What a difference five years makes.
Five years ago, Virginia’s lead economic development agency was a joke that wound up costing state taxpayers $1.4 million. Today, the overhauled, reformed agency is recognized as one of the best in the nation.
Back in 2014, economic development officials with the state and Appomattox County thought they’d hit the mother lode when a Chinese manufacturer of automotive catalytic converters selected the shuttered Thomasville Furniture plant near the town of Appomattox as its first production site in the United States.
Lindenburg Industry planned to invest $113 million in the plant and create 349 jobs. Economic development officials in Richmond awarded the company $1.4 million in incentives as part of the deal. Thomasville had been a mainstay of the local economy, and when the plant closed, the effects were deep and long-lasting.
But as the weeks turned into months and there was no activity at the plant, folks started to get worried. Had the lingering after-effects of the Great Recession claimed another manufacturing opportunity, or was something else afoot?
It turns out “Lindenburg Industry LLC” was a giant scam from start to finish. And Virginia taxpayers were left holding the bag.
An investigation by the Roanoke Times revealed the Virginia Economic Development Partnership (VEDP) relied on a falsified company website for basic information about Lindenburg. They also worked closely with a site consultant from North Carolina who vouched for the company but hadn’t asked basic background questions about Lindenburg. Even more distressing was the fact that Lindenburg had first approached North Carolina which turned down funding of a similar project. Most shocking was the fact that Virginia officials didn’t even request basic company financial statements until it was obvious the Appomattox project was stalled.
The deal was a bust. Taxpayers were out $1.4 million. Angry, embarrassed state officials from then-Gov. Terry McAuliffe down were demanding to know what had gone wrong.
The General Assembly directed the state’s Joint Legislative and Audit Review Commission (JLARC) to delve into the mess to determine how everything flamed out so spectacularly with such horrible repercussions. JLARC’s findings were blunt: VEDP had little oversight, few internal controls, few staffers capable of handling large projects and general inexperience.
As a result, the Assembly, working with the governor’s office, overhauled the VEDP from top to bottom. Internal controls were devised and implemented. Outside oversight was imposed. There was more input from both the executive and legislative branches. But most importantly, new leadership was brought in.
In November 2016, the commonwealth went after — and landed — one of the nation’s top economic developers to head VEDP: Stephen Moret, secretary of the Louisiana Department of Economic Development.
Moret came to Richmond with one, simple directive: Make the commonwealth’s economic development efforts competitive with any in the country. He added a few of his own, too: Get each of the state’s economic regions into positive growth mode and make sure the state gets the biggest bang possible for its buck.
Speaking at a business roundtable in Danville just months after arriving on the job, Moret told political, business and civic leaders from across Southside Virginia that he wanted to see rural Virginia as successful economically as Northern Virginia, the capital region and Tidewater, that he would only regard his work a success if all Virginia was prospering and growing, not just the Golden Crescent.
In just a couple of years on the job, Moret and his team have made astounding progress that, quite honestly, few people might have expected. There’s Micron Technology’s semiconductor plant in Prince William County, worth $3 billion for one, but then there’s the mother of all economic development projects: Virginia’s winning the race for Amazon’s HQ2, a $2.5 billion project in Northern Virginia that will directly create 25,000 jobs with the potential to transform the state economy.
That couldn’t have been done by the VEDP of 2014 that was duped by a savvy Chinese businesswoman.
And that is the very reason Site Selection magazine, the bible of the economic development professionals, awarded the commonwealth its Prosperity Cup last week as “the most competitive state-level economic development group” in the nation.
But is his office the best? Moret, honestly, says no; he knows improvements are needed in marketing, quick site development and training skilled workers. “This is a really big opportunity, particularly when you talk about the smaller metro areas and the rural regions,” he told the Richmond Times-Dispatch. “We definitely don’t want to take our foot off the pedal.”