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Thursday, December 17, 2009

McDonnell team takes aim at Martinsville's economy

Gov.-elect Bob McDonnell and Del. Danny Marshall, R-Danville, leave an economic roundtable at the New College Institute in Martinsville on Wednesday. As part of his effort to boost employment in the area, McDonnell has tapped Lt. Gov. Bill Bolling as his

Jeanna Duerscherl | The Roanoke Times

Gov.-elect Bob McDonnell and Del. Danny Marshall, R-Danville, leave an economic roundtable at the New College Institute in Martinsville on Wednesday. As part of his effort to boost employment in the area, McDonnell has tapped Lt. Gov. Bill Bolling as his

MARTINSVILLE -- In what is becoming a ritual for incoming governors, Bob McDonnell came to Martinsville on Wednesday with promises to work to fix what for years has been the state's most wretched, intractable economy.

"A decade of double-digit unemployment is absolutely unacceptable," McDonnell told political and business leaders. "I want to do everything we can to reverse that trend."

McDonnell's intentions are no doubt good, but the Martinsville area's problems are stubborn, offering the incoming Republican administration a herculean job-creation challenge even as it tackles the arduous tasks of boosting the rest of the state's economic fortunes and dealing with a massive state budget crisis.

Martinsville's economic misery -- touched off the previous decade when the city's textile industries collapsed -- outlasted the efforts of former Gov. Mark Warner and current Gov. Tim Kaine, both of whom labored to bring jobs to economically beleaguered Southside Virginia. Warner, in fact, said at the beginning of his term that the success of his governorship should be measured by how much good he had done for Martinsville.

Still, the city's most recent unemployment rate, from October, was 19.7 percent, the highest in the Old Dominion. Statewide, the unemployment rate was 6.3 percent.

"This area continues to struggle, and with it bad everywhere, it's worse here," said Del. Ward Armstrong, a 10th District Democrat and one of several state legislators who greeted McDonnell in Martinsville to discuss economic development strategy.

McDonnell came to this city of roughly 14,500 as part of a swing through Southside Virginia with Lt. Gov. Bill Bolling and Bob Sledd, secretary-designate of commerce and trade. McDonnell promised business leaders in Danville and Martinsville that, during his administration, either he or Bolling would come to Southside each month to work to bring jobs to the area.

McDonnell said he plans a multipronged effort to strengthen the area's anemic economy. Under consideration or in the works are plans to create a deputy secretary of commerce and trade position focused exclusively on rural areas; plans to better market the state's assets; a proposal to double the Governor's Opportunity Fund, which is currently about $10 million; the possible use of tax credits for companies that create jobs; a streamlining of the permit process for small businesses; and the use of direct representatives to deal with major world economies such as China and India. Bolling has been tasked as McDonnell's chief job creation officer.

For their part, local business and government leaders suggested the construction of Interstate 73 through Franklin and Henry counties would improve commerce in the area, as would the creation of state loans to help local governments improve their industrial parks. Local leaders also suggested the state continue to fund education initiatives in the area and consider locating some state offices in Martinsville.

The area has been mired in an economic despair that dates to 1993, when the North American Free Trade Agreement became a cornerstone of U.S. trade policy and local textile companies began folding or moving overseas.

Years later, no one has a road map to recovery for ailing Martinsville. One in five city residents is living in poverty, according to the U.S. Census Bureau; the city's population has shrunk by 5.7 percent since 2000 as residents have moved out in search of jobs; and the labor pool isn't as educated as residents elsewhere in the state: 31.5 percent of Martinsville residents 25 or older have no high school diploma, compared with 18.5 percent statewide.

Previous efforts suggest McDonnell will have difficulty bringing about any lasting change to Southside's economy. Warner, for instance, led the cheerleading for Martinsville while he was governor and funneled money from the Governor's Opportunity Fund to the area to attract businesses.

At the end of his term, his office claimed that it had created more than 16,000 jobs in the area, saved an additional 3,370 jobs and witnessed $1.6 billion in capital investments. Yet Martinsville's unemployment rate during Warner's last year in office was 9.9 percent. The year he was elected, the city's unemployment rate was 7.8 percent.

Whatever McDonnell ultimately tries, the road to recovery looks long and uphill. The city, after all, is competing with other areas working to pull themselves out of the recession.

"The number one issue is job creation," Martinsville City Manager Clarence Monday said. "We need jobs."

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