ABC 13 Special Report: Missed Opportunities
Danville, VA - When a city's economy is struggling, getting a company to bring hundreds of jobs is a real home run.Often in return, thousands, even millions of dollars are given to those companies, but many times, the projections are not met and the jobs never show up.
There are examples of this on the Southside, and when it happens, there are often so many questions.Amelia Brantley worked for Web Parts LLC for almost a year and left the IT company in April.
Web Parts came to Danville in 2012, projecting 260 new jobs and receiving $1 million from the Tobacco Commission, plus $100,000 from the city, but the company never grew past 10 employees.
"Server problems, software problemsit just never came to fruition, " Brantley said.
Owner Brad Mainland says he's not to blame. He says Danville Economic Development officials led him to believe the city had plenty of potential employees with advanced IT skills, which he says wasn't the case.
"We've had very limited success recruiting from the local area, " Mainland said.
City officials say they communicated these challenges to Mainland in advance, but Web Parts isn't the only company that came in as part of a recent jobs revival that has fallen short of expectations.
You may remember the Advanced Vehicle Research Center which opened in 2009. Owner Dick Dell died just a few years later and the bank foreclosed on the property. The new owner is now working to reopen the facility.
US Green Energy came in 2010 projecting 372 jobs over 3 years, but faced setbacks that have kept them from delivering.
Batolii is a sportswear company that received a $70,000 grant from the city. Owner Richard Robinson is currently serving a three-year prison term for trying to run off with that money.
"The main thing is just to survive and get through the tough times, " said Economic Development Director Jeremy Stratton, and those tough times often mean intense pressure to bring in jobs.
Danville's unemployment rate is above 8%, and if the city doesn't offer incentives for potential employers, other cities most certainly will.
But Stratton says, even with a boost from the Tobacco Commission, there are never any guarantees.
"Over a ten year lifetime of a company, seven out of ten of them do fail. If we are going to move this economy forward, we are going to have to take some calculated risks with some of these companies, " Stratton said.
We asked Delegate Danny Marshall, who is on the Tobacco Commission, about what happens to all of that grant money if a company does not succeed.
He says the money given by the Commission is conditional. If a company projects 100 jobs and only creates 50, they can expect to pay back some of the money.If the company meets none of their goals, they must pay the amount back in full.
Green computer company Ecom Nets is in the process of paying back $90,000 to the Danville Regional Foundation and $230,000 to the Tobacco Commission after they projected 160 jobs and had to scale back that number earlier this year.
Marshall says it is the responsibility of city officials to make sure a company is viable for success when they bring it before the commission.
"We have seen some companies that had all good intentions, but when the economy tanked in '08, the world changed, " said Marshall.
"Anyone can have very good projections about what they are going to do. So business plan lays out your ideas, but it really comes down to how they execute that plan, " said Stratton.
But what does that mean for the region's unemployed?
"I trusted the city. When they said this was a good company and they were going to be good for us. I have enormous regret, " said Brantley.
It's important to keep in mind, not all of this money comes out of taxpayer's pockets.
Tobacco Commission funds come from the tobacco Master Settlement Agreement of 1998.
Not all of the companies that came to Danville in recent years have struggled.
Friday, we'll take a look at a few companies that are getting our local economy back on track.