The Program :
Rotarian of the Day, Steve Schultz, had the honor of introducing Dr. James Koch. This is Dr. Koch’s 28^th visit to our club to report on the state of Hampton Roads.

 Dr. Koch is a retired Old Dominion Universiy president and well known for being a resident economist and expert on our regional economy. He has a good handle on our local economy. He joined us to share his thoughts on our regional economy and the financial impacts of our port, state institution tuition changes, and the housing market among other subjects. Our local economy has suffered in comparison to many other parts of the state and the nation due to sequestration. Virginia has grown slower than the remainder of the nation. Hampton Roads has been stagnate since 2009 while the remainder of the state has recovered the 6% job loss.  Hampton Roads faces a slow recovery.

Dr. Koch spoke about the following areas of our economy:

Defense Spending:
Sequestration has restored civilian and military spending in equal shares. The sequestration deal runs out in 2017 and without another spending deal, defense spending will decrease. Hampton Roads economy is more diversified now but it is for the wrong reason, defense spending hasn’t gone up. Defense spending as a regional driver is no longer the case.

Housing:
Housing has recovered and showing a bit of prosperity. The housing turnover rate has improved and houses are not remaining on the market as long as in the past. Last decade prices went up 90%. During the great recession, housing prices declined 19% but there has been a modest recovery with prices going up about 2% per year. There are two hidden issues to be considered when looking at the Hampton Roads housing market, bank owned properties not on the market and short sales. These have a tendency to depress housing prices. Bank owned properties sell on average 52% lower than that of a regular property and short sells 69% lower. We don’t know how many of these distressed properties are in the inventory.

Hotels and Tourism:
Hotels and tourism is a brighter note. Revenue per available room (REVPAR) has increased but that depends on your location. Substantial market share has been lost if you live in the historic triangle (Williamsburg, Yorktown, and Jamestown). Twenty years ago Williamsburg had approximately 30% of all the hotel revenue in the region. They are now below 20%. Young people are not attracted to Williamsburg. Historic Williamsburg has a marketing problem and needs to find a way to appeal to the younger generations.

The Port:
The number of TEUs (20 ft equivalent units) moving through the port continues to increase and the port is setting records ever month. The port and tourism  are responsible for about 16% (8% each) of the regional economy and defense spending about 30%. Almost half of the economy come from these 3 economic drivers. The movement of  containers by rail puts the region ahead of all others. Our market share on the east coast is going up. Our port can handle the big 20,000 TEU ships whereas most east coast ports cannot. 

Costs of Higher Education (Tuition and Fees):
Education costs have increased exponentially when compared to the consumer price index. Costs are up 250% on average, ODU is up 129%. Tuition has increased at a faster rate than medical expenses. The typical family cannot afford to send their children to school. Looking at the median rate of a typical Virginian’s income in 2001, that family had to work 234 hours to pay for tuition and fees. It is now 437 hours. Pell grant recipients are way down. W&M has the lowest rate of any school in the US, 11.9%  and is one of the most expensive public institutions in the US. UVA at 13% and CNU at 15.8% are indicators that these schools are high cost universities that do not let lower income students in. Why is this important… students are taking on enormous debt. They can’t buy cars, houses, or start new businesses which it is not good for Virginia’s economy. Universities offer too many “freebies”.

Dr. Koch closed by providing a link to the ODU Center for Economic Analysis and Policy’s economy dashboard (www.ceadodu.com/data/) which is updated in real time.

The Meeting:
Chuck Spence led us in song including “Let Me Call You Sweetheart” and a rousing rendition of “America the Beautiful”. Pam Tubbs played the piano and led us in the invocation.

Chip Vogan introduced two new members. Dr. Marilyn Gowen, retired pediatrician who specialized in pediatric pulmonology. Dr. Gowen, a Medical College of Virginia graduate, was a professor at Eastern Virginia Medical School and is actively involved in her church and community. Chip also introduced Dabney Baker. Dabney is lifelong Norfolk resident who attended Granby High School and ODU. Dabney worked in the warehousing and trucking industries until his retirement in 1994.  His wife own Norfolk Stationary, a downtown icon.

Visitation Report:
Fred Walker reported that Bill Burnett returned to the hospital after rehab at Harbor’s Edge . Please kept Bill and his family in your thoughts

Announcements:
Shep Miller was recognized as a Paul Harris Fellow for the eighth time!

Steve Jones and Lisa Chandler put in a plug for our 3^rd Annual Suds and Buds party on May 19. Lisa discussed some additional events that will added such as fly casting. She also asked for our members to find additional sponsors for this event to be held on May 19^th.

Happy Bucks and Fines:
Lisa Chandler’s phone went off.
Steve Jones welcomed Jean back to the club.
Joe New for the Virginia Tech overtimes.
Sally Hartman for her appearance in The Virginian-Pilot.
Shep Miller for his multiple television appearances during ODU games.
David Brandt for his son’s outstanding performance during a lacrosse game against The Citadel in quadruple overtime.

Visitors:
John Prince, guest of Church Vogan; Ian Phipps, an arborist with Bartlett Tree Service and former neighbor of Shep Miller, .Guy Gentry, new branch manager at UBS and colleague of Jim Kitz; .
Chuck Doud, WHRO’s director of radio and audience strategy, a Chesapeake Rotarian and friend of Sally Hartman
Bob Moore from the Chesapeake Rotary Club.

Meeting Conclusion
Sally Hartman won the daily raffle, drew the queen of hearts on Valentine's Day and left the big dollars for another day.