Corporate expansion in Virginia

Corporate expansion in 2011 brings a 52 percent increase in number of expected new jobs

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Isle of Wight County, long known for its farms, peanuts and smoke rising from the stacks of a now-defunct paper mill, is about to get a new industry:  specialty coffee. Vermont-based Green Mountain Coffee Roasters Inc. is investing $180 million to open a roasting, grinding and packaging facility for the single-serve portion packs that power its popular Keurig brewing system.  The operation is expected to create 800 jobs over five years.

That’s the best news the county has had since 2009 when International Paper decided to close its mill outside Franklin, laying off 1,100 workers.  “After being in the position we were in when the IP closing was announced, I couldn’t have dreamed of this,” says Lisa Perry, the county’s director of economic development.

Green Mountain bought a 330,000- square-foot building in the Shirley T. Holland Intermodal Park for $15 million and plans to begin operations in May with about 150 employees. “This is such a game-changer that I can’t describe it,” says Perry. “It’s really going to be exciting.” 

The transformational deal for Isle of Wight is one of the corporate investments that made 2011 a strong year for business growth. According to the Virginia Economic Development Partnership (VEDP), the state announced 406 economic development projects last year that are expected to create 27,938 jobs and $3.3 billion in investment.

Those job totals are 52 percent higher than in 2010, when the state announced 18,372 jobs and $2.6 billion in corporate investment. That year, the jobs numbers were 30 percent higher than in 2009, and state officials say the steady increase is encouraging.  The 2011 totals surpass even figures in 2008, before the depths of the recession, in job creation and the number of announced projects. “It was such a great year,” says Rob McClintock, director of the research division for VEDP. “This was the best year we’ve had in job announcements since 2003.” Every region of the state saw more job announcements last year compared with 2010, he says. “It was like a reawakening of the marketplace.”

Still, Virginia did see its share of closings and layoffs as well, as businesses continued to struggle in a slow-growing economy. According to the state’s notice log under the Worker Adjustment and Retraining Notification Act — which requires employers with 100 or more workers to provide public notice of plant closings and layoffs — nearly 6,000 jobs were lost last year. 

Northern Virginia is job leader
The VEDP divides the state into six regions. Last year Northern Virginia garnered more projects than any other region, as it usually does. It claimed half of the state’s announced total of new jobs, 13,974, and 36 percent of the investment dollars, $1.2 billion. Among the deals was news that Bechtel Corp., an engineering and construction management company, was moving its global headquarters from Maryland to Fairfax County, bringing 625 jobs. Altogether, Fairfax grabbed half of the top 10 announcements in job creation.

The Central Virginia region came in second with 4,238 announced jobs. It claims the biggest single expansion in the state by far, with the December announcement that Amazon wants to open two distribution centers in Dinwiddie and Chesterfield counties. The company is investing $135 million to build the two facilities, which are supposed to be operating by the fall, providing 1,450 jobs.

The Southern Region of Virginia did fairly well, too, picking up $424.5 million in investment and 2,669 new jobs. Among expansions in that region is Engineered BioPharmaceuticals based in Danville. It plans to expand its manufacturing presence, adding 100 jobs over three years. The deal was made possible in part by a $3 million grant from the Virginia Tobacco Commission.

Southwest Virginia came in last in the capital investment category but still attracted 2,029 jobs. Lonesome Pine Components, which makes laminated wood products, is locating a manufacturing facility in Wise County that eventually will create about 150 jobs.

Best sectors
The best job-creating sector for Virginia in 2011 was professional, scientific and technical services. “This is where we frankly dominate,” McClintock says. More than 12,000 of the new jobs announced are in that sector, which includes information technology, systems integration and data center operations and support. A lot of the work is oriented toward supporting federal government and defense functions, and the jobs pay above average. “These are the jobs that really are the foundation for the revenue for all the other services that government provides,” notes McClintock.

Coming in No. 2 as a jobs generator was the opening of headquarters and division offices, which created 2,105 jobs. Fairfax won one of the biggest headquarters announcements.  Defense Health Headquarters, the defense department’s medical command headquarters, consolidated operations in the area by leasing a larger space in a move that will bring 533 jobs.  ICF International also expanded its headquarters in Fairfax last year, which McClintock says may have had a ripple effect. It also announced plans to invest $15 million and create 539 jobs in Henry County at a new operations center. “By having the key management up in Northern Virginia happy with their headquarters, it may have helped us leverage the [project] in Henry County,” he says.

Data centers — especially in Loudoun and Fairfax counties — accounted for a big share of the capital investment. Virginia had 14 of those announced last year, with about $960 million in total investment. Second in drawing capital investment was the paper products category at $460 million. The top spender there is Richmond-based MeadWestvaco, which is investing $285 million for a new biomass boiler and power infrastructure at its Covington plant.

McClintock says one area where the state is underperforming is in life sciences. In the next biennial budget, Gov. Bob McDonnell is seeking a $5 million-per-year life sciences initiative. It would support a research fund to let companies work through major universities in Virginia to advance new products. “We’re not dominant in life sciences, and we feel like we should be,” McClintock says.

Other noteworthy corporate expansions in 2011:

  • International Paper’s $83 million project at its old paper mill in Franklin. The company plans to open a fluff pulp mill in June that would use about a third of the space in the mill. The project is expected to create 213 jobs.
  • Telemarketing firm Cuore’s decision to open a call center in Chesterfield County in the former J.C. Penney Catalog Center building. VEDP says the project created 772 jobs.
  • Mississippi-based Albany Industries, maker of upholstered furniture, plans to open a $2 million manufacturing center in Galax and hire 335 people. The project is going in the space once used by Vaughan Furniture Co.  Vaughan closed that plant in 2008, laying off 275 people. 

Top 10 announcements by job
Top 10 announcements by investment
Regional breakout - 2011
Top 10 sectors by investment - 2011

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