Industries

Sunny outlook

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Print this page by Andrew Petkofsky

Newport News recently celebrated with fireworks and feel-good speeches. The occasion wasn’t a holiday but an economic summit touting a long list of projects that promise more than $2 billion in investment and 3,000 new jobs for the city.  “The sun continues to shine,” beamed Mayor Joe S. Frank. “Our future is secure.”

The worst recession in decades has drowned the whole country in gloom, but Frank sees a brighter picture locally.  And knowing that people who feel good are more likely to shop, invest and generally act in ways that boost the economy, he decided to share his feelings.
Apparently lots of local business people — beaten down by national stories of layoffs, bankruptcies and home foreclosures — were ready to hear something positive: When Frank held his summit (called “Unparalleled Success in Uncertain Times”), 1,000 people showed up.

Along with lots of information about the city’s good fortunes, the audience was also treated to some inspirational messages from officials including Gov. Timothy M. Kaine and an upbeat video featuring fireworks blazing over prosperous-looking new commercial construction. “I want to paint a picture of the reality that we have here that’s not the same thing as you see on the national news,” Frank said afterward. “There is hope, and there is relief, and it’s foreseeable and it’s near.”

‘Difficult to find bad news’
While Newport News and its Hampton Roads neighbors have had their share of business blues, the confluence of corporate and government-related expansions now under way in the city of 180,000 is dramatic: Recent announcements include 1,000 new jobs at Canon Virginia, potentially another thousand at Northrop Grumman Shipbuilding because of a nuclear submarine contract, and more than 500 new jobs at a joint venture being formed by Northrop Grumman and Areva NP. (See list at left.)

Larry Filer, an Old Dominion University economist, was hired by the city to assess the economic impact of the expansions. “There’s $162 million of compensation flowing into the area. That’s good,” he says.  (Filer did not include the effects of Northrop Grumman’s submarine contract, which was announced after he began his study.)  “In my study, [the city’s economic future] is unambiguously better,” Filer says. “It’s very difficult to find bad news.”

The new jobs will be good ones, providing an average weekly wage of $916, Filer says. That’s 29 percent better than the current $711-a-week average wage on the Peninsula. And because an influx of new jobs and people will lead indirectly to the creation of more jobs, Filer calculates the initial $162 million in new payroll will generate a total compensation increase of $195 million for the city and up to $292.5 million for the Hampton Roads region.

New downtown at Oyster Point?
But new investments alone won’t erase a longstanding city problem. Newport News’ best-paid workers increasingly live outside the city. The percentage of those earning more than $3,400 a month and living in the city dropped from 33.6 percent in 2004 to 27.5 percent in 2006, Filer says.
City officials hope to channel some proceeds of the current economic development boom into a citywide makeover they’ve been struggling to achieve since the 1980s. That’s when many corporate, financial and commercial interests moved out of the traditional downtown area adjacent to the huge shipyard and resettled in a northeastern section of the city called Oyster Point.

Newport News has the geographic misfortune of being 25 miles long and only a few miles wide, so migration of businesses away from the downtown created challenges for transportation, government services, shopping and housing.
The city’s transformation has evolved through many phases and initiatives. In the once-dilapidated downtown, for example, streets have been spruced up and some buildings converted to office space for more than 3,000 engineers working on shipyard- and Navy-related projects.

But Newport News officials hope that Oyster Point will become the city’s new downtown. The city developed a 700-acre industrial park in Oyster Point in the 1980s and more recently created City Center, a 52-acre, mixed-used development. It includes stores, restaurants, offices and the kind of higher-end housing needed to keep workers from moving to neighboring localities. “That’s become a new business center and central business center,” says Florence G. Kingston, Newport News development director. “We are exceeding our original projection on revenues.”

Some retailers struggling
Office revenue is strong in City Center, but some stores and restaurants in the commercial district hugging a 5-acre fountain pond are struggling. Adjacent residential development, slowed by the recession, has not provided enough evening and weekend business.

Gerri and Don Pratt say their future in Newport News is uncertain unless business improves. Nearly three years ago, they opened Aromas coffeehouse in City Center. It’s similar to one they’ve operated in Williamsburg for nearly a decade. “We believe in the vision. Newport News needs a place like City Center that kind of pulls everybody together,” Gerri Pratt says. “Right now the volume is not there.”
The Pratts credit city officials and their commercial landlords with paying attention to the problem and trying to maintain momentum in a new development. Nonetheless, some of their neighboring businesses have packed up and gone.

The Pratts hope officials find a way to funnel some of the benefits of the new economic development projects toward small businesses.  They’d like to see grants or other incentives similar to those offered to lure and retain big business. “It’s got to roll downhill real quick, or you won’t see those same businesses here in 2012,” Don Pratt says.

Mayor Frank says he’s confident the surge of new corporate investment will provide the economic muscle needed to help support the city’s quality of life through the recession. “These investments are creating an economic momentum that will position Newport News, the Peninsula and the Hampton Roads region for a strong and rapid recovery,” Frank said. “There is good reason to be hopeful.”


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