RICHMOND — The Virginia Economic Development Partnership has new leadership and a revamped governing board, so now Gov. Terry McAuliffe and General Assembly leaders want to see results for “the new Virginia economy.”
That was the bipartisan message — “nonpartisan” in the words of Sen. Frank Ruff, R-Mecklenburg — as McAuliffe took part Monday in a ceremonial signing for legislation to address serious flaws identified in the state’s premier economic development agency in a watchdog investigation last year.
“I look forward to the proof of the pudding,” Senate Finance Co-Chairman Emmett Hanger Jr., R-Augusta, said at the ceremony on the South Portico of the Capitol.
Hanger was one of the sponsors of legislation, along with Ruff and House Appropriations Chairman Chris Jones, R-Suffolk, the General Assembly passed this year with strong support from the governor to address problems at VEDP, as the partnership is known, that were identified in a scathing report issued in November 2016 by the Joint Legislative Audit and Review Commission.
“Once the report came out, it was very clear to us we needed to fashion a response and address the problem,” said Jones, who was part of a legislative delegation Monday that included Del. Betsy Carr, D-Richmond, and Sen. Rosalyn Dance, D-Petersburg.
JLARC found VEDP only began closing massive due diligence gaps after they were cited in an investigation by The Roanoke Times into a failed state economic development deal in Appomattox. Lindenburg Industry, a Chinese-owned company, received a $1.4 million grant approved by Gov. Terry McAuliffe to launch a catalytic converter plant. The factory never opened. The newspaper’s investigation revealed that in vetting Lindenburg, VEDP largely relied on a company website filled with bogus information.
For McAuliffe, the legislation represents a long-needed correction to the governance of a quasi-independent, state-funded agency that he said wasn’t accountable to the governor or the legislature.
“Things just weren’t working,” he said. “I never liked the format.”
The legislation shrinks the VEDP board of directors from 24 to 17 members, and now includes the directors of the assembly budget committees, the executive director of the Virginia Port Authority and chairman of the GO Virginia board, a new business-led initiative administered and partly financed by the state.
The panel, which met last week for the first time to prepare for its first full meeting on Thursday, also includes Secretary of Commerce and Trade Todd Haymore and Secretary of Finance Richard “Ric” Brown.
While the Democratic governor emphasized bipartisan cooperation with the Republican-controlled legislature, Jones quipped that the assembly decided to let the board elect its own chairman from its non-legislative citizen members and make Haymore vice-chairman, rather than chairman, as McAuliffe had wanted.
The assembly’s Joint Rules Committee appointed four members last month, including three already on the board to satisfy Ruff’s insistence on retaining directors with experience “so we don’t lose anything moving forward.”
McAuliffe rounded out the new board with seven appointments late last month.
“I thought they struck a good balance,” said Stephen Moret, the new president and CEO of the economic development partnership, which faces tight deadlines to produce interim operational and marketing plans this month, and a strategic plan and reports to the governor and assembly by Dec. 1.
“That is the single most important deadline that we have,” Moret said in an interview after the ceremony. “We intend to, by December 1, to produce a first-rate strategic plan with broad input.”
In the next year, the partnership also will have to create a new division to manage and oversee financial incentives for economic development prospects to address JLARC’s overriding concern that the agency’s unstructured use of incentives exposed the state to “avoidable risk of fraud and poor use of limited resources.”
The report also faulted the partnership for failing to work closely with local and regional economic development agencies across Virginia, which Moret said the authority intends to correct in the strategic plan it is developing.
The Roanoke Times contributed to this report.