2011 State of the City

Good afternoon.  I would like to thank each of you for coming today.  I would also like to thank the Hampton Roads Chamber of Commerce and today’s sponsors for organizing and supporting this annual event… and my Towne Bank family, and my family at home — my lovely wife, Bev, and our three daughters, Mollie, Kate and Anne Douglas, for all the support and encouragement you give me on a daily basis.

 

Last but not least, I’d like to thank the newest addition to The Sessoms Family — five-week-old Madie — in my opinion, the most beautiful baby girl in the world.  I’m a first-time granddad, and there’s nothing like a new grandbaby to make a person feel good about the present, and think about the future.

Speeches like this are traditionally full of recognition….  But let me tell you, I wouldn't have run for Mayor if I didn't really believe in Virginia Beach.  When I am traveling, either near or far away, I often run into people who ask where I am from.  This happens to all of us, but you know what I tell them?  I tell them I am from Virginia Beach — the finest city in the world.  And I’m not kidding.  I don't say this because I am the mayor.  I really believe it.  I think when you stack up our list of attributes, our accomplishments, and our offerings, that's a statement we can make that’s tough to dispute.

Sometimes, I think we get so busy with daily life that it could seem like we live in a city like any other, but that’s far from the case.  Think about our eastern and northern boundaries — the Atlantic Ocean and the Chesapeake Bay.  Not many cities of this size have such fabulous, God-given natural treasures.

Because we have been so blessed by our natural abundance and economic advantages, Virginia Beach must be a strong advocate and champion for Hampton Roads.  Since we have the largest footprint in Hampton Roads, it stands to reason that what’s good for Virginia Beach is probably good for the region. 

That tells me Virginia Beach has an urgent interest in shaping and promoting what's good for Hampton Roads.  As stewards of the future, it is our first duty to set the table for the next generation.  If in 25 years, a future mayor is standing at a podium like this and rattling off a string of successes that we started, we've done our job.

And as lucky or blessed or fortunate as we are, we cannot rest.  There’s work to do, to make sure that as bright as Virginia Beach's past has been… as great as it is today, our future is even brighter.

As I prepared my remarks for today, I thought back to my first days as mayor just two years ago.  We were addressing an $81 million budget gap that year.  The future of Oceana and the BRAC Commission were front and center in everyone’s minds.

We were near the bottom of the worst recession of our generation.  Federal and state funding cuts were threatening to jeopardize our ability to provide core services like education and public safety.  And I was personally wrestling with the role our city could play in the energy crisis facing our nation.

Big issues… and tough challenges.

We came through those challenges, and there are more ahead….

I’m not breaking any news to anyone here when I say the weight of this long recession has worn down the budgets of every state, every city, every county and every town in the country.  Virginia Beach is not an island.  Factors larger than us — like the continued shrinking of residential real estate and commercial property values — are putting the squeeze on the city and the school budgets.

Yet our track record of fiscal management is outstanding and has been a saving grace….  Our debt is modest, and our conservative fiscal policies are paying big dividends.

Virginia Beach citizens saved $17.9 million last year when the city refinanced various bonds at extraordinarily low interest rates.  Those savings were possible because of our AAA bond ratings from all three Wall Street ratings agencies.  Moody’s says our “city’s debt burden will remain affordable, even with its substantial capital plan, due to the city’s active debt management policies.”

Still, federal and state funds to our city have been shrinking for the past decade.  Last year, we closed a budget gap of $111 million, and the year before that, the $81 million shortfall I mentioned earlier.  This year we're looking at an almost $24 million shortfall.

We have balanced the budget by making hard choices….  Programs have been eliminated, fund balances have been reduced, vacancies have gone unfilled, and city employees have not seen pay increases.  I know this hurts, and I thank them for their dedication and service.  Will all City employees please stand and be recognized?

Our city government operations are efficient, cost-effective, and still responsive — delivering services our residents have become accustomed to.  In fact, today the average Virginia Beach family is paying $337 less in taxes than it paid two years ago.

Raising taxes has always been — and still is — a last resort for us.  I am looking hard at this year's budget.  But I'm proud of our quality of life, and I won't be the one to cut, cut and cut until city services fall below the standards our residents demand and deserve.  The state of the city’s finances will not be compromised on my watch.  I also will not let the city lose its AAA bond rating.

Meanwhile, actions — not words — are helping us nurture one of the city’s largest economic engines — NAS Oceana.  In partnership with the state, the city has acquired or reached agreement to acquire 513 dwelling units and, of those, 453 have been eliminated.  We’ve threaded a needle that makes Oceana better for the Navy… and better for the prosperity of Virginia Beach residents and businesses.

When we were about to lose this important Navy asset, it gave us a good opportunity to appreciate the true significance — to both us and the country — of this gem in our midst.

So what is the state of our base today?  Here’s how Alan Zusman, former Department of Defense Encroachment Management Program Director, put it: “Oceana is like a Phoenix that rose from the ashes, and the city and state's program is a model for the entire nation.”

Not to mention, just last year, the Association of Defense Communities named Virginia Beach “Active Base Community of the Year” — largely for our work with NAS Oceana.

It's nice to get that recognition, but the most important word in there is “active.” We want to host an active military base.  We're happy to be part of an important past, but we want to be a partner to help the military have a successful, active future.

And by the way, we're not done.  The city continues to budget millions of dollars a year — in a partnership with the state — to buy property around Oceana, to keep the Master Jet Base here.

Two years ago, Governor Kaine neglected to fund these land purchases, but the General Assembly felt it was so important that it included $7.5 million in the final budget.  This year, after the General Assembly trimmed those funds from the Governor’s budget, Admiral Harvey and I traveled to Richmond to make our case.  Last Thursday, the General Assembly voted to restore the funding.  Thanks to Governor Bob McDonnell; Admiral John C. Harvey, Jr., Commander of the U.S. Fleet Forces Command; and our delegation for being such strong and sensible allies.

As a sign of affirmation and commitment to this program, I am delighted to announce today that last night, City Council authorized the acquisition of three major tracts of property totaling over 1,350 acres.  These properties will also be purchased using the BRAC Program money dedicated to acquiring the lands in the APZ and Interfacility Traffic Area between NAS Oceana and Fentress Airfield in Chesapeake.  This is a major acquisition — supported by the Navy — and demonstrates this City’s ongoing commitment to the future of Oceana.

 

Despite our success with Oceana, there are still many threats to the military's strong presence here in Hampton Roads.  Just look at the prospect that an aircraft carrier could be moved from Norfolk to Florida.  That would be a huge blow to the region.  It's a big country and a big Navy, and one, two or even three cities in South Hampton Roads working to keep “their” piece of the military here simply isn't going to do the trick.

All our cities, counties and towns need to appreciate what we have, and we need to work together — and in partnership with the military — to meet the needs of the Department of Defense.  Sure, we need them, and they need space to train to defend our country; and their families need solid, safe, enjoyable communities to live in.  From Virginia Beach to Franklin, we all need to recognize that we're in this together.  We need each other.  This type of thinking will make all our cities stronger economically… and our nation stronger militarily.

 

America is a mighty nation.  Will all members of the United States Armed Forces who are with us today — both active and retired — please stand and let us salute you!

We have so much to celebrate.  Even during the worst recession in a generation, the City of Virginia Beach has enjoyed national recognition and local economic success.

Our city is listed as twelfth among cities that can give you a career boost, and that's getting better, too.  Virginia Beach now has its first Fortune 500 company….

Amerigroup, a managed health care organization, leaped into the Fortune 500 last year when it grew by nearly 15 percent, brought in $5 billion in revenue, and now ranks at number 404.

I'm no health care expert, but I have to believe with the changes in the national health care system, Amerigroup is not nearly done growing yet, and we can look for more great things from this fine corporation.

Our hometown is a great place to do business.  Listen to this businessman’s view:

[Video Clip featuring Stihl President Fred Whyte]

Thank you, Fred.

Fred and the leaders at Stihl introduced me to executives of BMZ GmbH, based in Karlstein, Germany, during my visit there last summer.  Governor McDonnell followed up with them on his visit a couple of months after that, and out of those trips this relationship blossomed.  I am so pleased today to announce that BMZ will establish its United States headquarters here in Virginia Beach.  BMZ is in the lithium ion battery business….  You don't have to know much about the technology to know that lithium ion batteries are increasingly the charge behind medical devices, power tools, mobile data entry devices, and wind and solar energy.

Our vision of establishing Virginia Beach as a hub for alternative energy is taking shape!

I’m thrilled to announce that one week from today, LifeNet Health will break ground on its new Institute of Regenerative Medicine.  This $15 million, 42,000-square-foot facility — the first of its kind in this region of the United States — will house over 50 medical, scientific and research professionals, and will serve as a global center for research.  Thank you, LifeNet Health for strengthening the city’s posture as an emerging leader in the biotech industry worldwide!!!

Companies like Amerigroup, Stihl, BMZ and LifeNet Health — coupled with our outstanding workforce — must be among the reasons that the Brookings Institute ranks us 36th out of 150 regions in the world for both large and small companies during the economic recovery.

The City of Virginia Beach that we hand over to our children and our children’s children must remain vibrant, fiscally sound, globally competitive, and as environmentally majestic as it possibly can be.

In short, we owe it to future generations to leave the state of our city even better than what we inherited.

If we want our city to be as well thought of two or three decades from now, we’re the ones who have to sow the seeds for that.  We have to set great ideas in motion now for great things that will pay off for the next generation.

That’s a big reason City Council created Envision Virginia Beach 2040, a group of folks who are passionate about this city, and about our responsibility to leave an even better city for future generations.  This group is co-chaired by John Malbon and Gary McCollum, and I’d like to ask those two men and the other members of Envision Virginia Beach 2040 to please stand.

Thank you all for taking on this enormously important work.

While this group of enlightened leaders looks into the future, let’s look at what we’re working on today!

At the Oceanfront, our priorities are to convert the empty lots at 19th Street — also known as the Dome site — into an exciting entertainment center, and to fully showcase this beautiful convention center with an equally beautiful convention center headquarters hotel right outside the front door.

Both will be challenging because they will require us, as a community, to invest.  I have heard the critics of these public-private partnerships, but I think it’s fair to say that by now, we have demonstrated that we know how to work these projects well.  When we partnered to build the Amphitheater, Town Center, the 31st Street Hilton and the public parking garage, we had our skeptics….  But they’ve been proven WRONG, and these projects are now paying off.

What we're doing here — and what we're going to keep doing when it makes sense — is diversifying our tax base, creating jobs, and improving the quality of life for ALL!

Without a doubt, the state of our city is better because of successful public-private partnerships.

Just as an example, Town Center has contributed — after debt service — almost $30 million to the City’s general fund over the last five years.  The Amphitheater has contributed $6.7 million, and the 31st Street Hotel/Garage project has contributed $6.5 million.  Add those three up and that’s $43 million — or $8.6 million per year — that residents didn’t have to pay.

As we consider the Dome project, and the convention center headquarters hotel, we WILL have solid cost projections for them, and we will explain the return we expect to generate on these important investments.

Also at the resort, I’m pleased and proud to announce that the Gold Key PHR development on 31st Street and Pacific Avenue, Beach Centre, will soon be under construction.  Occupying nearly the entire block, this $70 million mixed-use project will include 178 apartments, 70,000 square feet of office space, and 50,000 square feet of commercial retail space, and over 600 additional parking spaces.

Another project on 35th Street and Atlantic Avenue is also under construction.  To be known as the “Oceanaire Resort Conference Center.”  This new $65 million investment will include 220 rooms and 12,000 square feet of conference space.  It will open in the summer of 2012.

These two projects alone represent more than $134 million in private investment within the Laskin Gateway corridor.  This corridor was planned as part of our Resort Strategic Plan which includes the public improvements to streets and sidewalks and undergrounding of utilities that you see underway today on 31st Street.  I commend the City departments of Public Works, Public Utilities, and the Strategic Growth Area Office for keeping this important project on schedule and within budget.  Well done!

As we talk about economic development in our city, we must also talk about agriculture — something we've never taken for granted here, and something we will continue to preserve and enhance.  Through our acclaimed Agriculture Reserve Program, we have preserved almost 9,000 acres for farming for generations to come.    I am sure that you, like me, have seen the growing number of people eager to buy fresh, local fruits and vegetables.  Our Farmers Markets along with our independent stands, have all had successful years providing quality produce to our citizens.

Not only does our farm land give us all a sense of elbow room, but it stokes our economy, too.   The overall economic impact of agriculture was more than $122 million to this City last year — ranking it up there with tourism and the military as part of the “big three” elements of our economy.

Move with me now from the fields to the Oceanfront….  Imagine what the state of our city would be if Virginia Beach became the East Coast center for wind energy.  Look no further than what has gone on in Libya, and is obviously spreading throughout the Middle East, for evidence that this country needs to develop renewable, sustainable energy.

This is why we formed the Mayor's Alternative Energy Task Force.  There's only one place on the East Coast with consistently stronger winds than we have off our shores, and Hampton Roads has so many other advantages that we easily should be the leader.

We have an electrical grid with large enough bandwidth to pull in and distribute that electricity.  We have the port facilities to import, store, construct and deploy wind turbines.  We have the Navy's assessment that these wind turbines — properly placed — would not interfere with their ships or aircraft.

 

So, I don't just feel strongly that we should establish a “wind factory” off the coast, I'd like to see Virginia Beach and Hampton Roads become the epicenter for manufacturing the units… for the scientists and experts who will work to develop even more efficient wind-generating capabilities… and I will work with Governor McDonnell and our delegation to see to it that this clean, efficient energy is used right here in Virginia.

As I look to the future, I think that the single largest challenge affecting the state of our city and region is transportation.

A few weeks ago, we got great news….  Governor McDonnell included $360 million in the state budget for road and bridge projects in Virginia Beach.  We will get more of our local roads projects funded than any other jurisdiction in Virginia.  This includes a long-due replacement of the Lesner Bridge, the widening of Witchduck, Laskin, and Holland roads, and an extension and widening of Lynnhaven Parkway.  And as I’ve been promising for years, all of these new roads will have bike trails!

This is fabulous news, but it doesn’t solve the regional issues.

If we want our businesses to remain competitive and for this region to be a desirable location for commerce, well then, industries need to be able to get their people and their products in and out.  The military will become increasingly concerned about readiness if their members can’t get to and from their facilities in a timely manner.

 

Our resort area — the number one vacation destination in the state — is a highly successful drive-to location.  We must continue to offer reasonable travel times for visitors coming from outside our region.  And, if a hurricane ever takes direct aim at us, we’re going to be hard-pressed to evacuate a million people in a timely manner.

We’ve taken the first steps toward working out some of our gridlock.  For the first time, the Hampton Roads Transportation Planning Organization has devised a truly regional plan to prioritize road projects.  At the top of that list is the need for a new harbor crossing.

Everyone knows we need a new crossing to help move traffic between the Southside and the Peninsula of Hampton Roads.  The crossing bottleneck gets worse every year.  We must make it crystal clear — to legislators, Congressional representatives, the Governor, the Department of Defense, and anyone else who can help make it happen — that we need and support Patriots' Crossing.  Patriots' Crossing would extend the I-564 spur near the Naval base and link it to I-664 near the Monitor-Merrimac bridge tunnel.

While the news of the Governor’s transportation initiative and the TPO’s unprecedented success in prioritizing our regional roadway priorities is absolutely great for Virginia Beach and the region, we must expand our vision… and consider a world with much higher gas prices, much greater environmental concerns, and the need for more energy efficient cities and mobility choices that extend beyond the private automobile.

We are fortunate to have a public transportation corridor comprised of the former Norfolk Southern right-of-way.  This corridor could not be better located to serve the future growth and transportation needs of our city.

Whether the corridor is eventually developed with Bus Rapid Transit or a light rail line is unknown at this time.  As you all have read, the Federal Transit Administration has reviewed the extension study being conducted by HRT, and questioned many of the study’s assumptions, models and preliminary findings.  Initial construction cost data appears to be higher than anticipated for the entire line to the Oceanfront, and ridership projections beyond Town Center may not be competitive in the quest for federal funding.

 

Phillip Shucet, HRT’s Executive Director, has wisely put further work on the study on hold until the FTA clarifies its questions and position.  This recent development contains the very real possibility that completion of the study may not occur in a timely manner to allow City Council to select the locally preferred alternative for the transit corridor by year’s end.

Although this development is frustrating, it offers an opportunity for us to step back and fully consider the many moving parts that have become the unfortunate saga of HRT’s current Norfolk light rail project.  Until Norfolk’s starter segment is up and running… until the investigations currently underway are concluded… and until all results are shared with the public, I cannot, as your Mayor, support making any further decisions on the light rail extension in Virginia Beach.

However, while current events may wisely dictate a delay in our efforts to extend light rail into Virginia Beach, I do believe that in order for Virginia Beach’s long-term future to reach its true potential, we must achieve viable public transportation alternatives.  Energy, mobility, environmental and redevelopment imperatives are converging in a dynamic way that allows no other thoughtful conclusion.  But as I said, until all facts are on the table, including the Tide’s actual ridership that the FTA is seeking, I will not ask the community to proceed with such a major decision.  This is important.  Let’s take this time to get it right.
 
Another critical transportation component for our region’s future is High Speed Rail.  Through the aggressive efforts of the TPO, we have positioned the region to be competitive should the nation’s priorities allow the development of the High Speed Rail network.  As energy constraints and highway network congestion increase, the connection of our nation’s vital regions demands another visionary alternative.  In the future, inter-regional trips of less than 600 miles could be more efficient utilizing High Speed Rail technologies rather than congested interstates and crowded airways.

What we must do as a region is to assure that we are prepared to be part of the High Speed Rail network.  If Hampton Roads is by-passed by High Speed Rail, the prospects for regional economic performance and our collective higher quality of life will be severely diminished, and we cannot allow that to happen.

As stewards of the next generation’s future, we must focus our attention on preserving great schools, great services, great neighborhoods, and a healthy environment.  Look at what we’re doing in Western Bayside….

Working with non-profit, faith-based groups, we’re taking steps to provide a network — a true connection — for young people.  We're opening gyms on weekends to provide places for them to get together, exercise and experience first-hand the personal connections that a community can offer.  And just recently, we've broken ground on a new rec center in Western Bayside.

And thanks to the Mayors’ Action Challenge for Children and Families, thousands of Virginia Beach families are on their way to a better quality of life.  Through this nationwide initiative, and working with a variety of partners in our community, including Schools, we will accomplish four major objectives:

First, we’re going to strategize to make Virginia Beach an even safer place.  Already this year, police officers have conducted door-to-door interviews of more than 1,000 residents who live in neighborhoods requiring the greatest amount of police resources.

Second, we will also connect 500 low-income families to mainstream financial institutions, and help them avoid foreclosure, avoid predatory lenders, and stretch budgets in tough economic times — ensuring they are “financially fit for the future” by 2015.

Third, we will also curb childhood obesity, and promote preventive health care, healthy eating, and physical fitness.

And finally, we will work to ensure that our preschool children are prepared to be successful in kindergarten.

The education of our children is vital to the future economic success of our city, and that’s why the Virginia Beach City Council has invested in ambitious capital projects like the beautiful Renaissance Academy and Virginia Beach Middle School that opened last year… and College Park Elementary School and Great Neck Middle School — both set to open later this year… and the new Kellam High School that will soon get underway.

We’re also working to preserve our environment for the next generation.  One example I’m very proud of is our partnership with Lynnhaven River Now.  They’ve been doing great work with the city to clean up the river.  There’s been a “no discharge zone” established for boats, the City’s sanitary sewer system has been improved, we’ve reduced the effects of stormwater run-off, and new oyster beds have been created.

How’s all this working?  Just since 2002, when only ONE percent of the Lynnhaven River was open to shellfish harvesting, there’s been an improvement on a scale that environmental clean-up projects hardly ever see.  Now, more than 41 percent of the river is open to shellfish harvesting.  When teamwork like this can show improvement like that, it creates momentum that will continue to make the Lynnhaven healthier, and establish our work with Lynnhaven River Now as a model for other Chesapeake Bay cities.

Every city is a product of its people.  In Virginia Beach, we have a special blend that truly makes us unique.

First, we have the finest citizens and businesses in the world.

We have a devoted team of first responders that keep Virginia Beach one of the safest cities of our size in the nation.  To the police, fire and rescue squads, we say thank you.

We have educators who are first class.  Thank you for all that you do, day in and day out.

We have volunteer organizations that would be the envy of any city anywhere.  Thanks to you, too.

The city staff in Virginia Beach is dedicated and talented.  Thank you for your hard work.  And thanks to the Virginia Beach City Council and the School Board for providing such great leadership.

As you can see, we have much to be thankful for in Virginia Beach, and I want to be clear about this….  Virginia Beach is a great city.  As I said, I tell people that I believe it is THE GREATEST city in the world — because we have worked for a generation to build a quality of life and top-notch services that are unparalleled anywhere.

Those of us in this room who have seen more sunsets in the past than we will in the future have an obligation to the next generation — and the one after that — to make sure that we continue to build upon and improve this quality of life. 

It is our responsibility to move ahead, to take hold of new opportunities, and to put the wind at the back of the generations coming after us.  Let’s give them every chance we had to live in a great city — the best city in the world: Virginia Beach, Virginia.