No incentive to stay

This may seem a bit out of VCOG’s wheelhouse of advocating for access to government records and meetings, but bear with me. There’s light (or, rather, darkness) at the end of this short tunnel of rant.

Deschutes Brewery is closing up shop in Roanoke. As reported in The Roanoke Times, the Oregon company announced it will soon vacate its downtown tasting room and says it has no plans to build a promised East Coast brewery on land it still owns in Roanoke County.

Though I don’t live in the Roanoke area, I read headlines from local media there and keep loose tabs on the goings-on there. VCOG’s founding director, Frosty Landon, lived there and was the longtime editor of the RT. The late Chip Woodrum represented parts of the city and county in the House of Delegates, where he was an open government champion, helped create the FOIA Council, sat on VCOG’s board of directors and is the namesake for VCOG’s annual legislative internship. Through these two and all the people who worked for, loved and respected them, I have spent more time in Roanoke than almost any other Virginia locality where I don’t have family. So I watch the goings-on with a little more attention than I might other areas.

Despite my emotional tie to the Star City, the Deschutes Brewery closing isn’t really about Roanoke. It’s really a story that could (and has) played out in any town, city or county across the Commonwealth.

It’s the story of great fanfare over an economic development deal. Hurrahs and hullabaloo, crowing about such-n-such business choosing Our Fair State as the site of its new business, expansion, headquarters, etc. But sometimes it’s a story with a sad, almost predictable ending.

In 2017, the city released a timeline to show just how hard everyone worked over five years to make sure Deschutes came to Roanoke, including cross-country meetings and dinners with the governor.

And, speaking of the governor, the Virginia Economic Development Partnership issued a press release upon then-Governor McAuliffe’s announcement of the deal.

The VEDP release touts all the many funds and grants that were or would be made available to the company: the Commonwealth’s Opportunity Fund, the Economic Development Access Program, the Virginia Enterprise Zone Program, the Governor’s Agriculture and Forestry Industries Development Fund and the Virginia Jobs Investment Program.

So many yummy incentives. It’s enough to make any business jump at the chance to call Virginia home. Only, then you realize that every single other state in the country has its own yummy programs, funds, incentives and investments. Every state is ready to up the ante to make itself the most enticing prospect at whatever cost. Their competition to land the next best deal is light the awful mother who tells her daughter she can’t be both pretty and smart if she wants to get the guy.

While the incentives arms-race may be an intractable problem, what really makes me uncomfortable with these programs and funds is that there’s just not a whole lot of transparency around them.

There’s been a steady march over the past decade-plus of their creation, and many of them are housed under departments (especially VEDP and the governor’s office) that can take full advantage of FOIA exemptions and other code provisions to withhold information about what went into a particular deal and how that deal is holding up.1

The deals themselves are worked up behind closed doors — protected by FOIA exemptions for records and meetings — up until the moment they are announced to the public, at which point it’s too late for citizens to say whether they feel the deal is the right one (the right industry, the right kind of jobs, etc.) for their community.

After that, it’s not always easy to keep up with how the business is keeping up with its side of the bargain: did it create the jobs, bring in the revenue, contribute to the community the way it said it would? Does the deal include any right of clawback by the state or locality if those goals haven’t been met? Hard to tell. 

I’m about to get out over my skis here, admittedly not knowing the exact ins and outs of the funds and programs or even how the VEDP and its local partners, or the governor’s office specifically handle all this. VEDP does have a page on its website with performance audits, for example.

What I know, though, is that exemptions for economic development are commonplace here and elsewhere in the country. And though they may help create more lucrative or more tempting deals, they are not 100% in the public interest when, just like that, a business that took advantage of what was offered closes up shop and leaves the public holding the empty mug.

1

VEDP’s FOIA page on its website lists these commonly cited records exemptions:

• Personnel information (§ 2.2-3705.1 (1)) of the Code of Virginia)

• Records subject to attorney-client privilege (§ 2.2-3705.1 (2)) or attorney work product (§ 2.2-3705.1 (3))

• Vendor proprietary information (§ 2.2-3705.1 (6))

• Information relating to the negotiation and award of a contract, prior to a contract being awarded (§ 2.2-3705.1 (12))

• Proprietary information, voluntarily provided by private business pursuant to a promise of confidentiality from a public body, used by the public body for business, trade and tourism development or retention; and memoranda, working papers or other information related to businesses that are considering locating or expanding in Virginia, prepared by a public body, where competition or bargaining is involved and where disclosure of such information would aversely affect the financial interest of the public body. (§ 2.2-3705.6 (3))

• Executive working papers (§2.2-3705.7 (2))

• Information contained in the strategic plan, marketing plan, or operational plan prepared by VEDP regarding target companies, specific allocation of resources and staff for marketing activities, and specific marketing activities that would reveal to the Commonwealth's competitors for economic development projects the strategies intended to be deployed by the Commonwealth, thereby adversely affecting the financial interest of the Commonwealth. The executive summaries of the strategic plan, marketing plan, and operational plan are not redacted or withheld from disclosure (§ 2.2-3705.7(33)).