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Help Wanted

The mayor's slow-grow economic strategy doesn't win political points, but it just might be what the city needs.

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As ribbon-cuttings go, the arrival of Luscious Lashes doesn't exactly scream political victory. Tamala White, the salon's owner, says she was lured to Southside Plaza in late June with a $3,500 grant from the city's Commercial Area Revitalization Effort, a program that provides money to new or existing businesses for interior and exterior renovations, security upgrades and physical improvements.

White was paying $1,300 a month for a tiny space in Chesterfield County, on Hull Street Road, but business wasn't keeping up. “I couldn't pay the rent,” she says, so she started looking elsewhere.

With help from the city's Department of Economic and Community Development, she found a space in Southside Plaza, where she pays $750 a month. She also found a steadier market for false eyelashes and eyebrow arching, her specialty, and the overhead is much more manageable. “Business is good enough to pay the rent,” she says.

In the politics of economic development, typically measured in job creation and capital investment, Luscious Lashes represents a paradox for the city. Traditionally disadvantaged when it comes to luring new industry to its borders, for Richmond — which has sparse developable land left, along with higher tax rates, higher rates of poverty, poorer schools — and just about poorer everything compared with the suburban counties — economic development victories have been few and far between.

The city has managed to land a few high profile corporate headquarters (MeadWestvaco in 2007) and the occasional out-of-the-park wonders (Philip Morris USA's $350 million research facility in 2005) but since Mayor Dwight Jones took office in January 2009 there's been a dearth of new business announcements.

For Jones, economic development has become a top priority. City Council has established a goal to reduce poverty by 50 percent in the city, and the key to poverty reduction is connecting the poorest residents with jobs. The recent recession has made job creation even more difficult.

There are hopeful signs. Despite a growing chorus of critics who contend that Jones has done little to address the city's expanding poverty, the administration has been installing a new strategy for economic development that gives precedence to business retention and neighborhood revitalization. It's slow but purposeful, says Peter Chapman, the deputy chief administrative officer for the Department of Economic and Community Development.

“When we got here last year one of the first things that was very clear to us was that economic development programming on every level was weak,” Chapman says. “What the city lacked … was what we call functionality.”

One problem is that Richmond has long measured economic development success by real estate investment and the number of corporate headquarters located here. But such measures of success gloss over reality. The physical growth of Virginia Commonwealth University, for example, often is cited as a key economic driver in the city during the last 20 years. While it's no doubt been a force, the state university's expansion has been a hindrance in one key category: real estate taxes.

The tax-exempt university consumes $1.48 billion in downtown real estate, according to a study of tax-exempt properties prepared for City Council last fall. That means the city loses out on $17.7 million in potential tax revenue annually. With Richmond home to a large base of state government offices and historic properties that receive real estate tax abatements, the city is plagued by large swaths of property generating no revenue.

Politically, there are other nonstarters. For example, one of the economic development office's key functions — business retention — rarely translates into political capital. At a news conference last week, the mayor told reporters that his office has “called on” 160 businesses, representing 7,360 jobs, in hopes of keeping those businesses in the city, which includes convincing Pfizer Inc. not to close its pharmaceutical research facility here, holding onto 300 jobs in the city.

Chapman says the economic development strategy is far more sophisticated, and comprehensive, than it has been in years past. In addition to focusing on business growth and retention — he says two key growth sectors are education and medical services — Chapman's office is incorporating neighborhood revitalization as a key to building the city's economy.

He refers to plans to redevelop the Dove Court public housing project, incorporating mixed-income housing around a medical facility and commercial corridor. The city is in discussions with a grocery store chains to locate in the area, around Nine Mile Road and 25th Street, and other retailers that would create entry-level jobs for one of the city's poorest communities.

“We have to transform the environment in which people live,” Chapman says. “The living conditions of many of our public housing residents is unacceptable.” In addition to retail and commercial development, the city is establishing a work force training program for nearby residents and other social development programs. “There will be job training, there will be wraparound services as part of that. It's not just about bricks and mortar.”

Greg Wingfield, president and chief executive of the Greater Richmond Partnership, says the city has a lot of catching up to do. While other jurisdictions, such as Henrico and Hanover counties, have well-established economic development programs and staff, the city has suffered from high turnover and instability.

“The key is getting the right team in place,” he says of the city, which has been without an economic development director for more than a year. “I have worked with 15 different [Richmond economic development] directors in 16 years. In order to get the right strategy implemented, you've got to get the right person.”

Last week Jones said he planned to interview a “finalist” for the economic developer director position by the end of October and that an announcement was forthcoming. In the meantime he asks for patience.

“Change is not easy, change is not fast,” Jones says. “We are working to establish a new foundation, a foundation that will lead to the deconcentration of poverty, that will lead to more quality, affordable housing and intentional hiring of city residents and in the increased usage of city businesses.”

So far that strategy focuses almost exclusively on the city's ability to lift itself up. Regional approaches appear absent from the mayor's plans to reduce the number of people living below the poverty line, which for the city's majority black population is about 50 percent.

There's also no public push for true regional transportation, extending full-service GRTC bus lines farther into Chesterfield and Henrico counties, to connect the city's poorest residents with suburban retail jobs. Jones says there have been discussions with surrounding jurisdictions, but declines to elaborate. 

David Hicks, senior policy adviser to Jones and the former Richmond commonwealth's attorney, says the city first must recast itself to succeed economically before the city's new multipronged approach can take root.

“For the last 30 years we've lived under a suburbs-good, city-bad” mentality, Hicks says. “If the members of your team believe in the inferiority of your team, you can't compete.”

Jones also must figure out how to balance the political pressures — what have you built for me lately? — with the slower, more meaningful poverty-reduction strategies.

“We had a time period where the measure was, as long as stuff was getting built it must be progress. … Right now, we are paying the bills for that,” Hicks says. “Sometimes you have to go beyond the political and pass the quick fixes, but understand you have to show progress along the way.”

Correction: In earlier print and online versions of this story, we incorrectly attributed City Council's established goal of reducing poverty by 50 percent to Mayor Dwight Jones' administration.

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