Posted: January 4, 2010

The Good, the Bad & the Ugly What will stimulus, recovery and reinvestment mean for businesses in Hampton Roads?

Four members of the local business community will discuss the $787 billion American Recovery and Reinvestment Act and what it means for businesses in Hampton Roads at the Cox Business Executive Discussion Series. Here are their responses to several questions we asked them in advance.

Ira Agricola
Senior vice president,
Hampton Roads Chamber of Commerce
 
Agricola is responsible for governmental affairs, local division operations and the Virginia Beach division of the chamber. His career with the chamber spans 28 years. He completed his undergraduate studies at Virginia Commonwealth University and attended the University of Delaware, completing the Institute for Organization Management program conducted by the United States Chamber of Commerce.
 
What is the biggest advantage you see for the local business community from the economic stimulus and recovery and reinvestment legislation?

Biggest advantage is that the stimulus helped the public sector avoid significant employment loss.
 
What is the biggest disadvantage you see for the local business community ?

The biggest disadvantage is that strains on the federal budget may decrease Department of Defense spending that represents nearly 40 percent of our region’s economy.
 
Gilbert Yochum
Professor of economics,
Old Dominion University
 
Yochum received his doctorate from West Virginia University and is director of the ODU Economic Forecasting Project. He was chairman of the ODU economics department from 1990 to 2000. Yochum is a member of the Governor’s Advisory Board of Economists for Virginia. He has been an economic consultant to more than 50 companies and government agencies and has provided professional testimony before both federal and state government commissions. He is author or co-author of more than 90 professional journal publications and research monographs.
 
What is the biggest advantage you see for the local business community from the economic stimulus and recovery and reinvestment legislation?

In the near term, the biggest advantage of the federal stimulus act to local business is that it props up local resident spending as well as spending on the products and services of local firms that do business outside the region. It helps to maintain local spending primarily through its direct protection of jobs, particularly those of public sector employees, enhanced unemployment and health care benefits, and by 2010, transportation and infrastructure projects.
 
What is the biggest disadvantage you see for the local business community ?

Over the longer term, there are a number of potential minefields for business created by the stimulus. Higher taxes and increased government intrusion are on the list, but perhaps the biggest disadvantage of the stimulus is the potential for contributing to higher business borrowing costs. The stimulus is being paid for by federal borrowing, which can eventually contribute to higher interest rates if the borrowing is eventually added to the government’s structural debt and/or it is monetized by the Federal Reserve.
 
Bruce Grulke
Senior architect,
Clark Nexsen Architecture & Engineering
 
Grulke has 30 years of experience in architecture. Since 2006, he has been with the Norfolk firm Clark Nexsen. He has worked as a senior architect at Hayes, Seay, Mattern & Mattern in Virginia Beach and run his own firm, BGA Design, in Savannah, Ga. He has been LEED-certified since 2003 by the U.S. Green Building Council. Projects he has worked on include the USS Wisconsin Museum in Norfolk and the Statue of Liberty in New York Harbor. A graduate of Ohio State University and the University of California at Berkeley, he has been an instructor for the Virginia Society of Architects and the American Institute of Architects Hampton Roads chapter preparing interns for their NCARB/ARE registration exam. He is a member of the Lead Hampton Roads class of 2009 .
 
What is the biggest advantage you see for the local business community from the economic stimulus and recovery and reinvestment legislation?
Lifting the limits on some of the renewable resource technologies provides the opportunity to finance energy-conserving projects using conventional funding. The technical expertise required to develop a successful project seems to suggest that leasing alternatives may be a more prevalent choice than actual ownership, especially for residential and small commercial consumers.
 
What is the biggest disadvantage you see for the local business community ?

In an ideal world there would be a repeatable footprint development that consistently produced tax credits. The energy tax credit program continues to be refined through ongoing interpretation and has grown so complex and onerous that it has become difficult to predict – with authority – whether a particular installation will satisfy all of the conditions and requirements of the program. In order to effect wide-scale implementation, the program needs to be both publicly comprehensible and convenient.
 
Cathy Williams
Business diversity and government administration manager,
Wolseley North American Division;
Vice chair of Hampton Roads Region,
Virginia Minority Supplier Development Council At Wolseley North America, the parent company for Newport News-based Ferguson Enterprises, Williams is responsible for the supplier diversity program providing equal access for minority-, women-, veteran- and service-disabled veteran-owned businesses to sell products and services to Ferguson. A Temple University graduate, she serves on the Virginia Minority Supplier Development Council Board of Directors.
 
What is the biggest advantage you see for the local business community from the economic stimulus and recovery and reinvestment legislation?

Since we are a military-rich business community, businesses that are involved in government construction with the Army Corps of Engineers, Department of Defense, Department of Veteran Affairs, Housing and Urban Development (through the Public Capital Fund) and the Department of Transportation are in a position to do well.
 
Those with General Service Administration and DoD EMALL Multiple Awards Schedules also should be in a position to do well, as the Obama administration and Office of Management and Budget is looking to GSA to lead the procurement efforts to assist agencies with expediting of awarding contracts and getting dollars out the door through fixed-cost contracts such as the GSA Multiple Awards Schedule program.
 
What is the biggest disadvantage you see for the local business community?

The ARRA will have unprecedented transparency and compliance reporting requirements oversight for all companies expecting ARRA funds.
The compliance and reporting will be challenging for some companies, especially those that will be new to government business.