Industries

Waiting for commitments

Based on activity in 2012, Hampton Roads expects deals to be made in 2013

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Print this page by Joan Tupponce

Darryl Gosnell, president and CEO of Hampton Roads Economic Development Alliance, promotes Hampton Roads around the world, representing 10 cities and five counties. This past year was a good year for Hampton Roads in terms of interest shown in the region by companies located outside Virginia but not a great year for new capital investment, he says. “People weren’t making commitments, but we think 2013 will be great because of the strong activity in 2012.”

The region targets a variety of industries, including aerospace and aviation, maritime and logistics, advanced manufacturing, corporate and professional operations, and modeling and simulation. “About 50 percent of all the activity we see in Hampton Roads comes from international companies,” Gosnell says, adding that the area is a major center for international business because of the Port of Virginia. “We serve world markets with 20 steamship lines offering weekly service to Europe and Asia.”

The Alliance also has consultants in London, Berlin and Seoul, South Korea, who focus on marketing the area. “The Port has offices in a number of locations around the world as well as the Virginia Economic Development Partnership,” Gosnell says. “Wherever we can partner and leverage with other offices, we do so.”

Charles Rigney, Norfolk’s interim director of development, says the city saw a good deal of job creation last year. “We did great in 2012.”

Amerigroup Corp., a WellPoint subsidiary based in Virginia Beach, expanded into Norfolk’s Lake Wright Executive Center with an investment that exceeds $20 million. Norfolk also snagged the regional headquarters of AECOM, a global provider of professional technical and management support services, a move that represented an investment of $520,000, and an Urban Outfitters location for Granby Street in the downtown area. “That is a great addition to the street,” Rigney says of the popular retailer.

Germany-based Bauer Compressors plans to build a new facility on the site of its North American headquarters in the Norfolk Industrial Park. The $15 million investment will add approximately 130 jobs. “The challenge was to find a way to expand on the property they already owned,” says Rigney. “We had to compete with … locations in Suffolk and Chesapeake that they could have purchased as well as the rest of the world.” Norfolk edged out its competitors because of its proximity to the Port of Virginia and the Norfolk International Airport.

Another boost to the area: the revitalization by The Cordish Cos. of Waterside, an aging festival marketplace. The potential $38 million private-sector investment, which will create an entertainment district along the riverfront, is expected to bring about $93 million in revenue to the city during the next 30 years.

“As many as 1,000 people could be employed through this investment,” Rigney says, noting that Cordish has developed areas in Baltimore, Philadelphia and St. Louis. “We want to make the riverfront one of the nicest in the country. This attraction will complement the $8 million upgrades to Town Point Park as well as the Norfolk Tides and the USS Wisconsin.”

Virginia Beach also saw gains in 2012. The city added 18 new business locations and helped to create 1,700 jobs in the market. “We had $258 million of new capital investment, which includes new facilities, furniture and equipment,” says Warren Harris, director of economic development for Virginia Beach. “We also had 31 existing industries expand their operations.”

New companies moving into the city included Medical Facilities of America with a $30 million investment. The new medical-care facility, currently under construction, will create 120 jobs. The city also saw major expansions such as German-based IMS:Gear, which is building a new 112,000-square-foot facility, and AMSEC, a subsidiary of Huntington Ingalls Industries, which owns Newport News Shipbuilding. The company invested $3 million and moved its corporate headquarters into a new 65,000-square-foot space on Cleveland Street.

One of the biggest highlights of 2012 was the announcement of the next phase for Town Center of Virginia Beach. In November the Virginia Beach City Council approved Phase V, a $90 million investment that would include a new high-rise office building and additional residential and retail development. Clark Nexsen, a large architectural and engineering firm in Norfolk, is designing the 14-story office tower and will be an anchor tenant, occupying 80,000 square feet,  when the building is ready by July 2014.

To help draw in companies, Virginia Beach revised its Economic Development Investment Program “to assist small businesses as well as office prospects without a high capital investment to add new jobs in target industries,” Harris says. “We also made adjustments to business license taxes for new companies coming into Virginia Beach. They are capped at $50 per year for the first two years.”

Harris’ office is close to hiring an international consultant that will represent Virginia Beach in Europe. “Primarily Germany,” he says. “We are only the second city in Virginia that has an office overseas. We have had such great results coming out of Germany that we felt it was necessary to place a regular presence there.”

If Harris had to note one missed opportunity, he says it would be last year’s proposal to build an 18,500-seat arena across from the Convention Center. The project, whose partners includes Comcast-Spectacor, the owner of the Wells Fargo Center in Philadelphia, and producer/promoter Live Nation, is on hold at the moment. Virginia Beach wanted the state to put up $150 million for the project, but the city wasn’t able to strike a deal with an NBA or NHL team before the General Assembly convened.

“It was a lesson learned,” says Harris, adding that Virginia Beach is one of the largest markets in the U.S. without a major arena. “We would like to still engage the public and find their sense of interest in pursuing or developing an arena without a team initially.”

The city is not only losing out on a sports team and the revenue it would bring, but also concerts and entertainment options that are passing its market. Harris believes that once an arena is built, the city would be in a “much better position to be attractive to a team.”

Last year also ended up being a good year for the Newport News Economic Development Authority. “We saw growth in new development,” says Florence Kingston, the authority’s director of development. “We have a diverse economy. When one area is not hitting on all cylinders, we have something else that is growing.”

The city has created tourism zones and is building an entertainment district at City Center at Oyster Point, a 52-acre mixed-use development in the downtown area. Two restaurants have opened in the new entertainment district — the 17,000-square-foot Toby Keith’s I Love This Bar & Grill and Tucanos Brazilian Grill. A movie theater and destination microbrewery restaurant are under construction.

The authority also sealed the deal to build The Apprentice School with Huntington Ingalls Industries, owner of the Newport News Shipyard and the largest private employer in the state. The project includes a $70 million campus and school.

Also on the education front, the city saw the opening of The University of Virginia Eastern Regional Center at Newport News. The regional center will also house Virginia Tech classes. “That complements Christopher Newport University, which has continued to grow physically and in popularity and prestige,” says Kingston.

The city’s three enterprise zones also help the city’s appeal to prospective businesses. “We have the second most enterprise zones behind the Richmond area in terms of overall activity,” says Sam Workman, assistant director of development. “We have expanded one of our enterprise zones to include Air Commerce Park at the Newport News/Williamsburg International Airport to help attract aviation-related companies.” 


Major employers by number of jobs

Huntington Ingalls Industries Inc., Newport News, 21,000 jobs

Sentara Healthcare, Norfolk, 17,000 jobs

Virginia Beach City , Public Schools, 10,000 jobs

Norfolk Naval Shipyard, Portsmouth, 9,000 jobs

Naval Air Station Oceana, Virginia Beach, 7,427 jobs

Riverside Health System, Newport News, 7,050 jobs

Norfolk City Public Schools, 6,527 jobs

Chesapeake City Public Schools, 6,000 jobs

City of Virginia Beach, 6,000 jobs

Naval Medical Center Portsmouth, 5,400 jobs

Source: Hampton Roads Economic Development Alliance


Eastern Virginia’s recent deals

Xerox, Chesapeake, 300 jobs

American Airlines, Norfolk, 300 jobs

LoanCare, Virginia Beach, 178 jobs

AECOM, Norfolk, 155 jobs

Bauer Compressors Inc., Norfolk, 130 jobs

Shenzhen Superwatt Power Technology Co., Suffolk, 100 jobs

Sumitomo Machinery Corp. of America, Chesapeake, 96 jobs

Amerigroup Corp., Virginia Beach, 88 jobs

IMS Gear, Virginia Beach, 80 jobs

Labels Unlimited, Virginia Beach, 71 jobs

Source:  Hampton Roads Economic Development Alliance

 


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