Business Drives Rival Economic Development Alliances in Southeastern Virginia to Follow Merger Trend.

HAMPTON ROADS, Va. -- Motivated by the trend of national and international business mergers, the Hampton Roads Economic Development Alliance and the Peninsula Alliance for Economic Development completed today their vote to merge effective March 1, to make the 1.5-million-population region around the East Coast's second-busiest harbor, in southeastern Virginia, more attractive to prospective businesses and easier to market around the country and world.

"This merger makes Hampton Roads more competitive in our quest to attract business that will enable our region to grow and prosper," said C. Jones Hooks, president and chief executive officer of HREDA, which has represented South Hampton Roads in efforts to lure expanding and relocating businesses. "The single greatest benefit of this merger is promoting the entire region and its assets in a uniform manner throughout the world. We expect there to be efficiencies of cost-savings." Thirteen communities are affected.

Merger of local and regional economic-development alliances like HREDA and PAED is a trend that began in the 1980s and has been reignited by forces such as the mergers of huge national and international companies, which provide significant funding for economic-development agencies.

"Today, you are not just competing with your neighbor," says Jeff Finkle, president and CEO of the Washington-based International Economic Development Council. "Your competition is also someplace in China." Adds Mayor Joe Frank of Newport News, a member-city of PAED: "The cities of Hampton Roads no longer only compete against each other, but in a global marketplace. Recognizing this made coming together compelling."

"We were going to the same conferences and competing for the same Fortune 500 companies," says Donald V. Jellig, vice president of Sentara Healthcare, southeastern Virginia's largest health care system, and former HREDA chairman. "Once you get 50 miles out of Hampton Roads, no one knows the difference between the Southside, Peninsula and western Tidewater. The investors - the businesses - pushed this because you can take the same dollars and do far more marketing."

Mr. Hooks will continue as president and CEO for the new organization, which will bear the Hampton Roads Economic Development Alliance name.

Mr. Hooks and Richard D. Weigel, outgoing president and CEO of the PAED, say other advantages include greater opportunity to tout such common and shared assets as the ports, colleges, research facilities and major employers; greater attention from the state in lead referrals; elimination of intra-regional competition; and the ability to present business prospects with statistics that are more-impressive because they reflect the true picture of the region and the actual boundaries of the metropolitan statistical area defined by the U.S. Department of Commerce.

"This creates a true southeastern Virginia economic-development partnership," says Mr. Finkle.

Historically, the communities separated by Hampton Roads harbor have maintained separate identities, with separate infrastructure. Stepped-up mergers in such industries as banking, health care and real estate have resulted in businesses pressing for less duplication of efforts in several areas, including economic development.

"This is long overdue," said Dennis J. Donovan, a principal at The Wadley-Donovan-Gutshaw Group, New Jersey-based site-consultants, who help businesses find the right location for their operations. "It's win-win."

Mr. Donovan says businesses have long viewed southeastern Virginia as "one fluid market," yet "we were always dealing with two groups. It doubled the work. This merger reinforces the concept that this is one metropolitan region. That will generate more prospects and bring the area in line with customer perceptions."

He views Hampton Roads' chief competition as Nashville, Charlotte, Raleigh-Durham, Louisville, Tampa and Orlando -- other metro areas with less than three-million populations. Location along the southern U.S. Atlantic coast and a high-quality, affordable workforce are this region's top two assets, he believes.

Other recent regional economic-development alliances have been created in the Tampa and Greensboro areas, and in Kansas City by merging agencies representing individual cities and counties.

"Even if a company doesn't land in `my' locality, there is still a feeling of some benefit there," explains Tim Cowdin, senior vice president for business development at the Kansas City Area Development Council, formed in western Missouri and eastern Kansas in the late 1970s. "There is no benefit if the business goes to Dallas-Fort Worth or to St. Louis."

The fates of groups that have merged, says Mr. Finkle, have been "positive."

With offices in London; Bremen, Germany; and Garches, France, the new HREDA will continue to have its headquarters at 500 East Main Street in Norfolk and will operate its Peninsula office at 21 Enterprise Parkway in Hampton, Mr. Hooks says.