DATE: Sunday, July 27, 1997                 TAG: 9707260809

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MEREDITH COHN, STAFF WRITER 

                                            LENGTH:  104 lines

WILL A BIGGER BUDGET ADD UP TO MORE DEVELOPMENT IN AREA?

They have talked about it and aspired to it for years.

But regional cooperation has eluded South Hampton Roads cities, which have bickered more than they've worked together on economic development.

Now they're putting their money where their mouths have been. Each city has agreed to pony up $1 per resident a year for the next five years, or $5 million, to the Hampton Roads Economic Development Alliance - a regional public-private partnership that will market the region.

The cities say this latest campaign to attract the international business community will succeed. They say well-paying jobs and residents' quality of life depend on it.

With contributions from more than 100 businesses (including The Virginian-Pilot), the group now has an $11 million budget - which is more than four times larger than its last five-year budget.

The alliance, formerly known as Forward Hampton Roads, is the economic development arm of the Hampton Roads Chamber of Commerce. At work for more than a decade, it has helped draw thousands of jobs and nearly 125 companies, many of which have since expanded.

But the region has not performed as well as its major competitors - which include Richmond, Charlotte, Atlanta, Tampa, Fla., and Nashville, Tenn., - in job growth and per capita income. The alliance estimates that Hampton Roads needs to generate 7,000 to 8,000 jobs a year to keep pace with population growth, but the area has been producing only 5,000 jobs a year.

Three months after they renamed the alliance, its leaders say they've been buttressed by their new mission and sizable checkbook. By the end of the summer, the group plans to have six full-time people on the road, pitching the region as a place for a new headquarters, a new plant or a business expansion.

Supporters say the expanded budget will improve the quantity and quality of businesses that consider the region.

Hans J. Gant, the alliance's president, said the group plans to analyze the region and target industries best suited to each city. The group will match that analysis with manufacturers, distributors and corporate offices and try and persuade them to move to or expand in Hampton Roads.

``We are salesmen,'' Gant said. ``We have a product to sell, and we're competing against thousands of other salesmen around the country. Our odds are low.''

The alliance will work with state economic development officials, develop contacts with location consultants hired by big business, hit the trade shows and visit specific companies identified as desirable. Once a company agrees to look at Virginia and then South Hampton Roads, each city will have a chance to make a sales pitch.

City leaders and alliance officials say they expect bumps in the road.

Richmond's regional public-private economic development organization has been at work longer recruiting new industry. Hampton and Newport News, with their own Virginia Peninsula Economic Development Council, won't be formally participating in the alliance.

Further, few people outside Hampton Roads can identify the region by that name, some city officials said.

Thomas A. O'Grady, Suffolk's economic development director, said the number and quality of businesses looking at the cities needs to rise. He estimates that about 60 percent of the city's prospects come from the state's Economic Development Partnership or the alliance.

``But you have to get a lot of companies to look at the city before one decides to move here,'' he said. ``They come looking for a reason to eliminate you from their list.''

Cities also need to prove they can get along.

It will help, O'Grady points out, that several city officials have a stake in the region. O'Grady, for example, once worked for Forward Hampton Roads. Roderick S. Woolard, director of Norfolk's Department of Development, grew up in Virginia Beach and still has family there.

``Competition among our cities is self-defeating,'' said John L. Pazour, Chesapeake's city manager. ``The whole goal is to bring in prospects for us from the outside.''

John P. Matson, the alliance's chairman, said he is hoping city leaders will see their cooperation pay off in good jobs for their residents and join forces in other areas.

Matson - whose employer, Signet Bank, kicked in $100,000 to the alliance's effort - said the group's goals in the next five years include creating 20,000 well-paying jobs, expanding the cities' tax base by bringing in $1.2 billion in capital investment and boosting residents' per capita income.

``Signet will benefit from a healthy region because there will be more opportunities to do business with new industry, and people will need more financial services,'' he said.

Matson said he isn't sure how First Union's recent buyout of Signet will affect the bank's pledge. However, the alliance raised more money than it budgeted, so any changes in contributions shouldn't affect its plans, he said.

Alliance leaders say they expect their efforts to benefit all South Hampton Roads cities.

So far, Chesapeake and Virginia Beach - the last two cities to approve funding for the group - have been the biggest beneficiaries. Alliance records show that among companies that the alliance helped bring to the region, more than half of the capital investment and one-third of the jobs and business locations went to Chesapeake. Virginia Beach got one-third of the locations and jobs.

Some of the city officials said they understand that regionalism is not a universally popular idea.

But Portsmouth Mayor James W. Holley III said they'll tell skeptics to reserve judgment ``until next year when we come back and measure the program.'' ILLUSTRATION: Photo

Hans J. Gant

Charts

Hampton Roads Economic Development Alliance KEYWORDS: REGIONALISM ECONOMIC DEVELOPMENT

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