John Marshall Bank hires three executives
http://www.virginiabusiness.com/companies/article/john-marshall-bank-hires-three-executives#When:22:24:00ZReston-based John Marshall Bank has announced three new hires.
Linda Fourney has joined the bank as senior vice president/director of human resources. She will be based in the bank’s Reston corporate offices.
Fourney was senior vice president/organizational development and recruitment officer for Virginia Commerce Bank.
Also, Nadia McGeough has become vice president/ business development. She will be based in John Marshall Bank’s Arlington office.
She spent the past 20 years in various positions at Freddie Mac, most recently as chief of staff to the senior vice president of the loan servicing and REO division.
In addition, Teresa Peterson has become a vice president/ loan operations manager at the Reston corporate offices.
Before joining John Marshall Bank, Peterson worked at Virginia Commerce Bank where she held a similar position.
In addition to Reston and Arlington, the bank has offices in Alexandria, Falls Church, Leesburg, Rockville, Md., and Washington, D.C.2014-03-07T22:24:00+00:00
Bon Secours to open first urgent-care center
http://www.virginiabusiness.com/news/article/bon-secours-to-open-first-urgent-care-center#When:22:22:00ZBon Secours Virginia will open its first urgent-care center Monday in the Glen Allen area of Henrico County.
The facility, Bon Secours Good Health Express, will offer immediate primary care for nonemergency medical issues.
Located on Brook Road in Henrico, the urgent care center will be open daily from 10 a.m. to 9 p.m.
“As we continue our efforts to evolve with new health care legislation and manage the population’s health care needs, we see an urgent care facility as part of the continuum of care,” Michael Robinson, CEO of Memorial Regional Medical Center, Richmond Community Hospital and St. Francis Medical Center, said in statement. “This is another access point for our patients, and it assists with our effort to keep costs down for the consumer, as well as manage non-emergent care outside of the emergency department.”
Robinson also is CEO of all Bon Secours Richmond’s ambulatory facilities.
The urgent care center will be staffed by family-practice and internal medicine physicians as well as physicians trained in emergency care.
The nearly 6,500-square-foot facility will house a physician clinic, radiation and laboratory services, as well as offer e-script prescriptions to the adjacent Walgreens pharmacy.
Physicians will serve patients with chronic ailments and routine health issues such as colds and flu, allergic reactions, sinus infections, rashes, sprains and minor fractures.
No appointments are necessary and patients will be served on a first-come, first-served basis. Patients who require emergency medical care will be transported to Bon Secours Memorial Regional Medical Center.
Bon Secours Virginia employs about 12,000 people in seven hospitals, four in the Richmond area and three in Hampton Roads.2014-03-07T22:22:00+00:00
New business incubator established in Warrenton
http://www.virginiabusiness.com/news/article/new-business-incubator-established-in-warrenton#When:20:16:00ZA new business incubator/accelerator has opened in Warrenton.
The Fauquier County Department of Economic Development and the Mason Enterprise Center of George Mason University are partnering in the project, which will be called Mason Enterprise Center, Fauquier County or MEC-Fauquier.
The facility is still looking for a permanent facility that would include 8,000 to 10,000 square feet of office and co-working space. The incubator will temporarily be housed at 70 Main St. in Warrenton.
The inclusion of co-working space is a first for a Mason Enterprise Center. Co-working space offers less formal open space for entrepreneurs who have previously been operating operating at local coffee houses and restaurants.
MEC will feature eight private offices, co-working space, meeting space, virtual client support and training and special programs. Tenants will sign short-term leases and business are expected to graduate from the facility within two years.
The Fauquier County Board of Supervisors approved $400,000 in December to be used for the first two years of its operation.2014-03-07T20:16:00+00:00
Green Applications LLC set to create more than 300 jobs in Orange County
http://www.virginiabusiness.com/news/article/green-applications-llc-set-to-create-more-than-300-jobs-in-orange-county#When:17:51:00ZNew Jersey-based Green Applications LLC will invest $9.75 million to establish its first Virginia operation in Orange County, creating 323 jobs.
“Virginia is great state with a strong workforce to lead our East Coast expansion,” Robert Butters, Green Applications owner and CEO said in a statement. “As the textile print and embellishment industry moves back to domestic production, being located in the center of the East Coast allows us to deliver quick-turn and strategic solutions to our customers …”
The company will design, print, produce and distribute graphic art on heat transfers and apparel. Green Applications is a division of Green Distribution, one of the largest printers and distributors of textile merchandise and heat applied graphics on the East Coast.
Virginia competed against Florida and New Jersey for the project.
Gov. Terry McAuliffe approved a $540,000 grant from the Governor’s Opportunity Fund for the project.2014-03-07T17:51:00+00:00
Virginia’s agricultural and forestry exports reach new record
http://www.virginiabusiness.com/news/article/virginias-agricultural-and-forestry-exports-reach-new-record#When:09:40:00ZVirginia’s agricultural and forestry exports reached an all-time high in 2013, Gov. Terry McAuliffe announced today during the Governor's Conference on Agricultural Trade in Richmond.
Agricultural and forestry products shipped from the commonwealth surpassed $2.85 billion in 2013, an increase of eight percent from the previous record in 2012.
Agricultural exports have grown by approximately 27 percent since 2010, according to a news release by Gov. McAuliffe’s office.
The top agricultural and forestry product exports from Virginia in 2013 included soybeans, soy meal, and soybean oil; lumber and logs; unmanufactured leaf tobacco; wheat, corn, barley and other grains; animal feed; pork; poultry; seafood and other marine products; processed foods and beverages, including wine; wood pellets; animal fats and oils; raw peanuts; and cotton.
The top three export markets for Virginia in 2013 were China, Canada and Switzerland.2014-03-07T09:40:00+00:00
Neustar to continue managing for U.S. country code domain
http://www.virginiabusiness.com/news/article/neustar-to-continue-managing-for-u.s.-country-code-domain#When:09:39:00ZSterling-based Neustar Inc. has been awarded a contract by the U.S. Department of Commerce to continue administering the .US Top Level Domain (TLD), the official Internet country code domain of the United States.
Neustar has administered the domain since 2001, when the Department of Commerce selected the company to build and manage it.
The .US domain helps American small businesses and individuals create and expand their online presence.
Neustar manages the domain and oversees the network of registrars who sell the .US domain names. The Department of Commerce has reawarded the contract for three years with two additional one-year extension options.
In 2014, Neustar plans to launch a new multi-stakeholder council connected to the domain, including members representing localities, registrars, small businesses and nonprofit organizations as well as entities involved with STEM education and cybersecurity.
The Department of Commerce contract has no bearing on a separate number portability administrator contract, which accounts for half of Neustar’s revenue.
The company’s stock declined by almost 20 percent in one day in January amid concerns about the future of that contract.
Neustar had announced that a revised bid for a contract starting July 2015 had been rejected by North American Portability Management (NAPM) LLC, the organization that awards the contract. Neustar had submitted an initial proposal last April.
NAPM has not announced a decision on the contract.2014-03-07T09:39:00+00:00
On the Red Carpet at The Big Ball
http://www.virginiabusiness.com/news/article/on-the-red-carpet-at-the-big-ball#When:09:14:00ZContact Adrienne Watson at email@example.com to get a copy of your red carpet photo from the recent Big Ball event at the Virginia Museum of Fine Arts.2014-03-07T09:14:00+00:00
Virginia Business celebrates The Big Ball
http://www.virginiabusiness.com/news/article/the-big-ball-2014-out-about#When:05:42:00ZVirginia Business celebrated Virginia's business leaders and publication of The Big Book Thursday night at its second annual The Big Ball.
This marked the magazine's second annual event, which was held at the Virginia Museum of Fine Arts. Photos from the red carpet can be viewed here.
Part of the event's proceeds benefited the Virginia Early Childhood Foundation, a nonprofit organization whose mission is to ensure that all of Virginia's children are prepared for school when entering kindergarten.
The Big Book includes more than 50 lists in areas ranging from construction and development to tourism and a list of the 50 Most Influential Virginians.
CCAM to work with new manufacturing innovation institute
http://www.virginiabusiness.com/news/article/ccam-to-work-with-new-manufacturing-innovation-institute#When:16:24:00ZThe Commonwealth Center for Advanced Manufacturing will partner with the Digital Manufacturing and Design Innovation (DMDI) Institute, a public-private organization recently launched by President Obama.
DMDI is one of two new manufacturing innovation institutes being led by the Department of Defense. DMDI and the Lightweight and Modern Metals Manufacturing Innovation (LM3I) institute are industry, university and nonprofit consortiums that will develop manufacturing technology to meet national security and energy needs.
The Commonwealth Center for Advanced Manufacturing (CCAM), based in Prince George County, is a research center developing advanced manufacturing solutions through the collaboration of with university and industry researchers.
“CCAM is pleased to support DMDI and look forward to leveraging the CCAM facility and research capabilities in concert with the institute’s goals,” said Bob Fagan, CCAM’s chief technology officer. “DMDI provides an opportunity for the CCAM member companies to participate in the DMDI projects, innovations and leading-edge developments.”
The DMDI is based in Chicago and led by the University of Illinois Labs. Its consortium includes 73 companies, universities, nonprofits and research labs.
In addition to funding from consortium members, the institute will receive a portion of $140 million federal funds designated for manufacturing innovation institutes.
CCAM industry and government members include Canon Virginia Inc., Chromalloy, Newport News Shipbuilding, Rolls-Royce, Sandvik Coromant, Siemens, Sulzer Metco, Aerojet, Hermle Machine Co., Mitutoyo, TurboCombustor Technology Inc., Buehler, Cool Clean Technologies, GF AgieCharmilles, Blaser Swisslube, Mechdyne, National Instruments, and NASA Langley Research Center.2014-03-06T16:24:00+00:00
Alpha Natural Resources fined $27.5 million
http://www.virginiabusiness.com/news/article/alpha-natural-resources-fined-27.5-million#When:09:47:00ZAlpha Natural Resources Inc. has been fined $27.5 million for alleged violations of its water discharge permits at mines in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia.
The fine is the largest ever for violation of water pollution permits.
The Bristol-based coal producer said Wednesday that it had reached an agreement with the U.S. Environmental Protection Agency (EPA), U.S. Department of Justice (DOJ) and three state agencies regarding claims under the Clean Water Act. The consent decree, filed with the U.S. District Court for the Southern District of West Virginia, is subject to a public comment period and must be approved by the court before it becomes effective.
Under the plan, Alpha will implement an environmental management system, expand its auditing/reporting protocol and install selenium and osmotic pressure treatment facilities at certain locations.
The Associated Press reported that these measures will cost the company about $200 million to reduce discharge pollution. The AP said that the government alleges Alpha exceeded water pollution limits of state permits more than 6,000 times between 2006 and 2013.
The pollution discharged did not affect drinking water, the company said.
"This consent decree provides a framework for our efforts to become fully compliant with our environmental permits, specifically under the Clean Water Act," Alpha Senior Vice President of Environmental Affairs Gene Kitts said in a statement. He said the company complies with water permits 99.8 percent of the time.
Kitts points out that the company has doubled in size twice since 2006, acquiring more than 700 state water discharge permits. The AP said more than half of the violations occurred at mines that were formerly part of Massey Energy, which the company acquired in 2011.
"For an organization our size and with as varied a group of mining operations and permit conditions as we have, our people do an outstanding job in maintaining environmental compliance," said Kitts. "This settlement will provide a consistent structure to our efforts to become even better in preventing incidents and in responding quickly to situations where permit limits are exceeded."
Kitts said Alpha’s violations related mostly to naturally occurring elements, such as iron, manganese, aluminum and selenium, whose limits are sometimes exceeded when rainwater or groundwater transports the elements into the discharge from mining operations.
Former McDonnell administration officials back private substitute for Medicaid expansion
http://www.virginiabusiness.com/news/article/former-mcdonnell-administration-officials-back-private-substitute-for-medic#When:22:43:00ZA group of former McDonnell administration officials on Wednesday joined a chorus of business leaders urging the adoption of a “market-based” program to expand health-care coverage in Virginia.
A letter from Jim Cheng, James D. Duffey Jr. and Cynthia Romero addressed to Senate Majority Leader Richard Saslaw and House Speaker Bill Howell is the second released by A Healthy Virginia Works, a coalition of business groups supporting a private insurance alternative for Medicaid expansion.
The first letter, signed by a group of prominent Virginia business and civic leaders, was released Friday. The coalition believes more letters are likely as a variety of business leaders try to show that support for a private option extends beyond a few organizations.
The coalition includes the Virginia Chamber of Commerce and a number of local chambers statewide. A similar group of business organizations, led by the Virginia Chamber, recently endorsed a private health insurance plan that could be used to expand coverage to Virginians who would be eligible for an expanded state Medicaid program under the federal Affordable Care Act.
The Democratically controlled Virginia Senate has made Medicaid expansion using a private insurance plan proposed by Republican state Sen. John Watkins a part of its budget proposal. The expansion would largely be financed with federal funds.
The Republican-controlled House of Delegates has rejected any type of Medicaid expansion, fearing that the federal government wlll not meet its funding obligations, leaving the state with a bloated, inefficient system.
The budget impasse threatens to shut down the state government if not resolved before the end of its current fiscal year.
The two letters concern the Virginians caught in the “coverage gap.” These are residents who make too much money to be eligible for Medicaid under current guidelines but do not qualify for premium subsidies using the federal health care exchange.
Medicaid expansion was part of the original ACA, but a Supreme Court decision upholding the law also let each state decide if it would expand its program. Medicaid programs are funded by state and federal dollars.
“We urge you to work together to find a way to close the coverage gap in healthcare, drawing down the federal funds that will help provide healthcare to the uninsured and also meet the needs of Virginia's business community," the former McDonnell administration officials wrote in their letter.
Under McDonnell, Cheng was secretary of commerce and trade, Duffey was technology secretary, and Romero was health commissioner.2014-03-05T22:43:00+00:00
Contractors trade group to launch private insurance exchange
http://www.virginiabusiness.com/news/article/contractors-trade-group-to-launch-private-insurance-exchange#When:21:31:00ZThe Arlington-based Associated General Contractors of America said Wednesday that it plans to launch a new private insurance exchange this summer in cooperation with Willis North America.
The new exchange, to be called “The AGC Alternative,” will allow the association’s 30,000 member firms to deliver health insurance and related benefits to their employees at a lower cost, officials said.
“This new exchange will make it far easier for member firms to provide top quality health insurance and related benefits for their employees,” Stephen E. Sandherr, the association’s CEO, said in a statement. “Our members will now be able to secure the kind of convenient and discounted benefits that a growing number of large employers already enjoy.”
According to Sandherr, the new exchange will offer a broader range of options than typically available to individual firms, so employers and employees will get more benefits that meet their particular needs.
The new exchange also is expected to make it easier for firms to comply with the Affordable Care Act requirements.
Rick Hawkinberry, Willis Construction CEO said, “Willis has been a long-term partner with AGC and while we have previously focused our efforts in the very important area of employee and jobsite safety, we are delighted to work with AGC to bring this new solution to AGC member firms and their employees.”
Once AGC and Willis complete preparations, which includes the securing of a national insurance provider, each member firm will each be able to set up its own private company benefits exchange site for employees, Sandherr said. Participating firms will provide a stipend to their employees, who will use those funds to shop for health insurance and other benefits offered through the exchange.
The national trade association is the largest in the construction industry, representing 95 charter members, including general contractors, specialty contractors and service providers and suppliers. It announced the new health insurance exchange during its annual convention now underway in Las Vegas.
Former church, duplexes in Danville will be turned into apartments
http://www.virginiabusiness.com/news/article/former-church-duplexes-in-danville-will-be-turned-into-apartments#When:21:30:00ZThree empty buildings in Danville’s Westmoreland neighborhood will be turned into affordable apartments, a $2.6 million project.
The Danville City Council approved the project Tuesday night. The three buildings include the former Sledd Memorial Church at 608 Upper St., which was most recently used for the Head Start program, and two vacant duplexes on Floyd St.
The church will be converted into 11 one- and two-bedroom apartments. The duplexes will provide two, one-bedroom units and two, two-bedroom units.
Thirteen of the units will serve veterans, people with disabilities, and low-income households. Two of the Floyd Street units will be rented at market rates.
Funding will come from the Virginia Housing Trust Fund and a Community Block Development Grant, low-interest loans and historic tax credit equity.2014-03-05T21:30:00+00:00
Staunton names assistant director of economic development
http://www.virginiabusiness.com/companies/article/staunton-names-assistant-director-of-economic-development#When:21:03:00ZCourtland Robinson has been named Staunton’s assistant director of economic development. He replaces Amanda Glover, who accepted the position of director of economic development in Augusta County last August.
Robinson previously worked for the Shenandoah Valley Regional Airport. As a graduate assistant at James Madison University (JMU), Robinson worked for the university as well as Harrisonburg Downtown Renaissance, the Shenandoah Valley Partnership and the Central Shenandoah Planning District Commission. In these positions he provided research, web and social media support, marketing assistance, policy analysis and grant writing.
“We are very pleased to welcome Courtland to the Staunton team,” Bill Hamilton, Staunton’s director of economic development said in a statement. “His strong knowledge of the region, combined with his background in urban planning and economic development make him an excellent choice.”2014-03-05T21:03:00+00:00
Jones Lang LaSalle shortens name to JLL
http://www.virginiabusiness.com/news/article/jones-lang-lasalle-shortens-name-to-jll#When:14:43:00ZJones Lang LaSalle, a professional services and investment firm specializing in real estate, has shortened its name. The company, which is based in Chicago and has offices in Hampton Roads and Richmond, announced Tuesday that it will go by the name of JLL.
It rolled out a new logo to accompany the change. The new branding, the company said, is more easily recognized, fits its global footprint and is suitable for digital applications and mobile channels.
Charles Doyle, chief marketing and communications fficer at JLL said in a statement, “JLL is easily pronounced, remembered, visible and representative of our firm wherever we serve our clients around the world.”
The JLL name and logo will be rolled out globally over the next two years. The firm’s legal name, Jones Lang LaSalle Inc., and the name of its wholly owned subsidiary, LaSalle Investment Management, will remain unchanged.2014-03-05T14:43:00+00:00
Herndon-based BridgeStreet acquired by Versa Capital affiliate
http://www.virginiabusiness.com/news/article/herndon-based-bridgestreet-acquired-by-versa-capital-affiliate1#When:21:36:00ZHerndon-based BridgeStreet Global Hospitality has been acquired by an affiliate of Versa Capital Management LLC.
BridgeStreet specializes in serviced apartments, fully furnished apartments that serve as alternatives to extended-stay hotels. The company has more than 50,000 locations in 60 countries.
Philadelphia-based Versa is a private-equity investment firm with more than $1.4 billion of assets under management. It focuses on investments in special situations involving middle market companies.
The acquisition follows recent BridgeStreet’s recent rebranding and international growth.
Company officials said the deal will elevate BridgeStreet’s presence and create new opportunities for development projects and long-term growth.
Serviced apartments typically are twice the size of extended stay hotels rooms and include complete kitchens and onsite laundry facilities.
BridgeStreet has introduced a family of brands with the intention of bringing definition to the furnished apartment sector.
BridgeStreet brands includes Exclusive, Residences, ApartHotels, Living, Places and Stüdyo. They offer a variety of service packages to offer options based on location, price point and individual needs.
Versa’s investment portfolio includes Bob’s Stores, Black Angus Steakhouse, Civitas Media, Eastern Mountain Sports and Polartec.2014-03-04T21:36:00+00:00
Herndon-based BridgeStreet acquired by Versa Capital affiliate
http://www.virginiabusiness.com/news/article/herndon-based-bridgestreet-acquired-by-versa-capital-affiliate#When:21:10:00ZHerndon-based BridgeStreet Global Hospitality has been acquired by an affiliate of Versa Capital Management LLC.
BridgeStreet specializes in serviced apartments, fully furnished apartments that serve as alternatives to extended-stay hotels. The company has more than 50,000 locations in 60 countries.
Philadelphia-based Versa is a private-equity investment firm with more than $1.4 billion of assets under management. It focuses on investments in special situations involving middle market companies.
The acquisition follows recent BridgeStreet’s recent rebranding and international growth.
Company officials said the deal will elevate BridgeStreet’s presence and create new opportunities for development projects and long-term growth.
Serviced apartments typically are twice the size of extended stay hotels rooms and include complete kitchens and onsite laundry facilities.
BridgeStreet has introduced a family of brands with the intention of bringing definition to the furnished apartment sector.
BridgeStreet brands includes Exclusive, Residences, ApartHotels, Living, Places and Stüdyo. They offer a variety of service packages to offer options based on location, price point and individual needs.
Versa’s investment portfolio includes Bob’s Stores, Black Angus Steakhouse, Civitas Media, Eastern Mountain Sports and Polartec.2014-03-04T21:10:00+00:00
Poll says winter weather puts chill on Virginia’s small businesses
http://www.virginiabusiness.com/news/article/poll-says-winter-weather-puts-chill-on-virginias-small-businesses#When:20:51:00ZA poll released Tuesday by Small Business Majority says this winter’s extreme cold weather has taken a toll on many of Virginia’s small businesses.
The poll of 505 small business owners, conducted Feb. 7 -10 by Public PolicyPolling, found that nearly that four in 10 (or 39 percent) of small Virginia business owners reported that they had been impacted by the weather, with 87 percent saying they have suffered a “significant” financial impact.
Many businesses were forced to close temporarily, with 59 percent closing their business for up to a week, and some closing for as long as 14 to 30 days. Nearly one in five said they had laid off workers.
Other business owners reported damages of between $5,000 and $25,000.
“I don’t normally blame weak sales on bad weather, but this winter has been really hard on my business,” Mike Brey, owner of Hobby Works in Fairfax, said in a statement. “We’ve been forced to close because of extreme snowstorms, several of which happened on weekends — our busiest time of the week. The extreme cold also has more people staying indoors, which has cut down on foot traffic. While you expect some snowstorms during this time of year, it’s clear the weather is getting more intense. “
A majority (56 percent) of Virginia small business owners who were polled supported a federal insurance program to help entrepreneurs recover from extreme weather and climate-change related events.2014-03-04T20:51:00+00:00
Kroger created more than 600 jobs in the commonwealth last year
http://www.virginiabusiness.com/news/article/kroger-created-more-than-600-jobs-in-the-commonwealth-last-year#When:22:51:00ZThe Kroger Co. announced Monday that it created more than 600 jobs in Virginia last year. The Cincinnati, Ohio-based grocery store chain also generated more than 7,000 jobs across the U.S. in 2013.
Virginia accounted for the most jobs created in Kroger’s Mid-Atlantic region last year, which yielded more than 800 new jobs. The division is made up Virginia plus North Carolina, West Virginia, Tennessee, Ohio and part of Kentucky.2014-03-03T22:51:00+00:00
Sporting goods executive named to ATK board
http://www.virginiabusiness.com/companies/article/sporting-goods-executive-named-to-atk-board#When:22:09:00ZSporting goods executive Michael Callahan has been named to the board of directors at Arlington-based Alliant Techsystems Inc. (ATK).
Callahan has worked in the sporting goods industry for 36 years.
Since 2008, he has been president and CEO of Aspen Partners, a Utah-based consulting firm serving the outdoor sports industry.
Before that, he worked for Cabela's Inc. for 18 years, retiring in 2008 as senior vice president for business development and international operations.
Callahan's election increases the size of ATK's board from eight to nine. He has been appointed to the board’s audit committee.
Callahan is a former board member at gun accessory maker Bushnell Group Holdings Inc., which ATK acquired last year for $985 million in cash.
ATK is an aerospace, defense and commercial products company with operations in 22 states, Puerto Rico and overseas.2014-03-03T22:09:00+00:00
Construction spending in January posts biggest year-over-year increase since 2006
http://www.virginiabusiness.com/news/article/construction-spending-in-january-posts-biggest-year-over-year-increase-sinc#When:20:04:00ZTotal construction spending in January posted the steepest year-over-year increase since 2006, with growth in public construction as well as private residential and nonresidential spending, according to an analysis of new Census Bureau data by the Arlington-based Associated General Contractors of America (AGC).
“Overall construction spending increased in January compared with both December and January 2013 despite uncommonly adverse weather conditions,” Ken Simonson, the association's chief economist, said in a statement. “The monthly gains were limited to homebuilding and multifamily residential construction, although private nonresidential work should rebound in the next few months. Public construction is up for now on a year-over-year basis, but funding remains questionable.”
Construction put in place totaled $943 billion in January, 9.3 percent higher than in January 2013, the fastest rate of growth for total construction spending since May 2006.
Private residential construction spending increased by 1.1 percent in January and jumped 15 percent in 12 months. Private nonresidential spending slipped 0.2 percent for the month, but rose 9.7 percent compared to January 2013. Public construction spending dropped 0.8 percent for the month but increased 2.5 percent from a year earlier.
“Contractors are clearly more optimistic about the outlook for private nonresidential markets this year … “ Simonson said. .“In addition, apartment construction is still very strong in much of the country, and homebuilding should remain positive.”
Simonson added that the Census Bureau estimates for January and December may not accurately reflect the impact of severe winter weather because the agency relies in part on models as well as field reports.
Association officials cited highway and street construction as an example of a category that may be revised. The preliminary data show spending soared 3.7 percent in January and 15 percent year-over-year. But they cautioned that federal highway funding could decline abruptly as early as this summer if the federal highway trust fund runs out of money as predicted.
"Letting highway investments lapse will only hurt overall economic growth and put more construction jobs at risk,” said Stephen E. Sandherr, the association’s CEO.2014-03-03T20:04:00+00:00
Study says National Park visitors spent $926.3 million in Virginia in 2012
http://www.virginiabusiness.com/news/article/study-says-national-park-visitors-spent-926.3-billion-in-virginia-in-2012#When:19:49:00ZA report by the National Park Service shows that 23.4 million people visited national parks during 2012.The report estimates that these visitors spent $926.3 million in the commonwealth, an economic infusion that supported 13,256 jobs.
Nationally, the parks service had 283 million visitors in 2012 generating $14.7 billion in direct spending in communities within 60 miles of each park. The spending total supported 243,000 jobs.
The report says most visitor spending supports jobs in restaurants, grocery and convenience stores (39 percent); hotels, motels and B&Bs (27 percent); and other amusement and recreation (20 percent).
The visitor spending analysis was conducted by U.S. Geological Survey economists Catherine Cullinane Thomas and Christopher Huber and Lynne Koontz for the National Park Service.
The national parks in Virginia include :Appomattox Court House National Historical Park, Arlington House - The Robert E. Lee Memorial, Assateague Island National Seashore, Blue Ridge Parkway, Booker T. Washington National Monument, Colonial National Historical Park, Fredericksburg & Spotsylvania National Military Park, George Washington Birthplace National Monument, George Washington Memorial Parkway, Maggie L. Walker National Historic Site, Manassas National Battlefield Park, Petersburg National Battlefield, Prince William Forest Park, Richmond National Battlefield Park, Shenandoah National Park and Wolf Trap National Park for The Performing Arts.2014-03-03T19:49:00+00:00
Small Sterling bank closed by regulators
http://www.virginiabusiness.com/news/article/small-sterling-bank-closed-by-regulators#When:17:30:00ZMillennium Bank N.A. in Sterling was closed last week by federal regulators, making it the fourth institution to fail in the U.S. this year.
The Federal Deposit Insurance Corp. (FDIC) announced Friday that it took over the bank and that it had entered into a purchase agreement with WashingtonFirst Bank to assume all deposits of Millennium for the FDIC premium of 1 percent. WashingtonFirst, based in Reston, also has agreed to purchase almost all of the failed bank’s assets.
Millennium Bank had two branches, which are now branches of WashingtonFirst. Deposits will continue to be insured by the FDIC.
As of Dec. 31, Millennium Bank had about $130.3 million in total assets and $121.7 million in total deposits.
FDIC estimates that the cost to the Deposit Insurance Fund will be $7.7 million.
The last FDIC- insured institution closed in Virginia was the Bank of the Commonwealth in Norfolk, which closed Sept. 23, 2011.2014-03-03T17:30:00+00:00
Urban Farmhouse and Market Café celebrating third location in Richmond
A grand opening event for Urban Farmhouse and Market Cafe’s new Church Hill location at 310 N. 33rd St. -- its third Richmond area restaurant -- will be held Saturday, March 8 from 1 to 4 p.m.
Festivities will include live local music and a farmer’s market, in keeping with Urban Farmhouse’s focus on local food, artisans and musicians.
The hours for the Church Hill restaurant are 6:30 a.m. to 9:00 p.m. Monday through Friday, 7:00 a.m. to 9:00 p.m. on Saturday, and 7:00 a.m. to 8:00 p. m. on Sunday. Urban Hill’s other locations are in Shockoe Bottom and Midlothian.2014-03-03T16:18:00+00:00
Two new tenants take space in Alexandria office building
5 Star Life Insurance Co. and Edgesource Corp. have signed two leases totaling more than 16,000 square feet at 909 N. Washington St, bringing the 105,000-square-foot property to full occupancy.
Scott Rabin, a regional manager for Edge Commercial Real Estate, represented the landlord, the Armed Forces Benefit Association, in completing the two leases.
Edge became the building’s leasing agent about three years ago, when the building had a lot of vacancy and deferred maintenance.
Since then, the owner invested significant capital to enhance common areas and replace a majority of the building’s infrastructure systems. Those renovations, Rabin said in a statement, helped reposition the property and make it more energy efficient.
Bethesda-based Edge Commercial Real Estate, which has an office in Tysons Corner, is a commercial real estate advisory, investment and management company. It manages more than 8.4 million square feet of commercial space throughout the Washington, D.C., region.2014-03-03T15:39:00+00:00
KCG moves corporate headquarters to larger facility
http://www.virginiabusiness.com/news/article/kcg-moves-corporate-headquarters-to-larger-facility1#When:15:33:00ZKnowledge Consulting Group (KCG), one of the largest privately held cyber security services firms in the U.S., has relocated its corporate headquarters to a 17,500-square-foot office in Reston.
The company stayed in Reston, moving from the Plaza American Tower II building to 2000 Edmund Halley Drive on March 1.
“Relocating our office to a larger facility marks an important milestone for KCG,” Dusty Wince, the company’s founder and CEO, said in a statement. “The company has experienced significant growth over the past 13 years, and this new space will better accommodate our plans for expansion while enabling us to better serve our customers.”
The new location offers a more open and collaborative environment and enhanced meeting facilities to coordinate with customers.About 115 employees will be able to work from the space, compared to 65 at the old location.
The company said it is expanding its focus to include more commercial work, while it continues to serve the government market with major contracts with the Department of Homeland Security and other agencies.2014-03-03T15:33:00+00:00
Rappaport Cos. acquires two shopping centers in Northern Virginia
The Rappaport Cos. acquired two grocery-anchored retail centers in northern Virginia, Dominion Valley Market Square in Haymarket and South Riding Market Square in Chantilly, for an undisclosed price.
Rappaport, based in McLean, purchased the centers through its joint venture partnership with Principal Real Estate Investors. The joint venture began in March 2012. For the past four years, Rappaport has managed both centers on behalf of Toll Brothers, the developer of the residential communities of Dominion Valley Country Club and South Riding.
“The [joint venture ] has proven to be extremely successful in pursuing acquisitions,” Henry Fonveille, president of Rappaport, said in a statement. “We look forward to acquiring more properties with Principal Real Estate Investors in 2014.”
South Riding Market Square is a 266,591-square-foot retail center located at the intersection of Route 50 and Loudoun County Parkway, 15 minutes from Washington-Dulles International Airport. Retailers include The Home Depot and Giant Food plus several family-style restaurants.
Dominion Valley Market Square is located in the Dominion Valley Country Club community on Route 15, two miles north of I-66. The 175,000-square-foot center is anchored by Giant Food and includes Subway, Hair Cuttery and SunTrust Bank.
According to Rappaport, South Riding Market Square is 99 percent leased, while there are a few spaces are available at Dominion Valley.
The Rappaport Cos. has a leasing and management portfolio of about 13 million square feet of retail space in shopping centers and mixed-use projects. The company provides leasing, tenant representation, management and development services for shopping centers and ground-floor retail in mixed-use properties throughout Washington, D.C., Maryland and Virginia2014-03-03T15:03:00+00:00
Christopher Newport sets $42 million fundraising goal
http://www.virginiabusiness.com/news/article/christopher-newport-sets-42-million-fundraising-goal#When:20:57:00ZChristopher Newport University in Newport News has begun what it describes as the most ambitious fundraising campaign in its history, with a goal of raising $42 million by June 30, 2017.
The CNU Board of Visitors announced the public phase of “Defining Significance: The First Comprehensive Campaign for Christopher Newport University” on Friday.
CNU already has raised $32 million during the campaign's “silent” phase, including $5 million from Smithfield Foods and a $12 million, 30-year commitment from Ferguson Enterprises, of which nearly $7 million will count toward the campaign goal.
“Defining Significance” is chaired by John Lawson, president and CEO of W.M. Jordan Co, whose family today pledged $1 million toward the campaign.
The “Defining Significance” campaign identifies five key priorities, the most important of which is funding scholarships to reward merit and address financial need for exceptional students.2014-02-28T20:57:00+00:00
University of Richmond president to step down
http://www.virginiabusiness.com/news/article/university-of-richmond-president-to-step-down#When:20:37:00ZEdward L. Ayers, the president of the University of Richmond (UR), announced his intention to step down on June 30, 2015. He became president of the university in 2007.
“Next year is a fitting one for a University transition as we finish important work,” he said in an open letter to the UR community. “With the conclusion of The Richmond Promise , we will begin to think about aspirations to guide the next strategic plan.”
Charles A. Ledsinger Jr., rector of UR’s Board of Trustees praised Ayers’ leadership and vision.
“As you can imagine, the board accepted his decision with disappointment, but also with deep gratitude for his outstanding leadership over the past seven years,” Ledsinger said in a statement.
Although Ayers is stepping down, he will continue teaching at the university and will still be involved with UR’s Digital Scholarship Lab. Ayers currently teaches history at UR and was recently awarded the National Humanities Medal at the White House by President Barack Obama.
Applications during Ayers’ tenure rose by almost 50 percent. In the class of 2017, more than one in seven students is a first-generation college student, and one in four is a U.S. student of color, the university said in a news release.2014-02-28T20:37:00+00:00
Business leaders back private option for Medicaid expansion
http://www.virginiabusiness.com/news/article/business-leaders-back-private-option-for-medicaid-expansion#When:20:24:00ZA group of influential Virginia business leaders is urging the General Assembly to adopt a proposal using federal funds to operate a private health-care plan for low-income families and the uninsured.
“We believe Virginia can and should close the Medicaid coverage gap, expedite the return of federal dollars to the commonwealth, and continue the ongoing Medicaid reforms,” says a letter from the group addressed to Republican House Speaker Bill Howell and Democratic Senate Majority Leader Dick Saslaw.
The group endorses the “Chamber Plan” put forth by the Virginia Chamber of Commerce and 17 other business groups across the state. The plan proposes a set of “free-market principles” for creating a private insurance plan for people eligible for an expanded Medicaid program under the Affordable Care Act (ACA).
Medicaid expansion was envisioned as an integral part of the ACA. However, a Supreme Court ruling determined that expansion was optional for the states.
Without expansion, some residents may fall into a coverage gap in which they are not currently eligible for Medicaid and also don’t qualify for premium subsidies under the federal health-care exchange.
Medicaid expansion has become a divisive issue in the General Assembly with the Democratically controlled Senate backing a proposal similar to the Chamber Plan creating a private plan funded primarily by federal dollars. The Republican-dominated House of Delegates opposes Medicaid expansion in any form, saying the commonwealth cannot rely on the federal government promises to shoulder most of the additional cost.
The impasse threatens to delay passage of a two-year budget for fiscal years beginning this July.
The letter says the Chamber Plan “would draw down Virginia’s share of federal funds while concurrently reforming our health-care delivery system for those eligible for Medicaid.
“With nearly 400,000 uninsured Virginians and billions of Virginia’s tax dollars headed to Washington that could pay for this coverage, Virginia needs to find a way to draw down our share of these health-care dollars.
“We urge the House and Senate budget negotiators to find a solution that will make the Commonwealth the national model for improving access to quality healthcare while promoting sound fiscal stewardship. We believe this includes finding a way to ‘yes’ during the current state budget deliberations.”
The letter is signed by :
• Thomas N. Chewning, the retired CFO of Dominion Resources;
• Louis S. Haddad, president and CEO of Virginia Beach-based Armada Hoffler;
• Steven A. Markel, vice chairman of Richmond-based Markel Corp.;
• Cheryl P. McLeskey, the widow of Hampton Roads developer F. Wayne McLeskey Jr. and the owner the real estate firm McLeskey and Associates in Virginia Beach;
• Alexander B. McMurtrie Jr. a member of the House of Delegates from 1971 to 1981 representing Chesterfield County;
• W. Sheppard Miller III, chairman of KITCO Fiber Optics and president and CEO of Light Tech Fiber Optics, Virginia Beach;
• Richard S. “Major” Reynolds III, president of the Richard S. Reynolds Foundation and former member of the House of Delegates; and
• John Sherman Jr., former CEO and president of Scott & Stringfellow Financial Inc.2014-02-28T20:24:00+00:00
Fulcrum IT Services acquires Forgentum Inc.
http://www.virginiabusiness.com/news/article/fulcrum-it-services-acquires-forgentum-inc#When:20:16:00ZCentreville-based Fulcrum IT Services LLC has acquired Manassas-based Forgentum Inc., a provider of application development, integrated systems engineering, managed services and training.
Fulcrum said the deal would expands its services in the military health market. Financial details of the acquisition were not disclosed.
Fulcrum provides solutions and services primarily for federal government customers in the defense, intelligence, education and health-care sectors.
“This acquisition solidifies Fulcrum’s offerings in health care and includes invaluable talent and historic knowledge working in the military health-care community,” Fulcrum CEO Jeff Handy said in a statement.
Forgentum was founded in 2007. Its expertise primarily lies in medical applications technology. More than half of its employees have more than 10 years of experience working with Department of Defense medical programs.2014-02-28T20:16:00+00:00
Sentara adds Albemarle Health in North Carolina to its system
http://www.virginiabusiness.com/news/article/sentara-adds-albemarle-health-in-north-carolina-to-its-system#When:19:07:00ZNorfolk-based Sentara Healthcare will add Elizabeth City, N.C.-based Albemarle Health to its growing list of regional health-care providers outside of its Hampton Roads base.
The Pasquotank County (N.C.) Board of Commissioners and the Albemarle Hospital Authority Board of Commissioners has approved a long-term lease agreement with Sentara that takes effect on Saturday.
“Choosing the right partner was critical in ensuring the highest level of health care for our community today and in years to come,” Mary Ann Keyes, chair of the Albemarle Hospital Authority, said in a statement. “We are proud that after two years of hard work, we were able to partner with Sentara Healthcare and look forward to the positive changes and progress ahead.”
Albemarle Health is the largest regional health and wellness provider in northeastern North Carolina.
Its facilities include: Albemarle Hospital, a medical center in Elizabeth City; Regional Medical Center in Kitty Hawk, which houses an outpatient surgery center, laboratory, diagnostic imaging services and medical offices; Regional Oncology Center, a cancer treatment facility on the Albemarle Hospital campus; and the Albemarle Health Sleep Center in Elizabeth City.
Sentara CEO David L. Bernd said Sentara “will place a strong focus on improving the community’s access to primary care, managing chronic disease and improving the services and programs available locally.
“Sentara appreciates the trust placed in us and together we will be good stewards of this shared community asset,” Bernd added. “The local community will see positive change in the future given initiatives coming from our focus on implementing new models of care to improve the health of individuals and populations.”
Sentara is a 125-year-old nonprofit health system with 11 hospitals in Virginia. It also has four medical groups, a health plan (Optima Health), a medical staff of 3,800 providers plus outpatient, urgent-care, advanced- imaging, rehab, nursing and assisted living centers.
Sentara added Halifax Regional Health System in South Boston to its expanding system last year. In recent years, hospitals and health-care systems in Harrisonburg, Charlottesville and Woodbridge also have joined Sentara.
Sentara named Kenneth W. Wood as interim president of Albemarle Health, effective Saturday.
Wood has served as CEO of four teaching hospitals, a health-care system and a community hospital. He most recently served for 12 years as president and CEO of Blue Ridge Healthcare in Morganton, N.C., which is affiliated with Carolinas Healthcare System.2014-02-28T19:07:00+00:00
Fourth-quarter profit rises at Huntington Ingalls Industries
http://www.virginiabusiness.com/news/article/fourth-quarter-profit-rises-at-huntington-ingalls-industries#When:18:02:00ZTHE TAKE: Newport News-based shipbuilder Huntington Ingalls Industries reported on Thursday that fourth-quarter diluted earnings per share rose 86 percent to $1.82. Revenues for the quarter totaled $1.94 billion, up 6.3 percent from the same period last year.
Fourth-quarter revenue: $1.94 billion, up from $1.82 billion in the fourth quarter of 2012.
Fourth-quarter diluted earnings per share: $1.82, up 98 cents in Q4 2012..
Fourth-quarter adjusted diluted earnings per share: $1.66 in Q4 2013, compared to $1.30 in Q4 2012.
2013 revenue: $6.82 billion, up from $6.71 billion in 2012.
2013 diluted earnings per share was $5.18, compared to $2.91 in 2012.
2013 adjusted diluted earnings per share: $5.36, up from $3.95 in 2012.
THE COMPANY’S TAKE:
"As HII's three-year anniversary approaches, I am pleased with the operational improvements achieved by our team and the resulting financial performance," Mike Petters, HII's president and CEO, said in a statement. "The last of our underperforming contracts, LHA-6 America, will be delivered in the coming weeks, performance continues to improve at Ingalls, and we are on schedule to meet our 2015 operating margin goal."2014-02-28T18:02:00+00:00
Williamsburg Winery’s wine wins Governor’s Cup
http://www.virginiabusiness.com/news/article/williamsburg-winerys-wine-wins-governors-cup#When:16:09:00ZThe Williamsburg Winery’s 2010 Adagio has won the Virginia Wineries Association’s Governor’s Cup.
The wine was selected from 410 entries of red and white wines from 96 wineries.
The wine is a blend of 42 percent Cabernet Franc, 30 percent Merlot and 28 percent Petit Verdot. The wine is aged in a blend of French, American and Hungarian oak barrels of various ages.
"The 2010 Adagio was unbelievable, exceeding all expectations for quality, and it was nice for Adagio to get that recognition,” Matthew Meyer, vice president and winemaker of The Williamsburg Winery, said in a statement. "Adagio, from the Italian ad agio, or 'at ease', is a musical term indicating the tempo of a composition that is meant to be slow and stately, so named in honor of the extraordinary depth, elegance and grace of this wine."
The 2014 Virginia Governor’s Cup Competition included more than three weeks of preliminary tastings by 30 judges to select the 12 wines selected for the 2014 Governor’s Cup Case. The 11 other wines chosen include:
Barboursville Vineyard - 2008 Malvaxia Passito
Barboursville Vineyard - 2010 Nebbiolo Reserve
Barboursville Vineyard - 2010 Octagon
Barren Ridge Vineyard - 2009 Meritage
Fabbioli Cellars - 2011 Tannat
Horton Vineyards - 2010 Tannat
King Family Vineyards - 2011 Meritage
North Gate Vineyard - 2011 Meritage
Rockbridge Vineyard - 2008 Meritage, DeChiel Reserve, unfiltered
Sunset Hills Vineyard - 2010 Mosaic
Two Twisted Post Winery - 2012 Chardonnay
The final round of tastings was held at The Jefferson Hotel in early February and included 15 judges. The competition was directed by Jay Youmans, who owns the Capital Wine School in Washington, D.C.
The Governor’s Cup is a partnership of the Virginia Wine Board, the Virginia Vineyards Association, and the Virginia Wineries Association, which owns and manages the competition.
Eligible wines include those made of 100 percent Virginia fruit.2014-02-28T16:09:00+00:00http://www.virginiabusiness.com/uploads2/NVIEW_McDonnels.pngFormer Gov. Bob McDonnell called the charges an “unjust overreach by the federal government." AP Photo/Steve Helber
McDonnell could have been a contender
http://www.virginiabusiness.com/opinion/article/mcdonnell-could-have-been-a-contender#When:11:00:00ZMany people following former Gov. Bob McDonnell’s fall from grace have traced his descent from the moment he was passed over by Mitt Romney as the Republican vice presidential nominee in 2012.
McDonnell, however, reached the political pinnacle of his career in the 2013 General Assembly session following that election. With bipartisan support, he secured passage of a $6 billion comprehensive transportation funding bill, an achievement that had eluded his predecessors for 27 years.
By all rights, McDonnell’s last months in office should have been a victory lap as he sized up a move to the national stage. He had reason to believe his legislative victory would give him the liftoff he needed. After all, former Gov. Mark Warner had parlayed publicity from a $1.6 billion, bipartisan revenue bill in 2004 into buzz about a possible presidential bid before settling for an easy Senate victory in 2008. Warner’s bill had rescued Virginia’s AAA bond rating, but it didn’t touch transportation.
McDonnell’s grand bargain on transportation funding had not been his first choice. For three years, he tried every other alternative imaginable for raising revenue without increasing taxes. The list included selling the state’s ABC stores, granting corporate naming rights for the commonwealth’s roads and bridges, and putting toll booths on Interstate 95. He did get $3 billion for new transportation projects by selling bonds in 2011, but that amount was dwarfed by the state’s rising transportation needs.
Facing his last year in office, McDonnell hinted at an economic conference at the beginning of 2013 that he was ready to do something big about transportation funding. McDonnell’s proposal, he said, would include “some things that you will all love, and [some] you will all hate.” The bill eventually passed by the General Assembly will raise nearly $6 billion for transportation during the next five years by raising sales taxes and replacing a per-gallon tax on gasoline with a 3.5 percent tax on wholesale fuel sales.
McDonnell no doubt knew raising taxes and working across the aisle in today’s poisonous political environment carried a political cost. A tea party group, in fact, wasted little time in running ads in Iowa, the first stop in the nation’s next round of presidential primaries, warning voters that McDonnell is not a true conservative.
But the real threat to McDonnell’s political career came not from disgruntled conservatives but from his relationship with Jonnie Williams Sr., then the CEO of Glen Allen-based Star Scientific Inc.
Just weeks after the 2013 General Assembly session ended, a story appeared in The Washington Post revealing that Williams had paid for the Executive Mansion wedding reception for one of McDonnell’s daughters.
The story began a 10-month drip-drip-drip of revelations about gifts and loans showered on the McDonnell family by Williams, whose struggling company had switched from tobacco products to making dietary supplements. The scandal eventually led to the federal indictment of McDonnell and his wife, Maureen, shortly after the governor stepped down at the end of his four-year term in January.
McDonnell has admitted poor judgment in his relationship with Williams and has apologized for the embarrassment it has caused the commonwealth, but he steadfastly maintains that he has done nothing wrong. “Not one penny of taxpayer money” went to Williams or Star Scientific during his administration,”
McDonnell said in a televised response to the indictment. He describes the criminal charges, the first filed against a line of 72 Virginia governors stretching back to Patrick Henry, as “unjust overreach by the federal government.”
If McDonnell’s political career had not been derailed by “Giftgate,” where would his ambition have taken him?
McDonnell seemed be the natural choice to oppose Warner in his Senate re-election bid. Both are former governors with reputations for getting things done in a tough legislative environment.
However, a University of Mary Washington poll conducted before the Giftgate revelations began showed Warner with a huge lead over McDonnell in a possible matchup.
A campaign against Warner would have been too risky for McDonnell, says Stephen Farnsworth, a Mary Washington professor and the director of its Center for Leadership and Media Studies. If McDonnell lost, “he would be damaged goods in Virginia politics.”
Ironically, a less hazardous choice would have been for McDonnell to run for president, Farnsworth says. After all, he had the right résumé for a good run in the Republican primaries: a former Southern governor with a successful record and strong ties to the conservative Christian community.
Those credentials stack up favorably against potential Republican candidates such as Kentucky Sen. Rand Paul and Texas Sen. Ted Cruz, Farnsworth notes. “His prospects would have been as good as anybody’s if he had not been caught up in the scandal.”
Additionally, a presidential bid offered no downside for McDonnell’s future in Virginia politics. Unlike the Senate contest, “no one is going to fault you for losing a race like that,” the professor says.
McDonnell would have been in position to run for governor again in 2017 or oppose Democratic Sen. Tim Kaine for his Senate seat in 2018.
Instead, McDonnell’s career is now ashes, no matter how his court case is decided. “It’s a Shakespearean tragedy,” Farnsworth says. “He could have had it all.”2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/0314_cover.png.png
The Big Book 2014
http://www.virginiabusiness.com/news/article/the-big-book-2014#When:11:00:00ZVirginia is considered the best state for business by Forbes.com, but ranks No. 5 in the estimation of financial network CNBC.
The commonwealth is home to one of the biggest banking companies in the country, McLean-based Capital One Financial Corp., but the rest of the banks based in the commonwealth are relatively small community banks.
Virginia has three hospitals with annual net patient revenue of more than $1 billion, but two of them, VCU Health System and the University of Virginia Medical Center, say they face big income cuts without the expansion of Medicaid.
Half of the 10 largest accounting firms in the commonwealth have their biggest office in Washington, D.C., suburbs while the majority of the state’s top 10 law firms have their main office in Richmond.
Those are just a few of the facts found in this edition of The Big Book, Virginia Business’ comprehensive look at trends and major players in the economic development of the commonwealth.
The magazine has tracked the progress of leading companies in a variety of industries since the 1990s. Beginning last year, however, Virginia Business cast its net wider, pulling in additional information in nearly a dozen areas.
This section includes:
The 50 Most Influential Virginians. These are people across the state who wield clout in business circles and civic affairs. (The group does not include elected officials or university presidents.)
Economic development charts tracking the state’s biggest deals in 2013, trends in international investment in the commonwealth, cargo growth at the Port of Virginia and the state’s various rankings as a good state to do business.
The listings of Virginia’s largest public and private companies, its fastest-growing firms measured by Inc. magazine and the Virginia Chamber of Commerce’s Fantastic 50 program plus a look at CEO pay at state-based corporations with at least $1 billion in revenue.
A look at enrollment at Virginia’s four-year public and private colleges and state community colleges plus a peek at the endowments at a number of schools in the commonwealth.
Charts ranking Virginia’s top firms and companies in construction, commercial real estate, banking, insurance, health care, accounting, law, tourism and many other fields.
Taken together, the section offers an overview of what makes the state economy hum.
The Big Book 2014
Most Influential Virginians
Construction & Development
Resources2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/TechPad3.pngBob Summers is the founder of TechPad.
Organizations offer helping hand to companies getting off the ground
http://www.virginiabusiness.com/news/article/organizations-offer-helping-hand-to-companies-getting-off-the-ground#When:11:00:00ZStarting or owning a business is not for the faint of heart, so it’s nice to have some help along the way. Thankfully, Virginia has several organizations aimed at helping companies succeed, whether the assistance involves formulation of a business plan or guidance on taking out a loan.
A great resource for startup companies are business incubators, which help companies survive and grow during the startup phase. Virginia has several business incubators, highlighted in the following pages by square feet.
The Virginia Biotech Center at the Virginia BioTechnology Research Park in Richmond has graduated more than 40 companies, three of which now are publicly traded. Amenities offered at the center include wet lab and office space, high-speed Internet and meeting rooms.
TechPad in downtown Blacksburg offers companies access to Gigabit Internet, which is 100 times faster than the average Internet speed. In Northern Virginia, Uberoffices provides co-working spaces for small businesses, entrepreneurs and freelancers. The New River Valley Business Center in Radford includes office and manufacturing areas.
A good resource for small businesses is the Virginia Small Business Development Center (SBDC) network. The network offers companies counseling, training, seminars and workshops. It is a partnership between the U.S. Small Business Administration, George Mason University-Mason Enterprise Center and other organizations throughout the state.
Virginia SBDC has specific programs for veterans, retailers, restaurateurs and companies interested in exporting. Virginia SBDC’s Small Town & Merchant Program (STAMP), for example, offers retailers and restaurants workshops, resources and initiatives to help them succeed.
Besides the organizations outlined above, other resources for businesses in the commonwealth include the Virginia Chamber of Commerce, the Virginia Economic Development Partnership and the Virginia Department of Business Assistance.
50 Most Influential Virginians, including Power Couples and People on the Move
Virginia tourist attractions range from historic sites to beaches
http://www.virginiabusiness.com/news/article/virginia-tourist-attractions-range-from-historic-sites-to-beaches#When:11:00:00ZVirginia may be a top state for business, but it’s not all work and no play in the Old Dominion. The following pages will offer a glimpse into Virginia’s tourism industry, a sector that in 2012 brought the state $1.36 billion in taxes and supported 210,000 jobs.
One way visitors arrive in Virginia is through the state’s nine commercial airports (flip to Page 147 to see how they rank by enplanements). Most of the commonwealth’s commercial airports saw an increase in passenger boardings from 2011 to 2012 except for three. Washington Dulles International Airport and Ronald Reagan Washington National Airport in Northern Virginia continue to be the largest airports in the state in terms of boardings.
Once tourists arrive in the Old Dominion offerings range from historical attractions — think of Monticello and Mount Vernon, for example — to rolling mountains and sandy beaches.
Besides the classic destinations, Virginia is seeing a burgeoning wine and craft beer industry. Turn to Page 145 to see the largest wineries in the state. If wine isn’t your drink of choice, Page 148 lists the top 10 largest craft breweries in Virginia, according to the latest data from the Brewers Association (it should be noted, however, that not all companies reported/publicly disclosed their numbers).
Another tourism sector that’s gaining attention is Virginia’s film industry. Steven Spielberg’s Oscar-winning-film “Lincoln” was shot in Central Virginia in 2011. Portions of “Captain Phillips,” released last fall, were filmed in Hampton Roads. The movie, starring Tom Hanks, tells the story of the 2009 hijacking of the U.S. container ship Maersk Alabama by a crew of Somali pirates. More recently, the film adaptation of Adriana Trigiani’s “Big Stone Gap” was filmed in Southwest Virginia.
The state also is hoping to pique outsider’s interests in a more obvious way. Starting in March, Virginia’s standard license plates will feature the “Virginia is for Lovers” logo. The popular campaign slogan is celebrating its 45th anniversary this year.
50 Most Influential Virginians, including Power Couples and People on the Move
2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/PROFSVCS_WilliamsMullen.pngPhoto by Adrienne R. Watson
Mergers, relocations make news in accounting and law
http://www.virginiabusiness.com/news/article/mergers-relocations-make-news-in-accounting-and-law#When:11:00:00ZAn observer looking at the lists on the following pages might conclude that businesses in the Richmond area have a bigger need for lawyers than other parts of the state.
Seven of the 10 top Virginia law firms have their biggest offices in Richmond. The other three are in Norfolk, Alexandria and Reston.
In the overall list, Richmond and Northern Virginia are the sites for the biggest offices of a vast majority of firms on the list.
The top two firms based in Virginia are McGuireWoods and Hunton & Williams, with 300 and 244 lawyers, respectively.
Many Virginia law firms made news last year not only in the courtroom but also in real estate deals. Several negotiated new leases, oftentimes for less square footage than they had before.
McGuireWoods is set to become the anchor tenant of an 18-story $110 million office building in downtown Richmond, Gateway Plaza, being developed by Chicago-based Clayco. The law firm and its consulting arm will occupy 217,000 square feet of space in the structure next year.
Richmond’s concentration of lawyers can be attributed to a number of factors, including the presence of federal district and appellate courts in the city and a number of major corporations in the area.
Another factor is the presence of the Virginia General Assembly. Many law firms are involved in lobbying at the legislature, an activity reflected in a list showing the largest amounts spent lobbying during the 12 months ending in April.
The biggest spender at $572,607 was Virginia Uranium Inc., a company that wants to mine and mill an estimated 119 million-pound deposit of uranium near Chatham in Pittsylvania County. Despite its spending, Virginia Uranium got no closer to its goal of lifting a more than 30-year-old state ban on uranium mining in the 2013 session. The company suspended its support for any uranium mining legislation this year after newly elected Gov. Terry McAuliffe pledged to veto any bill lifting the ban.
In contrast to the law firm list, slightly more accounting firms have their principal Virginia offices in Northern Virginia than Richmond.
The big four remain the national firms PwC, KPMG, Deloitte, and Ernst & Young. The biggest Virginia-based firm is Watkins Meegan in Tysons Corner.
Professional Services charts:
Charitable contributions support the quality of life
http://www.virginiabusiness.com/news/article/charitable-contributions-support-the-quality-of-life#When:11:00:00ZPhilanthropy plays an important role in making Virginia an attractive place to live and work. During the past year, donations have built academic and medical buildings, provided scholarships and funded research, an area typically hard hit during times of slow economic growth.
In fact among the 50 states, Virginia ranked as the sixth most generous during a recent survey. In 2011, based on an analysis by the Tax Foundation, nearly a third of the state’s residents, or 32.5 percent, claimed charitable contributions.
Often the wealthy give. Guy Beatty, a real estate developer in Northern Virginia, and his wife, Betty, recently contributed $5 million through their family foundation to Inova Fairfax Hospital. This followed an earlier commitment to Inova of $7 million for a research center that plans to delve into studies on the liver and obesity.
In other cases, the newly wealthy give back. After winning $217 million in a Virginia Lottery Powerball game in 2013, Stafford County couple Dave and Nancy Honeywell gave $4 million to the region’s local community foundation, which donates to many causes.
Companies also have stepped up. Last year Ferguson Enterprises in Newport News made the largest donation in Christopher Newport’s 51-year history. It pledged $12 million over the next 30 years with the funds targeted for scholarships, community service and performing arts initiatives.
For a fuller flavor of the major sources of giving in Virginia, be sure to check out the charts in this section. There’s a list of corporation donations — with many of the state’s largest public companies giving millions to Virginia’s nonprofits — and lists of gifts by individuals and family foundations.
There’s also a chart on the top 50 recipients of foundation grants. Altogether, the charts provide a feel-good money trial of generosity in Virginia.
50 Most Influential Virginians, including Power Couples and People on the Move
Medicaid expansion is the industry’s biggest issue
http://www.virginiabusiness.com/news/article/medicaid-expansion-is-the-industrys-biggest-issue#When:11:00:00ZThe biggest issue facing Virginia’s health-care industry as the General Assembly entered its last weeks was the expansion of Medicaid.
Medicaid expansion was supposed to be a big part of the Affordable Care Act passed by Congress in 2010. A 2012 U.S. Supreme Court ruling, however, let the states decide if they would expand their programs.
The federal government would pick up 100 percent of a state’s cost in Medicaid expansion until 2017. The federal share then gradually would fall to 90 percent. An additional 400,000 Virginians would be eligible for Medicaid with expansion.
The Virginia General Assembly last year left the decision to expand or not expand the program in the hands of the 10-member Medicaid Innovation and Reform Commission. After a series of hearings, however, the panel has made no decision.
Many Republican legislators are skeptical that the federal government will be able to keep up its end of the bargain in supporting expansion. They believe the state would be left responsible for a bloated, inefficient program that would crowd out funding for essential state services.
Newly installed Gov. Terry McAuliffe has been a vocal proponent of expansion, saying the federal money it brings to the state would help stimulate the economy and create jobs. Otherwise, he says, Virginia tax dollars simply would wind up going to other states.
For many hospitals, the issue could have big consequences. The ACA cuts Medicare payments and reduces the amount of money paid to hospitals treating uninsured patients. The cuts anticipated that the lost revenue would be made up by more patients with insurance coverage.
Two of Virginia’s biggest hospitals, VCU Health System and the University of Virginia Medical Center, treat a high number of the state’s poor and uninsured patients. With the ACA cuts, they expect to lose $500 million from 2017 to 2022.
At press time, a two-year budget proposed by the House of Delegates would provide hospitals an extra $81 million but would not expand Medicaid. The Senate budget proposal would use $1.7 billion in federal taxes paid yearly by Virginians under ACA to create a private insurance plan that would serve residents that would be covered under Medicaid expansion.
Banking ‘barbell’ defines industry’s look in Virginia
http://www.virginiabusiness.com/news/article/banking-barbell-defines-industrys-look-in-virginia#When:11:00:00ZThe U.S. banking industry has been consolidating for decades, falling from about 13,000 banks in 1960 to about 6,500 today.
Over the years, the industry has assumed a “barbell” shape, with many large banks on one end and numerous small banks on the other. The skinny bar between them belongs to the dwindling number of midsize banks.
The barbell image helps to describe the current configuration of Virginia-based banks, with one exception. Instead of many large banks based in the commonwealth, there is one, McLean-based Capital One Financial Corp. It is one of the top 10 banking companies in the U.S., with assets of nearly $300 billion.
All other Virginia-based banks are considered community banks. They generally have total assets of under $10 billion and their business typically is focused on a particular section of the state or metro area.
The Virginia-based regional banks, which had operations in several states, had disappeared by the turn of this century in mergers with larger institutions, many of whom were based in North Carolina. The former offices of Signet, Sovran, Dominion and First Virginia banks are now part of Wells Fargo, Bank of America and BB&T.
The makeup of Virginia’s banking lineup changed a bit at the beginning of this year with the completed $445 million merger of StellarOne and Union First Market banks, community banks that were based in Charlottesville and Richmond, respectively. Together they form the state’s largest community bank with assets of $7 billion and $5.8 billion in deposits.
Banks aren’t the only financial institutions in the commonwealth, of course. It also is home to the Navy Federal Credit Union, the largest credit union in the country in terms of members and assets. The Vienna-based credit union serves 4.6 million members worldwide and has assets of more than $55 billion. The company has 9,735 employees, of whom only 211 are based outside the U.S.
The company was named to Fortune’s list of 100 best companies to work for in the U.S., taking place No. 96. Joining Navy Federal on the Fortune list were Capital One, No. 85; Mars Inc., 76; and CarMax Inc., No. 54.
Member One, Belvoir Federal and Virginia credit unions, Valley Bank and Old Point National Bank, are among Virginia Business’ Best Places to Work in Virginia.
Enrollment remains flat at public, four-year colleges
http://www.virginiabusiness.com/news/article/enrollment-remains-flat-at-public-four-year-colleges2#When:11:00:00ZEnrollment statistics at Virginia’s colleges and universities proved to be a mixed bag. At public, four-year institutions, overall enrollment from fall 2012 to fall 2013 was flat. Virginia community colleges, however, saw their headcount decrease by 2 percent between those time periods, according to data from the State Council of Higher Education for Virginia. Enrollment was slightly up for the commonwealth’s private, four-year schools, increasing 1.6 percent.
Lynchburg-based Liberty University registered the highest number of students in the state. The private, Christian university enrolled a whopping 77,338 students last fall. That’s a 4 percent increase from the school’s enrollment figures in fall 2012. But Liberty University isn’t just increasing its population; it has also embarked on a $500 million campus rebuilding project. Earlier this year, for example, the $50 million, 170,000-square-foot Jerry Falwell Library opened on campus.
Northern Virginia Community College enrolled the most number of students at Virginia’s community colleges last fall. Its total enrollment of full-time and part-time students was 51,803, down slightly from the previous year’s 51,864 students.
Fairfax-based George Mason University (GMU) had the highest total enrollment in fall 2013 of Virginia’s public, four-year universities, with 33,917 full- and part-time students. Virginia Commonwealth University barely trailed GMU with 31,288 total students. When it came to the largest number of full-time students at Virginia’s four-year schools, Virginia Tech nabbed the top spot with 28,425 people signing up for classes last fall.
The education section on the following pages looks at endowments at colleges and universities in the state. Endowments were up for all Virginia colleges featured on the 2013 National Association of College and University Business Officers-Commonfund Study of Endowments except for Regent University, whose endowment dropped by 6.5 percent from fiscal year 2012 to FY2013. University of Virginia had an endowment of $5.2 billion in fiscal year 2013, the largest of Virginia schools featured in the study that year.
2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/LARGESTCOS_HuntingtonIngalls.pngHuntington Ingalls Industries was created when Northrop Grumman spun off its shipbuilding division in 2011.
Lists of state’s largest firms show diversity of its economy
http://www.virginiabusiness.com/news/article/lists-of-states-largest-firms-show-diversity-of-its-economy#When:11:00:00ZLists of the largest companies in Virginia offer a sense of the diversity of the commonwealth’s economy.
Among publicly traded companies, for example, the top 10 corporations include two giant defense contractors, two energy companies, the nation’s largest tobacco company, one of its largest banks and a major East Coast railroad.
Dropped from the list this year is Smithfield-based Smithfield Foods, the world’s largest pork producer and processor, which has annual sales of more than $13 billion. The company was bought in late September by a Chinese company, Shuanghui International Holdings Ltd.
One of the defense contractors, Northrop Grumman Corp., set off a bidding war when it announced plans to move its headquarters from Los Angeles to the Washington, D.C., area to be closer to its biggest customer, the federal government. Fairfax County was the winner in a competition with the District of Columbia and Maryland. The company settled into its new digs in summer 2011.
Even before it arrived in Virginia, Northrop Grumman had created another company that now ranks 14th on the publicly traded list. It spun off its shipbuilding unit, which became Newport News-based Huntington Ingalls Industries in March 2011.
Overall, more than half of the publicly traded companies on the top 50 list, 28, are based in Northern Virginia. Thirteen call the Richmond area home, five are in Hampton Roads region, and the rest are in the Roanoke area, Southwest Virginia and the Shenandoah Valley.
The list of the state’s largest private companies includes two that would make the Fortune 500 if they were publicly traded. They are McLean-based candy maker Mars Inc., one of the largest privately held companies in the country, and Performance Food Group, which was a publicly traded company before going private some years ago. Mars has estimated annual sales of $33 billion, while Performance Food had annual sales of $13.2 billion.
Virginia also is home to seven companies on the Black Enterprise magazine annual list of top 100 companies owned by African-Americans and has 19 companies on the Hispanic Business 500.
Largest Companies charts
2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/CONSTRUCT_Tysons.pngMcLean Station, first station in Phase 1 of the Silver Line Metro expansion. Photo by Dulles Corridor Metrorail Project
Contractors hammering away on new projects
http://www.virginiabusiness.com/news/article/contractors-hammering-away-on-new-projects#When:11:00:00ZIn many parts of Virginia, construction is picking up. While activity remains below prerecession levels, projects are going up in all of the state’s major markets.
General contractors are getting work across multiple sectors, but they still report challenges, namely finding enough skilled workers and paying for rising health-care costs.
Still, the mood is more optimistic than it has been in years. The multifamily sector has been particularly hot with new apartments under construction in downtown and suburban Richmond, downtown Roanoke and in Northern Virginia around the expanding Silver Line Metro. Young professionals are fueling the trend as they opt to live near their workplace or public transportation routes that can take them to their jobs.
Another busy sector is health care. Several hospitals are financing expansions, and medical centers and emergency rooms are popping up as co-anchors in mixed-use projects. One example in Henrico/Goochland County is The Notch at West Creek, a 230-acre mixed-use project. The Lingerfelt Cos. broke ground on the first of three 60,000-square-foot medical office buildings, and a large apartment community is under construction as well.
Builders also are finding opportunities in higher education and hotels. Blackburg’s Virginia Tech recently completed a 147,000-square-foot performing arts center. In Richmond, the five-diamond Jefferson Hotel is upgrading guest rooms, while Virginia Beach has joined forces with developer Bruce Thompson on a $260 million renovation of the iconic Cavalier Hotel and its sister hotel.
On the office side, the market has been sluggish, with one exception: Tysons Corner. The state’s largest business and retail center is transforming into a more urban community as it readies for expansion of the Silver Line Metro. Four new stations are scheduled to open this year, which has sparked more than 45 million square feet in new development, which will nearly double the size of Tysons.
According to research from Cushman & Wakefield, nearly 4 million square feet already is under construction. Several of those projects are office towers. This pipeline of new construction has been a welcome development in the face of cutbacks in leasing and construction from the federal government, which typically gives Northern Virginia a boost.
In the public sector, the construction industry expects new work in transportation. A funding bill passed last year is expected to pump more than $4 billion into Virginia’s transportation plan over the next six years.
Construction and Development charts:
2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/ED_STEM_jobs.pngVirginia ranked No. 1 last year as the state with the highest concentration of STEM jobs.
Positive developments help state maintain high rankings
http://www.virginiabusiness.com/news/article/positive-developments-help-state-maintain-high-rankings#When:11:00:00ZEconomic development in Virginia entered 2014 with wind beneath its sails. With a federal budget deal passed, the squeeze from sequestration in military-dependent Northern Virginia and Hampton Roads has eased. Plus, there’s money set aside for transportation projects, and the housing market has stabilized.
These are positive developments as Virginia strives to stay on top of national rankings as one of the best states to do business. In 2013, Forbes.com returned Virginia to the top of the pile in its national rankings.
On the jobs front, professional and technical services, along with food products and data processing, were the big generators during the past year. Northern Virginia’s strong IT community helped the region snag the headquarters of Amazon Web Services along with 500 jobs.
Manufacturers, particularly in the food and beverage sector, also are choosing Virginia for new locations. The Luxembourg-based Ardagh Group is spending $93.5 million to open a metal can factory in Roanoke County that will create nearly 100 jobs.
On the investment side, data centers are stealing the show. Data processing, hosting and related services sparked $1.4 billion in new investment in the state last year, according to preliminary figures from the Virginia Economic Development Partnership.
Companies including Microsoft Corp., Corporate Office Properties Trust and Digital Realty Trust are spending millions of dollars as they build new data centers in Loudoun County where 5 million square feet of data center space is expected to come online during the next three years.
Another welcome development? Expansions by existing manufacturers. Lipton Tea was one of several companies that decided to stay put. After regional and state economic development officials worked with the company and offered incentives, Lipton decided to invest $96 million in an agreement that saved 300 jobs.
Since Lipton imports loose tea from various countries, one of the advantages of staying in Suffolk was its proximity to the Port of Virginia. Charts on imports and exports tell readers what travels in and out of Virginia.
Barring the rough waters of another government sequestration, Virginia’s economic development ship should continue to sail along.
Economic Development charts
50 most influential Virginians
http://www.virginiabusiness.com/news/article/50-most-influential-virginians-2014#When:11:00:00ZThere was a lot of moving and shaking in Virginia’s business community during the past year. Hilton Worldwide in McLean pulled off the largest IPO ever in the hotel industry in a take-the-company public event that landed CEO Christopher Nassetta on our second annual list of the Top 50 Most Influential Business Leaders in Virginia.
Besides a record IPO, other things caught our attention: big promotions, big ideas and leadership amid uncertainty. On the big ideas front, Tom Frantz, CEO of one of Virginia’s largest law firms, is pushing for the creation of a mega region between Richmond and Hampton Roads.
Phebe Novakovic and Wes Bush, CEOs at Virginia’s largest defense contractors, were more concerned about contraction as they shepherded their companies through the federal defense cuts that came with sequestration.
Overall, the list tracks who’s moving up, making a difference and shaping outcomes. Many of these leaders run companies, serve on high-profile boards and give generously to philanthropic causes.
Virginia Business did not consider elected officials or college and university presidents. The magazine kept the focus on people who are growing their businesses and having an impact on the key issues of the day.
50 Most Influential Virginians, including Power Couples and People on the Move
Catalyst for change
http://www.virginiabusiness.com/news/article/catalyst-for-change#When:11:00:00ZVirginia Tech today is not the same school it was when Charles Steger became president in 2000. It has seen triumphs and tragedy during his 14-year tenure.
The triumphs have included great leaps forward in research grants, fundraising, building construction and academic achievement, not to mention four Atlantic Coast Conference football championships in the university’s first decade of league membership.
The tragedy was the massacre of 32 students and faculty in April 2007 at the hands of a mentally disturbed student who also killed himself.
On June 1, Steger will be succeeded by Timothy Sands, the provost of Purdue University in West Lafayette, Ind. The retiring president earned his bachelor’s and master’s degrees in architecture and doctorate in environment design and engineering all from Virginia Tech. In fact, except for a brief period in the early 1970s when he worked in Lynchburg, Steger’s life has been connected to the Blacksburg campus since he entered the school as a freshman in 1965.
“Charles Steger has been a dynamic leader of the university. The Virginia Tech slogan ‘Invent the Future’ is personified by no one better than him,” says Ben Davenport, chairman of Davenport Energy and First Piedmont Corp. in Chatham, a Virginia Tech graduate and former rector on the board of visitors. “He has proven to be a visionary individual who has taken Virginia Tech to a much higher plateau than where it was when he became president.”
Since 2000, student enrollment has grown 12 percent from just under 28,000 to more than 31,000 students, sponsored research has soared from $192 million to more than $450 million, and 40 buildings encompassing more than 3 million square feet have been built.
Helping to attract research grants are seven major research institutes, including the Virginia Bioinformatics Institute, that have developed on Steger’s watch.
The president’s strategy for Virginia Tech hasn’t been confined to its Blacksburg campus of gray Hokie Stone buildings. Steger has spurred the university’s involvement in economic development throughout the state. The efforts have included the Institute for Advanced Learning and Research, an educational and research initiative in Danville; Commonwealth Center for Advanced Manufacturing (CCAM), a collaborative research center in Prince George County involving three other Virginia universities and 17 industrial and government partners; and the Virginia Tech Carilion School of Medicine and Research Institute in Roanoke, a joint venture with Carilion Clinic.
“To evaluate the success of Carilion’s collaboration with Virginia Tech during Charles’ tenure, one could view photographs of the brownfields along South Jefferson Street 10 years ago compared with the vibrant activity there today,” says Nancy Agee, president and CEO of Carilion. “Better yet, look at the 42 new doctors who will be [the medical school’s] first graduates this spring and imagine the difference they will make in the lives of their patients and the world of medicine, and the 42 new doctors who will follow after them next year, and so on. We have forged a connection between the Roanoke and New River valleys that will make a difference in people’s lives for many years to come.”
Steger also has left his imprint on college sports. In addition to gaining membership in the ACC in 2004, he also chaired the Bowl Championship Series (BCS) Presidential Oversight Committee that created the playoff system for the major-college football championship, which will take effect next season.
“When we have [a home football game], you get 66,000 people together on a Saturday afternoon, this kind of collective experience helps you build a sense of community,” Steger says. “To me, that is one of the great contributions that athletics makes.”
That sense of community was tested in the 2007 shootings at two Virginia Tech buildings.
The university faced criticism for waiting two hours before alerting the campus of the first shooting. The families of two victims sued, and a Montgomery County jury in 2012 awarded them each $4 million (reduced by state law to $100,000 each). The Virginia Supreme Court overturned that verdict in October.
Virginia Tech says that, as a matter of principle, it plans to appeal in federal court two fines totaling $32,500 imposed by the U.S. Department of Education for alleged violations of a campus safety law.
The university has spent $40 million on safety and security since 2007, and Steger believes the community bonds are stronger than ever.
“Nothing will replace the lives of these students. Nothing will heal the hearts of their families,” he says, “But we can’t change that, and we have to do whatever we can to move forward.”
Virginia Business interviewed Steger at his office on Jan. 6.
VB: What role should a public university play in the state of economic development?
Steger: I think you have to conceptualize this whole effort in terms of building a robust economy as kind of an ecosystem of innovation and entrepreneurship. We play a role in collaboration with state government, with the private sector [and], with those of you in the business press. We have to all work together to create an environment that is attractive for outside investment as well as creating circumstances where existing industry wants to continue to invest and grow. Ninety percent of the new jobs come from existing industries, and although we’re always trying to attract new investment, we also have to be sensitive to what the existing industry needs.
We play a role in that, but it’s a collaborative with university, state government, with private sector, and with those of you in the press who help to educate others as to what the commonwealth has to offer.
VB: How did you become involved in such things as the medical school in Roanoke, the Commonwealth Center for [Advanced Manufacturing] and the Institute for Advanced Learning and Research?
Steger: Let me do them in reverse order. When I became president, I was visited by a group of individuals, some of whom I had known for many years, all dedicated to helping to grow the economy of [Southern Virginia]. They actually wanted to have a branch of Virginia Tech down there. Our general policy has been, and is, that we are not going to be offering any baccalaureate degrees off campus. We don’t think we can replicate the experience and all the things that go along with it off campus.
I suggested to them that one of the things we could do would be to have this new Institute for Research. It has turned out to be quite successful; particularly, when you look at the new Tire Research Center, which is just booming. I think they’re completely booked now.
The [Institute for Advanced Learning and Research] has a lot of activities going on there. You’re beginning to see affiliated and associated enterprises built around it, which is exactly what we had in mind. Once you get this kind of critical mass, then it really starts to help. We feel that has been a very good thing to do. But it all started in a meeting in this office in the year 2000.
Now on the medical school … Ed Murphy, who was the CEO of Carilion, and I ended up on all kinds of meetings and whatever together … We looked at what we could do to build some synergy for the evolution of the economy in this region … and it evolved over a number of months of discussions … We thought of this joint enterprise between Virginia Tech and Carilion to build a new kind of medical school ….
We only have 42 students per class. I must say I’ve been delighted and surprised at the extraordinary quality of the students that we were able to attract. Here’s a new school, no track record whatever; although, I do think Virginia Tech’s reputation helped to attract those students. Really extremely capable, and they match up in terms of test scores and performance with any of the major medical schools in the country.
But the idea was to provide an education for medical students, which would enable them to be highly competent in the field of research. At a lot of the M.D. schools, people are very well trained in what they do, but they’re not necessarily trained in research. By building the medical school in conjunction with the Research Institute, where they have significant research experiences with top faculty as they go forward, is really helping us to produce a new kind of an M.D.
Secondly, it has helped us to catapult the Research Institute. We started with five or six people; I think we’ve got about 160 people down there now. That’s four years ago. These are the best people in the world — from Oxford, from Harvard, and they’re doing incredible research ...
[On] CCAM, these things, they take years to evolve. I remember when Governor Kaine was in office participating in some initial meetings with Rolls-Royce [which planned to build a jet engine components plant in Prince George], with John Casteen, who was then the president of the University of Virginia, about this joint venture, to make it go. It has also evolved over time to the point where we’ve got a number of significant strategic partners — Rolls-Royce, Siemens and people who specialize in the types of materials you put overtop of the fins in the aircraft. It’s very exotic stuff …
We were in from the very beginning, meeting with and talking to the senior executives of Rolls-Royce. I remember having lunch in Richmond with Sir John Rose, who was president of Rolls-Royce Worldwide at the time, and then Jim Guyette, who is president of Rolls-Royce of North America. I still am in communication with Jim, and Tom Powers and his other people.
One of the issues that came up had to do not only with doing the research to help develop this next generation of jet engines, but also the labor force training. And that’s when the [community college system] came into play, and we also wanted to engage Virginia State since it’s right in their neighborhood. And it’s going along extremely well.
VB: Now tell me a little about the seven major research institutes, which have evolved during your tenure.
Steger: If you go back and you look at the global picture of financing for higher education, there are tremendous demands on the public purse. And even though Governor McDonnell and other governors have tried to put additional money in … the reality is that the funding from the state in the long run is going to go down and not up. In order to preserve the quality of the education we offer to our undergraduate students, we need to have the best faculty in the world, and we have some extraordinary folks here ... Our best researchers are also our best teachers. They are extraordinary people. They won’t come to a place where they can’t be engaged in advancing the leading edge of their profession. That’s one factor.
The second is that you’ve got to get to a critical mass of intellectual capital and of dollars to be competitive on a national and worldwide basis. We just got the drone research grant, and we competed with people all over the country. It’s serious money that you have there. To have the infrastructure that makes you competitive takes significant investment both in terms of the faculty, the facilities and the buildings and whatever else in the process.
We had been very successful with getting grants in the $1 million and $2 million category with [National Science Foundation and other sources]. But to get us to the level we are now, which this past year we’ll do $483 million of the research, you can’t get there a million or two at a time. There’s also a trend of having large-scale, interdisciplinary research projects, and you had to demonstrate the capacity to manage them.
These institutes were set up, one, to have the ability to manage across disciplines, and secondly, to have the capacity to manage these large-scale projects, and third, to be able to create centers of excellence which could attract the kinds of people that would enable us to compete with Stanford and MIT, and all the other people that we have here. So that’s how they all evolved.
Some of it is targets of opportunity. You look at bioinformatics … we probably have one of the best [bioinformatics institutes] in the world. But it takes some staying power to do that. We have over 300 people working there now, and they do a lot of joint projects with other major universities in the United States and, indeed, around the world …
You have to have world-class excellence. Now we can’t do it in everything we do, but in these key areas. If you don’t have that, you’re not going to be successful.
The underlying reason was to get a critical mass of dollars, and a critical mass of intellectual capital, and to be competitive with the new kind of paradigm in research that’s funded by [the National Science Foundation, National Institutes of Health and other research funding organizations].
VB: How important has it been for Virginia Tech to increase research spending and become one of the nation’s major research universities?
Steger: We couldn’t survive without it. The dollars that we spend for research help build new buildings. They help us pay faculty salaries to be competitive on a national/international basis. They support graduate students. They help us bring in equipment. They help us give visibility on a national/international level that simply wouldn’t exist without it. It has been the key driver and one of the principal initiatives within our whole effort to do that.
At the end of the day, we believe we do a lot of good things for society. It’s not just about making money. It’s about really adding value. I’ll give you one little example. Some of our folks in civil engineering developed a water treatment facility, a little plant that sits on the back of a truck … Water quality in developing countries is an extremely critical issue. And just having clean water affects health care. It’s a tremendous thing for … a trivial amount of investment. So they were able to create this treatment plant that sits on the back of a pickup for a few hundred dollars …
We have projects in 44 countries around the world going on now. I feel very good about the contributions we are able to make. Some of it’s very basic stuff. We helped the people in Bangladesh deal with the pest problem for growing onions, which is one of their cash crops. And pesticides, one, are bad for the environment, and secondly, they’re very expensive in these economies. We do these kinds of things all over the world, which are a tremendous value. They help to elevate the quality of life for millions of people. I’m very proud of what we do there.
VB: What do you see is your biggest accomplishment?
Steger: I think we have transformed the horizon of the institution to be a major national/international research university that we had aspirations for prior to that, but it has been realized today. It’s a long road; we still have a ways to go. We attract extraordinarily good students from all over the world, from 130 countries. And I think through that, we have been able to make a significant contribution to the welfare of the Commonwealth of Virginia as well as the United States. That to me is kind of the fundamental thing, in addition to getting into the ACC, which was good. That is a whole set of other stories.
VB: Do you think your tenure is going to be overshadowed by what happened in 2007?
Steger: No, I don’t, really. I mean the 2007 [massacre] will always be part of our history. It was a tragedy and an event that had never occurred before in the history of the United States …What these families have experienced, it’s beyond description …
You don’t want a tragedy to result in this, but it probably made our community stronger rather than weaker in the process. But it was a horrible tragedy … And I hope it doesn’t happen to anybody else ever again.
[Before] that time, April 16, 2007, all these warnings systems did not exist. People forget this. Now I think every major university in America has the systems that are a result of that tragedy…
And we’ve actually spent more than $40 million of university money on improving safety and security on campus. And many, many other places have done the same thing. So you try to make the best out of it you can.
Nothing will replace the lives of these students. Nothing will heal the hearts of their families. But we can’t change that, and we have to do whatever we can to move forward.
VB: What advice do you have for your successor?
Steger: I have to say I was very pleased. I think Tim Sands is a great selection. He’s a very bright and capable individual. All such institutions like Virginia Tech or Purdue are very complicated places. And you have dozens upon dozens of constituents.
Virginia Tech runs very well, but it’s not like a watch where every cog is interconnected. Different colleges have very different constituencies, and their strategies are very different ... You need to take some time to understand how all that works, and I know he will ...
We have a whole bevy of subsidiary corporations as a public institution. We have the Virginia Tech Foundation, which manages $1.6 billion in assets. And all the stuff has to be put together to advance the fundamental strategies of the institution. So it takes a while to get your arms around it.
VB: How did your training as an architect influence your management style?
Steger: I think it has been enormously helpful … because [architecture involves] creative thinking, and what you try to do is you try to develop the capacity to look at complex problems, large numbers of variables, high uncertainty, and recognize patterns of association that help you to get to solutions. That’s what I have to do every day. You never have enough information. The dynamics are incredible. But that kind of creative problem-solving ability that I learned in design has been a tremendous asset to me. Not related to buildings but just related to all the kinds of issues you have.
We’re not Harvard ... If we’re going to move up, we have to change the rules of the game, and that takes a lot of creativity. We look at new ways of doing things that maybe nobody else has done. Not only is it challenging, it’s a lot of fun to think about it creatively and do some things that have never happened before. We’ve done a lot of them. From financing to everything else.
VB: What do you plan to do in retirement?
Steger: I have been participating in a series of international conferences focused around how do we build into communities a capacity for resiliency after they’ve experienced natural or manmade disasters. We actually have a center that is being set up …
If you look between now and 2050, we’re going to add 2 billion people to this globe, largely in developing countries. The patterns of water consumption, land use development, whatever else, are unsustainable. They’re not even sustainable here [in the U.S.] … So this center is going to focus on trying to make a contribution to what the future patterns of urbanization should be.
It’s something I’ve been interested in my whole life. Previously, I headed up the Urban Design Program, and I have a doctorate in environmental science and engineering. We already have a couple of grants, and also have a book contract already signed as a matter of fact …
So we’re off and running …
But I think we do have the capacity drawing upon the kind of interdisciplinary skills that are present here, plus with our fellow institutions around the world that can help us rethink how we do these things. And it’s not something that would be nice … We have no choice but to change those patterns of consumption if we’re going to enable society to have a relatively high quality of life. If we don’t find a way to ensure that the next generation of young people has some stake in a bright future, the level of social unrest in our world is going to be beyond our
description.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/VEDC-GROSSMAN.pngPaul Grossman of the Virginia Economic Development Partnership Photo by Clement Britt
http://www.virginiabusiness.com/news/article/over-there#When:11:00:00ZVirginia is one of the nation’s leading recipients of federal spending, and there’s a good reason.
The state is home to more than 5,000 defense industry companies, who generate about 10 percent of the state’s economy.
Defense contracting, from shipyards in Hampton Roads to the high-technology belt in Northern Virginia, is a foundation stone of the state’s economy.
Companies based in Virginia had defense contracts worth more than $96 billion for fiscal years 2012-13, according to documents provided by the Department of Defense.
But defense contractors today are hurting.
Automatic defense budget cuts resulting from sequestration, the winding down of the war in Afghanistan and other defense spending reductions have fueled job and revenue losses.
When the sequester kicked in, the White House said that in Virginia approximately 90,000 civilian Department of Defense employees could be furloughed, reducing gross pay by about $648.4 million in total.
Moreover, all service branches — Army, Navy, Air Force, Marines — would face varying degrees of reductions.
Fortunately, the recent passage of the $1.1 trillion fiscal year 2014 Omnibus Appropriations bill has relieved some of the pressure.
Virginia’s U.S. senators, Tim Kaine and Mark Warner, said in a mid-January statement that the bill “offsets the worst effects of sequestration.”
Overall, the bill funds $486.9 billion in defense spending.
In Virginia, a portion of that money will finance ship repair, aircraft carrier maintenance, Virginia class submarine fleet construction and 14 military building projects
But Paul Grossman, vice president of international trade at the Virginia Economic Development Partnership (VEDP), says that passage of the appropriations bill doesn’t alter the downward trend of defense spending, which is projected to continue for years to come.
For defense contractors, he says, it’s only a reprieve.
“VEDP suggests that companies would be wise to use this reprieve to position themselves to access new revenue streams to replace what will ultimately be less defense spending in the U.S.,” Grossman says.
To raise defense contractors’ awareness that they are not alone in a changing economy, the VEDP has implemented a program that it calls “Going Global.”
The program’s goal is to aid defense companies in finding alternative markets in foreign countries for their products and services, so they can reduce their dependency on the federal government.
The “Going Global” Defense Initiative (GGDI) is working with a budget of $2 million, drawn from state and federal funding, through the fiscal year that ends June 30.
The money will be used to fund various components of the initiative, including:
Market research, using the VEDP’s team of in-country consultants in 57 nations.
Export compliance, which includes submitting the required paperwork to the Department of State to comply with International Traffic in Arms Regulations (ITAR).
Digital marketing, to enhance a company’s marketing presence in targeted foreign markets.
Export training, involving one-day sessions across the state.
International certification and standards, which will help companies acquire the certifications they will need to sell products and services abroad.
International defense events, to include trade missions and trade shows worldwide.
“Going Global” got off to a fast start when it launched in August, signing up nearly 80 defense-related companies in its first 30 days and accounting for nearly 50 percent of the total program. As of mid-January, 148 companies had signed on.
The response, the VEDP says, is a testament to the program’s significance and necessity.
Today, some components of the program are already fully subscribed and others are filling up.
As of December, market research was 84 percent subscribed; export compliance and marketing, 100 percent; and international certification, 60 percent.
In addition, three export seminars had drawn 250 participants.
Modeled after VALET
The “Going Global” program is modeled after the partnership’s VALET (Virginia Leaders in Export Trade) program, which has increased participants’ international sales by an average of 54 percent. VALET has been in place for 12 years and currently enrolls 50 companies. It has graduated 160 companies since its inception.
Martin Briley, president and CEO of the VEDP, has no difficulty pinpointing the event that made him realize Virginia’s defense companies might be facing trouble.
At the start of 2011, then-Secretary of Defense Robert Gates cancelled the Advanced Amphibious Assault Vehicle being developed by Falls Church-based
General Dynamics. Three billion dollars already had been spent on the $15 billion project.
Just like that, Briley says, 400 engineers faced potential job losses.
Such losses, he notes, are not only bad for the individuals and companies involved, but also for the commonwealth as a whole.
Briley points out defense contractors have some of the biggest payrolls in the state. “Many of those jobs are over $100,000” in annual pay, he says.
Saving those jobs is a priority. They provide a lot of tax revenues and inject a lot of dollars into the private sector.
Grossman says the partnership has never before devoted so much concentrated attention to the defense industry. “We’re the first state to do any such program. Our program could be a flagship. We are teaching them a new way to do business.”
Grossman notes that plenty of potential foreign buyers are emerging for Virginia’s defense contractors. He offered one current example. “All [the conflict] going on in Iraq and Syria makes their neighbors more concerned,” he says. “That’s more customers with more money to buy from the defense industry.”
So far, the average size of the defense companies being assisted by the VEDP is 190 employees.
Grossman says defense companies do not foresee increases in federal defense spending anytime soon. “Flat is the new growth,” he says.
Brian Dearing, vice president of business development and government relations for HDT Expeditionary Systems Inc., says the “Going Global” initiative is innovative and practical. “They focus on things that have impact,” he says.
Based in Ohio, HDT Expeditionary Systems has a number of manufacturing operations in Virginia, including robotics operations in the Fredericksburg area.
The company is known for its shelters, generators, heaters, air-filtration devices and other engineered technologies.
Dearing says VEDP’s program has helped the company gain international certifications for various product lines. “If you don’t have the right certification, you can’t sell them internationally,” he says.
Dearing echoes concerns about the situation faced by the defense industry. “The money is not flowing. There’s no oxygen in the room,” he says. “It’s a tough business, but we’ll get through it.”
George Judd, director of Cask LLC in Stafford, which provides business and technology management services, says “Going Global” has helped his firm conduct market research in foreign markets.
The connection to “Going Global” was made through the Fredericksburg Chamber of Commerce.
Judd says his company, whose biggest clients include the Navy and Marine Corps, now is expanding internationally. The company is opening an office in
Singapore and has established contacts in Europe.
Although Judd can’t trace the company’s expanding international footprint directly to “Going Global,” he says the initiative has provided tremendous help.
Douglas Burdett, a Norfolk-based defense-marketing consultant, says not all defense companies are acknowledging what he says is a dramatic paradigm shift in their industry. “For defense contractors, a perfect storm of change is brewing — and the denial is Titanic,” he asserts.
Yet it’s a daunting leap for the defense contractors trying to move from dependence on federal contracts toward market diversification, Burdett says. “What makes them successful as defense contractors makes them more risk averse.”
He notes that defense contractors are accustomed to telling government customers, “Give us the money, and we’ll develop it.”
But in the private sector internationally, they are told, “‘You develop it and bring it to market,’” Burdett says. “It’s an enormous hurdle culturally.”2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/MCDONNELS_front.pngFormer Gov. Bob McDonnell and his wife, Maureen P Photo/ Richmond Times-Dispatch, Dean Hoffmeyer
Ammo for the enemy
http://www.virginiabusiness.com/news/article/ammo-for-the-enemy#When:11:00:00ZOn July 28, former Gov. Robert McDonnell and former first lady Maureen McDonnell are scheduled to be tried on federal corruption charges at the U.S. District Courthouse in downtown Richmond, only a few blocks from the Executive Mansion,where they lived for four years.
In a state that has been largely free of political scandal, the trial has the potential to change the way that Virginians think about themselves and the leaders they elect.
But how will it affect business prospects weighing a move to Virginia?
“There’s no question in my mind that this situation is a setback,” says Hugh Keogh, the retired president of the Virginia Chamber of Commerce who once headed the state’s economic development agency. “The impact can’t be measured at this point in time. It will roll out over the next several months.”
Keogh believes that Virginia’s rivals in competition for business prospects will regard charges against the McDonnells as fair game in bad-mouthing the state and its business climate.
McDonnell is the only one of Virginia’s 72 governors ever to be indicted.
The government alleges in the 14-count indictment that the McDonnells received gifts and loans totaling more than $165,000 from Jonnie Williams Sr. in exchange for using the governor’s office to help the executive’s struggling dietary supplements company, Glen Allen-based Star Scientific Inc. Williams resigned as company CEO in late December.
The McDonnells have entered pleas of not guilty, and the former governor insists that he has done nothing illegal. “Not one penny of taxpayer money” went to Williams or Star Scientific during his administration, McDonnell said in a televised response to the indictment.
He maintains that the government has overreached in its interpretation of corruption laws.
The government’s case, McDonnell argues, hinges on the concept that “facilitating an introduction or a meeting, appearing at a reception or expressing support for a Virginia business is a serious federal crime if it involves a political donor or somebody who gave an official a gift.”
The trial is expected to be a media circus, covered by national and international news agencies.
Whatever the trial’s outcome, a state often proclaimed as “the best place to do business” will be in the public eye.
Greg Wingfield, president and CEO of the Greater Richmond Partnership Inc., a public-private regional economic development organization, agrees with Keogh that other states will make the most of the publicity generated by McDonnell’s indictment.
“I wouldn’t doubt that other states are using that ammunition. Depending on the issue, we have done that over time,” Wingfield says.
He recalled, for example, a time when California was having problems with providing enough electrical power.
“We sent a number of flashlights out to prospects we were dealing with,” he says. “We told them they might need them [in California].”
More recently, he made sure that prospects weighing Charleston, W.Va., against Richmond were aware of Charleston’s recent drinking water problems because of a chemical spill.
“To me, it’s not dirty tricks. It’s just informing and leveraging a situation,” Wingfield says. “We didn’t create it, but we took advantage of it.”
On the other hand, he has seen no indication from conversations with economic development teams in the field that McDonnell’s troubles are causing potential prospects to back away from Virginia.
Instead, they are getting questions concerning how a new Democratic governor and Democratic control of the state Senate will affect business.
“I tell them that in Virginia, you can’t tell a lot of difference between a Democrat and Republican when it comes to business. They’re all pro-business,” Wingfield says.
While the indictment against the McDonnells breaks new ground in Virginia, scandals involving governors in some other states are nothing new.
In Illinois, for example, four of the last seven governors were convicted of crimes and imprisoned. One of them is Democrat Rod Blagojevich, who was convicted of trying to sell Barack Obama’s Senate seat after he was elected president in 2008. The former governor is serving a 14-year sentence.
“Illinois is seen as a bad place to do business because it has a long history of corruption that goes above and beyond the norm,” observes Stephen Farnsworth, a professor and director of the Center for Leadership and Media Studies at the University of Mary Washington.
Some gubernatorial embarrassments, however, have not resulted from criminal charges. In South Carolina, Gov. Mark Sanford disappeared for a week in June 2009 for a rendezvous with his mistress in Argentina. Despite calls for his resignation and an impeachment threat, Sanford survived the scandal and served out his term as governor, which ended in 2011. He recently was elected to a congressional seat.
“It’s almost a comedy the way so many governors around the United States become embarrassed,” says C.R. “Buzz” Canup.
He is founder and president of Canup & Associates Inc., a Greenville, S.C., site location company that helps U.S. and foreign clients find the right place for their business.
On Sanford, Canup says that the governor’s policies preceding the incident with the mistress already were hurting economic development for South Carolina.
Judging from what he knows about the McDonnell case, however, Canup doesn’t believe it will have much of an impact on the commonwealth’s business reputation.
“A single incident would not hurt a state from an economic development perspective,” Canup says.
He added that if the indictment had come while McDonnell was still in office, clients might raise questions about his ability to deliver on incentives the state could offer to entice a company.
“But he’s out of office. He essentially has no authority,” Canup says.
Wingfield of the Greater Richmond Partnership says that, even when McDonnell was in office, and leaked accounts of his loans and gifts became the subject of news stories, economic development efforts went on as usual.
“We didn’t get a lot of questions or feedback, including prospects still meeting with the governor,” Wingfield says.
Stephen Fuller, director of the Center for Regional Analysis at George Mason University, also says he’s seen no hiccups in the economy related to the charges against McDonnell.
“I think there was more curiosity and some sadness,” Fuller says. “McDonnell was respected, but he got caught up in it. I don’t think it impugned his dedication to improving the state’s economy. He was viewed as a positive force.”
The revelations about the relationship between the McDonnells and Jonnie Williams will likely provide material for political scientists and historians to pore over for years to come.
Farnsworth of the University of Mary Washington already is thinking about what can be learned from this case.
“Virginia has gained from its reputation as a relatively clean state. The state is now under a bit more scrutiny. It would behoove the legislature to come up with a solution. I think it will help restore Virginia’s reputation,” Farnsworth says. “The good news for Virginia is that we live in a short attention span country.”
Keogh says the spotlight is on the General Assembly to produce ethics reform.
“The horse is out of the barn, and so any legislative treatment runs the risk of looking like window dressing,” Keogh says.
He adds that ethics reform must be a serious, long-term effort that gives the public confidence that the same kind of problems will not occur again.
Otherwise, the state might further damage its reputation.
In reaction to the scandal, ethics legislation is moving through the General Assembly.
Among other things, bills from both houses of the legislature would require lawmakers and public officials to disclose gifts to their immediate families and put a $250 cap on gifts from lobbyists.
On his first day in office in January, Gov. Terry McAuliffe signed a far-reaching executive order imposing a $100 limit on any gifts to him, his family and members of his administration.
Gifts from lobbyists are banned totally. In addition, the order established a three-member Executive Branch Ethics Commission to police possible violations, with $100,000 in startup money.
Brian Moriarty, an adjunct lecturer in management communications at the University of Virginia’s Darden School of Business and director at the Business Roundtable Institute for Corporate Ethics, talks about the Rule of 3s in ethical breeches.
“Once, it’s an aberration. If it happens twice, it’s on the radar. If it happens three times, people see a pattern,” he says.
Moriarty has seen no direct evidence that McDonnell’s missteps have had any serious impact on the state’s reputation. But the damage might not be known, he says, until the case undergoes a thorough academic study.
Still, he has reached some conclusions.
Former Gov. Bob McDonnell and his wife, Maureen, arrive at the U.S. District Court in Richmond to enter pleas of not guilty to a 14-count indictment.“The public trust in government is already pretty low. [And] for people who have a negative perception of business, it can only reinforce it,” he says.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/VaBiz_HorseRace.pngIllustration by Matt Brown
Off the pace
http://www.virginiabusiness.com/news/article/off-the-pace#When:11:00:00ZIt’s not a roaring comeback by any measure, but Virginia’s economy is growing. Housing sales are rebounding. Construction hiring is up. Unemployment keeps going down, dropping to 5.2 percent in December. And most important, the federal budget is not locked in a game of partisan brinksmanship the way it had been in the past few years. Federal dollars have long been the lifeblood of Virginia’s statewide economy, and the congressional budget agreement reached late last year gives businesses some certainty.
So, for most of the commonwealth, this year looks like it will bring at least modest improvement. After the recession and the sluggish recovery since 2010, that’s not so bad. Yet, there are reasons for concern about how the current recovery is unfolding and whether Virginia will be able to sustain stronger growth over the next decade.
The biggest hit this year is the lingering effect of federal spending cuts. Virginia actually faces predicted growth rates below the national average for the next few years. According to data from George Mason University’s Center for Regional Analysis, Virginia took less of a blow from the recession than did the rest of the country, but its recovery will be significantly slower.
Virginia’s economy shrank just 0.7 percent in 2009, the recession’s worst year, while the U.S. economy declined 2.8 percent. Yet Virginia has lagged behind the nation’s economic growth in every year since, a pattern that the center predicts will continue through 2017. “This is an unusual position for us because we’ve gotten used to benefiting from all of the government spending,” says Christine Chmura of Chmura Economics & Analytics in Richmond.
Plus, Virginia’s rebound so far is weaker at replacing the mid-wage jobs. During the recession, Virginia lost close to 80,000 jobs at that income level but replaced only 20,000 of them so far, according to GMU data. “That shows the hollowing out of the middle class over the past decade,” Chmura says, a trend that has been happening nationwide. “The job growth [in Virginia] has been at the highest-paid and the lowest- paid [positions].”
Many of those mid-wage jobs have been lost in manufacturing sectors, but that sector is regaining strength, she says, by adding jobs in advanced manufacturing. “That should help the mid-wage jobs, so I would expect to see some of that hollowing out of the middle class reversed in the next few years, but not a total reversal,” she says.
Training a key issue
A big obstacle to regaining those jobs is training, which many believe is key to the state’s economic future. “There are areas where there is demand, for example in IT jobs, and we’re just not producing enough graduates in those areas. There are openings that are not being filled,” Chmura says.
Still, economists expect most of the state to see at least modest growth. Northern Virginia, for example, with 1.3 million of the state’s workers, is projected to increase its employment by 1.2 percent this year. Most of the federal spending in Northern Virginia falls under the category of professional services, and jobs in that area have dropped 1.3 percent from a year ago, Chmura says.
“Northern Virginia has a higher education level, and the higher the education level, the more opportunities,” she says. “I would expect Northern Virginia to be more resilient than many economies, just because of its highly educated workforce.”
Gerald Gordon, president and CEO of the Fairfax Economic Development Authority, agrees that Northern Virginia is having a slower recovery this year because of federal budget cuts, but he sees some opportunity in changing federal priorities. “One of the things the federal government has said is it will actually increase funding for is cybersecurity, which is a strength of ours because we’re so dominant in the IT area,” he says.
In spite of the spending cuts, the D.C. region is still where the government gets much of its work done. “Even when the federal government cuts $85 billion a year for a couple of years at least, they are still going to be a larger buyer of goods and services, so they’re still a strong anchor of the economy,” he says.
Bullish in Hampton Roads
Hampton Roads is the state’s other major recipient of federal money, mostly defense-related dollars. Chmura says Hampton Roads’ federal contracts mostly are related to shipbuilding, “and for the most part those contracts have held up. We haven’t seen much of a decrease there, if any,” she says. She predicts job growth of about 1.3 percent this year.
Vinod Agarwal, a professor at Old Dominion University who works on the school’s Economic Forecasting Project, is optimistic. “I’m more bullish on 2014 than I was about three months ago,” he says. “In the last couple of years, the federal government has really created a lot of uncertainty, and, in an uncertain environment, businesses are not anxious to make long-term plans.” With a federal budget agreement in place “it has taken that uncertainty out, so businesses know what the fiscal environment will be for 2014 and 2015.”
Agarwal says there’s actually more defense-related money available in the coming year, which is good news for defense contractors. After enduring the cuts related to sequestration, discretionary defense spending will rise about $30 billion nationwide this year, he predicts. “We do not [yet] know how this extra money will play out in this region,” he says. “But from all I have seen, defense contractors seem to be happy in this area, and ship-repair contractors are happy. So, they see positive signs, which means they’ll start hiring people.”
ODU’s projections for 2014 call for the region’s employment to rise about 1.5 percent, and retail sales to increase at least 3.5 percent. Unemployment could drop to 5.3 percent, down from 5.9 percent for 2013.
The region’s housing and construction sectors already are improving, with a surge last year in the number of new apartment projects. And, the Port of Virginia should benefit from the higher retail demand across the nation, with tonnage rising about 6 percent, Agarwal says.
Cloud on the horizon
A cloud that briefly appeared on the horizon for the Hampton Roads’ economy now appears to have vanished. It involved a Pentagon proposal that would deactivate an aircraft carrier.
Next year three aircraft carriers are scheduled to rotate. The aircraft carrier George Washington is due to return to Hampton Roads next year from Japan. At the same time, the Theodore Roosevelt would move from Norfolk to San Diego. Replacing the George Washington in Japan would be the Ronald Reagan, currently based in San Diego.
The George Washington, which left Norfolk for Japan in 2008, is scheduled to undergo an extensive refueling and overhaul costing more than $3 billion at Newport News Shipbuilding.
Defense News, however, reported in January that the Pentagon was considering eliminating one aircraft carrier and a carrier air wing. “The carrier most often targeted is the Japan-based George Washington,” the report said. By February, however, that idea was off the table, after the Pentagon received a letter protesting the move from a bipartisan group of lawmakers, according to The Wall Street Journal.
2 million jobs
The Virginia Chamber of Commerce, the state’s leading business advocacy group, is pushing for more state money for workforce training. It’s part of Blueprint Virginia, a comprehensive economic plan the chamber spearheaded last year. “Virginia is going to have about 1.3 million workers retire in the next 10 years, and we’re going to have a need for about 800,000 new jobs, based on a very conservative 2 percent growth rate,” says Barry DuVal, the chamber’s president and CEO. “The total is about 2 million jobs over the next 10 years. That will be the engine that fuels our economy,” he says.
Virginia isn’t ready, DuVal says. “Our concern is that about 50 percent of the jobs are going to be in the science, technology and mathematics fields. What the chamber is supporting is investments in workforce training, in education and in public-private partnerships that will fill that need in the years to come.”
Former Gov. Bob McDonnell proposed $183 million in funding for higher education in the two-year budget he proposed in December, and the chamber backs that spending, DuVal says. The money would support goals of the 2011 Higher Education Opportunity Act, which seeks to produce an additional 100,000 college degrees by 2025 and to encourage students to study the STEM-H fields — science, technology, engineering, math and health. “We think the colleges and universities have the right vision and are supporting what the business community needs,” DuVal says.
The chamber is pushing its priorities in the current General Assembly session, supporting bills to increase funding for STEM-H education efforts. Those bills are being proposed by Del. Chris Jones, a Republican representing Chesapeake and Suffolk, and Sen. Walter Stosch, a Republican representing parts of Henrico and Hanover counties.
In Fairfax, Gordon, the economic development authority CEO, also is looking to catch the next wave of high-wage job growth. He thinks the county should move toward personalized medicine, a new field in which medical therapies are based on an individual’s genetic information. This nascent field lies at the intersection of information technology and the life sciences.
Gordon believes the commercial growth in the field is still several years away, but thinks Virginia is at risk of missing out. “The discoveries that will lead to the jobs will take place where the financing is available for the research,” he says. Places like Northern California and Boston are at the top. “We don’t have enough researchers. What we need to do is attract the capital, which will attract the best scientists and researchers,” he says.
Cuts in recent years in federal research grants through the National Institutes of Health have made finding research funding more difficult. Nonetheless, there’s been some movement in the field — in 2011, Inova Health System in Fairfax launched the Inova Translational Medicine Institute. It hired as its CEO Dr. John Niederhuber, former director of the National Cancer Institute, and put in $150 million in startup money.
“That’s a drop in the bucket compared to what’s available” in other areas, Gordon says. “In Boston and Northern California, they have the venture capital community that will fund these things. They understand taking risk and reaping the reward for it. We don’t have any large venture capital community here. These are very, very long-term investments, and the return is uncertain, and it’s high risk.”
The competition isn’t just from other U.S. regions, but from other countries as well. “I don’t know what the answer is. It’s got to be the long-term, high-risk funding that will generate these results, and we don’t have it. How do you get it, that’s the issue.”
All of the big plans and big numbers about which direction the state’s economy is going may not mean much to businesses trying to have some success for the rest of this year. DuVal says a closer look at the business environment reveals a key difference. “I see almost two Virginias,” he says. “Some of the larger companies are more optimistic than smaller companies.”
Bigger firms that endured the recession years made the cuts and changes they needed to make “and are in a fairly healthy financial position,” he says. “Then you have smaller businesses that are still recovering. They’d like to see some growth, but they’re concerned about the economy.”2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/VALLEY_cows3.pngShamrock Farms is building a $50 million dairy manufacturing facility in Augusta County.
A ‘great fit’
http://www.virginiabusiness.com/news/article/a-great-fit#When:11:00:00ZAt a groundbreaking ceremony in Augusta County last March, then-Gov. Bob McDonnell noted the county had been “on a roll economically.”
Augusta had seen expansions at Daikin McQuay’s industrial chiller plant, medical instrument supplier Cadence Inc. and snack maker McKee Foods.
The groundbreaking at the Mill Place Commerce Park in Verona, however, was especially satisfying for the county, which takes pride in its agricultural heritage. It is the second-largest producer of agricultural products in Virginia behind neighboring Rockingham County.
Arizona-based Shamrock Farms is building a $50 million dairy manufacturing facility at the industrial park. The company is one of the nation’s largest family-owned and -operated dairy processors.
When Shamrock began the site selection process for its first East Coast facility at the end of 2011, it considered several locations, from New York to North Carolina.
The Shenandoah Valley Partnership (SVP), a regional economic development organization, worked with Shamrock’s real estate consultant to find available properties, says Dennis Burnett, SVP’s executive director. “We try to screen and vet these [inquiries] as much as possible, but we don’t always know who’s behind the curtain,” he says. “That was certainly the case with this deal.”
After narrowing the search to a 40-acre tract in the publicly owned industrial park in Verona, the consultant and SVP officials toured the site twice to make sure it met Shamrock’s criteria. The requirements included proximity to major markets along the East Coast, access to a high-quality local milk supply, and a skilled and available workforce.
The readiness of county-owned land also was a major draw. “They didn’t have to negotiate property rights or worry about rezoning,” Burnett says. “The project was shovel-ready. It was really one-stop shopping.”
Ultimately, regional and county officials were able to deliver on all fronts. “Shamrock’s market continues to grow on the East Coast, so it made sense for them to establish a facility here,” Burnett says, citing the valley’s strategic location near Interstates 81, 64 and 66. “We quickly rose to the top of their list, and, I think, being an ag company, they felt at home.”
Sandy Kelly, Shamrock’s vice president of marketing, says the company has been impressed with the welcome it has received in Augusta. “From a business perspective, we are excited to be working with them, and they have been very forthcoming in helping us establish our business here,” she says. “From a cultural perspective, there is somewhat of a kindred spirit among our company, our people and the people of Augusta County. It’s a great fit.”
McDonnell approved a $250,000 grant from the Governor’s Opportunity Fund to help the county win the project. The governor also approved $50,000 from the Governor’s Agriculture and Forestry Industries Development Fund, a grant administered by the Virginia Department of Agriculture and Consumer Services and made to businesses that add value to Virginia-grown agricultural and forest products.
Other incentives included funding for road access from the Virginia Department of Transportation and recruitment and training activities through the Virginia Job Investment Program.
The new facility will allow Shamrock to deliver its extended-shelf-life (ESL) milk products to customers across the country. In recent years, the brand has expanded into convenience stores, groceries and quick-service restaurants such as Subway, Arby’s and Einstein Brothers. Shamrock’s Rockin’ Refuel protein-fortified milk beverages are used by sports teams at 150 colleges and universities nationwide. All of these products will be made at the new facility.
The plant will feature the new ESL technology, which allows milk to stay fresher longer. Shamrock was among the first dairies in the U.S. to introduce ESL technology more than 10 years ago.
“This is a key milestone in our company’s more than 90-year history, and a natural next step as we continue to achieve even further national growth,” CEO Kent McClelland said in a statement.
The Augusta facility is on track to open this fall. It will measure 130,000 square feet initially, with room for expansion. When completed, the plant will employ up to 60 people. Shamrock will get its milk from Virginia farmers.
“The new state-of-the-art facility will provide job opportunities that benefit from the strengths of our workforce while complementing our commitment to provide quality jobs to our citizens,” says Jeffrey Moore, chairman of the Augusta County Board of Supervisors.
Shamrock plans to be involved in the local community. To kick off the relationship, the company will donate Rockin’ Refuel products to Fort Defiance High School athletic teams.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/VALLEY_chickensfarm.pngShenandoah Processing LLC in Harrisonburg will open a processing facility in a former Pilgrim’s Pride building.
Fed by food companies
http://www.virginiabusiness.com/news/article/fed-by-food-companies#When:11:00:00ZThe cream rose to the top of economic development activity in the Shenandoah Valley in 2013 as dairy processors announced plans to invest more than $220 million in their local operations, moves that are expected to result in 170 new jobs.
Two of the year’s biggest announcements involved significant expansions by longtime members of the valley’s corporate community.
In April, state officials joined business and local government leaders in breaking ground on a $69.8 million expansion of WhiteWave Foods’ operation in Rockingham County. The company has since completed a new warehouse facility on site and purchased machinery to expand production of its plant-based dairy foods, beverages and coffee creamers under the brand names Silk, Horizon Organic, International Delight and Land O’Lakes. The Mount Crawford plant has been in operation for 25 years, and more than $190 million has been invested in property and equipment since 2000.
In the northern valley, HP Hood delivered the region’s largest dollar investment of the year and the largest in Frederick County in three decades — an $84.6 million expansion of its flagship facility along with 75 new jobs. The Massachusetts-based dairy processor is increasing the plant’s ultra-high-temperature production capacity, which will allow the company to keep up with product demand as well as secure and service new business.
Hood is a full-line dairy products manufacturer whose portfolio includes beverages, flavored coffee creamers, Greek yogurt, ice cream and cheeses. It is investing heavily in new equipment and technology. The Frederick County expansion strengthens the plant’s standing as the largest of its type in the U.S. In October, members of Hood’s executive team flew from their Boston-area headquarters to Winchester to tour the local facility and shake hands with employees.
“The fact that the largest plant of its type is operating in our area is testament to Frederick County’s business environment, our infrastructure capabilities and the quality and availability of our workforce,” says Richard Shickle, chairman of the county Board of Supervisors.
Those same selling points helped lure a new dairy processor to the valley last year.
Arizona-based Shamrock Farms, one of the largest family-owned and -operated dairies in the U.S., is building a $50 million, 130,000-square-foot manufacturing facility in the Mill Place Commerce Park in Augusta County. The project, which is on pace for completion this fall, will bring 60 new jobs. (See related story.)
“Augusta County is rich in agricultural heritage and committed to attracting industry that supports that history while advancing our community,” says Jeffrey Moore, chairman of the local Board of Supervisors. Shamrock Farms’ investment, he says, “presents opportunities to capitalize on each.”
Shamrock CEO Kent McClelland agrees, saying in a statement announcing the deal last March that Augusta County offers “the perfect fit for Shamrock Farms” from a business and a company culture perspective.
The valley’s dairy industry as a whole is strong, says Dennis Burnett, executive director of the Shenandoah Valley Partnership, a regional economic development organization. “It’s a federally regulated industry, so they can’t control the cost of their product. But we feel we can help them control their cost of doing business.”
The region’s commitment to agriculture produced two additional investments in 2013.
Shenandoah Processing LLC, a new locally owned company in Harrisonburg, announced in December that it will open a processing facility in the former Pilgrim’s Pride building to produce organically raised, all-natural chicken. The $2.2 million investment during the next three years will provide an important resource for area poultry farms, some of which have been forced out of production in recent years.
“We believe there is a significant demand for certified organic and humanely raised chicken products,” says company President Corwin Heatwole, adding, “This awareness will only increase.”
Shenandoah Processing will provide services for its sister supplier, Shenandoah Valley Organics, as well as custom processing for individual farmers and growers who want to have their poultry prepared for retail.
The new venture will create more than 100 jobs and is expected to generate a ripple effect on the local economy, as new poultry production will result in greater demand for equipment, veterinarians, farm hands, feed suppliers and other operations that support the valley’s poultry industry.
In another deal involving processing, Ariake USA, which makes stocks, bouillons and natural meat flavorings, added a $6.2 million production line at its Harrisonburg facility late last year. The expansion was the company’s third since moving to Virginia in 1989. Ariake invested $23.5 million and doubled the size of its facility during its last expansion in 2007.
Meat processing is a step in the food production ladder that consumers haven’t always paid attention to, but that’s beginning to change, according to local officials. More customers are demanding to know where their meat comes from, how it was raised and ultimately how it was processed.
“Farmers [understand] there are profitable opportunities associated with the local food movement,” says Scott Smith, a Highland County sheep farmer who helped coordinate the opening of Alleghany Meats in 2012. The processing facility specializes in custom, humane and USDA-inspected slaughter, helping farmers in rural Highland and neighboring parts of West Virginia sell their products directly to consumers.
Together with snack maker McKee Foods in Augusta County — which completed a $19 million expansion in 2012 — Hershey Chocolate in Stuarts Draft, and Route 11 Potato Chips in Shenandoah County, the valley is developing a significant cluster of food companies that is attractive to firms that may be considering locating in the region, Burnett says.
Overall, 2013 was a strong year for the valley, Burnett says. “I think you see that reflected in the investment and you also see it reflected in the unemployment numbers. To me, it’s a sign that we’re making progress. We’re not out of the woods yet, certainly, but we are walking toward the light.”
According to labor market information from the Virginia Employment Commission, the jobless rate in the Shenandoah Valley steadily declined last year, from 6.4 percent in January to 5 percent in November.
The valley benefits from a high-quality workforce and a diverse economy that includes advanced manufacturing, distribution, health care, medical technology, retail and tourism. “Some industries are taking a hit,” Burnett says, “but others are growing. That helps even things out.”
As a general rule of thumb, he says, about two-thirds of an area’s growth comes from existing industry, and in the valley that trend has certainly held true during the past five years. Commercial expansions not only create jobs and help broaden the local tax base; they also send a message to prospective companies that the valley is a good place to do business.
“New investments like Shamrock Farms are just icing on the cake,” Burnett says.
Moving forward, the region is marketing Innovation Village @ Rockingham, a county-owned research and technology park on 365 acres north of Harrisonburg, as a hub for innovators and entrepreneurs, particularly in the area of life sciences, energy, information technology, agriculture and crop science.
The park is already home to SRI Shenandoah Valley’s Center for Advanced Drug Research, a partnership with James Madison University focused on improving the productivity of the pharmaceutical industry, helping respond to biothreats and developing lifesaving treatments for neglected and orphan diseases.
Last year, SRI Shenandoah Valley produced its first spinoff when the research firm licensed its bedbug detection technology, which was developed on-site during the past three years, to a local company, Redcoat Solutions Inc. Redcoat intends to market the device under the brand name Rapid Pursuit. The test requires no sophisticated equipment, registers a response in minutes and is designed to detect only bed bugs, avoiding confusion that could be caused by the presence of other pests.
This year already is shaping up to be another good year for the region. “We’re pleased with the interest and activity levels we’re seeing,” Burnett says.
The Shenandoah Valley Partnership believes the area’s natural beauty, people, collaborative spirit and quality of life leave site selectors, consultants and prospective companies with a favorable impression. “We have set goals this year for getting boots on the ground, and we’re exceeding those goals,” Burnett says. “We feel those positive perceptions will pay dividends later.”
Major employers by number of jobs
James Madison University
Augusta Medical Center
Sentara RMH Medical Center
Valley Health System
Frederick County Public Schools
R.R. Donnelley & Sons
Source: Shenandoah Valley Partnership
Shenandoah Valley’s recent deals
Shenandoah Processing LLC
HP Hood Inc.
WhiteWave Foods Co.
Polymer Group Inc.
Source: Virginia Economic Development Partnership2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/SW_Ardagh_Announcement_0766.pngThe state provided $750,000 to Roanoke County to assist it with the Ardagh plant project.
Two for one
http://www.virginiabusiness.com/news/article/two-for-one#When:11:00:00ZA decision by Luxembourg-based Ardagh Group to spend $93.5 million creating a can factory in Roanoke County ranks as one of the largest new investments in Virginia last year.
In fact, Ardagh’s deal packed extra punch for the Roanoke Valley economy. In deciding to renovate the 525,000-square-foot former Hanover Direct building, Ardagh prompted one of its suppliers, Canline Systems, to invest in its own facility in Roanoke County to provide equipment to the can factory.
The two deals will create a combined 121 jobs — 96 at Ardagh and 25 at Canline — with the potential for expansion. The back-to-back announcements provided the Roanoke Valley with the opportunity to tout its appeal to global companies.
“These are pretty sexy projects,” says Jill Loope, director of Roanoke County’s economic development department.
During the official announcement, James Willich, CEO of Ardagh Metal Packaging USA Inc., said Roanoke County stood out for a variety of factors: The “proximity to our major customer, favorable business tax structure, skilled labor and reasonable cost of living for our employees, as well as logistical advantages.”
The behind-the-scenes story on the Ardagh deal, however, shows just how much location, timing and luck factor into landing new employers.
Ardagh, which makes glass and metal containers for the food and beverage industry, used real estate broker Tommy Turner of the Charlotte, N.C.-based Hart Corp. to assist in the search. He previously had worked with a smaller canning company acquired by Ardagh.
Because of a pending contract with a new customer, Ardagh sought to locate a production facility somewhere in Tennessee, western Virginia, the western Carolinas or eastern West Virginia. Turner used an internal database to find buildings in the 200,000-square-foot range.
During the search, however, Ardagh signed a new deal to provide cans for ConAgra Foods in Newport, Tenn. That meant the company now needed a building of 400,000 to 700,000 square feet, with ceiling clearances of at least 28 feet.
“When you looked at the Southeastern U.S. at the time, only four or five buildings fit that criteria,” Turner says.
Early in the process, Ardagh had zeroed in on build-to-suit sites in Berkeley County, W.Va., and Winchester.
The search changed course, however, when another Ardagh building project, on the West Coast, suddenly became more urgent.
“It delayed our time frame on this end, and they just felt a build-to-suit was cutting it too close,” Turner says. “We had to focus on an existing building.”
“All of a sudden the temperature amped up on that project,” says Beth Doughty, executive director of the Roanoke Regional Partnership. “They were in a huge hurry.”
Ardagh’s search focused on the Hanover Direct building, with its modern fixtures and high ceilings. Its first visit in early January last year was devoted to evaluating the Roanoke community — its workforce, quality of life, the cost of doing business — but over subsequent months company officials returned frequently to check logistics for freight distribution, determining whether that could be cost-effective and if it could distribute its product effectively from Roanoke County compared with other potential sites.
At the same time, another global company, Colgate Palmolive, also pursued the building. Ardagh and Colgate vigorously courted the owner of the Hanover Direct building.
Turner says Ardagh delivered its letter of intent to purchase first, but it had to move aggressively and raise its price to seal the deal. Ultimately, that approach paid off: The final sticking points were worked out, and Ardagh officials closed on the contract soon after.
Colgate Palmolive eventually announced it would invest $196 million into a similar-size building in Greenwood County, S.C.
“We could have sold that building three times,” Doughty says. “It’s too bad we didn’t have three of them.”
The incentive package ultimately included $750,000 from the state and $2.4 million from Roanoke County.
“It really emphasizes how important the real estate is,” Doughty says. “Of course you have to have a good business climate and cost structure, but if you don’t have the real estate that meets modern needs, you’re not going to be successful. Their instance of being in a hurry isn’t all that unusual either.”
Ardagh has moved quickly on the Hanover Direct building to strip out the mezzanine floors and outfit it with equipment to produce 4.5 million cans per day, or roughly 5 percent of the U.S. food can market annually.
Renovations and equipment installation should be complete by this summer, with initial startup tentatively set for this fall. The facility should be fully operational by the end of the year.
“I can tell you I fully expect future growth and expansion out of Ardagh,” Loope says. “I think this is just the beginning. They have a pad site that is pre-graded immediately adjacent to their building and can easily expand at any time.”2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/ROANOKE_OVERLOOK.pngThe Roanoke and New River Valley regions saw a year full of economic development announcements.
Picking up speed
http://www.virginiabusiness.com/news/article/picking-up-speed#When:11:00:00ZAfter decades of decline in manufacturing and years struggling to recover from the Great Recession, Southwest Virginia’s economic revival made big strides in 2013.
The Roanoke and New River Valley regions saw a year full of economic development announcements, and activity continued into the opening weeks of 2014.
“It was a wonderful, busy and successful year as far as economic development announcements go,” says Aric Bopp, executive director of the New River Valley
Economic Development Alliance. “We’ve laid the groundwork for a busy 2014.”
Beth Doughty, executive director for the Roanoke Regional Partnership, says that although she still hears complaints from the business community about the “tepid recovery,” the partnership’s economic development activity grew 39 percent last year. It did especially well generating investment in real estate, machinery and equipment.
The Milken Institute’s 2013 Best Performing Cities report saw Roanoke leap 47 spots to achieve its highest ranking ever, 95th out of 200 large metro areas. The same report saw the Blacksburg region advance from No. 32 to No. 21 among 179 small metro areas.
“That seems to indicate things are looking up,” Doughty says. “Job growth is improving, and this region in particular made a big leap in the past year.”
In the Roanoke area, there’s a clear driver behind that growth. “Manufacturing has led the way out of the recession,” Doughty says.
The Roanoke region’s year was highlighted by the August announcement that the Luxembourg-based food-packaging company Ardagh Group would invest $93.5 million to retrofit the former Hanover Direct distribution center in Roanoke County, creating 96 relatively high-paying jobs.
The deal generated an immediate spinoff announcement, with The Netherlands-based Canline Systems announcing it would invest $1 million and create 25 jobs in developing a facility manufacturing conveyor systems to supply Ardagh. (See related story.)
For job creation, however, the region’s biggest news was Red Sun Farms’ decision to build greenhouses and a distribution facility on 45 acres at the New River Valley Commerce Park in Dublin, creating more than 200 jobs. Red Sun Farms is a Mexican subsidiary of Canada-based JemD Farms. The announcement marks two major firsts: It’s Red Sun’s first high-technology greenhouse facility in the United States and the Commerce Park’s first tenant.
Construction on the greenhouses was delayed by heavy rain, but Red Sun Farms Director of Operations Jay Abbott says the steel structure is going up now, and the company hopes to plant its first crops in July.
Red Sun Farms will grow and distribute hydroponic tomatoes, further building its status as one of the largest organic vegetable producers in North America. It’s a potential game-changer in the regional food industry, which has seen rapid growth at the local level but nothing of this scale from a national or international company.
The Red Sun was the first of four major economic development announcements for Pulaski County.
In August, Falls Stamping & Welding Inc., a metal stamping company, announced it would invest $5.7 million and create 112 jobs in a facility that will supply assemblies to the Volvo Trucks plant in Dublin.
That was followed a month later by word that Korona S.A., a Polish company that is one of the largest candle manufacturers in the world, would build its first U.S. production facility in Pulaski County. Korona will invest $18.3 million and create 170 jobs.
The momentum carried into the new year: In early January, firearms manufacturer Alexander Industries said it would invest $2.88 million to expand its operations and relocate from the Radford Arsenal to Dublin Industrial Park in Pulaski County. Virginia competed against South Dakota and Texas to land the project, which will create 64 jobs.
Bopp says 2013 was a “wonderfully robust” year in terms of announcements for the New River Valley.
“When I meet with people, I tell them we work with 75 to 100 projects a year,” Bopp says. “Twenty to 24 come and physically visit, and in an average year, we’re lucky to get one or two companies new to the area.”
Success hasn’t been limited to Pulaski County, either.
The New River Valley’s burgeoning tech sector was highlighted by the expansion of Rackspace Hosting, which offers cloud and IT services. It’s investing $5.4 million to expand its facility in Virginia Tech’s Corporate Research Center, creating 100 jobs.
While Rackspace drew headlines for its large-scale expansion, the New River Valley’s tech sector is bubbling over with a steady stream of small entrepreneurs and startups. “The tech sector is an incredible economic engine,” Bopp says.
In August, Blacksburg’s Harmonia and Christiansburg’s CCS Inc. were featured in Inc. magazine’s list of the top 5,000 fastest-growing companies in America.
Recent advances in broadband technology and offerings may accelerate the growth of the technology sector regionally. Last year marked the completion of two projects that began with 2009’s American Recovery and Reinvestment Act (also known as the federal stimulus) and resulted in nearly 300 miles of new fiber-optic cable in Roanoke and the New River Valley.
Additionally, Botetourt County, Roanoke, Roanoke County and Salem formed the Roanoke Valley Broadband Authority, which, along with the already established New River Valley Network Wireless Authority, seeks to bring less-expensive Internet service to Southwest Virginia’s businesses and households.
A report by Blacksburg firm Design Nine indicated the region is falling behind when it comes to broadband. Southwest Virginia, however, is taking steps to catch up. In addition to the stimulus-funded infrastructure, there is a crowd-funded Gigabit project in downtown Blacksburg and a $4.6 million investment by cable provider Cox Communications to upgrade its Roanoke-area services,
Virginia Tech’s Corporate Research Center saw two of its former tenants expand into new sites. Biotech firm TECHLAB will retain its research facilities in the center but purchased a 54,000-square-foot-building in nearby Radford for its manufacturing facilities. Another former CRC tenant, Aeroprobe Corp., which makes instruments and software used in cars, jets, wind turbines and other applications, is investing $3 million over five years into a new site in Christiansburg’s Falling Branch Corporate Park.
The New River Valley also saw expansions: Polymer Solutions Inc. is investing $2.9 million to expand its Montgomery County site, creating five jobs, and Floyd County’s Hollings-worth & Vose Co., which makes non-woven fabrics, is investing $6.1 million to expand its plant and create 17 jobs.
The Roanoke Valley and far Southwest Virginia are growing more diverse, too, but their 2013 growth came largely from its strengths in manufacturing.
Smyth County’s Liaoyang Ningfeng Woodenware Co. Ltd., which builds furniture components, announced in November it would invest $2.1 million and create 125 jobs. Scott County saw two expansions, with mattress and pillow manufacturer Tempur Sealy International and VFP Inc., which builds concrete buildings for cell towers, announcing deals last year that are expected to create 42 and 50 jobs, respectively.
Further north in Botetourt County, Capco Machinery Systems Inc. is investing $4.2 million to expand its facility manufacturing roll-grinding machines, creating 30 jobs that pay an average of $60,000 annually. Also, Altec Industries Inc. plans to invest $2.2 million in its plant and will create 96 jobs. The company manufactures truck-mounted mobile equipment.
The city of Roanoke’s Virginia Transformer Corp. anticipates the creation of 150 jobs over three years by moving a portion of its facility to a site in Botetourt. Virginia Transformer CFO Steve Nelson says the move will allow the company to ramp up production in Roanoke. It’s investing about $9 million in Roanoke and Botetourt facilities, and there’s more room to grow, which could create an additional 250 jobs during the next five years.
“It’s not a necessarily big deal in terms of numbers, but the idea that they have purchased a whole other facility in Botetourt County — their growth potential is huge,” Doughty says.
She sees even more potential to land and grow manufacturing companies. Last year Botetourt, Franklin County, Roanoke, Roanoke County, Salem and Vinton banded together to create the Western Virginia Regional Industrial Facility Authority with the idea that they can better cooperate when it comes to prospective businesses finding sites.
Major employers by number of jobs
Roanoke, 11,300 jobs
Blacksburg, 8,000+ jobs
HCA Virginia Health System
Wells Fargo Bank
Advance Auto Parts
SOURCE: Roanoke Regional Partnership, New River Valley Economic Development Alliance
Southwest Virginia’s recent deals
Red Sun Farms
Virginia Transformer Corp.
Liaoyang Ningfeng Woodenware Co. Ltd. (New Ridge LLC)
Falls Stamping & Welding Inc.
Atlas, an Americold subsidiary
Altec Industries Inc.
Alexander Industries Inc.
Source: Virginia Economic Development Partnership2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/SOVA_eastman-sign.pngEastman Chemical plans to invest $40 million in expanding its 500,000-square-foot plant in Martinsville.
http://www.virginiabusiness.com/news/article/chemical-reaction#When:11:00:00ZAsk Mark Heath to name the biggest deal in the Martinsville area last year, and he’ll give you a quick answer: Eastman Chemical. The Kings-port, Tenn.-based specialty chemical company is investing $40 million to expand its 500,000-square-foot plant in Martinsville. As a result of the expansion, Eastman expects to create about 25 jobs by September 2016. The deal is the largest Martinsville and Henry County have had in some time in terms of capital investment, says Heath, economic development director for Martinsville-Henry County Economic Development Corp.
“It shows confidence in our area and hopefully the potential to continue to grow,” Heath says. “They have room to expand here, and if we can work with them and help provide the labor they need, we think we’ll be able to compete for future expansions, and that’s all you can ask for.”
Eastman’s expansion, coupled with Commonwealth Laminating & Coating Inc.’s presence in the area, has created what local officials believe to be the largest cluster of performance film companies in the U.S.
In the last five years, Commonwealth Laminating has invested over $40 million in Martinsville and nearly doubled its workforce, says president and CEO Stephen Phillips. As of January, the company employed 175 people in the area. “… We’ve expanded literally every aspect of the company. So we probably doubled the size of the company in the last five years, roughly speaking, and we’re going to double the size of the company in the next five years again,” Phillips says. The company has two buildings at Beaver Creek Industrial Park — a manufacturing facility and newly added corporate and distribution offices. Commonwealth Laminating, which was founded in 1995, now boasts approximately $120 million in revenues.
Commonwealth Laminating focuses on solar-control window films and recently entered the protection films market. That includes paint protection films used in the aftermarket and screen protection films used for iPhones, iPads and other tablets. The company’s biggest selling markets are in North America, Europe and Asia, particularly China.
“That’s an interesting thing to highlight where we’ve had a period over the last 10 to 20 years where more and more manufacturing is done in China and they’re selling into the U.S.,” Phillips says. “We are actually manufacturing and have been expanding in the U.S. and we’re selling into the China market, but we view China not as a future place for us to manufacture; we view China as a great future market to continue to sell into.”
Eastman’s Martinsville plant makes film used for architectural purposes and automobiles, says site manager Brian Miller. In automobile applications, Eastman’s films on car windows help keep the vehicle cool while protecting against harmful sun rays. Eastman’s films also help give buildings a “clean, reflective” look and can help with a building’s energy efficiency, Miller says.
The Martinsville plant formerly was owned by Solutia, a chemical company that Eastman acquired in 2012 for $4.8 billion. According to a news release describing Eastman’s latest Martinsville expansion, the plant is one of the largest and most integrated window and performance-coated film manufacturing sites in the world.
Eastman will add new equipment, which will create about 25 jobs. The expansion also will include infrastructure improvements and environmental, safety and reliability enhancements. Eastman plans to start hiring new employees the second half of this year. Most of the positions will be operator jobs, Miller says, but also will include one or two engineering positions.
Eastman is taking steps to create and retain a skilled workforce. “Eastman faces the same wave of baby boomer retirements in the coming years as many companies do,” Brad Belote, a corporate representative for Eastman said in an email. “We want to be proactive, particularly with our community partners, in identifying the capabilities we need, the talent that’s available and the resources needed to prepare those team members for a successful career at Eastman.”
The company is working with Patrick Henry Community College and New College Institute to develop programs that will train skilled operators for the company.
At the end of last year, Eastman Chemical held a job fair with the community college where it collected more than 100 résumés. The fair will “help us with maintaining an active pool of candidates that we can recruit from that are qualified to work in advanced manufacturing,” Miller says.
A $75,000 grant from the Governor’s Opportunity Fund was approved for the Eastman Chemical expansion project. The Virginia Tobacco Indemnification and Community Revitalization Commission also approved $230,000 in tobacco funds to secure the deal.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/SOVA_DCC.pngDanville Community College’s precision machining program. Photo courtesy Danville Community College
http://www.virginiabusiness.com/news/article/in-transition1#When:11:00:00ZSouthern Virginia is relying on more than Southern charm to drive economic development in the region.
“One thing we say is, ‘We don’t win in a fair fight,’ so we want to have the tools and resources that other communities our size don’t have in terms of that type of product, and our leadership here has been very good and very strong to give us those resources,” says Mark Heath, the president and CEO of Martinsville Henry County Economic Development.
Southern Virginia lost thousands of jobs when its textile, furniture and tobacco industries declined. One way the area hopes to stand out is by having a skilled workforce, particularly in areas like advanced manufacturing where more technical skills are now needed.
Greg Sides, Pittsylvania County’s assistant county administrator for planning and development, points to a project in which students can begin a precision machining program at the Pittsylvania Career and Technical Center while they are still in high school. These students then can obtain a standard precision machining certificate at Danville Community College (DCC) and finish a more advanced version of the certificate at The Institute for Advanced Learning and Research in Danville. The county also is working on a similar path for an industrial maintenance program, he says.
Another big effort has been to develop industrial sites, particularly megaparks. One site that’s being developed is the Mid-Atlantic Advanced Manufacturing Center in Greensville County, which spans almost 1,600 acres. The project is a partnership involving Emporia and Greensville and Mecklenburg counties.
“The purpose of developing such a large area is to bring one large … manufacturer, somebody like a Volkswagen or Toyota,” says Natalie Slate, Greensville’s director of economic development. Although the park currently has no tenants, local officials are working to get the site as “shovel ready” as possible for business prospects, Slate says.
Preparing two other megaparks, Berry Hill Road Industrial Park in Pittsylvania County (jointly owned by the county and Danville) and the Commonwealth Crossing Business Centre in Henry County, has posed challenges. Economic development officials haven’t been able to get grading permits for the sites from the U.S. Army Corps of Engineers (USACE) because they say it wants a specified end user before issuing a permit. USACE is charged with finding the least environmentally damaging practical alternative before it issues a permit. To do that it must have certain project details, says Tom Walker, chief of USACE’s Norfolk district regulatory branch.
In the case of the Commonwealth Crossing Business Centre, Henry County officials “actually found us the detail that we needed. [The problem] was not necessarily not knowing whose name was going to be on the wall, but it’s more about knowing enough detail about what’s driving the site design in order to look at alternatives that would accomplish the project purpose, and we have that now,” Walker says.
Henry County was able to provide USACE with two companies that are interested in locating at Commonwealth Crossing.
“That’s gone beyond the speculative nature, those are real companies and so that’s kind of where we are,” Heath says. “But we still have to go through the design phase, and we have to meet all the legal requirements, and we have to do the mitigation and all the issues around grading and developing large sites, so we’re still not there. We’re a lot farther along now that we have potential end users, but that has been the case with us all along, that’s what’s enabled us to advance our effort.”
Danville and Pittsylvania recently provided USACE with a market analysis on the Berry Hill site to advance permit efforts there.
“That study has been … furnished to the Corp of Engineers, so after they have a chance to review that study, then we’ll be in touch with them to see where we go next but that’s the latest update on the Berry Hill situation,” Sides says.
In the meantime, a bill has been introduced in Congress to amend the Clean Water Act so that regulators can’t deny a permit because of the lack of an end user, if all other permit requirements are met.
Other projects have had less difficulty getting moving. The State Corporation Commission recently gave Dominion Virginia Power the go-ahead to build a 1,358-megawatt, natural gas-fueled power station in Brunswick County. The $1.3 billion investment is the largest the county has ever seen, says Joan V. Moore, executive director of Brunswick County’s Industrial Development Authority. The facility, expected to be operational by 2016, is slated to create 30 jobs at the plant (and 600 to 1,000 construction jobs during peak construction). Once the Dominion plant is fully operational, the county expects more than $4 million in additional local taxes, Moore also says.
Another big win for Southern Virginia was Microsoft’s plan, announced in early 2013, to expand its data center in Mecklenburg County, a $348 million investment that would create 30 jobs. “That’s one of the biggest deals in Virginia; it continues to grow and build out,” says Jeff Reed, executive director of Virginia’s Growth Alliance. The economic development organization serves Emporia and the counties of Brunswick, Charlotte, Greensville, Lunenburg, Mecklenburg and Nottoway.
Helping attract data centers to Southern Virginia is the Mid-Atlantic Broadband (MBC), a nonprofit broadband network for underserved communities. Danville also has its own broadband network, nDanville, that’s connected to MBC.
Other recent coups in the region include AllergEase’s move from Northern Virginia to Danville’s River District. Last year, the allergy medicine company announced it would invest $7.5 million and create 150 jobs to establish its headquarters plus a warehouse and distribution center in Danville.
The city is seeing more act-ivity from startups like AllergEase (which was founded in 2011) rather than established companies, says Joe King, Danville’s city manager. One exception, however, has been Chinese companies wanting to break into the U.S. market. Chinese furniture company GOK International already operates at Cane Creek Centre, an industrial park owned by Danville and Pittsylvania. Chinese wood flooring company Zeyuan Flooring International Corp. also plans to move into the park. The $15 million investment by Zeyuan will create 100 jobs over three years.
“That’s primarily because they have not gotten into the American consumer market, interestingly enough,” King says about Chinese companies’ interest in setting up shop in the U.S. “They may have had dec-ades of profitable experience in China, but they haven’t touched the American market yet, and they see huge opportunities. So, China is unusual right now compared to other countries in that it’s looking to establish operations.”
Danville also has seen a good return on investment on its River District Development Project, which aims to revitalize downtown Danville and drive economic development in the area. Since the project began three years ago, the city has attracted $100 million in investments, King says. Danville also has seen $3 in private investment for every dollar put into the project. To refine its economic development strategy, the Danville and Pittsylvania County Chamber of Commerce recently held the Danville Economic Development Summit.
The city is seeing a slow improvement in the economy, Kings says, but officials know change doesn’t happen overnight. When existing businesses are asked how they are doing, “they’re all responding [that] they’re doing well,” King says. “They’re not growing at a robust rate, but they are holding their own, and they’re growing slowly, and we are seeing some evidence of that in our tax receipts, in our unemployment rates, but we still [have] a long way to go.”
Major employers by number of jobs
The Goodyear Tire & Rubber Co.
Greensville Correctional Center
Danville Regional Medical Center
1,000 - 1,499 jobs
Danville Public Schools
1,000 - 1,499 jobs
City of Danville
1,000 - 1,499 jobs
Henry County Public Schools
Memorial Hospital of Martinsville
600 – 999 jobs
Community Memorial Healthcenter
600 – 999 jobs
Sources: Martinsville-Henry County Economic Development Corp., Southern Virginia Regional Alliance, Virginia’s Growth Alliance
Southern Virginia’s recent deals
Kilgour Industries Ltd.
North American Mold Technology
Zeyuan Flooring International Corp.
Macerata Wheels LLC
Nestlé Refrigerated Foods
Source: Virginia Economic Development Partnership2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/AES4366.pngAES Corp. has made the Ballston area of Arlington its home since 2003. Photo by Mark Rhodes
http://www.virginiabusiness.com/news/article/staying-put#When:11:00:00ZThe Arlington Economic Development team was thrilled last year when global energy company AES decided to keep its headquarters in the county. The company has more than 500 employees in a 100,000-square-foot space in the heart of Arlington’s Ballston area. AES, founded in Rosslyn, has been a member of the Arlington community for more than 20 years. The Fortune 200 company has offices in 20 countries and 25,000 employees worldwide.
AES felt good about the move it made from Rosslyn to Ballston in 2003. “There was more space and it was less expensive and near the Metro, but at the time it was out in the boondocks,” says company CEO Andrés Gluski.
The company likes the way the area has developed during the past few years with more restaurants and retail joining the mix. Even so, it still had to consider economics when it began thinking about its contract renewal. “All companies are under a lot of cost pressure, especially in the utility industry,” Gluski says. “We have to make sure every dollar we spend is efficient.”
It made sense for AES to look at other offers from competing localities that were offering the company a great deal of space as well as attractive rents. Because AES liked the Ballston area, the company had to see if it “could justify staying” in Ballston, Gluski says. “Our alternative was moving to the Dulles area.”
The economic development department began talking with the company about two years ago when other Northern Virginia localities began trying to lure AES away from the county. “There was a lot of pressure from neighboring communities for AES to move,” says Jennifer Ives, the county’s director of innovation and strategic partnerships. “We worked with AES about any concerns they might have.”
Rent was a major factor and AES was hoping to negotiate a figure that would keep the company in Ballston. To help with the process, the company hired the Chicago-based real estate firm, Jones Lang LaSalle. “They did a great job of helping us look at this area and out in Dulles,” says AES’ chief information officer, Elizabeth Hackenson. “They helped us negotiate a favorable lease with the building owner, Prudential, and we signed an 11-year contract last year.”
The contract negotiation included remodeling AES’ current space. Originally, the company occupied five floors. In recent years, it built an internal stairway connecting three of the floors. The deal involves the remodeling of the company’s current space, creating a more open, collaborative workspace on the three connected floors. “We are in that stage now,” says Hackenson of the remodeling. “By the end of August we will be in our new space.”
Retaining the headquarters of the Fortune 500 company was crucial to the county. Not only is it a member of the business community, but it is also a leader in the global energy sector. “It was important for AES to continue to help anchor the innovation-economy business community within Arlington,” Ives says.
Arlington economic development officials have a longstanding relationship with executives at AES, a factor that contributed to the company’s decision to stay. “We have been actively assisting with the needs of the company,” Ives says. “We are always seeing how the community could be of support.”
Economic development staff, for example, met with company executives during lease negotiations to see how the county could help and address any potential concerns. One of the company’s requests was to add larger signage to the top of its headquarters for better visibility. “We were able to do that,” Ives says, noting there were no incentives offered to the company during negotiations.
The benefits of being based in Arlington helped make the company’s decision easier. AES’ headquarters is just a block away from Interstate 66, offering easy access to Washington Dulles International Airport, and a block from the Metro with access to embassies and potential clients in Washington, D.C. It also is close to Ronald Reagan National Airport. “It’s about a global company looking for that connectivity,” Ives says. “They felt very comfortable in Arlington.”
The company’s location offered access as well to a young, well-educated workforce. “Live, work and play isn’t just a phrase anymore that economic development officials can use,” says Ives. “Now companies are truly looking for an area where you can live, work and enjoy yourself within the same community and have everything within a few blocks.”
At the end of the day AES wanted to be in Arlington because of its workforce, accessibility and business-friendly community. “We have been very happy with the end result,” Gluski says.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/Ives4327.pngJennifer Ives director of innovation and strategic partnerships for Arlington Economic Development. Photo by Mark Rhodes
A new focus
http://www.virginiabusiness.com/news/article/a-new-focus1#When:11:00:00ZNorthern Virginia had a strong year in 2013, thanks to an overall focus on diversification. In light of federal budget cuts, the region is expanding its economic base, moving away from a dependence on government contracts. Counties and cities are pinpointing new, innovative ways to attract business prospects.
Jennifer Ives, director of innovation and strategic partnerships for Arlington Economic Development, sees the county as a “case study for how a community can create innovation districts and move into the new economy.”
Ives says the recent launch of TandemNSI, a public/private partnership involving the private-sector venture capital firm Amplifier Ventures and Arlington Economic Development, builds on the county’s commitment to fast-growth technology product companies by giving them ways to connect more effectively with national security agencies. “The importance of this initiative can’t be overstated,” she says, noting that Amplifer Ventures will make connections between companies and agencies and also will provide the firms with mentors.
The partnership pairs the owners of fast-growth technology businesses with university officials, government program managers, representatives from Arlington-based federal agencies and members of the local business community. The goal is to help technology product companies better identify business opportunities.
TandemNSI is financed by a $350,000 grant from the Virginia Federal Action Contingency Trust (FACT) Fund with an in-kind $150,000 match from Arlington. FACT invests in initiatives designed to help boost Virginia’s economy at a time when it faces federal budget cuts and changing spending priorities.
The partnership feeds into the county’s three-pronged approach for economic growth — bringing people and ideas together, diversifying the economy and helping entrepreneurs develop their businesses. “You can’t have one of these without the others,” Ives says.
Several new technology-related firms were founded in the county or moved there last year, including Endgame Inc., a cybersecurity technology firm from Texas with more than 30 employees. “They have a technology that no one else has,” Ives says. “They needed to be near their private-sector users and talent.”
Another recent arrival, Distil Networks, a cloud security provider, has tripled its number of employees since moving to Arlington. Healthcare IT provider PriviaHealth quickly grew to more than 75 employees after its move from D.C.
Other new arrivals include the fast-growing education technology firm Common Application, which moved from Arizona and now employs more than 75 people, and cybersecurity firm Live Safe, founded by two Virginia Tech alums. “They have about 15 employees, have received funding from CIT Gap Fund and other sources and are in the startup growth phase,” Ives says. “They’re a rapidly growing company with a unique and innovative technology.”
The county also was able to snag the first East Coast location for California-based TechShop, a membership-based, do-it-yourself technology-focused workshop and fabrication studio. It offers classes and workshops with access to high-quality 3-D printers and other technology-based tools. The Arlington location opens this spring.
The county is able to attract and retain innovative companies, in great part, because of its sought-after 25-to 34-year-old workforce. “We have the highest concentration [of residents in that population group] in Virginia,” Ives says. “They make up almost one-third of our population.”
Fairfax County, the commonwealth’s most populous county, wants to expand into several industry sectors, including food service, automotive, life science and large-scale construction. “We’re also looking at new areas such as translational medicine,” says Gerald Gordon, president and CEO of the Fairfax County Economic Development Authority (FCEDA). “It works with genetic code, which has 6 billion characters. This is a computer function that requires an IT base, and that is what we have in Fairfax.”
Last year Fairfax snagged the headquarters of Amazon Web Services and its 500 jobs, thanks to the county’s large IT community and its highly regarded public school system. “The public schools are enormously important for us,” Gordon says. “They help us attract the best IT workers from around the world.”
The county also announced that Cvent Inc., which makes event management software, will shift its headquarters from another county location to Greensboro Station in Tysons Corner later this year. Cvent plans to add more than 400 employees in three years, almost doubling its headcount. It will lease about 130,000 square feet of space.
Fairfax also continues to attract foreign businesses. The FCEDA’s overseas offices are in London, Munich, Seoul, Tel Aviv and Bangalore. It also has Boston and Los Angeles offices.
Gordon says that, while the county probably will feel fallout from federal budget cuts in some areas, it also expects benefit from increased spending for cybersecurity. “We are one of the leading cybersecurity business communities in the country,” Gordon says.
Next door in Loudoun County, Buddy Rizer, director of the county’s Department of Economic Development, describes 2013 as a “really big year.” Loudoun continues to be a hot spot for commercial data centers. “We will have an estimated 5 million square feet of new data center space come online over the next three years,” Rizer says. “There hasn’t been one day in the last five years that we haven’t seen data-center construction in the county.”
The commercial side of the county also is technology based. “Seventy percent of the world’s Internet traffic flows through Loudoun,” Rizer says, noting that he is seeing an influx of companies that serve and use data centers. “We have 3,000 technology companies inside data centers doing business here.”
The county scored two additional data centers last year. Construction began on a 450,000-square-foot facility for Corporate Office Properties Trust, representing a $300 million investment, and a 217,000-square-foot data center for Digital Realty Trust, a $20 million investment. In addition, Pohanka Automotive struck a $15 million deal to build a 52,000- square-foot headquarters housing 80 employees.
Expansions include EPL Archives Inc. in Sterling, which is investing $6 million to construct a 38,000-square-foot medical lab.
The county’s growing rural economy includes 43 licensed wineries, representing $5 million in taxable sales. “Seven years ago we had 18 wineries,” Rizer says. “We have a whole team that focuses on the rural economy and works with landholders and farmers in the development of land for agricultural ventures.
Agriculture brings in about $69 million in tax revenues a year and represents a little more than half of the land base.”
The county also is home to 16 German companies. The latest to open a U.S. office in Loudoun is pharmaceutical company Biogrund, which invested approximately $1 million to open a facility. “That is a direct result of our international outreach program,” Rizer says.
Last year also was good to Prince William County, with announcements of capital investment reaching a 17-year high. The county’s Department of Economic Development registered 20 successful projects, which are expected to create 354 jobs and yield $1.04 billion of private capital investment at completion.
From June 2012 to June 2013, the county recorded 160 new businesses. “Prince William County presents a tremendous value proposition for companies,” says Jeff Kacz-marek, executive director of the Department of Economic Development. “Our location offers companies significant cost and other competitive advantages, which allow them to compete effectively at the national and international levels.”
The county solidified its position as a major player in the national data center market based on its robust fiber network, competitive power rates and a record-high $1 billion in capital investment spurred by the data center market. The county also has continued development of Innovation Park with the start of construction on about 9,000 square feet of wet lab space at the Prince William Science Accelerator. “Once completed, the facility will be the only public-private commercially available wet lab space in Northern Virginia,” Kaczmarek says.
Major employers by number of jobs
Booz Allen Hamilton
Inova Health System
Federal Home Loan Mortgage Corp.
M.C. Dean Inc.
Raytheon Technical Services
Source: Northern Virginia economicdevelopment offices
Northern Virginia’s recent deals
Salient Federal Solutions
Amazon Web Services
Buchanan & Edwards
Onyx Government Services Inc.
Buller Group LLC
Zantech IT Services
Management Systems International
Applied Predictive Technologies Inc.
FrontPoint Security Solutions
Sources: Virginia Economic Development Partnership, Fairfax County2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/Suffolk_Plant___lipton.pngSuffolk’s Lipton Tea plant produces 6 billion tea bags a year. Photo courtesy Unilever
Scoring a save
http://www.virginiabusiness.com/news/article/scoring-a-save#When:11:00:00ZKevin Hughes was surprised to learn that, after having a Lipton Tea plant in Suffolk for 58 years, its owner was considering relocating to another city as it reinvested in its product line. A 2010 telephone call from the company started Hughes, the city’s director of economic development, on a 2½-year quest to keep the company in the city.
The Lipton plant, which has 300 employees, produces 6 billion tea bags a year, nearly all the tea bags it sells annually throughout North America. It was one of London-based Unilever’s first U.S. factories to achieve “zero-to-landfill” status in reducing waste and was a pilot site in installing LED lighting, which reduces energy consumption. Since the Suffolk plant opened in 1955, the company has consolidated its production there.
In making a decision about the Suffolk plant, Unilever wanted to look at all of its options to determine which move would make the most sense economically.
The company had several options, including relocating the plant to Kentucky, North Carolina or South Carolina, states with Unilever facilities. Another option being considered was to build a production facility in Latin America where the company purchases its teas.
The final option was to stay in Suffolk. “They wanted to see if they could be more efficient with their production,” Hughes says. “We heard them loud and clear.”
As they talked about how best to keep the plant in Suffolk, city leaders considered two scenarios. “Since they were so interested in the efficiency side, we offered them … some land opportunities that we controlled if they wanted to build a new facility,” Hughes says.
The city also looked at the deal from an incentive standpoint — how it could encourage an investment in new equipment. It had been taxing the plant’s machinery since 1955.
The city enlisted the aid of the Virginia Economic Development Partnership and the Hampton Roads Economic Development Alliance to secure the project. In the final deal, the city offered Unilever $3.7 million in phased-in local incentives to help with taxes on new equipment. In addition, then-Gov. Bob McDonnell approved a $1 million performance-based grant from the Virginia Investment Partnership program, an incentive available to existing Virginia companies.
Waiting to hear whether the company accepted the deal was difficult, Hughes says. “You know the project is out there, and you have to sit and wait. The toughest part is being patient.”
Unilever looked at different proposals. “They knew what they wanted to do, but it was always evolving,” Hughes says. “We had to keep up with them and stay in the conversation. We had to be proactive.”
The city was able to provide a response to every question the company asked. Hughes, City Manager Selena Cuffee-Glenn and Mayor Linda Johnson traveled to Unilever’s U.S. headquarters in New Jersey to meet with executives and present Suffolk’s proposal. One of the advantages to staying in Suffolk was the plant’s proximity to the Port of Virginia. The company imports loose tea through the port from various countries. That factor, along with the area’s high-quality existing workforce, low cost of doing business and an attractive incentive package, helped Unilever make its decision to stay in Suffolk.
The end result: Unilever decided to invest $96.2 million to expand and upgrade its plant in Suffolk. The company is in the first year of a six-year project.
In addition to 300 jobs, Suffolk would have lost at least $600,000 in annual tax revenue if Lipton had moved out of Suffolk. “This is one of the most rewarding projects I have worked on, a facility that has such a long tradition in the city,” Hughes says.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/Consentino_image2.pngSpain-based Consentino N.A. was one of eight companies setting up shop in Hampton last year. Photo courtesy Consentino N.A.
A solid year
http://www.virginiabusiness.com/news/article/a-solid-year#When:11:00:00ZLast year was a very good year for Hampton Roads, giving it three straight years of solid growth.
The Hampton Roads Economic Development Alliance, which promotes the region around the globe, assisted in six company projects and almost $30 million in capital investment.
“From 2011 to 2013 we have had 18 new announcements that the Alliance has assisted,” says Darryl Gosnell, the alliance’s president and CEO, noting those companies have invested more than $242 million in the area. “We feel like overall that is pretty good considering the conditions we have been dealing with.”
Gosnell was surprised at last year’s results because the area saw fewer prospect visits. “It was down a little from 2012 but the number of announcements we had went up,” he says.
Three of the new companies — generator manufacturer Grandwatt Electric Corp. in Suffolk; Spain-based Consentino, N.A., an importer of quartz and natural stone surfaces, in Hampton and German-based manufacturer PRUFREX USA in Virginia Beach — were international deals. The remaining three — manufacturer Atomized Products Group in Chesapeake, peanut roaster Hampton Farms in Southampton County and Carson Helicopters in Hampton — were domestic deals.
Target industries for the region range from aerospace to advanced manufacturing. To diversify its targets, the alliance brought in a consultant to study the region and find companies in places such as New York and California that would benefit from relocating their operations. “We came up with a list of over 500 companies in eight different industry sectors,” says Gosnell. “We will communicate to those sectors every month or so to give them information relative to their industry and make them aware of the business advantages we have here.”
Newport News celebrated 2013 by opening of the new Apprentice School for Newport News Shipbuilding and by scoring three major expansions by existing businesses. “It was a very good year for economic development,” says Florence Kingston, director of development for Newport News Economic Development Authority. “We had some significant projects.”
The Apprentice School sits outside the shipyard’s gates in downtown Newport News. In addition to the 90,000-square-foot school building, the $70 million project includes workforce housing, retail space and a parking garage. Students began classes in January. “It’s important for the shipyard,” Kingston says. “It will ensure the workforce of the future.”
In addition, three manufacturers announced expansions. Liebherr Mining Equipment Newport News Co., a maker of construction and mining equipment, is investing $45.4 million in expanding operations in Newport News and Hampton. The project will create 174 jobs over a 48-month period. “They are doubling their plant,” Kingston says.
Another company, High Liner Foods, a processor and marketer of frozen seafood, is investing $6.6 million in expanding its U.S. food-service production. The company expects to add 57 new jobs in addition to retaining more than 400 employees.
Also, Canon Virginia Inc. is investing $27 million to add 30,000 square feet of upgraded space on its campus to start making toner for copiers.
In addition, the city, Virginia Tech and Newport News-based construction company W.M. Jordan are collaborating on the creation of a corporate research center adjacent to Jefferson Lab. They expect the project to attract technology and research-based companies. The research center is part of a $250 million development that will include retail and residential space.
Not including retail projects, Hampton had at least $11.5 million in new capital investment and added 179 jobs last year. Eight new companies joined the community. Announced projects include DLBA Robotics, a manufacturer in the composite industry; defense contractor Threat Tec; Spanish-based Consentino, N.A., an importer of quartz and natural stone surfaces; and Carson Helicopters, which will manufacture composite tail rotor blades.
The city also struck a deal for Bay Disposal and Recycling to construct a $1.5 million, 24,000-square-foot addition to its recycling facility. The expansion, will add 32 employees to the company’s existing workforce in Hampton. In addition, Rappahannock Concrete Corp. of Gloucester also built a new concrete plant at the Copeland Industrial Park, creating 15 new jobs.
The city continues to move forward to create the Science Park at Hampton Roads Center North, a public-private partnership between Hampton’s Economic Development Authority and North Carolina-based Craig Davis Properties. “The city continues to fund the Peninsula Technology Incubator located there,” says Leonard Sledge, the city’s director of economic development. “Seven companies are currently in the incubator.”
The land designed for the Science Park is already home to the National Institute of Aerospace. The Economic Development Authority provided a $200,000 grant to the NIA to buy a high-speed computer cluster to help expand its research capabilities. Other companies in the Science Park will be able to use the computer cluster, as well.
Norfolk kicked off 2013 with plans for the redevelopment of the aging Waterside marketplace, a project headed by The Cordish Cos., and the completion of the $25 million Bon Secours DePaul Medical Plaza, including a comprehensive cancer center. “People are so invested in this city. There is an immense energy,” says Steve Anderson, Norfolk’s director of economic development.
In June, Kinder Morgan Energy Partners LP purchased two liquids-handling facilities from Allied Terminals in Norfolk and Chesapeake for about $24 million. Combined, the two facilities, which sit on 119 acres along the Elizabeth River, have 40 tanks with a total capacity of almost 1.8 million barrels of storage. The primary commodities handled at the two locations are refined products, fertilizer and ethanol.
Ninety percent of the city’s economic development announcements last year involved expansions and consolidations. EOS Surfaces, a company that creates innovative surfaces and countertops, relocated to a new facility in the city’s St. Paul area.
Virginia Beach saw 17 new business locations and 20 expansions of existing companies last year with $141 million in new capital investment and plans for the creation of more than 1,200 jobs. “We are seeing signs of a positive uptick,” says Warren Harris, the city’s director of economic development.
The city started the year with a $20 million investment from Green Flash Brewing Co. It purchased 10 acres in Corporate Landing for a 52,000-square-foot microbrewery. In trying to establish an East Coast presence, the San Diego-based craft-beer company considered several locations, including Wilmington, N.C. “It was a real competition. We did our due diligence,” Harris says.
The city also competed with Gainesville, Ga., for the first U.S. manufacturing facility for Germany-based PRUFREX Innovative Power Products GmbH. The company’s $7.33 million investment is expected to create 60 jobs. The plant will supply ignition components for customers including power-tools manufacturer STIHL Inc. in Virginia Beach
Last year the city opened an office in a suburb of Dusseldorf, Germany, to create a presence in the European market. In addition to Germany, target countries include Belgium, The Netherlands, Austria, Switzerland and Italy.
In an effort to ensure a workforce for the future, the city established GrowSmart, an early childhood education program, as part of its workforce development initiative. The program was the recipient of one of 11 Excellence in Local Government awards from the Alliance for Innovation.
Suffolk had its share of large announcements last year, including Unilever’s investment of $96 million in Lipton Tea. (See related story)
The city is making progress on its efforts to revitalize downtown. It is working with The Monument Cos. from Richmond on an $8.8 million renovation of the 100 block of West Washington Street. The space, vacant for 25 years, is being converted into 68 apartments and 5,000 square feet of retail space. “This is Monument’s fourth project in downtown,” says Kevin Hughes, the city’s director of economic development. “This is their biggest project to date” in Suffolk.
The city also has been able to stave off the loss of 3,000 jobs and 600,000 square feet of space resulting from the disestablishment of the U.S. Joint Forces Command. Suffolk’s work with elected officials and decision makers resulted in a name change to the Joint Staff J7, which employs 1,500 and occupies more than 350,000 square feet of space. The Navy Cyber Command moved into 200,000 square feet of the original space and brought in 1,500 people. “It was no small feat,” Hughes says of the project. “It was so rewarding to keep what was originally gone and replace what we had lost.”
Major employers by number of jobs
Huntington Ingalls Industries Inc. (Newport News Shipbuilding)
Virginia Beach City Public Schools
Norfolk Naval Shipyard
Riverside Health System
Norfolk City Public Schools
Chesapeake City Public Schools
City of Virginia Beach
Newport News City Public Schools
Naval Medical Center Portsmouth
Source: Hampton Roads Economic Development Alliance
Eastern Virginia’s recent deals
Mills Marine & Ship Repair
Bauer Compressors Inc.
Architectural Graphics Inc.
Franklin Lumber LLC
Isle of Wight County
Oceaneering International Inc.
Urology of Virginia
PRUFREX Innovative Power Products
Plains All American Pipeline
High Liner Foods Inc.
Sources: Virginia Economic Development Partnership, Hampton Roads Economic Development Alliance2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/CV_Deal_vitaminshoppeexterior.pngThe Vitamin Shoppe’s distribution center in Ashland
A healthy boost
http://www.virginiabusiness.com/news/article/a-healthy-boost#When:11:00:00ZIn landing The Vitamin Shoppe’s nearly 312,000-square-foot distribution center, there was no hard sell, says Edwin Gaskin, economic development director for Hanover County.
“This is the element I love the most about that story: We didn’t even know they were looking at us until we were on the short list,” Gaskin says about the deal.
Most localities would like to see their names on that list. The Vitamin Shoppe plans to hire 174 workers and invest almost $40 million by 2015 in its facility, which opened last year at Ashland’s Virginia Transportation Park. The New Jersey-based retailer, which sells products like vitamins, minerals and herbs, has more than 600 stores around the world. As of the third quarter of 2013 (the latest available figures), the company employed about 50 workers at the Ashland facility, with plans to continue hiring during the next two years.
Gaskin says The Vitamin Shoppe had used data models to narrow its site selection process to a handful of the sites on the East Coast by the time company contacted Hanover officials. “It felt good to walk into a room knowing they wanted to be here because their business model dictated that this was the general area where they wanted to be,” he says.
So, what made Ashland so appealing? The site made sense logistically since it’s off Interstate 95, and The Vitamin Shoppe moves most of its freight by truck, says Rich Tannenbaum, the company’s senior vice president of supply chain. The company also found a good workforce and access to parcel carriers for Internet orders.
“We’ve had ample labor available to us, and we’ve been super impressed with the skillset and the experience and the work ethic that we found with the health enthusiasts that we hired at this facility,” Tannenbaum says. (The Vitamin Shoppe calls its employees health enthusiasts.)
Gaskins thinks one of the factors for The Vitamin Shoppe’s decision was Ashland’s quality of life. “I know for a fact that when they came to visit they really liked the feel of the town,” Gaskin says. “So, you know, they are very employee focused, and I think the quality of life, the quality of place, really played a factor in the final decision making. You know, that never trumps the economics, of course, but it is a soft factor that I think does influence that final decision.”
The Vitamin Shoppe had been looking at the mid-Atlantic region and eventually narrowed its search to North Carolina and Virginia. The company focused “generally around Richmond,” Tannenbaum says, before settling on Hanover County. Construction on the facility began in September 2012 and was completed last June.
Tannenbaum notes how smoothly the construction project went. “I would say completing such a large capital infrastructure project like building a facility of this magnitude [is] certainly a complicated endeavor, and … the timeline moved along nicely, and I think that’s a real testament and tribute to the working relationships that we developed with both the local and county officials,” he says.
Tannenbaum describes The Vitamin Shoppe’s distribution center as the company’s most automated, pointing to investments in conveyor and material handling systems (the company has three other distribution centers in the U.S. besides Ashland). “This technology allows us to move the goods quickly and efficiently through the distribution center. It allows us to do it with a high degree of accuracy so that we make sure we’re shipping exactly the right item that our customers need and we are able to do it in an efficient manner,” he says.
The facility has an employee fitness center that includes treadmills, stationary bikes and weightlifting equipment. Other amenities include a cafeteria, lounge areas and an outdoor seating area.
“We think that the culture inside our [distribution center] for our health enthusiasts is really important,” Tannenbaum says. “You know we all spend a lot of time at work, sometimes more than we do at home with our loved ones, so we try to make it a really pleasant experience when folks are with us throughout the day.”
At the end of 2013, The Vitamin Shoppe’s Ashland facility planned to supply more than 120 stores in Texas, Oklahoma, Louisiana, New Mexico and Florida. The distribution center intends to serve more stores this year and start shipping Internet orders.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/CVA_Vireol.pngVireol Bio-Industries is investing $30 million and creating 75 jobs in Hopewell. Photo by Adrienne R. Watson
http://www.virginiabusiness.com/news/article/moving-along#When:11:00:00ZCentral Virginia economic development officials are optimistic about the region’s direction despite the slow improvement of the national economy.
Greg Wingfield, president and CEO of the Greater Richmond Partnership (GRP), says things are on the upswing for his area, which includes Richmond plus Chesterfield, Hanover and Henrico counties. Many economists in the region think it finally will regain during 2014 the last of the 45,000 jobs lost during the Great Recession.
“It’s taken us four or five years to absorb that loss of 45,000 jobs, and now we’ll be moving forward and adding jobs positively,” Wingfield says.
Helping meet that goal is a recent announcement that Amazon.com plans to add 1,000 full-time workers at its fulfillment centers in Chesterfield and Dinwiddie counties.
In 2013, GRP announced 1,277 new jobs from 16 companies investing more than $172 million. Gary McLaren, executive director of the Henrico County Economic Development Authority, says Henrico ranked second in the commonwealth among localities announcing new jobs in 2013. The county announced 1,563 jobs last year. (GRP wasn’t involved in all those projects.)
“I think we are definitely seeing a recovery, just a slower recovery,” says Renee Chapline, president and CEO of Virginia’s Gateway Region, an economic development organization serving the cities of Colonial Heights, Hopewell and Petersburg plus Chesterfield, Dinwiddie and Prince George counties. The organization announced 1,546 jobs and $237.5 million in investments in 2013.
Hopewell welcomed news that Vireol Bio-Industries PLC plans to open an ethanol plant previously owned by Osage Bio Energy. United Kingdom-based Vireol is investing $30 million and creating 75 jobs.
The facility was supposed to be the first commercial plant in the U.S. to make fuel-grade ethanol from barley, but Osage closed it in 2011 before it reached full production. Vireol expected to have the plant operational by February, says Andrew Hagy, Hopewell’s economic development director.
“We, the city, had high hopes for the plant, and Vireol originally came in, purchasing the plant to disassemble it and ship the equipment to the UK,” explains Hagy. “However, once they got access to the plant and the equipment, they began doing a due-diligence and realized that there may be a good chance of operating the facility rather than disassembling it.”
Lynchburg’s economic development director, Marjette Upshur, highlights a number of economic development successes. She sees Liberty University as a major economic engine, pointing to the school’s many building projects. The university has embarked on a $500 million campus renovation project. In January, Liberty officially opened the $50 million, 170,000-square-foot Jerry Falwell Library.
Also fueling the area economy is a $26.3 million expansion announced last year by nuclear energy company Areva. It has designated facilities in Lynchburg and Campbell County as its Operational Center of Excellence for Nuclear Products and Services in North America. Investments will include advanced machinery and equipment to enhance research and development capabilities and to improve competitiveness in advanced manufacturing. The expansion will add $10.9 million in machinery and tools in Lynchburg during the next three years and $6.9 million of investments in the Areva Solutions Complex in Campbell County.
Central Virginia continues to see growth in several industries, including logistics, call centers, manufacturing, and food and beverages.
While Amazon.com continues to expand, another logistics project involved The Vitamin Shoppe, which opened its nearly 312,000-square-foot distribution center last year in Ashland. The project is expected to create 174 jobs. (See related story)
Aiding logistics and manufacturing growth in the region are two collaborative research organizations with university, corporate and government partners: the Commonwealth Center for Advanced Manufacturing (CCAM) and the Commonwealth Center for Advanced Logistics Systems (CCALS), both based in Prince George County.
Assessing challenges to the region, Chapline points to the effects of federal budget cuts on defense contractors and subcontractors working at Fort Lee.
Another hurdle for economic developers in Central Virginia is a lack of shovel-ready sites. “That is our single challenge,” says Edwin Gaskin, Hanover County’s economic development director. “We have great traffic in terms of interested prospects. We have a great response in terms of the location, the quality of life. It’s growth potential. What we lack are places for those investments to be received in terms of commercial pad-ready sites.”
The Hanover County Board of Supervisors is working on this issue, he says. Gaskin also says Hanover lacks a locality-owned industrial park, although there are a few that are privately held. That puts Hanover at a disadvantage in recruiting large businesses because other competitors often have government-owned land.
Wingfield also says economic development officials need to be able to offer companies more land and building opportunities, particularly in Chesterfield.
“If a manufacturing company came into the Greater Richmond area and wanted a 50,000- to 60,000-square-foot building, stand-alone, not part of a larger space, we don’t have it,” he says, unless it’s an old warehouse or building that is not in good condition.
Wingfield also would like to see a regional workforce strategy. “We need a regional group that wakes up every day and says, ‘We’re all about workforce coordination,’” Wingfield says.
An economic development group serving the Lynchburg area restructured in 2013. Virginia’s Region 2000 Partnership’s economic development and technology councils created the Business and Economic Development Alliance.
“Essentially what’s happening is we’re trying to break some of the walls down so we can do a better job of incorporating the technology-based economic development,” says Bob Bailey, executive director at the Center for Advanced Engineering and Research in Bedford County which is part of Region 2000. “We had a partnership where they were working together, but it was still kind of technology initiatives and traditional economic development initiatives, and they were kind of like side by side … so the reorganization is meant to do a better job of really pulling those even closer together.”
Region 2000 also includes the local government council, the workforce investment board and the Young Professionals of Central Virginia.
The executive director positions for the economic development council and technology council positions were eliminated at the end of the year. Region 2000 expects to hire a CEO for the Business and Economic Development Alliance by June and then begin recruiting a senior vice president for the alliance.
At the end of 2013, the Lynchburg Regional Chamber of Commerce also eliminated the position of president because the city took its tourism program in-house rather than outsourcing it to the chamber. The Lynchburg chamber also is working to develop a regional economic development approach with other partners in the area.
“We need to take the lead on what kind of growth we want,” says P. Tulane Patterson, chair of the chamber of commerce. “What we are trying to do is to pull players together to have united economic growth.”
Another economic development organization in the region also had big news in 2013. The Thomas Jefferson Partnership for Economic Development changed its name to the Central Virginia Partnership for Economic Development. The organization serves Charlottesville and the counties of Albemarle, Culpeper, Fluvanna, Greene, Louisa, Nelson and Orange. Central Virginia Partnership announced the expected creation of 475 jobs in 2013 from projects involving a dozen businesses investing more than $40 million.
“We think leveraging that new name, leveraging Virginia as the best state for business and identifying where we are in the state is huge,” says the partnership’s president, Helen Cauthen.
Major employers by number of jobs
State government (Richmond MSA) 38,384 jobs
Federal government (Richmond MSA) 16,738 jobs
Fort Lee Army Base, 11,745 jobs
Chesterfield County, 13,371 jobs
Henrico County, 13,294 jobs
Capital One Financial Corp. (Richmond area) 10,918 jobs
City of Richmond, 10,751 jobs
VCU Health System (Richmond) 8,226 jobs
UVA Medical Center (Charlottesville) 7,306 jobs
HCA Virginia Health System (Richmond area) 6,904 jobs
Source: Richmond Times-Dispatch; United States Department of Labor
Central Virginia’s recent deals
Aditya Birla Minacs
Sabra Dipping Co.
Marten Transport Ltd.
Tyson Foods Inc.
Porter’s Group LLC
Amsted Rail Co. Inc.
Michael & Son Services Inc.
Source: Virginia Economic Development Partnership2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/GLOBAL_Gatekeeper.pngGatekeeper Security has created a global distributor network in 23 countries. Photo courtesy Gatekeeper Security
New technology keeps people safe
http://www.virginiabusiness.com/news/article/new-technology-keeps-people-safe#When:11:00:00ZFans traveling to this year’s Super Bowl via mass transit didn’t see Gatekeeper Security’s technology at work, but the Sterling-based company was making sure riders were safe from threats. The automatic under-vehicle inspection systems produced by the company allow the underside of vehicles to be searched and drivers and passengers to be screened from a safe distance.
The company’s patented technology can be used on properties with a regular stream of traffic, including oil fields, shipping ports, airports, prisons, trains and hotels.
Chris Millar and Dick Barcus started the company in 2004 after seeing the limitations associated with the standard inspection of vehicles. Inspectors generally use a mirror attached to a long stick to look for any threats. “We took the most inefficient, antiquated inspection technology and said, ‘Why can’t we automate this?’ The germinating idea behind Gatekeeper was using computerization, optical technology and high-speed imaging,” says Barcus.
Gatekeeper’s technology is more effective at detecting threats such as explosives, weapons, drugs, cash and bombs that are brought into facilities under vehicles. Companies can use X-ray equipment to look inside a vehicle, but that approach is not viable for under-vehicle inspections because of the large amount of metal. “We thought we could come up with a better and safer way to do it,” Barcus says.
The company’s first order, delivered in 2005, went to U.S. Central Command in Baghdad. “You don’t want to have soldiers on a government facility stopping vehicles and inspecting,” Barcus says. “This allows you to move the inspection point out further and take the humans away. A safe standoff distance, from 500 feet to one mile, became life and death in Iraq.”
Gatekeeper’s products come in different languages — Arabic, Russian, Spanish, Hebrew and English — and are sold in 23 countries. They have to work in all types of terrain and weather — from the cold in Northern Russia to the heat and sand in the Middle East and the jungles of Indonesia and Vietnam. “This has to work in the worst weather possible,” Barcus says.
The company also has several commercial customers, including high-end resorts in Kuwait and the seven-star Emirates Palace in Abu Dhabi. “Our ideal market is anywhere there are huge security concerns,” Barcus says. “The Middle East is a very dangerous place, and they have a lot of money to spend for protection. They are our No. 1 market.”
Gatekeeper works with all of the nuclear stations in Russia and several in Spain, as well. “They need help with defending their property,” Barcus says.
The company has five employees at its headquarters in Sterling, four in its office in Dubai and four in its location in Mexico City. Barcus is hoping to add two more employees in the Mexican office because of a rapid increase in business last year.
Gatekeeper recently won a large contract with Mexico to provide license plate reading equipment for its northern and southern borders. “Mexico has very old, under-performing license plate reading technology,” Barcus says. “There were many vendors trying to win that business. We had to show them that the product did what it claimed. We had the best overall performance and economics in terms of price, maintenance and reliability.”
The Mexican federal police and secret service used the company’s technology when President Obama and Stephen Harper, the prime minister of Canada, visited the country in February.
Eighty-five percent of the company’s clients are international. From 2005 to 2013 the Middle East, Indonesia, Vietnam, Russia and Spain represented an overwhelming share of the company’s business. The company also works with the Department of Defense, the Pentagon, U.N. headquarters in New York City and several Federal Reserve banks.
Sales have grown steadily, from six systems in 2005 to 60 last year. The cost of an individual system averages $100,000. “This year we plan to be closer to 130 systems,” Barcus says. “Our technology is more widely known now, and Gatekeeper is respected.”
The company worked with the Virginia Economic Development Partnership to expand its international reach. “We took our first business development trip to Saudi Arabia and Jordan in 2005,” Barcus says. “We took another to Kuwait and Amman, Jordan.”
Barcus and Millar directly support their customers even though they often use authorized distributors. “One of our key attributes is that we take care of our customers better than anybody,” Barcus says. “We love face-to-face meetings and side-by-side comparisons.”
The company currently provides all of the vehicle tracking camera and license plate reading technology for the new Doha airport in Qatar. The small products are mounted in the open on poles or sides of buildings, for example, wherever there’s a good view of the street.
The company also works with a few U.S. military bases in Kuwait as well as hotels in Jordan. After a suicide bombing several years ago at the Grand Hyatt in Amman, Jordan, the city turned its attention to non-invasive ways to monitor traffic. “When bad stuff is going on, that is a Gatekeeper place,” Barcus says. “We are trying to give people tools to make their lives a little safer.”
Economy in Sterling (Loudoun County)
Loudoun County is constantly diversifying its economy. Industry targets include aerospace, information and communications technology, data centers, air cargo, life and health sciences and government contractors. The county’s labor force has grown 80 percent over the past 10 years. It has more than 900 federal government prime contractors and is home to a large number of data centers, with more than 4.3 million square feet of space. Up to 70 percent of the world’s Internet traffic passes through the county on a daily basis. Large employers with up to 5,000 employees include AOL Inc.; United Airlines; Raytheon Technical Services, which specializes in defense, security and civil markets; and M.C. Dean Inc., a systems integration firm. The county also is home to Washington Dulles International Airport.
Economy in Dubai
The city of Dubai is moving toward a technology-driven economy that will complement its revenues from oil. Dubai was named the overall leading investment destination in the Middle East Cities of the Future 2012/2013 report of fDi Magazine, a foreign direct investment publication. It came in first in the categories of economic potential, infrastructure, business friendliness and strategy. The Emirate has a diversified list of industry sectors that include logistics, financial services, hospitality, tourism, construction and manufacturing. It attracts many international organizations and multinational corporations because of its focus on the development of information and communication technology. The city is home to the Dubai Biotechnology and Research Park. Companies based in the Emirate include Emirates airline; Halliburton, a provider of products and services to the energy industry; Leisure Corp., which invests in sports and leisure activities; and Advanced Global Trading, an investment group.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/MARCH_Bernie4241.png
http://www.virginiabusiness.com/opinion/article/spectacular#When:11:00:00ZOn a cold and snowy morning in late January, the Virginia Chamber of Commerce was forced to delay and shorten the program for this year’s Virginia Chamber Day at the Capitol. Leaving my office, I slogged a couple of slushy blocks on foot to Richmond’s Omni Hotel. The weather was anything but spectacular.
Inside the warmth of the hotel, I was pleased to see that attendance had held up pretty well. A couple of hundred stalwarts from the business community were gathered, some in wet shoes and others in duck boots, for a luncheon keynote address by Gov. Terry McAuliffe.
Not unlike other successful politicians, our new governor can be substantially more engaging in a one-on-one conversation than from behind the podium. Still, with the ugly 2013 election
largely behind us, McAuliffe now exudes a good deal more confidence as a governor than perhaps he did as a candidate — this is a good thing.
Our new governor extolled his “spectacular” secretarial appointments as a diverse crowd, mixing reappointments like Ric Brown, secretary of finance, with new faces, like Maurice Jones, secretary of commerce and trade. As promised, the cabinet picks also come from across party lines — this also is a good thing.
McAuliffe extolled the “spectacular” assets of Virginia. By my count the governor used the word spectacular more often than any other — at least five times in his first five minutes behind the podium. In concluding his remarks, he promised to be the commonwealth’s best salesman. After all, he said, “I’m experienced at raising money!”
McAuliffe says he’s working hard across party lines to find common ground, finding what folks agree on and vowing to move forward. Breakfast meetings every day at the Executive Mansion, receptions every night. Rumors are that he’s thrown out the cheap booze and replaced it with the good stuff, paying out of his own pocket. Given the allegations of past shenanigans at the Mansion, it’s good to have a guv who can do things on his own dime.
Still, it’s going to take more than throwing out bad whiskey to solve some of the problems faced by this year’s General Assembly. The fight over Medicaid expansion has opened a rift between the Republican establishment and the business community. On one hand, the R’s are hewing to the anti-Washington party line that government can’t be trusted to pay for the expansion. On the other hand, the business community knows that they’ve traditionally shouldered a disproportionate share of health-care spending. Lack of Medicaid expansion has already cost Virginia at least $800 million in federal reimbursements through the remainder of the current budget cycle ending June 30. This money cannot be recouped.
Furthermore, the Virginia Hospital & Healthcare Association estimates Virginia’s hospitals face an additional funding gap of more than $1 billion during the next two years because of reductions in federal reimbursements if Medicaid is not expanded.
It’s not as if Virginia doesn’t already rely on federal money for much of its economic health. When defense cuts are announced, politicians join hands across all party lines to help persuade Washington to spare the ax. Whether it is entitlement spending, like Social Security, or defense contracts, we have long accepted federal money in a variety of ways without a litmus test for future solvency.
It’s also not as if Virginia is already overly generous in its support of Medicaid reimbursement. Virginia ranks 47th in the country in Medicaid services to people with intellectual and developmental disabilities and 48th in overall per-capita Medicaid spending.
This year’s General Assembly session is scheduled to end on March 8; with a special session it can be expected to conclude sometime in April.
Using recent years as an example, balancing the state budget will require monumental legislative effort. By any measure, the millions (or billions!) in Federal Medicaid reimbursement could go a long way to helping Virginia with other priorities. Turning down these dollars only serves to subsidize programs in other states who accept them.
Medicaid expansion was a centerpiece of candidate McAuliffe’s economic plan for Virginia. Now that the election has been won, the governor’s challenge is to gain passage in a deeply partisan general assembly.
Success would be good for both parties — nothing short of spectacular.2014-02-28T11:00:00+00:00http://www.virginiabusiness.com/uploads2/FOLLOWUPS_Herring.pngVirginia Attorney General Mark Herring (AP Photo/Richmond Times-Dispatch, Bob Brown)
http://www.virginiabusiness.com/opinion/article/struck-down#When:11:00:00ZThe ultimate fate of Virginia’s same-sex marriage ban likely will be decided by the U.S. Supreme Court.
Opponents of the ban, however, were heartened by the February ruling of a federal
District Court judge finding it to be unconstitutional.
Norfolk-based U.S. District Court Judge Arenda Wright Allen stayed her decision pending appeal to the Fourth Circuit Court of Appeals in Richmond. That means Virginia’s same-sex marriage ban remains in effect until a final decision is reached in the case, probably in the nation’s highest court.
Gov. Terry McAuliffe praised Allen’s ruling as a step toward equality that also makes economic sense.
“In order to grow our economy and attract the best businesses, entrepreneurs, and families to Virginia, we must be open and welcoming to all who call our commonwealth home,” McAuliffe said in a statement. “As this case continues through the judicial process, I will enforce the laws currently on the books, but this decision is a significant step forward in achieving greater equality for all of our citizens.”
McAuliffe backed a decision by Virginia Attorney General Mark Herring not to defend the ban, an amendment to the state constitution, against a suit filed by same-sex couples living in Norfolk and Chesterfield County. Herring, who, like McAuliffe, took office in January, joined the plaintiffs in the suit.
“Although this process is far from over, it remains a great day for equality in Virginia,” Herring told reporters at a press conference after the decision was announced.
In her 41-page opinion, Allen said that Virginia’s same-sex marriage ban unconstitutionally denied same-sex couples their fundamental freedom to choose to marry.
“Government interests in perpetuating traditions, shielding state matters from federal interference, and favoring one model of parenting over others must yield to this country’s cherished protections that ensure the exercise of the private choices of the individual citizen regarding love and family,” Allen said in the ruling.
The decision follows similar rulings in recent months by federal judges in Utah and Oklahoma. In Kentucky, a federal judge ruled that the state must honor same-sex marriages that had been legally performed in other states. The decision, however, did not address Kentucky’s same-sex marriage ban.
Virginia Del. Bob Marshall (R-Prince William), the author of the commonwealth’s same-sex marriage ban amendment, denounced Allen’s ruling.
“If homosexuals can marry whoever they love, then it follows that bi-sexuals should be legally allowed to marry two people, polygamists should marry several, and pedophiles should marry children,” he said in a statement. “There is no logical line to draw once marriage as we have known it from the beginning of time is abolished. “
Tony Perkins, president of Washington, D.C.-based Family Research Council, took aim at Herring in criticizing the decision.
“This ruling comes on the heels of Attorney General Mark Herring’s refusal to fulfill his constitutional duty to defend the state’s marriage law,” Perkins said in a statement. “His lawlessness is an insult to the voters of Virginia who rightfully expected elected officials to uphold the laws and constitution of the state, not attack them as Herring has done.”
At the press conference, the attorney general said it was important that the case move through the appeal process as quickly as possible.
“We are going to work very quickly to get an order in this case entered,” Herring said in response to a question about the case’s time frame moving forward.
On Jan. 23, VirginiaBusiness.com reported on Herring’s decision not to defend the commonwealth’s constitutional amendment banning same-sex marriage. “It’s time for the commonwealth to be on the right side of history and the right side of the law,” he said.2014-02-28T11:00:00+00:00
Riverside Logistics renews three leases in Henrico County
Riverside Logistics, a third party logistics company, has renewed three leases totaling more than 148,000 square feet in Henrico County. The transactions were 40,123 square feet at 5645 Eastport Blvd., 40,126 square feet at 5664 Eastport Blvd. and 67,968 square feet at 4203 Eubank Road. Rob Dirom of CBRE/Richmond handled the transactions on behalf of the tenant.
In another deal for CBRE/Richmond, the Children’s Museum of Richmond leased 11,999 square feet at 1271 Jefferson Davis Highway in Fredericksburg. John Carpin handled the transaction on behalf of the tenant.2014-02-27T21:39:00+00:00http://www.virginiabusiness.com/uploads2/Medline_Option1_Perspective.JPG
Construction begins in March on Medline’s new distribution center in Chesterfield
http://www.virginiabusiness.com/news/article/construction-begins-in-march-on-medlines-new-distribution-center-in-chester#When:21:20:00ZConstruction on Chesterfield County’s newest distribution center, a 404,000-square-foot project, gets underway in March.
Chicago-based Medline, a medical supply company, will replace its current facility at Enterchange at Walthall in southern Chesterfield with the new project at Meadowville Technology Park. It will be located on a 63-acre site across from Amazon’s 1 million-square-foot fulfillment center.
“We hope to have the permitting in place in the next week or so. We will start construction in March and should be finished by July,” said Bob Murray, vice president and general manager of Alston, the general contractor on the project. According to Murray, the construction costs for the new building are $20 million.
Alston, based in Atlanta, will work with a local subcontractor, Rockville, Va..-based Liesfeld, which will handle the civil construction.
The project will incorporate the latest in sustainable building techniques as well as room for future expansion. Murray said the facility will have an 8,000-square-foot main office space with an 8,000-square-foot mezzanine for future office needs. There will be a 1,500-square-foot shipping and receiving office along with 52 dock doors, two drive-in doors and a 750 kilowatt backup generator.
Warehouse space will be equipped with T-5 lighting with motion sensors and daylight harvesters. A building management system will monitor electrical and mechanical systems. In addition, the building will have 400 skylights and LED lighting for energy savings. “We will be seeking LEED certification for the facility,” Murray said.2014-02-27T21:20:00+00:00
Interstate Hotels & Resorts in Arlington opens seven new hotels
Interstate Hotels & Resorts, a global hotel management company based in Arlington, announced Thursday the opening of seven hotels, expanding its portfolio by nearly 2,000 rooms.
The new properties include four hotels in the Winter Olympics city of Sochi, Russia; the combined 261-unit Residence Inn and 378-room Courtyard New York Manhattan/Central Park, the tallest hotel in North America; and the 228-room StreamsongResort, a Florida golf resort and conference center with two golf courses.
“It is exciting to see Interstate’s continued growth, expanding across the globe in dynamic destinations like Russia, New York and Florida,” Jim Abrahamson, Interstate’s CEO, said in a statement. “… Broadening our geographic portfolio diversity is a strategic venture possible through our proven performance, producing strong results for owners worldwide.”
In Russia, the largest of the four new hotels was Marriott International’s first hotel in Gorky Gorod. Managed by Interstate, it opened just weeks before thousands of international and visitors descended upon the city to attend the Winter Olympics in Soshi.
The five-star, seven-story Sochi Marriott Krasnaya Polyana Hotel has 428 rooms and suites and is within walking distance of the area’s ski slopes.2014-02-27T21:18:00+00:00
Evonik announces $15 million expansion in Chesterfield
http://www.virginiabusiness.com/news/article/evonik-announces-15-million-expansion-in-chesterfield#When:20:49:00ZEvonik, a specialty chemical manufacturer, has announced a $15 million expansion to relocate and expand its Business and Innovation Center in Chesterfield. The move is expected to create 50 jobs in Chesterfield over the next five years and retain 130 positions.
The company purchased a 93,000-square-foot building near the Chesterfield County Airport for the center. In a news release, Evonik said the 18-acre site would give it plenty of room for future expansions.
Evonik will maintain its Hopewell manufacturing operation, which employs 110 people. The Hopewell site produces ingredients used in cosmetics, fabric softeners, toothpaste and other products.
Former Gov. Bob McDonnell approved a $500,000 grant from the Governor’s Opportunity Fund for the project.
Evonik is an industrial group from Germany that had more than 33,000 employees in fiscal year 2012. Evonik North America has several locations throughout the United States and employs around 3,600 people in the U.S2014-02-27T20:49:00+00:00
Media General reports fourth-quarter loss
http://www.virginiabusiness.com/news/article/media-general-reports-fourth-quarter-loss#When:20:32:00ZTHE TAKE: Richmond-based Media General Inc. on Thursday reported a loss of $5.2 million in the fourth quarter of 2013 because of merger-related expenses and debt modification and extinguishment costs. The company merged with Young Broadcasting last November, increasing its number of network-affiliated television stations from 18 to 31.
Fourth-quarter net operating revenue: $110 million, up from $71.4 million in fourth quarter 2012.
Fourth-quarter net income: A loss of $5.2 million, compared with net income of $19.1 million.
Fourth-quarter earnings per share: A loss 7 cents a share, compared with 30 cents a share.
2013 net operating revenue: $269.9 million, up from $228.2 million in 2012.
2013 net income: $6.1 million, down from $35.9 million.
2013 earnings per share: 10 cents, down from 53 cents.
THE COMPANY’S TAKE:
“The merger of Media General and Young Broadcasting on November 12, 2013, was a renaissance event for both companies. This business combination created a new, diversified broadcast and digital company with a strong balance sheet, generating robust cash flows,” George L. Mahoney, president and chief executive officer of Media General, said in a statement.
“We expect a particularly strong year in 2014, when we benefit from advertising associated with the Winter Olympics and this year’s elections as well as growing revenue from the rising market for retransmission revenues,” Mahoney said. “Additionally, our digital and mobile platforms are providing new, accelerating opportunities to generate higher revenues.”2014-02-27T20:32:00+00:00
Henrico County shopping center adds 15 new tenants
http://www.virginiabusiness.com/news/article/henrico-county-shopping-center-adds-15-new-tenants#When:17:27:00ZShort Pump Town Center, a 1.3 million square-foot shopping center in western Henrico County, is adding 15 new retailers and restaurants and undergoing a multimillion-dollar renovation of some public areas.
During the next six to nine months, these stores and restaurants are scheduled to fill more than 62,000 square feet in the open-air center:
• American Eagle Outfitters/aerie
• Athleta (now open)
• Cooper’s Hawk Winery & Restaurants
• Free People
• Gymboree (now open)
• Justice & Brothers
• kate spade new york
• Michael Kors
• Rock Bottom Restaurant & Brewery
• True Religion
• Versona Accessories
The renovations will include a new pedestrian bridge spanning the Main Plaza, canopies over walkways and a new centrally located elevator.
In addition, changes will include new gathering spaces, redesigned fountains, additional landscaping, a feature fireplace, enhanced signage and updated restrooms.
The improvements are scheduled for completion before the holiday shopping season in November.
The center is co-owned and managed by Cleveland-based Forest City Enterprises Inc.2014-02-27T17:27:00+00:00
Richard Bland College signs dual enrollment agreement with military academy
http://www.virginiabusiness.com/news/article/richard-bland-college-signs-dual-enrollment-agreement-with-fork-union-milit#When:21:50:00ZStudents at Fork Union Military Academy (FUMA) in Central Virginia will soon be able to get a head start to their college education.
On Wednesday, FUMA signed a dual enrollment agreement with Petersburg-based Richard Bland, a junior college afflilated with the College of William and Mary.
The arrangement allows FUMA students to complete an Associate of Science degree at Richard Bland while fulfilling their high school graduation requirements. The agreement goes into effect March 1 and will be renewed on a yearly basis.
FUMA, located in Fork Union, is a military boarding school for males in grades 6-12 as well as postgraduates.
In-state FUMA students will be required to pay in-state Richard Bland tuition, and out-of-state FUMA students will be required to pay out-of-state Richard Bland tuition.2014-02-26T21:50:00+00:00
Barron’s ranks top financial advisors in Virginia
http://www.virginiabusiness.com/companies/article/barrons-ranks-top-financial-advisors-in-virginia#When:18:32:00ZThe head of McLean-based Cassaday & Co. has been named the No.1 financial advisor in Virginia by Barron’s.
Stephan Cassaday is president and CEO of Cassaday & Co., a wealth management company with $1.5 billion in assets. Cassaday was ranked fourth on the list from 2010-2013 and also ranked in 2009.
Barron’s says its Top 1,200 Advisors’ list “represent the cream of the crop from each of the 50 states and the District of Columbia.” The other Virginians who made the top five were: Paul Pagnato from HighTower in Reston (No. 2); David Speck from Wells Fargo Advisors in Alexandria and Joseph Montgomery from Wells Fargo Advisors in Williamsburg (No.’s 3 and 4, respectively) and Gregory Smith from Robert W. Baird & Co. in Reston (No. 5).
To compile its annual list, Barron’s uses data from more than 4,000 of the nation’s advisors. The list takes a number of criteria into account including assets under management, revenue produced by the firm, regulatory records, quality of the practice and philanthropic work. To see the full ranking of top financial advisors in Virginia, click here. 2014-02-26T18:32:00+00:00
Reston office building sold for $7.3 million
http://www.virginiabusiness.com/news/article/reston-office-building-was-sold-for-7.3-million#When:18:27:00ZA 48,000-square-foot Reston building once occupied by TNS Inc. has been sold for $7.3 million.
The Pond Building at 1939 Roland Clarke Drive in Reston, which is now a complex of office condominiums ,was acquired from the Bernstein Cos. by The Pond Building LLC. The commercial real estate company CBRE arranged the sale.
Bill Prutting, first vice president of CBRE, said last year’s departure of TNS, which occupied the entire building, gave the buyers the opportunity to upgrade and convert the space into individual office condominiums.
Individual suites range in size from approximately 1,200 square feet to more than 12,000 square feet and share a park-like setting, pond views, and visibility from the Dulles Toll Road.2014-02-26T18:27:00+00:00
CPA firm establishes subsidiary to serve professional athletes
http://www.virginiabusiness.com/news/article/cpa-firm-establishes-subsidiary-to-serve-professional-athletes#When:18:01:00ZA Richmond-based CPA firm has set up a subsidiary to provide tax consulting and financial management services to professional athletes and high net-worth individuals
PIASCIK Business Management LLC, a subsidiary of PIASCIK Certified Public Accountants, will customize services to each client, according to firm officials.
PIASCIK Business Management will provide monthly financial statements and budget forecasts, monthly bill payment; tax compliance and financial services; tax returns and estimated tax calculations; legacy planning; financial planning and investment assessments; and other services.2014-02-26T18:01:00+00:00
Richmond CPA firm expands international tax practice
http://www.virginiabusiness.com/companies/article/richmond-cpa-firm-expands-international-tax-practice#When:16:42:00ZRichmond-based CPA firm PIASCIK is expanding its international tax service with the hiring of two tax managers.
Margueritte Britton has become expatriate tax manager at the firm. Previously, she was a U.S. tax consultant and manager for MG Partners in Paris and Thomas St. John in London.
Ed Cole joins the firm as international senior tax manager. He was tax director at Deloitte Tax LLP in its Washington, D.C., national tax practice, where he was responsible for international tax consulting and compliance covering Fortune 100 companies.
Britton and Cole will work with Ryan L. Losi, the firm’s international tax partner-in-charge.
The number of international tax practice clients at the firm has nearly doubled in the past three years.2014-02-26T16:42:00+00:00
Revenue is flat, but 2013 EBITDA rises at Lumos
http://www.virginiabusiness.com/news/article/revenue-is-flat-but-2013-ebitda-rises-at-lumos#When:21:04:00ZTHE TAKE: Waynesboro-based Lumos Networks Corp. had total revenue of $207.5 million in 2013, largely unchanged from $206.9 million in 2012. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 8.4 percent to $96.3 million. The company is a fiber-based service provider of data, voice and IP-based telecommunication services in the mid-Atlantic region.
2013 revenue: $207.5 million, up from $206.9 million in 2012.
2013 EBITDA: $96.3 million, up from $88.9 million.
Fourth-quarter revenue: $51 million, down from $52.7 million in the same quarter in 2012.
Fourth-quarter EBITDA: $24 million, up from $23.2 million in the same quarter in 2012.
THE COMPANY’S TAKE: “In 2013, Lumos Networks’ strategic data revenue grew by 11.3 percent year-over-year, which offset declines in our legacy voice revenue streams, and overall adjusted EBITDA grew by 8.4 percent as a result of effective expense control. We had sequential strategic data revenue growth in each quarter of 2013 and for the total year strategic data revenue accounted for more than 50 percent of our total revenue,” Timothy Blitz, the company’s president and CEO, said in a statement.
For the first quarter of 2014, the company expects revenue to be $50 million to $51 million and adjusted EBITDA to be $22.5 million to $23 million. For the full year 2014, the company is introducing guidance of $200 million to $204 million for revenue and $94 million to $96 million for adjusted EBITDA.2014-02-25T21:04:00+00:00http://www.virginiabusiness.com/uploads2/exteriornight.jpg
Renovations begin at 7900 Westpark Drive in Tysons
Washington Real Estate Investment Trust (WRIT) has started renovations at 7900 Westpark Drive, a three building, 550,000-square-foot, Class A complex at Tysons.
According to Jones Lang LaSalle, the exterior renovation of the Tower building is a “reskinning” project, where construction crews will remove the existing precast concrete façade and replace it with high-performance, two-story, glass panels.
When renovations are complete, the new glass panel system will offer floor-to-ceiling glass, with enhanced views and annual energy savings of more than $100,000.
Work on the atrium also will give the building a new look. WRIT is adding glass handrails and metal clad columns to offset new terrazzo floors and wood accent walls. The atrium’s ground floor will be reconfigured to create an enlarged retail presence and more opportunities for informal gatherings.
There are four levels of structured parking, and new escalators are planned to connect the parking garage to the office building.
The on-site amenities include an updated fitness center, conference facility, cafe, daycare center, convenience store with dry cleaner drop-off and common areas with wi-fi and seating for tenants and guests. Metro’s new Silver Line Tysons Corner Station, scheduled to open this year, is about five minutes away.
“Tysons is one of the few submarkets which saw growth at the end of 2013, and, given the impending arrival of the Metro’s Silver Line and the property’s prime location and high visibility, it is an opportune time to start renovations,” Thomas L. Regnell, senior vice president and managing director for WRIT’s office division, said in a statement. Earlier published reports said the renovations are costing between $30 to $35 million.
7900 Westpark Drive is located in the heart of Tysons, with visibility from I-495 and Route 123. The complex recently received a LEED (Leadership in Energy and Environmental Design) silver certification from the U.S. Green Building Council.
Jones Lang LaSalle’s Northern Virginia agency leasing team is handling leasing for the complex on behalf of WRIT. The real estate investment trust owns a diversified portfolio of 51 properties totaling about 7 million square feet of commercial space.2014-02-25T19:15:00+00:00
B&W subsidiary gets $1.3 billion contract for naval reactor components
http://www.virginiabusiness.com/news/article/bw-subsidiary-gets-1.3-billion-contract-for-naval-reactor-components#When:16:05:00ZThe Babcock & Wilcox Co. said Tuesday today that its subsidiary, B&W Nuclear Operations Group Inc. (B&W NOG), has received a contract from the U.S. Naval Reactors Program worth up to $1.3 billion in funding over the next three years if fully executed.
An order for $508 million has been released for work to begin immediately. The contract covers the manufacture of nuclear components to support U.S. defense programs, including the manufacture of U.S. Naval nuclear power systems for submarines and aircraft carriers.
The initial funding will be followed by various releases during fiscal years 2014, 2015 and 2016, which is in addition to existing business awarded to B&W NOG under other multi-year and annually awarded contracts.
“We are very pleased with this contract and the opportunity it affords B&W to continue to support our country, our customer, our employees and our shareholders,” Peyton S. Baker, President B&W Nuclear Operations Group, said in a statement. “The reliability of our nuclear products will again be called on to help ensure that our Navy can successfully meet its missions.”
Work under the contract will be performed at B&W NOG’s facilities in Lynchburg, Mount Vernon, Ind., and Barberton and Euclid, Ohio.2014-02-25T16:05:00+00:00
Business groups urge adoption of private option for Medicaid expansion
http://www.virginiabusiness.com/news/article/business-groups-urge-adoption-of-private-option-for-medicaid-expansion#When:21:21:00ZEighteen chambers of commerce throughout Virginia on Monday endorsed a private approach to Medicaid in Virginia.
Led by the Virginia Chamber of Commerce, business leaders and chamber officials released a list of “free-market based principles” to guide reform of Medicaid, a state and federal funded health-care program designed to help the poor and disabled.
Medicaid expansion has been a divisive issue in the current session of the General Assembly. Democratic Gov. Terry McAuliffe has strongly backed expansion as a way to provide health care to low-income Virginians and stimulate the economy.
Under the federal Affordable Care Act (“Obamacare”), the federal government has pledged to pick up 90 percent of the states’ cost for expansion through 2017. That percentage then would gradually decline to 90 percent in later years.
The state Senate, controlled by Democrats, has adopted a budget that would use federal Medicaid dollars to finance a private insurance plan proposed by Republican state Sen. John Watkins. The plan would serve residents that would be covered under Medicaid expansion.
The House of Delegates, controlled by Republicans, has rejected Watkins’ plan and any expansion of Medicaid, saying the federal government could renege on funding its share, leaving the state with a bloated, inefficient program. House leaders held a news conference Monday with the National Federation of Independent Business, which represents 5,500 Virginia businesses, opposing the expansion of Medicaid.
The private option supported by business leaders was seen as a compromise proposal.
“The Affordable Care Act (ACA) has created uncertainty for the business community. Insurance premiums for Virginia’s businesses have risen 32 percent faster than the rate of inflation, in part because of the cost shifting due to the uninsured,” Gary Thomson, the chairman of the organization, said in a statement. “Over the next 8 years, Virginia businesses will incur $16.4 billion in ACA-related taxes to pay for federal health-care reform. A private option plan will allow Virginia to take control of $15 billion of its federal tax dollars and put them to work for Virginia businesses, taxpayers and communities.”
Reforms urged by the business organizations include:
• Privatizing Medicaid expansion in Virginia;
• Requiring the commonwealth achieve sufficient savings to offset the state’s share of contributions for the private option;
• Requiring enrollees to be employed or actively seeking employment;
• Encouraging a market-oriented approach for new enrollees to control their use of health-care services and maintain healthy behaviors, including cost sharing;
• Providing financial incentives to encourage healthy behaviors, including health savings accounts;
• Requiring an audit of the Medicaid program and a renewal of the private option plan every 4 years;
• Including language that the private option plan would terminate if the federal government fails to meet its financial obligations under the ACA;
• Supporting wellness and preventative services;
• Requiring annual performance reviews; and
• Expanding fraud and abuse prevention measures to control costs.2014-02-24T21:21:00+00:00
CIT GAP Funds invests in Encore
http://www.virginiabusiness.com/news/article/cit-gap-funds-invests-in-encore#When:20:39:00ZHerndon-based Center for Innovative Technology (CIT) announced Monday that its CIT GAP Funds invested in a Northern Virginia-based company.
Rosslyn-based Encore provides social alerts to marketers. Each alert provides marketers with three recommendations, such as replying to or retweeting a conversation. The company also breaks down social data for social data analysis.
According to the International Data Corp., the data analytics market is projected to grow to $16 billion in 2014 and is growing six times faster than the overall information technology market. Gartner also predicts that the social analytics market will grow 144 percent in the next three years, to $4.4 billion.
CIT GAP Funds invests in Virginia-based technology, clean tech and life science companies. It is part of CIT, whose mission is to accelerate the next generation of technology and technology companies.2014-02-24T20:39:00+00:00
Norfolk’s Interstate Corporate Center announces two leases
http://www.virginiabusiness.com/news/article/norfolks-interstate-corporate-center-announces-two-leases#When:16:44:00Z Divaris Real Estate Inc. announces the signing of two leases for more than 12,000 square feet of office space at the Divaris-leased and –managed Interstate Corporate Center in Norfolk. Elizabeth Paasch of the Virginia Beach office of Divaris, handled lease negotiations on behalf of the landlord, ICC Norfolk FlexxOffice LLC.
Alzheimer’s Association leased 3,116 square feet, and DaVita Tidewater LLC renewed its lease for 9,465 square feet. DaVita is a lprovider of kidney care, including dialysis services.
Interstate Corporate Center is a 17-building campus with 440,000 square feet of multi-tenant office buildings in a park-like setting at the intersection of Interstates 264 and 64 in Norfolk. Many tenants are in healthcare-related fields as the property is adjacent to Sentara Leigh Hospital and Norfolk’s light rail station.2014-02-24T16:44:00+00:00
CSR to relocate to Ballston
http://www.virginiabusiness.com/news/article/csr-to-relocate-to-ballston#When:16:34:00ZCSR Inc. is relocating its office from the Clarendon/Courthouse submarket of Arlington to Ballston. The company, which provides professional and technical consulting services and research to government, private, and nonprofit organizations, has signed a lease for 18,479 square feet at 4250 North Fairfax Drive. It plans to move later this year, according to Studley, which advised the company in the transaction.
With its current lease expiring, “This process afforded us an opportunity to explore all areas of our organization and map out our short-and long term goals,” John Foster-Bey, president and CEO of CSR, said in a statement.
After taking a look at CSR’s operations, Studley said in a press release that it recognized opportunities to reduce overall square footage while still preserving flexibility for future growth.
Executive Vice President and Co-Regional Manager Gary Stein along with Managing Director Jon Glass led the transaction for Studley on CSR’s behalf.
“We spent quite a bit of time analyzing CSR’s operations, looking at how employees work together, how workspaces impacted productivity, departmental adjacencies, and where the organization envisions itself in the near and distant future. That exercise led us to the space in Ballston, which best suits CSR’s financial and operational goals,” said Stein.
The building is owned and managed by Piedmont Office Realty Trust and was represented in the transaction by Jones Lang LaSalle.2014-02-24T16:34:00+00:00http://www.virginiabusiness.com/uploads2/Susan_Stoudt.jpeg
Susan Stoudt named director of project management for Ezra Co.
http://www.virginiabusiness.com/companies/article/susan-stoudt-named-director-of-project-management-for-ezra-co#When:16:32:00ZThe Washington, D.C.-based Ezra Co. has named Susan Stoudt director of project management.
In her new role, Stoudt, who has worked in the construction and real estate industries for more than 30 years, is charged with heading the firm’s in-house project management team. It provides services such as strategic planning, construction management, and design and relocation management.
During her career, Stoudt has managed a variety of projects in the Washington metropolitan region and across the country for a variety of commercial clients including office tenants, commercial landlords, data center developers, hotel operators and retailers.
Before joining Ezra, Stoudt headed project management for DTZ’s Washington office, and before that provided project-management services for CBRE and Mark Anderson Associates. Some of her clients have included AARP, CACI, Harris Corp., NASA and Rolls-Royce.2014-02-24T16:32:00+00:00http://www.virginiabusiness.com/uploads2/NokesPlaza650_021814.jpg
New mixed-use project coming to Dulles Town Center
http://www.virginiabusiness.com/news/article/new-mixed-use-project-coming-to-dulles-town-center#When:15:51:00ZLerner Enterprises has announced a new project for Dulles Town Center: Nokes Plaza, a 56,000-square-foot office, medical, retail development within The Corporate Office Park.
The Rockville, Md.-based company, one of Washington, D.C.'s largest private real estate developers, said the project would include four buildings and two retail pads. It will be visible from the intersection of Nokes and City Center Boulevards.
The buildings also will be within walking distance of Windmill Parc at Dulles Town Center, a luxury apartment home community currently under construction. Work will begin this summer, and construction is scheduled to be done by fall 2015.
“Nokes Plaza, when complete, will add much needed medical, office and service oriented retail options for the thousands of residents and office workers within Dulles Town Center,” Mark D. Lerner, a principal of Lerner, said in a statement. “Dulles Town Center will continue to expand and add amenities in the future to serve the growth of Loudoun and Western Fairfax counties.”
The Polleo Group of Reston designed Nokes Plaza. The building will be situated among a tree conservation area with park-like plazas between each building. Gittleson Zuppas Commercial Realty Inc. of Bethesda, Md., will lead the medical and office leasing while Lerner will spearhead retail leasing.
Dulles Town Center is a 554-acre, mixed-use development. Serving as its anchor is Dulles Town Center Mall, the largest shopping and dining destination in Loudoun County. It has 1.4 million square feet of retail with several national tenants such as Nordstrom, Macy’s and Lord & Taylor.2014-02-24T15:51:00+00:00http://www.virginiabusiness.com/uploads2/Doug_Henkel_2009.jpg
Norfolk’s Doug Henkel named to top broker group for CBRE
http://www.virginiabusiness.com/companies/article/norfolks-doug-henkel-named-to-top-broker-group-for-cbre#When:15:47:00ZDoug Henkel, an executive vice president in CBRE’s Hampton Roads office, was recognized in the Colbert Coldwell Circle of the Top 100 professionals in the U.S. for 2013 by CBRE Group Inc. In addition, Henkel was the number one producer for CBRE|Hampton Roads and in the company’s mid-South region.
CBRE’s Top 100 Performers include the top producers in North America.
“For a Norfolk broker to be in the top 100 CBRE brokers nationally is an incredible accomplishment we all take great pride in,” J. Scott Adams, president of CBRE’s mid-South Region, said in a statement.
Henkel has more than 30 years of experience in commercial real estate specializing in hotel brokerage. He provides the hospitality real estate industry with advisory services to owners, developers, lenders, hotel chains and operators.
Hotel brokerage activities involve transactions across a broad geographic area. Henkel has done deals in states from Florida to Maine, and from Washington, D.C., to Los Angeles, including coverage in Mexico and the Caribbean.2014-02-24T15:47:00+00:00http://www.virginiabusiness.com/uploads2/gast_.jpg
David Gast joins Colliers International in Tyson Corner
http://www.virginiabusiness.com/companies/article/david-gast-joins-colliers-international-in-tyson-corner#When:14:55:00ZColliers International announced the addition of David Gast as executive vice president in the company’s Tysons Corner office. Gast specializes in the leasing and sales of commercial property throughout Northern Virginia.
According to Colliers, he has provided transaction expertise and consulting services to landlords and tenants for more than 19 years. Prior to joining Colliers, David worked with CBRE and Cambridge Property Group.
He is the recipient of the GWCAR Top Ten Producer Award in Northern Virginia and CoStar’s Power Broker Award in multiple years. Gast has represented such tenants as Siemens, Samsung and Ford Motor Co. and worked on assignments at Park Tower, Westpark Business Campus and Atlantic Corporate Park.2014-02-24T14:55:00+00:00http://www.virginiabusiness.com/uploads2/Nick_Schimick1.jpg
Cushman & Wakefield | Thalhimer hires marketing director
Cushman & Wakefield | Thalhimer
Nick Schimick has joined Cushman & Wakefield | Thalhimer as the firm’s director of marketing. Schimick has more than 20 years of marketing experience supporting large and small companies.
Most recently, he provided strategic marketing guidance to several clients, including the University of Virginia, in his role as a senior account director at West Cary Group in Richmond. Past work experiences also include roles at McKesson Corp. and Capital One Financial Corp.
In his new role at Thalhimer, Schimick will provide strategic direction, leadership and direct management to the commercial real estate company’s Marketing Group. He will be responsible for the planning, development, administration and execution of marketing programs including branding and design.2014-02-24T14:53:00+00:00
Freedom Bank announces stock split
http://www.virginiabusiness.com/news/article/freedom-bank-announces-stock-split#When:21:01:00ZFairfax-based Freedom Bank of Virginia has announced an 11-for-10 stock split.
The split will result in shareholders receiving one additional share of common stock for every 10 shares of common stock they own.
The split will be effective for stockholders owning the stock on April 1.
“This tax-free distribution of additional shares rewards our shareholders for their continued support of our bank,” CEO Craig Underhill said in a statement.
The bank reported net profit of $1.4 million in 2013, 15.1 percent from 2012. Earnings per share were 40 cents, up from 35 cents.
Total assets grew nearly 15 percent to $274 million.
The bank has branches in Fairfax and Vienna.2014-02-21T21:01:00+00:00
New president and CEO named at The Up Center
http://www.virginiabusiness.com/news/article/new-president-and-ceo-named-at-the-up-center#When:20:37:00ZTina Gill has been named president and CEO of The Up Center, a nonprofit Norfolk-based social services agency.
Gill’s tenure will become effective April 1. She will succeed Ed Welp, who is retiring after 24 years as head of the organization.
Gill was vice president of external relations operations for Wellpoint/Amerigroup and executive director of the Amerigroup Foundation.
She also served as general manager of Landmark Communications’ Interactive Media Group and steered the National Advisory Board on Improving Healthcare Services for Seniors and People with Disabilities.
The Up Center, founded in 1883, has seven locations in the Hampton Roads region serving more than 10,000 people a year.2014-02-21T20:37:00+00:00
Strayer reports lower revenues for the fourth quarter
http://www.virginiabusiness.com/news/article/strayer-reports-lower-revenues-for-the-fourth-quarter#When:20:32:00ZTHE TAKE: Strayer Education Inc. reported lower revenues in the fourth quarter as enrollment dropped at the company’s schools. Enrollment for the 2014 winter fell 14 percent to 41,098 students, compared with 47,926 students in 2013.
The company also reported a net loss of nearly $19 million in the fourth quarter related to restructuring, which is estimated to reduce annual operating expenses by $50 million starting in 2014. The restructuring included closing 20 physical locations in the Midwest, affecting 5 percent of Strayer’s students.
Revenue: Revenues in the fourth quarter dropped 12.6 percent to $124.1 million, compared with $141.9 million during the fourth quarter of 2012. Lower revenues mostly were attributed to lower enrollment. For the year, revenues fell 10 percent to $503.6 million, compared with $562 million in 2012.
Profit: Strayer reported an $18.96 million loss, or $1.80 per share, for the fourth quarter, compared with a profit of $16.6 million, or $1.47 per share, during the same period last year. Net income was affected by $33 million in after-tax charges related to restructuring costs.
Full-year net earnings were $16.4 million for 2013, compared with $65.9 million the year before.2014-02-21T20:32:00+00:00http://www.virginiabusiness.com/uploads2/Chris-Frye-Headshot-%281%29.gif
Small businesses seek clarity: three issues that could make or break 2014
http://www.virginiabusiness.com/opinion/article/small-businesses-seek-clarity-three-issues-that-could-make-or-break-2014#When:20:29:00ZWith 2013 now in the rearview mirror, some small businesses can breathe a brief sigh of relief. Whether or not the past year was a success, a failure or a little bit of both, it is important to learn from the past while laying the groundwork for a solid future. While many of us learned a lot about ourselves and our businesses in 2013, there are still issues looming that will rear their heads in 2014 and beyond.
This coming March, it will be four years since the Patient Protection and Affordable Care Act (ACA) was signed into law. You would be hard-pressed to find a more hotly debated topic over the past decade.
Many of the ACA’s reforms have already been put in place. Confusion and uncertainty remains within the small business community regarding health insurance options and how we can educate our workforces on their responsibilities and alternatives. Most businesses were pleased to receive a one-year reprieve from the employer mandate. This potentially costly provision has now been delayed until 2015 (2016 for those with 50–99 employees).
According to the U.S. Treasury Department, 96 percent of employers have fewer than 50 full-time workers and will be exempt from the employer mandate altogether. However, significant changes to insurance plans offered in the small-group market have the potential to create pricing turmoil for those small businesses that still elect to provide this highly valued benefit to their employees. Some will see costs go down, although many will see premium increases as a result of the new underwriting standards and requirements for essential health benefits. Understanding how your organization will be impacted will assist in budgeting for these costs in the future.
Many people will debate as to the true extent of the economic recovery. Most would agree that things are in better shape than four or five years ago, but a far cry from being ideal. Different industries have been affected in different ways. Some are seeing incremental growth while others are still treading water. The stock market ended the year at record highs and 2013 returns were as good as they have been in 15 years. Is this a springboard to continued growth in 2014, or are we being set-up for an epic fall? That is the million-dollar (or maybe trillion-dollar) question.
The 2016 presidential election will likely go a long way in determining the direction of our economy in the foreseeable future. Midterm elections may also cause some “blips” on the radar; however, many prognosticators think the economy will take a “wait and see” approach. Barring any unforeseen circumstances, the next few years may see minimal, but positive growth until the next leader in the White House emerges. Small businesses should proceed with cautious optimism and be ready to swiftly adapt to market changes. Balancing growth and anticipating the optimal workforce composition will be key.
Tax reform and expiring provisions
2013 provided a host of new tax provisions, many of which the full wrath may not be seen until the filing deadline in April 2014 and beyond. The new 3.8 percent and 0.9 percent Medicare tax were brought about in conjunction with the Affordable Care Act. A new 39.6 percent top tax bracket and potential 20 percent rate on capital gains and qualified dividends for high-income individuals was spurned from the American Taxpayer Relief Act of 2012. These taxes ultimately will impact the owners of many small businesses, and could play a major role in whether or not capital for expansion and growth is deployed in 2014.
The generous $500,000 limitation for Section 179 depreciation has reverted to $25,000. Many eyes will be closely watching Congress in early 2014 to determine if this will be retroactively extended. My best guess is that Congress will meet us in the middle and extend the Section 179 limitation at a $250,000 annual amount. In my opinion, Congress would be foolish to allow the Section 179 limitation to decrease to such a negligible amount. This would certainly discourage investment at a time where our economy is in need of additional positive momentum. Businesses must monitor this and be ready to react and adjust accordingly.
What lies ahead in 2014 is anyone’s guess. Organizations and leaders must be ready to adapt to change quickly. While we must be cognizant of the obstacles and issues that could bring us down, we should attack each day with a positive attitude and entrepreneurial spirit, seeking to make ourselves and those around us better. Never be afraid to fail. As the great basketball coach John Wooden said, “Failure is not fatal, but failure to change might be.”
Chris Frye, CPA is a manager with the professional accounting firm Yount, Hyde & Barbour PC His areas of expertise include assisting clients in the construction and non-profit industries with assurance, tax, and advisory services with an emphasis on strategic planning. Chris has also earned a CSPM (Certified in Strategic Performance Management) designation through MentorPlus®. Frye is a member of the Virginia Society of Certified Public Accountants.2014-02-21T20:29:00+00:00
Roanoke College Poll finds improving confidence in state real estate market
http://www.virginiabusiness.com/news/article/roanoke-college-poll-finds-improving-confidence-in-state-real-estate-market#When:20:09:00ZConsumer confidence in Virginia’s real estate market has improved in recent months, according to the Roanoke College Poll.
More than 30 percent of respondents in a recent survey say they are optimistic about the residential real estate market today and in the coming year.
More than 62 percent of respondents believe that market conditions have improved since last year, a 5 percentage point improvement since November.
Also 52 percent believe that conditions will improve during the next year, a 3 point increase since November.
The survey included interviews with 601 Virginia residents by The Institute for Policy and Opinion Research at Roanoke College on Feb. 3-5.2014-02-21T20:09:00+00:00
Chincoteague Island ranks second on TripAdvisor list
http://www.virginiabusiness.com/news/article/chincoteague-island-ranks-second-on-tripadvisor-list#When:19:48:00ZChincoteague Island ranks second in a list of top 10 island destinations in the U.S. compiled by the website TripAdvisor.
Trailing only Marco Island, Fla., the island off Virginia’s Eastern Shore outranked Nantucket, Hilton Head, Key West and Maui.
The TripAdvisor Travelers’ Choice Islands list is based on reviews and opinions posted on the website.
“Wild horses can actually drag you away…to Chincoteague Island,” the website says. “Here, ponies run wild, you can catch or dig up your own seafood, and the beaches bring literal breaths of fresh air.”
The website notes that the Chincoteague National Wildlife Refuge is a unspoiled spot for bird watching, horseback riding, swimming and biking.
Plus there is the Pony Swim. Every summer since 1925, all of the feral ponies on Assateague are rounded up for a swim across the channel to Chincoteague.
The Chincoteague Chamber of Commerce notes that the island has been picked by TripAdvisor as a top travel spot for two years running. It was No. 7 last year on the website’s list of top U.S. beaches.
The islands on the TripAdvisor list this year are:
1. Marco Island, Fla.
2. Chincoteague Island
3. Anna Maria Island, Fla.
4. San Juan Island, Wash.
5. Maui, Hawaii
6. Kauai, Hawaii
7. Island of Hawaii
8. Nantucket, Mass.
9. Hilton Head Island, S.C.
10. Key West, Fla.2014-02-21T19:48:00+00:00
Herring appoints panel to review attorney general’s office operations
http://www.virginiabusiness.com/companies/article/herring-appoints-panel-to-review-attorney-generals-office-operations#When:21:17:00ZAttorney General Mark R. Herring has announced the creation of a three-member review panel charged with identifying reforms and efficiencies in his office.
The panel members include:
• Bill Leighty, managing principal of DecideSmart. He is the former chief of staff to former Governors Mark R. Warner and Timothy M. Kaine, and former director of the Virginia Retirement System. Leighty also served as special advisor to former Gov. Bob McDonnell's Commission on Government Reform and Restructuring.
• W. Taylor Reveley, III, president of the College of William & Mary, former dean of William and Mary Law School, and former managing partner of Hunton & Williams.
• Katherine Busser, executive vice president and Central Virginia market president of Capital One. She has experience in operations, technology and risk management. She has served rector of Virginia State University and currently serves on the VCU Health System and Virginia Early Childhood Foundation boards.2014-02-20T21:17:00+00:00
Virginia’s ranking drops in nationwide survey of perceptions of well-being
http://www.virginiabusiness.com/news/article/virginias-ranking-drops-in-nationwide-survey-of-perceptions-of-well-being#When:21:12:00ZVirginia ranks 24th among the 50 states, down 10 spots, from last year in an annual survey of Americans’ sense of well-being.
North Dakota ranked first, and West Virginia was last in the latest ranking of Gallup-Healthways Well-Being Index, now in its sixth year.
The index is based on 178,000 interviews conducted nationwide last year examining Americans’ perceptions on topics such as physical and emotional health, healthy behaviors, work environment, social and community factors, financial security, and access to necessities such as food, shelter and health care.
The 10 states with the highest sense of well-being in the nation are:
• North Dakota
• South Dakota
The 10 states with the lowest sense of well-being are:
• West Virginia
Iowa, Nebraska, Vermont, Hawaii, Minnesota, Montana and Colorado have been in the top 10 for two years straight.
Virginia fell from No. 14 in last year’s list. By category, the commonwealth this year ranked 17th in life evaluation, 32nd in emotional health, 38th in working environment, 20th in physical health, 28th in healthy behaviors and 15th in access to basic necessities.
Virginia’s overall ranking of 24th is the lowest it has recorded in the six years the index has been compiled. Its highest ranking was 13th in 2009.
Nearly 5,000 interviews were conducted in Virginia as part of the study.
Certain states have consistently ranked well in certain categories, according to the survey.
Colorado, for example, has ranked at or near the best in the nation for the lowest obesity rate, and Utah has the lowest smoking rate.
The authors of the report note that research shows a strong link between well-being, health-care costs and engagement in the workplace.
Each point in well-being improvement, they say, equates to a statistically significant percent decrease in the likelihood of hospital admission and emergency room visits and in the likelihood of incurring health-care costs.2014-02-20T21:12:00+00:00
Highwoods Properties’ CEO discusses office market trends
http://www.virginiabusiness.com/news/article/highwoods-properties-ceo-talks-office-space-fads#When:20:04:00ZFeeling a little closer to your co-worker than before, literally? Highwoods Properties is finding that more companies are going for collaborative spaces where break and meeting areas may be larger but an individual’s working space is smaller.
“It’s basically a Starbucks within an office,” says Ed Fritsch, president and CEO of Raleigh,N.C.-based Highwoods Properties. Fritsch was in Richmond Thursday for Virginia Commonwealth University’s Real Estate Circle of Excellence Breakfast Program, where he talked to 150 guests about the current and anticipated state of the office market. The real estate investment trust is the largest landlord at Innsbrook Corporate Center in Henrico County where it is working to develop a mixed-use project.
Fritsch also noted that new construction projects have decreased dramatically, and they are likely to stay that way for an extended period of time. He said the company is fortunate, however, to have new development projects such as a recent $56 million deal in Memphis, Tenn. to expand International Paper’s headquarters.
Asked whether mixed-use projects were a fad by an audience member, Fritsch said he didn’t think so.
“I think it’s not a fad, not for the next several decades at least and I have trouble seeing beyond that,” Fritsch said.2014-02-20T20:04:00+00:00
CyrusOne plans data center in Loudoun
http://www.virginiabusiness.com/news/article/cyrusone-plans-data-center-in-loudoun#When:19:35:00ZCyrusOne announced plans Thursday to build a 400,000-square-foot data center in the Loudoun Tech Center in Sterling.
This will be the first data center facility on the East Coast for the Dallas-based data center services provider.
“The purchase of acreage in Northern Virginia is the first step in extending CyrusOne’s presence to the East Coast,” Gary Wojtaszek, president and CEO of CyrusOne, said in a statement. “We’re very excited to bring our unique approach to providing colocation solutions for Fortune 1000 enterprise customers to a market such as Northern Virginia, which has superior fiber connectivity options and a steady absorption rate of new space.”
CyrusOne recently purchased the 14 acres to accommodate a shell of about 400,000 square feet that would include up to 240,000 square feet of raised floor space and 36,000 feet of Class A office space.
The first phase of construction includes a 124,000-square-foot shell with 60,000 square feet of raised floor space, 15,000 square feet of office space and 12 megawatts of critical load.
CyrusOne expects the first phase of the new site to be completed during 2014.2014-02-20T19:35:00+00:00
New port CEO: Focus will be on profitable growth
http://www.virginiabusiness.com/news/article/new-port-ceo-focus-will-be-on-profitable-growth#When:21:30:00ZAfter more than five years of operating losses, a newly unified Port of Virginia will focus on profitability and sustainable growth, the port’s new leader told the maritime community Wednesday afternoon.
“That’s not good stewardship,” John Reinhart, the port’s new CEO and executive director, said at the Hampton Roads Global Commerce Council’s annual State of the Port Address held at the Norfolk Marriott. “That’s not fiscal responsibility. That’s not how we will run the port in the future.”
The Port of Virginia has posted record growth in container traffic during the past two years but has continued to have operating losses.
In 2013, the Port of Virginia saw its cargo traffic increase 5.6 percent to a record 2.2 million TEUs (20-foot equivalent units) handled at its terminals. However, the port reported an operating loss of $10.5 million from July to December. Even as the port has surpassed pre-recession traffic levels, it has posted a projected operating loss of $109.2 million over six years.
“Going forward. the growth is going to have to be more measured, and it’s going to have to be profitable,” Tom Capozzi, chief commercial officer of the Port of Virginia, said.
The address comes nine days after Reinhart took his position as head of both the Virginia Port Authority and its operator, Virginia International Terminals. Under a reorganization approved last year, the port is streamlining operation of the two groups.
Reinhart was the former CEO of Maersk Line Ltd. The Norfolk-based unit of A.P. Moller-Maersk Group operates a U.S. fleet of commercial ships used in international commercial service or that are under military contract.
Last month, before Reinhart took the helm at the port, newly appointed Virginia Secretary of Transportation Aubrey Layne took the Virginia Port Authority’s Board of Commissioners to task for the port’s operating losses. He has asked the board to develop a report on projected finances for this year in March and another one on use of the port’s current facilities by July 1.2014-02-19T21:30:00+00:00