Bacon's Rebellion

Democracy Thrives in Sunlight

Richmond EDA Needs to Open up the Books

—

by

James A. Bacon
in ,

Major Dwight Jones (left) and Governor Terry McAuliffe. The commonwealth donated $5 million to the project.

Meanwhile, in the City of Richmond… The Economic Development Authority is ducking transparency in the $74 million Stone Brewing project, a major economic development coup for the city and the state. At issue is the role of the Richmond EDA, which is helping to finance construction of the brewery and related restaurant. On Oct. 22, the EDA picked Hourigan Construction from a field of six contractors.

EDA officials won’t say if Hourigan submitted the lowest bid, on the grounds that the final contract has not been signed yet. Another key question is who Hourigan’s subcontractors are. As Graham Moomaw reports for the Times-Dispatch, the EDA considers not only price but its track record of delivering projects on time and its ability to meet a target of using minority-owned businesses for subcontracts.

The Dwight Jones administration has aggressively pushed economic development such as the Shockoe Slip ballpark, Boulevard redevelopment and the Washington Redskins training camp, in which the city plays a prominent role in financing. Unlike entirely privately financed deals, projects funneled through the EDA are subject to the minority set-aside requirement.

Writes Paul Goldman, a Richmond political activist in a recent email missive:

The EDA is being used for one reason in the Brewery deal: to get around city and state law [that] mandates the use of an open, transparent bid process creating a level playing field and insuring the best result for the city’s taxpayers.

The key to this backroom deal, as the others, is the special “wink, wink” for political influence peddlers and their cronies.

Are buddies of the mayor getting special treatment? Who knows. But that’s the suspicion when city government takes an active role in the financing of economic development projects. Let me be clear: There is no evidence of any wrong-doing. But “trust me” just doesn’t work in this day and age. The public would like assurances that there’s no hanky-panky. Open up the books, please.

— JAB

Share this article

ADVERTISEMENT

(comments below)

ADVERTISEMENT

(comments below)

Comments

7 responses to “Richmond EDA Needs to Open up the Books”

  1. larryg Avatar
    larryg

    Apparently some folks have gotten to see the details of the deal:

    ” Stone project carries potential financial risk for Richmond”

    ” The arrival of Stone Brewing Co. in Richmond could transform the East End, but it also has the potential to leave the city and taxpayers with “a long-term liability” if the brewer were to leave in less than 10-15 years, according to an analysis by the city’s private financial consultant.”

    http://www.timesdispatch.com/news/local/stone-project-carries-potential-financial-risk-for-richmond/article_c8c0a9c7-8abb-51b7-9ee7-94e1715a36f3.html

    The other interesting thing in the article is that Richmond has a AA+ credit rating… not AAA like Henrico but not too shabby either…

  2. DonR Avatar
    DonR

    Don’t craft brews and brew pubs seem like a fad? I’ve heard that prior Richmond city administrations considered EDA funds for an Atkins Weight Loss Center, a bermuda shorts factory, a bar featuring toga parties, The Center for Excellence in Rubik’s Cubes and subsidized water beds for all Richmonders.

    How many craft brews and brew pubs does the world actually need?

    And I love beer.

    1. larryg Avatar
      larryg

      I agree. I don’t think its a good bet to be around for 20+ years.

      I think the Mayor and the EDA are throwing stuff on the wall to see what sticks.

      if nothing else – new stuff replaces blight.. and may attract a follow-on tenant if the first one stumbles.

      I can’t but help think the other folks who sell beer would frown on the govt helping this one out … especially the ones that have busted their financial butts to build something.. and keep it going.

  3. LifeOnTheFallLine Avatar
    LifeOnTheFallLine

    Alright, so I definitely agree with you that the EDA needs to be way more transparent, but do you also have a problem with its set aside for minority contractors?

    If not, why include this:
    “its ability to meet a target of using minority-owned businesses for subcontracts.”

    And this:
    “Unlike entirely privately financed deals, projects funneled through the EDA are subject to the minority set-aside requirement.”

    Also the way you pivot from this:
    “Another key question is who Hourigan’s subcontractors are.”

    To the above

    To this:
    “The key to this backroom deal, as the others, is the special ‘wink, wink’ for political influence peddlers and their cronies.”

    And land with this:
    “Are buddies of the mayor getting special treatment?”

    Heavily implies that not only do you have a problem with the minority set asides, but that their use in the EDA is potentially being engaged for the benefit of the mayor’s friends.

    1. James A. Bacon Avatar
      James A. Bacon

      No, I don’t have a problem with minority set-asides — for African-Americans, who have been victims of racial discrimination here in Virginia in the past, but not for other groups. Have Indians and East Asians suffered racial oppression in Virginia? No.

      More to the point, I do have a problem with a program that obscures who the contractors are, minority or otherwise. I want to be assured that buddies of the mayor, of any racial classification, are not getting sweetheart deals.

      1. LifeOnTheFallLine Avatar
        LifeOnTheFallLine

        Again, I agree that opaque contracts are bad for public business, whether it’s the EDA here or the PPP contracts that are obscured because of “proprietary information.” But you lean a little hard on the minority set asides in you analysis here if it’s not actually something you have a problem with. I appreciate the clarification, though.

        1. James A. Bacon Avatar
          James A. Bacon

          We need more transparency in Virginia just about everywhere. EDAs and P3s are only part of the story.

Leave a Reply

Read More