Virginia Beach questions its funding of regional alliance

The Hampton Roads Economic Development Alliance hasn’t satisfied Virginia Beach, and the city could withdraw if it doesn’t start doing so after an ongoing reorganization.

Only one business has been lured to the Beach in the past five years because of the alliance, said Warren Harris, director of the city’s economic development department.

“They would say two,” he told the City Council Tuesday.

Either way, he said, “that’s a weak performance.”

The alliance is currently undergoing a “strategic reset” initiated by the Beach, its top contributor of funding, councilmembers and Harris said. As a part of that, CEO Darryl Gosnell resigned in January and members from the Historic Triangle left the the group.

Further changes recommended by Harris include creating a committee to review the new CEO’s performance, increasing each member city’s influence on decision-making, hiring a senior official to provide research and data for potential investors, and revamping the alliance’s funding model.

But all that might not be enough.

Councilmembers said it would be unfair to give each city the same number of votes — one — when some contribute financially more than others. That’s what current suggestions would do.

The Beach pays the alliance about $420,000 annually in dues, said Scott Hall, the city’s business development coordinator, in an email. He was unable to say how that compares to other cities’ contributions.

“We pay the lion’s share and get so little in return,” Councilwoman Barbara Henley said during the discussion Tuesday.

Warren said the proposed changes to the alliance “are not going to be the answer to it all,” but bolstering the group is a step in the right direction for the city.

For now, the city appears to be sticking with the alliance. Harris recommended the city stay a member while the alliance finalizes its future financial model.

Mayor Will Sessoms said the alliance’s proposed changes are good and the city should wait and see how it benefits from them.

“We must make them successful,” Sessoms said of the alliance. “And if they’re not successful, we will pull back.”

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