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The Big Book: Cover Story Rebuilding VEDP New leader responds to concerns and rolls out a strategic plan


tral focus of his first year has been respond- ing to 27 recommendations in the JLARC report. “Nothing was more important than addressing the major recommendations. Of the 27, we have substantially implemented 25 of them and still have a couple of things to do,” says Moret, who plans to wrap things up with a final update by June.


New incentives division


Stephen Moret (left), the president and CEO of the Virginia Economic Development Partnership, has hired Steve Parsons to head its new incentives division.


F by Paula C. Squires


or Stephen Moret, 2017 was a re- building year. The president and CEO of the Virginia Economic Develop- ment Partnership (VEDP) faced a daunting task: overhauling the state’s primary busi- ness recruitment agency while beginning to restore the commonwealth’s reputation as one of the best states for business. Fourteen months into the job, Moret and others say VEDP is back on solid ground. A five-year strategic plan positions the agency to move forward with initiatives such as a more robust marketing effort and a new emphasis on customized workforce recruitment and training.


“They have made great strides to improving the situation and to improving the things that needed to be addressed,” says Hal Greer, director of Virginia’s investiga- tive watchdog, the Joint Legislative Audit and Review Commission (JLARC). “They are on the way to being an effective agency.” That’s high praise considering the criti-


54 MARCH 2018


cism VEDP faced from JLARC, Virginia’s investigative watchdog, shortly before Moret took over. JLARC released a 132- page report in November 2016 lambasting VEDP as an organization with slipshod management and an unstructured approach to incentive grants that left the state vulner- able to fraud. “In my 22 years, I’ve never seen an agency with this level of dysfunc- tion,” Greer said at the time of JLARC’s report.


A catalyst for JLARC’s intervention


was a $1.4 million incentive grant Virginia gave to Lindenburg Industry, a Chinese company that reneged on a plan to build a plant in Appomattox that was expected to create 350 jobs. Despite ongoing legal action and a criminal investigation by State Police — which reported that VEDP relied upon a bogus company website during its vetting process — Virginia has yet to collect any money.


Not surprisingly, Moret says the cen-


Chief among the recommendations was the creation of a separate incentives division. The Lindenburg incident, says Moret, rep- resented “a systemic failure” in how VEDP conducted due diligence and monitored incentives. Under the system in place before 2016, he explains, individual project managers vetted a company’s credibility and fiscal soundness before the state awarded incentive money. Frequently the grants would be given upfront, before a company had carried out plans to build a facility or create jobs. There was no comprehensive incentive reporting or monitoring after a deal was done.


Since the Lindenburg deal collapsed, two other companies, Vastly (formerly Tranlin) in Chesterfield County and a foundry in Radford have not paid back money on troubled projects. In both cases, VEDP has pursued legal action. For example, it has taken a lien on a property involved in the Vastly project.


The JLARC report criticized VEDP for not enforcing performance contract provisions, increasing the state’s exposure to financial loss. It said VEDP did not enforce clawback provisions on 23 projects that received incentive grants between 2006 and 2015 but failed to meet performance requirements on capital investment or job creation. Initially, JLARC said this lax enforcement meant that $8.7 million had slipped through VEDP’s hands. That figure, Moret says, was later whittled down to a much smaller amount — VEDP board member Dan Clemente puts the number at $180,000. Subsequent


Photo by Caroline Martin


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