipated gains aren't nearly enough to offset the 45,000-plus jobs the region has shed since the start of the recession, according to federal labor statistics.

So while there have been successes, the overall results have been mixed, undercut by broader national trends that left more than 264,500 Virginians without work as of Dec. 22.

Those factors make for an unsettling economic roller coaster ride.

Just this month, a German power tool company announced expansion plans at its Virginia Beach facility that would accommodate 52 new hires, a welcome development that was followed by news that two other companies plan to lay off more than 110 workers next year.

"Sometimes it seems like we take two steps forward and one step back," said Lt. Gov. Bill Bolling, the state's chief jobs ambassador. "You close a big deal and you create a few hundred jobs someplace and then the next day some existing company shuts down and you lose a few hundred jobs. And that's just the way the economy is right now."

State officials say they showcase Hampton Roads assets to prospective corporate tenants, but the ultimate decision on where to relocate or expand is up to the businesses. And even when companies select this area, McDonnell said, it can take a few years for them to start hiring.

Saddled with a sluggish economy, the governor has aggressively marketed the state as "open for business." He's worked to promote its corporate-friendly reputation and reduce regulations, and he won legislative approval for a $100 million package of tax credits and other financial incentives. He's asking for an additional $40 million next year.

That's positioned Virginia to do "better than most states" on the job front, McDonnell says, though he acknowledges the results thus far aren't "nearly good enough to meet my expectations."

His administration says it has overseen a net gain of nearly 63,000 jobs over two years - ranking Virginia's job growth among the top 10 states during that time - and helped consummate more than 660 deals expected to bring upward of 41,600 jobs to the state in the years to come.

Yet the bright spots emphasized by state officials don't overshadow anemic job growth that is "but a drop in the bucket to what we need" to reverse years of losses, according to Michael Cassidy, president of the Commonwealth Institute for Fiscal Analysis, which advocates for policies to help low- and middle-income Virginians.

"We still remain near the bottom of a very deep jobs hole in Virginia, and it's going to take a very long time to get out of it," said Cassidy, referencing state employment figures that fell below 3.7 million during the recession and have remained in the 3.6 million range since its official end in summer 2009. Factoring in growth in the working-age population, the institute estimates Virginia needs another 291,400 jobs to return to pre-recession levels.

The latest employment data back that up - labor figures show about 127,000 fewer people are working in Virginia now than before the downturn became evident in the state labor market.

Administration officials say a rosier picture emerges when you consider that the number of Virginians who have jobs - 3.9 million - is near pre-recession levels. That figure includes state residents who work elsewhere.

"The good news," Bolling said, "is that we're doing better than almost anybody in the country in a tough economy. And that's something we can be proud of."

He cites Virginia's better-than-average unemployment rate - it's ninth lowest in the nation - business recruitment efforts, growth in tourism and comparative prosperity to other Southern states as encouraging signs.

Still, with federal budget cuts looming, there's cause for concern in Hampton Roads, a region acutely vulnerable because of its reliance on defense spending, said James Koch, an economist and former Old Dominion University president.

Koch sees other trouble spots in the lack of a robust recovery in port activity and in housing prices, which have a direct impact on real estate taxes that are a key source of revenue for localities. Both factors are beyond the governor's control, he said.

"I give the governor very high grades for what he's done, but he and the commonwealth in many ways are captive to what's happening on the national and international scene," Koch said. "He's done the right kinds of things, but he's not able to push all the buttons."

Julian Walker, (804) 697-1564, julian.walker@pilotonline.com