By Jeff Maisey
At the end of last year, I sat down with Norfolk Mayor Kenny Alexander to discuss a wide array of topics.
Mayor Alexander had succeeded longtime mayor Paul Fraim. For Alexander, his new role was quickly made more challenging than anyone realized as the city manager and most of its key department heads moved on to other cities.
The duties of being mayor as well as his prior time serving in the General Assembly in Richmond have taken a toll on his role within his funeral home business. He has not been able to work a full day in over two years.
The year 2017 has seen a lot of positive energy for this historic port city that is today the cultural hub of the Hampton Roads region as well as the home of the world’s largest naval base and the only headquarters for NATO outside of Belgium.
In early December, I caught up with Mayor Alexander and asked him to reflect on his experiences. Here’s what he had to share.
Looking back at 2017, the city of Norfolk saw the opening of The Main and Waterside District. The city also celebrated the 100th anniversary of Naval Station Norfolk in conjunction with the centennial of America’s entry into WWI. From your viewpoint, what have been the highlights for Norfolk?
Of course, celebrating the 100th anniversary of Naval Station Norfolk with a year-long celebration.
Very early on we established the Mayor’s Centennial Commission and we populated it with a diverse group of stakeholders, including persons from Naval Station Norfolk and retirees of our military. We continued that celebration as we had the Grand Illumination (in November).
Of course, the Norfolk NATO Festival and the Virginia International Tattoo were to help celebrate how proud Norfolk is of our military. People came to Norfolk from all over.
Travel + Leisure recognized Norfolk as the Favorite City in America.
The highlight for me is that Norfolk is the best small big city. How I define small big city is that we’re small in size, however we’re big as it relates to the plethora of assets that we have.
We have 7-1/2 miles of beach. The city is leading the revitalization of that beach with the Army Corps of Engineers as it relates to sand replenishment but also as it relates to acquisitions. We are strategic in partnering with the private sector to make sure the acquisitions are smart.
We continue to celebrate the opening of ADP, The Main, Norfolk Premium Outlets, and the additional stores since we talked last. Also, the possibility of the Scope arena expanding by 1,500 seats with 12 or so luxury boxes, increasing our ability to attract some of the larger events traveling around the country.
Right now, we lose, in general, because they go from Washington, DC to Charlotte or Raleigh, bypassing Virginia all together. We just have not had the venue size. I think the spirit and the market is here with 1.7 million people in our SMA (Statistical Metropolitan Area). We know that 70% of people who attend those types of events will come from outside of Norfolk.
I’m very excited about The Waterside opening and The Main with the jobs they’re bringing.
Since you brought up Scope, our hockey team has lost its NHL team affiliation. Do you think this will make it harder for Norfolk to land another professional sports team?
I’m not that familiar with the acquisition. I met the new owners of the hockey team, but what I’ve heard is that whole acquisition and transition may not have been as promising as the new owners thought. They should have done more due diligence.
In talking with my people, we won’t have a problem drawing professional sports teams here. I don’t think we’ll grow our arena to an NBA standard because they require so much.
I have had conversations with the commissioner of the C-USA (Conference USA) about bringing some conference games here. I think with an expanded Scope we can probably get an NBA pre-season game or exhibition game.
Of course, concerts, volleyball, hockey and mixed martial arts.
I think there’s a niche for our city that fits with our size. We have to be purposeful and strategic in going after that market.
Recently, when you and I spoke, you had expressed some concerns regarding some financial restrictions the previous city administration may have put on the city. Can you elaborate on that?
I think that it has not been well-communicated of what we as a city have done over the past 10 years. So, let’s just put it out there.
I’m very happy with the previous administration. I think they positioned Norfolk very well for growth and prosperity. However, I think the communication of what all has transpired may not have been readily available to the general public.
For example, if you look at our revenue. Where does our revenue come from? Our revenue primarily comes from real estate taxes and personal income taxes, which equates to about 60% of our revenue.
Of the $1.26 billion we have to operate, 40% of that comes from state and federal sources.
Here are your challenges: the 40% coming from state and federal sources are designated, earmarked. They’re not discretionary. If you look at what’s discretionary, it’s about $857 million. You have public safety, public education, public works, public utilities, public infrastructure…even if you decide to build at St. Paul’s quadrant, which I now call Church View, the city would be responsible for putting in the infrastructure, even if we brought-in a developer. They would like to have a pad that’s ready for development. If the infrastructure improvements cost $1 billion, it’s very challenging.
Out of the property in Norfolk – and I think this is where the conversation needs to be had – 38% of all of our real estate is exempt from the personal property tax I just mentioned. Thirty-eight percent!
Now, some of it is the Port, Naval Station Norfolk and other federal facilities. I think they’re fine because they bring jobs, value, and they define us. They give us character and make us unique. And the museums, of course.
But if you start to look at some of the areas like the 200 acres we now call Church View, which is primarily low-income public housing – it’s not taxed. There are 4,500 people with 2,200 of them children. Poverty is high.
If you look at how much money the city generates in taxes on that acreage it’s only about $300,000.
We have an opportunity to do several things. One is to give those families a better way of life; better schools; better housing; address flooding; create a mixed-income, mixed-use community, and more importantly you will see a reduction in crime and a reduction in our high unemployment rate there. It will give the children stuck in poverty and real opportunity for growth and development.
Lastly, you’re going to put 200 acres back on the tax rolls, which allows us to invest into education, health, infrastructure, the arts.
Another issue I don’t think has been well documented is our credit card. The city has a credit card, or a line of credit. Our debt ceiling is about $1.9 billion. What we have borrowed, or obligated on that line of credit over that past 10 years, is close to $1.4 billion. That only leaves $500 million for additional projects we may want to borrow money on. We can borrow money at 3% interest so I see why you would borrow when money is that cheap. But those are generational projects that we have done, so I think that needs to be communicated.
You have city council members who want projects done in their districts and wards throughout the city. If you don’t have the cash, then you borrow the money. But you have to have a revenue stream to service the debt.
In addition to getting money from real estate taxes and personal income taxes you have the admissions taxes. That’s why I have been big on the arts and entertainment, because the admissions tax is 10%, which is pretty standard across the region. I think that’s important.
You have the food and beverage tax, with is 6-1/2%. And you have the sales and use tax we share with the state.
So, you have to continue to diversify and grow your economy, and not try to do it on the backs of homeowners. Remember, 60% of our revenue comes from home owners, property owners. Our tax rate is $1.15 per $100 in assessed value, which is not as low as in Virginia Beach but not as high as Portsmouth.
We have to communicate to the residents about the challenges we face and how we continue to make the investments and improve the quality of life for our citizens while keeping the tax burden low. I want more people living in the city of Norfolk.
Again, as we talked last year, we have to be strategic in look at the 7-1/2 miles of beach in Ocean View; looking around Freemason, Larchmont and Ghent. And what do we do with the City Hall building? When we have city council meetings we have to cram everybody into the two or three working elevators.
Shouldn’t our City Hall be on the ground level to make it accessible with adequate restrooms, parking spaces for those persons who are physically challenged.
And, then, what do you do around Harbor Park? Should that be a place for residential living, like The Wharf in Washington, DC, where all around the waterfront from Norfolk State to Freemason. How do we bring it all alive with a lot of energy and collaboration?
You ask great questions, Mr. Mayor. Can I get you to answer those? What do you think the riverfront from downtown to Norfolk State should be developed?
Well, for City Hall, I certainly think we should have a civic center for community engagement and have some type of twin tower where citizens come to do their business, and that they have a City Hall that is accessible and easy to navigate.
We need to create a civic center where people feel very good about coming to the City Hall – the town square – not only for council meetings but other civic meetings.
Around Harbor Park, let’s create more opportunities for people who are working and living in Norfolk. If you look out the window (of City Hall) at 3:30 PM you can see the roads are jam-packed with people going either to Chesapeake or Virginia Beach.
Let’s assess what type of housing opportunities they’re looking for. What are their needs? We need to make sure we can supply their demand.
One of the things I hear either from NATO and US military families as well as non-military newcomers is that they are informed in advance not to live in Norfolk because of the public school system. In almost every case, these people are encouraged to live in Virginia Beach. In terms of quality of life, their children’s education and well-being are a top priority. How can you work to improve and sustain the school system in Norfolk?
Great question. What we have learned is that individuals come to a region primarily because of a job. That’s why they are here, be it the military, Sentara, health sciences, Old Dominion. Of course, the maritime industry and government. People come to the region because of a job, but they decide to live in a city because of the schools.
If Norfolk is losing because our schools lag behind when it comes to the standards of learning. I know a lot of educators don’t want to refer to that being the benchmark, but, Jeff, it is what it is.
If we have schools that haven’t met the basic benchmark then a family will not move to that city. Where the schools are accredited, you will find there’s a shortage on supply (housing), and what’s available may not be affordable.
If you look at the graduation rates, where are our graduation rates compared to Chesapeake or Virginia Beach? You may find that we (Norfolk) lag behind. You may find that we have more schools that are unaccredited than Chesapeake or Virginia Beach.
Then you look at where the kids are going after high school. Are they going to college? Are they going in the military? Are they getting post-high school certification that will allow them to go into employment?
What I have asked for – and I’ve been very vocal about it – is a school improvement plan from Norfolk Public Schools. I’ve asked the superintendent. I’ve asked the chairman of the Norfolk School Board.
The citizens in Norfolk, the business community, and especially the children deserve to have a school improvement plan. Not necessarily how much it’s going to cost to put a roof on. The kids don’t care about that. Parents are concerned, but that’s not their care. Capitol improvement and cosmetic things are thing we should be concerned about, but that’s not my care. My care should be our kids graduating by meeting or exceeding all of those benchmarks and having real opportunities to go to college, the military, or move into employment.
One of the things we do in Norfolk is a lump sum appropriation – about $329 million. $196 million of that comes from the state. The other comes from local tax dollars. We approve a lump sum to Norfolk Public Schools, ok?
Now, I’m in business. You and I have developed business plans before. We’ve had to borrow money before and then pay it back. When we go to a banker or lender they ask us for three years tax returns, P&L, financial statement, and a “are you going to guarantee this loan” paper. We have to give documentation.
I have not seen any documentation since I’ve been the mayor from Norfolk Public Schools in order to receive that $329 million.
When it comes to the governance of the schools we are prohibited by law from taking over. But the financial responsibility rests with the city council.
You can have a school board to propose a budget of $500 million. They can pass a budget. They have no taxation authority to generate it. Then they could say, “Norfolk City Council did not fund public education,” and some people would believe it.
We need to start talking about expectations and goals. $329 million is a lot of money for failing schools. We really need to have an honest conversation.
I think that Norfolk should take the lead in standing up the region’s Career Technical Education Pathway School. With Sentara, Bon Secours, and some of our private healthcare providers we could anchor that school with a health/science component.
You have to look at the industries we have, not necessarily the industries we want. We’re rich in maritime. We’re rich in military and defense. We’re rich in health and culture. This is who we are and this is what defines us.
We can talk about cyber. We can talk about drones. And, yes, they are emerging. But let’s not lose what we have trying to figure out what’s on the horizon. We can be mindful of what’s on the horizon, but what pays the bills are the industries we recognize.
Police Chief Boone recently spoke at a monthly Ghent Business Association meeting. He explained how he and the city are allocating more assets – personnel – in neighborhoods that have problems and reducing police presence in other areas of the city such as Ghent. It seems to be successful, but I’m wondering if you can share your thoughts on the topic?
One of the things I should say is part of the Michael Goldsmith coming to City Hall to work on the bigger picture – working with the FBI and other law enforcement in the region – is going very well. He hosted a conference last week with all of the police chiefs, FBI, ATF etc. to make sure we’re abreast of what’s going on as it relates to national security.
Norfolk and Hampton Roads are on the map of where terrorists want to target. We have averted four possible terrorist attacks.
How recent were those foiled terrorist attacks on Norfolk?
Since I’ve been mayor.
It is part of the talking, learning and understanding who we are and where we are in the world.
Since 9/11, cities around the country moved away from community policing and moved to this paramilitary operation. What we have done in Norfolk is ask Chief Boone to revisit the community policing and what worked back in the 1990s, right after crack cocaine hit in the late ‘80s and Norfolk started the PACE program. We were able to partner with stakeholders and community enforcement and saw a reduction in violent crime. We’re revisiting that.
Crime is down in Norfolk, however, there is still too much. One death is too many. I’m a big fan of a strong police presence, so I don’t want a reduced police presence in other communities because what happens is you’ll see an increase in non-violent crime – car break-ins, burglaries, and things like that. I think we need to strike the right balance. I’m willing to put more money in this budget (2018-19) to make sure we keep a police presence throughout our city, but more importantly that we continue to put pressure on communities that have high crime. When you have drug transactions going wrong and violent crimes continue to boom I continue to believe traffic stops and raids that are Constitutional and legal are the way to deter.
Getting into prevention very early as we are in our rec centers, our schools and faith-based communities help prevent crime in the first place, but when you have people who are violent you’ve got to be tough on them. At the same time, don’t leave your backdoor open in other communities.
Last year we also discussed a potential international flight from Norfolk to London, Paris or Brussels. I hear from members of the Norfolk Airport Authority that cities like Providence, Rhode Island has been able to lure low-cost Trans-Atlantic carriers because the city provides financial enticements. Do you see Norfolk making such a commitment given the city’s challenging financial means?
First of all, let me say I’m very happy with the improvements at the Norfolk International Airport. I fly a lot and I know you do as well. I think the common space, the terminals, public restrooms are something we should be proud of.
There are a lot of non-stop flights to Dallas, Atlanta, so we do have frequency. We have talked about a non-stop flight to the West Coast. I’ve had this conversation with Blythe (Scott) and our city manager. The city manager and deputy city manager are working on that.
We are talking to stakeholders in the business community to see how we can get a couple of non-stop flights to Europe and the West Coast. One of the things we’re talking about is a charter flight once a week to Europe.
Norfolk has so many international families. I’ve often said the Selden Arcade, which the city owns, should be dedicated for a festive international marketplace where our international citizens and visitors can display their culture, wears, products. It helps define who we are with our Sister Cities, with our NATO countries, and our students at Old Dominion as well as those internationals working at the Port and hospitals.
Norfolk will be enriched and empowered by having that direct flight. That just makes since.
Recently a news report shared the cities of Norfolk and Portsmouth are seeking ways to work better together. Do you see a merger on the horizon?
I think that merger question had been on the table when Johnny Joannou offered a resolution in the General Assembly that started talks. I served on that commission when I was in the House of Delegates.
I think a merger might not happen in my lifetime, but to have these two cities that share this beautiful river; that are rich in maritime history, military history…I think for economic development, festivals and tourism…our city managers met recently to work out terms. There are opportunities for our cities to work together. We’ll start there, but you just never know.
Last year’s budget was set by previous city manager, Marcus Jones. Now that your team is in place, how do you see the city moving forward with a Mayor Alexander and Doug Smith-led government?
Thank you for raising that.
One of the things that had not been communicated was when I was elected mayor the media and public did not pickup on that within six months we had five managers on the 11th Floor that had these large port folios, meaning they were department heads and pretty much ran the city, departed. Peter Chapman, who was the deputy city manager, went to Detroit. Ron Williams, another deputy city manager, went to Virginia Beach. Marcus Jones, city manager, went to Charlotte. Sabrina Joy-Hogg went with Marcus to Charlotte.
The only person left was the most junior person – Wynter Benda.
So, you have a new mayor. It all fell on my shoulders. A $1.62 billion budget. Five thousand employees. Public/private partnerships. Waterside hadn’t opened and there was very little work going on at Waterside. ADP was just beginning to move in. The IKEA contract had not been inked. The outlet mall was under construction.
Again, you have a new mayor, who hadn’t served on City Council before. I had to come in and just spend every day.
This is the first time I’ve ever articulated this. It wasn’t anybody’s business but mine. I signed up for the job.
So, I called Doug Smith right after Marcus told me he was leaving. Doug was in the private sector doing his thing.
I said, “Doug, where are you?”
He said, “Mr. Mayor, I’m in Suffolk and about to see a client.”
I said, “Well, I need you to come see me at City Hall.”
He walked into City Hall and I said, “I need you to serve as intern manager.”
He said, “Can I call my wife?”
I said, “No. You need to make a decision tonight.”
I had not talked to one person on City Council that I had just hired a manager, but my council trusted me.
I’ve never shared with them the stress and pressure I was under losing that many people.
I called the Council and told them what I did. Some said, “Mr. Mayor, I wish you had told me,” and, of course, you go through that because you’re a team. It’s a partnership. I don’t do this stuff by myself. But somethings you’ve got to show courage and leadership on. I had to pull on all the experiences I had.
With Doug, we started building a team.
I understand the city has a new branding message and logo. The logo is the word Norfolk with the letter O and K highlighted to stand out. The video spotlights the US Navy, NATO, museums, the arts, breweries, restaurants and the like. Can you share details?
OK, Norfolk is more “bravo.” You don’t want people saying Norfolk is just ok. It’s like, Bravo, Norfolk. Alright, Norfolk. We’re highlighting the “o” and “k” in our name.
If you look at Columbus, Ohio. They are now using “US” in their name.
We often try to redefine ourselves. Who are we? You and I have talked about what makes us unique. If you take the totality of everything that is happening in Norfolk you leave by saying, “OK, Norfolk.”
We have not funded a strong marketing campaign of our brand. We should be very proud of the assets we have and the direction we’re going in. When you summarize it it’s, Bravo, Norfolk. OK, Norfolk!
It’s important you recognize Norfolk by its name. We are Norfolk.
I know a lot of cities are trying to add taglines like “keep Austin weird.”
Or, “Most vibrant port city in the world,” right?
Those are fads. Those are trendy. I think that we are Norfolk. We’ve been around since the 1600s. In our name is that “OK.” I want to celebrate that and highlight that, not add a tagline because it is trendy.
We need to be Norfolk proud and where it with honor.
We are the heart of the region. All roads lead to Norfolk.