THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, April 8, 1996 TAG: 9604060188
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Column
SOURCE: Ted Evanoff
LENGTH: Medium: 86 lines
It's not taxes. Or distance from markets. Or literacy, wages or water supply. Nor is it crowded roads.
No, the big disadvantage of doing business in Hampton Roads is competition among Tidewater cities.
That discovery was headlined in the survey of 235 chief executive officers in Hampton Roads by the Norfolk accounting firm Edmonson Ledbetter & Ballard.
No doubt the CEOs are correct. If intercity competition is Topic No. 1, though, the Hampton Roads Chamber of Commerce and the Virginia Peninsula Chamber of Commerce ought to mail this survey coast to coast.
What a wonderful calling card in the mailbox of business owners weary of snow and taxes in, say, Boston. It's like saying: Move here. Tidewater has no business disadvantages. At least no big ones.
After all, if intercity competition was a major disadvantage, it would erode profits. And everyone knows how CEOs would solve that bottom-line problem. They'd ride hard on the mayors and the city councils.
CEOs gripe about Tidewater's fractured political process, but they haven't put their full corporate weight behind unifying Hampton Roads.
Sure, they've talked. They've talked about regionalism for years.
Still, the metro area's 15 cities and counties sustain duplicate city halls, police forces, park systems, road crews, planners, engineers, economic directors, personnel departments and other municipal paraphernalia.
Common sense says the overlap wastes tax dollars. But put local government in perspective. It isn't wildly extravagant.
Tidewater on average employs one local government worker, including public school teachers, for every 22 residents. Metropolitan Richmond's rate is one per 24.
Where the burden appears is in the tax base. Richmond's large corporations help pay for local government. In Tidewater, home to a lone Fortune 500 industrial company, Norfolk Southern Corp., the tax burden rests on middle- and working-class property owners.
Regionalism could ease the tax burden. However, laws and logistics, fear and tradition stall regionalism. So does politics. So does the corporate bottom line.
No crushing financial woes force CEOs forward on the regionalism issue. Intercity competition hardly dents the typical company's profits.
``It has an effect, but I don't think you'd call it a direct effect,'' said James K. Hall, managing partner at Edmonson Ledbetter & Ballard.
``Whether it's measurable, I don't know,'' Hall said. ``I don't think the chief executives think of it in terms of how it might affect their business. I think a lot of them have lived here a long time. They've grown up with the situation.''
While scores of company leaders ranked regionalism Topic No. 1, the matter faded in Hall's office soon after the survey came out last month.
Hardly anyone requested the results. One exception was Divaris Real Estate of Virginia Beach.
The commercial property firm wanted copies in the hands of prospective out-of-town clients. What stood out in the survey was the CEOs' high regard for Tidewater's lifestyle, living costs and economic stability.
The survey became a sales tool, though it underscored a deeper issue for Gerald S. Divaris, the head of the firm who himself was among the 235 surveyed CEOs.
``I believe regionalism, if one is honest about what regionalism is, is absolutely vital,'' Divaris said. ``Unfortunately, in this market regionalism is interpreted differently by different people.''
In Virginia Beach, it looks like Norfolk tries to gouge the suburbs. In Norfolk, it looks like the suburbs retreat in fear of the old city.
In fact, Divaris said, regionalism means deciding where to put resources and how to share costs.
Norfolk builds the National Maritime Center. Virginia Beach builds the Virginia Marine Science Museum. Each goes its own way, though a unified community could build one grand attraction scaled for the entire East Coast.
``We all agree regionalism is vital and would help spur the economy,'' Divaris said. ``But the politicians have been running the show instead of the business people.''
If there was no strong incentive to unify the region in the past, there is now. Virginia's General Assembly recently created the Urban Partnership with a proposed $200 million revenue sharing fund.
One key provision controls it. A community won't get the cash unless it cooperates as a region.
That's an incentive for Hampton Roads to unite. Urban Partnership money can help build a new sports arena. by CNB