Hospitals, defense contractors fuel growth of a historic regionFebruary 26, 2010 6:00 AM
by Marjoljin Bijlefeld
Real estate developer Tommy Mitchell grew up behind a Shoney’s restaurant on Route 3 in Fredericksburg. As a child, he could ride his Shetland pony, Bimbo, down the road and rarely see a car. Today Route 3 has been transformed into a busy artery as the Fredericksburg area has become the fastest-growing region in Virginia in the past eight years.
Mitchell has participated in that development, but he also has helped the region hold onto its heritage and small-town ambience. As a young man, he began buying and renovating old buildings in Fredericksburg rather than letting them be razed. Many of them are now the sites of new business ventures.
“I used to own that building,” he says wistfully, pointing to the distinctive burnt-orange canopy over Hyperion Espresso, a coffee shop that has become a popular gathering place in Fredericksburg.
Situated halfway between Washington, D.C., and Richmond, the Fredericksburg region has retained its own identity, despite Northern Virginia’s encroaching suburbs. It is a place where high-tech workers can retrace the steps of George Washington and order a first-class cappuccino.
“A lot of our vitality relates, as it has for centuries, to our location,” says Karen Hedelt, the city’s interim director of economic development and tourism. She notes that Fredericksburg was established in 1728 as a port on the fall line of the Rappahannock River. “We were once a regional center of commerce, when we were an agricultural society. We’re creating a 21st-century model that trades on its location in some way. I get prospects who are charmed by that. It’s something that distinguishes us.”
Being near but not too close to the national and state capitals has allowed the region to establish its own gravitational pull, even in a weak economy. Buoyed by a number of developments, including the construction of two hospitals, a major extension of the main campus of the University of Mary Washington, and the increasing presence of defense contractors, the region may come out of the recession with relatively few bruises.
“Our economy has not contracted so much because of defense and health-care spending,” says Gene Bailey, president of the Fredericksburg Regional Alliance. “Several years ago, we had 350 government contractors in the region; now it’s between 810 and 820.” While retail and construction have taken a big hit, the region is drawing increasing interest from companies looking for a new location.
The Fredericksburg region — which includes Caroline, King George, Spotsylvania and Stafford counties in addition to Fredericksburg — appeals to both visitors and business prospects. Tourists and local residents enjoy visiting Fredericksburg’s picturesque downtown. A thriving arts community hosts First Fridays, in which art galleries offer tours and new exhibits on the first Friday of each month. Throughout the year, red trolleys roll through the area, which features outdoor cafes, antiques shops, boutiques and a litany of historic sites. They include Rising Sun Tavern; the homes of George Washington’s mother and brother-in-law; Hugh Mercer’s Apothecary Shop and the James Monroe Museum, with many of them clustered within the 40-block historic district of 18th- and 19th-century buildings.
The area also includes other historic sites such as Ferry Farm (George Washington’s boyhood home), and battlefield parks where the bloody Civil War battles of Chancellorsville, Fredericksburg Spotsylvania and the Wilderness were fought.
But the region, which has a population of more than 300,000 people, is not living in the past. It has a regional airport in Stafford and three hospitals within a stretch of about 20 miles along Interstate 95. Mary Washington Healthcare, formerly known as MediCorp, owns the 437-bed Mary Washington Hospital, which moved into a new facility in the city in the mid-1990s, and the 100-bed Stafford Hospital, opened in early 2009. HCA is completing a 126-bed Spotsylvania Regional Medical Center, about eight miles to the south.
Development, representing a mix of projects, is moving along the major road corridors. To the south is Cosner’s Corner South, a 60-acre medical park near the new Spotsylvania hospital. In the north end of Stafford County near the Marine Corps Base Quantico is the Quantico Corporate Center. A pair of 140,000-square-foot, Class A office buildings in the park already are filled, and construction may start soon on a third.
Quantico Corporate Center, a project of Fredericksburg-based Silver Cos., houses offices of many defense- and government-related contractors, such as General Dynamics, MITRE and Unitech. If demand continues, the park could grow to 11 buildings. The growth so far is driven by corporate relocations connected to the BRAC (Base Realignment and Closure) process, which is bringing more jobs to Quantico. “If things start to pick up, I like to think that in the next five to seven years we can get the whole park built out,” says Phillip Baxter, vice president for commercial office sales and leasing for Silver.
In the city, the University of Mary Washington Foundation is earning extra credit in real estate development. Last year, the foundation broke ground on Eagle Village, a mixed-use project featuring premium apartment housing for up to 624 students, a parking deck with Class A office space fronting Route 1 and 30,000 square feet of ground-level retail space. A pedestrian bridge will connect Eagle Village to the main university campus.
This first phase of the project is expected to be completed in August, says foundation CEO Jeff Rountree. Eventually, the foundation will update much of the space in a 21-acre shopping center. Rountree explains that the foundation wanted to improve student life by providing more evening and nighttime entertainment. Another aim is to solve the university housing crunch, especially for out-of-state students who want to stay in Fredericksburg year-round. “We only house about half of our students on campus, so we’re forcing 2,000 students into the community or their own housing,” he says. But once the university started discussions with the city on how to accommodate its goals “we realized we had a wonderful opportunity to be a main catalyst in urban renewal on the Route 1 corridor,” says Rountree.
The retail space will include salons, a dry cleaning business and likely a grocery store — the type of tenants that occupied the old shopping center. “None of these businesses can be completely student-centered or they won’t make it. We have a very light summer school enrollment,” Rountree says.
In addition to its main campus, with about 4,000 undergraduates enrolled, the university’s College of Graduate and Professional Studies, along Route 17 in Stafford County, has more than 1,000 students. This spring, the university plans to break ground on its third campus in King George County, near the Naval Surface Warfare Center in Dahlgren.
The UMW Center for Education and Research at Dahlgren is a partnership with eight academic partners: Old Dominion, Virginia Tech, Virginia Commonwealth University, George Mason and the University of Virginia, the Naval Postgraduate School and Germanna and Rappahannock community colleges. The $20.4 million, two-story, 40,000-square foot academic building will offer graduate and undergraduate programs in science, engineering, technology, mathematics and other areas.
King George also saw the opening last year of Mid-Atlantic Precast, a concrete manufacturer, in its new industrial park. North Carolina-based grocer Harris Teeter remains in negotiations for building a 500,000-square-foot distribution facility in the park.
Meanwhile, the region’s tourism industry expects to get a boost from the once-stalled Kalahari Resort project. The project, planned for the Celebrate Virginia South complex, got a shot in the arm in January, when the state allocated it $25 million in tax-exempt Recovery Zone Facility Bonds. The $260 million resort would include a 200,000-square-foot indoor water park, 100,000-square-foot theme park, 100,00-square foot convention center and 832-room hotel. Wisconsin-based Kalahari still must secure additional financing for the resort, but the bonds have created more optimism about the project.
“As the financial markets became so constricted, the important element would be some additional show of public support beyond the city’s incentive package.” says Hedelt, who adds that Kalahari and The Silver Cos., the developers of the Celebrate Virginia, have continued to invest in design and engineering work. The bonds require that construction start before the end of June.
Celebrate Virginia South has seen more traffic since the opening of the 139,000-square-foot upscale Wegmans grocery store in June. Already in the park were a Hilton Garden Inn, Homewood Suites, Hampton Inn & Suites and the Fredericksburg Expo and Conference Center. With the additional rooms from Kalahari Resort, the complex will have more than 1,000 hotel rooms.
In downtown Fredericksburg, the first hotel in recent history opened its doors last year — a brick, four-story, 98-rooom Courtyard by Marriott. It sits on the site of the old Indian Queen Tavern. An archaeological site dig conducted before construction began uncovered artifacts, such as Colonial-era dishware and bottles. They now are on display in the hotel lobby.
The hotel has been one of Tommy Mitchell’s long-term goals. He’s one of three partners who brought Marriott to town a contentious process in which Mitchell had to convince downtown merchants and preservationists that a hotel would fit the character of the historic district. Now it’s melding into the cityscape.
On a January afternoon, a half-dozen people walked up to Mitchell as he strolled through the lobby. “Good afternoon, Mr. Mitchell,” “Good afternoon, Tommy,” they said. He greeted all in turn. It was a neighborly exchange of pleasantries that could have happened any time in Fredericksburg’s history — except, perhaps, during the Civil War.
• Booz Allen Hamilton has opened a satellite office in Dahlgren in King George County.
• A $6.6 million, 30,000-square-foot England Run Library, part of the Central Rappahannock Regional Library system, is under construction in Stafford County.
• Germanna Community College opened a satellite campus in Aquia Park near Garrisonville late last summer. Eventually, the community college may build a full campus in Stafford.
• A Harris Teeter grocery distribution center scheduled for King George has delayed construction start until early 2011.
• The Mattaponi Springs Golf Club, which opened in late 2004 in Caroline County, was ranked the No. 1 new course on East Coast by Golf Digest in 2005.
• MidAtlantic Precast opened last summer in King George.
• Spotsylvania Courthouse Village, an upscale, multiuse development featuring office space, retail and condominiums, is under construction.
• Also being built is Spotsylvania Towne Center, which includes the renovated Spotyslvania Mall and approximately 180,000 square feet of new space.
• University of Mary Washington expects to break ground on its Dahlgren Campus Center for Education Research in King George County this spring.
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