Two years after council push for local investment, Hampton Roads Ventures has yet to deliver

Hampton Roads Ventures, created by the Norfolk Redevelopment and Housing Authority, is headquartered in this office building in Norfolk. (Jim Morrison/For the Virginia Mercury)

More than two years after Norfolk’s city council directed a for-profit subsidiary of its redevelopment and housing authority to prioritize local investments, the company has yet to deliver.

In July 2022, the council passed a resolution requiring Hampton Roads Ventures (HRV) — a community development entity created by the Norfolk Redevelopment and Housing Authority (NRHA) — to make its “best efforts” to invest in the city following a Virginia Mercury investigation revealing it had allocated only a fraction of its $360 million in tax credits to Norfolk’s distressed areas.

The resolution required HRV to submit an annual report detailing its activities. The 2024 report shows $53 million in New Markets Tax Credit (NMTC) allocations across six states — with none directed to Virginia. The investments included projects as diverse as a food bank expansion in Tallahassee, a shopping center with a grocery store in the Bronx, N.Y., and a salmon processing barge in Washington (see info box).

Three years after repeated requests for interviews with HRV and NRHA officials, Alphonso Albert, chair of HRV’s board of managers and NRHA’s board of commissioners, sat down with The Mercury to defend HRV’s failure to invest locally.

In an email ahead of the interview — copied to Norfolk’s mayor and several city council members — Albert accused the Mercury reporter of intending harm, being vindictive and “more about making mischief” than reporting the facts.

During a 45-minute conversation, Albert portrayed HRV as “a successful business” with a competitive strategy for securing New Markets Tax Credits. However, he also acknowledged limited outreach in Norfolk, where the company hasn’t funded a project since 2008.

Albert said the “primary driver” for HRV’s focus outside Norfolk is maintaining its track record to win future tax credit allocations. Changing its business model to prioritize Norfolk, he argued, could jeopardize the company’s ability to secure funding in a highly competitive process.  

“We want to be successful in obtaining and utilizing new market tax credits,” Albert said. “That’s the end game, and not to make efforts that don’t meet the objective, the successful model that HRV operates on.” He added that HRV’s success relies on “tax-ready projects” in its pipeline that align with competitive application requirements. 

However, the city council’s resolution from two years ago directed the firm to “proactively seek Norfolk projects and not rely solely upon the Norfolk Economic Development Department.” It also required marketing efforts to raise awareness about the NMTC program.

Other community development entities, though, have demonstrated that strategies can evolve without jeopardizing funding. For example, Indy CDE in Indianapolis has secured $177 million in tax credits since 2010 for a wide range of local projects, including a YMCA, high school modernization, and a recycling facility. It focuses on eliminating food deserts, increasing access to education, and revitalizing blighted areas.  

Albert said the company’s small staff size prevents it from actively developing projects in Norfolk unless they are brought to the firm. HRV’s website lists just three employees — a CEO, a portfolio manager, and an executive assistant — and Albert suggested that adding two or three more positions might be necessary if the company were to expand its focus locally.  

HRV’s 2023 audit revealed that salaries and benefits totaled nearly $490,000, up from $463,000 the previous year. Albert said he was unaware of CEO Jennifer Donohue’s salary and would not support releasing that information. 

When asked how HRV identifies projects in places like Tallahassee, Tampa, and rural North Carolina, Albert said, “Consultants bring them to us. Consultants will see a deal and see if we’re interested in participating at one level or another, the same way we would do right here if somebody would bring us a deal.” According to the 2023 audit, HRV spent $230,000 on consultants that year.

Albert added that Donohue is also approached directly with proposals. “She’s going to look at a project that somebody says, here’s one here, but she doesn’t go out and solicit projects,” he said. 

According to a December report from the U.S. Department of Treasury, HRV currently has $52 million in unallocated tax credits. Some of these funds may already be tied to pending deals. Treasury rules require half of HRV’s allocations be invested in rural areas. With the next application deadline approaching in late January — $10 billion available, double the usual amount — there is an opportunity to advance a Norfolk project. 

Asked what efforts HRV made to secure a Norfolk project in the past year, Albert said the company met with local lenders, including TowneBank, Truist, and Chase. However, when pressed about whether HRV had issued a request for proposals to solicit local projects, Albert said that it did not. “I will float that,” he added. “That’s not a bad idea.” 

Sean Washington, who oversees both Norfolk’s Department of Development and the city’s  Economic Development Authority, said that he hasn’t heard from HRV since discussions about a failed proposal to fund a Norfolk shopping center project in 2023. When asked why HRV hadn’t maintained contact with Washington, Albert replied, “A lot of people don’t have confidence in Sean. But Sean’s a nice guy.”

The 2022 city council resolution aimed at pushing HRV to invest in Norfolk projects and increase oversight followed a Virginia Mercury investigation revealing that the company had invested only a fraction of the $360 million in tax credit allocations it had received since 2003 in Norfolk. Some council members expressed surprise, admitting they were unaware of the NRHA subsidiary’s existence and questioned why it was not prioritizing Norfolk. 

HRV operates as a community development entity, which includes offshoots of banks, nonprofits, public agencies, and financial institutions. These entities apply for the tax credits  from the Treasury Department and, if awarded, attract investors who earn a 39% tax break over seven years.  

The tax credits aim to spur investment in distressed areas with the Treasury reporting that every New Markets Tax Credits dollar generates $8 in private investment. Norfolk has 16 severely distressed census tracts given the highest priority for tax credit allocations. In these tracts, poverty rates range from 31% to 80%, and unemployment rates reach as high as 40%.

HRV’s last local investment came in 2008, supporting the Fort Norfolk Plaza health center near Brambleton Avenue. Last year, HRV had pledged to back The Village, a proposed shopping center with the Urban League of Hampton Roads that aimed to eliminate a food desert. That project collapsed after the city failed to secure a state grant to help fund the development. The property later was sold to Fishing Point Healthcare, a company founded by the Nansemond Indian nation. 

HRV transferred $655,000 of its recent profits to NRHA to fund workforce development, youth services, crime prevention, and transportation support for food access and cultural events. The company also donated $144,538 to 27 local organizations, including Zion Word Days Church, My 2K Foundation, Second Calvary Baptist Church, the Virginia Arts Festival, the Beacon Light Civic League, the Urban League of Hampton Roads, and the Portsmouth Bruins Football Association, according to a list provided by Albert. 

HRV’s 2023 audit, also shared with the city, reported net income of nearly $2 million. Since 2021, following increased scrutiny, HRV has transferred more than $3.6 million to the NRHA — surpassing the $1.3 million it had transferred over the previous 18 years.

Norfolk Mayor Kenneth Alexander did not respond to requests for comment for this story, but in May 2022 he urged HRV to prioritize projects in the city. “The point is to spur economic development in areas that but for the new markets tax credits there would not be any investment. That’s the reason they exist,” he said at the time. “I’m not suggesting that they shouldn’t do business in other markets, rural markets. But this is the city of Norfolk. We need to spur economic growth.” 

A spokesperson for NRHA said Executive Director Nathan Simms would not grant an interview. According to the 2003 city council resolution that authorized HRV’s creation, the entity is managed by NRHA commissioners. 

Four of the nine NRHA commissioners, including Albert, are on the Board of Managers of HRV. Albert said the HRV board met quarterly. While they don’t jointly discuss the annual applications for tax credits tied to projects, he said Donohue shared them for comments. He also noted that  HRV works with a nationwide advisory board to consult on investments. 

“I’m not the operational CEO. I’m talking principally who we are and I think defending our record and this organization,” Albert said.

Norfolk City Manager Pat Roberts also declined to comment through a spokesperson. Council member John “JP” Paige was the only elected official to respond. Paige, who represents some of Norfolk’s most vulnerable census tracts, said he hopes that HRV can identify a local project to support. 

“I was very excited about the grocery store that was coming, but the state didn’t come through,” Paige said, referring to The Village proposal. 

Other Virginia housing authorities have formed development entities like HRV that match projects with investors drawn to the tax breaks offered through the New Markets Tax Credits (NMTC) program. But they focus on projects in the cities or regions, often plowing the administrative fees back into their communities and holding public meetings. Hampton Roads Ventures does not hold public meetings and has declined to make its records subject to the Freedom of Information Act. 

In cities like St. Louis, Pittsburgh and Cleveland, development entities have used the tax credits to stimulate major local investments, generating jobs and revitalizing their neighborhoods. . 

St. Louis has leveraged $543 million in NMTCs to fund 103 developments and businesses, creating 6,800 jobs. Pittsburgh has utilized $238 million for projects such as affordable housing, transit hubs, and mixed-use development. Cleveland’s development team has financed urban schools athletic centers, job creation hubs and mixed-use spaces to drive growth.

 Albert defended the HRV’s broader focus, saying it brings indirect benefits to Norfolk.

“We may be the only one that doesn’t support programs in our urban setting or in the area that we operate in, but we do bring very positive benefits to the city that we operate in,” he said. “I guess it’s a game of priorities.”