Business news and intelligence for and about the Virginia business firstname.lastname@example.orgCopyright 20182018-11-14T22:18:00+00:00
Delta Dental of Virginia names new COO
http://www.virginiabusiness.com/news/article/delta-dental-of-virginia-names-new-coo#When:22:18:00ZDelta Dental of Virginia in Roanoke announced Wednesday that Kristin Merlo joined the company as senior vice president and chief operating officer. Merlo is replacing Dyke Davies, who is retiring at the end of the year after more than 20 years.
Delta Dental of Virginia is a member company of the Delta Dental Plans Association, a large dental benefits carrier that covers people around the country.
Delta Dental of Virginia said in a press release that Davies oversaw a period of growth in revenue and membership that led to over one million subscribers.
Merlo most recently was chief marketing and sales officer for Delta Dental of Washington. She also led member experience and digital transformation. Merlo sat on the board of Delta Dental of Washington’s foundation and built partnerships involving the foundation and the corporation.
Merlo grew up in Great Falls, Virginia. She went to University of Virginia, where she got an undergraduate degree and a master of business administration.2018-11-14T22:18:00+00:00http://www.virginiabusiness.com/uploads2/nationallandingrendering.pngRendering of National Landing courtesy Arlington County Government.
Northern Virginia lands a big chunk of Amazon’s second corporate headquarters
http://www.virginiabusiness.com/news/article/northern-virginia-lands-a-big-chunk-of-amazons-second-corporate-headquarter#When:21:28:00ZAfter a year-long search and frenzied speculation over where Amazon Inc. would locate a second corporate headquarters, Northern Virginia beat out a slew of other contenders Tuesday to land a fat slice of the pie.
In separate announcements, Gov. Ralph Northam and Amazon said the tech giant will invest $2.5 billion to establish a major headquarters in the state that is expected to create more than 25,000 high-paying jobs over 12 years.
The headquarters will be housed at National Landing, a joint site in Arlington County and Potomac Yard in Alexandria.
The announcements ended months of suspense over where Amazon would locate a second, $5 billion headquarters that promised 50,000 high-paying jobs and an 8 million-square-foot campus. Ultimately, the tech giant decided to split the headquarters between Northern Virginia and the Queens neighborhood of Long Island City in New York.
While news of the split decision leaked over the past few days, Tuesday’s announcements brought new details about one of the most highly anticipated corporate location decisions of the 21st century.
“This is a big win for Virginia — I’m proud Amazon recognizes the tremendous assets the commonwealth has to offer and plans to deepen its roots here,” Northam says. “Virginia put together a proposal that we believe represents a new model of economic development for the 21st century … The majority of Virginia’s partnership proposal consists of investments in our education and transportation infrastructure that will bolster the features that make Virginia so attractive: a strong and talented workforce, a stable and competitive business climate, and a world-class higher education system.”
Amazon said it plans to locate in 4 million square feet in Northern Virginia, with the opportunity to expand to 8 million square feet. The company said its investment and job creation should produce more than $3.2 billion in new state general fund revenues during the next 20 years.
In return, Amazon said it will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average pay of more than $150,000 in Arlington. This includes a workforce cash grant from the commonwealth of up to $550 million based on $22,000 for each job created. Amazon would receive the incentive only if it creates the projected high-paying jobs. According to state officials, the package comes out to 6 to 1 return on investment over the term of the performance-based agreement.
The company also is slated to receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local transient occupancy tax, a tax on hotel rooms.
In its announcement about selecting two cities, Amazon said it can recruit more top talent by being in two locations. “These are fantastic locations that attract a lot of great talent,” the company said.
To woo the much-coveted headquarters, Virginia also offered $195 million in transportation projects to improve mobility in Northern Virginia, including additional entrances to Metro stations at Crystal City and Potomac Yard. In addition, Arlington and Alexandria plan to fund more than $570 million for transportation projects, including rail connections and transit facilities serving the site.
Virginia officials and business leaders celebrated the news, saying Amazon’s presence will make Northern Virginia a top East Coast technology hub and lift Virginia’s national profile as a desirable location among corporate recruiters. “Anyone that moves in 25,000 jobs will move the needle and make this much more of a tech hub. It will be great for this marketplace,” says Bob Kettler, chairman and CEO of Kettler, a commercial real estate development company in McLean.
Holly Sullivan, Amazon director of WW economic development, said in a statement: “We are looking forward to joining the community and are excited to be creating high-paying jobs in Arlington. We believe that northern Virginia is a great place for our teams to keep inventing on behalf of our customers.”
The quest to land Amazon involved hundreds of people working collaboratively across the state. The Virginia Economic Development Partnership (VEDP) collaborated with Arlington County, the city of Alexandria, the General Assembly’s Major Employment and Investment (MEI) Project Approval Commission and local, regional and state partners.
Northern Virginia’s proposal included four sites in the Alexandria, Arlington County, Fairfax County and Loudoun County. National Landing, the winning location, was proposed as a joint partnership between the Alexandria and Arlington.
Stephen Moret, VEDP’s president and CEO, lauded the cooperative efforts, saying that it laid the groundwork for Virginia’s success. “The tech-talent pipeline investments that Gov. Northam and the General Assembly are launching will position communities across the commonwealth for healthier, more diversified economic growth,” he says.
The backbone of the cooperative pitch for Amazon’s headquarters is a long-term strategic investment of more than $1 billion in public higher education institutions to double the annual number of graduates with bachelor’s and master’s degrees in computer science and closely-related fields, ultimately yielding 25,000 to 35,000 additional graduates, above current levels, during the next two decades.
“Winning Amazon’s major new headquarters is a significant accomplishment for Virginia and it’s technology sector,” says Sen. Frank Ruff, R-Mecklenburg County and chairman of the MEI Commission, which reviews and approves major state incentive packages. “The jobs might be in Northern Virginia, but the revenues that will come are going to help us finance education, public safety, mental health, all the important issues,” he says in an interview with Virginia Business.
‘Deal of the century’
“In some ways, it is the deal of the century,” says Bill Quinby, vice chairman and co-regional manager of the Washington, D.C., office of Savills Studley, a commercial real estate services firm with offices across the country. “It’s tech; it’s retail; it’s everything. Consequently, Amazon is going to be as competitive and a bit of a monopoly maker as some of the greats going back a century.”
From the start, Northern Virginia was considered a top contender because of its deep pool of tech talent. According to Cushman & Wakefield’s 2018 Tech Cities report, the metro D.C. region has 327,273 tech workers, second only to New York with 491,419. With an office market of more than 300 million square feet that in recent years has seen higher-than-normal vacancies as a result of the federal government’s sequestration, it also has enough space to absorb a large headquarters.
Amazon already employs more than 2,000 people in Northern Virginia in technical and corporate jobs, and it has nearly 100 data centers in Loudon County that are either on the ground, being constructed or in the planning stages.
Plus, Amazon’s founder and CEO Jeff Bezos has ties to the region. He owns The Washington Post and a $23 million property in D.C.’s Kalorama neighborhood that he’s renovating into a home.
In addition, Amazon is locating its East Coast campus for cloud computing, Amazon Web Services, to Fairfax County. While the company is best known as the world’s largest online retailer, the fast-growing cloud computing division generated $1.6 billion, or 55 percent, of the company’s third-quarter operating income of $3.7 billion.
When Amazon announced its short list of 20 cities in January, Northern Virginia, Washington, D.C., and Montgomery County, Md., all made the list. Jason Miller, CEO of the Greater Washington Partnership, characterized Amazon’s decision as “an incredible win” for the entire region. “It is an important affirmation of our talent, our diversity, and our incredible potential. It also proves that the unprecedented unity among Maryland, the District, and Virginia sent a loud and clear message that we’re all in this together… When one wins, we all win.”
Arlington County Board Chair Katie Cristol said Amazon’s selection of the National Landing site validates the county’s strengths: sustainability, transit-oriented development, affordable housing, and diversity. “The strength of our workforce coupled with our proximity to the nation’s capital makes us an attractive business location,” she said in a statement.
Besides transportation improvements, Arlington and Alexandria also have committed to fund affordable housing, workforce housing and public infrastructure, relying on revenues generated from Amazon's presence in their communities. Combined, the localities project annual investments of more than $15 million over the next decade, resulting in the creation and preservation of 2,500 to 3,000 units in and around the Crystal City, Pentagon City and Columbia Pike areas and throughout Alexandria.
A key player in Amazon’s new home in Northern Virginia is JBG Smith, a real estate investment trust based in Chevy Chase, Md., and the main property owner of National Landing. The site offers more than 12 million square feet of existing office space and 13,000 residential units. It’s a walkable neighborhood that includes Crystal City, the eastern portion of Pentagon City and the northern portion of Potomac Yard. Situated across the Potomac River from Washington, D.C., it's considered one of the region's best-located, urban mixed-use communities.
JBG Smith controls more than 6.2 million square feet of the project’s development, primarily in Crystal City. Amazon intends to lease existing space and purchase land for development from the company in Crystal City and Pentagon City, while a new Virginia Tech Innovation Campus is expected to be developed in the Alexandria portion of National Landing.
“We are incredibly pleased to partner with Amazon on their new headquarters,” JBG Smith CEO Matt Kelly said in a statement. “It validates our placemaking and repositioning strategy in National Landing and will accelerate our plans to revitalize the area in a dramatic way.”
National Landing checks off many requirements Amazon had in a second headquarters; namely an urban site with access to public transit that’s close to an airport. The area is within walking distance of Reagan National Airport. It has three Metro stations and a commuter rail station. Plus, Crystal City’s proximity to the Pentagon is seen as a plus at a time when Amazon’s cloud computing unit is vying for billion-dollar federal defense and intelligence contracts.
Many of the older office buildings in Crystal City originally were built for government agencies and contractors in the 1970s. After 2005, many large government tenants left as part of the Pentagon’s Base Closure and Realignment Commission (BRAC) process.
Recently, Arlington County approved major upgrades to Crystal City’s commercial center, Crystal Square. JBG plans a new four-story retail building anchored by an Alamo Drafthouse Cinema, the addition of a specialty grocery store and a public park. The company already has tried to punch up the area’s drab public exteriors by covering some of the office high-rises with colorful building wraps.
“The bones are there; it just needs to be built out,” says Sarah Dreyer, regional director of research for Savills Studley’s D.C. office. “There’s an opportunity for whoever comes to craft it on their own.”
Amazon says it would need at least a half a million square feet by the end of next year. Crystal City alone offers 8.6 million square feet of rentable space and has a vacancy rate of 20 percent.
JBG became the largest owner of commercial real estate in Crystal City as part of its July 2017 merger with Vornado Realty Trust’s D.C. business.
Dealing primarily with a single landlord “will make Amazon’s life a lot easier,” says Quinby of Savills Studley. “Putting these projects together is not simple. It’s time consuming and very capital intensive.”
Amazon’s site selection sweepstakes began on Sept. 7, 2017. That’s when the company issued a request for proposals (RFP) inviting cities in North America to respond with bids. The deadline for submitting proposals for what came to be called HQ2 was Oct. 19. The process drew proposals from 238 localities across the U.S. and Canada. Amazon CEO and founder Bezos said at the time that its second headquarters campus would be “a full equal” to the company’s global headquarters campus in Seattle.
The Seattle site employs about 45,000 people in 33 buildings and is still growing. According to Amazon, the company has had an indirect impact of $38 billion in additional investment on Seattle’s economy. Yet, some residents there have been critical of the company, saying its presence has driven up housing prices and swamped the city’s infrastructure.
Perhaps because of those sentiments, Amazon decided to reduce its impact with two new headquarters instead of one. “We are excited to build new headquarters in New York City and Northern Virginia,” Bezos said in a statement. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come.”
To win the headquarters, some states such as Maryland and New Jersey reportedly each offered economic incentive packages of more than $5 billion. Following the open call, though, the quest to win HQ2 was shrouded in secrecy. Until Tuesday’ s announcement most states, including Virginia, refused to disclose what taxpayer incentive offers had been made for fear of tipping their hand to the competition. Nor would they make public what sites were being offered, in part because state officials and developers had signed nondisclosure agreements with Amazon.
According to Quinby of Savills Studley, who has been involved with several large corporate headquarter locations during his 40-year career, secrecy is typical on mega deals.
“To the public, I’m sure it does look like Amazon was the big bad wolf coming to town, and now it’s changing the rules,” he says since the company opted later in the game to split the headquarters.
“Yet, it wasn’t an uncommon approach. What made it different was because of who it was and the sheer size.”
Still, groups opposed to having Amazon’s second headquarters in the D.C. area didn’t take kindly to being kept in the dark about what was being offered to a company headed by one of the world’s richest men. Bezos took the top spot this year on Forbes magazine’s annual list of America’s wealthiest people with an estimated net worth of $160 billion.
Two local community groups, Our Revolution Arlington and the Northern Virginia branch of Metro DC Democratic Socialists of America, have been vocal about their opposition to Amazon locating its headquarters in the area. DSA NOVA’s Alex Howe says he’s glad that Virginia’s not offering as much money as Maryland planned to if it landed the deal. However, his group still opposes providing incentives to Amazon.
“Virginia, Arlington and Alexandria shouldn’t be subsidizing or giving money to the largest corporation in the world,” Howe says.
Our Revolution Arlington and DSA NOVA are working to make sure Amazon pays its fair share of the deal. That includes providing enough money for infrastructure improvements across the entire region and ensuring enough money for affordable housing in the area. The groups are hosting a town hall in December where members of the community can ask questions and express their concerns.
Some residents also are worried that housing prices will spike, much like what happened in Seattle. While the Northern Virginia suburbs have some of the highest median household incomes in the country, they also have some of the most expensive home prices. During the third quarter, the median price for a single-family home in Arlington was $855,000, according to a market report from the Long & Foster Cos. The median price for a townhome came in at $565,950, and buyers could expect to pay $360,000 for a condo or coop.
Amazon’s announcement should give the Northern Virginia real estate market a shot in the arm, which has plateaued recently despite a strong economy and tight labor supply, says Nick Ron, CEO of House Buyers of America Inc., based in Chantilly.
He also expects new housing to create pressure on home prices. “There’s going to be a supply problem,” said Ron. “It’s really hard to build housing for 25,000 people quickly.”
Land prices also have been increasing, he adds, which makes construction of affordable housing nearly impossible. “When you’re trying to build affordable housing, it’s really hard when land prices are high.”
The Metropolitan Washington Council of Governments says the region needs to add 235,000 housing units by 2025 to respond to expected job growth, even without Amazon.2018-11-13T21:28:00+00:00
Amazon at a glance
http://www.virginiabusiness.com/news/article/amazon-at-a-glance#When:20:43:00Z• Founded: July 5, 1994 in Seattle, Wash. The corporate headquarters consists of 33 buildings with more than 8 million square feet of space, 24 restaurants and other retail operations.
• Number of employees: more than 540,000 worldwide, including 250,000 full-time jobs in the U.S. and 8,500 fulltime employees in Virginia.
• Small businesses: 28,000 small- and medium-sized Virginia businesses currently sell on Amazon.
• Third quarter sales: $56.6 billion.
• Market cap: As of Nov. 13, the company’s stock was trading at $1,636 per share for a market cap of $800.3 billion. In September, Amazon became the second U.S. public company (after Apple) to hit the $1 trillion market cap.
• Facilities in Virginia: Six fulfillment and sortation centers in Ashland, Chester, ClearBrook, Petersburg, Springfield and Sterling; three Prime Now hubs in Richmond, Springfield, and Virginia Beach; six solar facilities in Buckingham, New Kent, Sussex, Powhatan, Accomack and Southampton Counties. Amazon also is locating its East Coast campus for Amazon Web Services, the company’s cloud computing unit, in Fairfax County, where AWS already has operations.
Sources: Amazon’s website, Virginia Business, published reports.2018-11-13T20:43:00+00:00
Amazon HQ2 Timeline
http://www.virginiabusiness.com/news/article/amazon-hq2-timeline#When:19:10:00ZSept. 7, 2017: Amazon announces a request for proposals for a second $5 billion corporate North American headquarters, sparking a bidding war between cities.
Oct. 19, 2017: Deadline for cities to submit bids. Amazon receives 238 proposals from cities and regions in 54 states, provinces and territories from the U. S., Canada and Mexico.
Jan. 18, 2018: Amazon announces a short list of finalists, with 20 cities making the cut. Northern Virginia, Washington, D.C., and Montgomery County, Md., make the list.
March 2018: News organizations report that representatives from Amazon tour sites proposed in NoVa, D.C. and Maryland.
May 2018: Amazon reportedly concludes visits to 20 states.
November 2018: National news organizations write stories revealing Amazon is in final discussions with several locations, including Arlington County. The idea of splitting the second headquarters site is proposed.
Nov. 13, 2018: Amazon announces that the second headquarters will be split between Northern Virginia and New York City.
Sources: Virginia Business, Amazon’s Website, published reports.
-Paula Squires2018-11-13T19:10:00+00:00http://www.virginiabusiness.com/uploads2/Norfolk_Southern_McKinnon_building_for_web.pngPhoto courtesy Norfolk Southern
What a Norfolk Southern exit could mean for Hampton Roads
http://www.virginiabusiness.com/news/article/what-a-norfolk-southern-exit-could-mean-for-hampton-roads#When:19:09:00ZWhen a Norfolk Southern Corp. executive sent a letter to the city of Norfolk and a state agency outlining terms to which the company would agree to move part of its Roanoke office operations to its corporate headquarters in Norfolk rather than to its operational headquarters in Atlanta, he expressed optimism about the Hampton Roads city.
The year was 2015.
Today, Norfolk Southern again is considering a corporate office shakeup and once more has Georgia on its mind.
Atlanta’s City Council recently approved a $1.9 billion downtown redevelopment project that The Virginian-Pilot reported was key to a relocation of Norfolk Southern’s headquarters to Atlanta. The company is now waiting to see whether Atlanta’s economic development arm will sign off on $600 million in bond financing for a new 750,000-square-foot headquarters building for Norfolk Southern.
Norfolk Southern already has around 1,900 employees at an office building in Atlanta. The company has around 500 employees in its current corporate headquarters in downtown Norfolk at 3 Commercial Place and a total of 982 employees in the Hampton Roads region.
Norfolk Southern agreed to add to its corporate headquarters functions in Norfolk after signing in 2016 a 10-year performance agreement with Norfolk and its economic development authority. The company had relocated about 500 employees in Roanoke to Atlanta and Norfolk.
Under the terms of the agreement, which don’t expire until 2026, Norfolk Southern would get $1.925 million from the Commonwealth’s Development Opportunity Fund and a $2.5 million parking subsidy for a Norfolk city garage.
In return, Norfolk Southern agreed to invest $8.2 million in its Norfolk headquarters and bring 165 new jobs to Norfolk that paid an average minimum salary of $97,000 a year. The terms of the agreement dictate that Norfolk Southern has to submit annual reports showing it maintains at least 90 percent — or 148.5 — of the jobs it brought to Norfolk. The company has done so for 2017 and 2018.
With Norfolk Southern eyeing a move before its performance agreement with Norfolk expires, the company may have to pay back a portion of the subsidies it received.
Norfolk Southern’s performance agreement with Norfolk and the city’s economic development authority includes clawback provisions. They say that Norfolk Southern could have to pay back an amount that is proportionate to the average number of jobs it created between the start and end dates of the performance agreement.
For example, if by 2026 Norfolk Southern had maintained an average of 50 percent of the target new jobs number, or 82.5 jobs, then it would owe Norfolk’s economic development authority 50 percent of the incentive money, or $962,500. The example is cited in the actual performance agreement. There is also a provision for how the company would have to pay back its parking subsidy.
The Virginia Economic Development Partnership and Norfolk did not respond to follow up questions about the agreement by press time.
Norfolk Southern declined to respond to questions about its Norfolk performance agreements.
Daniel M. Siegel, a Sands Anderson lawyer in Richmond who specializes in public economic development deals, says it is unusual for a company to choose not to meet the terms of a performance agreement. He says it’s more typical for struggling companies to do so.
Siegel thinks it would be good for public relations for Norfolk Southern to pay back whatever it has received in public incentives and subsidies from Norfolk.
"It's such a breaking of the trust and agreement with the community regardless of what the agreement says,” Siegel says. “With a big company you would expect them not to nickel and dime it, but it does happen.”
Beyond the question of what it might pay back if it leaves, is what will become of Norfolk Southern’s local philanthropy if it moves its headquarters out of Virginia.
In 2016, the company’s total cash contributions were $11 million to nonprofits, universities and art institutions around the U.S., according to the most recent company report published online. Norfolk Southern contributed $263,900 to the United Way chapter in Hampton Roads in 2016, according to the report. That same year Norfolk Southern gave Atlanta’s United Way chapter $204,370.
The company donates to the Foodbank of Southeastern Virginia, the YWCA of South Hampton Roads and the Virginia Symphony, among other organizations around the state. Were Norfolk Southern to leave Hampton Roads, it may well reduce its Virginia charitable contributions in favor of organizations in and around Atlanta, says Robert McNab, an economics professor at Old Dominion University.
"It would require additional work by nonprofits and other charitable organizations to think about their strategies in terms of fundraising and in terms of management," McNab says of a potential Norfolk Southern move.
For the overall Hampton Roads economy, the potential loss of 500 jobs is disconcerting but relatively small, McNab says. He thinks the more damaging aspect of Norfolk Southern possibly leaving Hampton Roads is more intangible.
“If one thinks of the psychological or marketing effect of losing a major headquarters to another city, that will be more significant,” McNab says. “It presents another challenge in attracting large Fortune 500 firms here to Hampton Roads.”
In the wake of a loss of the Norfolk Southern headquarters, localities in Hampton Roads would be wise to work together to go after midsize companies, McNab says. He says Norfolk Southern’s potential for an early departure from Hampton Roads is part of the risk localities take when they roll the dice in the private market.
“Businesses evolve and they have to do what's in their best interest,” McNab says. “Norfolk Southern has been a great member of the community. It would be sad to see them go but we also have to recognize that this is a part of business.”
So was the original deal to use public financing to relocate Norfolk Southern’s corporate functions in Roanoke to Hampton Roads and keep it in Virginia worth it in the first place? McNab thinks so.
The average annual wage of the 148 new jobs Norfolk Southern maintained from June 1, 2016 to May 31, 2017 was $103,212, according to an annual company report submitted to Norfolk. The year before that Norfolk Southern maintained 161 jobs in Norfolk that paid an average annual wage of $98,724.
"In terms of net payroll and spending in the economy it would seem that the return on the investment has been relatively good for the Commonwealth, even though the Commonwealth would be losing a headquarters to a competing state,” McNab says.
For now, Norfolk Southern’s headquarters in Norfolk sits in a cluster of other office towers close to a mix of hotels and eateries. Ginger Davenport, the bar manager at Hell’s Kitchen on Granby Street nearby, says Norfolk Southern workers are among the patrons that make downtown Norfolk a lively scene. She hadn’t heard about the potential headquarters relocation and felt there was enough activity downtown to handle the potential loss.
Still, Davenport felt local businesses would notice if Norfolk Southern’s headquarters left the station.
“It would definitely affect us if they weren’t here anymore,” Davenport says.
George Mason launching Institute for Digital InnovAtion (IDIA)
http://www.virginiabusiness.com/news/article/george-mason-launching-institute-for-digital-innovation-idia#When:17:13:00ZGeorge Mason University said Tuesday it is creating an Institute for Digital InnovAtion (IDIA) on its Arlington campus. The move is part of initiatives meant to support Amazon’s decision to locate half of its second headquarters in Northern Virginia.
IDIA will be located in a new 400,000-square-foot building, which will house GMU’s graduate education programs as well as public and private-sector entities.
The university also is planning to launch a new School of Computing to help meet growing demand for computing professionals. GMU says Amazon’s decision to establish its headquarters in Northern Virginia is expected to triple the number of students seeking degrees in computing majors. The school currently enrolls more than 5,000 students in computing programs and more than 37,000 total students.
The university also has established a new program called ADVANCE through a partnership with Northern Virginia Community College, which seeks to develop future tech talent while also managing the cost of higher education.2018-11-13T17:13:00+00:00http://www.virginiabusiness.com/uploads2/VT_rendering-1-updated.pngRendering courtesy Virginia Tech
Virginia Tech to establish $1 billion Innovation Center in Alexandria as part of Amazon deal
http://www.virginiabusiness.com/news/article/virginia-tech-to-establish-1-billion-innovation-center-in-alexandria-as-par#When:16:48:00ZVirginia Tech will establish a 1 million-square-foot graduate campus in Alexandria as part of the commonwealth’s pitch to attract Amazon’s second headquarters.
The $1 billion Virginia Tech Innovation Campus will serve to grow high-tech talent in the Washington, D.C., region.
Amazon officially announced Tuesday it would divide its second headquarters among Northern Virginia and New York City.
The campus will be located on U.S. Route 1 at National Landing in Alexandria near Potomac Yard. The land, commonly called Oakville Triangle, is owned by Blackstone Group LP’s real estate fund. It will be developed by Stonebridge.
The development will include:
300,000 square feet of academic space and research and development facilities
250,000 square feet of partner space dedicated for startups and corporate facilities
350,000 square feet of housing space for students and faculty
100,000 square feet of retail and support spaces.
Virginia and Virginia Tech each have committed to provide $250 million to seed the project.
Virginia Tech also has agreed to increase its undergraduate enrollment at its Blacksburg campus by 2,000 students in computer science, computer engineering, software engineering and related disciplines.2018-11-13T16:48:00+00:00
CBRE affiliates joining Colliers
http://www.virginiabusiness.com/news/article/cbre-affiliates-joining-colliers#When:16:42:00ZColliers International Group Inc. announced on Monday it agreed to acquire a majority interest in CB Richard Ellis of Virginia Inc. The CBRE affiliate will be rebranded as Colliers International | Virginia beginning in January.
J. Scott Adams, a CBRE regional president of the mid-south affiliate offices, will become president of Colliers International | Virginia.
In October, CBRE Inc. and CB Richard Ellis of Virginia announced plans to end their affiliate agreement on Dec. 31. CBRE Inc. plans to operate as a wholly-owned business in Virginia beginning in January.
The Colliers International | Virginia deal is planned to close by January. In the meantime, the CBRE affiliate offices in Fredericksburg, Charlottesville, Hampton Roads and Richmond will continue to operate under the CBRE brand.
Terms of the transaction were not disclosed.2018-11-13T16:42:00+00:00
REACTIONS: Amazon HQ2
http://www.virginiabusiness.com/news/article/reactions-half-of-amazons-new-headquarters-coming-to-arlington-alexandria#When:16:09:00ZThe rumors are no more. Northern Virginia has landed half of Amazon's second headquarters and its 25,000 jobs.
The e-commerce giant will locate in National Landing, which includes portions of Pentagon City and Crystal City in Arlington and Potomac Yard in Alexandria. The other half of the headquarters will go to the Long Island City neighborhood in Queens, New York.
Here's what local leaders and groups are saying about the deal.
Arlington Chamber of Commerce: "Amazon's commitment to locate in Arlington will help to alleviate the pressures on our local economy caused by an office vacancy rate that has been elevated for more than a decade by the Base Realignment and Closure (BRAC), the 2008 financial crisis and resulting recession, and federal budget sequestration," the organization said in a statement. "Their plans to add new jobs in Arlington will help meet the employment needs of the Washington, DC region's growing population and will create new opportunities for our local workforce."
Del. Lee J. Carter via Twitter (D-Manassas): "Amazon is leaving Seattle precisely because they made Seattle too expensive to live in. Now Virginia's falling all over itself to have Amazon do the same thing here, and paying them for the privilege!"
Barry DuVal, president and CEO, Virginia Chamber: “This is a historic day for Virginia’s economy. Amazon’s selection of Virginia is a testament to the caliber of our workforce in the Commonwealth and our commitment to keeping Virginia the most business-friendly state in America."
Gerald L. Gordon, president and CEO of the Fairfax County Economic Development Authority: “Having HQ2 in Northern Virginia will bring important jobs, business diversity and more innovative technology to the area. We look forward to continuing to work with Amazon Web Services to expand its presence here and are excited to collaborate with other innovative companies that will be putting down roots in Fairfax County soon.”
Ted Leonsis, CEO of Monumental Sports and Entertainment and vice chair of the Greater Washington Partnership: “Amazon’s decision to invest here is a big win for the Capital Region - and just the latest proof that from Richmond to Baltimore, we are truly a super-region. We are already a global hub for tech innovation and home to some of the best educated, most skilled workforce in the country. Now, thanks to Amazon’s decision, we all have a great chance to continue to build around our common purpose: making this the best place in the world to live, work, innovate and compete.”
Barry Lynn, executive director of the Open Markets Institute: "Amazon demanded subsidies and terms from cities all over the country, demanded those terms be kept secret, then reneged on its promise to locate thousands of jobs. Amazon is now treating even the biggest of American cities with the same disrespect it shows for the suppliers and the merchants who depend on its website to reach customers."
Jason Miller, CEO, The Greater Washington Partnership, an alliance of CEOs which seeks to advance economic issues in the region spanning Baltimore to Richmond: "Amazon's announcement is an incredible win for the Capital Region, and it is an important affirmation of our talent, our diversity, and our incredible potential. It also proves that the unprecedented unity among Maryland, the District, and Virginia sent a loud and clear message that we're all in this together. The announcement is just the beginning. Now we must seize this once-in-a-lifetime opportunity and work together to show the world what an inclusive, unified region looks like. When one wins, we all win."
Stephen Moret: "I’m grateful to Governor Northam and his cabinet, the General Assembly’s MEI Commission and their staff, Virginia’s university leaders, our amazing local partners, our talented colleagues at VEDP, and many other Virginians for all they have done to make this possible. Virginia’s biggest employment growth opportunity in the years ahead will be in tech – from artificial intelligence to cloud computing to cybersecurity, and everything in between. The tech-talent pipeline investments that Governor Northam and the General Assembly are launching will position communities across the Commonwealth for healthier, more diversified economic growth."
Our Revolution Arlington and NoVA HQ2 Coalition: "The tax-payer funded subsidy offers made to Amazon by the State of Virginia have been completely hidden, and there has yet to be any opportunity for local community input on this deal. We oppose a massive state gift to a company headed by the world’s richest person. We call upon Amazon, Gov. Northam and County Board chair Cristol to immediately and fully disclose all of the tax incentives, infrastructure improvements and other subsidies that have offered for HQ2."
Buddy Rizer, director of Loudoun Economic Development: “We consider this a win for the entire region. Many of Loudoun’s highly educated professionals will join the Amazon workforce, and many of Loudoun’s wine country and other retail and recreation venues will become favorite destinations for Amazon employees throughout the Northern Virginia/DC Metro region. We will continue to market Loudoun County as a world-class location for global businesses like Amazon, and we look forward to making some exciting announcements about new Loudoun companies soon.”
U.S. Sen. Mark Warner: “As a former Governor, now Senator, but also as a former technology executive, I'm really excited about the potential Amazon offers not only to Northern Virginia but the whole capital region and the entire Commonwealth," Warner said in a statement. "We've seen that major investments like these can bring not only thousands of direct jobs but also lead to job growth in other industries. As we welcome Amazon's new investment in Virginia, we must commit to implementing this announcement in a way that will benefit the whole region and all of the Commonwealth.”2018-11-13T16:09:00+00:00http://www.virginiabusiness.com/uploads2/1SG_0369x.png
Half of HQ2 heading to Northern Virginia
Half of Amazon HQ2 is coming to Northern Virginia.
The company will invest about $2.5 billion and create 25,000 jobs over 12 years.
The new headquarters will be housed in National Landing, which includes portions of Pentagon City and Crystal City in Arlington and Potomac Yard in Alexandria.
Amazon will establish another headquarters location in the Long Island City neighborhood in Queens, New York. That investment also is expected to create 25,000 jobs. Also on Tuesday, Amazon announced it would establish an Operations Center of Excellence in Nashville with more than 5,000 jobs.
Virginia says the investment is expected to generate $3.2 billion in new state general fund revenues over a 20-year incentive term with Amazon. In addition to the 25,000 jobs, Virginia estimates the investment will create 22,000 permanent, direct and indirect jobs in Virginia.
Amazon is expected to begin hiring in 2019.
Northern Virginia’s proposal included four sites in Alexandria, Arlington County, Fairfax County, and Loudoun County.
National Landing, the winning location, was proposed as a joint partnership between Alexandria and Arlington. It is located less than three miles from Washington, D.C. It is served by three Metro stations and commuter rail. Reagan National Airport is within walking distance.
As part of the commonwealth’s long-term incentive agreement with Amazon for the creation of at least 25,000 jobs, Virginia will:
Provide post-performance incentives to Amazon that will be paid annually based on job creation and wage levels, with minimum average wages of at least $150,000. Subject to General Assembly approval, the company will be eligible to receive up to $22,000 per job or up to $550 million in incentives. Additional incentives would be available if Amazon creates more than 25,000 jobs; and
Invest up to $195 million of non-general fund money in transportation projects that will improve mobility in the region, including additional entrances to the Metro stations at Crystal City and Potomac Yard, improvements to Route 1, a connector bridge from Crystal City to Washington National Airport, and a transitway expansion supporting Pentagon City, Crystal City and Potomac Yard. Additional funding would be available if Amazon creates more than 25,000 jobs.
To support the growth of the technology sector across the commonwealth, Virginia will:
Make performance-based investments in bachelor’s degree programs in computer science and related fields that will be distributed statewide based upon a negotiated agreement with each public university or community college that wishes to participate;
Make performance-based investments of up to $375 million over 20 years for new master’s degree programs in computer science and related fields at George Mason’s Arlington campus and for Virginia Tech to establish a new Innovation Campus in Alexandria, both of which are subject to a one-to-one match from the universities with philanthropic funds; and
Invest $50 million over 20 years in K-12 tech education and internship programming to connect higher ed students to tech jobs.
This story will be updated throughout the day.
Arlington County, New York City to share Amazon’s HQ2, WSJ reports
http://www.virginiabusiness.com/news/article/arlington-county-new-york-city-to-share-amazons-hq2-wsj-reports#When:03:42:00ZThe Wall Street Journal reported Monday evening that Arlington County and New York City will split Amazon’s HQ2.
The Journal report says Amazon is dividing its second headquarters evenly between New York City’s Long Island City and Arlington County’s Crystal City neighborhoods — and the 50,000 jobs and billions of dollars of investment it promises to bring with it.
Amazon did not comment on the Journal’s report Monday night. The Journal says the official announcement could come as soon as Tuesday.
The decision follows months of frenzied speculation over which city in North America would win the coveted 8-million-square-foot headquarters with its high-paying salaries and the potential to attract billions of dollars in additional development.
Crystal City is across the Potomac River from Washington, D.C., has Metro rail access and is close to Reagan National Airport.
In January, Northern Virginia was included on Amazon’s short list of 20 cities it was still considering. Washington, D.C., and Montgomery County, Md., also were on the short list. The high-stakes selection process drew 238 proposals from locations across the U. S., Canada and Mexico, sparking a competitive bidding war of economic incentives.
Amazon solicited proposals for HQ2 in September 2017. It said it initially would need 500,000 square feet of space and eventually would expand to a total of 8 million square feet.
Check back at VirginiaBusiness.com for updates on the story.2018-11-13T03:42:00+00:00
McDonald’s extends Virginia Beach lease
http://www.virginiabusiness.com/news/article/mcdonalds-extends-virginia-beach-lease#When:02:20:00ZMcDonald’s has extended its ground lease on 38,300 square feet of land located at 2400 Princess Anne Road in Virginia Beach.
Chris Zarpas of S.L. Nusbaum represented the landlord.
Additional leases in Hampton Roads from S.L. Nusbaum include:
· CitiTrends has exercised its option on 16,800 square feet of retail space at Suffolk Plaza Shopping Center in Suffolk. Chris Hucke represented the landlord.
· Accurate Courier Express Inc. has leased 16,276 square feet of industrial space located at 3412 Inventors Road in Norfolk. Michael Myers handled the transaction.2018-11-13T02:20:00+00:00
Gloucester land purchased for apartments
http://www.virginiabusiness.com/news/article/gloucester-land-purchased-for-apartments#When:02:19:00ZRiverbend Apartments LP has purchased 27 acres in Gloucester for apartment buildings.
The land, located at 6139 George Washington Memorial Highway, was purchased for $2.762 million from Zandler Development Co. LLC.
Phase 1 of the apartments will include 130 units, while Phase II will include 88 units.
Bill Overman and John Wessling of S.L. Nusbaum Realty Co. represented the buyer.2018-11-13T02:19:00+00:00
From banking to donuts
http://www.virginiabusiness.com/news/article/from-banking-to-donuts#When:02:18:00ZA Dunkin Donuts franchisee has purchased a 3,412-square-foot commercial building in Virginia Beach that used to be a Wells Fargo bank.
The franchisee purchased the building at 5284 Providence Road from Wells Fargo for $1.025 million.
Dunkin Donuts plans to renovate the building, which sits on 0.916 acres of land.
George Fox of Divaris Real Estate Inc. represented the buyer.2018-11-13T02:18:00+00:00
Alexandria apartment complex sells for $23 million
http://www.virginiabusiness.com/news/article/alexandria-apartment-complex-sells-for-23-million#When:02:01:00ZHermitage Hill, a 122-unit apartment complex in Alexandria, has changed hands. Klingbeil Capital Management bought the property at 2246 N. Beauregard St. from Zeke Capital for $23 million.
CBRE Group Inc.’s Bill Roohan, Robert Dean, Jonathan Greenberg, John McFadden, Yalda Ghamarian and Tom Leachman represented the seller in the transaction.2018-11-13T02:01:00+00:00
Commercial Real Estate Women (CREW) Northern Virginia names deal of the year
http://www.virginiabusiness.com/news/article/commercial-real-estate-women-crew-northern-virginia-names-deal-of-the-year#When:21:40:00ZThe Northern Virginia chapter of Commercial Real Estate Women has honored Loudoun Economic Development with its “Deal of the Year” award for a project that will co-locate D.C. United’s headquarters and Loudoun United’s stadium near Leesburg Airport.
Construction on the project is underway and is projected to be complete in 2019.
Kimley-Horn and Associates, an engineering consulting firm, and GeoConcepts Engineering, a geotechnical engineering company, jointly nominated Loudoun Economic Development for the award.
“This development offered several challenges, such as the fact that the team needs to have the stadium built and operational less than one year after the deal was signed,” the nominees stated about the project. “This required a significant amount of planning and coordination between county departments to ensure permits and approvals could be obtained.”
The strongest aspect of the project, according to the nominees, is the value the community will gain from being the home of a professional soccer franchise. Loudoun United will be part of the United Soccer League, which has 40 teams throughout the U.S. Loudoun United will play teams from Richmond, Louisville, Ky., Cincinnati and other cities in a 30-game schedule that will have 15 home dates.
Loudoun County is providing the land for the facilities, and approximately $15 million in financing for the construction of the fields, offices, training facility and a 5,000-seat stadium. The team will make regular lease payments to the county that will fully offset any debt payments incurred as part of the financing package.
The county will also retain the ability to operate the paid parking lots for stadium events and as a Loudoun County Transit Park and Ride lot during commuting hours. Of the four soccer fields, two will serve as the team practice fields and two can be used by the county during peak recreational periods. The county will also be able to use the stadium for other purposes, such as graduations and concerts.2018-11-11T21:40:00+00:00
Port of Virginia posts record month
http://www.virginiabusiness.com/news/article/port-of-virginia-posts-record-month1#When:20:40:00ZThe Port of Virginia set a new record in October, handling more than 270,000 TEUs, or 20-foot equivalent units. That total is more than 5,000 units above the port’s previous record.
The growth was driven by a 2 percent increase in loaded imports and a 14.5 percent increase in empty export containers. The port is trying to decrease its empty container inventory to improve efficiency and better focus on moving loaded containers.
The growth created congestion at the gate’s terminals, however. The Port of Virginia is undergoing expansion projects totaling nearly $700 million at its two largest terminals at the same time.
“The record volume, especially during construction, put a significant amount of pressure on the gates, and there were some trying moments last month for motor carriers,” John Reinhart, CEO and executive director of the Virginia Port Authority, said in a statement. “We are taking steps to create greater flexibility in our gate hours and add more chassis to the pool to build fluidity.”
October cargo snapshot
• Total TEUs – 270,538, up 1.9 percent
• Loaded export TEUs – 83,577, down 4.8 percent
• Loaded import TEUs – 127,677, up 2.1 percent
• Total containers – 150,931, up 0.9 percent
• Breakbulk tonnage – 11,738 (tons), down 23.8 percent
• Virginia Inland Port containers – 3,958, up 17.8 percent
• Total rail containers – 47,804, down 5.2 percent
• Total truck containers – 98,204, up 4.1 percent
• Total barge containers – 4,923, up 1.5 percent
• Richmond Express containers – 3,261, up 31 percent
• Vehicle units – 1,003 – down 56.3 percen2018-11-09T20:40:00+00:00
King and Queen peat moss and pine bark facility expanding
http://www.virginiabusiness.com/news/article/king-and-queen-peat-moss-and-pine-bark-facility-expanding#When:21:57:00ZPremier Tech, a horticulture and agriculture company, plans to invest $1.89 million to expand its peat moss and pine bark mixing and distribution facility in King and Queen County in eastern Virginia.
Ed Miller, King and Queen’s director of economic development, says he and his peers at the local and state level knew they were competing with Minnesota for Premier Tech’s investment, so they put together the best incentive package they could to win the 20 jobs the company ultimately agreed to create.
Miller says the King and Queen Economic Development Authority approved $75,000 in incentive money to be paid to Premier Tech over five years. Gov. Ralph Northam approved $75,000 from the Commonwealth’s Opportunity Fund and $75,000 from the Agriculture and Forestry Industries Development Fund for Premier Tech.
Premier Tech is one of King and Queen County’s biggest employers. The rural county recently established its own public broadband system. King and Queen is also home to a major landfill but no major grocery stores.
Premier Tech plans to increase its production capacity and introduce new products to the East Coast market. The company was founded in 1923 and does business around the world. Premier Tech could not immediately be reached for comment Thursday.
The Virginia Economic Development Partnership worked with King and Queen County, the Virginia Department of Agriculture and Consumer Services, and the Virginia Department of Environmental Quality to get the project for Virginia.
Premier Tech is eligible for Sales and Use tax exemptions on manufacturing equipment as well as recycling tax credits for the processing of recyclable materials. Funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.
Jobless rates fall in Virginia metro areas
http://www.virginiabusiness.com/news/article/jobless-rates-fall-in-virginia-metro-areas2#When:21:50:00ZUnemployment fell in Virginia’s metro areas during September.
The Virginia Employment Commission reported this week that the commonwealth’s 11 metropolitan statistical areas (MSAs) saw jobless rates decline by three-tenths to half of a percentage point during the month.
The VEC numbers were not seasonally adjusted. That means they do not take into account seasonal fluctuations in the labor force.
The biggest drop occurred in the Charlottesville area, where unemployment fell from 2.9 to 2.4 percent in September.
Charlottesville was one of eight Virginia MSAs with jobless rates under 3 percent during the month. The lowest unemployment rate, 2.3 percent, was recorded in Northern Virginia.
The highest metro unemployment rate was only 3.1 percent, a figure reported in the Lynchburg area and Hampton Roads.
The U.S. unemployment rate, using statistics that aren’t seasonally adjusted, was 3.6 percent in September. The Virginia rate was 2.8 percent.
A breakdown of the VEC numbers show:
Bristol: 3 percent in September, down from 3.4 percent in August.
Charlottesville: 2.4 percent, down from 2.9 percent.
Hampton Roads: 3.1. percent, down from 3.4 percent.
Harrisonburg: 2.7 percent, down from 3.1 percent.
Lynchburg: 3.1 percent, down from 3.5 percent.
New River Valley, 2.9 percent, down from 3.3 percent.
Northern Virginia: 2.3 percent, down from 2.6 percent.
Richmond 2.9 percent, down from 3.2 percent.
Roanoke: 2.7 percent, down from 3.1 percent.
Staunton-Waynesboro: 2.5 percent, down from 2.9 percent.
Winchester: 2.4 percent, down from 2.7 percent.2018-11-08T21:50:00+00:00http://www.virginiabusiness.com/uploads2/CVILLEOFFICEBUILDING.pngRendering and graphics courtesy Cushman & Wakefield | Thalhimer.
New office building coming to downtown Charlottesville
http://www.virginiabusiness.com/news/article/new-office-building-coming-to-downtown-charlottesville#When:21:46:00ZA new office building is coming to downtown Charlottesville.
Charlotte, N.C.-based Insite Properties has broken ground on 3TWENTY3, a 120,000-square-foot structure which should be complete in spring 2020. The space at 323 Second St. S.E. is being transformed into a five-story office building with a four-level parking garage.
The building will be built on what is now the back half of The Glass building and a parking lot. The front of the Glass building — currently occupied by Augustiner, The Bluegrass Grill & Bakery and Paradox Pastry — will continue to be used as retail space.
McGuireWoods already has signed up to occupy 17,218 square feet on the third floor of the building. Building amenities include a rooftop terrace with patio, an event facility and electric-car charging stations.
Construction of 3TWENTY3 will be handled by Atlanta-based Batson-Cook Construction. The architect is Charlotte, N.C.-based BB&M Architecture. Jay Kessler will serve as project manager/owner representative. Cushman & Wakefield | Thalhimer’s John Pritzlaff is the leasing representative for the building.2018-11-08T21:46:00+00:00
Carry-On Trailer plans expansion in Westmoreland County
http://www.virginiabusiness.com/news/article/carry-on-trailer-plans-expansion-in-westmoreland-county#When:20:24:00ZGeorgia-based Carry-On Trailer Inc. plans to expand its manufacturing operations in Westmoreland County, a $1.6 million project expected to create 42 jobs.
The company makes utility, cargo, horse, livestock and specialty trailers as well as replacement parts program.
Carry-On employs 208 people in Virginia, with 198 at the Westmoreland factory.
Based in Lavonia, Ga., the company has seven manufacturing facilities in the U.S.
The Virginia Economic Development Partnership worked with Westmoreland County and the Northern Neck Planning District Commission on the project for which the commonwealth competed against Georgia and Pennsylvania.
Gov. Ralph Northam approved a $125,000 grant from the Commonwealth’s Opportunity Fund to assist Westmoreland with the project.
Carry-On also is eligible for state benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development, as well as Sales and Use tax exemptions on manufacturing equipment.
Funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.2018-11-08T20:24:00+00:00
Women on corporate boards in the Washington area increases slightly
http://www.virginiabusiness.com/news/article/women-on-corporate-boards-in-the-washington-area-increases-slightly#When:22:50:00ZThe number of women serving on corporate boards in the Washington, D.C. region increased slightly in 2018.
Still, women hold just 15.8 percent, or 243, of the 1,538 board seats at the 170 publicly held companies in the Washington region, a 1.1 percent increase from 2017, according to an annual study by The Leadership Foundry, a program of Women in Technology.
Of those 170 companies, 14.7 percent, or 25, had three or more women serving on their boards. That is up from 12 percent last year.
The study also found that the number of companies in the region without any women on their boards has decreased to 34. That was down from 43 in 2017 and 89 in 2010.
“While we have increased the number of women serving on corporate boards in our region, we still have a long way to go to achieve parity,” Denise Hart, chair of The Leadership Foundry, said in a statement.
The Leadership Foundry identifies and prepares women to serve on corporate boards.2018-11-07T22:50:00+00:00
Fairfax businessman pleads guilty to fraud
http://www.virginiabusiness.com/news/article/fairfax-businessman-pleads-guilty-to-fraud#When:21:44:00ZA Northern Virginia businessman has pleaded guilty to charges of organizing a multi-year investment fraud scheme that cost dozens of victims at least hundreds of thousands of dollars.
Amrit Jaswant Singh Chahal, 30, of Fairfax, orchestrated an investment fraud scheme through a company he established and operated called The Kane Capital Investment Group LLC. The details of Chahal’s fraud were announced Nov. 2 by the U.S. Attorney’s Office for the Eastern District of Virginia.
Chahal carried out his fraud by falsely representing that Kane Capital had earned returns of roughly 28 to 34 percent annually. He actually was suffering substantial losses in managing investors’ funds.
Chahal created falsified brokerage statements to conceal Kane Capital’s losses and siphoned off some of his investors’ funds by transferring the money to accounts he controlled or by spending the funds on personal items.
When investors asked for returns on their investment, Chahal often used money from newer investors to pay disbursements to older investors. He did this without disclosing the practice to his investors.
Chahal pleaded guilty to one count of wire fraud and one count of securities and commodities fraud. He faces a maximum penalty of 20 years in prison on the wire fraud count and 25 years in prison on the securities and commodities fraud count.
Chahal is scheduled to be sentenced on Feb. 8. Actual sentences for federal crimes are typically less than the maximum penalties.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Matthew J. DeSarno, a special agent in charge of the FBI Washington Field Office’s Criminal Division, announced the details of Chahal’s fraud.
U.S. District Judge Leonie M. Brinkema accepted the plea. Assistant U.S. Attorneys Matthew Burke and Jamar K. Walker are prosecuting the case.
The Virginia State Corporation Commission provided significant assistance with the investigation.2018-11-07T21:44:00+00:00
Land in Hanover County to be turned into independent living facility
http://www.virginiabusiness.com/news/article/land-in-hanover-county-to-be-turned-into-independent-living-facility#When:10:18:00ZA new independent living facility for seniors is coming to Hanover County.
Roanoke-based Smith Packett has bought 4.64 acres along Meadowbridge Road for more than $1.38 million. Smith Packett also will develop the property, which is adjacent to The Crossings at Hanover, an assisted living and memory care facility it recently opened. The sellers were Lincoln T. Campbell Jr. and Johnny H. Tucker.
Cushman & Wakefield | Thalhimer’s David M. Smith handled the sale on behalf of Smith Packett, which bought the property under Hanover II Investors LLC.2018-11-07T10:18:00+00:00http://www.virginiabusiness.com/uploads2/Reid%2C_Jim.jpgJames A. Reid of CBRE Inc. Source: CBRE Inc.
CBRE eyes life after affiliate in Virginia
http://www.virginiabusiness.com/news/article/cbre-eyes-life-after-affiliates-in-virginia#When:21:33:00ZAs it prepares to cut ties with its Virginia affiliates, CBRE is laying the groundwork for the company’s next chapter in the state.
On Tuesday, Los Angeles-based CBRE Inc. announced it had tapped long-time CBRE executive James “Jim” A. Reid to temporarily oversee the global company’s ramping up of operations in Virginia. Reid’s work will begin in January, after CBRE Inc. and its Virginia affiliate CB Richard Ellis of Virginia Inc. separate their businesses on Dec. 31.
"We have had affiliate relationships in the past, but our business model is whole ownership, full accountability,” Reid says. “We intend to bring that to full bear in Virginia."
Reid says he was one of a number of people involved in the decision to separate CBRE Inc. from its Virginia affiliate. He declined to share any details about the reasons for the split.
Reid says his job in Virginia will be to bring on long-term leadership to join CBRE Inc.’s mid-Atlantic leadership team, which is led by Kyle Schoppmann, CBRE’s executive managing director for the greater Washington, D.C., region. Reid is currently based out of Washington, D.C. and has been for some time.
Reid says he will be looking where CBRE could add office space around Virginia, especially in Richmond and Hampton Roads. Currently, CBRE Inc. has offices in Tysons and Richmond with more than 600 employees across Virginia that do valuation and property management services.
Reid says it’s too early to say how much office space and how many new employees will be hired. He also didn’t provide a timeline for the expansion.
Reid had initially planned to retire at the end of the year after 33 years with CBRE. Instead, he agreed to take on the Virginia project. It won’t be Reid’s first contact with the commonwealth: he used to oversee CBRE’s operations in Virginia as the company’s eastern division president. He’s also a graduate of the University of Virginia.
“I’ve got contacts across the state,” he says.
As CBRE Inc. develops its new operations in Virginia, the future of its affiliate is stil being determined.
In October, J. Scott Adams, a CBRE regional president of the mid-south affiliate offices based in Norfolk, said a new structure was being planned for the affiliate but declined to say anything more. The CBRE Virginia affiliate has offices in Charlottesville, Norfolk and Richmond.
“We have no further update at this time – still focused on operating as CBRE through year end,” Adams wrote in an email Tuesday.
As the split takes shape, some CBRE affiliate executives have launched an independent property management group called WPM MidSouth Multifamily, which has offices in Richmond, Norfolk, Charlottesville and Mount Pleasant, S.C.
High-bay industrial facility in Suffolk sells
http://www.virginiabusiness.com/news/article/high-bay-industrial-facility-in-suffolk-sells#When:16:49:00ZA 30,525-square-foot high-bay industrial facility has sold in Suffolk.
Copperhead Properties LLC purchased the facility on 6.65 acres from Grandwatt Electric Corp. for $1.81 million as an investment. The property is located at 1013 Obici Industrial Blvd.
William Throne Cushman & Wakefield | Thalhimer handled the sale negotiations on behalf of the seller.2018-11-05T16:49:00+00:00
Norfolk industrial property sells
http://www.virginiabusiness.com/news/article/norfolk-industrial-property-sells#When:16:31:00ZAn industrial property in the Norfolk Industrial Park has sold for $1.45 million.
Wei and Xin LLC purchased the 27,281-square-foot property at 3412 E. Virginia Beach Blvd. from Glen M. and Julia M. Cherry for $1.45 million. The company plans to use the building as a warehouse facility for their cabinet and countertop business.
Geoff Poston and William Throne of Cushman & Wakefield | Thalhimer handled the sale negotiations on behalf of the seller.2018-11-05T16:31:00+00:00
California REIT purchases second building in Henrico business park
http://www.virginiabusiness.com/news/article/california-reit-purchases-second-building-in-henrico-business-park#When:16:25:00ZA California-based REIT (real estate investment trust) has purchased a second building in Windsor Business Park in Henrico County.
Rich Uncles NNN REIT Inc., based in Costa Mesa, Calif., purchased the 72,890-square-foot Windsor IV for $10.5 million, or $144 per square foot, on Oct. 31. Windsor IV, a single-story facility built in 2001, is 100 percent occupied by Bon Secours Mercy Health.
The REIT bought the building from an affiliate of Fernau LeBlanc Investment Partners of Bethesda, Md.
In 2017, Rich Uncles purchased Windsor VI, a single-tenant, net-leased industrial property, for $7.4 million.
Fernau LeBlanc, with a co-investor, acquired the business park in December 2016 for $33 million.
Cushman & Wakefield | Thalhimer represented the seller.
The sale was completed by Eric Robison, senior vice president of Cushman & Wakefield | Thalhimer’s Capital Markets Group in Thalhimer’s Richmond office, and assisted by Evan Magrill of the firm’s leasing team.2018-11-05T16:25:00+00:00
Insurance company moving to bigger digs in Virginia Beach
http://www.virginiabusiness.com/news/article/insurance-company-moving-to-bigger-digs-in-virginia-beach#When:16:24:00ZProsper Insurance Group is moving its headquarters in Virginia Beach to accommodate growth.
The insurance firm has leased 17,396 square feet of office space at the Sabre IV office building at 2929 Sabre St. The company, which employs 43 full-time workers in the city, plans to create 75 additional jobs in the next three years.
The firm currently occupies 6,000 square feet at 361 Southport Circle and expects to move by Feb. 1, according to Divaris Real Estate.
Jason Oliver and Vivian Turok of Divaris represented the tenant in the transaction.2018-11-05T16:24:00+00:00
Cushman & Wakefield | Thalhimer to lease Ashland-Hanover shopping center
http://www.virginiabusiness.com/news/article/cushman-wakefield-thalhimer-to-lease-ashland-hanover-shopping-center#When:16:22:00ZCushman & Wakefield | Thalhimer has been selected to provide exclusive leasing representation for Ashland-Hanover Shopping Center in Ashland.
Thalhimer also retains commercial management of the 220,000-square-foot retail center, located at 251 N. Washington Highway.
The retail center is located at Route 54 and Washington Highway (Route 1).
It is anchored by Food Lion with additional tenants including Peebles, Petco and ACE Hardware. The center currently has 1,200 to 8,000 square feet of available space.
Richard Thalhimer and Annie O’Connor of Cushman & Wakefield | Thalhimer are the exclusive leasing representatives. Jason Crowder, also with Thalhimer, is the portfolio manager assigned to the property.2018-11-05T16:22:00+00:00
White Oak Technology Park Owners Association selects commercial property manager
http://www.virginiabusiness.com/news/article/white-oak-technology-park-owners-association-selects-commercial-property-ma#When:15:18:00ZCushman & Wakefield | Thalhimer has been tapped to provide commercial property management services for White Oak Technology Park Owners Association Inc. in Henrico County. The property covers 2,278 acres of land within White Oak Technology Park.
The Henrico Economic Development Authority selected Cushman & Wakefield | Thalhimer for the role. The park’s tenants include Facebook, Quality Technology Services, Bank of America, Lumber Liquidators Services, Polykon Manufacturing and ICON VA.
Cushman & Wakefield | Thalhimer’s Kelly Meehan will serve as the property’s portfolio manager.2018-11-05T15:18:00+00:00
Manufacturer expanding in Winchester
http://www.virginiabusiness.com/news/article/manufacturer-expanding-in-winchester#When:09:49:00ZContinental announced Friday that it would expand its O’Sullivan Films production facility in Winchester, creating 61 new jobs.
Virginia competed against Mexico for the $10.3 million project, according to a news release from the governor.
O’Sullivan Films produces films and artificial leather products for the North American automotive industry. The company was purchased by Continental in 2016.
Gov. Ralph Northam approved a $188,000 grant from the Commonwealth’s Opportunity Fund for the project. The company also will receive benefits from the Virginia Enterprise Program and the Virginia Jobs Investment Program. It also is eligible for sales and use tax exemptions on manufacturing equipment.2018-11-05T09:49:00+00:00http://www.virginiabusiness.com/uploads2/caponemetro.JPG
Inside Capital One’s massive new headquarters tower
http://www.virginiabusiness.com/news/article/inside-the-tallest-occupied-structure-in-the-washington-d.c.-area#When:20:48:00ZCapital One unveiled its massive new headquarters tower to the media on Friday. The 31-story building in Tysons is the tallest occupied structure in the Washington, D.C., area.
The tower, located at 1600 Capital One Drive, is adjacent to Capital One’s current headquarters and conference center, which the financial services company will continue to occupy. Roughly 2,000 employees already have moved into the 470-foot structure. Another 1,000 employees should move in by early December.
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The building includes a conference center, cafeteria and fitness center. Capital One broke ground on the new headquarters project about four years ago. Partners on the project included development manager Cushman & Wakefield, general contractor Davis/Gilford Construction and architects Bonstra Haresign Architects and HKS Inc.
The tower is only part of the company’s expansion plans. Future development includes the 125,000-square-foot Capital One Center, which will house a 1,500-seat auditorium available for public performances. An 80,000-square-foot Wegmans and hotel also are planned for the campus.
Additionally, the company will break ground on another office building in February. That building should be complete by early 2023 and house around 3,200 Capital One employees currently located in other buildings around Tysons. The 410-foot building will consist of two towers joined by an atrium, with ground floor retail.2018-11-02T20:48:00+00:00
British company is locating first U.S. plant in Southern Virginia
http://www.virginiabusiness.com/news/article/british-company-is-locating-first-u.s.-plant-in-southern-virginia#When:20:46:00ZHarlow Group Ltd., an England-based manufacturer, plans to invest $8 million to locate its first U.S. plant in the Cyber Park in Danville. The investment is expected to create 49 jobs. Harlow also will establish a training center focused on additive manufacturing.
The company will initially locate inside the park’s Institute for Advanced Learning and Research. It then plans to build its own sheet metal fabrication facility – to be named Harlow Fastech- in the park, which is jointly owned by Danville and Pittsylvania County.
Harlow Group was founded in 1975. Its customers include GE, Raytheon Safran and Sony.
Gov. Ralph Northam approved a $147,000 grant from the Commonwealth’s Opportunity Fund to assist with the project. The Virginia Tobacco Region Revitalization Commission also approved $315,000 in funds.
Harlow Group is eligible to receive state benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development. Funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.
Virginia competed against Alabama for the project.2018-11-01T20:46:00+00:00
PepsiCo buys Richmond ‘superfood’ company
http://www.virginiabusiness.com/news/article/pepsico-buys-richmond-superfood-company#When:17:04:00ZPepsiCo Inc. has acquired Health Warrior Inc., a Richmond-based “superfood” company.
Purchase, N.Y.-based PepsiCo said the deal would expand its nutrition portfolio.
Health Warrior makes low-sugar products that contain plant-based ingredients.
Its current offerings include nutrition bars made with chia and pumpkin seeds and other products such as muffins and protein powder.
Health Warrior was founded in 2011 by three college friends, Dan Gluck, Nick Morris and Shane Emmett.
Emmett, who is CEO, will continue to lead the Health Warrior from its current headquarters.
The Health Warrior deal is the first investment for the PepsiCo HIVE, a newly-created entity focused on emerging, smaller brands.2018-10-31T17:04:00+00:00
Firm awarded management of Newport News community
http://www.virginiabusiness.com/news/article/firm-awarded-management-of-newport-news-community#When:20:07:00ZThe commercial real estate firm Cushman & Wakefield | Thalhimer has been awarded the management of Newport Crossing Townhomes in Newport News.
Newport Crossing Townhomes, formerly known as Liberty Point Townhomes, includes 78 units. The community is located off Warwick Boulevard.
One-, two- and three-bedroom units at Newport Crossing range from 723 to 1,173 square feet. Amenities include a swimming pool, dog park, playground, courtyard and off-street parking.
The property is being upgraded with new roofing, siding, shutters, paint, fencing, landscaping and signage.
Each apartment will be renovated with white shaker cabinets, wood vinyl flooring, granite countertops, appliance upgrades and bathroom remodels.
Melissa Vambell of Cushman & Wakefield | Thalhimer has been assigned as portfolio manager and will oversee the property’s operations.
Cushman & Wakefield | Thalhimer manages more than 7,250 multifamily units in Virginia and North Carolina. The firm also manages nearly 25 million square feet of commercial real estate properties.2018-10-30T20:07:00+00:00
University using blockchain to issue degrees
http://www.virginiabusiness.com/news/article/university-using-blockchain-to-issue-degrees#When:19:46:00ZECPI University has begun using blockchain to issue degrees digitally.
The Virginia Beach-based school said, with the change, its graduates would not need to contact the registrar’s office to have a verifiable degree sent to a prospective employer.
ECPI said blockchain technology provides secure, immediate verification, allowing students to control and distribute their official records.
Next year, ECPI plans to use blockchain to issue digital transcripts as well.
First used for cryptocurrency, blockchain manages information in small units called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.
ECPI said these digital credentials could dramatically reduce false claims on resumes because employers will be able to instantly substantiate a person’s educational background.
ECPI has campuses in Virginia, North Carolina, South Carolina, Florida and Texas.2018-10-30T19:46:00+00:00
Yorktown office fetches $1M
http://www.virginiabusiness.com/news/article/yorktown-office-fetches-1m#When:19:43:00ZColonial Real Estate Holdings LLC has bought the office property located at 3526 George Washington Memorial Highway in Yorktown for $1 million.
The seller of the 8,574-square-foot property was Pilgrim Village LLP
Teresa Nettles of Cushman & Wakefield | Thalhimer represented the buyer in the deal. Colonial Real Estate Holdings bought the 0.81-acre site as an investment.2018-10-30T19:43:00+00:00
Altria gives $1.33 million grant to community college foundation
http://www.virginiabusiness.com/news/article/altria-gives-1.33-million-grant-to-community-college-foundation#When:19:42:00ZHenrico County-based Altria Group has given a $1.33 million grant to the John Tyler Community College Foundation to expand the college’s industrial electricity and mechanical maintenance programs.
The programs offer students the option of earning a career studies certificate in a year or less, an associate degree, or both.
The programs are designed to relieve a skilled worker shortage. The community college said almost 60 percent of Virginia companies report a lack of qualified candidates to fill current and future manufacturing job vacancies.
The Altria grant will allow Tyler to create and equip a second industrial electricity lab on its Chester Campus, while upgrading equipment in its existing electrical lab. As a result, Tyler will have the capacity to serve 40 to 60 additional students per year.
The college also plans to upgrade the equipment in its mechanical maintenance lab and launch a new mechanical maintenance concurrent enrollment program. That program will bring area high school students to campus for training.
Those who complete the program earn a career studies certificate and are work ready by the time they graduate from high school. The grant provides scholarship funding for 20 to 30 high school students to participate in this program.
The new mechanical maintenance equipment will be up and running for the spring 2019 semester. Tyler’s new industrial electricity lab and upgrades to the equipment in its existing electricity lab will be complete in August 2019, in time for the start of the college’s fall semester. The college also anticipates welcoming high school students into its new concurrent mechanical maintenance program in fall 2019.2018-10-30T19:42:00+00:00Photo by Don Petersen
2019 VSCPAs’ Virginia Economic Expectations survey - Southwest Virginia
http://www.virginiabusiness.com/news/article/2019-vscpas8217-virginia-economic-expectations-survey-southwest-virginia#When:08:00:00ZJohn Reynolds, CPA
Senior accountant, financial performance & analysis analyst
How long have you been living in your region? What are your favorite parts about the region?
I have lived in Blacksburg since 2011. My favorite parts about living here are hiking to local sites (The Cascade Falls, McAfee Knob and Dragon’s Tooth); going to Virginia Tech sporting events and the large number of local restaurants in the area per capita.
Working in this area is great, the commutes are reasonable with minimal traffic, and you get to interact with world-class professionals without all the stress of a big city.
What local industry do you think has potential for growth?
The local tech industry is prepared to take off. There are a number of high-growth startups in the area, which are showing true promise and drawing talent to the area. A number of companies are looking to double and triple their workforce over the next year with high-paying skill career paths. The Roanoke-Blacksburg Technology Council among other groups really has facilitated a culture of collaboration and innovation in the area.
What’s the biggest challenge to doing business in your area?
Distance and the result on our ability to aggregate skilled workforces. This part of the state has significant geographical disconnect from many of the major metro centers. This distance means you truly need to grow and retain or recruit into the area quality talent.
How is the economy faring in your part of the state?
Moderately to reasonably well considering the headwinds we have historically seen in the deeper Southwest parts of the state. The energy and textile industries were large drivers of employment and have fallen off. In my local area the health-care, technology and educational sectors are big drivers of economic stability and growth moving forward.
Photo by Don Petersen2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/DSC_5534.pngPhoto by Stephen Gosling
2019 VSCPAs’ Virginia Economic Expectations survey - Northern Virginia
http://www.virginiabusiness.com/news/article/2019-vscpas-virginia-economic-expectations-survey-northern-virginia#When:08:00:00ZAndrew Youhas, CPA, JD
founder and owner
Youhas and Associates LLC
How is the economy faring in Northern Virginia?
Going great guns. Roads and stores are packed — everybody is buying, working, living. Financial optimism seems to abound — regardless of political persuasion.
What local industry do you think has potential for growth?
Construction. Not sure how much moving is going on. I don’t see as many “For Sale” signs as I used to, but Home Depot is absolutely packed every time I visit. So maybe everyone’s staying in place, putting on additions, whatever. Everyone seems to be spending money.
What’s the biggest challenge to doing business in your area?
Congestion. I usually work from home — so my commute is minimal — but when I go out on the weekends it’s almost as bad as Rush Hour out there.
How has the new tax law affected your clients?
Clients have definitely noticed the extra money in their pocket from the change in withholding tables. The jury’s out on whether those withholdings will affect these clients so much that they end up owing on their 2018 tax returns next April. My advice has been to assume “same tax liability as last year” and to leave their quarterly estimates alone.
What impact do you think U.S. trade policy will have on business?
More limited than you’d think. I personally believe that tariffs — or rather, the threat of tariffs — is being used as a bargaining chip in efforts to get freer trade in the end. There might be pain to affected industries, and it might be substantial, but if all goes according to plan, that pain will be short-lived. Months or a year, not years.2018-10-30T08:00:00+00:00Photo by Shandell Taylor
2019 VSCPAs’ Virginia Economic Expectations survey - Central Virginia
http://www.virginiabusiness.com/news/article/2019-vscpas8217-virginia-economic-expectations-survey-central-virginia#When:08:00:00ZGary Wallace, CPA
How long have you been living in your region? What are your favorite parts about living and working in the region?
My entire life. Fifty-five years. Richmond is a vibrant community and has been adaptive and progressive in recent years. We have great amenities, a cultural scene and a strong work environment.
How is the economy faring in your part of the state?
We are seeing significant growth in all sectors of the economy. It is highlighted by new business growth, as well as a strong real estate market in the commercial sector [in neighborhoods like] Scott’s Addition, Manchester and others.
What local industry do you think has potential for growth?
Most are doing well, so to single out one industry is challenging. However, we are seeing substantial new business opportunities in the services industry, which have lower barriers to entry in terms of capital or personnel costs, initially.
What’s the biggest challenge to doing business in your area?
People. Qualified employees continue to be a significant challenge for many businesses.
How has the new tax law affected your clients?
Generally, a positive impact. It offered both initial tax relief for many corporations and also provided an economic sign of stability. What has yet to occur is the additional time to comply with the new provisions.
What impact do you think U.S. trade policy will have on business?
Some [industries] already are being affected, including our manufacturing and construction sectors. As to the overall economy, it raises questions and concerns regarding such additional costs of doing business and how businesses are able to pass on the additional costs of tariffs, etc.
Photo courtesy Shandell Taylor2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Scott_Moulden_1.pngPhoto by Norm Shafer
2019 VSCPAs’ Virginia Economic Expectations survey - Shenandoah Valley
http://www.virginiabusiness.com/news/article/2019-vscpas-virginia-economic-expectations-survey-shenandoah-valley#When:08:00:00ZScott Moulden, CPA
Yount, Hyde & Barbour PC
How long have you been living in your region? What are your favorite parts about living and working in the region?
I’ve lived in the Winchester area all my life (except for four years at Virginia Tech). It’s a great community and place to raise my kids. We are close enough to [Northern Virginia] to visit and benefit from the activities, restaurants, etc., that are part of the DC Metro area but far enough away to avoid the traffic and other issues.
How is the economy faring in your part of the state?
The local economy seems to be growing, and I am optimistic that the growth will continue. We have had large employers — Amazon, Procter & Gamble, Navy Federal Credit Union and others — make significant investments in this area, which have created jobs and opportunities. This has made Winchester and surrounding areas a desirable community to live, work and/or relocate to.
What local industry do you think has potential for growth?
Warehousing/distribution and manufacturing seem to be doing very well in this area.
What’s the biggest challenge to doing business in your area?
Finding and retaining qualified workers in all industries and professions.
How has the new tax law affected your clients?
The tax bill and related tax cuts have been well received by businesses and individuals in our area. This will translate to businesses making capital investments and increasing salaries and wages.
What impact do you think U.S. trade policy will have on business?
I’ll take a wait-and-see approach on this question. Some policies will have a short-term negative impact on some products and industries but may be beneficial in the long run.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Matthew_R._O._Brown_Photography-1868.pngSarah Paxton expects her store to be impacted by tariffs on Chinese products.Photo by Matthew R. O. Brown
http://www.virginiabusiness.com/news/article/trade-tensions#When:08:00:00ZSarah Paxton, co-owner of the LaDiff furniture store in downtown Richmond, is preparing for the worst.
Earlier this year, the cost of furniture she imports from China rose because of 10 percent tariffs imposed by the U.S. on Chinese goods. Furniture from China makes up roughly 10 percent of the store's sales. For the most part, she and her vendors have been able to absorb the extra cost rather than pass it on to customers.
Now, she’s facing more cost increases because of 25 percent tariffs on Chinese goods going into effect Jan 1. Paxton and many other retailers won’t be able to shield customers entirely from the effects of those tariffs. That means they will have to raise prices or get products currently sourced from China from somewhere else.
“That to me is the most important part to get across is that the consumer is the one paying this price increase,” says Paxton, who owns LaDiff with her husband, Andy Thornton.
Paxton’s dilemma reflects one of the takeaways from the latest Virginia Society of CPAs' Economic Expectations report.
Many Virginia accountants are worried about the harm that tariffs will cause U.S. consumers and the economy. Almost 350 financial professionals responded to the survey last summer, offering insights about major issues that will affect Virginia businesses next year.
Here are some of the highlights.
The economy and trade
The survey respondents generally are optimistic about the future of the state and national economies.
Nearly half believe the U.S. economy will remain strong next year. A majority also are bullish about Virginia’s economy. Many, however, also believe the health of the state economy will be a major issue in next year’s election, in which legislators will be elected for all seats in the Virginia General Assembly.
Old Dominion University economist Robert M. McNab thinks the national economy will grow in the first half of next year. The current expansion soon will set a record as the longest since the end of World War II.
“The question is whether the ongoing trade battles will either subside into negotiated settlement or erupt into a full trade war,” he says.
McNab says the state economy is improving but still lags behind the national economy. Virginians have earned more this year than they did last year and should pocket more money next year. Their improving paychecks are partly the result of federal tax reform passed last year by the Republican-controlled Congress.
Projected increases in federal spending in fiscal year 2019 also should be good news for Virginia’s economy. That spending accounts for about one quarter of the state’s economic activity, and the regional economies of Northern Virginia and Hampton Roads are even more dependent on the federal budget.
“This is not to say there are not storm clouds on the horizon,” McNab says. “Virginia’s relationship with the federal government is a strength and weakness. When discretionary federal government spending increases, Virginia’s economy tends to benefit. Likewise, contractions or uncertainty in federal government expenditures create headwinds for the Virginia economy.”
But McNab says the more immediate threat to the economy is the uncertainty being caused by trade tensions. A majority of accountants taking the survey agree that the nation’s aggressive trade position will have a negative impact on the economy. Still, more than 43 percent of respondents believe U.S. trade policies either will have a positive impact or won’t hurt the economy.
Bill Becker doesn’t share that view. He says the U.S. trade relations with China are creating problems for his Chantilly-based furniture company, BDI. The company sells to retailers, including LaDiff. It designs furniture in Northern Virginia but outsources production to manufacturers in China and other countries.
Because of the tariffs, he has delayed hiring employees and expects his revenue to take a hit next year.
“It’s a very bad strategy for dealing with issues that we have with China because, ultimately, this burden will fall on local retailers — in many cases small manufacturers and also the consumer,” says Becker.
Nancy Thomas also is keeping a close eye on trade tensions with China. Her organization, the Retail Merchants Association (RMA), represents roughly 500 retailers in the Richmond area. She’s urging her members to get in touch with vendors to see what effect tariffs will have on products they import. So far, Thomas hasn’t fielded many questions about the trade situation, but she expects that to change as the end of the year approaches.
“For the holiday season, most retailers won’t feel the worst of it because a lot of them may already have inventory in,” she says. “It’s the new year that’s going to bring some woes to people.”
The ultimate impact of tariffs on retailing and other industries could depend on how U.S. trade talks with China shake out. An additional factor could be the renegotiated North American Free Trade Agreement (NAFTA), now known as the United States-Mexico-Canada Agreement (USMCA), which still must be approved by the three nations.
Rising cost of health care
Another issue that raises big concerns for businesses and consumers is the rising cost of health care. Those costs consistently rank in the CPA survey as the most-pressing issue for Virginia. Nearly 34 percent of respondents picked health-care costs as the state’s biggest problem.
RMA’s Thomas says providing adequate health care at an affordable cost continues to be a huge challenge for retailers. Many believe they have to provide health-care benefits to retain employees in a tightening labor market. Employers have to determine how they’ll provide health insurance and what percentage of the cost they will be able to absorb. “What I have heard from most of our retailers is they continue to see increases in their [health-care] premium,” Thomas says.
Barry DuVal, president and CEO of the Virginia Chamber of Commerce, also says ballooning health-care costs continue to be a problem for his 26,000 members. The chamber believes association health plans offer one solution. These plans allow small businesses to group together based on industry or location to lower costs in buying health insurance.
President Trump expanded access to these plans earlier this year, allowing sole proprietors to qualify. Each state, however, sets specific regulations for association health plans. In Virginia these plans still are subject to certain provisions in the Affordable Care Act (ACA) that drive up premiums. The chamber plans to again support legislation in next year’s Virginia General Assembly session to change the requirements for the plans so that they won’t be subject to those ACA provisions.
However, critics say the plans curtail important protections. Gov. Ralph Northam vetoed two chamber-supported bills passed during the past legislative session, saying they would not include key consumer benefits.
“Through this exemption, association plans are not required to provide comprehensive coverage and may not cover essential benefits like mental health treatment, substance abuse treatment, prescription drugs or maternity benefits,” Northam said in a statement earlier this year when he vetoed the bills. “Moreover, association plans will be able to discriminate against people by charging them more because of characteristics like gender and occupation. People with minimal current health-care needs are more likely to purchase these skimpy plans, leaving people with more significant health-care needs in the marketplace.”
Virginia also filed a lawsuit in July against the expanded federal rule for association plans, saying the change would undermine the ACA. The commonwealth was joined in the lawsuit by 10 other states and the District of Columbia.
Kenn Penn, president and CEO of ChamberSolutions, a chamber subsidiary, says the plans are meant to place associations on a level similar to large employers, which aren’t subject to certain ACA requirements but still cover thousands of Virginians at an affordable price.
Uncertainty in dealing with health-care costs or trade is bad for business and the economy, says ODU’s McNab. “We don’t know what’s emanating from D.C. on a regular basis, and businesses and markets love certainty,” he adds. “They love policy process that’s slow and transparent.”
Businesses hope they will get more answers in the year ahead.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/VALLEY-airplain-AP.pngAP photo by Larry MacDougal
http://www.virginiabusiness.com/news/article/gaining-altitude#When:08:00:00ZWith a major airline partner and daily connections to two of the nation’s busiest hubs, Shenandoah Valley Regional Airport is spreading its wings.
The regional airport in Weyers Cave now offers nonstop service to and from Chicago O’Hare and Washington Dulles International airports aboard United Express, putting local travelers within reach of hundreds of domestic and international destinations and bringing the valley closer to the world.
The service, operated by SkyWest Airlines, launched to great fanfare during a ceremony in April that drew area government officials, business leaders and residents. The first United Express 50-seat Bombardier CRJ200 jet touched down at 7:15 that evening en route from Chicago and departed an hour later bound for Dulles.
In his remarks, Gerald Garber, chairman of the Shenandoah Valley Regional Airport Commission, said the partnership with United and SkyWest is 30 years in the making. “This is a once-in-a-lifetime chance,” he said at the event.“We need to get this right.”
If the numbers are any indication, the partnership has accomplished just that.
Passenger traffic at Shenandoah Valley Regional Airport in the last six months has been strong, according to executive director Greg Campbell. “United and SkyWest have done a great job,” he says. “We’re seeing significant increases over what the airport has seen before.”
SkyWest operates more than two dozen inbound and outbound flights per week between Weyers Cave and United’s hubs at O’Hare and Dulles. In May, its first full month of service, the carrier served approximately 2,100 passengers, a 50 percent increase over the 1,400 people who used the service in April. Passenger traffic steadily increased over the summer, nearing 3,000 in August.
Travelers can move through the terminal in Weyers Cave quickly, and the facility applies the same federal Transportation Security Administration standards as large metropolitan airports. Parking is free; there are three rental car kiosks located inside the terminal; and shuttle service is available for guests of the new Hotel Madison and Shenandoah Valley Conference Center at James Madison University.
Campbell says that, as word continues to spread about the reliability of the service, he expects traffic to continue to increase throughout the fall and into next year.
Shenandoah Valley Regional Airport’s evolution from a general aviation facility to commercial air service has not been without some turbulence. The airport cut ties with its previous partner, Via Air, in 2017 after only 18 months, in response to numerous flight delays and cancellations. Before that, the airport was served by Silver Airways for four years. Both of the Florida-based regional carriers were impacted by a nationwide pilot shortage.
Officials, however, believe they have found the right partner in SkyWest. The Utah-based affiliate airline operates more than 2,000 flights per day nationwide for United, Delta Air Lines, American Airlines and Alaska Airlines.
“It’s reliable service that the community can count on,” says Campbell, calling SkyWest’s performance record at Shenandoah Valley Regional Airport “exceptional.”
The service also promises to bring more visitors to the valley and help boost economic development in the region.
Carrie Chenery, former executive director of the Shenandoah Valley Partnership (SVP), says that business prospects want to know about access to commercial air service.
“They hear about our location and our transportation assets,” she says. “What had been missing there [until recently] was quality, reliable air service. So, now to have that in our fold is significant for our efforts.”
Similarly, when SVP hosts national site location consultants, “they’re going to see these flights coming and going,” Chenery says. “They’re going to know that they can come back here using this service. And they can go home and tell the companies that they work for that we have this service.”
Courtland Robinson, SVP’s director of business development, says the service also offers existing employers better access to their customers as well as potential employees.
In August, Chenery announced she was stepping down as executive director to begin a consulting business and devote more time to her 1-year-old daughter. Jay A. Langston, a Virginia Economic Development Partnership official, will succeed her in December.
Just as commercial air service is taking off in the Shenandoah Valley, so too is the field of cybersecurity.
Blue Ridge Community College (BRCC) has implemented a cybersecurity workforce development program to fill high-wage, high-demand cybersecurity jobs in the region.
The $200,000 public-private initiative is being funded by GO Virginia — a state grant program designed to encourage regional economic development collaboration and diversification — along with matching cash and in-kind investments from Harrisonburg and Waynesboro, BRCC and InnovateTech, a private cybersecurity firm in the region.
InnovateTech provides on-the-job and virtual training opportunities and assists BRCC with student recruitment and evaluation. BRCC, in turn, offers classes, training and support services, including continued online training post-certification.
“I think almost every business now has to be aware of and address cybersecurity in some way,” says BRCC President John Downey. “I think what this will mean for the region is a greater number of trained, skilled technicians that can help local companies be prepared with cybersecurity. That’s the big win for the region.”
The overall goal of the cybersecurity workforce development program is to create at least 50 candidates for entry-level cybersecurity analyst positions within two years. The average annual salary for these positions is $53,641.
Harrisonburg and Waynesboro believe businesses in their communities will benefit from the training.
“Harrisonburg has been targeting information-technology and information-security for well over five years now and recognizes that we need a talent pipeline in place to fill jobs when they become available,” says Brian Shull, the city’s economic development director. “This training program will certainly help provide that talent pipeline.”
Greg Hitchin, Waynesboro’s director of economic development and tourism, sees a similar benefit for the city’s economic development growth opportunities. “By partnering on this initiative, we are solidifying our interest in a high-wage industry that will graduate skilled, certified technicians in a high-demand marketplace — a positive outcome for both area students and businesses,” he says.
The region’s transportation infrastructure, including its proximity to major interstates and access to the Port of Virginia, has helped the valley attract several multimillion-dollar corporate locations and expansions in recent months.
InterChange Cold Storage is building a 250,0000-square-foot facility in Rockingham County to provide cold-chain warehousing and value-added services to the region’s food and beverage industry. The $41.6 million investment is expected to create 88 jobs.
Road improvements and new rail service to the site will connect the InterChange facility to area manufacturers and the Port of Virginia, enhancing the potential for exporting the region’s food products overseas. The facility also will offer blast freezing for the poultry industry.
Sumitomo Machinery Corp. of America is investing in new machinery at its manufacturing operation in Augusta County. The company, a subsidiary of one of the largest heavy machinery manufacturers in Japan, will purchase new 10- and 20-ton overhead cranes, a new paint booth, an automatic storage retrieval system, and new assembly workstations. Sumitomo recently built a 72,000-square-foot facility adjacent to its former location in the Mill Place Commerce Park.
NIBCO Inc., a manufacturer of copper valves, fittings and flow-control products, is investing $14 million to expand its operations in Augusta County. The company is adding equipment and updating technology, training programs and new product development at its Stuarts Draft facility, which opened in 1969. The project will create 30 new jobs, while retaining 117 existing employees who will be retrained on the new technology.
Also as part of its expansion plans, NIBCO recently purchased a 173,000-square-foot manufacturing/distribution building in Buena Vista.
In Frederick County, Amazon has opened a 1-million-square-foot e-commerce facility that soon will employ more than 1,000 workers. The facility is intended to help the online retailer improve distribution to mid-Atlantic markets. The county’s permit review team collaborated with Amazon and the developer to meet a nine-month occupancy deadline.
Economic development officials hope the new United/SkyWest service at Shenandoah Valley Regional Airport will help the region attract more projects like these.
“The Shenandoah Valley Regional Airport has the potential to be one of the biggest drivers of economic development in this region,” Robinson says.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Tracy_Fitzsimmons_3.pngTracy Fitzsimmons, the president of Shenandoah University. Photos by Norm Shafer
‘A different animal’
http://www.virginiabusiness.com/news/article/a-different-animal#When:08:00:00ZAcross the state’s higher-ed landscape, Shenandoah University stands apart because of what it does not profess to be.
“Shenandoah is a different animal in higher education in Virginia,” says Tracy Fitzsimmons, president for the past decade at the Winchester-based university. “It was not started as a liberal-arts institution, and we have never been a liberal-arts institution.”
That pronouncement may be unusual for a private, nonprofit institution, but the principle behind it has gained currency since the recession.
Founded in 1875 as a seminary and conservatory, Shenandoah has grown into a university while retaining its mission to align degrees with careers.
“We have always been unapologetic about offering professional training,” Fitzsimmons says. “We love that our students get jobs at graduation and that they are able to contribute broadly to their community.”
But don’t mistake Shenandoah for a technical school. With nearly 4,000 students almost evenly divided between undergraduate and graduate students, SU offers a blend of liberal arts education with career preparation through about 150 academic programs in seven schools.
According to the university, 81 percent of its 2017 graduates are employed or furthering their education, and those who are working reported a median salary of $52,000.
Next year, the university plans to tap into fast-growing and lucrative industries with new majors in e-sports and virtual-reality design.
SU programs are varied. They include, for example, musical theater, criminal justice, business administration and the health professions. Last year, the university expanded a partnership with Inova Health Systems to launch graduate-level programs at a new campus in Fairfax County.
Admission to the highly ranked Shenandoah Conservatory is by audition only.
Back from Broadway
Kevin Covert, an assistant theater professor who grew up in Winchester, was startled by what he found at Shenandoah when he returned to his hometown after a career on Broadway.
Covert, who saw the school as “just a conservatory” when he was growing up, left Winchester in 1988 for Florida State University. On Broadway, he appeared in “Spamalot,” “Memphis” and “How to Succeed in Business Without Really Trying.”
After “How to Succeed” closed, he decided to try something different and went to Florida State for an adjunct position.
“I fell in love with teaching,” he says. “I fell in love with watching the students and their desire to get better. I even thought to myself, ‘I remember this. I remember all of the hope and none of the cynicism that comes with living in New York.’”
So, when a friend sent him a link for a teaching job at SU, it seemed “kind of kismet.”
Touring the campus during the job interview was like seeing the school for the first time, says Covert, who is in his third year at the university.
“Once you come here and look at the campus and the area surrounding the university and meet the faculty, you’ll be sold,” he says. “There’s a real dedication to care here.”
‘Try different things’
Nonetheless, it took about a semester for Shenandoah’s amenities and opportunities to take hold for James Turner, a junior from Manassas who is president of the Student Government Association.
“My first impression wasn’t very good, actually,” he says. During his first semester, he recalls, all he did was go to class until a faculty member advised him to get involved.
Now, Turner gives similar advice to others. “This is the time you want to step out of your comfort zone and try different things,” he says, and at SU “all those opportunities are right in front of you.”
Turner lists a few:
experiential learning opportunities such as trips to events where sports management students help with game-day logistics for media credentials, corporate suites and team travel schedules.
internships such the one he had last summer with an auditing firm in Reston.
and his visit to Pittsburgh to meet with the Steelers marketing department.
One other experience that Turner would like to try is the Global Citizens Project, an expense-paid, study-abroad trip for 50 to 60 students, faculty and staff members who are selected for the program based on their essays. Their destinations are not revealed until the winners are announced at a school assembly.
Turner, a business administration major who also is president of the Alpha Kappa Psi business fraternity, was recruited to play football at SU but found that time commitment interfered with other goals.
“I kind of chose my career over football,” he says. “I no longer play, but I fell in love with the school, so I stuck around.”
Moved in 1960
Shenandoah’s fortunes were not always so bright, though. Its original campus was in Dayton, about an hour south of Winchester. With only 159 students, the school was about to close when business leaders decided in 1960 that Winchester needed a college.
“They plucked us out of Dayton and invited us here, and we have thrived since then,” Fitzsimmons says. Winchester provided the first classroom buildings and some acreage, but the school didn’t have dormitories.
“So, community members opened their doors and invited students to come live with them for the first couple of years,” she says.
Now the university, which is affiliated with the United Methodist Church, has 10 residence halls and satellite locations near Winchester and in Northern Virginia. The sites include Scholar Plaza in Leesburg, which offers graduate programs in business, education and health care.
In January, the university opened the James R. Wilkins Jr. Athletics & Events Center, a 77,000-square-foot indoor facility that serves SU’s 21 teams and can seat 5,000 people for events.
Since 2013, SU also has been steward of the 195-acre Cool Spring River Campus, which serves as an outdoor classroom for history and environmental-studies programs.
Formerly a golf course acquired by the Civil War Trust, the property was the site of the 1864 Battle of Cool Spring. The university is returning the land to its natural state, but it remains open to the public, with the paved cart paths retained for accessibility.
Ties to health systems
The university collaborates with two major health systems: Winchester-based Valley Health and Inova, to train nurses, pharmacists and other health-care professionals. New programs announced last year at the Inova Center for Personalized Health in Fairfax County focus on emerging fields, such as pharmacogenomics — the study of how genes affect a person’s response to drugs.
Specialized health-care training also includes the nursing school’s new Patient Navigation Certificate for licensed registered nurses, which is based on a program developed by Inova Health System.
The program focuses on training nurses as “navigators” to coordinate patient care, especially for those with complex and chronic conditions, says Lisa M. Darsch, a faculty member and the program’s director.
She says the program’s techniques already have shown cost and health benefits for patients who are followed by a trained professional. “Patients no longer fall through the cracks,” she says by email.
Fitzsimmons says such collaborations are mutually beneficial for the health systems and the university. The partnerships help SU expand programs for which there are demonstrated needs, resulting in jobs for graduates and employees for health systems.
SU might be best known for its conservatory and health programs, she says, but it also is investing more in the liberal arts in a way that cuts across majors.
For example, a program might bring in a community expert to explore human trafficking in a forum involving students from a wide range of disciplines. A business major, for example, might address the economics of the problem, while a nursing student would discuss the impact on the body, and a creative writing student would write a poem.
“That’s really about celebrating the breadth of learning — the opening of minds, which is the heart of liberal learning,” she says.
$145.7 million impact
The university has a $145.7 million annual economic impact on Winchester and Frederick County, according to a 2016 study by the consulting firm TischlerBise. The university’s presence supports about 1,570 jobs, an increase of 230 jobs and $56.2 million in economic impact since 2010.
But Fitzsimmons says that’s not the full story. “It’s important to say Winchester is our home, but our backyard extends all the way to Washington,” she says.
And whether they are in a bank, a hospital or on stage, Shenandoah alumni “are the people who keep this country going,” she says. They have “useful, relevant degrees” that prepare them “to do good in the world.”
“I think that’s the magic of our story.”2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Shared_Office_Space-by_Matthew_R._O._Brown_Photography-1548.pngStephen Moegling (left) is a tenant at Gather. James Crenshaw is Gather’smanaging partner. Photo by Matthew R. O. Brown
http://www.virginiabusiness.com/news/article/coworking-spaces#When:08:00:00ZStephen Moegling could have worked from his Richmond home when he took a job last year with Minnesota health-care marketing agency, Hailey Sault.
But like a growing number of remote workers, Moegling decided to join a coworking office space. He pays a monthly fee to share a professional office environment with coworkers from a variety of businesses, ranging from small startups to nonprofits to global companies.
“I really like it because I still have a lot of that engagement with people in an office environment, which I think is just healthy, to have that small talk here and there at the water cooler,” says Moegling, who works out of an office at Gather, a Richmond coworking company with three area locations. “But when it’s time to really get down to work, I can … close the door to my office and do it.”
In recent years, the popularity of coworking spots has soared. The number of coworking spaces globally is expected to increase 16 percent annually through 2022, according to research sponsored by Global Coworking Unconference Conference (GCUC).
The trend also is reflected in Virginia. Chains such as New York-based WeWork and McLean-based MakeOffices offer flexible workspaces with a variety of amenities aimed at “gig economy” freelancers, consultants and independent contractors. Smaller coworking companies also are setting up shop around the state.
$250 to $500 a month
The largest local coworking space in Richmond, Gather was founded in 2014 and has more than 500 members who pay monthly fees ranging from $250 to more than $500 for 24/7 access to the facilities. Some just need an available cubicle; others pay for a dedicated desk or a suite of offices. Internet and utilities are included and members have access to conference rooms at any of the Gather locations.
For small businesses and startups, coworking offers considerable savings in time and money, says James Crenshaw, managing partner at Gather.
“Creating an office is its own workload and really [businesses would] much prefer to just be focusing on their core competency,” he says. “They didn’t get into their business to open an office, right? Whereas, that’s what we do. That’s our specialty. So they can focus on running their businesses and not have to worry about setting up an office.”
Jeweler finds new home
Since it opened in July 2017, Norfolk’s Percolator has opened four coworking spaces serving about 55 member companies, including David Nygaard Jewelers, whose namesake owner decided to close his longtime retail storefront in favor of working out of a Percolator office and seeing clients by appointment only.
“It has hyper-focused my business towards what I do best, which is the custom-design process, and it has lowered my expenses … because I’m not operating a retail store and retail space,” says Nygaard. Most of the foot traffic he had coming into his store was from people who wanted minor repairs or to have jewelry cleaned. In his first year switching to an office, his revenue has been nearly the same as previous years.
Percolator was founded to combat local “brain drain” by providing an attractive alternative to traditional workplaces and to build community and promote networking among entrepreneurs, says Jimmy Poplin, Percolator’s lead community manager.
The coworking space seeks “to harness the talent that we have right here in every industry from graphic design to art to music to film to wellness,” Poplin says.
“There’s so many people that are a part of the Percolator community and are just reaching out to help each other; it’s been really fun to watch this place grow.”
Working from home can be isolating, says John Dudley, owner of software development firm Industrial Imagination, who manages subcontractors working on projects around the globe. Being around other entrepreneurs at Percolator has sparked his creativity and inspired him.
“It actually inspires me in my own business. When I see, oh, they’ve just launched this, and they’ve just gotten this new client, it kind of makes me feel like I’ve got to keep up the momentum as well,” Dudley says. “If you’re sitting around your house, you’re not going to get any of that. You’re not going to necessarily feel the hot air that’s breathing down your back from potential competitors.”
Being around a community of people from different business backgrounds and experience levels can provide lots of opportunities for networking and learning, he says, likening it to “taking a master class in entrepreneurship.”
“I just love the diverse community of entrepreneurs [and] established business owners,” says Anastasiya Rogatnik, who runs her foreign-language instruction and translation business Lingo Rocket from a Gather location in Richmond. “If I need legal advice, I can go to a law firm next door. If I need help with my taxes, I can go to an accountant. … just love the feeling of having different businesses literally next door to my office. If I have a question, I don’t even have to go outside of the building. I just have to walk down the hallway and get any assistance that I need.”
Amenities also are a key draw of coworking spaces, ranging from the open-bar, beer-on-tap provided by WeWork in some states to the gym memberships and podcast studio offered by Percolator or the fresh-baked cookies served on Wednesdays at Gather.
In February, Ali Greenberg opened The Broad, a coworking space in Richmond dedicated to building community and providing social experiences and coworking space for women and gender minorities. The Broad eschews desks and dedicated office spaces in favor of communal lounges with a modern design. Its 160 members include entrepreneurs and teleworkers who pay a $150 month-to-month fee, as well as “social” members who pay a reduced $75 month-to-month membership fee, which includes access to The Broad’s numerous perks.
“We do two weekly yoga classes … [and] we have office hours every single Friday with lawyers, accountants [and] personal finance professionals,” Greenberg says. “We get discounts at lots of local women-run businesses, and we put on a lot of our own programs that members all get free access to — everything from business-related stuff, like how to get an intern, to life stuff: travel … health and wellness, politics. It kind of runs the gamut.”
Scaling up or down
Coworking spaces are so popular that some larger landlords are looking at starting coworking businesses themselves in order to lease out their vacant buildings and large office spaces, says Jonathan Koes, a research manager with Cushman & Wakefield|Thalhimer.
There are risks inherent in operating a coworking space, including the up-front expenses for setting up the space. Additionally, relying on individual tenants to pay on a month-by-month basis isn’t as stable or secure as the traditional model of signing one corporate tenant to a long-term, three-year or five-year lease.
Ultimately, though, says Koes, “you’re going to command larger rents and get more dollars per square foot on an individual basis when you’re renting a desk versus an office.”
While the desire for community and opportunities to socialize and network are large components driving the growth of coworking spaces (“massive,” says Poplin), it’s also an affordable way for startups and small businesses to have professional workspaces and scale up (or down) as needed without expensive long-term lease commitments.
“I don’t need a conference room 24 hours a day; I don’t need a kitchen 24 hours a day. I only need fractional use of those spaces. And that’s what coworking allows you to do,” Dudley says. “It just seems to be a perfect model for a 21st-century company.”2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Saving_for_College-by_Matthew_R._O._Brown_Photography-1606.pngDavid and Macy Allen are saving for the college educations of their children. Photo by Matthew R. O. Brown
Coping with costs
http://www.virginiabusiness.com/news/article/coping-with-costs#When:08:00:00ZWell before their oldest child could walk or talk, David and Macy Allen began planning for her college education.
The couple, Henrico County residents who work in information technology, began saving when their daughter, now 10, was 6 months old. They met with a financial adviser to choose a college-savings plan. Today, they are saving for her 6-year-old brother’s education as well.
Despite the early start, the cost of college seems insurmountable.
“The way people are trying to figure out how much money they’ll need for their kids is to figure out the current cost of college and how much it’s been growing and project that out. But the cost has been growing so fast that if you project that out, you’re not going to be able to pay for your kids’ college,” says David Allen.
The Allens are among millions of Americans saving for their children through the Virginia College Savings Plan, known as Virginia529. Named after the section authorizing them under the U.S. Internal Revenue Code, 529 plans are tax-advantaged savings programs used to finance the cost of higher education.
Virginia529 is the largest 529 program in the country, with 21 percent share of the national market. The program had assets of $69.1 billion on March 31.
Virginia529 plans can provide big breaks for taxpayers. Virginians can receive a state income tax deduction on contributions to 529 accounts — up to $4,000 per account per year — and their earnings also grow free from federal taxes. Earnings, in fact, are never taxed if used for qualified higher-education expenses.
Despite Virginia529’s overall success, Virginia legislators are considering ways to make one of its plans, the prepaid plan, more affordable and flexible.
The affordability of college has become a national issue in recent years, as student debt has risen. In the 2016-17 academic year, for example, average student debt in Virginia was $29,974, according to the State Council of Higher Education for Virginia (SCHEV).
Meanwhile, college costs show no indication of leveling off. Total charges — the average sum of tuition, all mandatory fees and room and board — will be $24,003 for the 2018-19 academic year, a 63 percent increase from 2008-09, SCHEV says in its most recent tuition report.
Virginia529’s prepaid plan, Prepaid529, is perhaps the most innovative in its portfolio, but it is also the smallest. The prepaid plan has only 63,858 accounts, a small number compared with Virginia529’s CollegeAmerica plan, which has 2.3 million accounts.
The idea behind Prepaid529 is that participants can purchase the cost of a future college education at today’s tuition levels. But as tuition has spiked, the cost of the prepaid plan has become too high for most parents.
For example, during the 2017-18 enrollment period, parents of a newborn could pay $70,600 to cover four years of college tuition and mandatory fees. If a parent pays monthly, fees are added. That means a parent would pay $545 a month until the child goes to college (a total of $118,265).
Because of rising contract costs, the number of Prepaid529 accounts declined 11 percent from fiscal year 2009 to fiscal year 2018, according to a recent oversight report by the Joint Legislative Audit & Review Commission (JLARC), the Virginia General Assembly’s oversight agency.
During the past decade, the cost of a Prepaid529 contract covering eight semesters at a four-year college or university rose from $44,060 in 2008-09 to $67,880 in 2017-18, primarily because of the rising tuition. As a result, consumers shifted to more affordable plans, JLARC says.
Tinkering with the ‘pricing reserve’
Possible changes to Prepaid529 have been outlined by JLARC, Virginia529 and by two Republican members of the Virginia House of Delegates.
JLARC raised the possibility of reducing the “pricing reserve” in Prepaid­529. The reserve is an amount paid above the Prepaid529 tuition contract as a hedge against a potential financial risk to the fund from events such as a dramatic stock market correction.
JLARC has made the case for reducing the pricing reserve from 10 percent to possibly 7 percent, but the agency didn’t make that change a recommendation.
Instead, it says Virginia529’s board should consider guidelines that would reduce the pricing reserve in conjunction with the Prepaid529’s funding status.
JLARC noted that Prepaid529 had funding representing 138 percent of its payment commitments as of June 30, 2017. That is the highest in the prepaid program’s 21-year history.
A larger cut in the pricing reserve is proposed in legislation introduced by Delegates Steven Landes of Augusta County and Tim Hugo of Fairfax County.
In a recent opinion piece in the Richmond Times-Dispatch, Landes proposed lowering the price reserve from 10 percent to 5 percent. That move, he says, would reduce the cost of an eight-semester prepaid contract by $3,000.
Mary Morris, Virginia529’s executive director, says the delegates’ proposal was a surprise. “I don’t think that’s the right percentage,” she says of Landes’ 5 percent recommendation.
Reacting to suggestions that the prepaid fund balance may be higher than needed, Morris says, “In actuarial terms, if you’re funded 100 percent, it means you only have a 50-50 chance of meeting your long-term obligations.”
She adds that the Virginia529 board has a fiduciary responsibility to ensure the long-term solvency of the prepaid plan, recalling the stock market dropped 35 percent during the last recession.
By the time the 2019-20 enrollment period opens for Prepaid529, she believes the Virginia529 board will have a policy that says, “at a certain funding status, we’ll take a look at adjusting our pricing reserve.”
In response to concerns about the current model, Virginia529 also is proposing a payout plan for the Prepaid529 plan called WAT (Weighted Average Tuition).
Today, Prepaid529 pays tuition costs and mandatory fees for those attending state public institutions of higher education (and an adjusted benefit to those attending out-of-state or private institutions).
Under the WAT program, the payout would be the same for all students, whether they attend in-state, out-of-state public or private institutions.
Students attending more expensive schools would have to make up the difference between the WAT payout and their actual cost of tuition and fees.
On the other hand, students attending less expensive schools might have money left over, which they could use for other expenses, such as books.
“What you give up is the certainty that we’ll cover tuition and fees at the most expensive state schools … but what you gain is you’re paid the same thing no matter where your child goes … to a private school or to a school out of state,” Morris says.
Legislation to enact the WAT model did not pass in the last General Assembly session. Some legislators expressed concern about a shift away from paying the full cost of tuition and fees at state institutions.
JLARC says the WAT model would have several advantages over the current model including the “potential for reduced contract pricing and more flexible payment terms.”
At the request of the General Assembly, JLARC is reviewing the WAT model to determine how it might affect payouts, contract costs, plan sustainability and other issues. JLARC is to report on its findings at its November meeting.
Virginia529’s most popular education savings plan is CollegeAmerica, which has $62 billion in assets. But there are only about 200,000 Virginia families among its 2.3 million account holders. Morris says CollegeAmerica always was positioned as a national program.
CollegeAmerica is the product of partnership between Virginia 529 and Capital Group, a private mutual fund company.
Private financial advisers sell the accounts, which are invested in various mutual funds through American Funds. Account holders work with advisers to determine how their money is invested.
Besides CollegeAmerica and its prepaid plans, Virginia529 also offers another fairly popular college-saving plan: Invest529, with more than 272,000 accounts.
Invest529 allows account holders to save at their own pace through options ranging from bank savings accounts to a portfolio of investments.
Proposed changes at Virginia529 reflect ongoing changes throughout the 529 industry.
For example, Morningstar has reported that the 529 industry has initiated changes to reduce expenses, as well as to improve the asset-allocation approach in aged-based portfolios “to smooth out the transition from stocks to bonds as the beneficiary ages.”
Virginia529 plans certainly aren’t the only way to save for college, but par­­­­­­­­­­­­­­­­­ents should start early and have a defined strategy, financial advisers say.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/_DSC5476.pngJeff Barbour, a partner with Brown Edwards in Roanoke. Photo by Don Petersen
Section 199A and the 2018 tax return
http://www.virginiabusiness.com/news/article/section-199a-and-the-2018-tax-return#When:08:00:00ZMany Virginia business owners signed off on last year’s tax returns only a few weeks ago, in early September, the Internal Revenue Service’s annual, last-chance filing deadline for most U.S. companies.
Now, accountants and tax advisers want them to focus on the best ways to benefit from the 2017 Tax Cuts and Jobs Act (TCJA), the biggest overhaul of the U.S. tax code since the 1980s.
The law’s many changes — especially for pass-through companies like sole proprietors, partnerships, LLCs and S-Corps — means meetings with tax professionals are “not just a five-minute conversation,” like they may have been in other years, says Jeff Barbour, a partner with the accounting firm Brown Edwards in Roanoke.
“You should really take advantage of the opportunity to run the calculations through multiple scenarios with whatever updated software programs you have at your disposal” before preparing a tax return in 2019, he says.
Tax specialists all say the extra time and effort could mean huge financial benefits to thousands of smaller businesses across the commonwealth, since the TCJA now permits them a 20 percent deduction on their year-end taxable income.
“Especially in this last quarter it’s really important for companies to know where they are with their business,” says Christina Monfalcone, president of Monfalcone & Garris in Charlottesville.
“The biggest problem with small businesses, not just sole proprietors but even businesses with multiple owners, … is they don’t keep their records well enough to know where they are to begin with. So, how will they know how they can take advantage of these options, to take advantage of the 20 percent deduction if they don’t know where they are?” cautions Monfalcone.
The Republican-controlled Congress swiftly passed TCJA last December. President Donald Trump then promptly signed the bill into law a few days before Christmas to fulfill one of the main promises of his 2016 presidential campaign. The legislation lowers certain tax rates and raises deductions for individuals, families and companies.
Clearing up the details
Most of the analysis and publicity surrounding the TCJA has focused on a new tax rate for corporations, (slashed from 35 percent to 21 percent) and an increase in standard deductions, which almost doubled from $6,350 to $12,000 for single filers and rose from $12,700 to $24,000 for married couples filing jointly. Details of the 20 percent deduction promised by lawmakers to the nation’s numerous pass-through companies were unclear until early August, when the IRS released its interpretation of Congress’ intent, Section 199A.
About 30 million U.S. businesses are considered pass-through entities for tax purposes by the IRS, according to the Tax Foundation. Unlike corporations, which distribute their net income to shareholders through dividends, pass-through businesses pass their profits on to their owners —including musicians, landscapers, babysitters, farmers, restaurateurs, truck drivers, plumbers, carpenters, caterers and home-health aides, to name a few — as personal income.
The IRS ruling states that all owners of pass-through companies can take the hefty 20 percent deduction on their taxable income if that amount is $157,000 or less for individual tax filers and $315,000 or less for couples filing jointly. If pass-through business owners have taxable income above these totals, certain limitations on the 20-percent deduction begin to kick in.
For example, accountants, attorneys, physicians and performing artists owning pass-through entities earning above $157,000 or $315,000 are classified as a “specified service or trade businesses,” or SSTB. They are excluded from taking the 20 percent deduction.
Pat Murtaugh, another partner with Brown Edwards in Roanoke, participated in a two-hour webinar with clients in September to learn more about how higher-earning owners of pass-through companies can take full advantage of Section 199A.
“With that comes now … a tremendous amount of planning for people who are right around that [taxable income] threshold,” says Murtaugh. “What we can do as tax preparers is to get [our clients] below the threshold or look through the weeds to help make sure they can get part of it [the deduction]. To get the deduction, does that mean pushing income into next year or accelerating deductions?”
Who are ‘brokers’?
Many tax professionals criticized the original draft of TCJA as vague and imprecise. The legislation sparked many questions last spring about which types of pass-through companies and which types of business activities would qualify for the 20 percent deduction. Many small-business owners wanted to know if they should restructure as another type of pass-through company to increase their benefits.
“There was some confusion across the board. Specifically, which clients were able to use it or not,” says Monfalcone. “There was some confusion whether you could use it as a sole proprietor versus an LLC. They’ve cleared up those hurdles of confusion.”
Earlier this year, Ryan Losi, executive vice president of the Piasick accounting firm in Richmond, was telling his pass-through clients that it might take some months for the IRS to clarify what businesses Congress meant to include or exclude in its tax reform package. Specifically, he had difficulty interpreting language in the original legislation excluding any pass-through company whose sales were based on the owners’ reputation. Losi also puzzled over how Congress defined “brokers.”
“The question was how broad is that [term] going to be interpreted,” Losi says. “Insurance brokers. Real estate brokers. Freight forwarders. Commodity brokers. Are they included in this [exclusion] or not? Fortunately, when the regulations came out [in August] they were not. The Treasury and the IRS took a very narrow interpretation.
“As soon as I read that, I started reaching out to our real estate brokers, our real estate developers, insurance brokers and I said, ‘Hey, you guys slipped through. You’re going to get the benefit of this deduction.’”
While the first version of Section 199A answered many questions about tax deductions for pass-through companies on their 2018 returns, a final version of the IRS rules would not be official until they were published in the Federal Register in mid- to late-October (after this issue of Virginia Business went to press).
As the final weeks of the 2018 tax year tick away, tax professionals hope the owners of pass-through companies take the time to plan how best to file this year’s returns and budget for higher preparation costs because of the increased complexity of TCJA.
“There is nothing in that bill, the Tax Reform and Jobs Act, that simplified our code, at all,” says Losi. “This year is going to be a nice big billing year for most CPA firms … We’re looking at a 3 to 5 percent bump,” in both price and preparation hours.
“With a W2 employee with not a lot of deductions, there’s probably not a lot of additional time. But if you’re a business owner with one or more companies, that’s going to be a pretty big effort. Some will qualify; some will not. And we’ve got to go through that analysis,” he says.
Additional tax preparation time and the charges for those services is “going to vary by client,” says Barbour of Brown Edwards.
“But for people under $315,000 and $157,000, it will probably be pretty straightforward for them,” he says. “It’s going to be the ones over those limitations that we’ll spend more time talking about structuring and adjusting wages and different things like that to maximize the deduction to the extent we can. And maybe look at ways to restructure the business before year-end to maximize the deduction and more time doing the calculations. Especially when a company has multiple owners.”
That sentiment was echoed by Monfalcone of Monfalcone & Garris.
“Clients are probably expecting cost cuts, but honestly with all this stuff that’s going on, I don’t know how that will happen, unless we take a hit to cover their expectations of that,” she says. “But honestly, I think it’s going to take more time to make sure we’re doing the right thing.”2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Neal_Kassell_-_Focused_Ultrasound_%C2%A9_Caroline_Martin_Photography-1.pngDr. Neal Kassell, chairman of the Charlottesville-based Focused Ultrasound Foundation. Photo by Caroline Martin
http://www.virginiabusiness.com/news/article/making-connections#When:08:00:00ZOne challenge of being a CEO with a new technology is finding investors who believe in it as much as you do.
“Raising money is a full-time job,” says Mike Blue, CEO of Michigan-based HistoSonics Inc., which is trying to bring to market a new kind of focused-ultrasound technology that destroys targeted tissue such as tumors using pulsed sound waves. “It takes constant effort to try to get in front of the right people.”
Lucky for Blue, the Charlottes­­­­­­ville-based Focused Ultrasound Foundation already had the right people: its wealthy donors and an all-star board of directors.
Foundation leaders told them about Blue’s need for money, and, in about 10 days, the entrepreneur had what he needed: a $5 million convertible note from a group of investors led by an ultrasound foundation board member.
That money is helping to keep HistoSonics going as it works on its C-round funding, which Blue hopes to close by the end of this year. The goal is $30 million. He’s grateful for the foundation’s role in helping the $5 million deal happen. “I can’t overstate the power of an introduction to an audience who is already familiar with and believes in the potential of focused ultrasound,” he says.
The ultrasound foundation would like to see a lot more deals like that one. So, earlier this year it launched a formal effort, called FUS Partners, to make more connections — not just for financing but other initiatives such as collaborative partnerships or academic-research opportunities, all with the goal of advancing the development and adoption of focused ultrasound technology.
“The field of focused ultrasound is at a tipping point, where it’s transitioning from a research and development activity to a commercial activity,” says Dr. Neal Kassell, who started the Focused Ultrasound Foundation in 2006 and is its chairman.
Focused ultrasound is a noninvasive therapy using ultrasound waves to generate heat and destroy targeted tissue. It also has potential in drug delivery. Kassell began the foundation to speed development of the technology.
FUS Partners program is a logical next step for the foundation, Kassell says. “Ten years ago, there were five manufacturers in the field. Today, there are about 65,” he says. That’s a good trend, but those companies are relatively small and not making money, he says. “So, the first step that we see is to get these companies to be successful. The next step is to effect some consolidation.”
Kassell came to Charlottes­ville in 1984 as a professor of neurosurgery at the University of Virginia School of Medicine. He co-chaired the neurosurgery department there for 22 years.
Partnering with experts
The person leading the partners program is Dr. Emily White, who joined the foundation as director of operations in 2016. Besides her training in general surgery — she’s a U.Va. School of Medicine graduate — White also has experience on the business side, having held leadership roles with several startup companies.
The first step was going to investors already involved in focused ultrasound to test their willingness to continue investing, White says. Then she started asking ultrasound-related startups about their growth plans and what help they need.
“Our first phase was to go to incumbent investors and say, ‘Can we talk to you about why you decided to invest in this space? And do you have an appetite for more?’” she says. “The companies were obviously already out there knocking on doors trying to get meetings with investors. I think what we brought to the table is some efficiency.”
White also tries to make other contacts. “I want to introduce companies to whoever is the world expert in whatever they’re trying to do,” she says. For example, a researcher trying to use ultrasound to create a drug delivery therapy for bladder cancer would benefit from talking with a company trying the same thing. In its 12 years, the foundation has helped fund research efforts in the U.S. and abroad, and its leaders know a lot of people. “Yes, they need money, but sometimes they need strategic partnerships,” White says.
The key hurdle is winning approval of focused ultrasound treatments from the U.S. Food and Drug Administration. So far the leaders in winning FDA approval are ultrasound-based thermal ablation applications that use heat to destroy targeted tissue such as tumors. HistoSonics is developing a system without heat. Its pulse technology destroys tissue, the company says, without generating heat that can damage surrounding tissue.
Another approach is to use focused ultrasound to deliver drugs. That use “is still in its infancy” in terms of development and FDA approval, White says.
Immunotherapy for treating cancer is another application, with research in one area of that field showing that ultrasound treatment actually was stimulating the immune system. White says a researcher in Italy, using ultrasound for palliative care for pancreatic cancer, found that, somehow, leaving part of the tumor in place produced a stronger anti-tumor immune response. Research shows that approach works on about 30 percent of patients, but they don’t yet know which 30 percent, White says.
So, the foundation works with every kind of stakeholder — drug companies, startups, researchers and the rest. “If your whole thing is to accelerate the adoption of the technology, then all of that matters,” she says.
A board of heavyweights
A key resource for White’s efforts is the expertise of the foundation’s 14-member board. There are plenty of heavyweights. Among them are William Hawkins III, retired chairman and CEO of Medtronic; Stephen Rusckowski, chairman, president and CEO of Quest Diagnostics; Andrew von Eschenbach, a former FDA commissioner and former director of the National Cancer Institute; and Dr. Frederic Moll, chairman and CEO of Auris Health, a medical robotics company that he founded. When White has questions she can’t answer about technology or financial issues, she can turn to a bevy of experts. “This is the genius behind the way Neal put this together,” she says.
Moll is the board member who led the round of investment for HistoSonics. His interest with that supporting technology — called histotripsy — goes back a few years to when it was being developed at the University of Michigan. After Moll learned that Histo­Sonics was having a hard time raising money, he met with the company’s leaders at a J.P. Morgan conference in San Francisco and agreed to help. “It’s something I’m personally excited about, both as someone in the field who wants to see focused ultrasound get as far as it can go, and I thought it was a great investment opportunity,” he says.
It’s a tough fundraising environment for young companies, Moll says. “Most people don’t have the time or the background or interest to really understand the nuances of a technology like this.”
In late October, the foundation held its sixth International Symposium on Focused Ultrasound in Reston. The four-day event, which included some of the top researchers in the field from the U.S. and abroad, covered the latest advances in the treatment of a number of conditions in fields such as oncology, neurology and women’s health. The conference also explored the technology gaps and commercialization efforts needed to bring wider use to focused ultrasound.
White went into that meeting with plans to gather all the CEOs into a room and ask them what they need from the partners program. She’s having those talks with other stakeholders, too, and wants next year to produce a more detailed picture of the state of focused ultrasound. “We want to be market responsive,” she says.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/INTERVIEW_GregTrepp2.pngGregory Trepp joined Hamilton Beach Brands in 1996. Photo by Caroline Martin
http://www.virginiabusiness.com/news/article/customer-focused#When:08:00:00ZGregory H. Trepp leads one of the newest publicly traded companies in Virginia, but it is already a household name.
Trepp, 56, is president and CEO of Hamilton Beach Brands Holding Co. (HBBHC), which since 1910 has produced appliances such as mixers, blenders and coffee makers.
The Glen Allen-based company includes two business segments: Hamilton Beach Brands Inc., a designer, marketer and distributor of household and commercial appliances, and The Kitchen Collection LLC, a chain of specialty housewares stores.
“We are one of the top three players in small appliances. There’s nobody else that’s a pure-play small appliance business at our size,” Trepp says.
Before the September 2017 spinoff of HBBHC, Hamilton Beach Brands and Kitchen Collection were part of Cleveland-based NACCO Industries Inc., whose primary business today is coal mining.
“NACCO’s board of directors felt that it was in the best interest of the shareholders to separate into more focused businesses,” says Trepp, who had led both Hamilton Beach Brands and Kitchen Collection under NACCO.
HBBHC has about 1,600 employees companywide, 264 of whom work at its headquarters beside a lake at the Innsbrook Corporate Center.
On Oct. 30, HBBHC reported consolidated revenues of $196.9 million and consolidated net income of $8 million, or 59 cents per diluted share, for the third quarter of 2018. By comparison, the company had consolidated revenues of $181.7 million and net income of $4.3 million, 31 cents per diluted share, for the third quarter of 2017.
The holding company had revenue of $740.7 million last year. More than 80 percent of its sales came from the Hamilton Beach Brands business segment, which has offices and distribution centers in the U.S., Canada, Mexico, Brazil, Belgium and China. Its products are made by third-party manufacturers in China, which has become the world’s low-cost producer of small appliances.
Hamilton Beach Brands appliances are top sellers in many key retail and commercial sales channels. The business segment has a long-term goal of increasing annual revenue, which totaled $615.1 million last year, to a range of $750 million to $1 billion. Its growth plan includes six initiatives: “Only the Best” product expansion, global e-commerce, global commercial leadership, international market growth, category and channel expansion and strategic acquisitions.
Trepp is guiding HBBHC through a time of changing consumer habits, including an increasing shift to online shopping.
Online houseware purchases represent Hamilton Beach Brands’ fastest-growing segment, accounting for 25 percent of its U.S. sales last year. Trepp says one reason for the that growth is the company’s efforts to communicate with customers.
“It used to be in the very early days [of the internet] that you would put your product up online and get a number of sales,” he says. “Now, you are in a very heated battle with your competitors to make sure that, when a consumer goes in to look at a coffee maker, you are in full discussion with them.”
That focus has “allowed the Hamilton Beach brand to be the No. 1 selling small-appliance brand through the e-commerce channel through 2017,” he says.
The growing e-commerce trend, however, has reduced foot traffic at Kitchen Collection stores, which are located primarily at outlet malls. The retail chain recorded a net loss of $2.9 million in HBBHC’s second quarter as revenue declined to $22.8 million from $25.9 million in the same quarter the year before.
Kitchen Collection has culled under­performing stores while negotiating with landlords for shorter-term and more favorable leases. In the first six months of this year, the number of stores declined from 210 to 199. Trepp says that number eventually will decline to 100 to 150 stores.
“Kitchen Collection has certainly been through a tough few years. Sales have been declining,” he says. “What I feel really good about is that we have a really strong team at Kitchen Collection who has done a good job trying to adjust with the times. We downsized the stores to 199, and while doing that, very importantly, we’ve protected very strong gross margins. We’ve been around 40, 45 percent gross margins,” he says.
Excluding Kitchen Collection, HBBHC’s portfolio of brands includes Hamilton Beach, Proctor Silex, Weston and Hamilton Beach Professional plus licensed brands Wolf Gourmet and CHI. Last year, 87 products were introduced. Trepp says about three times that many products are in the development pipeline.
“One of our keys to our culture is called good thinking. If you are developing a new product, you talk to consumers, see what is important to them. What are their pain points and how do you solve their pain points?” he says.
Six employee teams — whose members represent areas such as marketing, engineering and design — are responsible for developing products in a variety of categories, such as cooking or beverage. Each Thursday, teams make their case for product ideas to a group of executives.
This review, which resembles a pitch competition, begins a three-stage process in which teams getting an initial green light continue working on their proposals.
At the third stage, “you’re approved to go. You have all the funding you need. Now all you have to do is development,” Trepp says. “The key is that those team leaders are driving that innovation … as opposed to it being one person because that is not a healthy long-term business strategy.”
Trepp joined Hamilton Beach in 1996. He had attended college in Richmond, earning a bachelor’s degree from the University of Richmond. He holds an MBA from the University of Connecticut.
Trepp and his wife, Ann-Marie, have four children, two sons and two daughters. The three oldest children are in college. The youngest child is in sixth grade.
The Trepps are supporters of the Anna Julia Cooper Episcopal School in Richmond, which provides full-tuition scholarships to fourth- through eighth-grade students with limited economic resources primarily from the city’s East End.
Virginia Business interviewed Trepp at his Richmond office on Sept. 5. The following is an edited transcript.
Virginia Business: What is your timeline to increase your [Hamilton Beach Brands business segment] revenue to a billion dollars?
Trepp: If we can get to the $750-million-to-a-billion-dollar range, to get a 9 to 10 percent profit for the Hamilton Beach business, it will get us to a much stronger leadership position in our industry. We implemented a number of strategic initiatives back in 2012. We’ve been adding a few [more] as time goes on. Those are really starting to help drive growth on a quarter-to-quarter and year-to-year basis. We haven’t set an exact timeframe, but we feel that we can get into that $750-million-to-a-billion-dollar range in the not-so-distant future. Then we’ll go from there.
VB: Let’s talk about your growth initiatives. One that caught my eye was the “Only the Best” strategy. Would you give us some explanation of that?
Trepp: You’ve probably heard of the term “good, better, best.” Hamilton Beach and Proctor Silex are brands that are plus-or-minus 100 years old. They are very well known, very well respected and have a very strong awareness in the “good or better” segment. That’s really been our heritage over time.
The high-end market, “the best,” is about a third of the dollars in small appliances in the U.S. It varies a little bit depending on the market you are in. That’s a scenario that we didn’t play in very much. Our goal was to [determine]: How can we build and invest in products and in brands that really play a stronger role in that part of the market? That led us in acquiring the Weston brand back in late 2014. It has very high-end products focused on field-to-table and farm-to-table: meat grinders, food preservation products — things like that.
We introduced the Hamilton Professional line. Again, high-end products. [Through licensing agreements], we also introduced Wolf Gourmet in 2014 and introduced the CHI brand of irons and steamers in the past 18 months. That portfolio of brands allowed us to grow very nicely.
VB: Are you looking to add more products like this to that area?
Trepp: Yes, for sure. You’ll see a lot more products coming out. We have a beautiful coffee maker coming out from the Wolf Gourmet brand, then a long list of products from all four of those brands coming out each year.
Brand-wise, we probably will add another one. We would see if something came up, but we feel the four we have will take us forward for the next few years. From a product standpoint, we will definitely be expanding product lines.
VB: Also, you talked about strategic acquisitions [in the growth initiatives]. In that area, are you talking about buying other companies, buying other products or buying brands?
Trepp: Most of our growth is going to come from [existing brands through] the initiatives we talked about. But we do hope and believe that one of the ways to get to our growth goal would be through a handful of acquisitions.
There are some companies that have a very successful strategy of acquiring companies nonstop. That’s not what we’re focused on. We do hope to find several [acquisitions] … probably not transformable ones, but ones that we can fill in opportunity areas for us. It could be a category that we don’t compete in very well. It could be a brand, a particularly strong brand.
VB: Would you be able to say what sort of areas you would be interested in? In terms of fill-ins and places where you want to be stronger?
Trepp: It’s always tough to say because you don’t know who’s for sale. One example I’d give you is where we wouldn’t do it. We are the No. 1 brand of kettles in the U.S. and in Canada. So, if there was a company that was particularly strong in kettles, it wouldn’t be really additive to us.
There are over 50 categories we compete in the retail business, and globally there is a number of categories in the commercial market that we have opportunities in. So, really, we just take it in and say: Where do we have a gap in our portfolio and where can we fill that in?
VB: What percentage of your sales are international currently? How do you plan to raise that? I think I saw something saying that you want to raise that to 35 to 45 percent.
Trepp: That right. That’s a longer-term goal right now. About 77 percent of our business is done in the U.S. That’s combined Hamilton Beach and Kitchen Collection, so a very U.S.- focused company. Conversely, if you look at the small appliance business around the world, over 70 percent are purchased outside of North America.
Clearly, if we want to grow and want to address consumers’ needs in small appliances, an important way to do that is to reach them outside of the U.S. We are a strong player in Canada already but have plenty of room to grow. We have a strong presence in Mexico and plenty of space to grow. [We have a] very strong position in Latin America, but we are just entering South America.
We also began selling directly into China several years ago and are looking at testing additional markets. So, I think our goal is, on the retail side, to expand in the Americas, continue to expand in China and then test a few more markets.
Commercial is already a very global business for us, one that is about 50-50, U.S. and international. We see a very strong upside in both U.S. and internationally, but clearly an opportunity to grow that business faster. Between the commercial and the retail business, it would give you between 35 and 40 percent [in international sales]. We have a long way to go, but we are investing in products and capabilities and people around the world to try to get growth going.
VB: Would you introduce new products that are specifically targeted to those [international] markets?
Trepp: When it comes to new products, we want to make sure everywhere we go, we understand what the consumer is looking for. We don’t want to just ship in things we think work. We want to talk to consumers. We are doing research in these markets.
A great example would be in Brazil. Consumers will, almost always after using an iron, empty the water out of it. That’s something that people don’t do much around here. So, we developed an iron that you can remove the water tank. That just makes it easier to fill and empty, as opposed to shaking the iron upside down over your sink or carrying it around. That’s a small detail, but something where, once we learned that pain point for consumers, we had a great solution. That’s an item that has gotten good reception so far.
VB: [Since 2012, have your growth initiatives] worked the way you expected it to?
Trepp: Not exactly. Back to being a good thinking-focused and learning organization, we’ve adjusted as things have worked and some have not. “Only the Best” is growing nicely. In the new markets, some are working really well, while some are really challenging.
We moved into Brazil right before they had their worst recession on record … That’s been one that has been more challenging than we thought, but our products are selling well, and we’re getting distribution. We are getting back to the long-term focus, and we are just going to keep on working on it. The economy has stabilized, not where it needs to be yet, but stabilized. We’re growing and doing okay.
VB: E-commerce is about 25 percent of your total sales right now, correct? Where do you expect that to go in, let’s say, the next five years?
Trepp: It’s tough to say, but we have seen some industries where it’s grown to 35 percent of the industry. Electronics is one of those examples.
Right now, in our market, the data isn’t perfect, but e-commerce is around 25 to 30 percent of the industry. We think it will go somewhere in the mid-30s. It could go higher, as high as 40 percent. It’s hard to tell exactly. Consumers are still clearly interested in buying products from brick-and-mortar stores.
You’ve got a lot of retailers who are doing both well. So, we think it will balance out between 30 and 40 percent. Certainly if it goes further than that we’ll adjust, if it goes backwards — which I don’t think it will do — we’ll adjust there also.
VB: Your operations are all over the world. Have tariffs [imposed by the U.S. on imports from China] affected your business?
Treppp: Yes, they have. [Before early September, tariffs affected] around 4 percent of our revenue.
[Additional tariffs imposed in late September affected another 7 to 8 percent of the business, making more than 10 percent that has been impacted.]
It affects the whole industry. We’re supportive of the opportunity to make things better in certain ways. If things don’t get resolved and things stay in place long term, we’ll have to adjust and figure out how to run our business that way.
VB: Another thing that’s in the news is the federal tax cuts approved by Congress last year. How will it affect the company now?
Trepp: That will be benefiting us. We will probably be around, we estimate, a 26 to 28 percent tax rate this year, which is around 10 to 12 points lower that it was last year. So, our shareholders will definitely see a benefit to that.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/G4A_6445x.pngGerald L. “Jerry” Gordon. Photo by Stephen Gosling
http://www.virginiabusiness.com/news/article/head-cheerleader#When:08:00:00ZConsidering the big question of the year — where will Amazon locate its highly coveted second headquarters? — many oddsmakers put Northern Virginia at the top of the list.
If that prediction comes true, it might crown the legacy of one man in particular: Gerald L. “Jerry” Gordon, the president and CEO of the Fairfax County Economic Development Authority (FCEDA). In effect, landing Amazon’s HQ2 — which is expected to employ 50,000 people — would serve as a walk-off home run for the man who has led the FCEDA through the bulk of its existence.
Gordon, who turns 68 on Nov. 3, plans to retire at year’s end. He declines to answer any questions about Amazon, which in January included Northern Virginia on a short list of 20 regions it was considering for the headquarters site. A decision is expected by the end of the year.
“The story of Jerry Gordon has been the story of Fairfax County’s growth and development,” says Sharon Bulova, chairman of the county’s Board of Supervisors.
Gordon joined the authority in 1983 and rose to its top executive position in 1987. Bulova recalls that she was elected to the board a year later when antigrowth sentiment was high among voters. “Fairfax residents thought we were growing too fast and that the growth was not managed well,” she says. “Those were tumultuous times.”
The county board’s chairman at the time, Audrey Moore, advocated tourism as a solution — but the early 1990s brought a brief recession and bigger problems. “Then, it was about: ‘How do we get Fairfax back in business?’” Bulova says.
Thus began the ascension of Gordon as the county’s chief marketer and salesman. During his tenure, employment in Fairfax has grown from 243,000 to more than 600,000. Today, the county’s roster of major employers includes Inova Health System, George Mason University and the U.S. Department of Defense, plus the headquarters of nine Fortune 500 companies, such as Capital One, Northrop Grumman, Hilton Worldwide, Volks­wagen Group of America and General Dynamics.
According to Gordon, the county contains more office space than any other locality in the Greater Washington area — 117 million square feet, to be exact — amounting to 35 percent of all the office space in Virginia. In 1983, when he came on board, Fairfax had just 32 million square feet. “We have more space filled than [the rest of] Northern Virginia has space,” he says.
Gordon notes that the FCEDA was quicker than many nearby localities to assess the risk of leaning too heavily on federal contracting as an anchor of the local economy. So, in the late 1990s, Gordon and his team began to diversify their targets and, in time, turned Fairfax into a mosaic of industries. The result is a local economy that can withstand, somewhat, stormy weather in any industry.
The year 2009 saw a flurry of high-profile relocations to Fairfax: CSC (now DXC Technology) pulled up stakes from El Segundo, Calif.; Hilton left Beverly Hills; and Volkswagen moved from Michigan.
When asked about his most difficult deal, Gordon answers simply: “All deals are difficult in different ways.”
Leading a group with such a magic touch led Virginia Business magazine to name Gordon its 2010 Virginia Business Person of the Year and include him in its annual list of 50 Most Influential Virginians.
His career accomplishments also have been recognized by the International Economic Development Council, the Israel Bonds organization, the Catholic University of America and the Virginia Hispanic Chamber.
Gordon demurs still when asked to pick an accomplishment that he’s most proud of — there is no one favorite recruitment success that he’ll name.
Instead, “the thing I’m most proud of,” he says, “is having an extraordinary staff.”
He ticks off a list of the assets he’s recruited to his team of more than 40 professionals, including people with industry-specific knowledge, marketing acumen and focused research skills. “Across the board, they’re very strong because this region is very diverse,” he says.
The FCEDA’s reach goes well beyond the region, of course.
“We developed an international footprint,” says Fairfax Supervisor Pat Herrity. In addition to U. S. offices in Tysons and Los Angeles, the authority has locations in Bangalore, Berlin, London, Seoul and Tel Aviv.
Herrity notes that Gordon’s success is enabled by the strength of the product FCEDA has to offer: diverse demographics, a highly educated workforce, solid schools and comfortable neighborhoods. “Marketing the county is really telling a story,” Gordon explains.
It could be argued, as a recent column in the Washington Business Journal noted, that Gordon has focused intently on selling Fairfax at the expense of promoting the region at large. “I think that’s a fair assessment,” Bulova says.
Nevertheless, the county board chairman notes that: “He has been pro-Fairfax, and that has been his mission. He’s done a terrific job.” Herrity and Cathy Lange, who chairs the FCEDA board, echo that statement.
Lange, a partner at Human Capital Advisors, adds: “His competitive nature is appropriate” for what he has been asked to do.
Herrity points to the fact that Gordon has, in fact, coalesced regional cooperation on issues such as transportation and that the capital investment needed for certain developments in the county meant reaching beyond Fairfax’s boundaries. “You don’t solve that problem locally,” he says. “You have to solve that regionally.”
Both county supervisors point out, too, that Fairfax joined Loudoun County in pitching one Northern Virginia site to Amazon for HQ2.
Bulova says that whoever replaces Gordon — the search has just begun — will be challenged to broaden FCEDA’s scope toward more regional partnerships.
Teacher and author
Gordon has proved himself to be a dynamo, a man whose activities extend over the bounds of the economic development authority.
Beyond the job, he has taught classes at Catholic University, the University of Maryland, George Mason University and Virginia Commonwealth University. He’s dispensed his knowledge on strategic planning and economic development in 13 books.
Gordon’s idea of retirement, it seems, may not be quite as sedate and recreational as most business people who hang up the suit.
His plans include a move to a Seabrook Island just south of Charleston, S.C., with his wife, Barbara, to be closer to family living in the area. The move will mark a return to Gordon’s old college town. He earned his bachelor’s degree from The Citadel. Gordon also holds a master’s degree from The George Washington University and a doctorate in international economics from Catholic University.
Whether he will continue writing books is an open question. “I think I need to settle in a bit,” he says.
He will continue to teach as a fellow at the College of Charleston’s Joseph P. Riley Jr. Center for Livable Communities.
As Gordon’s economic development career comes to a close, the question hangs there: Will Fairfax win the crowning jewel of Amazon and will his victory lap be that much sweeter?
In any case, Herrity says, Gordon gave his all. “When it came to winning one for the home team,” the supervisor says, “He won for the home team.”1302018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Slate-9846.pngNatalie Slate is hopeful that Mid-Atlantic Advanced Manufacturing Center will attract a major prospect. Photo by Mark Rhodes
Chasing the big payoff
http://www.virginiabusiness.com/news/article/chasing-the-big-payoff#When:08:00:00ZGreensville County and state officials were in high spirits.
In 2015, Swedish carmaker Volvo was looking for a location for its first U.S. manufacturing plant. The company had narrowed the list down to two sites, and the 1,600-acre Mid-Atlantic Advanced Manufacturing Center (MAMaC) in Greensville had made the cut.
Volvo’s final site visit had gone so well that local and state officials were exchanging high-fives as the plane carrying auto executives took off. “We were like: ‘We’ve got this. This is ours,’” recalls Natalie Slate, Greensville’s economic development director.
Then came the letdown.
Weeks later, Volvo announced it would build the factory outside of Charleston, S.C. — a $500 million facility that promised to create 2,000 to 4,000 jobs. “It just broke our hearts,” says Slate.
It’s been three years since that heartbreak, and Slate is hopeful again.
With the help of a $2.2 million grant from GO Virginia, a regional economic development program, Greensville has made the enormous site “infrastructure ready.” The county has engineered and built part of MAMaC’s sewer system and purchased rights-of-way needed to bring electricity and natural gas to the site. A business locating there could be up and running in 18 months or less — a critical parameter in snaring big economic development deals these days.
“If [Volvo] were to come back today, I think they would choose us,” Slate says. “We’ve mitigated all the risk that we could foresee. So, we’re ready. We are more ready than we’ve ever been.”
MAMaC, which is owned by the Greensville County Industrial Development Authority, is a megasite, a loosely defined term for very large tracts of land used to attract major manufacturers. Typically, megasites encompass at least 500 acres.
In the last year, two similar massive sites have come online along the Virginia-North Carolina line. One is the Commonwealth Crossing Business Centre in Henry County, and the other is the Southern Virginia Mega Site at Berry Hill in Pittsylvania County. In fact, most of Virginia’s existing megasites are in Southern Virginia. Grants from the Virginia Tobacco Region Revitalization Commission have aided their development.
Megasites are big gambles. They require millions of dollars of investment in the hopes of big payoffs. Many Virginia megasites now are trying to improve their odds by becoming “infrastructure ready,” essentially removing risks that could hold up site development.
Economic development officials say those efforts are bearing fruit — they’re seeing increased interest in permit-ready sites. “We’re in better shape than we were, say five years ago,” says Joe Hines, who leads economic development for the Richmond-based engineering firm Timmons Group. He assists the state on many economic development deals. “I’m very bullish on the next five to 10 years for the Commonwealth of Virginia because we are starting to bring our product in line with the marketplace.”
Today the pace of business development is accelerating. Companies want to begin construction within months of announcing the location of a new facility. “Most companies we’re working with want to move quickly and be up and operational within 18 months,” says Seth Martindale, senior managing director for CBRE Consulting, who assists companies with site locations.
To meet this need for speed, sites should be able to bring utilities to a new facility by the time it is built. That means all environmental permits have been approved, grading completed, rights-of-way for utilities acquired, and the property is properly zoned. Sites need these items already in place to compete in today’s market.
Unfortunately, Virginia trails other states in site readiness, says Stephen Moret, president and CEO of the Virginia Economic Development Partnership (VEDP). “While we are one of the best states to do business, we very often underperform when it comes to attracting high-quality manufacturing projects,” he says. “The most common reason is the lack of a well-prepared site. It’s a very significant competitive challenge for Virginia.”
Virginia is especially deficient with mid- and large-scale, permit-ready sites, he says.
So, the state is making a major effort to improve the preparedness of potential sites of all sizes.
VEDP is working with the board of GO Virginia to address the “site-preparedness gap.” The first priority is to classify the commonwealth’s hundreds of sites and then develop programs to help address their deficiencies.
The commonwealth uses a five-tier system, developed by Timmons, to classify readiness through its Virginia Business Ready Sites Program.
Achieving Tier IV or Tier V status can drastically improve a site’s odds of winning a project, says Hines, who played a key role in developing the system.
When all other factors are considered equal, he says, Tier IV sites are 70 percent more likely to be chosen, while Tier V sites are more than 90 percent more likely to score projects.
Several developments are improving their readiness, but Virginia still has a long way to go, Moret says. “We’re definitely headed in the right direction, but I would say we have much more left to do.”
Going after mega-deals
Megasites can attract major investments.
In late 2017, Huntsville, Ala., won a big prize, a $1.6 billion Toyota-Mazda manufacturing facility expected to create 4,000 jobs at a 1,200-acre megasite. “That was a really big opportunity that Virginia never really got in the running for because, while we did have two or three sites that could work pretty well, they just weren’t ready enough to be competitive,” says Moret.
But while economic developers dream of snagging projects the size of Toyota-Mazda, most manufacturers need 200 or 300 acres at most.
Now armed with infrastructure certifications, Virginia’s megasites say they are getting more attention.
The Southern Virginia Mega Site at Berry Hill in Pittsylvania is Virginia’s largest at 3,500 acres, the equivalent of about 5.5 square miles. The site didn’t get much traction until the Danville-Pittsylvania Regional Industrial Authority agreed to grade a 166-acre lot to prep it for development. After the grading, the property was certified as a Tier IV site. “Up until then, we were just like any other industrial park anywhere in the Southeast,” says Matt Rowe, Pittsylvania’s economic development director. “It was a bunch of trees, and we’re just trying to sell them on their hopes and dreams and them having vision.”
Now, Rowe says, the park has drawn the attention of more than 10 credible prospects. They represent potential projects involving $100 million to $6 billion in investment that need anywhere from 200 to 2,000 acres.
The authority is working on two big infrastructure jobs to make the entire site ready for prospects. The tasks include building a connector road from an interchange off Route 58 and purchasing rights-of-way to supply the site with 200 megawatts of power. “Once we get these last two items ... I think we’re frankly going to be the best megasite in the South,” says Rowe.
Two businesses already have purchase agreements on sites in Berry Hill. Wood pellet manufacturer Enviva Development Holdings LLC signed an agreement for a 168-acre plot. In June, Enviva extended the agreement six months while it continues to evaluate the land. In September, the authority also signed an option agreement with Indevprop LLC, which is checking out a 149-acre property for an unnamed client.
Less than 25 miles to the west, Commonwealth Crossing Business Centre in Henry County also is getting looks from business prospects.
It took a decade to prepare the 720-acre megasite. Commonwealth Crossing was officially deemed “open for business” in September 2017. Getting a permit from the U.S. Army Corps of Engineers took an extra four years, and the site took more than $40 million to develop.
Last July, Press Glass, the largest glass manufacturer in Europe, said it would erect a 280,000-square-foot facility in the park that would employ 212. The company plans to start construction toward the end of this year with production beginning next year or early 2020.
The park has been well worth the wait and investment, says Mark Heath, president and CEO of the Martinsville-Henry County Economic Development Corp. “We have a lot more interest [in the area] now than before Commonwealth Crossing.”
So should we expect more announcements soon?
“I will guarantee you there will be more news, but I will not guarantee you when,” says Heath. “I’m confident that we will see more success at Commonwealth Crossing in the months and years to come.”
Other large sites in Virginia also are improving their odds with new readiness certifications.
In Isle of Wight County, officials hope the Tier IV certification of an 82-acre site will breathe new life into the Shirley T. Holland Intermodal Park, which includes 1,500 acres. The park already has more than 700 employees working at three major businesses: Cost Plus World Market, Safco Products and Keurig Green Mountain. But there have been no new tenants since 2011.
The 82-acre site, which is part of the intermodal park’s second phase, was officially deemed permit ready in October 2017. “It’s getting a lot of attention,” says Chris Morello, Isle of Wight’s economic development director. “We are very, very hopeful that we’ll be able to make an announcement in the near future.”
Now the county is considering upgrading a 25-acre site near the Keurig and Safco buildings. It also is re-evaluating the other 965 acres in the park to determine how much of the third phase of the project can be developed.
Certifications, however, don’t always mean success.
A private landowner in Mount Jackson had proposed a 700-acre megasite in Shenandoah County near Interstate 81. In 2015, the town’s planning commission rezoned 136 acres of the property for industrial use, and it was certified Tier IV. The landowner wanted to combine that property with an adjacent 575-acre site to create a megasite.
After several years without a buyer, the landowner asked the planning commission this summer to change the property’s zoning back to agricultural use because of its tax burden, says Jenna French, Shenandoah County’s director of tourism and economic development.
Meanwhile, most of the adjacent 575-acre site will be used for solar farms. “We are still marketing the property,” says French, “but we would need to go back through the process with the town council for rezoning it back to industrial should we have a potential prospect.”
Not everyone sees the benefits of the investments required by megasites.
In August 2017, former Gov. Terry McAuliffe announced plans to rezone a 1,750-acre Chesterfield County site with hopes of landing a prospect that would create 5,000 to 10,000 jobs.
Chesterfield residents living in subdivisions near the site were stunned. Largely because of grassroots opposition by these neighbors, the Chesterfield County Economic Development Authority had by May dropped plans to rezone the property for industrial use.
“We’ve got a lot of industrial property in Chesterfield that’s not being occupied,” says Mike Uzel, a Chesterfield real estate agent considered the de facto leader of residents fighting the project. “Why not concentrate on what we have and maybe attract smaller projects but still meaningful jobs rather than dropping the megasite in the middle of a residential area where it doesn’t belong?”
He also questions the premise behind waiting for a dream company, noting that several Virginia megasites have been unoccupied for years. “And if that dream company doesn’t come, then what? They could reduce those proffers and attract someone who’s not so attractive to the community.”
But while the Chesterfield EDA withdrew the rezoning request, it encouraged the board of supervisors to buy the property and discuss its possible uses with the community. The county is still pursuing construction of a road that would serve the site.
Chesterfield supervisors are still evaluating the property and its future use, a spokeswoman says.
Louisa County also is pondering the creation of a 1,430-acre megasite. The county has an option to purchase the property where it is conducting environmental studies.
If Louisa moves forward, it would rezone the land and begin developing a portion of it into a Tier IV site. The property would be developed in phases over 25 years.
“There’s a need from market demand, and that’s why we want to develop the sites to as close to shovel ready as possible to help fill that void,” says Andy Wade, Louisa’s economic development director.
Initial discussions about the site have met some resistance, but Louisa is finishing its studies and holding public meetings. Wade says the megasite would diversify the county’s tax base and support its expected growth. “We’ve got to make informed, responsible decisions on how to combat a projected 10,000 population growth over the next 20 years,” says Wade. “I feel strongly this is a way to do that, with the revenues generated from a development such as this.”
Chesapeake also is considering a megasite.
The city is debating whether to pursue the first phase of a proposed 4,000-acre site located on the North Carolina line. For the project to move forward, the city would need to amend its comprehensive plan and rezone the property.
While other Virginia localities embark on megasite projects, Greensville’s Slate is confident that its investments in MAMaC will pay off soon.
Now that rights-of-way have been obtained to supply the site with electricity and natural gas, she believes MAMaC is ready for a starring role. “We’ve seen additional interest,” she says.
During the past few years, several business prospects have given MAMaC serious looks.
Among the past five prospects, the average potential investment was $1.3 billion and the average potential employment was 1,200 jobs, she says.
Only one of those prospects needed more than 500 acres at the 1,600-acre site. “So, we could feasibly put three businesses in that park that all have toward a $1 billion investment and 1,000 jobs each. It’s amazing what we have seen going through this process as far as clients,” says Slate.
Fingers crossed.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/2SG_7775x.pngSonu Singh. Photo by Stephen Gosling
IT company serves D.C. agencies from Blacksburg
http://www.virginiabusiness.com/news/article/it-company-serves-d.c.-agencies-from-blacksburg#When:08:00:00ZBy 2005, Sonu Singh had built and sold two IT consulting companies, but he was convinced there was a better way to handle IT. The new owners of his old company, however, didn’t share his point of view.
“I kept telling them the business model was going to change,” he says. “They kept looking at me like I was a complete dope.
“I finally said, ‘I’ve just got to stop talking about it. I’ve got to pull a team together and go do it.’”
So, in 2009, the 1901 Group moved into about 800 square feet of the Virginia Tech Corporate Research Center (CRC). Singh says 170 of the company’s 250 employees work at the CRC now and he expects the Blacksburg workforce to grow to 250 within a year.
The company — whose customers range from the U.S. Department of Agriculture to the Army to the Small Business Administration — is talking with the CRC about building a new facility to accommodate that growth.
Singh realized IT equipment and infrastructure had changed drastically, but the management model hadn’t changed in 30 years, particularly in government circles. The government was still contracting with companies that put employees on-site to manage systems. The 1901 Group offered a different approach.
“We don’t sell bodies,” Singh says. “We sell services.”
About 80 percent of those services, he says, can be handled remotely — for 30 percent less than they would cost in D.C.
At first, convincing the federal government that its business and data can be securely managed from Blacksburg was a hard sell, Singh says. But, he adds, potential customers are beginning to understand that security has less to do with proximity than with infrastructure, networks and access control.
Edward Snowden, Singh points out, was a contractor working at a government site when he downloaded documents that revealed a secret National Security Agency surveillance program.
Singh grew up in Blacksburg, graduated from Virginia Tech and calls himself “a giant Hokie football fan.” But that’s not all that drew 1901 to the CRC.
“We wanted to locate the business in an area that had access to talent, a good quality of life and a moderate cost of living,” Singh says, pointing out that with Tech, Radford University and New River Community College, about 50,000 college students are studying within 15 miles of the 1901 Group’s CRC office. “There’s massive untapped talent here.”
There’s massive opportunity for growth, too. The federal government spends $100 billion a year on IT, Singh says. “All we have to do is bring 1 percent to Blacksburg, and we’ll be happy.”2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Virginia_Business_McGlothlin_01.pngPhoto by Earl Neikirk
Former classmates want to turn Bristol Mall into a casino resort
http://www.virginiabusiness.com/news/article/former-classmates-want-to-turn-bristol-mall-into-a-casino-resort#When:08:00:00ZThe vacant shopping mall’s electronic sign blares a new message: “We’re betting on Bristol!”
Two former high school classmates hope to transform the former Bristol Mall into a casino resort. Jim McGlothlin, CEO of The United Co., and Clyde Stacy, the president of Par Ventures LLC, see their $150 million privately financed venture as an economic boost for their home on the Tennessee line. Bristol has been hit hard by the regional decline of the coal industry and, more recently, the loss of Bristol Compressors, which announced in July it was closing its local plant, eliminating 468 jobs.
McGlothlin believes the casino is “a mix of great opportunity and fun,” but would still preserve a healthy, law-abiding atmosphere.
McGlothlin and Stacy’s bet may be risky. Long resistant to casino gambling, Virginia’s General Assembly must first legalize it. And McGlothlin wants that to happen in the 2019 session before Virginia’s neighboring states license casinos. McGlothlin’s team expects a casino bill to be introduced in the 2019 session and has been in conversations with legislators about sponsoring legislation.
Virginia’s position on gambling shifted this year. State lawmakers legalized historical horse racing, wagering in which players places bet on past races using devices similar to slot machines.
“That was done to help the equestrian groups. Surely you would want to help a struggling city,” McGlothlin says.
Republican state Sen. Bill Carrico, whose district includes Bristol, opposed the horse-betting measure.
“I’m not committed one way or another to the casino,” Carrico says. “Even if legislation goes through, Bristol people should have the final say through a public referendum.”
Plans call for a 100,000-square-foot casino, a hotel, restaurants, shops, conference center, go-kart track, water park and live entertainment venue. A McGlothlin-commissioned economic study expects the development to create 2,000 jobs and $567 million in local and regional economic impact.
“If we can’t attract high-tech jobs, then we have to look at what is being proposed,” Vice Mayor Kevin Wingard says. “I believe this project will put Bristol and Southwest Virginia on the map and turn things around.”
For critics, the casino is seen as a bad bet that could lead to gambling addiction, crime and suicide.
“You’re doing this on the backs of people who will lose $30,000 and $40,000 they don’t have,” says the Rev. Dewey Williams of Belle Meadows Baptist Church in Bristol. 2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/IMG_9378.pngLaura Yoder says Eastern Mennonite University sees nursing as a calling. Photo courtesy Eastern Mennonite University
Eastern Mennonite University expands nursing program
http://www.virginiabusiness.com/news/article/eastern-mennonite-university-expands-nursing-program#When:08:00:00ZThe Bureau of Labor Statistics estimates the U.S. needs more than a million new nurses by 2024. The American Association of Colleges of Nursing reports that, in 2016, nursing schools turned away more than 64,000 qualified applicants because of lack of space.
Eastern Mennonite University in Harrisonburg has firsthand knowledge of that problem. “We always have a wait list of qualified people who are unable to get into our program,” says Associate Professor Laura Yoder.
That’s why EMU has expanded and upgraded its Lisa Haverstick Memorial Nursing Laboratory, allowing the school to admit 16 more students each academic year. The move will increase the typical graduating class for its traditional undergraduate nursing program from 48 to 64 students.
EMU, which began offering nursing degrees in 1966, provides several paths to nursing careers. They include undergraduate and master’s nursing degree programs and a doctoral program in nursing practice.
The university sees nursing as a calling. “We are a Christian university, so we do have a philosophy of nursing that we call the sacred covenant model for nursing,” Yoder says.
EMU considers the nurse-patient relationship “something that’s sacred and holy, built on trust and respect. The nurse, in practicing nursing, is responding to a call, a sacred call … Students don’t need to be Christian to be at EMU, but we always invite students to think about how their faith impacts what they are doing as a nurse, how they do nursing,” Yoder says.
“Beyond that, we’re very concerned about values and what it means to think about the common good, and doing health care in a way that serves those who are in need and have difficulty accessing care. Many EMU nursing students serve low-income patients, refugees and immigrants, Yoder says.
EMU strives for a sacred covenant relationship between faculty and students as well as graduates and their patients, Yoder says. “We want to make sure students feel like they’re well known by their professors and that they can see them as a mentor.”
The expansion and upgrades at the nursing school cost approximately $245,000, according to Kirk Shisler, the university’s vice president for advancement. He says EMU has raised more than $90,000 and expects to raise the rest by the end of this year.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/CVA_Tedesco.pngMaria Tedesco. Photo courtesy Union Bankshares
Bank’s first female president advocates industry diversity
http://www.virginiabusiness.com/news/article/banks-first-female-president-advocates-industry-diversity#When:08:00:00ZMaria Tedesco says her banking career grew out of her family’s business in Boston.
“When you run a family restaurant, you learn all about numbers and business as well as taking care of the customer,” the Boston native says. The family’s two restaurants taught her “life lessons — the rewards of hard work and persistence. It prepared me for banking, for serving customers and for leading teams.”
In September, Tedesco was named president of Richmond-based Union Bank & Trust, the first woman to hold that position in the financial institution’s 116-year history.
Union, which had total assets of more than $13 billion at the end of June, is the largest regional bank based in Virginia. In early October, the bank’s parent company, Union Bankshares Corp., announced plans to acquire Reston-based Access National Bank in a deal valued at $610 million.
John Asbury, president and CEO of Union Bankshares, says Tedesco is an industry thought leader who fits the bank’s culture. “Our backgrounds are complementary, and we are going to be quite the team,” he says.
Tedesco, 58, was chief operating officer for retail at Chicago-based BMO Harris Bank. During her career, she also served as senior executive vice president and managing director of the retail bank at Santander Bank in Boston, U.S. headquarters of a bank based in Spain. She spent 19 years at Rhode Island-based Citizens Financial Group, Inc. where she was group executive vice president and executive director of retail banking and business banking.
Tedesco was named one of the most powerful women in banking, a team award, by American Banker in 2012 and 2017. In 2015, the banking publication also named her one of the most powerful women to watch.
When she became a banker in 1986 there were few female role models, Tedesco says. “That was my biggest challenge. I am lucky I had the opportunity to have mentors that took an interest in me and believed in me. I am very grateful for the folks that helped instill confidence and a sense of purpose.”
While there are now more women in banking, it’s “still not good enough. We’ve made progress, but we have a long way to go,” she says, noting that diversity is a priority at Union. “It was important for me to have women around me that would support me and help me.”
Tedesco believes in strong mentors and guiding principles. “I’m a mom with two adult daughters, and I say this to them, ‘I live my life by setting goals, going after them, speaking up, staying resilient and being good to others.’ ”
In her new role, Tedesco will oversee the bank’s 140 locations – 133 Union offices in Virginia and Maryland and seven Xenith Bank offices in North Carolina. Union acquired Richmond-based Xenith earlier this year.
Tedesco says she was attracted to Union because it checked all the boxes. “I felt like I had the opportunity to make a difference.”
Her goal is to continue the bank’s growth. “We are going to leverage what Union has built and deliver on promises to customers,” she says. “I am thrilled that the culture is very embedded in the fact that Union customers come first.”2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/ref.pngPhoto courtesy The Pinkston Group
Springfield complex creates venues for a variety of sports
http://www.virginiabusiness.com/news/article/springfield-complex-creates-venues-for-a-variety-of-sports#When:08:00:00ZMore than 7,000 people, including Alex Ovechkin, captain of the NHL champion Washington Capitals, turned out for the September grand opening of The St. James in Springfield.
The turnout bodes well for the 450,000-square-foot sports and wellness complex, which expects to employ more than 300 people during its first year.
The 20-acre campus is the first project of co-founders Kendrick Ashton and Craig Dixon. They plan to open a similar complex in the Chicago suburbs in 2021. “We are actively pursuing expansion across the country,” says Dixon.
The cost of the Springfield complex wasn’t disclosed. Its financial backers include Cain International, a real estate investment firm.
The St. James was inspired by childhood experiences of Ashton and Dixon who were involved in a variety of sports. “We had a clear recollection of times in the car just trying to get from place to place,” Dixon says.
The founders wanted to create a destination that would consolidate a number of sports venues. “We started working on the idea in earnest in 2013,” says Ashton “We tried to approach the business in a very analytical way.”
They decided the Northern Virginia area was an “extraordinary market to build a destination based on people passionate about being active,” Ashton says. “There was a lack of supply of comparable offerings in the region. The cherry on top was the fact that Craig and I grew up in this region. We have deep and broad networks here that would help us be successful.”
St. James’ facilities range from two ice rinks to a 10,000-square-foot gymnastics center, a soccer field, an Olympic-size swimming pool and a 50,000-square-foot health club.
An active-entertainment center has a 6,000-square-foot water park that opened in September. Opening in November are a 25,000-square-foot area housing obstacle courses, virtual-reality studios and party rooms plus a retail area with a restaurant and café.
The company’s health-care partner, MedStar, is scheduled to open an on-site health and sports medicine center next spring. “We think we have something for everybody,” Ashton says.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/Willoughby-9886.pngPhoto by Mark Rhodes
Developer buys land that state wants for transportation project
http://www.virginiabusiness.com/news/article/developer-buys-land-that-state-wants-for-transportation-project#When:08:00:00ZEditor’s note: A previous version of this story appeared on VirginiaBusiness.com on Sept. 26.
A waterfront Norfolk condominium proposal could face a roadblock from a state transportation project intended to ease congestion in Hampton Roads.
WF Willoughby Spit LLC, an affiliate of Alabama-based WeldenField Development, bought 14 acres at the end of Norfolk’s Willoughby neighborhood for $4 million on Sept. 4.
The site, which includes two parcels recently assessed at $6.3 million, was purchased from REDUS VA Housing LLC, a Wells Fargo-controlled entity.
Brian Rowe, WeldenField’s Virginia partner, says the firm plans to develop a 333-unit condominium project that will be called Admiral’s Cove at Willoughby.
WeldenField’s plans will sound familiar to people within Norfolk’s real estate scene. The proposal is roughly the same as one made about 14 years ago for a development known as the Spectrum at Willoughby Point.
Those plans were shelved when the developer was beset by financial woes during the recession, and the property went back to its lender, says Robert Thornton, a broker with the commercial real estate firm Cushman & Wakefield|Thalhimer who represented Wells Fargo in the recent sale. Thornton says WeldenField sent its first letter of intent to Wells Fargo around 2012.
State transportation planners have their own ideas for the site.
In expanding the Hampton Roads Bridge-Tunnel, the Virginia Department of Transportation plans to buy the two parcels for a construction staging area, according to Les Griggs of VDOT. Asked why VDOT couldn’t lease the property during the project, Griggs says that move isn’t an option since “the terrain of the property will likely be altered.”
Virginia law says the state can’t try to buy an entire property with an offer lower than its appraised or assessed value unless something has happened to make the property worth less than its assessment. That means if the state plans to buy the 14-acre site on Willoughby Spit, it would have to make an offer of at least $6.3 million, or $2.3 million more than what Wells Fargo sold the property for.
The city of Norfolk says it has adopted new flood maps and storm-water regulations since 2004. A city spokeswoman says the new condo plans would have to be approved for WeldenField’s proposal to move forward.
Grady Palmer, a lawyer for WeldenField, disagrees with the city’s position that the old site plan needs modification. He says WeldenField plans to apply for building permits if it receives no offer from VDOT.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/2014IMSA__4091.png
VIR is optimistic about solution for faulty water system
http://www.virginiabusiness.com/news/article/vir-is-optimistic-about-solution-for-faulty-water-system#When:08:00:00ZProblems with VIRginia International Raceway’s water system have local leaders pressing for a long-term solution for the motorsports complex, which has a major impact on the local economy.
The Halifax County Service Authority owns and operates VIR’s troubled water system. The system once used five wells, but three have been disconnected and taken out of service because of unsafe levels of chemicals. That has left VIR with a well that runs consistently and another one — called well No. 5 — that does so off and on along with a 250,000-gallon storage tank.
“Well No. 5 has elevated levels of fluoride and appears to be seasonal, perhaps due to fluctuating aquifer water levels,” says Mark Estes of the Halifax County Service Authority. “We only run well No. 5 when fluoride levels are low or non-detectable.”
The situation is cause for anxiety for Connie Nyholm, the CEO of VIR. She says the motorsports complex, an economic player in Southern Virginia, can do only so much as a customer of the water supplier, but she is hopeful a solution is on the way. In May, a report commissioned by VIR found that the motorsports complex contributes $237 million annually to the state economy and $197 million locally.
“We’re still in the optimism phase, not the do-or-die phase,” Nyholm says.
Local leaders are exploring two paths to solve VIR’s water troubles, and the sticking point is money.
The preferred, but more expensive, option is to connect VIR to the Pittsylvania County Service Authority water line just east of Danville at a cost of $3.8 million. Estes says officials in Danville, Pittsylvania and Halifax are working to get federal, state and local money to pay for the connection.
The less expensive alternative is to dig more wells, possibly with a treatment system, for around $750,000. Estes estimates this option would buy VIR 10 years for its water system.
Nyholm says that, because of the water issues, VIR has focused on sustaining itself rather than expanding. A new water line would help the business focus on growth. If a new line doesn’t come together, Nyholm says, she’s hopeful the less expensive option will.
“The shorter-term solution of wells and a filtration system could be an interim solution,” she says. “That’s why I still sleep at night.”2018-10-30T08:00:00+00:00
People - November 2018
Loretta H. Harris has been appointed by Clarksville Town Council to take over the seat vacated by Kristy Somerville-Midgette, who departed after being named Brunswick County’s school superintendent. Harris has owned and operated several businesses. (SoVaNow.com)
Matt Leonard, executive director of the Halifax County Industrial Development Authority, plans to leave his position Nov. 1 in a decision that the IDA described as “mutually agreed” upon. Leonard took over the reins at the IDA in 2012. (News & Record)
Danville Community College President Bruce R. Scism will retire at the end of the year. Scism became the fifth president of DCC in 2013. (Danville Register & Bee)
A Virginia Beach-based Realtor has been named Realtor of the Year by the Virginia Association of Realtors. Deborah Baisden is a Realtor with Berkshire Hathaway HomeServices Towne Realty’s Lynnhaven office. (VirginiaBusiness.com)
Christopher Morello has been named economic development director for Isle of Wight County. He was the county’s assistant director of economic development. (VirginiaBusiness.com)
Charles E. “Chuck” Rigney Sr. has been named director of economic development for Hampton. Rigney was named Norfolk’s economic development director in 2015, but he became assistant director in March when the city changed its economic development strategy to focus on redevelopment of public housing complexes. (VirginiaBusiness.com)
Charlie Watkins is president and CEO of Landmark Media Enterprises and Dominion Enterprises in Norfolk. He will remain chairman of Expedient, Landmark’s data center and cloud computing company. (The Virginian-Pilot)
Lorraine Wagner has been named vice president of operations for Stihl Inc.’s U.S. headquarters in Virginia Beach. She was director of manufacturing for the company. (VirginiaBusiness.com)
Darren Conner has been promoted to president of Dewberry Engineers Inc., the Fairfax-based firm’s engineering practice. He previously was president of the firm’s southeast division, directing approximately 500 people in 24 offices. Conner succeeds Dan M. Pleasant in the new role. Pleasant will continue as chief operating officer of Dewberry. (VirginiaBusiness.com)
Forbes magazine’s annual list of America’s 400 wealthiest people included four Virginians. The richest Virginian on the list was Jacqueline Mars with a net worth of $24 billion. Her fortune stems from her ownership of an estimated one third of McLean-based Mars Inc., the world’s largest candy maker. Mars’ wealth made her No. 18 on Forbes’ list. (VirginiaBusiness.com)
Adam Rudo is the new senior vice president and general manager at Fairfax-based ManTech International Corp. He previously led the intelligence portfolio for General Dynamics Information Technology after its blockbuster acquisition of CSRA Inc. but resigned months later. (Washington Business Journal)
Matthew L. Austin has been named a managing director at Keiter Advisors, the merger and acquisition specialist group at Glen Allen-based CPA firm Keiter. Before joining Keiter Advisors, he was the leader of the Analytics and Financial Planning & Analysis team at NewMarket Corp. (News release)
Liberty University has named Mark Horstemeyer dean of its School of Engineering. Horstemeyer comes to Liberty from Mississippi State University, where he taught computational manufacturing and design as a Giles Distinguished Professor. He also served as chair for computational solid mechanics in the university’s Center for Advanced Vehicular Systems. (News release)
Thomas A. Lisk has joined Cozen O’Connor Public Strategies as a managing director of its Public Strategies Group in Richmond. Lisk previously worked for Eckert Seamans, where he represented a wide range of businesses in regulatory matters. (News release)
Stone Brewing Co. has hired Sean Monahan as its Richmond-based chief operations officer and Mark Fabrizio as director of East Coast brewing operations. Monahan previously worked for the management consulting firm A.T. Kearney. Fabrizio managed operations and quality control for North American Breweries based in Rochester, N.Y. (Richmond Times-Dispatch)
Katherine O’Donnell has been named executive vice president at Richmond Region Tourism, overseeing the sales and services and community relations departments. She was vice president over community relations. Also, Jennifer Hendren’s title was changed from vice president of marketing to chief marketing officer. (Richmond Times-Dispatch)
Courtney Paulk has become the first female president of the board of directors at the law firm Hirschler Fleischer. Paulk, who leads the firm’s litigation section, succeeds James L. Weinberg. The firm also elected Andrew Lohmann as executive vice president, succeeding Michael H. Terry. (Richmond Times-Dispatch)
Matthew Regan has been named president of Wealthcare Capital Management LLC, a Richmond-based wealth-management advisory firm. He was chief operating officer at Wescott Financial Advisory Group. (Richmond Times-Dispatch)
Vicki O. Tucker of Hunton Andrews Kurth LLP in Richmond has begun a one-year term as chair of the American Bar Association’s Business Law Section. The Business Law Section is one of the largest ABA groups, with nearly 50,000 members and approximately 60 committees. (News release)
Jason Aikens has been appointed to the board of directors of Strasburg-based First Bank. Aikens, a graduate of James Madison University, is vice president and partner of the Aikens Group, a real estate firm based in Winchester. (The Winchester Star)
William C. “Bill” Daniel was named chairman of the Lord Fairfax Community College Board. Daniel, the coordinator of data management for Frederick County Public Schools, has been a Clarke County representative to the board since 2012. He is a 1991 graduate of LFCC and taught for the college’s adult education program after graduating from the University of Virginia in 1994 with a bachelor of science degree in math and a master’s degree in teaching. (News release)
Waynesboro Director of Economic Development and Tourism Greg Hitchin was named on the 2018 list of North America’s Top 50 Economic Developers. (News Leader)
The Virginia Bar Association recently awarded Phillip C. Stone of Harrisonburg its William B. Spong Jr. Professionalism Award. Stone, the award’s 12th recipient, is a VBA Life Member who joined it in 1970 and served as its 1997 president. He was president of Bridgewater College for 16 years and Sweet Briar College for two. With three of his children, he formed the Stone Law Group PLC in Harrisonburg. (News release)
Roy Evans recently celebrated 30 years as commonwealth’s attorney for Smyth County. The Groseclose native took the job as the county’s prosecutor in 1988, when it was a part-time job, and his predecessor, Danny Lowe, decided not to seek re-election. In August, Evans also was elected president of the Virginia Association of Commonwealth’s Attorneys. (SWVAToday.com)
Noted Appalachian chef Travis Milton will no longer be involved with the Sessions Hotel in Bristol. Milton confirmed in October that he and Creative Boutique Hotels jointly agreed he will step away from the downtown project, which includes plans for two restaurants. First announced in 2013, the Sessions is now expected to open in August. “I’ve been working about 100 hours a week for, like, 18 years now, and it was really starting to take a toll on me,” Milton said. (Bristol Herald Courier)
ROANOKE/NEW RIVER VALLEY
Retired Pulaski County administrator Peter Huber is back in the municipality’s fold to take on the newly formed role of “New Community Workforce Innovation Adviser.” Huber will be working with the Board of Supervisors and the county’s economic development authority. Huber retired as county administrator in January 2017 and was succeeded by Jonathan Sweet. Huber will receive a yearlong $26,000 stipend to cover his functions and associated expenses such as travel, Sweet said. (The Roanoke Times)
Roanoke businessman Maury Strauss has made a $1 million gift to the Virginia Tech Carilion Research Institute. The donation will be used to endow the public lecture series. Strauss is the founder of the Strauss Development Corp., a real estate development firm. (The Roanoke Times)2018-10-30T08:00:00+00:00
For the Record - November 2018
The parent company of Danville-based American National Bank and Trust Co. has struck a deal to buy Roanoke-based HomeTown Bank and its parent company. American National, with 24 bank offices, will acquire HomeTown, which has six offices in the Roanoke and New River valleys, in a $95.6 million deal scheduled to close early next year. (Danville Register & Bee)
The Henrietta Lacks Commission visited South Boston as it continues planning for a cancer research and treatment center in Halifax County. Lacks was a one-time Clover resident whose death from cervical cancer in 1951 unexpectedly opened multiple paths of medical research. The commission was created by the General Assembly to oversee development of the Henrietta Lacks Life Science Center, envisioned as a $50 million, 200,000-square-foot medical research and treatment facility. (News & Record)
Two years after it announced plans for a $9.5 million investment and 35 new jobs, the Japanese company Kyocera SGS opened its facility in the Cyber Park in Danville. The Kyocera SGS Tech Hub LLC includes a 30,000-square-foot facility across the street from the Institute for Advanced Learning and Research. The company, which produces solid carbide rotary tools, had been operating in the nearby Gene Haas Center for Integrated Machining. (Danville Register & Bee)
The Mecklenburg County Board of Supervisors agreed to send a letter of support for the VCU-Community Memorial Hospital’s request for $50,000 in Tobacco Commission grant funding to study the feasibility of turning the former hospital site in South Hill into an emergency preparedness training facility. (SoVaNow.com)
It seems the revitalization efforts in the River District, as well as Danville’s support for the historic tax credits, has caught the attention of a group that knows history. Richmond-based Preservation Virginia, a group established in 1889 that owns Historic Jamestowne in a public-private partnership, chose the city as the spot for its annual, two-day conference in October. “We thought about having it in Danville for the last couple of years because of the revitalization that’s happened in town in the River District,” said Sonja Ingram, preservation field services manager for the group. The group is a nonprofit that saves historic sites throughout the state. (Danville Register & Bee)
A total of 2,500 temporary jobs will become available at the Radial call centers in Martinsville in coming months. The company announced plans to add positions as it prepares for the Christmas season. Typically the company adds about 2,000 temporary positions. However, with the number of packages expected to rise this season, as well as residents wanting their purchases delivered quicker, Radial officials said it was time to increase the number of workers at the facility. (Martinsville Bulletin)
The president of a Virginia seafood company pleaded guilty in federal court in September to netting millions by fraudulently labeling hundreds of thousands of pounds of recalled, old or returned foreign crabmeat as fresh Chesapeake blue crab, according to court records. Federal prosecutors in Virginia say Casey’s Seafood Inc. of Newport News mixed discount “distressed” crabmeat from Indonesia, Brazil and other locales with Chesapeake blue crab and labeled it as a “Product of the USA.” Casey’s sold nearly 360,000 pounds from 2012 to 2015, but the fraud may have begun as early as 2010, according to court documents. The crab was worth $4.3 million at wholesale prices and was sold in D.C., Maryland, Virginia and other states. (The Washington Post)
Chesapeake-based Dollar Tree is moving 700 jobs from North Carolina to Virginia. Dollar Tree announced in September it is closing Family Dollar’s Matthews, N.C.-based headquarters next fall. This will result in the transition of 700 employees to its new Summit Pointe headquarters, a 12-story office building in Chesapeake’s Greenbrier area. Two hundred jobs will be eliminated in Matthews because of the closing of Family Dollar’s headquarters, but a distribution center there will remain open. Dollar Tree bought Family Dollar more than three years ago for about $9.1 billion. (VirginiaBusiness.com)
Hampton Roads may have finally turned the corner after the debilitating recession of 10 years ago and sequestration that cut Defense Department spending starting in 2013. For the first time, the region had more jobs in 2017 than it did at its pre-recession height in mid-2007. And for the first time ever, the region’s gross domestic product, not adjusted for inflation, is expected to break $100 billion, according to the latest State of the Region report from Old Dominion University economists released in early October. (The Virginian-Pilot)
The list of startup businesses inside Selden Market is growing again. The Downtown Norfolk Council announced three new tenants in the retail incubator at 208 E. Main St.: Slide Thru #FAM, KOR Vintage and Pure Lagos. Slide Thru is a restaurant featuring a mix of Filipino and American fare. KOR Vintage is a reseller of vintage and transformed apparel, accessories and home décor. Pure Lagos is an African art gallery and boutique. (Inside Business)
Nearly 10 months after learning that Amazon was searching for a new location for its second headquarters, a geographical website has predicted that the best location would be in Oatlands in Loudoun County. Reasons for Loudoun County’s selection included its proximity to Washington and location in a politically friendly state. (WUSA9)
Scottsdale, Ariz.-based Assisted Living Locators has launched a franchise in Fredericksburg. Franchise owners Eunice and Kwesi Thompson offer seniors and their families advice at no cost on short- and long-term care options, including in-home care, independent living, assisted living, memory care and retirement apartments throughout the greater Fredericksburg and central Virginia area. The franchise generates revenue from the referral fees paid by the facilities. (The Free Lance-Star)
Health-care information technology company Cerner Corp. will locate in the same Arlington building as Nestlé and its subsidiary, Gerber. North Kansas City, Mo.-based Cerner will lease 38,075 square feet of space at 1812 N. Moore St. in the Rosslyn area of Arlington. This will be the company’s first Virginia office. The company did not provide a timeline or number of employees that will occupy the space. (VirginiaBusiness.com)
McLean-based GTT Communications Inc., a major cloud networking provider, has acquired Access Point, a North Carolina-based communication services company. GTT paid $40 million in the Access Point acquisition. That amount includes $35 million in cash and 115,194 GTT shares valued at $5 million. GTT said Access Point, which has its headquarters in Cary, N.C., brings a roster of strategic U.S. clients, improving GTT’s presence in a variety of industries, including retail, manufacturing and energy. GTT also said Access Point’s broadband, internet and voice capabilities would enhance GTT’s market position in cloud networking. (VirginiaBusiness.com)
Solar power generation is coming to Culpeper. The county’s Board of Supervisors approved a conditional use permit request from Florida-based NextEra Energy Resources to operate a utility scale solar farm on up to 1,000 acres near Stevensburg. NextEra, which bills itself as the world’s largest generator of renewable energy, recently acquired the project from Texas-based Greenwood Energy. (Culpeper Star-Exponent)
Its completion is five years away at the earliest, but planning efforts continue for construction of a new Virginia Railway Express station in Crystal City. Despite the progress, “We have a long way to go,” acknowledged Sonali Soneji, VRE’s planning program administrator, in September. There is no funding yet identified to construct the station, but planning dollars are in hand and the concept design has been completed. The existing Crystal City platform is 400 feet long and serves one track. Officials aim to provide a two-track facility (with boarding in the middle) with longer platforms to handle 10-car trains, up from a maximum of eight cars today. (Inside NOVA)
Henrico County-based Altria Group Inc., the maker of Marlboro cigarettes, was in talks about a stake in Canadian cannabis producer Aphria Inc., the Globe and Mail reported in early October citing multiple sources. Details of the investment were still being finalized though Altria has expressed interest in buying a minority stake in Aphria with the intention of eventually holding a majority, the report said. Sales of recreational marijuana became legal in Canada on Oct. 17. Altria and Aphria were not available for comment. (Reuters)
A landmark property, with about 150 years of history in the Lowesville community, is targeted to become a bed-and-breakfast and venue for weddings and special events. The Amherst County Planning Commission unanimously voted in September to recommend approval of a special exception request allowing the building formerly known as the Hite Store to be used for overnight stays and gatherings. The home, built around 1869, is located on seven acres with a portion fronting the Piney River. (Amherst New Era-Progress)
Recommendations from county staff to designate two areas near Forest as Urban Development Areas (UDAs) were denied by the Bedford County Board of Supervisors in September after residents raised concerns about development in Forest. The board voted 6-0 to prevent two areas at either end of Thomas Jefferson Road near Forest and New London from being designated as UDAs in Bedford County’s Comprehensive Plan. (The News & Advance)
The Bon Secours Richmond Health System will raze one of two Colonial Revival buildings at Richmond’s former Westhampton School to accommodate a $53 million mixed-use development on the property in the city’s West End, according to preliminary plans unveiled in September. The proposed plans — including a previously announced medical office building, two new mixed-use buildings and a parking deck — are projected to generate $524,000 in new real estate taxes for the city, but come at the expense of the majority of the structural footprint of the school, built in 1930. The remaining, easternmost portion of the school, which was built in 1917 and played an important role in the desegregation of public schools in Virginia, will serve as office space. (Richmond Times-Dispatch)
CFA Institute, one of Charlottesville’s largest employers, eliminated 31 positions in September — the majority of which were local cuts. The financial industry credentialing organization, which employs more than 600 people in seven offices around the world, said the cuts came after “a strategic review” to accommodate its business growth and “strategic priorities.” The impact of the cuts is offset by 39 newly created positions, according to a company spokeswoman. (The Daily Progress)
Facebook expects to break ground early next year on the second phase of its eastern Henrico County data center development, which will total more than 2 million square feet when completed in late 2020, the company said in September. As the first phase of the project in White Oak Technology Park nears completion, the social media giant said it will invest an additional $750 million to expand the data center complex it launched last year with a $1 billion investment. (Richmond Times-Dispatch)
The Lynchburg Office of Economic Development and Tourism presented its Year in Review in late September. The department engaged residents, business executives, community leaders and elected officials to create a five-year comprehensive plan, which was released earlier in the month. The population of Lynchburg in 2017 was 80,380, a 6.4 percent increase since 2010. Of individuals ages 25 to 64 in the city, 34.5 percent have a bachelor’s degree or higher, compared with the 31.8 percent national average. (The News & Advance)
Markel Ventures, the investment arm of Henrico County-based specialty insurer Markel Corp., is buying a majority ownership stake in the Brahmin leather handbags and accessories business. Markel and Massachusetts-based Brahmin announced the deal late in September. Financial terms were not disclosed. The deal is expected to close in the fourth quarter. Brahmin, a family-owned business, sells its products at its own stores — it has six retail stores and four outlet locations — as well as through online sales and at department and specialty stores, including Nordstrom, Dillard’s and Macy’s. (Richmond Times-Dispatch)
Goochland County-based Performance Food Group Co. has agreed to pay $599,989 in back wages to settle findings that the company discriminated against women and African-Americans in hiring for some warehouse jobs. A review by the U.S. Department of Labor Office of Federal Contract Compliance Programs found hiring discrimination violations at four Performance Food Group facilities in Florence, S.C.; Hickory, N.C.; Batesville, Miss.; and Lebanon, Tenn. Publicly traded PFG is one of the nation’s largest food service companies, supplying food and food products to independent and chain restaurants such as Red Lobster and Outback Steakhouse, hospitals, retailers, schools, movie theaters, hotels and others. (Richmond Times-Dispatch)
The Virginia Economic Development Partnership may have reached a dead end in its long-running quest to recover $1.4 million lost on a failed Appomattox business deal. In September, the Virginia Supreme Court declined to revisit a failed lawsuit seeking damages for the lost taxpayer money. The partnership also has asked the Virginia attorney general to attempt to recover a state grant given to Lindenburg Industry, but that office hasn’t yet acted. Lindenburg agreed to create a factory in Appomattox to manufacture catalytic converters and create 349 jobs in return for state incentives. (The Roanoke Times)
Christendom College in Front Royal has exceeded its $40 million fundraising campaign. The college raised more than $45 million. The campaign, titled “A Call to Greatness,” was publicly announced two years ago, with the aim to complete the effort to raise $40 million by the end of the college’s 40th anniversary celebrations in 2018 — the largest campaign in the college’s history. The college met and exceeded its three campaign goals: to raise funds for the Christ the King Chapel Project, double the endowment, and meet the college’s increasing annual fund needs due to student enrollment growth during the life of the campaign. (News release)
Direct Title Solutions in Winchester continues to grow. The real-estate settlement company at 12 N. Braddock St. has expanded into an adjoining building at 14 N. Braddock St., giving it more room to perform title and closing services for residential and commercial property transfers. Direct Title Solutions started in 2001 as a two-employee company working out of a basement. Today, 25 people work for the firm to provide title histories and recordings nationwide and real-estate closing services in Virginia, West Virginia and Maryland. (The Winchester Star)
Lord Fairfax Community College is expanding its access to training for heavy equipment operators, a course of study that was the first of its kind in the state when it began a year ago. The college will partner with two other colleges to provide greater access to training for heavy-equipment operators. A $4 million expenditure by the 23-member Virginia Community Colleges System is making the partnership possible. The money will be spent over two years to support curriculum development and accelerate workforce training in the fields of heavy construction and utility-scale solar energy. It is projected $1.4 million will go to the expansion of the heavy equipment operator program. Lord Fairfax Community College is joining with Piedmont Virginia and Germanna community colleges to develop heavy equipment operator statewide training. (The Winchester Star)
Mount Jackson Town Council members have unanimously approved the application to expand a solar farm off Turkey Knob Road by an additional 320 acres. Council members approved the 160-acre Mount Jackson I, the first of three projects that make up the farm, last year. Cypress Creek Renewables took over the project from Virginia Solar LLC in May and plans on breaking ground on the first phase next year. Despite the fact that projects II and III are on land adjacent to the first project underway, the permitting process starts back at square one. (Northern Virginia Daily)
State Street in Bristol, Tenn., and Bristol, Va., was named one of 15 great places by the American Planning Association (APA). The organization’s Great Places program annually recognizes streets, neighborhoods and public spaces for demonstrating exceptional character, quality and planning, according to the statement announcing this year’s winners. “Bristol was nominated for State Street for the work both localities have been doing on the street itself. A good many projects have been community-driven and led by both the Virginia side and the Tennessee side,” APA President Earl Anderson said in September. (Bristol Herald Courier)
BVU Authority power customers can expect to pay a bit less for electricity in the months ahead. The Tennessee Valley Authority recently approved BVU absorbing TVA’s planned base rate price increase that went into effect Oct. 1. That means most BVU customers won’t be charged the additional amount, which amounts to a projected saving of $555,000. An additional rate reduction is expected to be approved before the end of this year, President and CEO Don Bowman said. In August, the BVU board approved reducing the rates it charges power customers. A customer who uses 1,000 kilowatt hours per month is expected to save almost $5 per month or about $58 per year. If approved by TVA, that cut is expected to go into effect Dec. 1 and save ratepayers an estimated $1.2 million. (Bristol Herald Courier)
Emory & Henry College has established a new certification course for athletic trainers to help in filling much-needed positions in the region. Previously, students could obtain certification as an athletic trainer by either a four-year undergraduate course or two-year graduate course. Starting with this first course in May, the only path to certification as an athletic trainer is through the master’s program. (SWVAToday.com)
Tazewell County is hoping to take advantage of a federal grant to improve internet service in the county. At its Oct. 2 meeting, the Board of Supervisors authorized the wireless service authority to apply for a $4 million grant from the state Department of Housing and Community Development. Interim County Administrator Eric Young said the $4 million is what is available statewide from the federal government. He said the department of housing and community development is administering the funds in Virginia and the grant requires a 20 percent match. That money could come from the county or a private investor. (SWVAToday.com)
ROANOKE/NEW RIVER VALLEY
Eldor Corp. has begun production at its $75 million manufacturing facility in Botetourt County. The company makes ignition systems, electronic control units and hybrid and electric vehicle systems. In March 2016 the Italian company announced plans to locate its first North American plant in Daleville. It marked the biggest economic news in the county’s history and the largest expansion of new manufacturing jobs in the Roanoke Valley since before the Great Recession a decade ago. The company has hired about 120 people and has plans to have 350 employees in the next four to five years. (The Roanoke Times)
Federal regulators have approved a plan to stabilize a section of the Jefferson National Forest where construction of a natural gas pipeline began but was later halted by a lawsuit raising environmental concerns. The measures required by the Federal Energy Regulatory Commission — along with a separate decision by the U.S. Forest Service to reopen two of its roads that had been closed for construction — indicate that it could be months before work on the Mountain Valley Pipeline is allowed to resume in the forest. In July, a federal appeals court invalidated an approval by the Forest Service for a 3.5-mile segment of the buried pipeline to cross public woodlands in Monroe County, W.Va., and Giles and Montgomery counties. (The Roanoke Times)
As Franklin County works to bring broadband to more areas of the rural locality, it may partner with northern neighbors. A draft of what’s being called a “teaming agreement” with the Roanoke Valley Broadband Authority was presented to the Franklin County Broadband Authority, whose membership consists of the county Board of Supervisors. Steve Sandy, the county’s director of planning and community development, said the agreement would provide an opportunity for the two entities to work together. (The Roanoke Times)
LewisGale Regional Health System has acquired Virginia Orthopaedic. Nine of the practice’s 10 providers will remain with the new organization, LewisGale Physicians — Virginia Orthopedics. Virginia Orthopaedic was formed in 1999 and is located near LewisGale Medical Center in Salem. (The Roanoke Times)
Employees of Yokohama Tire Co. in Salem have ratified a new labor contract that will be in effect through Sept. 14, 2022, according to their union, United Steelworkers Local 1023. In a Facebook post, United Steelworkers, which represents about 600 employees at the plant, said the contract won approval with a majority of the popular vote. The union’s last contract, approved in 2014, was originally set to expire in May, but workers said an extension was agreed to while negotiations continued. (The Roanoke Times)2018-10-30T08:00:00+00:00
Out & About - November 2018
http://www.virginiabusiness.com/news/article/out-about-november-2018#When:08:00:00ZThis month's Out & About features photos from the Richmond Ballet’s 35th anniversary celebration, the Virginia Business Meeting Planner of the Year and other events
Fall is a busy time for events. The Richmond Ballet celebrated its 35th anniversary as a professional company in late September. The party was held in the Rhythm Hall at the Dominion Energy Center in Richmond.Karen Surmacewicz was named the Virginia Business Meeting Planner of the year at the VSAE Fall Conference. Other photos come from events held by Hampton Roads Workforce Council, the Virginia Early Childhood Foundation and the Virginia Chamber of Commerce.
Followups - November 2018
http://www.virginiabusiness.com/news/article/followups-november-2018#When:08:00:00ZBaliles proposes a ‘Marshall Plan’to assist Virginia’s rural areas
Former Gov. Gerald Baliles has proposed a “Marshall Plan” aimed at improving the economy of rural Virginia.
In a September speech to the State Council of Higher Education for Virginia, Baliles, who served as governor from 1986 to 1990, said that, while the urban “Gold Crescent” stretching from Northern Virginia to Virginia Beach has prospered, the “rural horseshoe” has not.
“If you were to take the ‘rural horseshoe’ and hold it up against the Golden Crescent, the contrasts are stunning. Two Virginias!” Baliles said. “Moreover, according to our community college system officials, if the ‘rural horseshoe’ region were considered a separate state, it would be tied for dead last with Mississippi and West Virginia for educational attainment levels” in percentage of residents with high-school diplomas and college degrees.
He proposed creating an educational trust fund for rural areas using money now held by the Virginia Tobacco Region Revitalization Commission. The commission provides grants for projects throughout Southern and Southwest Virginia using money from a 1999 settlement between 46 states and major tobacco companies. The commission has about a half billion dollars remaining in its account.
Virginia Business discussed the economic disparities of the “Two Virginias” in its March cover story.
W&M president’s home gets national exposure
The president’s home at the College of William & Mary received star billing in an early October issue of The Wall Street Journal. William & Mary President Katherine A. Rowe and her husband, Bruce Jacobson, live in the 5,763-square-foot brick house, which was built in 1732. Its visitors have included George Washington, Thomas Jefferson and every president from Woodrow Wilson to Dwight Eisenhower.
The WSJ story, which appeared in its weekly Mansion section, also featured the homes of the presidents of Harvard, Cornell, MIT, Salve Regina University, the University of Alabama and University of Washington.
Virginia Business interviewed Rowe for its August issue after she became the first female president of William & Mary in its 325-year history.2018-10-30T08:00:00+00:00http://www.virginiabusiness.com/uploads2/PG_Cropped_.pngPhoto courtesy 5W Public Relations
Virginia Beach firm hires chief technology officer
http://www.virginiabusiness.com/news/article/virginia-beach-firm-hires-chief-technology-officer#When:20:40:00ZVirginia Beach-based Fintech company FinFit has hired Paul Grosch as chief technology officer.
Grosch formerly was the vice president of information technology for Gold Key|PHR, a hospitality and real estate management company based in Virginia Beach.
There, he led the technology team through a series of rapid growth, innovation and exit cycles. This included the $168 million sale of Gold Key Resorts and recent sale of oceanfront Hilton properties valued at more than $87 million. He has also led state-of-the-art development projects within Lockheed Martin and the Department of Defense.
In his new role, Grosch will work to ensure sales and operational teams can better understand customers’ financial needs. He also is charged with ensuring continuous improvement of FinFit’s software delivery capability.
Grosch received his bachelor’s degree and master of science in Computer Science from Old Dominion University. He holds an MBA from the University of Virginia Darden School of Business and is a Certified Project Management Professional (PMP) and Certified IT Service Management Expert (ITIL).
FinFit, founded in 2008, has more than 125,000 clients who use its financial wellness platform. FinFit provides a self-directed online experience that allows employees to measure their financial fitness and provides educational resources and tools to increase their financial knowledge.2018-10-29T20:40:00+00:00http://www.virginiabusiness.com/uploads2/Mark_Herndon.jpgMark W. Herndon. Source: PRNewsfoto/Bay Banks of Virginia Inc.
VCB Financial Group adds new face to board of directors
http://www.virginiabusiness.com/news/article/vcb-financial-group-adds-new-face-to-board-of-directors#When:20:34:00ZBay Banks of Virginia Inc. has appointed Richmond businessman Mark W. Herndon to VCB Financial Group’s Board of Directors.
Bay Banks of Virginia is the holding company of Virginia Commonwealth Bank and VCB Financial Group. Virginia Commonwealth Bank has its headquarters in Richmond and 19 banking offices and a loan production office throughout Virginia.
Herndon owns and operates multiple restaurant ventures including Buckhead’s Restaurant & Chop House in Richmond; Sugar Shack Donuts & Coffee located at multiple spots around Virginia and Washington, D.C.; and Square Burger in McKinney, Texas.
Herndon is a member of Virginia Commonwealth Bank’s Community Board. He is a member and past chairman of the Advisory Board for Reynolds Community College Culinary and Hospitality Program.2018-10-29T20:34:00+00:00
Urology of Virginia names CEO
http://www.virginiabusiness.com/companies/article/urology-of-virginia-names-ceo#When:20:32:00ZVirginia Beach-based Urology of Virginia has named Christopher S. Ennis as its CEO.
He was senior administrator at the University of Maryland Medical Center in Baltimore in its R. Adams Cowley Shock Trauma Center.
Ennis earned a bachelor’s degree from Towson University and holds a master’s degree in business and health-care administration from the University of Maryland. He is a member of the American College of Healthcare Executives and the Association of Academic Surgical Administrators.
Urology of Virginia employs 33 board-certified sub-specialist urologists.2018-10-29T20:32:00+00:00
Law firm Hirschler Fleischer rebrands
http://www.virginiabusiness.com/news/article/law-firm-hirschler-fleischer-rebrands#When:20:29:00ZThe Richmond-based law firm Hirschler Fleischer has rebranded itself as Hirschler and launched a new website, http://www.hirschlerlaw.com.
The one-word trade name will be used for all external communications.
"Though the look of Hirschler has changed, our commitment to providing the highest quality legal and client service remains the same," firm President Courtney Paulk said in a statement. "Our interest in updating the firm brand and website coincided with putting a finer point on who we are as a firm and developing a unique positioning strategy – something that truly differentiates us and the experience we offer to clients."
To honor the legacy of the firm's founders, the firm's legal name remains Hirschler Fleischer.
In addition to its Richmond office, the firm has offices in Fredericksburg and Tysons.2018-10-29T20:29:00+00:00
California company acquires Copper Mill Apartments in Henrico County
http://www.virginiabusiness.com/news/article/california-company-acquires-copper-mill-apartments-in-henrico-county#When:15:46:00ZSan Francisco-based real estate investment firm Hamilton Zanze has acquired the 192-unit Copper Mill Apartments in Henrico County from JRK Property Holdings.
The deal, which closed Oct. 24, represents the company’s fourth acquisition in the commonwealth.
Financial details of the sale were not discloseds.
The 158,568 square foot apartment community was built in 1987. It had a 99 percent occupancy rate in July.
Copper Mill includes 12 garden-style apartment buildings on 13.3 acres of land. The units range from 697 to 1,010 square feet.
Hamilton Zanze’s plans include a large-scale improvement program under which 25 percent of units will be renovated to include stone counters, backsplashes, lighting fixtures, cabinet pulls, flooring, and replacement kitchen cabinets.
An additional 50 percent of the units will receive a lighter renovation with resurfaced counters and the addition of new appliances and cabinet faces. The company will also add a dog park and additional enhancements to the community's amenity package.
Property management responsibilities handled by Mission Rock Residential, a Denver-based affiliate of Hamilton Zanze.
Since its founding in 2001, Hamilton Zanze has acquired more than $3.3 billion in multifamily assets. The company currently owns and operates 82 properties in 13 states.2018-10-29T15:46:00+00:00Photo by Mark Rhodes
2019 VSCPAs’ Virginia Economic Expectations survey - Hampton Roads
http://www.virginiabusiness.com/news/article/2019-vscpas-virginia-economic-expectations-survey-hampton-roads#When:15:37:00ZLori Overholt, CPA
President/chief financial officer
VSA ResortsVirginia Beach
How long have you been living in your region? What are your favorite parts about living and working in the region?
I’ve lived in Coastal Virginia most of my life. The thing I love most about Virginia Beach is the people. Because of the military, people move here from all over the country, and it is very diverse. Also, having an ocean outside my office window is amazing.
How is the economy faring in your part of the state?Virginia Beach seems to be thriving. New businesses and development are popping up. We have noticed it is harder to find workers.
What local industry do you think has potential for growth?
I think the tourism industry in Virginia Beach still has room for growth. The addition of the new Sports Center being built in Virginia Beach will help with the seasonality aspect of the tourism market.
What’s the biggest challenge to doing business in your area?The biggest challenges are traffic, affordable housing and workforce development. For our industry, the airport is a huge challenge in our area as there are few direct flights, and it is harder for people to get here.
What impact do you think U.S. trade policy will have on business?
Like any government policy, some businesses will benefit from the policy, and some will be hurt by it. Businesses will find a way to make it work.
Photo courtesy Mark Rhodes
Virginia Cardiovascular Specialists renews lease in Chesterfield County
http://www.virginiabusiness.com/news/article/virginia-cardiovascular-specialists-renews-lease-in-chesterfield-county#When:15:33:00ZVirginia Cardiovascular Specialists PC has renewed its 10,456-square-foot lease in Boulders VI in Chesterfield County.
Richard L. Thalhimer handled the lease negotiations for the property located at 7401 Beaufont Springs on behalf of the tenant.2018-10-29T15:33:00+00:00
Rockville-based company takes over management of 625 units in Virginia
http://www.virginiabusiness.com/news/article/rockville-based-company-takes-over-management-of-625-units-in-virginia#When:15:32:00ZThe Donaldson Group (TDG) of Rockville, Md., has taken over management of multifamily properties in Chesterfield County and Norfolk as it tries to expand its portfolio in Virginia.
That adds 625 units to its 11,000-unit multifamily management portfolio.
In Chester, the company has begun managing Rivermont Crossing, a 457-unit rental community with 312 apartments and 145 townhouses. The property recently was bought by The Steven A. Goldberg Company of Bethesda, Md.
TDG also is now managing the Lafayette in Norfolk, a 168-unit high rise apartment building that recently was acquired by Graycliff Capital Partners LLC. TDG will assist in a renovation that will include hallway and lobby improvements, relocation of the leasing center and amenities, elevator upgrades and interior unit renovations.
The company has managed a 300-unit apartment community in Charlottesville for the last six years for the Goldstar Group.
TDG plans to grow its footprint in the Richmond and Hampton Roads markets through both third-party management contracts and acquisitions as principals.2018-10-29T15:32:00+00:00
Retail property sold in Henrico
http://www.virginiabusiness.com/news/article/retail-property-sold-in-henrico#When:13:55:00ZA former Caston Studio building in Henrico County has been bought for $1.125 million.
Manakin Farms Quioccasin LLC bought the 6,324-square-foot freestanding building as an investment and for possible future development.
James Ashby IV of Cushman & Wakefield | Thalhimer handled the sale negotiations on behalf of the seller.2018-10-29T13:55:00+00:00
JLL tapped to market Tysons Corner property
http://www.virginiabusiness.com/news/article/jll-tapped-to-market-tysons-corner-property#When:13:24:00ZJLL’s Northern Virginia Agency leasing team was hired by Brandywine Realty Trust to lease a 300,000-square-foot space in Tysons Cortner.
The property is at 1676 International Drive.
JLL’s Brian Connolly and David Goldstein are partnering with Brandywine to lease the property.2018-10-29T13:24:00+00:00
Competing for global Investment
http://www.virginiabusiness.com/opinion/article/competing-for-global-investment#When:08:50:00ZThe U.S. economy exemplifies success on a global stage. America leads the world in attracting international companies to invest and create jobs. No other country in the world can match our large consumer market, skilled workforce, innovative hubs and diverse industry. While Virginia outpaces the national average in the percentage of jobs supported by international employers, we lag behind some of our neighboring states. That is why we must continue to prioritize keeping the Commonwealth attractive to international employers.
When companies like Cascades, ProSeal America, Anton Paar USA or Polykon (a subsidiary of Air Liquide) build facilities and hire employees in the Richmond region, it is an example of foreign direct investment (FDI). When you consider all of the products and services produced by these global companies in the United States — you realize that foreign direct investment really is not that foreign at all.
International employers are an important part of Virginia’s economy. For example, it would take three Richmond Raceways to hold all the Virginians employed by international companies. What is more, these jobs offer wages and benefits that are 43 percent higher, on average, than the overall state private-sector. When a foreign-based company invests in the United States, it brings much more than financial capital. These employers often “import” world-class workforce training programs, build local supply chains and become part of the communities in which they sustainably operate.
International companies help diversify our economy, making it more resilient. RVA is home to more than 200 international companies, which have created more than 6,700 jobs locally since 1994. Currently, two-thirds of the Greater Richmond Partnership’s prospect pipeline is internationally-based.
International companies operating in the United States are a good measure of U.S. competitiveness. Not surprisingly, competition for this investment is fiercer than ever before. Fortunately, the Richmond region has a winning strategy for attracting some of the world’s industry leaders. Companies from countries all over the world including, Spain (Biomat USA), Brazil (Mavalerio), and the United Kingdom (Pryor Marking Technology) have decided to expand and grow in our area.
Favorable legislation and a business-friendly atmosphere helps Virginia stay at the top of best places to incorporate businesses, which is a factor when international firms establish American headquarters. In fact, during the past five years, job growth at international companies operating in Virginia has grown nearly four times faster than the state’s overall private-sector. This hard work and persistence has paid off for the Virginia economy and others are paying attention, too: Foreign Direct Magazine named Richmond as the top U.S. mid-sized city for FDI.
Nationally, international companies employ nearly 7 million Americans, including 20 percent of America’s manufacturing workforce. In fact, 54 percent of the manufacturing jobs created in the past five years came from international companies. These companies produce more than 23 percent of U.S. exports, shipping nearly a billion dollars in goods a day to customers around the world. International companies also reinvest $100 billion annually of their profits back into their U.S. operations and pay 17 percent of all federal corporate income taxes.
When international companies invest here, it means their home countries now have a stake in America’s success. Their investments also help spur U.S. companies to increase productivity through competition and fuel American innovation. American scientists and engineers employed by international companies are leading our nation’s innovation advantage.
International employers spend more than $57 billion on research and development activities, or 16 percent of all R&D performed by the private-sector. Israeli-based Sabra Dipping Co., which also operates the world’s largest hummus plant in Chesterfield County, is also home to its “Center of Excellence” R&D facility. The 20,000-square-foot center is the first-of-its-kind research and development center for refrigerated dips and spreads.
We will continue to tell international companies that the greater Richmond area is a welcoming location and has programs in place to help them succeed. For instance, the Global Assistance Program (GAP) is a program to assist international companies connect with localized business services to ease the transition when building a subsidiary and creating jobs. Think of GAP as a customized concierge service to help firms grow and succeed in RVA.
Working together, our region and our state can show the world that the Richmond region is a great place to call home.
Barry Matherly is the president and CEO of the Greater Richmond Partnership (GRP), the lead regional public-private economic development organization for the city of Richmond and counties of Chesterfield, Hanover and Henrico in Virginia. GRP recruits companies from all over the globe which provide employment opportunities and taxable capital investment for the community. Nancy McLernon is president and CEO of the Organization for International Investment (OFII), an association representing the unique interests of U.S. subsidiaries of global companies – or insourcing companies.2018-10-29T08:50:00+00:00Photo courtesy Gold Key | PHR.
The Cavalier Hotel names director of food and beverage
The Cavalier Hotel has a new director of food and beverage at the helm.
Christopher Castle joins the Virginia Beach-based hotel from the Williamsburg Inn in Williamsburg where he was director of restaurants. He also worked at the Inn at Little Washington – a Michelin 3 Star restaurant – for two decades. His roles at the Rappahannock County property included serving as assistant food and beverage director and director of branding. Under Castles’ leadership, The Inn at Little Washington earned its AAA Five Star rating, the first restaurant/inn to receive Five Diamonds for both its food and accommodations.
The Cavalier Hotel opened its doors in March after a massive, four-year renovation nearing $85 million dollars. The hotel was originally completed in 1927.
Christopher Castle photo courtesy Gold Key | PHR2018-10-26T20:12:00+00:00
Virginia MBA program ranked among world’s best
http://www.virginiabusiness.com/news/article/virginia-mba-program-ranked-among-worlds-best#When:16:38:00ZAnother list, another feather in Virginia’s cap.
The Economist magazine recently ranked the University of Virginia’s Darden School of Business the ninth best full-time MBA program in the world. Last year, the school was ranked 10th.
The Darden School of Business was ranked first in a category called “personal development and educational experience.” It was the only Virginia school to make the annual the list of 100 programs, which included schools in the U.S., Canada, Mexico, Spain, India and other countries.
The MBA program ranked first overall was the University of Chicago’s Booth School of Business.
Read more about the list here.2018-10-26T16:38:00+00:00
Shenandoah University adds degrees in virtual reality and esports
http://www.virginiabusiness.com/news/article/shenandoah-university-adds-degrees-in-virtual-reality-and-epsorts#When:15:49:00ZShenandoah University will launch new undergraduate degree programs next fall that will establish an academic foothold in the expanding world of virtual reality and esports.
The university is announcing this afternoon in Winchester that it will offer bachelor of arts and science degrees in virtual reality design and a bachelor’s of science in esports, or video game competition.
“We believe a significant number of careers will live in virtual reality,” says J.J. Ruscella, executive director of the Shenandoah Center for Immersive Learning (SCiL) and associate professor of theatre.
Immersive experiences such as training and simulation videos that students produce through SCiL will be a game changer not only for education but also for how industry will train workers for ever evolving jobs that now don’t even exist, he says.
“You remember when web design came out in the ‘90s and you needed someone to design a website and the only person you could turn to was a high school student?” Ruscella says. “That is sort of happening with virtual reality.”
Corporations are turning to universities to produce simulation-training videos, he says, giving students the opportunity to work on real-world projects.
SU already has an augmented and virtual reality (AR/VR) program. The esports program is new, although the university currently has a varsity team competing in video-game matches. Both programs also will offer minors and certificate options.
Esports has rapidly become one of the fastest-growing segments of the commercial entertainment industry, according to Joey Gawrysiak, associate professor and director of sport management.
The industry is predicted to be worth $1 billion by 2020. “I think it will be there next year,” he says.
In esports, competitors face off in video games such as Call of Duty, League of Legends and Madden NFL that have a global audience. Fans can attend live events or watch from home via streaming services.
The esports degree will offer three tracks in which students focus on management, coaching, or media and communications, positioning graduates well ahead of other applicants in competing for jobs in the industry, Gawrysiak says.
In researching the degree program, he says, industry professionals told him many applicants think they are qualified simply because they play video games.
His students, for example, will learn how to produce a match that is live-streamed, as opposed to a broadcast production of a traditional sporting event.
Although most jobs now are in management and marketing, he says, coaching slots are increasing as esports trickle down from the professional level to colleges and even high schools.
Players used to compete “for energy drinks, not million-dollar prizes,” he says, and this change has brought a new emphasis on sport science and psychology “to optimize performance and minimize injuries.”
“It’s following the traditional sports model,” he says, and he does not see the two as mutually exclusive.
“I see none of the stereotypical ‘jocks vs. nerds,’’’ he says. Often, in fact, the jocks are the nerds as traditional athletes also play on esport teams.
For the AR/VR design program, SU has partnered with Immersive VR Education, a software company in Ireland that provides a platform called Engage. Ruscella says Engage will allow SU to focus not on software development but on “human experience design.”
The BA program will prepare students for careers producing content for AR/VR and related disciplines through a concentration in either VR Media or Digital Stages.
The BS focuses on careers for technical specialists and programmers in AR/VR or related fields.
Students will build virtual worlds and scenes that create simulated life experiences for training or educational videos for museums, law enforcement and the health professions. The videos can recreate history – the university recently used 360-degree VR video to simulate a 1960s Civil Rights-era lunch counter sit-in and the trial of pre-Civil War abolitionist John Brown.
But they can also create training experiences, such as how emergency responders should handle a suicide threat, by simulating “life moments” in real-time work scenarios so that “the novice is a veteran even before they take their first step on the job,” he says.
“This has been the gap that education has had between delivering knowledge and developing skills,” he says, as classroom training does not always translate to the workplace. “Now we can recreate the work experience in the education experience.”
Such simulation training grew out of earlier collaborations between theatre majors and health-care students, two of the university’s largest programs, he notes. Now as VR simulation is increasingly used by corporations for training, the videos also will be a way for actors “to make their daily bread” while trying to land their Broadway roles.2018-10-26T15:49:00+00:00
Hampton Roads bank promotes executives
http://www.virginiabusiness.com/companies/article/hampton-roads-bank-promotes-executives#When:08:53:00ZSuffolk-based TowneBank is promoting three executives and expanding its corporate management group starting in January.
Brian K. Skinner was named chief banking officer. He joined TowneBank in 2007 and most recently was regional executive officer of Peninsula/Williamsburg. In his new position, he will be responsible for the leadership and development of community banking strategies.
Dawn S. Glynn, who was regional executive officer for Portsmouth/Chesapeake/Suffolk, has been promoted to president of retail and private banking. She is a founding member of TowneBank, which was created in 1999.
William I. Foster has been named president of commercial and real estate banking. He joined TowneBank in 2004. He has been regional executive and president of TowneBank Virginia Beach.
The three executives will join TownBanke’s Corporate Management Group, which includes Executive Chairman G. Robert Aston, Jr., President and CEO J. Morgan Davis, CFO William B. Littreal and Chief Operating Officer Brad E. Schwartz.2018-10-26T08:53:00+00:00
Twenty new jobs coming to Norfolk
http://www.virginiabusiness.com/news/article/twenty-new-jobs-coming-to-norfolk#When:19:23:00ZA distributor of flooring, wall and countertops is making a $4.65 million investment in Norfolk that’s expected to add 20 jobs.
M S International Inc. (MSI) will establish a 64,000-square-foot distribution and showroom facility in the city. The new space will be fully operational by early 2019.
MSI also operates a 60,000-square-foot distribution center and showroom in Sterling.
The company has more than $1 billion in annual revenues and more than 1,800 employees. The firm is one of the largest granite and countertop slab suppliers in Virginia.2018-10-25T19:23:00+00:00
Richmond Fed report: moderate economic regional growth
http://www.virginiabusiness.com/news/article/richmond-fed-report-moderate-economic-regional-growth#When:18:57:00ZVirginia’s regional economy has seen moderate growth in recent weeks, according to a new report by the Federal Reserve Bank of Richmond.
On Wednesday, the Federal Reserve Bank of Richmond published analysis of the economic conditions in its district saying there was moderate growth despite disruptions caused by Hurricane Florence.
The regional report was part of what’s called The Beige Book, which is published eight times a year. The report collects anecdotal information on the current economy for each of the Federal Reserve Bank’s 12 districts. The periodic reports also include analysis of the overall economy, which has expanded recently.
The district of the Federal Reserve Bank of Richmond is called the Fifth District and includes Virginia, Maryland, most of West Virginia, North Carolina and South Carolina.
The report on the Fifth District included a number of mentions of Virginia’s business conditions in manufacturing, real estate and construction and banking and finance.
In manufacturing, the district overall saw moderate increases in activity, however there were rising material costs and some hurricane-related disruptions.
In Virginia, a window maker credited high consumer confidence for the company’s strong sales. Many manufacturers are struggling with the increasing costs of raw materials, a partial consequence of the recent tariffs. A display case manufacturer in Virginia sought to import materials from countries other than China.
In real estate and construction, the Fifth District saw modest growth. Virginia, Washington, D.C, South Carolina and Maryland saw residential construction pick up. On the commercial side, brokers in the district reported overall increased demand for restaurant, grocery and industrial space.
For banking and finance, there was a moderate rise in demand for loans in recent weeks. In Virginia, bankers reported an increase in commercial and industrial lending.
Read the full report here: https://www.federalreserve.gov/monetarypolicy/beigebook201810.htm2018-10-25T18:57:00+00:00
Tax firm expanding in Northern Virginia
http://www.virginiabusiness.com/news/article/northern-virginia-tax-firm-expanding#When:20:44:00ZA tax firm is relocating and expanding its offices in Northern Virginia in a deal that involves public dollars and tax incentives. The move is expected to create 500 jobs over three years.
KPMG LLP, an audit, tax and advisory firm, plans to move out of its current office at 1676 International Dr. in Tysons Corner to a forthcoming development called The Boro near the Greensboro Metro Station in Tysons. The company's current office in Tysons Corner is 183,000 square feet of a 13-story building.
KPMG says it plans to invest $30 million over the next 12 months to build out its new space. The company will occupy up to seven floors at a 20-story tower at The Boro development. The tower will be finished in early 2019.
“We saw this as a tremendous opportunity to move into a cutting-edge space that will be ideal for our team, clients, and recruiting efforts,” a KPMG spokeswoman says. “We feel that Boro Tower’s close proximity to the Greensboro Metro, its building amenities, and its location in a brand-new development within the fast-growing Tyson’s Corner area will be appealing to both current and future employees.”
Virginia beat out Washington, D.C. for the project. KMPG says the new jobs include professional positions like consultants, tax experts and audit professionals. KPMG declined to say what the salaries for these jobs will be.
KPMG LLP is the United States-based member firm of KPMG International and is headquartered in New York.
KPMG has had its current office in Fairfax since at least 1998. KPMG later subleased the office to a KPMG spinoff that filed for bankruptcy in 2009 called BearingPoint. KPMG took back the space in 2010 and has nearly 2,000 employees in Fairfax. KPMG also has offices in Washington, D.C., Richmond and Norfolk.
The Fairfax County Economic Development Authority worked with the Virginia Economic Development Partnership to lure KPMG’s investment. Gov. Ralph Northam approved a $1 million grant from the Commonwealth’s Opportunity Fund to help Fairfax with the project.
KPMG will be eligible to get the Major Business Facility Job Tax Credit for new full-time jobs created. Funding and services to help the company’s employee retraining activities will be provided through the Virginia Jobs Investment Program.2018-10-24T20:44:00+00:00
Richmond-area data center now tied into subsea cables in Virginia Beach
http://www.virginiabusiness.com/news/article/richmond-area-data-center-now-tied-into-subsea-cables-in-virginia-beach#When:20:22:00ZA data center in Henrico County is now tied into two subsea cables providing ultra-high-capacity connectivity between Virginia Beach and overseas.
Telxius, the operator of subsea cables coming ashore in Virginia Beach, has established a location in QTS Realty Trust’s data center in eastern Henrico.
The 1.3-million-square-foot facility is the closest Tier 3 data center to the Virginia Beach Cable Landing Station, where the subsea cables come ashore in Virginia Beach.
The cables, known as MAREA and BRUSA, are two of the highest-capacity, lowest latency subsea cables ever built. Low latency is especially important for streaming data.
MAREA, which connects Spain and Virginia Beach, is a joint project with Facebook and Microsoft. Telxius operates the cable for the companies.
BRUSA is both owned and operated by Telxius and connects with Brazil.
But once that data comes ashore, it needs the compute and storage infrastructure of a data center. That’s why Telxius set up QTS’ Henrico facility.
“What that means functionally for the traffic on those networks is you've now got the ability to interconnect with the 17 different carriers and network suppliers in that building, which means you can get to a lot of places all across North America right there at the Richmond data center,” Sean Baillie, executive vice president of sales and marketing for QTS, said in an interview.
It also will connect the subsea cables to QTS’ data center in Ashburn in Loudoun County, which is home to the largest concentration of data centers in the world.
The announcement is expected to attract major enterprises and “hyperscalers” needed access to high capacity, low latency connectivity.
The cables enables the next generation of cloud services and content distribution to European and Latin American markets. “Just think of an enterprise in North America that wants to serve customers in Puerto Rico and Brazil,” says Baillie.
That could be financial institutions, health-care providers, gaming companies and content providers.
“What we in Richmond offer to all those potential buyers is the closest geographic access to those cables, which is the closest geographic access to Puerto Rico and Brazil and then to Bilbao, Spain, which is an entry point to all of Europe and beyond,” Baillie said. “There’s a ton of use cases for folks that want access to those cables.”2018-10-24T20:22:00+00:00
NoVa cybersecurity company expanding office space, employees
http://www.virginiabusiness.com/news/article/nova-cybersecurity-company-expanding-office-space-employees#When:20:22:00ZAn Arlington County cybersecurity and IT company is adding 87 employees and moving into bigger digs.
Two Six Labs LLC is investing $3.4 million to relocate from 4350 N. Fairfax Drive to Ballston Metro Center at 901 N. Stuart St. It expects to move into an almost 30,000-square-foot space early next year, an upgrade of about 10,000 square feet.
The new jobs will almost double Two Six Labs’ workforce, according to a statement from Gov. Ralph Northam. The new employees will specialize in machine/deep learning, distributed computing, vulnerability research and reverse engineering.
Two Six Labs’ products include PlanX, a battle command system for cyber and electronic warfare, and SIGMA, a radiological detection and threat response system.
The company is receiving funding from the Virginia Jobs Investment Program (VJIP), which provides consulting and funding to companies creating new jobs or experiencing technological change.
Andrew Genova, Sam Werner and Brian Dickerson of West, Lane & Schlager Realty Advisors represented Two Six Labs. Ballston Metro Center was represented by JLL.2018-10-24T20:22:00+00:00
Kroger opening another store in Hampton Roads Wednesday
http://www.virginiabusiness.com/news/article/kroger-opening-another-store-in-hampton-roads-wednesday#When:20:31:00ZKroger is opening a second store in York County on Wednesday.
The 45,500-square-foot store in Grafton is one of eight properties that was purchased by Kroger earlier this year from Farm Fresh. The location at 6500-C George Washington Memorial Highway will employ 93 workers, including 38 previous Farm Fresh employees. The company has invested $4 million to reopen the store.
Kroger’s other store in York County is located on Victory Boulevard in Yorktown.
Another former Farm Fresh on Coliseum Drive in Hampton already has opened and six more stores are expected to be transformed into Kroger locations in the coming months. However, Kroger also announced this week that it will close its only Norfolk store, which will impact 102 jobs. It also doesn’t plan to reopen the former Farm Fresh store located on Little Creek Road in Norfolk.2018-10-23T20:31:00+00:00http://www.virginiabusiness.com/uploads2/HEALTH_BethBortz.pngBeth A. Bortz, president & CEO of Virginia Center for Health Innovation. Photo by Rick DeBerry
Report measures Virginia’s health-care payments
http://www.virginiabusiness.com/news/article/report-measures-virginias-health-care-payments#When:20:29:00ZA new study released Tuesday is designed to help Virginia measure success as it attempts to make health-care payments more value-oriented.
More than two-thirds, or 67 percent, of the health-care payments paid to doctors and hospitals in the commercial sector in 2016 contained incentives to improve both the cost and quality of care patients receive. For health-care payments made through Medicaid, 37 percent of them contained similar incentives that are considered value-oriented.
The findings were announced Tuesday morning by Catalyst for Payment Reform, the Virginia Center for Health Innovation and the Virginia Association of Health Plans. The numbers are part of The Virginia Scorecard on Payment Reform and are meant to act as a baseline in the state’s efforts to reform its health-care payments.
The payments highlighted in the report are considered to have some ties to value as opposed to just being based on costs and efficiencies. A payment tied to value is one that takes into consideration the quality and safety of the care being delivered and reduces unnecessary spending.
Virginia was one of three states picked by Catalyst for Payment Reform to have the study done. The study was part of a state pilot program called Virginia Scorecard 2.0. The study was funded by grants from the Robert Wood Johnson Foundation and the Laura and Arnold Foundation.
“This is our line to say here’s where we are,” says Beth A. Bortz, president and CEO of the Virginia Center for Health Innovation. “It looks like Virginia is taking a very positive step.”
The report is based on a survey of six Virginia health plans that together cover about 72 percent of privately insured patients in Virginia. The participating health plans were Aetna, Anthem, Optima, UnitedHealthcare, Cigna and Virginia Premier. The report also is based on a survey of four Medicaid managed care organizations who together cover about 58 percent of the Medicaid-insured people in Virginia.
In the United States, the health-care system is mostly based on a system where fees are paid for services. Doctors and hospitals are paid for how many services they offer. The result in the health-care industry can mean unnecessary fees and services that aren’t necessarily helping patients get better.
For years there have been efforts to move the health-care system toward a new model that rewards providers for positive outcomes for patients. The data released on Tuesday is an attempt to understand how Virginia is doing as it moves toward that model.
Tracking how Virginia progresses means continued study of payments tied to value, Bortz says. But it isn’t clear when another study will take place since there currently isn’t any funding for it.
“We can’t improve what we don’t measure,” Bortz says.2018-10-23T20:29:00+00:00http://www.virginiabusiness.com/uploads2/VBDATACENTER.png
Two new data centers coming to Virginia Beach
http://www.virginiabusiness.com/news/article/two-new-data-centers-coming-to-virginia-beach#When:18:28:00ZA Canada-based company is investing $80 million to build two data center facilities at Corporate Landing Business Park in Virginia Beach.
PointOne, a data center developer headquartered in Alberta, will build two 31,000-square-foot properties that will house data centers, a cable landing station for future subsea cables and an international internet business exchange.
The Virginia Beach Economic Development Authority has approved a purchase agreement for a 10.4-acre site in Corporate Landing Business Park to PointOne for $2.08 million.
The project will be built in two phases. Phase I is expected to be finished by the end of 2019.
Keith Frieser, chairman and CEO of PointOne Development Corp., said the company chose Virginia Beach for the project for several reasons, including a pro-business attitude.
“Additionally, the proximity of our development site in Corporate Landing Business Park to established submarine cable landing points at Virginia Beach was instrumental in our decision-making process,” he said in a statement. “PointOne’s facility in Corporate Landing Business Park will enable us to offer our clients direct submarine-to-terrestrial fiber connectivity to our hyperscale data center campus located in Remington, Va.”
Corporate Landing Business Park is a 325-acre property owned by the Virginia Beach Economic Development Authority.
Photo courtesy City of Virginia Beach Communications Office2018-10-23T18:28:00+00:00Photo courtesy American Bankers Association.
Virginia banker elected chairman of American Bankers Association
http://www.virginiabusiness.com/news/article/virginia-banker-elected-chairman-of-american-bankers-association#When:18:20:00ZA Virginia banker has been named chairman of the American Bankers Association.
Jeffrey M. Szyperski is chairman, president and CEO of Kilmarnock-based Chesapeake Financial Shares Inc. and Chesapeake Bank, an $820 million institution. He also is chairman of Chesapeake Wealth Management.
Szyperski succeeds outgoing ABA chairman and president, Kenneth L. Burgess Jr., who is chairman of FirstCapital Bank of Texas.
Szyperski is a past chairman of the Virginia Bankers Association (VBA) and currently serves on VBA’s board and chairs the VBA Education Foundation. Locally, he has served on the Saint Mary’s School board of trustees, is a past chairman and member of the Chesapeake Academy board of trustees, and is a past chairman and member of the Rappahannock Westminster-Canterbury Inc. board of trustees.
Prior to his time at Chesapeake Bank, Szyperski was a CPA in Raleigh, N.C., where he was a senior manager for a major accounting firm. He also is a Certified Financial Planner.
He is a graduate of the University of North Carolina and the Graduate School of Banking at Louisiana State University.
Photo courtesy American Bankers Association. 2018-10-23T18:20:00+00:00
New group promoting cannabis industry in Virginia
http://www.virginiabusiness.com/news/article/new-group-promoting-cannabis-industry-in-virginia#When:01:18:00ZAs the medical cannabis industry sprouts to life in Virginia, a new trade association aims to promote the budding industry across the state.
A group called CannabisVA hosted a panel discussion Monday night about the current legislation and regulatory process for cannabidiol (CBD) oils for medical and pharmaceutical purposes.
CannabisVA was recently formed by KVCF Solutions, a lobbying firm owned by the Richmond law firm Kaplan Voekler Cunningham & Frank PLC. Part of CannabisVA’s mission is to encourage a favorable and responsible business environment for medical cannabis and cannabidiol in Virginia.
In September, Virginia’s Board of Pharmacy awarded conditional approval for licenses to five companies to grow cannabis, manufacture cannabidiol or THC-A oils and sell them to patients registered with the state.
To be considered for a license to make and sell cannabidiol oils, the 51 interested companies had to pay a $10,000 application fee. The selected companies currently are undergoing background checks before receiving final approval.
Legislation governing the licenses required that they were awarded in five different areas of Virginia.
Monday night’s panel consisted of Virginia Sen. Siobhan Dunnavant, R-12th; Dr. David Brown, director of the Virginia Department of Health Professions; Dr. Travis Shaw of Travis Shaw, M.D.; and Cal Whitehead of Commonwealth Strategy Group. Steve Baril of KVCF Solutions moderated the panel.
Brown said he has been amazed by the progress made around the medical cannabis legislation on both sides of the aisle in Virginia. In 2015, Virginia’s first law addressing cannabidiol or THC-A oil allowed a legal defense for use only by people with intractable epilepsy. Now, the current legislation allows their use if recommended by any physician for any condition.
“That really opened the field,” Brown says. “Times have changed.”
Cannabidiol, THC-A and THC are chemicals produced by the cannabis plant. THC is the chemical that makes people high. CBD and THC-A are chemicals that do not make people high.
More than half of U.S. states along with Washington, D.C., Guam and Puerto Rico have legalized marijuana for medical purposes, according to the Pew Research Center. Cannabis is still illegal under federal law. Nine states and Washington, D.C. have legalized cannabis for recreational use. A Pew Research Center poll saw 62 percent of respondents saying use of cannabis should be legal.
Dunnavant says that since Virginia’s legislation was based around the expected demand for the oils by epilepsy patients, there likely will be continued discussions around meeting demand for legislation that allows the oils be recommended for any medical condition.
Dunnavant says it has to be demonstrated that the process in place is diligent and faithful to legislators for whom legalizing medical cannabidiol oils has been outside of their comfort zones.
“That may be a conversation we’re having in this legislative session,” Dunnavant says. “We want to have that supply and demand worked out.”2018-10-23T01:18:00+00:00http://www.virginiabusiness.com/uploads2/Gary_McLaren.pngGary McLaren is retiring in February. Source: Henrico EDA
Henrico EDA director stepping down
http://www.virginiabusiness.com/news/article/henrico-eda-director-stepping-down#When:20:01:00ZGary McLaren is retiring in February as the executive director of the Henrico Economic Development Authority. McLaren plans to travel and spend time with his wife.
“I do have mixed emotions about it,” McLaren says. “I’m just trying to finish strong.”
The Henrico EDA is in the process of finding McLaren’s replacement and hopes to make an announcement in January.
McLaren has been executive director since April 2009. Before that he worked for 10 years at the Virginia Economic Development Partnership. Earlier in his career, McLaren also led the economic development arm’s in Chesterfield and Chesapeake.
In Henrico, McLaren helped lure more than 12,000 new and retained jobs along with more than $3.5 billion in capital investment, according to the Henrico EDA. During McLaren’s tenure Henrico attracted companies like Facebook, Anord Control Systems, Teleperformance and Polykon Manufacturing.
With more than 40 years of economic development experience, McLaren says deals still often boil down to having a good property or building to market. What has changed is the speed at which the deals are made, McLaren says. He says research that companies once would have done with the help of a locality is now being done online.
“The challenge is you don’t have the opportunity to develop relationships,” McLaren says. “But it’s good from a productivity standpoint.”
Some legislators and residents around the state question the value of public incentives and tax exemptions to attract private investment. McLaren says residential development doesn’t pay for itself and that Virginia’s business base has helped keep taxes lower than other states like New Jersey. McLaren says that it’s important for communities to make reasonable decisions about timelines for breaking even and performance agreements.
“I think they make sense,” McLaren says of certain tax exemptions. “Would you rather have 50 percent of something or 100 percent of nothing?”
McLaren says he thinks Henrico is in a good position to continue attracting data center users and technology companies.
News of McLaren’s impending retirement comes as a number of localities around the state have seen high profile turnover at their economic development organizations.
In Northern Virginia, Gerald L. Gordon plans to step down as president and CEO of the Fairfax County Economic Development Authority in January after more than three decades at the helm. Korn Ferry, a recruiting company, has been hired to help find Gordon’s replacement.
And in Hampton Roads, Charles E. “Chuck” Rigney Sr. this month left Norfolk’s economic development arm to lead economic development efforts in Hampton.2018-10-22T20:01:00+00:00
Liberty University celebrates grand opening of renovated football stadium
http://www.virginiabusiness.com/news/article/liberty-university-celebrates-grand-opening-of-renovated-football-stadium#When:16:05:00ZLiberty University has completed the $32 million expansion of its football stadium within a year.
The stadium was expanded and improved to support the team’s advancement to the NCAA Division 1 Football Bowl Subdivision.
The stadium redevelopment included the addition of 6,000 new seats and a press box, a new concourse level, videoboard, restrooms, concessions, camera platforms and road improvements.
Woolpert provided the sports architectural services and retained Odell Associates Inc. as design architects.
“One of the biggest takeaways on this project was that we were able to drastically change the fan experience,” Andrew Pack, Woolpert’s education and athletics practice leader, said in a statement. “We were able to enclose the stadium like a horseshoe by adding a concourse to connect the existing west side to the new eastside, while creating a new promenade gateway on the south entry. The adjustments improved access to seating and vendors and elevated security to support the eclectic variety of sports, outdoor concerts and events that the stadium hosts.”2018-10-22T16:05:00+00:00
JLL announces new property management leader
http://www.virginiabusiness.com/companies/article/jll-announces-new-property-management-leader#When:15:52:00ZJLL has promoted Megan Matthews to mid-Atlantic property management lead.
Matthews currently is director for JLL’s South Central Region Property Management business in Dallas.
Matthews will locate to the mid-Atlantic starting in 2019 but already has assumed the role.
Prior to leading the Property Management business based in Dallas, Matthews oversaw a 2.6 million square foot portfolio in JLL’s Atlanta office.
Matthews earned a bachelor’s degree in business administration from the University of Georgia. She was recognized in 2016 and 2017 as a JLL Top Gun, which highlights the top revenue producers of the firm.2018-10-22T15:52:00+00:00
Restaurant space in Arlington sells for $2.3 million
http://www.virginiabusiness.com/news/article/restaurant-space-in-arlington-sells-for-2.3-million#When:14:06:00ZA restaurant space in Arlington County has sold for $2.3 million, according to Divaris Real Estate Inc.
1800 Wilson LLC purchased a 4,290-square-foot property at 1800 Wilson Boulevard, which will continue to be used for a restaurant. Divaris’ Joe Farina and Chris Saa represented the seller.2018-10-22T14:06:00+00:00
$100 million development planned for Crystal City
http://www.virginiabusiness.com/news/article/100-million-development-planned-for-crystal-city#When:13:42:00ZA $100 million mixed-use development is being planned in the Crystal City part of Arlington County.
LCOR has purchased a 39,700-square-foot land parcel at 400 11th St. South from New York-based Verizon Communications. Financial terms of the transaction were not disclosed.
The real estate company is planning a mixed-use project that will feature retail and a high-rise tower with approximately 280 units. LCOR intends to break ground on the project in early 2020. The project aims to improve walkability in the surrounding area.
“As part of this project, we are working with Arlington County to identify potential opportunities for park space, which would enrich the entire neighborhood,” Josh White, vice president of development at LCOR, said in a statement.
The land is adjacent to Altaire, LCOR’s 451-unit building at 400 Army-Navy Drive in Crystal City. The new development aims to complement Altaire’s luxury residences by offering a range of efficient unit types at lower price points.
LCOR has offices in Bethesda, Md.; New York and Berwyn, Pa.2018-10-22T13:42:00+00:00
Five Va. resorts make Condé Nast’s list of Top Resorts in the South
http://www.virginiabusiness.com/news/article/five-va.-resorts-make-conde-nasts-list-of-top-resorts-in-the-south#When:20:08:00ZFive Virginia resorts were named to Condé Nast Traveler’s annual list of the Top Resorts in the South.
Last week, Virginia Business reported on Virginia hotels that made the magazine’s annual Readers’ Choice Awards, but failed to include those that had made the top resorts list.
Primland in Meadows of the Dan was the highest-ranked Virginia resort on the list at No. 8.
Other Virginia resorts include: the Landsdowne Resort and Spa in Leesburg at No. 14, Tides Inn in Irvington at No. 20, Salamander Resort & Spa in Middleburg at No. 21 and The Omni Homestead Resort in Hot Springs at No. 25.
The list is part of the travel magazine and website’s 31st annual Readers’ Choice Awards. The Readers’ Choice Awards are announced in the November issue of Conde Nast Traveler, which will appear on newsstands in late October.2018-10-21T20:08:00+00:00
Virginia unemployment rate takes another dip
http://www.virginiabusiness.com/news/article/virginia-unemployment-rate-takes-another-dip#When:20:07:00ZVirginia’s unemployment rate dipped for the third consecutive month.
The commonwealth’s seasonally adjusted rate for September was 2.9 percent, down 0.7 percentage point from a year ago.
It marks the commonwealth’s lowest rate in more than 10 years. The unemployment rate last was 2.9 percent in June 2007.
Virginia’s seasonally adjusted unemployment rate continues to be below the national rate, which was down by 0.2 percentage point to 3.7 percent.
Virginia’s nonfarm employment increased by 5,600 jobs to 4,025,000, a new record high.
Private employment in September increased by 7,700 jobs to 3,324,000, while public-sector payrolls decreased by 2,100 jobs to 701,200.2018-10-19T20:07:00+00:00
Proposals sought for Colonial Williamsburg Foundation’s former headquarters
http://www.virginiabusiness.com/news/article/proposals-sought-for-colonial-williamsburg-foundations-former-headquarters#When:19:35:00ZThe Colonial Williamsburg Foundation is looking to breathe new life into its former headquarters in Merchants Square.
The foundation and Cushman & Wakefield | Thalhimer have issued a Request for Proposals (RFP) for the adaptive reuse of the property at 134 N. Henry St. in Williamsburg.
From 1940 through 2018, the building served as the administrative headquarters for the Colonial Williamsburg Foundation and the repository of the foundation’s corporate archives. Colonial Williamsburg’s executive team has relocated to 301 First St.in Williamsburg on the foundation’s Bruton Heights campus.
A co-issued news release said the property awaits an adaptive reuse that capitalizes upon advancing downtown vibrancy and high demand for new residential and commercial options in the city’s epicenter. The reuse of the property, which is now vacant, should honor the quality of the finishes that were employed during the Williamsburg Restoration. The proposals will be reviewed by Colonial Williamsburg’s Real Estate Department and subject to approval by its senior leadership.
Merchants Square, located in Williamsburg’s downtown, is flanked by Colonial Williamsburg’s Historic Area and Art Museums and by the College of William & Mary. The mixed-use commercial district spans roughly 10 city blocks and includes 225,000 square feet of retail, restaurant, entertainment, residential and specialty space plus more than 30,000 square feet of office space.
Cushman & Wakefield | Thalhimer’s Dawn F. Griggs and Drew Haynie are leading the assignment on behalf of The Colonial Williamsburg Foundation.
Photo courtesy Cushman & Wakefield | Thalhimer
General Assembly: Adopt full conformity
http://www.virginiabusiness.com/opinion/article/general-assembly-adopt-full-conformity#When:19:19:00ZAs the House and Senate of our great commonwealth begin/continue discussions around the new federal tax laws and the effect on Virginians, as well as tax conformity and tax reform in Virginia, please consider reading the whitepaper "Virginia Tax Conformity: 2018 and Beyond," recently released by the Virginia Society of Certified Public Accountants (found in its entirety at vscpa.com/TaxConformityWhitepaper).
As a member of the VSCPA Tax Advisory Committee, I feel it is important for the commonwealth that the approach we have laid out be considered a roadmap for new legislation. But most importantly, we feel it is in the best interests of the commonwealth, individuals and business owners that the General Assembly act quickly in January to adopt full conformity with the federal tax laws.
We are proposing that any current deconforming provisions be reconsidered and be made fully conforming to the Internal Revenue Code. Full conformity just means that Virginians start with federal adjusted gross income (individuals) or federal taxable income (businesses) on their tax returns with no additions or subtractions resulting from deconforming items such as federal bonus depreciation, medical expenses or different treatment of net operating losses, to name a few. Conformity or deconformity does not affect Virginia's standard deduction or exemption amounts.
While deconformity adds complexity, simplicity is our goal. Simplicity helps to ensure accuracy and compliance, and in the long-term, more revenues for the commonwealth.
Early conformity adoption in the first days of session will allow software vendors to act expeditiously with software changes (critical), taxpayers to complete filings quickly, and allow the commonwealth to begin collecting revenues in a timely manner. Otherwise, delays and uncertainty may result in extensions being filed and delays in revenue collection.
One other provision the General Assembly should consider is to allow the Virginia Department of Taxation to waive penalties for 2018 underpayments of tax by Virginia's taxpayers. Uncertainty surrounding the federal tax law changes — the IRS is just now issuing guidelines and regulations — as well as uncertainty surrounding Virginia's response to these changes, has made it difficult for taxpayers to plan accordingly and possibly miss targets for withholdings and quarterly payments. We believe that penalty waivers are an equitable approach to these sweeping changes.
Lastly, we ask the senators and delegates to not let projected increases or decreases in tax revenue delay the process. Instead, we are asking them to set aside any additional revenues for this first year of change and make decisions later regarding spending or earmarking those funds. We also are asking that no legislation around tax policy changes or comprehensive tax reform be enacted with an effective date prior to Jan. 1, 2019. The focus in the early days of their session should be on the primary issues — full conformity, quick adoption and penalty waivers.
I hope that you will take the time to review this whitepaper and consider the many issues that we have raised and recommendations made. As citizens of this great commonwealth, I urge you to continue this conversation with your senators and delegates as they begin to ponder on all the various proposals before them. They will have much work to do in January and February, but it is important that this be considered the top priority.
Sarah Adams, CPA, is president & CEO of Adams & Co., PC., in Lebanon, and is a member of the Virginia Society of Certified Public Accountants and can be reached at email@example.comT19:19:00+00:00http://www.virginiabusiness.com/uploads2/Hildi_Pineda_President_20181_copy.jpg
Northern Virginia government contractor names new president
http://www.virginiabusiness.com/companies/article/northern-virginia-government-contractor-names-new-president#When:18:59:00ZAbleVets LLC, a Chantilly-based government contractor, has promoted its chief growth officer to president, effective immediately.
Hildi Pineda is tasked with helping the health IT consulting firm transition from a small to mid-tier business.
Pineda was one of the firm's first employees when it was founded in 2012. While she was chief growth officer, the company grew 400 percent year-over-year. The company works with federal agencies, including the departments of veterans affairs and defense.2018-10-19T18:59:00+00:00
U.S., Canadian relations improved after USMCA, deputy ambassador says
http://www.virginiabusiness.com/news/article/u.s.-canadian-relations-improved-after-usmca-deputy-ambassador-says#When:10:01:00ZU.S. and Canadian trade relations are in a better place now that an agreement has been reached to revise the North American Free Trade Agreement, Kirsten Hillman, Canada’s deputy ambassador to the U.S. said Thursday in Richmond.
“It has been a challenging time between our two countries this past year. We’re in a better place today,” Hillman told 350 people at the 70th annual Virginia Conference on World Trade at the Richmond Marriott.
Late last month the U.S., Canada and Mexico announced they had reached an agreement on an updated to NAFTA, called the United States-Mexico-Canada Agreement, or USMCA.
The USMCA includes new regulations on intellectual property, improves trade of digital content and provides stronger protections for environmental and labor standards. It also increases the percentage of North American vehicle parts that must be included in cars produced in the region from 62.5 percent to 75 percent. Another provision requires that 30 percent of vehicles made in the region be made by workers earning at least $16 per hour.
The USMCA still requires ratification by all three countries.
The agreement has many benefits, Hillman told conference attendees. The USMCA reinforces the North American supply chain, removes red tape for trade among the countries and has new provisions to benefit more employees.
“We wanted to make it more relevant to a broader audience,” Hillman said. “There are some people who believe the promise of international trade hasn’t benefited them.”
The new agreement provides protections against discrimination and includes an entire chapter on small and medium-sized businesses, which are vitally important to all three countries’ economies, said Hillman.
“Whether the company has five people or 500,000 people, the more that we can get our companies to trade generally the more competitive they become,” Hillman said in an interview with Virginia Business after the speech. “The higher wages they pay … the more stable they are in terms of their place in the marketplace.”
Negotiations on the USMCA were intense and fast. Hillman said that trade agreements typically take three to five years.
“We achieved a complete renegotiation of the agreement in less than 14 months, which is at breakneck speed,” Hillman said.
Canada is Virginia’s No. 1 export market. In fact, Virginia sells more to Canada than it does to China and Mexico combined. Nearly 700,000 visitors each year come to Virginia, Hillman said.
Despite a deal on a new agreement, Hillman said Canada still wants to revisit the steel and aluminum tariffs imposed by the Trump administration. Canada was included in the U.S. administration’s 25 percent tariff on steel imports and 10 percent tariff on aluminum imports.
“We still have some work to do with respect to tariffs that remain in place,” said Hillman.
Canada responded with its own tariffs on U.S. steel and aluminum. “When these tariffs are put in place our government had to put in place counter measures,” Hillman said.
The two-day Virginia Conference on World Trade included several panels in addition to Hillman’s speech.
The consensus among panelists was that the U.S. needed to compete in a free and fair marketplace. Most indicated that measures need to be taken to address unfair trade practices by China, but that an all-out trade war would harm the economy.
One panel included three former governors. George Allen, Bob McDonnell and Terry McAuliffe discussed international trade during their administrations, including its importance on the commonwealth’s economy and how trade missions were vital to land key deals for the commonwealth.
Another panel that included representatives of the logistics and shipping industries said that trade volumes had seen an artificial bump from importers trying to bring in goods before proposed tariffs hit.
But they concluded the economy could be heading for trouble next year if the 25 percent tariffs on $200 billion in Chinese goods go into effect.2018-10-19T10:01:00+00:00