Looking for ways to maintain momentum

Almost 20 years ago, Tim Kaine was elected to Richmond City Council. That event began a political career in which he would become mayor, lieutenant governor and governor before being elected a U.S. senator in 2012.

But at a recent meeting with Richmond entrepreneurs, Kaine talked more about developments in his hometown than he did about the federal government.
“About the time my boys hit 20, they began saying, ‘Dad, Richmond is a cool place … [it] is like the Portland of the East Coast,” Kaine told the group. “Nothing in public life has made me feel better than to hear my kids brag about their city.”

The gathering took place at Health Warrior, a company that produces health bars from chia seeds. Its CEO is Shane Emmett, an adviser to Kaine when he was governor from 2006 to 2010.

Health Warrior is one of a growing number of new businesses helping to transform Scott’s Addition, a once-scruffy industrial district about four miles from downtown Richmond. The area now is home to craft breweries, restaurants, a bicycle boutique, a glassblowing studio and loft apartments.

The blossoming of Scott’s Addition is part of a continuing turnaround taking place in Richmond. After shrinking for 30 years, the city’s population has grown more than 8 percent in the past 13 years, from 198,000 in 2000 to more than 214,000 last year.  (But the city’s poverty rate remains stubbornly high at 26 percent of its population.)

In a trend being seen in many U.S. cities, young professionals have poured into downtown Richmond, sparking an apartment-building boom. By some estimates, the number of downtown residents now equals the population of Williamsburg.

The scene is stark contrast to 1994 when Kaine was elected to City Council. Richmond recorded 160 homicides that year, making the city one of the most dangerous in the country. The recent closing of two block-long department stores, Miller & Rhoads and Thalhimers, seemed to signal the death of the city’s downtown.

Richmond’s fortunes, however, began to change in 1997.

Project Exile was created that year in an attempt to stem Richmond’s murder rate. The program prosecuted the illegal possession of guns in federal court, where conviction carried a mandatory five-year minimum prison sentence. Homicides dropped by more than 55 percent during Kaine’s term as mayor, 1998-2001, and stood at 37 last year.

Also in 1997, Virginia initiated a historic tax credit program that allowed developers to reduce the cost of rehabilitating old buildings. The program has had nearly $4 billion in economic impact in the past 17 years throughout the commonwealth, according to a recent study. The downtown Miller & Rhoads store is now a hotel and apartment complex. The Thalhimers store now is part of Richmond CenterStage, whose Carpenter Theatre is a former movie palace.

While those programs helped turn the tide in Richmond 17 years ago, Kaine said that one of the forces driving Richmond growth today is the “energy” being generated by entrepreneurs like those gathered in Scott’s Addition.

“I really want to know: Why is it working?” the senator asked, urging the entrepreneurs to let him know what government can do to help their businesses.
Many of their concerns focused on education and workforce training, issues that fall more within the bailiwick of Kaine’s wife, Anne Holton, Virginia’s secretary of education.

Mark Henderson of Relay Foods and Heather Loftus of PlanG, talked of the difficulty they are having finding computer developers and programmers. Henderson, whose company allows customers to order food and household goods online, said he searched Richmond and Charlottesville for programmers before finding help in Boulder, Colo., and Atlanta.

Loftus had a similar complaint, adding that her company, an online service for making and tracking charitable contributions, has sought technical help in places as far away as India and Ukraine. “Even though, Richmond has a wealth of creative and artistic talent, there is an intersection of marketing and technology where we can’t find people,” she said.

Kaine said the shortage could be the result of programming and computer science being regarded as electives in many school systems rather than being counted as courses meeting math or science requirements. Steps to change the situation have been taken, he said, “but more needs to be done.”

In contrast to their workforce concerns, the entrepreneurs were remarkably upbeat about their ability to find funding. Jim Ukrop, the former chairman of Ukrop’s Super Markets Inc. who now is a partner in a venture capital development firm, said a new generation of investors is emerging from people who have sold businesses in recent years.

Loftus said PlanG has received widespread support from angel investors in Central Virginia. “We raised all of our money here,” she said.

Emmett, the Health Warrior CEO, believes Richmond’s entrepreneurial environment is just a step behind trendy cities such as Portland, Boulder and Austin, Texas. Richmond’s challenge, he said, is to keep the momentum going.

“It has all the ingredients,” Emmett said.  “It just needs to turn up the volume.”