Will a new boss whip Richmond’s economic development into shape?

There’s a new deputy in town.

Peter Chapman has only been working for the City of Richmond for five weeks, but already he’s studying ways to improve several departments that have for decades been a thorn in the side of local businesses.

In late June, Mayor Dwight Jones hired Chapman away from Denver to be the city’s first deputy chief administrative officer of economic and community development, a role that aims to bring together the two departments to serve the city and its residents more effectively.

Chapman is coy about specific plans for Richmond, in part because he is still evaluating his new surroundings. But he said he chose the job partly because of the mayor’s vision.

“The mayor has spoken often and eloquently about making Richmond a tier one city,” Chapman said in his first interview since arriving in Richmond.

“There are going to be substantial changes to the way things are done at the local government level.”

Chapman faces a daunting task and a skeptical business community. Businesses have complained for a decade that the City has too much red tape, making it more costly and time consuming to set up shop in Richmond than surrounding counties. Running a business in Richmond can be particularly frustrating (and less profitable) for builders who need to file for numerous permits during the construction process. At one point in the past several years, inspectors were riding public transportation and didn’t carry cell phones.

Some business owners remain skeptical that the city can change its ambivalence toward business. And several much-hyped new hires — and numerous commissioned reports — have failed to improve even the most basic responsibilities. Two years ago, the city hired building commissioner from Northern Virginia. Art Dahlberg has since left and taken a job in Milwaukee and an interim director has taken his place.

Chapman’s job has a much broader reach and could potentially have a more lasting impact.

As a new arrival, Chapman has a new plate of issues to chew on and he must digest them quickly. He’ll have to make crucial decisions regarding downtown revitalization and the contentious riverfront development debate. He will also inevitably be involved with the city’s plans to acquire the GRTC garage site in the Fan, as well as its rumored plans to tackle the Reynolds’s industrial plants on either side of the river (which could present huge opportunities for new development — and plenty of squabbling).

Not to mention the city’s flat-lined bid for a baseball stadium.

Chapman has formed a number of interdepartmental groups to evaluate policy and make recommendations and says one of his first tasks is getting the two departments to break out of their respective fiefdoms and work more closely together.

“I think it starts with changing the mindset — and it’s not going to occur overnight — so that folks understand that people within government are also critical stakeholders across the community,” he said.

Seedco

In June, Chapman left his previous job as executive director of a nonprofit that contracted with the city of Denver to build affordable housing and fund other community development projects. Some people there say that the partnership over-promised and under-delivered, while others say it was a lifeline for revitalizing parts of Denver.

Chapman served as executive director of the Denver office of New York-based Seedco Financial. Seedco used its available capital to make much bigger loans than the city could on its own.

“The city realized early on it had to diversify and expand the financing tools it had access to at the local level,” Chapman said.

Before that, Chapman was an economic adviser to Mayor John Hickenlooper and served on the committee that selected Seedco. The committee fielded several bid proposals. Shortly thereafter, the city hired Seedco, and Seedco hired Chapman to serve as executive director of its Denver office.

Chapman got a waiver from the city’s ethics board to get around a rule that requires city employees to wait six months to take a job with a city contractor.

That didn’t sit well with some, including City Council member Charlie Brown.

“Peter is all hat and no cattle,” said Brown. “And Seedco has been a disaster.”

Brown, along with council member Jeannie Faatz, voted against the city’s contract with Seedco from the beginning. The other 11 council members have voted to keep the Seedco contract going.

“What got me is that he was working for the mayor,” said Brown. “He went to the ethics board and got this through. I didn’t like that and voted against the contract.”

The partnership started out with a bang. Under the contract, Seedco was awarded $3 million from the city’s revolving Community Development Block Grant fund each year. As of July, Seedco had made 17 loans totaling $5.3 million, according to Denver’s economic development office.

But critics of Seedco said that for that amount of money, a lot more jobs should have been created. Federal requirements on community block grants require one job created for every $35,000 loaned out. For the amount of money lent, 153 jobs should have been created. The economic development office could only verify 38 new jobs.

Lesia Bates Moss, president of Seedco, publicly acknowledged that the firm fell short of meeting its job creation goals.

“The businesses tell us their intention to add jobs, and we follow up,” Moss told the Rocky Mountain Independent in July. “We can’t force them to generate new jobs.”

An October monitoring report, which is required of all CBDG projects across the country, found more than a dozen areas where Seedco did not seem to be in compliance with its contract, including spending and reimbursement issues. The report also noted missing and disorganized records and other billing issues.

But Seedco was not without its successes, and its loans funded several projects around Denver, including a 60-unit condo development that offered below market rate units to those who made less than the area’s median income.

Paul Franke, an attorney with Franke Greenhouse List & Lippitt, served as chairman of the Seedco board during Chapman’s tenure. Franke said Chapman did the best he could under the tough economic circumstances.

“Peter, I think, did a yeoman’s job. Part of it was this was really a startup branch of Seedco,” said Franke. “This is a new type of relationship for Seedco and the City of Denver, so all of the accompanying issues that come along with those new relationships and understanding what everyone’s role is presents significant challenges.”

Franke said Chapman is creative and adroit at using outside-the-box tools and incentives to achieve his goals.

“I tease him about being a geek in some of those areas,” Franke said.

Franke acknowledges that Seedco has not accomplished everything it set out to do, but he blames the economy, not Chapman’s leadership, for the program’s shortcomings.

“The reality is lending and being able to lend and have borrowers qualify has been very difficult,” Franke said.

Chapman said he is proud of the work he did for the city of Denver and Seedco Financial. He said the findings in the monitoring report were either resolved or unwarranted.

“The folks who conducted the on-site evaluation of Seedco Financial did not understand that they had moved to a paperless system. We actually had excellent records,” Chapman said.

He said only a handful of folks in the city were unhappy with Seedco’s performance.

“There is an element of complexity to how community development financing works and that is one factor — and frankly there are some folks who have philosophical reasons that they have been opposed to it,” Chapman said.

A new beginning

In July, Chapman packed his bags and left the Rocky Mountains to take the job in Richmond, which pays a salary of $160,000 a year.

For now, he lives with his family in the Malvern Gardens neighborhood on the western edge of the city.

Chapman said a headhunter contacted him in March or April. He said he was mainly attracted to the job by Mayor Jones’s vision. He also said he wants to help guide an emerging city on the verge of rapid growth.

Chapman also said his father’s side of the family lives in Richmond.

Carthan Currin III, the city’s head of economic development, said Chapman’s arrival has been refreshing.

“Community and economic development at times are institutions that will have differences of opinion,” said Currin. “With Peter in this position, we have a person who has a background in both arenas who can be an objective referee and cheerleader at the same time.”

Currin, along with Community Development Director Rachel Flynn, as well as the heads of the minority business office and the real estate department, reports directly to Chapman. Chapman reports to the CAO, who reports to the mayor.

John Accordino, a professor of planning and urban economic development at Virginia Commonwealth University, said the new structure has the potential to enhance the performance of both departments.

“Planning has to think of the long-term coherence of the community, while economic development has to think of generating jobs and growing the tax base,” Accordino said. “That’s where the two can get into loggerheads.”

But the bottom is the competency of the people within the structure, Accordino said.

“You can have a structure that is great, but without good people, it won’t work. If you have a structure that is just okay with great people, it will work better,” Accordino said.

Jim Crupi, a Texas-based consultant who wrote a 2007 report commissioned by the local business community, said that the people working for the city are the key to any eventual improvement.

“The big issue isn’t the structure — it’s the people that populate that structure and policies that enable them to be creative,” Crupi said.

In his research, Crupi said he saw problems with clarity, bureaucracy and streamlining that made licensing and form approvals too difficult to obtain. He said the creation of a position to oversee the two vital departments sends an encouraging signal.

“From a community perspective, what you are saying is that what we have isn’t working,” said Crupi.

For Chapman to be effective, Crupi said he will need to have a clear vision and have decision-making authority. And even if he makes the right recommendations, it’s not clear whether they will be implemented.

As for Chapman, he said he loves the new job.

“I’m having a great time,” Chapman said. “This is very substantive, important work, and I am just glad to be a part of it.”

About Peter Chapman:

Chapman has more than 20 years of experience in the urban development field. He has an undergraduate degree in literature from Wesleyan University and a master’s in public policy from Tufts University. His experience in the public and private sector include time as managing director of Boston-based Madison Park Development Corp., executive director of economic and community development for Nashville and Davidson County, Tenn., senior member of Cambridge-based Abt Associates, and economic adviser to Denver Mayor John Hickenlooper.

He is married and has two children, and in his spare time enjoys reading about political urban history. He is a former competitive long distance runner.

Al Harris is a BizSense reporter. Please send news tips to Al@richmondbizsense.com.