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Out & About - November 2014
http://www.virginiabusiness.com/news/article/out-about-november-2014#When:10:00:00ZThis month's Out & About features photos from the Virginia Living Museum's Golden Paw awards. The Virginia Living Museum in Newport News presented its highest honor, the Golden Paw Award, to Riverside Health System in recognition of years of strategic partnership between the two neighboring institutions on J. Clyde Morris Blvd during a reception on Sept. 24 honoring museum supporters. The award is a bronze otter statue by Eastern Shore sculptor David Turner.
To share photos of special events at your company with Virginia Business, e-mail your high resolution images to or mail them to 1207 East Main Street, Suite 100, Richmond, VA 23219. Photos not used in the magazine may be posted on our online photo gallery.2014-10-30T10:00:00+00:00
Reports point to ways U.S. can boost manufacturing
http://www.virginiabusiness.com/opinion/article/reports-point-to-ways-u.s.-can-boost-manufacturing#When:10:00:00ZIs the U.S. on the cusp of a manufacturing renaissance? Two reports released in recent months suggest that, given some help, small and midsize manufacturers in this country can thrive and create jobs.
The creation of more manufacturing jobs is important to our economy, not only for the boost that additional employment can provide, but also for symbolic reasons.
As a report from the Miller Center at the University of Virginia notes, for decades well-paid manufacturing jobs were the key for millions of middle-class families achieving the “American Dream”: home ownership, a secure retirement and the opportunity to send the kids to college.
That dream has suffered in recent years as U.S. manufacturing has declined. Since 1972, the number of American manufacturing jobs has dropped by more than 50 percent, from 21 million in 1972 to just 10 million in 2010, according to the Miller Center. In Virginia, manufacturing jobs peaked at 432,500 in 1989 and now total fewer than 230,000.
Some observers have seen this decline as inevitable, with manufacturing jobs moving to countries with the lowest labor costs. The shift in the past two decades have wreaked havoc on regional economies heavily reliant on certain types of manufacturers, such as the textile and furniture-making industries in Southern Virginia.
The Miller Center report, released in June, examined the prospects for a U.S. manufacturing comeback as part of its “Milstein Symposium: Ideas for a New American Century.” A 14-member panel co-chaired by former Mississippi Gov. Haley Barbour and former U.S. Sen. Evan Bayh of Indiana focused on small and midsize manufacturers as catalysts for change.
The report notes that while the number of manufacturing jobs has shrunk in the past four decades, the percentage of jobs generated by small and midsize companies has risen from 29 to 45 percent of the industry workforce during that time. Companies in these categories, in fact, now represent 98 percent of all manufacturers.
Despite the long decline of U.S. manufacturing, these companies are increasingly optimistic about their prospects, according to the 2014 Manufacturing and Distribution Monitor, a report released in September by the accounting firm McGladrey LLP, which has offices in McLean and Richmond.
A survey of 900 manufacturing executives found that 67 percent expect to hire more employees in the U.S. during the next year, up from 62 percent last year. Meanwhile, the percentage of employers expecting to cut back their workforce dropped to 5 percent after ranging from 9 to 11 percent during the past three years.
The optimism found in the McGladdrey report also can be seen in the economic development announcements made by the Virginia Economic Development Partnership since January. In mid-October, the list included 72 manufacturing projects, 53 of which involved existing companies that are expanding their operations in Virginia.
Nonetheless, both reports note that manufacturers still face many hurdles in remaining competitive.
In the McGladrey report, manufacturers say government regulations represent the biggest obstacle to growth. That broad topic includes implementation of the Affordable Care Act (the employer mandate takes effect next year), Environmental Protection Agency rules and state regulations.
The Miller Center report explored other problems that could limit potential growth and offered recommendations to solve them. “Outpacing the global competition requires a highly skilled workforce, yet there exists no efficient mechanism to match supply and demand within the labor market, leading to systemic inefficiency,” the commission report says.
One of the problems manufacturers face in creating a skilled workforce, the report notes, is the lingering stigma that workforce training and manufacturing careers have in the K-12 education system.
Even without the stigma, manufacturers face problems investing in training programs. They also have difficulty acquiring new technology, plugging into existing supply chains and bringing their products to market.
Given those issues, the commission had six recommendations:
Create talent-investment loans: These government-backed loans would help companies expand their businesses, hiring more workers and upgrading their skills.
Develop “upside-down” degrees: This program would allow students to get credit toward a bachelor’s degree for technical training, work experience, military training or community college courses.
Start a skills census: A survey would be routinely conducted to determine what skills employers need now and in the future.
Launch a national supply chain initiative: A study “mapping” manufacturing supply chains would spot gaps and identify emerging technologies.
Expand technology and engineering certification programs: The goal here is to give high school students opportunities to get certified technical skills.
Begin a “big-trends, small firms” initiative: The U.S. Commerce Department’s Manufacturing Extension Partnership would help small and midsized companies acquire and utilize new technologies.
Policymakers should heed the issues raised by both reports. If they want a true revival of the U.S. economy — and a restoration of the American Dream — they should give manufacturers a hand in achieving their growth potential.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/ROANOKESIDE_drone.pngGov. Terry McAuliffe at an event at Virginia Tech, one of six U.S. test sites for drone research. Courtesy Virginia Tech
http://www.virginiabusiness.com/news/article/economic-engines#When:10:00:00ZVirginia Tech and the Virginia Tech Corporate Research Center are major drivers in the local and state economies. Because of Tech’s research and the companies it attracts to the Corporate Research Center (CRC), business impact is steadily increasing.
“Impact plays out over time,” says the director of Tech’s economic development office, John Provo. “The CRC is more than a quarter century of success. You’ve seen incredible growth, with 160 companies and about 2,700 people working there. The CRC is a great arc over the history of this region.”
The CRC’s current Phase II construction will add 19 buildings to the existing 29 structures. Rackspace, a computing cloud company, opened the first Phase II building in 2012, bringing 100 jobs. The building, designed specifically for Rackspace’s young tech-set, even has an indoor climbing wall.
CRC President Joe Meredith says the center was selected by the Association of University Research Parks as one of 18 founding members of the Academy of Outstanding Research Parks. In August, it hosted the VT Knowledgeworks Global Partnership Week, a business challenge that brought students and faculty from universities around the world together to explore new business concepts.
Larry Hincker, Tech’s vice president for university relations, points to the statewide economic impact of university research. “The best example is the Commonwealth Center for Advanced Manufacturing,” he says. “This was an initiative resulting from the state’s courtship of Rolls-Royce. The state sweetened the pot by offering up Virginia Tech and the University of Virginia.”
The academic partnering attracted not only Rolls-Royce but also 19 other major manufacturers to the Prince George County center, which opened last year with the goal of bridging the gap between research and commercialization, speeding up the process of getting developments to market. In July, European aerospace giant Airbus became one of the latest members of the collaboration.
In other recent developments, Virginia Tech was named one of only six test sites in the nation for drone research. The Federal Aviation Administration declared Tech’s program fully operational in August when Gov. Terry McAuliffe and leaders from three states gathered to watch a simulation at the Virginia Tech Transportation Institute’s Smart Road. The Arlington-based Association for Unmanned Vehicle Systems International predicts that drone commercialization will add more than $13.6 billion to the national economy by 2025. Tech’s research will assist the government in developing regulations for the technology.
Tech’s Pamplin College of Business launched a new Center for Innovation and Entrepreneurship last December and operations are now underway. Linda Oldham came from Georgia Tech in August to serve as executive director, and Derick Maggard, former director of the Roanoke-Blacksburg Technology Council, came onboard as director in July. The center’s purpose is to support entrepreneurship and innovation by offering courses, mentoring, networking and fostering research projects between participants and faculty members. Tech alumni who have become successful entrepreneurs will work with participants, as well.
To support and inspire entrepreneurship, Tech has two other new projects. Last year, Innovate, a living-learning community for students of any major, opened on Blacksburg’s Oak Lane. The residence program equips students with an understanding of entrepreneurship and associated business practices through a network of peer and faculty partnerships. Students in the program commit to one year of participation but may opt for more.
Virginia Tech Foundation CEO John Dooley also points with enthusiasm to NuSpark, a startup resource that began in February. NuSpark is open to people over 18 in the Roanoke-Blacksburg region who want to work on an idea with the goal of commercializing or implementing it. NuSpark offers work space, workshops and one-on-one mentoring opportunities.
This month, Dooley notes that Tech is offering a new conference on entrepreneurship and innovation, TEC2014. It’s happening Nov. 14-15.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/CO-RedSunFarms-140710-1543.pngPhase one of construction at Red Sun Farms’ vegetable production facility in Dublin. Photo by Christina O'Connor
Slow and steady
http://www.virginiabusiness.com/news/article/slow-and-steady#When:10:00:00ZBig economic development deals announced over the last two years are coming to fruition in the Roanoke and New River valleys, even as other companies are shutting down and scaling back.
Ardagh Group, a food packaging manufacturer; Korona S.A., a Polish candle maker; Red Sun Farms, a Mexican greenhouse tomato grower; and Falls Stamping & Welding Co., which provides metal stamping for the automobile industry, all have begun to hire and ramp up production.
Other employers are expanding their existing operations. Volvo Trucks North America is adding 200 jobs at its Pulaski County plant, and Altec Industries Inc., another truck-related company, is adding 203 in Botetourt County. Virginia Transformer Corp. is expanding its Roanoke facility to a new, 25-acre site in Botetourt, eventually creating 150 jobs.
Indeed, manufacturing has contributed the most to employment growth in the region during the past four years, according to Bureau of Labor Statistics figures provided by the Roanoke Regional Partnership. That employment sector is trailed by education and health, professional services and finance, in that order.
Health care remains the biggest economic driver in the Roanoke and the New River valleys. Carilion Clinic is Western Virginia’s largest employer, and another hospital chain, Hospital Corporation of America (HCA), which operates LewisGale Regional Health System, is a major employer as well.
Yet there have been setbacks. BB&T Corp. is closing its Roanoke call center, eliminating 140 jobs. Caterpillar Global Mining closed two regional facilities for a total of 285 jobs lost. Another 250 employees lost their jobs when Grede idled its foundry in Radford.
“The question is, are we still further ahead?” says Joyce Waugh, president and CEO of the Roanoke Regional Chamber of Commerce. “I believe firmly that we are, but it’s not been an easy rapid rise. It’s been slow and continuous with fits and starts.”
Recent job gains and losses have had a mixed effect on area unemployment rates. The Blacksburg area’s jobless rate was 6.2 percent in August, unchanged from July, while the rate was 6.1 percent in the Roanoke area in August, up from 5.6 percent the month before.
Dennis Cronk of commercial real estate group Poe & Cronk says that 2014 has been his firm’s best year for marketplace activity. He notes, however, that inventory has been shrinking. Industrial parks and prime commercial spaces have filled, leaving some companies bursting at the seams but unable to expand due to lack of capacity.
“The biggest problem is supply and demand,” Cronk says. “We have a very limited supply of industrial buildings and a limited supply of industrial land that is developable at a reasonable cost.”
One of the companies that has found space is Korona Candles. Agnieszka Fafara, the president and CEO, says the Polish company decided to build its factory in Pulaski for two reasons: It met geographical and climatic criteria for manufacturing and shipping its product, and its proximity to higher education. “Our production is pretty advanced, so we need skilled workers and engineers to be employed here,” she said.
Like Korona, Ardagh Group chose to locate a large manufacturing facility in the region because of geography. It needed a site that met a long list of criteria, including access to the ConAgra Foods plant in Newport, Tenn., one of its bigger clients. That contract also created the need for haste, which resulted in Ardagh’s decision to locate in the former Hanover Direct building in Roanoke County. Ardagh’s facility, which opens in November, will produce about 4.5 million cans per day and create 96 full-time jobs within two years.
Red Sun Farms, the first tenant of the New River Valley Commerce Park in Pulaski, began harvesting its first fruits this fall. Director of Operations Jay Abbott estimated its workers will harvest more than one million pounds of greenhouse tomatoes by January.
The NRV Commerce Park remains one of the few regional industrial parks with plenty of room to grow. The 1,000-acre property is planned for sites 75 acres or larger, with the anticipation of hosting up to five businesses of that size.
Brian Hamilton, Montgomery County economic development director, says the 175-acre Falling Branch Corporate Park has picked up a new building or two every year since 2011. Inorganic Ventures, a chemical company that moved to the park in 2008, expanded in 2012. That same year, BackCountry.com built there and now employs 180. In 2013, both Aeroprobe Corp., which makes instruments and software for cars, jets, wind turbines and other applications, and Polymer Solutions, a lab for polymer, materials and metals testing, moved in.
“We’ve got three remaining lots, the smallest being four acres and largest being 16,” Hamilton says. “There’s still some room, just not a lot.”
It’s the same story at Blacksburg Industrial Park, now in its fifth expansion to accommodate TORC Robotics, which, like Polymer Solutions, is growing out of Virginia Tech’s Corporate Research Center. That leaves three available sites before it reaches capacity. Christiansburg Industrial Park already is full.
That shrinking industrial space is driving regional cooperation and creativity. It’s why 13 localities banded together as a regional industrial facility authority to create the NRV Commerce Park. It’s also why six Roanoke Valley localities have formed the Western Virginia Industrial Regional Facility Authority to identify large potential economic development sites and allow for partnerships between local governments to split costs and share the benefits.
Reinventing the city
A steadily shrinking amount of property is also pushing governments and individual developers to think outside the box. Roanoke city worked first to reinvent its downtown and now is expanding it beyond its traditional confines.
The city partnered with Carilion Clinic and Virginia Tech to redevelop large chunks of land near the Roanoke River. Parcels previously occupied by industrial development now house the Virginia Tech Carilion School of Medicine and Research Institute — which in May graduated its first 40 doctors — a Cambria Suites hotel and a mixed-use development known as The Bridges, which will mix parks, commercial business and apartments for an estimated build-out value of $150 million.
Aaron Ewert, project manager at The Bridges, says the first residents have already moved into the new apartment building. A Starbucks coffee shop and restaurant are moving into a historic lumber warehouse, and JDS Uniphase Corp., which develops software and instruments, is moving into a former trolley barn. Four more historic buildings are slated for commercial retail, and contractors are building a riverwalk, kayak launch and stage.
On the northern edge of downtown, private developers await the build-out of an interchange that will provide interstate access to the biggest parcel of undeveloped land in Roanoke, which sits across I-581 from Valley View — its most popular retail destination.
Closer to downtown’s heart, just a few blocks from the newly renovated Elmwood Park and its new amphitheater, developer Faisal Khan is finding ways to turn potentially difficult historic buildings into new apartments. In August he formally opened the former Crystal Tower building, renamed the Ponce de Leon, as a nod to its past as a hotel of the same name. The restored art deco building includes 90 apartments, 87 of which were leased as of mid-September.
Nearby, Khan is tackling an even bigger challenge with a former YMCA. The building has neither the ornate majesty of the Ponce de Leon nor the fashionable, exposed brick of warehouse-based projects, but instead was built with block concrete. It includes small, upper-floor dorm rooms and outdated athletic facilities that must be structurally preserved to obtain historic tax credits that make the financing work.
Khan hopes to take advantage of those potential challenges by making them a selling point. He’s turning the building into 56 apartments and 15,000 square feet of workout amenities, naming the development “the Locker Room” for its old lockers, which will be incorporated into living spaces, and marketing it all to an athletic demographic.
“Being creative in how we lay it out and being creative in keeping amenities gave the project an identity it may not have had,” Khan says.
That creativity, playing out at the individual, company and governmental levels, may well help the Roanoke and New River valleys continue to forge a regional economy that continues to reinvent itself, too.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/TysonsMetro0856.pngPhotos by Mark Rhodes
Lots of office vacancy
http://www.virginiabusiness.com/news/article/lots-of-office-vacancy#When:10:00:00ZTim Steffan doesn’t mind boasting when talking about Tysons Tower. His employer, California-based Macerich, opened the 22-story building this June at the Tysons Corner Metro Station — one of four new stations at Tysons along the expanded Metrorail Silver Line.
The office tower rises above the Capital Beltway, offering panoramic views of Northern Virginia. “It’s got a host of amenities that are really unparalleled and unmatched by anything in the region,” says Steffan, a senior vice president.
Plus, it has something many NoVa office buildings lack these days: tenants.
Intelsat, a satellite service provider, leased nine floors for its new North American headquarters, in a relocation from Washington, D.C. Deloitte Consulting already is in the building, too. “We’re approaching 80 percent [leased], and we’ll be well over that by year’s end,” Steffan says.
The 552,000-square-foot building is part of 1.4 million square feet of development that Macerich has planned for Tysons Corner. The other projects include a 300-room Hyatt Regency Hotel and a 430-unit residential tower, which are scheduled to open in the first quarter of 2015.
Much of the Northern Virginia market can only look on in envy. The region’s office market hasn’t recovered from the beating it has taken over the past few years from cuts in federal spending, Base Realignment and Closure Commission reductions and budget sequestration, not to mention the recession.
As private-sector contractors and government cut their staff and their office footprints, vacancy rates soared.
Rosslyn’s rate hovers around 30 percent, according to recent data from the commercial real estate firm Cassidy Turley. Crystal City was close to 27 percent in the second quarter. The Interstate 395 corridor from Springfield to the Pentagon has it worst, with more than a third of its office space vacant.
At least in the near term, things don’t look bright. Net absorption for the region is negative and will likely stay that way the rest of the year, says CJ Hardy, a research analyst with Cassidy Turley. Vacancy for the Northern Virginia region was 18.1 percent mid-year and is getting worse. “It probably won’t hit 19 percent, but it will tick up a little,” he says. “Demand for office space has been pretty soft.”
Some submarkets are doing better. Reston Town Center — where a fifth new metro station opened — is the county’s second largest business center. It has 19.8 million square feet of office space, just behind Tysons, which has 26.3 million square feet. Reston’s vacancy rate is 1 percent, says Hardy. In Tysons at mid-year the rate was nearly 17 percent.
With the Silver Line now open, big projects in Tysons like the Macerich building “are benefiting from a lot of that flight toward quality,” Hardy says.
According to the Tysons Partnership, a coalition of Tysons developers, businesses and residents, three new buildings have been completed this year.
Another nine projects are under construction or will soon break ground. Altogether, by late 2018, 3 million square feet of residential, 2.3 million square feet of office and 85,000 square feet of retail are scheduled to open near Tyson’s four Silver Line metro stations.
The downside, though, is that the new space just makes the market tougher for much of the rest of the region, which is dominated by older office buildings.
Macerich’s Steffan makes this pitch to prospective tenants: Employees will love it here so much that they’ll work longer hours. The new tower and apartment building connect to the Silver Line and Tysons Corner Center, a Macerich-owned shopping center with more than 300 dining and shopping establishments. There are more high-end restaurants opening and other amenities, such as public gathering places, that Steffan says will encourage people to hang out.
The Towers project includes a 1.5-acre grassy, elevated area called The Plaza, which has a kids’ play space, free concerts, movies, and free WiFi. A farmers market is planned next year. “This is a place where people want to work, so I can capture their time maybe 10 hours a day,” he says.
Places like Crystal City and the I-395 corridor are loaded with older office space and find it difficult to compete with the newer projects. Instead, they’re trying to attract smaller tenants with sweeter leasing terms.
Even the celebrated Rosslyn-to-Ballston corridor along the Orange Line of Metrorail is losing out to what used to be considered weaker locations. For example, in July the Department of Labor signed a lease for 75,000 square feet in a Vornado Realty Trust building in Crystal City, leaving behind its 91,000-square-foot space in Rosslyn.
Multifamily projects continue to lead the charge, especially along transit routes and especially in Tysons. The Ascent at Spring Hill Station, a 404-unit luxury apartment building by Greystar, opened in March. It’s no surprise that the new rail stops in Tysons are seeing the most construction of multifamily units. Getting people to live in Tysons is key to the county’s plan.
Paul Norman, executive director of Cushman & Wakefield’s multifamily team, says new development in Tysons will bring in about 5,000 apartments in the next year. “That’s a big number, but not when you consider how underserved Tysons has been” in residential space, he says.
Before the current building boom began, Tysons had 11 jobs for every one resident, Norman says. The county’s goal is to get that ratio down to four to one. That would help transform Tysons from an auto-dependent office park to a more urban transit-oriented district where people live and work. Grocery stores and restaurants and other retail offerings are popping up in Tysons, just as they did in the Rosslyn to Ballston corridor more than 30 years ago after its Metrorail stations opened.
“Now that Metro is open [in Tysons] it’s not inconceivable that a lot of people who previously were going to the Rosslyn-to-Ballston corridor will be coming to Tysons,” says Norman. With Tysons adding several thousand residential units in the near future, that much-heralded transit corridor will face some competition, especially if employers migrate toward newer office space. “Not everybody can afford to live and work in Arlington,” Norman says.
The market is still sorting itself out, often with one location taking tenants from another without much net gain for the market. For example, despite the dismal market conditions for office space, JBG Cos. is building a 31-story tower atop the Rosslyn Metro Station in Arlington that will open in 2018. The project will have 525,000 square feet of office space, a 377-unit residential tower, a public observation deck, public plaza and 45,000 square feet of ground-level retail. CEB, a member-based advisory company based in Arlington, has signed on to take 15 stories in the new building and will consolidate its other locations in Arlington into the new building.
According to Cassidy Turley’s Hardy, the trends that have depressed the office market aren’t going away. But there are positive signs in job growth, especially in the professional and business services category. It added 1,216 jobs in the second quarter in Northern Virginia, according to Cassidy Turley data.
That’s not enough to offset the 1,381 federal jobs lost through the first half of 2014, yet the growth trend is a good sign, says Hardy. The headwinds of federal agencies and federal contractors taking less space are still in place. Consequently, landlords are adjusting to the new market because they have to, he says. “So maybe we recover a little bit more, and then we see more expansion.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/DSC_2762.pngDavid Tysinger of the Virginia Employment Commission. Photo by Rick DeBerry
Looking for a job?
http://www.virginiabusiness.com/news/article/looking-for-a-job#When:10:00:00ZDavid Tysinger of the Virginia Employment Commission runs the state’s Labor Market Information site, http://www.virginialmi.com He sa.ys it is a tool for job seekers, students, educators, analysts and government managers.
The site includes statistics on wages and job openings broken down by county or city and by industry. Searches can be done that compare jurisdictions.
For example, as of Sept. 20, Richmond had 12,422 advertised job openings with a mean wage of $45,337. Its highest average wage among the top 10 job openings was $102,666 (computer programmer), while sales and related workers could anticipate making $15,080.
Rockbridge County, in contrast, had 133 jobs at a mean wage of $29,484. Its highest wage was $119,565.79 (manager), while a nursing assistant could expect to earn $24,383.21.
The useful statistics don’t stop there.
In Richmond, only 7.61 percent of the openings had no minimum education requirement, while in Rockbridge County that figure was 40 percent.
Only 5.46 percent of Richmond employers would hire someone with less than a year’s experience, while lack of experience was not a factor in 19.35 percent of openings in Rockbridge County.
Site users also can compare industries within the same field. They can find educational and training programs and look for jobs posted by individual employers.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/Taweel2757.pngDr. Fred Tawee of Internal Medicine Associates, the first practice to join Privia Medical Group. Photo by Mark Rhodes
http://www.virginiabusiness.com/news/article/supporting-independence#When:10:00:00ZTwo years ago, Dr. Fred Taweel at Internal Medicine Associates of Reston concluded that the changing nature of the health-care business was going to make it almost impossible for him and his partners to continue running their practice on their own. Nonetheless, they weren’t keen on the solution that has become common with many doctors — selling to a hospital-affiliated group.
“We were adamantly opposed to that because we felt it would usurp our independence and require us to meet patient quotas and change the way we wanted to take care of our patients,” Taweel says.
They discovered a more workable option with Privia Health. The Arlington-based physician practice management and population health technology firm offers physicians the benefits of being part of a large organization without eliminating their autonomy.
“Our physicians get to decide for themselves how busy they want to be, how best to structure their day and their practice,” explains Jeff Butler, Privia’s CEO. He says that, while physicians who sell to hospital groups typically become their employees, Privia’s physicians act as partners and have an ownership stake in the firm. “We’re here to give them full support and help them be more successful, not to dictate how to operate their office or how to practice medicine.”
Idea born in South Africa
The model was born out of work Butler did with a previous company in rural South Africa while helping doctors treat HIV/AIDS patients. He and his colleagues organized the doctors into a network and developed technology that could better monitor patients — determining, for example, who had missed medications and needed home-based support — and evaluate clinical outcomes. As a result, medication adherence levels and patient improvement outcomes there were as good or better than some of the best programs in the U.S.
“We attributed those results to the fact that we were driving all of these interventions through physicians that the patients trusted, and we felt that by engaging patients through the doctor, we were able to get much higher levels of patient engagement and compliance than you typically see,” Butler says.
With Privia, Butler and Dave Rothenberg, who serves as the company’s president, are replicating that model in the U.S. with the aim of giving physicians the business and technological foundation they need so that they can spend more time caring for patients.
The model is resonating across the health-care industry. Internal Medicine Associates became the first practice to join the Privia Medical Group in April 2013. Since then, another 220 physicians from 80 offices in the Washington, D.C., metropolitan region have followed, making Privia one of the fastest-growing physician groups in the country.
And it’s attracted the attention of investors. In September, Brighton Health Group, a Goldman Sachs affiliate and holding company, merged with Privia Health in a $400 million investment deal that will expand the Privia network to cities outside of the D.C. area.
“We’re able to bring the operating assets and technology platform that Privia has developed together with some of the relationships that we’ve developed in other markets across the country,” says Bill Sullivan, the CEO of Brighton Health. He expects to start building Privia physician networks in Orlando, Atlanta, New York and New Jersey within the next few months.
Emphasis on outcomes
Privia’s goal isn’t to buy up practices in order to apply volume and economies of scale. Instead, as the insurance industry moves toward a reimbursement model rewarding doctors for improving patient outcomes (rather than paying fees for services such as office visits and procedures), Privia sees an opportunity to free up physicians to better focus on patient care.
“For doctors to be successful in participating in those kinds of new reimbursements, they have to have a lot of sophistication around them,” Butler explains. “It takes a lot of technology and a lot of personnel, and small and medium-size practices just don’t have those resources.”
Privia’s model calls for organizing doctors into a network built for population health, with a mix of primary-care providers and specialists. Underpinning that network is technology, data analysis, patient monitoring activities and a support team of home-based care teams, health coaches, treatment adherence counselors, fitness specialists and nutritionists.
Taweel says that Privia’s technology platform and support staff continually keep him informed about his patients. At the click of a button, for example, he knows which patients haven’t had a mammogram in the past two years or which diabetic patients aren’t well controlled on their hemoglobin numbers. “If I have a new patient diagnosed with diabetes, that will trigger a whole cascade of care points across the network,” he explains. “So, the patient will immediately get a call from a Privia wellness nurse to provide fitness and nutrition care or, if their numbers are off or they don’t pick up their prescription, we’ll know that and we can intervene.”
Privia also employs engineers, software developers, contract negotiators, billing staff and practice management specialists to help take care of business and administrative functions. A second business, Privia Quality Network, is an accountable-care organization and contracting vehicle that helps physicians negotiate contracts with self-insured payers, health plans and Medicare.
“We’re really about giving physicians a sort of sophisticated platform that they can come dock into and then get immediate access to all kinds of resources and enable them to focus their day on taking great care of patients and be successful doing that,” says Butler.
He says many Privia practices see a 30 percent-plus increase in overall revenues within 90 days of going live with the firm, and Privia doctors also realize a 30 percent savings in their medical malpractice premiums. “We overinvest in training, and we overinvest in infrastructure so our physicians see a very fast impact,” he explains.
In exchange for all of this, Privia takes a percentage of the physician’s collections. “Essentially, our incentives align with the physicians’ incentives,” Sullivan says. “The more successful they are, the more successful we are.”
Taweel considers the model an opportunity for physicians who want to remain independent but still have have time to focus on their patients and get rewarded for their work. “I get to decide whether I want to see 10 patients or 30 patients a day. My partners and I get to decide which employees we hire, how many vacation days we take and when and how to divvy up the income of the practice,” he explains. “So we still have a great deal of control, but we still get the benefits of being with a larger affiliated group that has the capital, infrastructure and resources to help us provide better patient care.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/Burnette0997.pngW. Scott Burnette, CEO of VCU Community Memorial Hospital in South Hill Photo by Mark Rhodes
http://www.virginiabusiness.com/news/article/consolidated-care#When:10:00:00ZWhen the economy started sinking six years ago, it almost took South Hill’s Community Memorial Healthcenter down with it.
For a long time, jobs have been scarce in this region along the North Carolina line, and few people served by the hospital had private insurance. When recession pressures started closing local factories, the money flow dried up. The hospital, which opened in 1954, felt it. “That’s when it really started to change,” says W. Scott Burnette, the hospital’s CEO. “We could see that we had more needs than we could meet.”
Burnette says the hospital’s board started looking for a partner, which it found after a two-year search. In July, it joined the Richmond-based Virginia Commonwealth University Health System, which pledged to contribute at least $75 million toward improving health-care services and technology, including plans for construction of a new hospital. “It’s just getting harder for individual, especially rural, hospitals to survive on their own,” says Burnette, whose facility is now called VCU Community Memorial Hospital.
There has been a string of similar moves in Virginia in recent years, and there’s good reason to think the consolidation will continue. Faced with rising costs and lower reimbursements, health-care groups are jockeying for a financial advantage by spreading their costs and expanding their footprint.
In 2010 Norfolk-based Sentara Healthcare took over hospitals in Charlottesville, Harrisonburg and Prince William County. Last year it acquired Halifax Regional Health System in South Boston. So far this year hospitals in Culpeper, Bedford and on the Northern Neck have become affiliated with larger hospital groups, along with the merger of Community Memorial with VCU Health System.
Mergers and acquisitions are what hospitals must do, says Sheila Gray, vice president of communications and public relations for the Richmond-based Virginia Hospital and Healthcare Association. “Consolidation offers hospitals the ability to reduce overhead and increase purchase power while at the same time providing additional resources to address operating, capital and staff needs,” she says. “Consolidations should not be judged as either good or bad, they are simply necessary given the current climate in health care.”
The General Assembly’s decision not to expand Medicaid under the Affordable Care Act is a factor. But the trend toward consolidation didn’t start with the ACA, says Ken Krakaur, a senior vice president with Sentara. “This was going on in 2008 and 2009, long before we knew what the ACA was going to look like,” he says.
Krakaur was involved in all of Sentara’s recent acquisitions. He says they weren’t hostile takeovers; they were led by the boards of smaller community hospitals asking larger health-care systems what they could offer. The recession was a big reason for these moves, he says. “One thing that most hospitals witnessed was the great increase in bad debt. There were a lot of jobs that were lost, so people didn’t have insurance.”
Independent hospitals won’t go out of business, Krakaur says, “but most that have not sought an affiliation yet will probably be doing so … We won’t find too many single, tax-exempt hospitals in the future. There are very few now.” In fact, he anticipates the next phase will involve smaller health systems joining larger ones. For Virginia, that would ultimately mean four or five major nonprofit players, as well as the for-profit entities such as Tennessee-based HCA.
Not for sale
By the metrics that others in the industry are describing, Mary Washington Healthcare in the Fredericksburg region is a good candidate for consolidation. In September this two-hospital nonprofit system laid off 66 people as part of a $30 million spending cut.
In a letter to employees, MWHC CEO and President Fred Rankin blamed the layoffs on “significant cuts to what we are paid to care for patients.” MWH lost $20 million in 2012 and $8 million last year.
While facing these financial issues, the health-care group is in the midst of a significant leadership change. Rankin is retiring and Dr. Michael McDermott, a local radiologist, will take over in January.
Eric Fletcher, senior vice president of strategy, marketing and business development for MWHC, acknowledges that the financial pressures that forced staffing cuts still exist, but there are still ways to improve the system’s financial health. Federal programs, primarily Medicare, have been reducing their payments to health-care providers nationwide, but there are ways to increase those payments “if you can maintain top-level quality of care,” Fletcher says. “Especially on the clinical quality indicators, we are performing extremely well, among the best in the country.”
The MWHC board’s determination to stay independent reflects the concern, especially among not-for-profit hospitals, that their mission of serving the health-care needs of the community would be threatened if local control is lost. “Yes, they need to be able to pay the bills, but that’s not why they exist,” Fletcher says. A larger system might be inclined to shift some services to another location to reduce its overhead. “There’s a fear that if that if you don’t have that local control, you’ll be less responsive to community needs.”
Others, though, see advantages in joining bigger systems. For one thing, the knowledge base is better, they say. “For example, if I’m in my own hospital, I’ve got a team to help determine best practices,” says Megan Perry, Sentara’s vice president for mergers and acquisitions. “But if I’m part of a team of 12 hospitals, everyone in the system gets the advantage of that knowledge. We’re able to expedite best practices faster. These smaller hospitals would have gotten there, but it’s faster this way.”
The economies of scale apply, too, in keeping up with technology. For example, tomosynthesis is the new 3D mammography. “It’s a game-changer in terms of early detection and reducing the number of unnecessary callbacks,” says Dale Gauding, a Sentara communications adviser. Sentara has deployed nine machines over three months and will add two more, bringing it into more communities. These units are now in Norfolk, Newport News, Suffolk, Virginia Beach and Williamsburg. “Our desire is to have the best quality and most effective technology, and our economies allow us to do that on the rollout.”
Perry adds that there’s a lot of support that goes into a rollout, too, beyond the equipment purchase. Technicians have to be trained on how to take the images, and radiologists have to learn how to read them. “All of that goes into the cost of ramping up a system; we can do that.”
Burnette tends to agree. “Prior to the affiliation, I made the decisions here,” he says. “But now there are certain decisions I have to send out. So it’s different, but from the community standpoint, there is no downside. They have the assurance that the hospital is going to be here, and it is going to be more modern and efficient.”
The benefits can flow both ways. Sentara learned from the patient-satisfaction success that Martha Jefferson Hospital in Charlottesville had achieved, Perry says. And a bigger health-care group has more to offer to employees and can retain its brain power. “Young professionals coming through have more options,” she says.
Expanding their reach
Burnette says many of the corporate suitors who wanted his hospital, such as Duke Lifepoint, saw advantages in expanding their reach. Otherwise, why would they want a struggling hospital? “Some of the systems we looked at have their own health insurance products … if you have a group coverage to offer, when you’re negotiating with [larger insurance firms] if you have a larger service area that you cover, it makes it easier to negotiate,” he says.
Doug Gray, executive director of the Virginia Association of Health Plans, agrees. In general, larger entities appear to be a trend that continues in health care. “Many argue that larger entities are the approach necessary to treat more patients at a lower cost under the ACA,” he says.
Despite the desire for local control, financial pressures likely will win out. Today’s technology, including electronic medical records, is expensive, Perry says. “The American public has said we can’t keep paying more, but we want the best and latest technology, and we wanted to be connected and we want to be affordable. That’s why you see hospitals coming together, either in mergers or partnerships such as purchasing groups.”
Burnette says his hospital in South Hill still has enough local control to satisfy the community. If the state approves its expansion plans, a new hospital could break ground next summer and open in three years. And, if all goes as planned, the new facility will include a new 70-bed hospital and a 120-bed nursing home, he says.
VCU Health System is also seeking permission for a cardiac catheter unit and OB/GYN care, he says. Even the process of planning those services lets the hospital start recruiting cardiologists and other specialists. “So it’s an attractive package,” Burnette says.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/BANK_Essex.png“Millennials are people who just don’t like the old traditional structure of a bank,” says Rex Smith. Photo by Rick DeBerry
http://www.virginiabusiness.com/news/article/next-generation-banking#When:10:00:00ZWalk into Essex Bank’s new Deep Run branch and headquarters outside Richmond, and you’ll be immediately struck by the lack of institutional features.
There are no long teller lines and no loan officers sitting at desks. The atmosphere is bright and open, punctuated by semicircular “pods” outfitted with tablet computers and automated cash machines.
A cross-trained “financial services representative” wanders about and greets you on arrival, ready and able to assist with any banking functions, whether you need to open an account, cash a check, research an investment product, figure out how to use the bank’s mobile deposit service on your phone or apply for a loan.
The branch is designed to be high-touch, high-tech and one-stop, and it is only the latest tactic in Essex Bank’s larger strategy to attract the attention — and business — of millennials, the burgeoning generation of young adults who by 2025 are expected to make up 75 percent of the workforce, according to the Brookings Institution.
Like other banks, Essex already offers online services such as mobile banking and mobile deposit that customers can use at any time and from anywhere over their smartphones, and it heavily promotes the bank’s services through social media mainstays like Facebook and Twitter. It’s also exploring the development of new service and communication channels, including 24/7 help desks and call centers that offer help via phone, text messaging, email and live chat. In addition, the bank provides “smart” ATM machines that offer greater flexibility and more services, including face-to-face videoconferencing with a “virtual” representative.
“Millennials are people who just don’t like the old traditional structure of a bank,” says Rex Smith, CEO of Essex Bank. He notes its Annapolis branch, also a “techbar” like Deep Run, took in more than $18 million in deposits in less than five months, a sum that usually takes more than a year to accumulate in new branches. “And so we’re trying to make banking a more positive experience for them, something they feel comfortable with and that meets their needs and expectations.”
Young and old
For banks, the effort to attract members of the millennial generation — typically defined as the more than 80 million U.S. citizens born between the early 1980s and late 1990s — is drastically changing the way they do business. It requires ongoing investments in modernization, of course, but it’s not a challenge that can be addressed by simply checking the technology box.
That’s because, unlike baby boomers and customers from other generations, millennials don’t simply find banking and its conservative conventions to be boring.
According to a survey by Scratch, an in-house unit of Viacom, the vast majority of millennials believe that banks are irrelevant in the 21st century. What’s more, nearly half are counting on tech startups to overhaul the way banks work, and 73 percent say they would rather bank with Apple, Google, Amazon or PayPal, if they offered financial services.
“Millennials are actually quite leery of banks and are really cautious about their interactions with them,” admits Alec Hughes, millennial segment manager for Wells Fargo’s Enterprise Marketing Group. “And a lot of that is because they came of age and were entering the job market at the peak of the Great Recession. Fundamentally, they’re not really sure that banks are on their side.”
For this reason, banks that want to earn the trust of millennials have to meet them where they are — and take the long view, says Bruce Whitehurst, president and CEO of the Virginia Bankers Association.
The first step is providing all the technology-enabled channels that millennials expect. These include online bill pay, the ability to bank and make deposits using smartphones and tablets, and access to smart ATMs that, among other things, “remember” how much money a customer withdraws each week (and in what denominations) and offers a shortcut to that transaction on the first screen.
“Millennials are not the only bank customers that want this stuff, but they are digital natives who are totally comfortable with technology because they’ve grown up with it, and so they have an absolute expectation that it should be available to them,” Whitehurst explains. “They also want a lot more of it than other generations. They want it to be available for everything.”
Five years ago, the 162-year-old Burke & Herbert Bank, Virginia’s oldest continuously operated bank, came face to face with this reality. “We did some research within the community and found that younger people had a perception of us as ‘a bank for my parents and grandparents, but not for me,’ mainly because of all the personal service, the in-branch banking, that has always been the bank’s strength,” recalls Terry Cole, senior vice president and director of products, marketing and sales for the Alexandria-based bank.
That finding explained why the bank’s rate of new account openings was historically light. “Our thought at that point was: ‘Where are we going to find the bank’s customer base of the future?’” she states. “It certainly heightened our sense of urgency.”
Burke & Herbert quickly created a strategy to modernize the bank’s products, services and delivery systems — revamping its website, adding the latest in online bill pay, mobile banking and deposit capabilities, and upgrading its ATM network. But it also developed new products that feed millennials’ need for convenience and value, such as a creating a new checking account with unlimited, fee-free ATM use, with the bank picking up any surcharges levied by other banks. The bank also upped its service game. New account holders, for example, always get a personal call from the branch manager.
“That was never done exclusively for the millennials, but we feel like we are definitely getting their attention,” says Cole, pointing to the fact that since 2010, the bank’s personal checking account portfolio nearly doubled to almost 44,000, with the majority of those new account holders skewing to a much younger audience.
All service, all the time
As much as millennials love their technology, they are better characterized by their need for “omni-channel” service, according to Hughes. “They are used to and expect to engage with a brand through multiple channels,” he says, noting that besides online and mobile, they also want to be able to reach someone via text, chat, on the phone and in-person.
“They want those experiences to be seamless across all those channels and they want the process and the experience to be consistent and they don’t want to have to restate who they are and what their issue is,” Hughes explains. “We’re doing a lot of work right now to tie all of those channels together, recognizing that millennials really do want to engage with a financial services company when and where they want it and how they want it.”
In fact, one of the biggest misconceptions about millennials is the belief that they will always choose technology to the exclusion of traditional interaction, says Gary Shook, CEO of Middleburg Bank. They will come into the bank for assistance and advice — if they’ve got a good enough reason.
“What we find is that millennials are going to spend a lot of time upfront doing research online to learn about your bank and your products, and they’ll use online and mobile technology to do the transaction-type stuff, like paying bills or transferring money or even opening a checking account, but when they actually need to take care of some major type of business like a mortgage or loan or investment, they still prefer to come in,” he says. “And when they do come in, you have to have top people because they want to talk to someone who knows what they’re talking about and can answer their very detailed, sophisticated questions.”
In fact, Wells Fargo research has found that millennials seek out face-to-face assistance at a greater frequency than older generations, according to Hughes. In recognition of that fact, the bank is now offering 24/7 access to call center representatives. It also recently introduced an online automated scheduler called “My Appointment” so millennials can set up a face-to-face meeting at the time and branch of their choice.
Changing role of branches
A key challenge for banks, says Cole, is “figuring out the role of the branch and how best to meet the broader financial needs of customers when we don’t see them as often.”
Like Essex Bank, many financial institutions are redesigning branches to make them more inviting to millennials. For example, McLean-based Capital One Financial Corp. offers Capital One 360 “cafés” where millennials can enjoy WiFi and a cup of coffee while chatting with bank employees, a concept that emanated from its acquisition of online bank ING Direct USA in 2012.
Wells Fargo recently opened a few new “stores,” as its branches are now known, that are one-third of the size of a traditional bank office and are completely paperless. They provide customers with online banking stations, WiFi hotspots and 24/7 access to “smart” ATMs.
Whitehurst notes that banks need to always be prepared for the fact that, in an electronic age, the rarity of personal interaction only serves to make those encounters that much more valuable. For this reason, he says, banks need to invest just as much in personnel and customer service training as they do in technology infrastructure.
“Just like other businesses that are trying to reach millennials, banks have really got to figure out how to take full advantage of every face-to-face opportunity they have so when the millennials do come in to ask questions or open an account or seek advice, they make it a really positive experience,” Whitehurst states. “And then even if you don’t see that customer for another six months, you’re staying in touch with them through electronic means, and they know that they can come see you or call you or email you, and you’re going to be there to help in whatever way they need.”
Banks also are trying to make sure that when millennials show up in person, they are not inconvenienced by long waits or the need to discuss their issue with different specialists.
Some banks are doing away with traditional structured roles, like tellers and loan officers, and cross-training staff to handle just about any transaction or question. “It costs a little more in the beginning because the quality of your people has to be higher, but you can staff the branch with fewer people because they’re all qualified to do just about anything,” says Smith.
Finally, banks also are changing the way they promote themselves, and new media represent a key tactic because they enable two-way communication. “The trick is to get in front of millennials, engage them in conversation, answer their questions and subtly but constantly remind them that we have different products and services that can meet their needs,” says Cole. “So we’re using all kinds of online channels and social media, like Facebook and Twitter, to really keep the bank’s name in the conversation and help assure them that we want to be where our customers are.”
It’s also critical to get the attention and trust of millennials when their financial needs are in their infancy, says Shook, noting that Middleburg Bank makes it a point to locate branches, support staff and fee-free or low-cost ATMs near colleges and universities. It also is active during orientation week when students are opening accounts and have questions about banking.
“If you can grab millennials early, attend to their needs and then gradually introduce them to more of your services as they begin to accumulate wealth, and you make it a point to have the right mix of technology and in-person service so you’re always accessible and available to meet their needs, then we think they’re very likely to end up being loyal, long-term customers,” he says. “Millennials may have some unique views and ways, but I think if you can do those things for them, a community bank or a locally based financial services company will be able to continue to differentiate itself and earn and keep their business.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/CPA_opening.pngVirginia Business Publisher Bernie Niemeier introduces the roundtable panel. Photo by Rick DeBerry
Looking behind the numbers
http://www.virginiabusiness.com/news/article/looking-behind-the-numbers#When:10:00:00ZTo better understand the top issues highlighted in the survey, Virginia Business and the Virginia Society of Certified Public Accountants held a roundtable discussion in September at VSCPA’s Richmond headquarters. The panelists were Charles Equi, owner and managing partner of Equi & Co. in Roanoke; Greg Lawson, partner at Dixon Hughes Goodman in Newport News; Ryan L. Losi, executive vice president of PIASCIK in Glen Allen; and Colette Wilson, chair of the VSCPA board of directors and former partner at Cotton & Co. in Alexandria. An edited transcript of the discussion follows.
Virginia Business: Looking at the results for the past two years, why does the survey continue to show that many CPAs believe a full recovery is still several years away?
Equi: Within my practice, I’ve had a handful of clients who have had the best years they’ve ever had the last three years, just astounding years. But the majority of them are just barely getting over the hump. They’re just moving along. I think a lot of the practices from my sector are seeing that … We haven’t had that breakthrough, that innovation that’s going to move the whole country forward. And usually when we came out of these economic downturns, we saw something that moved us forward …
VB: Is sequestration taking a toll on companies in the state?
Wilson: Absolutely, I think it has. In terms of this question [which was, “Has the region done enough to lessen its dependence on federal spending?’’] I think for the respondents to say Virginia hasn’t lessened its dependence on federal spending — it’s kind of hard to lessen your dependence on that spending when the spending doesn’t stop. The federal government continuously … spends. And with our proximity to the nation’s capital, I just think it’s obvious, and it’s hard to lessen that dependence
VB: Should the Affordable Care Act be reformed or repealed?
Losi: Well, if I were running for office, I’d be really stuck. It’s 50/50 across the commonwealth. Certain areas it’s a little bit more skewed … I am a business owner, small-business owner, so I understand the burdens that businesses have, a lot of compliances.
Red tape is what you’ll hear. A lot of paperwork and red tape and things that require administrative resources are put upon us because of regulation. And so, for instance, why are we withholding-tax agents that are unpaid when it’s really not our responsibility? Well, these are things that add on to it. So, the business community gets, a lot of times, forced to be the responsible agent for these plans, whether we like it or not. From a business standpoint, I don’t like to see more administrative burden. It distracts us from our core businesses.
But when you look at it from a global standpoint, we have an aging population. We’re one of the few developed countries that doesn’t have a national policy regarding health care. I can see that argument right there.
Personally, my opinion is that ... a business shouldn’t be responsible for the health care of its employees. It should be responsible for …paying them a fair compensation, and then they can choose.
Equi: [The ACA] is very cumbersome for us — any law that’s passed, any tax law the business community has to deal with. But what readily happens is that the CPAs at the end have to deal with it. We’re the one who has to finalize it on the tax return, collect the money and submit it back. So it always comes back on us no matter what ball it is. Health care, you name what entry, it’s going to come back on us. We pretty much have to enforce the law. So there’s a theory, go ahead and just implement it because it’s just causing so many problems right now for us … and it’s a moving target. Every time I think we’ve got it, they change it or delay it.
I don’t know if there is a right answer for that, but it is going to be very costly. Whether my personal opinion matters or not, whether you want it or not, I think it’s coming. And whether different parts of it will be changed, I think it will be. But from a CPA standpoint, just trying to handle these, it needs to be moved on, implemented so we can tell clients what to do instead of trying to guess all the time.
Wilson: The answer to the question for me is reform. I think, like Ryan said, it has gone so far: It’s coming, it’s here, reform is needed. I think to … repeal it would … make things completely worse. But it does put the onus on the CPAs, and that is something they should be looking to us for. We have to deal with the businesses, or we have to deal with the individuals, and we’re the ones who are going to put forward what we feel needs to be right, what we feel needs to be consistent in how to handle these issues. But, I think, repealing it would just cause more harm than it already has done thus far.
VB: [Virginia has dropped in CNBC’s “Top States for Business” from No. 3 in 2012, to No.5 in 2013 and to No. 8 this year. What, in your opinion, is the reason for this continued drop?]
Equi: Taken from a sports [comparison,] if I go from No. 3 to No. 8, I’m still happy, but ... over the past years, we’ve had issues within the political realm — trying to solve the budgets, trying to meet the funding and things of that nature. I think that has had a big part to play in it.
Lawson: Some of the other states in our surrounding markets have discovered the advantage of being aggressive in attracting business locations. South Carolina has been very aggressive in that area with large incentives and has been successful in getting some major manufacturing facilities to locate there that were also looking at Virginia as a possibility. So, I think that’s one thing — just the field of competition has expanded.
I think secondly, a broader comment, Virginia once was known [for its] genteel, collegial legislature that could get things done, and we enjoyed that benefit for decades. The last decade or two, it has become much more partisan. And I think that has adversely impacted on how businesses in surrounding states see us from a competitive standpoint …
VB: Infrastructure was identified as the most pressing issue facing Virginia. … What do you think are the critical infrastructure issues we have?
Losi: My take is … that it’s our roads. Everyone has experienced or read the news headlines where we’re experiencing record exports … Our roads were not built to handle the container volume that they’re currently handling … And cars don’t really beat up interstates and highways; trucks do. And so that has been a big challenge. …
Lawson: Yes, I think Ryan is right on point on that. And me, being from the Southeast, [it’s also] transportation … The I-64 corridor from Hampton up through Richmond is critical, as well as solving the tunnel issues getting from Hampton into Norfolk and Virginia Beach. Those are critical factors. And they’re not only critical for our commercial enterprises and our ports … They’re also critical to the military.
Sequestration is the law of the land right now. We’re going to have another [round of] BRAC [the Base Realignment and Closure process]. It will probably be in 2017. And I can tell you there are a concentration of military bases in the Southeast. They’re looking very closely at that issue. And if we can make some progress in solving the 64 corridor between Hampton and Richmond, get some shovels in the ground on that project, having a plan as it relates to the Hampton Roads Bridge Tunnel, then that is going to be critical in any considerations from the BRAC perspective. …
[Naval Station Norfolk] has the capacity and the technology, including nuclear engineers to house the entire Atlantic Fleet. Naval Weapons Station Yorktown has the infrastructure capacity to merge with other two naval weapons stations. Those issues would be tremendous … save billions of dollars in the national defense budget. SEALs, special [operations], are an increasingly important element in our national defense in addressing critical problems. We have the facilities and the commands in place to consolidate those activities.
VB: Our tax climate was identified as one of the top issues that needs to be addressed at next year’s General Assembly session … What are the specific tax issues that businesses are going to face next year?
Lawson: From a state legislature level, Virginia still enjoys a relatively low individual tax rate and a relatively low corporate tax rate. … Those tax rates have remained unchanged, I think, probably for a couple of decades. So, I think that’s positive. That brings some certainty. It’s still a very friendly state from a tax perspective for businesses to operate in and relocate to.
There are some issues around the margins as it relates to the level of funding we’re going to get for business incentives, tax credit programs and some of those things that have to be reauthorized every year, so we watch those very closely.
Losi: I would just add in that certainly the VSCPA has done a great job of helping tax policies stay simple compared with other states. We try to conform as much as possible to make it simple from an individual’s compliance standpoint as well as a corporate compliance standpoint. And also having, for the most part, a fixed rate. There is a little bit of graduation on the individual side, graduated rates, but pretty much a fixed rate so you can plan ... I think those are things that boded well for Virginia. I think the VSCPA has been very active with the General Assembly sessions explaining, reinforcing and ensuring that stays pretty much solid.
Wilson: Like Ryan said, when we go to the General Assembly, it almost seems like no matter what the issue is related to taxes, we’re always talking about conformity because this is the burden on the taxpayer, the burden on the businesses, and just understanding what Virginia needs to do as compared to the federal government. Passing [a bill] late and not having it conforming on so many different issues is just a burden in itself no matter what the specific issue is …
VB: Access to credit continues to be a problem, the survey shows. Are loan requirements too strict?
Equi: I’ve seen some relaxation there. If you move it from a business standpoint to an individual standpoint, it’s still pretty difficult to get a home mortgage loan. Difficult is not the word. It’s a challenge to go through the process is what I want to say. … From a business standpoint … I have seen a little bit of loosening up. A line of credit is a little bit easier to get. The real estate is still a little bit dicey when you’re going in. It depends on where the property is, what kind of property it is, whether they’re going to give it to you. But it depends on the bank, and again, it depends on what area you’re talking about.
Losi: When a majority of loans are being dictated by [the Federal Housing Administration], that’s what’s going to cause it. When private lenders will not come in the game yet to lend, you’re going to have these struggles because you have one agency dictating loan terms. So, everyone has to conform to these really high documentation levels. And they don’t want to be sued like the court case that just got announced … for misrepresenting the loan portfolio that they’re packaging and selling [In September, Virginia filed a lawsuit seeking $1.15 billion in damages against 13 banks accused of misleading the Virginia Retirement System. The suit alleges the banks misrepresented the residential mortgage-backed securities it sold to VRS, which was forced to sell most of those securities at a loss of $383 million.]
VB: [What top issues need to be addressed in U.S. Congress?]
Losi: My thoughts are, we need a deal maker in the administration who will go to Congress and compromise … make a deal, and cut deals that help the entire country. We’ve had 14 years of close or either absolute control in … Congress and the Executive Branch … And there has been ... two very opposite polar ends. If you had someone that could come in and just make deals and not worry about the next cycle, getting elected, we’d probably have some compromise.
I always think of it from a business [perspective] — if both parties are unhappy it was probably a good deal. If one is happy and the other one is not, then someone didn’t get a great deal and vice versa. That’s what I think we’re missing right now.
Everyone knows the issues this country needs to deal with. The debt one is huge, and it looks like that’s what’s kind of slowing things down because we’ve got to deal with it. But there are other things that would release the business community to go out there and really make some long-term investments. But you’ve got to have a CEO that makes the deal, and shakes hands, and says, “We’re going to do this because it’s for the greater good of the company” or, in this case, the country [and] is not worried about the board, or not being there when it comes time to campaign.
Wilson: Ryan, you said it very well. We need someone who can cause that kind of change ... I don’t know what it’s going to be. But those partisan [differences] come up so severely in every single issue. It’s almost disgusting. And when you hear other people, other commentators or journalists in other countries talking about our country and how we can’t get along, how things can’t get passed, and who is going to stonewall the other person, there just has to be … I can’t think of another word other than a change in the culture of our Congress no matter who is in that seat.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/Braun0818.pngJohn Braun’s health insurance costs rose 22 percent this year. Photo by Mark Rhodes
The survey says ...
http://www.virginiabusiness.com/news/article/the-survey-says#When:10:00:00ZYou’d think federal budget cuts would be the biggest worry for a government contractor like Arlington-based Dynamis. Nonetheless, a more pressing issue for John Braun, its president and chairman, is the rising cost of health care.
Dynamis’ health in­­­surance costs increased 22 percent from 2013 to 2014. That’s actually the good news — the original quote was much higher. “We actually ended up negotiating with [the insurance company] and getting that number down,” Braun says.
Health-care expenses are the No. 1 financial issue Virginia businesses are facing, according to the 2015 Economic Expectations Survey conducted by the Virginia Society of Certified Public Accountants. The society surveyed 9,598 members on their outlook about the economy and financial hurdles their clients are encountering.
One of those hurdles, they say, is federal health-care reform. Seventy-four percent of the more than 300 respondents believe the Affordable Care Act is hurting the U.S. economy. But when asked whether the ACA should be reformed or repealed, CPAs were almost evenly split — 51.8 percent want it reformed, while 48.2 percent say the law needs to be repealed.
Overall, CPAs had a cautious outlook about the economy in the Old Dominion and the U.S. but were more optimistic than previous surveys.
A sustained recovery?
In the latest survey, CPAs are almost evenly divided in deciding whether the U.S. is in a sustained economic recovery. More than 30 percent believe that a full recovery will take more than four years.
That somewhat gloomy response, however, still represents a sunnier outlook than seen in the VSCPA’s survey three years ago. Back then, more than two-thirds (67.7 percent) of respondents did not believe the U.S. had begun a sustainable economic recovery while 32.3 percent believed it had.
Although most CPAs taking the most recent survey are “somewhat” or “very” pessimistic (42.7 percent) about the national economy next year, they have a brighter outlook about Virginia’s economy for 2015. More than 38 percent are “somewhat” or “very” optimistic about the commonwealth’s economy as a whole as opposed to 28.6 percent who have “somewhat” or “very” pessimistic views. The remaining 31 percent hold a “neutral” or “balanced” opinion.
Respondents also find a lot to like in Virginia’s business climate, with 68.7 percent rating it “good.” A significant percentage (almost 49 percent) think capital investments in the state will stay the same in 2015 while 39 percent think investments will increase. Only 12 percent think capital investments will decrease.
In addition to health-care costs, the survey says infrastructure is the state’s most pressing issue. (Other top issues are federal budget cuts, government regulation and education.)
Ryan Losi, executive vice president of PIASCIK, a CPA firm in Glen Allen, says the state’s biggest infrastructure problem is the deteriorating condition of its roads. “Our roads were not built to handle the container volume that they’re currently handling … and cars don’t really beat up interstates and highways; trucks do,” Losi says.
Some relief for the commonwealth’s roads was expected to come from a landmark transportation-funding bill approved by the Virginia General Assembly in 2013. When it was passed, the legislation was supposed to boost transportation projects by $4 billion, although that number depends on economic conditions.
A proposed federal law, the Marketplace Fairness Act, was expected to supply part of the transportation funding. It would allow states to collect sales tax from out-of-state Internet retailers. The bill, however, is stalled in Congress. If the legislation isn’t passed by Jan. 1, the commonwealth’s wholesale gas tax will increase from 3.5 to 5.1 percent.
Rough roads are bad for business, but the survey identifies the availability of an educated workforce as one of two factors that have the greatest impact in retaining or attracting business to Virginia (the top factor being a pro-business climate).
Stephen Fuller, director of the Center for Regional Analysis at George Mason University, says Virginia will need to fill almost 1.3 million new and replacement jobs between 2012 and 2022. That job-creation number is lower than previous projections because of the slowdown of the Virginia economy as a result of decreased federal spending from 2011 to 2014, he says.
Another economist, Chris Chmura, the head of Chmura Economics & Analytics in Richmond, sees education as the biggest long-term issue for the state in creating a skilled workforce. She believes Virginia needs to ensure students receive the skills for occupations that are in demand and that they are trained in a cost-effective manner. “It seems that our education system is in need of undergoing some change to help bring down the costs for students,” she says.
While education is a long-term issue for Chmura, she says federal budget cuts will be the biggest issue confronting Virginia next year. The CPAs also identify the federal spigot as a major dilemma. Almost 86 percent of respondents said the commonwealth has not done enough to lessen its dependence on federal spending.
Respondents also say partisanship — largely blamed for triggering sequestration (across-the-board spending cuts) — is preventing the federal government from addressing urgent needs that have an impact on business. Federal budget cuts also were especially a big concern for CPAs in Northern, Southeast and Central Virginia taking the survey (they picked “infrastructure” or “health-care costs” as the most pressing issue for the state, but “federal budget cuts” were the No. 2 concern).
Although Northern Virginia rebounded quickly after the recession and regained the jobs it lost, “right now they’re dead in the water,” Chmura says. “Employment is not growing, and that’s what’s driving Virginia’s economy to be so weak.” In September (the last available statistic), employment in Virginia had grown by three-tenths of a percentage point since September 2013. The national job-growth rate, however, increased by 1.9 percent during the same time period.
BirchGrove Consulting, a Potomac, Md.-market research firm, predicts the commonwealth stands to lose approximately $13.5 billion of its defense funding from fiscal year 2013 to FY2018. Northern Virginia and Hampton Roads will be the hardest hit by sequestration. They stand to lose 35 percent and 23 percent of their defense funds, respectively.
Virginia has not been guaranteed a certain amount of defense dollars, but “it is fair to say, all-things-equal, the commonwealth is facing reductions of that magnitude in the future years,” explains Raymond C. Bjorklund, president of BirchGrove Consulting, in an email.
Yet sequestration hasn’t hampered growth at Dynamis, which primarily provides services to the U.S. departments of Defense and Homeland Security. The firm employs about 85 people and was recently named to Inc. magazine’s list of the 5,000 fastest-growing companies. Many other government contractors, however, have not been as fortunate, Braun says.
“Companies that are either small or are willing to bid on jobs that they can do for a low price tend to beat the larger and the midsize companies because they are more flexible … they are cheaper and they are in an environment where contracting officers are choosing the low price over the known provider,” he says. “So for us, actually, this strange … convolution of events has been fairly good. If you’re a midsize company not protected by small-business status and not really in a position to offer a low bid, it’s been very dramatically painful.”
The employer mandate
Dynamis may be able to offer lower bids than its counterparts on contracts, but offering fewer benefits to its employees is not an option. Because he already offers health coverage, Braun doesn’t expect to be affected by the ACA’s employer mandate going into effect next year.
Survey respondents, however, believe the mandate will have a major effect on businesses next year. It will force some companies to offer health-care benefits to their employees for the first time.
The mandate says that, in 2015, employers with 100 or more full-time-equivalent employees will have to offer workers affordable health-care coverage that complies with ACA standards. If they don’t, and that employee receives a tax credit for purchasing insurance on the Health Insurance Marketplace (healthcare.gov), the employer may have to pay a penalty. In 2016 and beyond, the mandate will affect businesses with 50 or more full-time-equivalent workers (in this case, a full-time employee clocks in an average 30 hours or more per week).
The survey also identifies health-care costs as the top issue that needs to be addressed in the 2015 Virginia General Assembly session.
Nonetheless, there may be little that the Virginia General Assembly can do. “We will ultimately be examining potential reforms to the industry, but the provisions of the law may stymie that effort,” Del. Kathy Byron (R-Lynchburg), chair of the legislature’s Health Insurance Reform Commission, says in an email. “Because the ACA is imposed on the states and uses a ‘one-size-fits-all’ approach to health care, the options available to states that would mitigate its negative effects are limited.”
Barry DuVal, president and CEO of the Virginia Chamber of Commerce, believes the continued rollout of the ACA will especially affect small businesses (defined by the chamber as companies with 250 full-time workers or fewer), because most large employers are already meeting ACA’s standards. Overall, the chamber estimates that businesses in Virginia will incur $16.4 billion in ACA-related taxes from 2014 through 2022.
Greg Lawson, partner at Dixon Hughes Goodman in Newport News, assesses the confusion businesses are facing: “The issues are from a business perspective, in my mind: Are we covered under this legislation or not? Are there strategies where we can avoid coverage under this legislation? How do we educate our employees as to what opportunities the legislation presents for them? How do we manage our entire employee benefit model around this regulation and still be able to pay a competitive wage to our employees and give fair return to our shareholders?”
Fielding those kinds of questions, no wonder CPAs are concerned about the effects of the ACA.
Click here for a copy of the entire Cover Story package.
Click here for a copy of the full 2015 VSCPA Economic Expectations Survey Results.
Virginia Society of CPAs roundtable
Should the Affordable Care Act be repealed or reformed?2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/INTERVIEW_Mallory2.pngTonya Mallory has been succeeded by Joe McConnell. Photo courtesy Health Diagnostic Laboratory Inc.
http://www.virginiabusiness.com/news/article/under-scrutiny#When:10:00:00ZWhat a difference a year makes.
Last December, Tonya Mallory, the co-founder, president and CEO of Health Diagnostic Laboratory Inc. (HDL), was named Virginia Business magazine’s 2013 Virginia Business Person of the Year. Her drive to create a new model for treating chronic disease and HDL’s impressive ramp up — one of the biggest expansions ever in Richmond’s biotechnology park — made her stand out.
Less than 11 months later, Mallory has stepped down as CEO, citing family reasons. HDL is under scrutiny as part of a federal investigation into reimbursement practices in the clinical laboratory industry. The company also is being sued by Connecticut-based health insurer Cigna, which seeks to recover $84 million in insurance claims paid to HDL.
At issue in the Department of Justice investigation is HDL’s former practice of paying doctors for blood samples sent to its labs for testing. Federal regulators have warned that such remittances posed a risk of amounting to kickbacks.
In early September, The Wall Street Journal ran an unflattering front-page story on HDL and the investigation. About two weeks later, Mallory announced in a letter to employees that she was resigning as CEO to help her widowed brother start a business. Mallory remains on HDL’s board and serves as an adviser to the new CEO. The company has said her departure was not related to the federal probe.
In mid-October, Cigna filed suit in U.S. Federal District Court in Connecticut, accusing HDL of a “fraudulent fee-forgiving scheme.” Cigna’s suit alleges that HDL entices Cigna plan members into using its blood-testing services by not charging patients for their share of the cost. The result, the suit says, are “exorbitant and unjustified charges” for these tests.
The company’s new leader is Joe McConnell, HDL’s chief laboratory officer and the former director of cardiovascular laboratory medicine for the Mayo Clinic.
Mallory co-founded HDL with McConnell and the company’s Chief Scientific Officer G. Russell Warnick in 2009. Under Mallory’s leadership, HDL saw phenomenal growth, swiftly becoming one of the fastest-growing companies in the region with more than $400 million in annual revenue and a local staff of more than 750 workers (about 30 of whom have recently been laid off). In 2012 Mallory received Ernst & Young’s National Entrepreneur of the Year award in the Emerging Company category, one of the country’s most prestigious business awards.
This spring HDL opened an expanded 283,000-square-foot, $100 million headquarters and laboratory in downtown Richmond. HDL’s buildings are owned by a public/private joint venture. The Virginia BioTechnology Research Park owns 11 percent of Biotech 8 LLC, with HDL and Lingerfelt Development in Richmond being the other partners.
One of the largest cardiovascular and diabetes testing labs of its type in the world, HDL can process as many as 60,000 lab tests a day. The company says its panel of advanced biomarker tests helps physicians more accurately predict and prevent cardiovascular disease.
Change in practices
In June the Office of the Inspector General for the Department of Health and Human Services issued a special fraud alert, warning that the practice of paying physicians for blood tests represented “a substantial risk of fraud and abuse under the anti-kickback statute.” HDL had reimbursed most physicians $20 per blood sample for processing and handling the samples, a fee slightly higher than what some other labs paid but $17 more than the $3 reimbursement paid by Medicare, according to The Wall Street Journal.
The Journal raised the question of whether the reimbursements improperly incentivized doctors to order tests. It noted that HDL collected hundreds of millions of dollars from Medicare while using this payment model. According to the newspaper, $157 million, or 41 percent of HDL’s 2013 revenues of $383 million, came from Medicare reimbursements, with the company’s billings for some procedures far exceeding Medicare payments to other labs.
HDL stopped physician reimbursements, which it said was an industry-wide practice, as soon as it received guidance from the federal government in June, says company spokesman Jeff Kelley. The company has shifted its operations since then, using a variety of means to obtain blood samples. HDL now provides free testing materials to physicians, is opening its own blood labs and is placing HDL-employed, blood-draw technicians in some doctor’s offices. The company also is contracting with independent lab testing sites across the U.S. to draw blood for its tests.
“The last few months have included significant changes at our company. Like all young, innovative companies in the health-care and biotechnology arena, we are constantly evolving to respond to the needs of physicians and their patients. Looking to the future, our mission and focus is clear — bringing physicians valuable testing tools and providing state-of-the-art disease prevention information for millions of people,” says Kelley.
Physician defends company
One of those physicians is Dr. Sam Fillingane, who specializes in treating patients at high risk for cardiovascular disease. The Flowood, Miss., doctor was singled out in the Journal article for the high volume of tests he sends to HDL. Fillingane serves on the company’s medical advisory board and receives payments from HDL for delivering medical lectures about the company’s biomarker testing. According to the WSJ story, he stood to earn more than $23,000 in reimbursements from HDL for blood testing in the first half of 2010, after sending in 1,179 blood samples.
Fillingane says that, by using HDL’s tests, he’s able to help patients prevent heart attacks, strokes and a host of other health problems that are more costly to insurers. Speaking to HDL’s former reimbursement practice, Fillingane says “doctors don’t order these tests because they’re going to get reimbursed. … But I will tell you there’s a lot of work to be done to draw seven tubes of blood: process, spin, separate, label, put in plastic bags, put in ice appropriately and get it to Fed Ex … by a certain time of day … because it’s a time-sensitive blood test. So there is work to be done for all of that, and I really feel like the medical profession is treated wrongly. We’re treated like criminals for getting paid for doing a service.”
In a statement released to the WSJ, Mallory said HDL “rejects any assertion that we have grown and succeeded as a result of anything other than proper business practices,” adding that HDL “has consistently complied with all applicable laws.” The company has launched a website, hdlinckeyfacts.com, to address the controversy and refers all media questions about the investigation to the website.
Despite the timing of her resignation, Fillingane says it’s nonsense to think that Mallory resigned from HDL for any other reason than to help her family. “Tonya Mallory’s one of the finest people you’ll ever meet,” he says. “She has done more good for cardiovascular disease in America than any one single individual. … If anyone ever disrespected her, they would have to do it over my cold, dead body because that lady has stepped up and taken risks personally and financially to make these biomarker tests more accessible” to a wider variety of patients, including those with lower incomes.
The Cigna suit
Cigna’s 28-page lawsuit against HDL stems from insurers’ use of health-care networks in which providers agree to accept fixed rates. Health-plan members are allowed to use providers outside the network, but they are required to bear a portion of the cost of that treatment because out-of-network providers generally charge higher rates.
“Without this obligation, out-of-network providers could demand prices from health-care plans which have no relation either to their actual costs or to the actual market for medical services, and members would have no incentive to avoid these providers,” the suit says.
HDL undermines this system, the suit says, by “misrepresenting those responsibilities under the plans by promising not to collect a co-payment, co-insurance or deductible obligation, and further promising not to seek reimbursement for any portion of its bill the plan does not cover. HDL then misleadingly bills the plans themselves at exorbitant and unjustified ‘phantom’ rates — rates that misrepresent what HDL actually intended to collect.”
Because patients don’t pay any portion of the charges, Cigna contends, they have no incentive to control their demand for HDL services, leading to increased cost to the plan.
The insurer also mentions in its lawsuit the fraud alert issued by the federal government, saying fees paid to physicians and other health-care providers encourage them to order a “litany” of tests that may not be necessary.
HDL’s business model “is designed to game” the health-care system, the suit charges. Kelley, the HDL spokesman, said the company does not comment on pending litigation.
In a statement released by HDL when Mallory resigned, her successor, McConnell, said he looked forward to leading HDL “as it continues its critically important advanced testing that provides actionable information that can lead to early detection of diseases … improved treatment and even disease reversal.”
McConnell declined to be interviewed for this story. However, in an interview with Virginia Business last December McConnell, 50, recounted that he was motivated to go into cardiovascular medicine and research because of a lengthy family history for cardiovascular disease.
“My grandparents died in their late 50s and early 60s of heart attacks and strokes. My dad had his first heart attack when he was 61. … He had a second heart attack when he was 62 and died … Nobody in my family had ever lived past 63 years of age. That really hit home.”
In a statement provided to Virginia Business, Mallory endorsed McConnell’s leadership. “Joe McConnell succeeding me as president and CEO of HDL Inc. is a natural progression of the business we co-founded together…. Preventative medicine is in Joe McConnell’s DNA, and he will serve HDL well.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/Thorton2645.pngSaranna Thornton helped research and develop an annual report on the economic status of professors. Photo by Mark Rhodes
Running to keep up
http://www.virginiabusiness.com/news/article/running-to-keep-up#When:10:00:00ZDiscussions about higher education in Virginia usually focus on rising tuitions.
And there’s a good reason: average undergraduate tuition and mandatory fees at the state’s four-year public institutions have risen about 66 percent in constant dollars since 2004-05.
But the other important story at Virginia’s public colleges and universities has been the struggle to keep faculty salaries competitive, in light of a decline in state support.
The state policy aims to provide 67 percent of an institution’s cost of education for in-state undergraduate students, with students contributing 33 percent.
Yet by the start of the current academic year, 2014-15, the state’s contribution was 47 percent, according to the State Council of Higher Education for Virginia (SCHEV).
Because state support has faltered, tuitions and faculty salaries are now more inextricably intertwined than ever. That does not mean, however, that faculty salaries have pushed up tuition costs.
In fact, Virginia’s Joint Legislative Audit and Review Commission (JLARC) found in a 2013 study that most college spending does not involve instruction.
JLARC says auxiliary enterprises — student housing, dining and intercollegiate athletics — have driven spending increases.
So, even though tuitions have skyrocketed, salaries for faculty have not.
Compared with their peers
Virginia’s stated goal is to provide sufficient funding, through a combination of general fund and tuition dollars, so that salaries at the state’s four-year public colleges and universities are at the 60th percentile of the salaries of their peer institutions.
Dan Hix, SCHEV’s finance policy director, says the 60th percentile goal was simply a way of stating that Virginia wanted its public institutions to be better than average, the 50th percentile, in terms of faculty salaries when compared with the institutions’ peers.
The peers — every college and university has its own group — are selected by SCHEV in consultation/negotiation with each institution, as well as other state agencies and relevant General Assembly money committees.
Here’s an example of how the system works.
Christopher Newport University, a four-year public college in Hampton Roads, is currently at the 40th salary percentile of its peers with a state appropriated average faculty salary of $72,011. To reach the 60th percentile, the average salary would have to rise to $79,694.
Achieving the 60th percentile goal for university faculty salaries has long been elusive for the state.
This year, the average teaching and research faculty salary at Virginia’s public four-year institutions ranked at the 38th percentile of peer institutions, according to SCHEV’s latest research.
Some of the state’s premier institutions have struggled. For example, the state’s flagship institution, the University of Virginia, is at the 32nd percentile of its peers. Virginia Tech, the state’s premier land-grant institution, is at the 31st percentile.
The academically rigorous College of William & Mary, the nation’s second-oldest institution of higher education after Harvard, is at the 34th percentile.
A few institutions are doing just fine.
The college with the highest salary percentile to peers is the University of Virginia at Wise, which is at the 80th percentile.
The institution with the lowest salary percentile to peers, according to SCHEV, is George Mason University in Northern Virginia, which is at the fifth percentile.
“In its communication with the faculty, the university is aware of the need to move compensation to a competitive level,” says Charlene Douglas, chair of the GMU Faculty Senate.
She adds that GMU has “worked in a strained environment to change its budget model to stabilize our financial base. As we implement cuts now and in the [near] future we are seeking to protect our core academic mission.”
Increased fundraising and new public/private partnerships are part of the university’s new strategy, Douglas says.
A recruitment challenge
Colleges say that unless faculty salaries are competitive, qualified educators can’t be retained, and recruiting becomes an insurmountable challenge.
But raising faculty salaries is much easier said than done.
When the U.Va. board of visitors voted in April to increase tuition by 4.7 percent, in part to help support faculty salary increases, three members dissented.
The board’s vote was a follow-through on a resolution it approved in February 2013 to boost U.Va.’s average faculty salaries by 2017 into the Top 20 among its peers in the Association of American Universities, a nonprofit association of 60 U.S. and two Canadian select public and private research universities.
Member institutions of the AAU include such prominent names as Northwestern University, Princeton University, Pennsylvania State University and the University of Chicago.
Overall, the total cost of attending U.Va., which includes tuition and fees, room and board and estimated expenses for books and travel, has risen to $27,417 for Virginia students.
What students and taxpayers get for their money is the second-ranked public university in the nation, and 23rd among all national universities, according to the latest U.S. News rankings.
After the board of visitors’ tuition vote, former U.Va. Rector Helen Dragas, who was one of the dissenters, wrote an op-ed piece for the Richmond Times-Dispatch in which she said tuition increases were unsustainable.
In an email exchange with Virginia Business, Dragas says that, while she believes that U.Va. faculty salaries need to be competitive, colleges and universities must also look to new efficiencies and make hard choices.
“Secretary of Education Anne Holton recently told the [U.Va.] Board that we need to minimize tuition increases and partner with other public universities to set priorities, share resources — even including faculty — and be more efficient. I doubt the message can get any clearer, or to the point,” Dragas says.
Wave of retirements
The struggle over faculty salaries comes at a time when many institutions face a tide of looming retirements among their faculty ranks while demands are rising among students and their families for more education for the dollar, and business and industry want globally competitive graduates.
To say that the salaries of college and university instructional personnel in Virginia are not on par with their peer institutions doesn’t mean that faculty members are paid a pittance.
The highest paid faculty members in Virginia are at U.Va., where the average salary for a full professor is $150,800, while the private University of Richmond (UR) is second at $147,700, according to the most recent salary survey by the American Association of University Professors (AAUP).
However, Saranna Thornton, a Hampden-Sydney College economics professor who helped research and develop this year’s AAUP annual report on the economic status of the profession, notes that both U.Va. and UR have law schools and MBA programs, which skew the salary scale upward.
She says typical professors at the two schools are not earning those salaries.
Even though college educators at the high end of the salary scale are making a good living, salary competitiveness across all ranks has become a major talking point when it comes to faculty compensation.
“Over the past seven years, our faculty have seen salary competitiveness slide from the 49th percentile [to the 31st],” says Larry Hincker, Virginia Tech’s associate vice president for university relations. “Over the past seven years, the university has been able to implement only one merit program for faculty raises.”
Hincker says tuition has become the primary revenue stream supporting the instructional program at Virginia Tech, supplanting state support.
“Higher education currently comprises less than 10 percent of the state budget,” Hincker said. “When I started working here in the late 1980s, it was about 15 percent of the state budget.”
Bernice Hausman, president of the Virginia Tech Faculty Senate, says there’s not much to brag about when it comes to faculty salaries.
“There is a lot of dissatisfaction on the part of faculty with respect to salaries,” Hausman says.
“As you know, the market for university faculty is national and international, not local. We are competing with Berkeley, Michigan, MIT, Rutgers, Texas, etc., not with institutions in Virginia for the most part.”
Who is getting raises?
Thornton, the economics professor, says colleges often are misleading about why tuitions are going up.
“Colleges will say they are raising tuitions to retain teachers and to hire. But when you look at salaries adjusted for inflation, it’s not true,” Thornton says.
Thornton says that administrators, not faculty, have enjoyed the big salary boosts during the past six years, 2007-08 to 2013-14, recession and all.
For example, she points to a data indicating that nationally, the top three administrators at national public doctoral institutions received the largest salary hikes during the period: president (11.3 percent); chief academic officer (12.6 percent); and, chief financial officer (15 percent).
By contrast, faculty members struggled: full professor, 2.2 percent; associate professor, 0.5 percent; assistant professor, 2.6 percent.
Among Virginia’s public and private colleges and universities from which the AAUP received surveys, Thornton says that faculty salaries — adjusted for inflation — declined 2.2 percent over the period from 2007-08 to 2013-14.
But Thornton says some colleges and universities were able to swim against the tide and raise faculty salaries during that time span.
Washington & Lee University in Lexington was the leader, by far, raising faculty salaries by 8.5 percent, according to Thornton’s analysis.
Ken Ruscio, the university’s president, says raising faculty salaries was “very deliberate, very strategic and very intentional.”
Seven years ago, just as the national recession was about to do its worst, W&L was beginning to implement a strategic plan and capital campaign.
One of the key components called for raising faculty salaries to the average of the university’s peer institutions, such as Middlebury, Amherst and Williams.
“At the time, our salaries were 10 percent below the mean of our rivals,” Ruscio said.
Gerry Lenfest of Philadelphia, an entrepreneur and philanthropist, jump-started the push with a $33 million challenge gift in 2007.
At that point in terms of faculty salaries, W&L stood 24th in the ranks among the Top 25 liberal arts institutions nationally.
Today, W&L has risen to 17th, and its pay scale is 94.6 percent of the mean of its peers across all faculty categories.
Ruscio said that Lenfest’s gift, along with the gifts of other contributors, helped build a larger endowment to cover faculty raises without sharply having to increase tuition.
Later, Lenfest gave $17 million to establish funding for faculty sabbaticals and summer research.
The effort to raise faculty salaries was included in an ongoing $500 million capital campaign. Since the campaign began, W&L has raised $464 million, and its endowment is up 45 percent to $1.35 billion.
On its website, W&L estimates that the standard cost of attending the university, including tuition of $44,660, is $61,310 annually. But students whose family incomes are below $75,000 receive full tuition without loans, and financial aid is widely available.
Only about 12 percent of W&L’s students are from Virginia, so its recruitment and outreach are both across the U.S. and globally, Ruscio says.
William & Mary Promise
The College of William & Mary in Williamsburg, a “public Ivy,” whose rivals often tend to be well-endowed private institutions, took a different approach to strengthening faculty salaries and focusing on student learning.
It adopted a new operating model, called the William & Mary Promise, which includes endowment building, increased financial aid, more Virginia students, tuition predictability for parents and merit pay for faculty.
But the most talked-about aspect of the Promise is a guarantee that tuition will not rise for in-state students in the four years after they enroll as freshmen.
However, nothing is without cost. William & Mary’s tuition and fees for in-state freshmen, $17,656, are the highest among all Virginia public institutions in 2014.
This year’s rate represents a 14.2 percent increase over the $15,463 that W&M freshmen paid in 2013-14.
But again, the tuition will be frozen for freshmen for four years, so there is more predictability on the end-cost of education for both parents and students.
W&M’s board of visitors has approved the guaranteed tuition rates for each class of incoming in-state freshmen for fall 2014-2016. But the plan is for the new operating model to be part of an ongoing program beyond 2016. “So far, so good,” says Samuel E. Jones, W&M’s vice president for finance.
Jones says the new operating model is meeting its goals, with record numbers of applicants and no downturn in their level of qualifications. Yet in terms of reaching the faculty salary levels of some of its peers — Brown, Notre Dame, Georgetown — W&M admittedly still has a ways to go.
Before the Promise began, W&M was scraping bottom in terms of faculty salaries, compared with its SCHEV-approved peer group. In 2013, for example, it was at the 17th percentile — far, far below the state goal of the 60th percentile.
In 2014, the college has climbed into the 30s, according to SCHEV data, because of additional resources generated by the Promise. University officials believe the salary percentile to peers percentage will rise even higher over the next several years.
“If we took no action, we would’ve been in the single digits,” Jones says, remembering those gloomy days. “Our sense is we’ve reversed the trend. Our hope is that over the next three to four years, we’ll have larger increases.”
Despite its struggles with faculty salaries, W&M has maintained a focus on its commitment to undergraduate teaching. U.S. News recently ranked W&M second in that category among national colleges, just below Princeton, a university spokesman says.
Thornton believes that “irrational exuberance” surrounding college athletics has siphoned away funding that could have been used to strengthen institutions’ academic mission, with respect to faculty salaries and academic programs.
In Virginia, JLARC has reported that, on average, 12 percent of student tuition and fees at public colleges are funneled into intercollegiate athletic programs.
At the moment, a possible increase in state funding for higher education — and for faculty salaries — seems distant.
In fiscal year 2013, an increase in general fund revenue collections gave the state an opportunity to halt a trend of consecutive general fund budget cuts.
The result was the lowest tuition and fee increase in a decade.
But momentum was lost this year.
State budget negotiators initially proposed an additional $70 million to $100 million in funding for higher education in the new biennium, but unexpected revenue shortfalls totaling $2.4 billion stalled that effort.
Under the current budget agreement, spending cuts will reduce the state appropriation to higher education by about $90 million over two years.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/INTERVIEW_Horn3.pngMichael Horn
A new rhythm for Volkswagen
http://www.virginiabusiness.com/news/article/a-new-rhythm-for-volkswagen#When:10:00:00ZVolkswagen has a goal of selling 800,000 vehicles in the U.S. by 2018, a part of its strategy of becoming the world’s leading automaker.
Some industry analysts think the U.S. target is a tall order, considering sales have slowed since 2012 and totaled 407,704 vehicles last year.
Michael Horn, however, believes that number can be achieved. “With the right new products … and if everything comes in the right time and with the right approach, 800,000 definitely is possible,” he says.
In January, Horn became president and CEO of Herndon-based Volkswagen Group of America and president of the Volkswagen brand in the U.S. A 24-year Volkswagen employee, he was vice president for global service and parts — in charge of the company’s entire service business — before his arrival in Virginia.
Volkswagen’s market share in the U.S. currently stands at 2.2 percent, compared with 14 percent in Europe. Horn’s strategy for accelerating U.S. sales — for the 2018 target and beyond — includes producing a new midsize sport utility vehicle and quickening the company’s pace in introducing new generations of car models.
VW announced in July that it would spend $900 million to produce the new SUV starting in late 2016 at the company’s 3-year-old plant in Chattanooga, Tenn., which currently makes Passat sedans. The seven-seat SUV would fill a hole for Volkswagen in one of the fastest-growing product segments in the U.S. auto industry. The company also plans to build a development and planning center in Tennessee that will scrutinize the manufacturing practices of competitors in tailoring vehicles for the U.S. market.
The projects will add 2,000 company employees in Tennessee. The state will give the automaker a $166 million grant for plant development and a $12 million grant for worker training.
In addition to production of the new SUV, Volkswagen cars made in North America will be totally remodeled after five years rather than the seven years customary in Europe. Between overhauls, vehicles will get face-lifts — changes that “refresh” the current model — after three years instead of four.
“If you carry your model one year longer, your car is aging. Demand is not as high anymore,” Horn says. “Then you have to spend more money on incentives and all of those things. If you factor all of those things in, it definitely makes sense to reduce the cycles, and that’s what we’ve done.”
Five months before Volkswagen announced plans to produce the new SUV in Tennessee, the United Auto Workers narrowly lost a vote to organize plant workers. Volkswagen took a neutral stance on the vote, but Tennessee politicians vehemently opposed the unionization effort. The defeat was seen as a blow to the UAW’s ambitions of organizing workers at U.S. auto plants in the South.
Shortly after the vote, the UAW announced it was forming a union local that Volkswagen employees in Chattanooga could voluntarily join. A UAW official recently claimed that about half of the plant’s 1,500 hourly workers are now members of the union local.
Unions at other Volkswagen plants have played a major role in works councils, committees of employees who negotiate with management on day-to-day work issues. Horn declined to comment on labor activities in Tennessee.
The $900 million to be spent on the new SUV ($600 million in Tennessee) is part of a $7 billion investment that Volks­wagen plans to make in North America by 2018. In addition to the Chattanooga plant, the company also has a North American production facility in Puebla, Mexico.
In Virginia, Volkswagen Group of America has 648 employees at its headquarters in Herndon. The company moved the headquarters from Auburn Hills, Mich., near Detroit in 2008. Volkswagen also has 28 new-car dealers in Virginia.
“Virginia has provided us with the right environment to support our innovation and growth,” Horn says, citing an educated workforce, a pro-business culture and a good quality of life.
Throughout the U.S., Volkswagen of America has 5,900 employees and nearly 1,000 dealers. In addition to the Volkswagen brand, the company is the home of the U.S. operations of Audi, Bentley, Bugatti and Lamborghini plus the financial services firm VW Credit Inc.
When not working at the Herndon headquarters, Horn likes to relax by paddle boarding with his wife and two sons on the Potomac.
Horn, a native of Hamburg, Germany, earned a bachelor’s degree in business administration from the European University in Antwerp, Belgium, and an MBA from the University of San Francisco. He currently drives a 2015 Golf GTI.
Virginia Business interviewed Horn at his office on Sept. 15. The following is an edited transcript.
Virginia Business: Since you have [been head of sales for VW in Europe as well as president of Volkswagen Group of America], what are your reflections about how the auto industry is changing in the United States?
Horn: Well. I also lived here 25 years back. I think the automotive business in Europe and the U.S. compares, to a certain degree, the same, and then it’s really different.
To start with, the price points here in the U.S., the pricing of the vehicles in the market, is much, much lower than in Europe. It’s not just due to the exchange rate, but it’s also due to what the customer really is willing to pay for a car, or what he’s willing to put up as far as the monthly rate is concerned for a car …
The second thing is, in the U.S., there is much, much more transparency for the customer as well, which is good, but which is also a challenge [for the manufacturer] because you’re much more measurable. In terms of the transparency, you have cost.com, edmunds.com, Kelly Blue Book, Auto Trader, you name it. And so the customer ... can pretty much make up his opinion in terms of what is the quality of the car, what is the cost of ownership of the car, what do people say in terms of are they happy with the experience and so forth.
VB: Is Volkswagen still on track to reach [a goal of 800,000 vehicles sold in the U.S. by 2018]?
Horn: Volkswagen is very much committed to reach this goal. With the right new products … and if everything comes in the right time and with the right approach, 800,000 definitely is possible.
VB: Volkswagen sales in the U.S. have slowed in the past two years. Why has that happened?
Horn: There are different reasons from my point of view … Volkswagen has done a really great job in bringing the current Jetta and the current Passat to the market … They were cars designed for this market — one built in Mexico, the other one built in Chattanooga. Basically it showed if we do it right, if we have the right design, the right [features], pricing and everything, we can do the job. We had a great head start and tremendous years in 2011, 2012 because at the end of ’10, we brought the Jetta, at the end of ’11, we brought the Passat …
I think, in the future, we have to do our homework better. That’s one of the things we’ve addressed now, for instance, in making decisions to reduce the life cycle — the cadence — of our products. If you take the Passat today, for instance, it’s getting into its fourth year [of the current generation of the model]. The Jetta is already four years old. [The model recently has been refreshed for 2015 and is now on sale.] The Passat will see a face-lift of the model year ’16. But the cars have been four years on the market without any major changes, just very minor ones.
If you look at what the competitors have been doing, they have brought in all new models [on a faster cycle] and are already face-lifting in between [generations] … That’s the reason why we made those decisions now to reduce the cadence in order to be fresher, to bring more design changes to the market, because that’s also one of the points where the American markets are more demanding than, for instance, the European markets. Just to give you the example, let’s say 40 percent of the market here is leasing ... Those leasing customers come back after three years, and they want to have something fresh …
So the wheel is turning faster and faster, and that’s, I think, one of the reasons [that sales have slowed] …
And the second reason is [the market is growing rapidly for midsize SUVs]. And year on year, for instance, it’s growing about 17 percent. And we have a nice car; it’s called the Tiguan, but we are not really pricewise competitive in the segments. It’s a European import. It’s 10 to 12 percent more expensive. The American consumer is not willing to pay premium prices except for real premium brands …
That’s something we have to acknowledge because our dealers are doing a great job. We work with them, we look at them, we measure their performance, and our dealers are doing their bit. They have a good after-sales business, service and parts business. But we will grow with the future models and with the SUVs.
VB: So, what is the life cycle now? And what do you want it to be?
Horn: If you look at the sedans for instance, here in the U.S., you bring an all-new model … and then you bring a face-lift after three years. Then after another two years, you bring an all-new model. So you have a total cadence for one model of five years …
What we did for most of the time with Volkswagen, we brought an all-new model, and then we carried it for four years [before giving it a face-lift]. And then after another three years, we brought an all-new model. So we have a seven-year cadence ...
[The different patterns partly reflect cultural differences in consumers.] The German, if he can afford a new car, sometimes doesn’t want to show it to his neighbor. He buys the same color. He knows it’s new, but his neighbor is not supposed to because German neighbors are jealous. Really, it’s true. “What does he have? Can he afford this?”
In the U.S. it’s totally different. In the U.S., it’s, “Wow, great, you made it, buddy. Good job. Awesome,” and so forth. People are proud to show off their new cars. So they want to see this new design …
Loyalty in the U.S. is quite lower among customers. They go for the best value, the best price … If you carry the model one year longer, your car is aging. Demand is not as high anymore … And then you have to spend more money on incentives and all of those things. If you factor all of those things in, it definitely makes sense to reduce the cycles. That’s what we’ve done. …
This means everybody has to think differently … Just to explain this to you on how big this decision is: Designers usually design a car, then they design the next car, and then a couple of years later start working on the face-lift. With the three-year cadence, they have to think in the beginning, “How do I design this car so that I make it really easy for me to bring a change after three years which is not too costly and which is still bold and noticeable by the customer?” …
And so with the next model generations, starting with the Jetta successor and starting with the Passat successor, in ’17, ’18, we will start to introduce those cadences. So, that’s a big one for us. ...
The core brands in Europe, they get away with those [seven-year] cycles. The customers don’t mind and still buy cars. [Automakers] are not challenged to bring the shorter cycle because it’s more effort. The market is working on the seven-year cycle more or less in Europe 80 to 90 percent. Here in the U.S., 90 to 95 percent,it’s different. Then, you have to adapt — do your homework and adapt — or you’re out.
VB: My understanding from reading the press is that there was a choice between [producing the new SUV] in Chattanooga or in Mexico. Why was it you decided to do this in Chattanooga?
Horn: It was purely done on economic criteria. I mean it makes sense from a lot of different points, but naturally if you go to your supervisory board and you want to invest around ... $1 billion U.S., they want to know whether this is a prudent investment … We, of course, looked at our existing facilities in Mexico and whether it makes more sense commercially to do it there.
You analyze these factors on many different variables. One to start with is what is the additional investment the plant has to do in order to get [the automobile] platform in? And so the positive for Chattanooga was that they already had … what we call MQB — in America, it’s an awkward translation, it’s called “modular transverse toolkit” — for the B platform. [MQB is a standardized technical platform for nearly all Volkswagen cars whose engines are mounted transversely to the direction of driving. The matrix can be used on a long-term basis to make different vehicle classes on a single production line.] The future SUV will … be on the B platform. And B platform is Chattanooga; A platform is Mexico. In order to put the tools in and use the synergies and so forth, [Chattanooga] had the advantage.
VB: So they were already set up?
Horn: Yes. And then you take: What is the cost of the plant? What is the cost of the additional investment? What are labor rates and wages and … what are the different local governments — the state in Mexico and Tennessee — putting in incentives? At the end, we made the decision based on the economic criteria for Chattanooga, which is great not only for our engagement in the U.S, but basically it’s great also for the plant to have two models [the Passat and the midsize SUV] … You can manage the factory totally different in terms of capacity utilization, for instance, which is very good for them. ...
VB: [Tell me about the center that’s going to be in Chattanooga.]
Horn: It’s called a development and planning center … The point will be to have a deep-drill competitive analysis, because one thing we have to do is to better understand our competitors in terms of how do they design their cars, which are sometimes less expensive than our cars, and they still show a lot of profit here in the U.S. … What is the direct cost of the different components? Where do they source? How do they source? This is the kind of manufacturing/engineering intelligence unit we will put down there.
After you have started to analyze, then you look at a future model, then you can come up with ideas: How do you save costs without subtracting value from the customer? … This is the kind of balance we have to get.
VB: Now tell me about the electric Golf, which my understanding is, it’s to be introduced soon in the U.S. What are your expectations for sales there? And who is your target audience for that?
Horn: Well, first of all, we will market the e-Golf starting and more or less in the ZEV states … zero emission vehicles states. That’s California, that’s Maryland, that’s New York. …
The customers are intelligent, smart people. They have more than average income. They have usually more than just one car. It’s a commute which is around 30 to 40 miles or something.
And then, they want to make a statement as well, not just for themselves but in terms of how they look at the environment … Those customers are more on the forefront of things, and they want to make intelligent choices in life, and they want to demonstrate this to themselves, their friends and the environment.
VB: And the whole Golf family of cars, I understand, has been undergoing a transformation. You want to tell me a little bit about that?
Horn: [In the late spring], we introduced the seventh generation, the Golf Mk 7, here to the U.S., starting with the GTI. And for the first time we also built the Golf GTI in Puebla, in Mexico…
If you look at the car, it’s lighter. It’s bigger. It has a larger, longer wheelbase, which makes the ride much better. And it has more interior space. If you would sit in it, you would think you were sitting in an upscale car because of the materials. And it also has the newest engine technology. …
[The group includes the Golf, Golf GTI, Golf TDI, Golf TSI, Golf SportWagen and Golf R. The first four are currently being sold in the U.S. The Golf R will go on sale later this year, and the Golf SportWagen will come to the market in 2015. With the exception of the e-Golf, all of the cars are being produced in Mexico. The electric car is being made in Germany.]
So, we have everything for everybody basically.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/CVA_Stone.pngPhoto courtesy Governor of Virginia
Richmond lands major West Coast craft brewer
http://www.virginiabusiness.com/news/article/richmond-lands-major-west-coast-craft-brewer#When:10:00:00ZRichmond beat out cities in more than 20 other states to land Stone Brewing Co.’s East Coast production facility. The San Diego-based brewery says it will invest $74 million in the city, creating more than 288 jobs.
The facility, to be located in the Greater Fulton neighborhood in the city’s East End, will include a 200,000-square-foot brewery and distribution center, restaurant, gardens and retail store. The brewery is expected to be in operation in late 2015 or early 2016.
In its first year, Stone Brewing will produce approximately 120,000 barrels of beer, almost doubling the barrels of beer produced by Virginia’s craft brewers last year (about 130,000). Besides Richmond, Norfolk and Roanoke were top-five finalists for the project.
“We put all in to get this project,” Gov. Terry McAuliffe said during an early October news conference at the Executive Mansion where Stone Brewing beer was served.
The state’s incentives package for Stone Brewing includes a $5 million Governor’s Opportunity Fund grant and $250,000 from the Governor’s Agriculture and Forestry Industries Development Fund, depending on the company’s procurement and use of Virginia-grown products. The company also will receive benefits from the Virginia Enterprise Zone Program and employee training funding and services from the Virginia Jobs Investment Program.
The value of the city’s incentive package was even bigger — more than $30 million. It includes $23 million in bonds for the facility’s construction, $8 million in bonds for Stone Brewing’s restaurant and beer garden and $2 million in grants.
But incentives weren’t the only attraction, says Steve Wagner, Stone Brewing’s president and co-founder. “The logistics, the water supply, and things like that go into the equation as well, but for us it’s more the gut [feeling] and being in a cool place,” he says.
Wagner started Stone Brewing in 1996 with CEO Greg Koch. Back then, the operation included Wagner, who brewed the beer; Koch, who sold it and another employee who delivered it.
“It was not easy in those times,” says Wagner, whose company now bills itself as the 10th largest craft brewer in the U.S. “I think sometimes people get the impression that we’re an overnight success. It’s been 18 years — and working really hard — to get to where we are today.”
Stone Brewing ranked No. 3,015 this year on the Inc. 5000 list of the fastest-growing, private companies in the U.S. It plans to expand beyond the states, opening the first American-owned craft brewery in Europe by 2016.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/Mason-in-Loudoun-map.pngGMU’s new site is expected to create “new partnerships” with Northern Virginia Community College.
GMU site shares space with community college
http://www.virginiabusiness.com/news/article/gmu-site-shares-space-with-community-college#When:10:00:00ZGeorge Mason University has a new site in Loudoun County and a closer relationship with Northern Virginia Community College.
The university held a ribbon cutting on the Mason in Loudoun Instructional Site in October, four months after the location opened an office building at Signal Hill Plaza in Sterling. GMU, which has had a presence in Loudoun since 2006, shares space with the community college at the new Sterling site. GMU’s previous Loudoun site was on Ridgetop Circle in Sterling.
“It’s a great way to create partnerships and efficiencies,” says Una Murphy, director of outreach for regional campuses at George Mason. “George Mason and Northern Virginia Community College have a great relationship with each other … This is an excellent way to reinforce that connection.”
Signal Hill Plaza offers greater accessibility to students, she says. “There will also be greater availability,” Murphy says of the school’s offerings. “We will have a total of eight classrooms and six breakout rooms. We also have videoconferencing capabilities.”
George Mason is increasing the number of classes it is offering in Loudoun in IT, business, leadership studies, graduate education, executive education, and continuing and professional education. The school has a guaranteed admission agreement with Northern Virginia Community College that grants admission to students pursuing bachelor’s degrees who meet certain criteria.
“Traffic from Northern Virginia Community College students wanting to learn about transfer possibilities has increased since we moved,” Murphy says.
Offerings at Mason also include partnerships with Osher Lifelong Learning Institute for adults over 50. “They can take advantage of many of the professors that teach at George Mason,” Murphy says. “Students are mostly retirees, and they are incredibly engaged. They take [courses in] everything from public policy to jewelry making.”
Osher takes advantage of George Mason’s video conferencing equipment. “A lot of the classes originate in Fairfax,” Murphy says.
She feels the new location will be a boost for George Mason. “Loudoun is a growing community,” she says. “There are a lot of people that live there and want to learn there as well. This is a way to serve the community.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/Continental_corp_newportnews.pngThe Newport News plant produces low-pressure gasoline injection and exhaust after-treatment products.
Plant’s expansion will nearly double its workforce
http://www.virginiabusiness.com/news/article/plants-expansion-will-nearly-double-its-workforce#When:10:00:00ZEven though it has quite a few plants in Mexico, Germany-based Continental Corp. decided in August to expand its plant in Newport News rather than south of the border. “We had been in Newport News for 44 years,” says Dave Kilgore, plant manager in Newport News. “That helped us justify the expansion of the plant.”
The Newport News plant is part of Continental’s Engine Systems Business Unit in the North American region. The plant produces low-pressure gasoline injection and exhaust after-treatment products. It already has produced more than 265 million fuel injectors.
Continental approached the city about a possible expansion in January. “We asked if there was competition,” says Florence Kingston, the director of development for Newport News. “Back in 2008, this plant was in competition with South Carolina for a consolidation. We won that competition.”
The city’s support over the years was one of the factors that helped the company make its decision. “We were comfortable with the location and the workforce,” Kilgore says.
The company will make an approximate $150 million investment in its Newport News facility over a number of years. The project is expected to create about 500 jobs, nearly doubling the plant’s current workforce. “We will have a whole range of jobs, from straightforward manual labor to highly technical engineering jobs,” Kilgore says.
The expansion will allow Continental to start three product lines for the automotive industry: high-pressure injectors, high-pressure fuel pumps and turbochargers.
The 360,000-square-foot plant can accommodate the expansion within its walls. “We don’t have to expand with bricks and mortar,” Kilgore says. “We are currently in the preparation stage, getting the facility ready. We will have product launches and most of our hiring in the second quarter of 2015.”
The company will start with two lines: high-pressure injectors and fuel pumps. “A couple of years later we will phase in the turbocharging business,” Kilgore says. “It will be the first time we are producing turbochargers in North America.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/IMG_0664_5.pngVirginia Canopy Tours started construction on the park course in July 2013. Photo courtesy Virginia Canopy Tours
‘Canopy tour’ is a first for Virginia state parks
http://www.virginiabusiness.com/news/article/canopy-tour-is-a-first-for-virginia-state-parks#When:10:00:00ZVisitors to Shenandoah River State Park in Warren County now can glide through the trees on a zip line, thanks to a course built by Virginia Canopy Tours. The course, which opened in April, is the first of its kind in a Virginia state park.
Virginia Canopy Tours, a sister company of North Georgia Canopy Tours, approached the state through the Public-Private Education Facilities and Infrastructure Act of 2002, which gives companies the opportunity to submit proposals for projects. “We can negotiate with any we feel are appropriate or worthwhile,” says Gary Waugh, public relations manager for the Virginia Department of Conservation and Recreation.
The department looked at the company’s offerings and sent personnel to Georgia to check out the course in place there. “It seemed compatible with what we do in our state parks,” Waugh says. “We felt it was a nature-oriented type of offering as well as a family-oriented offering. We decided it was worth giving it a try.”
Virginia Canopy Tours started construction on the course in July 2013. The company contracted with Bonsai Design in Grand Junction, Colo., to design and build it. “They have been building courses since 1992,” says Bonnie Nicklien, office manager for Virginia Canopy Tours in Bentonville. “They use recycled materials and steel frames. They are eco-friendly.”
The course is designed to hug the trees. As the trees grow out, the platforms will expand around them. “They won’t cut off growth,” Nicklien says of the platforms. “We wanted to highlight the ridgelines and utilize the natural resources.”
The course includes eight zip lines, two bridges, two nature hikes and a rappel. “It takes about two and a half hours,” Nicklien says. “There are two certified guides that handle all the equipment and take care of the gear and harness. We also do an eco-tour of the park.”
The course contains more than 3,000 feet of cable on the zip line. Zips range from 200 to 1,039 feet in length. “The course starts low and slow,” Nicklien says. “All of the zips are in the trees. The highest zip is 90 feet, and you get mountain views.”
The canopy tour, which costs $84 per person, is a revenue generator for the company and the park system. “We do get a percentage of the profits they make,” Waugh says, adding, “This is new to us. We are evaluating and seeing if it’s something worthwhile to try in other parks. We are still in that evaluation stage.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/SWVA_jonathansweet.pngJonathan Sweet
Grayson lands three deals in two months
http://www.virginiabusiness.com/news/article/grayson-lands-three-deals-in-two-months#When:10:00:00ZGrayson County Administrator Jonathan Sweet can attest to the old saying that good things come in threes.
In July and August three companies — Independence Lumber, Hansen Turbine and Core Health — announced plans to expand facilities in the county.
“Three qualified projects don’t close in the same quarter without a seasoned team approach,” he says, noting the county worked with the regional economic development organization (Virginia’s aCorridor) and Virginia Economic Development Partnership to develop proposals “that meet both the company’s needs and the county’s capacity. If it weren’t for the confluence of all of these factors at the right time with the right companies, Grayson County may not have been able to have announced the three projects and benchmarked a banner year for economic development.”
The county competed with North Carolina to keep Hansen Turbine and Independence Lumber, which suffered a devastating fire in November 2012. In its deal, Independence Lumber will invest more than $5 million, retain 57 current jobs, create 25 jobs at the site and purchase 90 percent of its timber from Virginia forests. “We won the deal because of the relationship we have with our existing industries,” says Sweet.
Hansen Turbine, a manufacturer of coating spray applications for the aircraft and turbine parts coating industry, is investing $2.5 million to expand its operations. Its sister company, Falcon Turbine, will relocate from North Carolina to the facility to produce specialized aluminized coatings. The project will create 25 new jobs. “We had a foot in the door to compete for their North Carolina operation,” Sweet says. “We were able to meet their needs.”
The most challenging project for the county was Core Health & Fitness LLC, which develops and markets advanced strength and cardio equipment. The company is investing $2 million to expand the former Med-Fit operation in Grayson. The facility has made Nautilus commercial products for more than 34 years. “This was the toughest project I have ever worked on,” Sweet says. “It was a challenge to find a viable suitor that wasn’t a private-equity firm. We worked hand-in-glove with the turn-around team.”
The goal was to find a suitor that would partner with the county and agree to keep the operation and jobs in Grayson. “We had to vet Core and reach a level of comfort that they weren’t going to take the intellectual property and franchise agreement and manufacture the strength equipment in China,” Sweet says.
As a result of negotiations the plant in Grayson will make Chinese components, adding 150 to 250 jobs. “That’s a wonderful conclusion,” Sweet says. “The Nautilus name is synonymous with fitness. If we had lost the Nautilus brand, we would have lost a lot of pride.”2014-10-30T10:00:00+00:00
People - November 2014
Douglas J. BeMent, appointed chief financial officer, Memorial Hospital, Martinsville. BeMent comes to Memorial Hospital from Warsaw, Ind., where he served as chief financial officer for Kosciusko Community Hospital. (Work It, SoVa)
Kelly S. Jones, a world history and sociology teacher at Greensville County High in Greensville County, named 2015 Virginia Regional Teacher of the Year, Region Eight. (News release)
Carl Manasco, named the recipient of the National Association of Realtors Major Investor award. He is the principal broker at Prudential Manasco Realty in Danville. (WorkItSoVa.com)
William Seth Roberts, a Pittsylvania County farmer who owns and operates a multistate fencing business, was presented with the 2014 Virginia Cooperative Council’s Young Farmer Award. (GoDanRiver.com)
State Sen. Frank Ruff (R-Clarksville) and Dora G. Wynn, superintendent of Brunswick County Public Schools, named to the Commonwealth Council on Childhood Success. (News release)
Scott Slagle, named business-to-business consultant, Danville Interstate All Battery Center. He brings more than 20 years of sales and business experience. (Work It, SoVa)
Lisa Tucker , named Danville Regional Medical Center’s new director of surgical services. Tucker comes to Danville from Morehead Memorial Hospital in Eden, N.C., where she served as director of surgical services. (Work It, SoVa)
The Taxpayer’s Alliance of Pittsylvania County selected Nancy Barbour Smith as its chairperson. Smith, an Axton resident, sued Pittsylvania County in 2010 over improper closed meetings and won and has run for the Pittsylvania County Board of Supervisors’ Tunstall seat. (Danville Register & Bee)
Michael Bund y resigned as interim president and CEO, Bristol Virginia Utilities, effective Nov. 3. Bundy plans to return to the health-care industry, (Bristol Herald Courier)
Selena Childress-Mayo and Beth Dillow Rhinehart, named to the Common wealth Council on Childhood Success. Childress-Mayo, of Roanoke, is director, TAP Headstart/Early Headstart, Total Action for Progress, Roanoke. Rhinehart, of Bristol, is director of government relations, Wellmont Health Systems, Kingsport, Tenn., and a member of the Virginia Early Childhood Foundation. (News release)
Y. Thomas Hou, professor of electrical and computer engineering at Virginia Tech, named Bradley Distinguished Professor of Electrical and Computer Engineering by the Virginia Tech board of visitors. The professorship recognizes faculty excellence. (News release)
Greg Jenkins is one of three researchers who recently received the 2014 AAA/Deloitte Foundation Wildman Medal Award for their study on how brainstorming meetings can help auditors detect fraud. He is professor of accounting and information systems, Pamplin College of Business, Virginia Tech. (News release)
Virginia Tech President Timothy D. Sands, appointed to the Innovation and Entrepreneurship Investment Authority. (News release)
Vijay Singal, the J. Gray Ferguson Professor of Finance, has been reappointed head of the Department of Finance, Insurance and Business Law in the Pamplin College of Business, Virginia Tech. (The Roanoke Times)
Matthew T. Newton, a grades 3-5 special education teacher at Fishburn Park Elementary in Roanoke, and Mark T. Merz, a pre-kindergarten teacher at Oak Point Elementary in Smyth County, named 2015 Virginia Regional Teachers of the Year. (News release)
Virginia Tech alumnus Thomas Davis Rust will receive the American Society of Civil Engineers’ Outstanding Project And Leaders (OPAL) award in Arlington on March 26, 2015. The award recognizes outstanding civil engineering leaders whose achievements have made significant differences in construction, design, education, government or management. (News release)
Frank Rogers, named Campbell County’s administrator. He worked for the Bedford County administrator’s office since serving as the deputy, interim and assistant administrator. He replaced David Laurrell, who held the position for nearly 20 years. (The News & Advance)
Johan G. Broekhuysen, named executive vice president, chief financial officer and treasurer of Waynesboro-based Lumos Networks Corp. He also remains the company’s chief accounting officer. He previously was interim chief financial officer and corporate controller for six months. (VirginiaBusiness.com)
Velma Jordan , named president, New Market Chamber of Commerce. She replaced Cathy Donald who left because of family concerns. (The Shenandoah Valley-Herald)
Dr. Stacy Miller joined Shenandoah Community Health’s team of providers at Winchester Family Health Center at 525 Amherst St. (NVDaily.com)
Ellen B. Shinaberry and James Wells, named to the Virg inia Board of Health Professions. Shinaberry is pharmacy information technology manager, Sentara RMH Medical Center, Harrisonburg. Wells is pharmacy administrative director of Warren Memorial and Page Memorial hospitals, both located in the Shenandoah Valley. (News release)
Donna Whitley-Smith, named superintendent, Page County Public Schools. Whitley-Smith’s appointment follows the retirement of former Superintendent Donna Power. (Page News and Courier)
Cheryl Thompson-Stacy, named to Commonwealth Council on Childhood Success. She is president, Lord Fairfax Community College, which has campuses in Warrenton and Middletown. (News release)
Ernest F. Steidle, of Waynesboro, renamed to the Information Technology Advisory Council. Steidle is chief operations officer, Virginia Department for Aging and Rehabilitative Services. (News release)
Jaclyn Roller Ryan, an agricultural education teacher at Signal Knob Middle School in Shenandoah County, has been named the Virginia Region 4 Teacher of the Year. (News release)
Seth Aubin, selected as a Fulbright Scholar for the 2014-15 academic year by Fulbright Canada. He is associate professor of physics at the College of William and Mary. Aubin will work at TRIUMF, Canada’s national laboratory for particle and nuclear physics. (Daily Press)
Persifor “Perry” Frazer, promoted to managing director, CBRE|Hampton Roads. During his career at CBRE, Frazer has served as a board member, partner, brokerage leader and personal mentor to young brokers. (VirginiaBusiness.com)
Barbara Hamm Lee, elected chairwoman, Norfolk Redevelopment and Housing Authority Board of Commissioners. She is the first woman to head the board in its 74-year history. Lee is executive producer and host of WHRV’s “Another View” and is managing director of SkillsOnline, a workforce development project at WHRO Public Media. (Daily Press)
Patricia Richardson, named publisher of The Virginian-Pilot and president of Pilot Media in Norfolk. Richardson was publisher of the Capital Gazette in Annapolis, Md., and the Carroll County Times in Westminster, Md. Until May, both newspapers were owned by Norfolk-based Landmark, The Pilot’s parent company. (The Virginian-Pilot)
The Port of Virginia has promoted two executives in its final move as part of its reorganization. Joseph P. Ruddy, the chief operations officer at the port, has been appointed chief innovation officer. Shawn Tibbets, who has been senior vice president of operations at the port, will become chief operations officer. (VirginiaBusiness.com)
Michelle Bethea and Kyle Windley joined Long & F oster’s Kempsville office in Virginia Beach. They will specialize in working with homebuyers and sellers. (News release)
Kathryn B. Pfeiffer joined the Virginia Beach office of the Williams Mullen law firm as an associate with the business and corporate team. She joins Williams Mullen from Midkiff, Muncie & Ross P.C., where she was an associate in the litigation department. (Daily Press)
Sandra Baynes and Gene E. Magruder, named to the Virginia Board for Asbestos, Lead and Home Inspectors. Baynes is CEO/chief financial officer, Retnauer Baynes Associates LLC, Chesapeake. Magruder is tradesman with Newport News Shipbuilding and a member of the board for contractors. (News release)
John R. Broderick, named to the Virginia Offshore Wind Development Authority. He is president of Old Dominion University. (News release)
Jim Hernandez, named general manager of Priority Nissan in Williamsburg. Hernandez was general manager of Priority Nissan, Newport News. (VirginiaBusiness.com)
John E. Hofmeyer Jr., of Williamsburg, named to the Aquaculture Advisory Board. He is president, Virginia Aquaculture Association. (News release)
Sen. Mamie E. Locke (D-Hampton), named to Legislative Advisory Council to the Southern Regional Education Board. (News release)
Randy Fuerst, named president and CEO of Oceus Networks Inc, Reston. Fuerst was Oceus’ president and chief operating officer. (VirginiaBusiness.com)
Fairfax-based SRA International has named David Keffer executive vice president and chief financial officer, while Theresa Golinvaux was named vice president and corporate controller. Keffer was SRA’s corporate controller. Golinvaux was assistant controller. (VirginiaBusiness.com)
Michael Lisse, appointed client executive for financial services, 3Pillar Global, Fairfax. Lisse was a consultant at KPMG LLP. (News release)
Dr. Michael McDermott, named CEO, Mary Washington Healthcare, Fredericksburg, effective Jan. 1. McDermott is a radiologist with Radiologic Associates of Fredericksburg. (News release)
Andrew J. Peden, promoted to executive vice president, real estate lending, at Tysons Corner-based Cardinal Bank. Peden was senior vice president and market executive for the Commercial Real Estate division of the bank. (VirginiaBusiness.com)
Jim Scott, named president of DRS Technologies’ Aviation, Communication and Homeland Security (ACHS) business group in Herndon. Scott was vice president and general manager for the Global Enterprise Solutions business unit of ACHS. (VirginiaBusiness.com)
Robert. G. Templin Jr. plans to retire in February as president of Northern Virginia Community College. After retirement, Templin will hold a part-time position at The Aspen Institute in Washington, D.C. (VirginiaBusiness.com)
McLean-based Mars Inc. announced several promotions in the wake of a decision by Todd Lachman, the current president of Mars Global Petcare, to leave the company at end of the year to relocate his family to San Francisco. He will be succeeded in January by Poul Weihrauch, currently global president of Mars Food. Fiona Dawson, now regional president of Chocolate UK and Global Retail, will become global president, Mars Food, with accountability for Mars Drinks and European Multisales. Andrew Clarke, now regional president of Petcare for Latin America, will become Mars’ new chief customer officer and a member of the Mars leadership team, effective Feb. 15. Bruce McColl, Mars’ chief marketing officer, also is becoming a member of the Mars leadership team. (VirginiaBusiness.com)
The Arts Council of Fairfax County selected London-based artist Julia Vogl for the public art and engagement project Imagine Art Here in Tysons. The artist will conduct community engagement sessions at several sites near the new Silver Line Metro stations culminating in a large-scale installation in June through August 2015. (News release)
Jeff Sadler, named interim executive director, Culpeper Renaissance. The Virginia Main Street organization is working to revitalize Culpeper’s downtown area. Sadler has a background in economic development and specializes in historic commercial district revitalization and organizational strategic planning. (The Free Lance-Star)
Falls Church-based CSC named Michael Sweeney interim corporate controller and principal accounting officer. He was CSC’s assistant corporate controller and controller of the company’s North American Public Sector segment. Thomas Colan, who has been vice president, controller and principal accounting officer at CSC, is stepping down for personal reasons. He has held those positions since August 2012. (VirginiaBusiness.com)
Carrie Hileman Chenery, named assistant secretary of agriculture and forestry. Chenery was manager of legislation and policy for the Virginia Economic Development Partnership, Richmond. (News release)
Richmond-based CarMax Inc. promoted Shamim Mohammad to senior vice president and chief information officer. He was vice president of application development and IT planning. (VirginiaBusiness.com)
Steven Settlage, named president, Eagle Construction of VA, Henrico County. Settlage joined the company in 2011 when Eagle took on many of the projects started by his former development firm, the Tascon Group. (RichmondBizSense.com)
Michael W. Smith, a partner at Christian & Barton LLP in Richmond, named president-elect of the American College of Trial Lawyers. He will become president of the organization at the conclusion of its annual meeting in October 2015. (VirginiaBusiness.com)
University of Virginia President Teresa A. Sullivan, reappointed to the Innovation and Entrepreneurship Investment Authority. (News release)
Laurence P. Wisdom, named president, HHHunt Homes, Richmond. He was the first non-owner president of Essex Homes’ Columbia Division. (VirginiaBusiness.com)
Steven A. Wolf, named director, litigation support services, Cherry Bekaert, Richmond. Wolf was executive director at a leading forensic accounting and transaction advisory services firm for more than five years. (News release)
Courtney Moates Paulk is the seventh person in history to complete the 20-mile swim across Cape Cod Bay. Paulk is a partner at Hirschler Fleischer, Richmond. (News release)
Madelyn Buckley joined the workers’ compensation-litigation practice group at McCandlish Holton in Richmond. She most recently served as law clerk for Justice LeRoy Millitte of the Supreme Court of Virginia. (RichmondBizSense.com)
Paul Galanti, a nationally known prisoner of war turned advocate for veterans, stepped down as commissioner of the Virginia Department of Veterans Services. He was held as a prisoner of war in North Vietnam for nearly seven years. (Richmond Times-Dispatch)
Lauren Ross, named curator of the Institute for Contemporary Art at Virginia Commonwealth University, Richmond. She is currently the Nancy E. Meinig Curator of Modern and Contemporary Art at the Philbrook Museum of Art in Tulsa, Okla. (RichmondBizSense.com)
Jorge Calleja, promoted to executive creative director at Richmond-based The Martin Agency. He had been global group creative director. (RichmondBizSense.com)2014-10-30T10:00:00+00:00
For the Record - November 2014
Amthor International plans to ramp up production at its Gretna plant and create 30 jobs. The Gretna-based company says it is the largest and most diverse manufacturer of truck-mounted tanks in the U.S. The family-owned firm already employs more than 100 people at the 86,000-square-foot plant. Amthor will be hiring welders, mechanics and electricians. The expansion will allow the company to operate its two existing shifts at capacity. (VirginiaBusiness.com)
Danville has filed lawsuits against GOK International and Web Parts LLC. When the Tobacco Commission awarded grants to the ci ty in 2012 and 2013 to support new companies, Danville expected the grantees to follow through on performance commitments. Two lawsuits later, Danville is now liable for a total of $2 million to the Tobacco Commission, plus another $359,007 in other grants to the two companies that are lost but don’t need to be paid back. (Danville Register & Bee)
Danville’s IKEA plant will have a new production line operational by January 2016 — and the equipment expansion will result in new hires. Plant Manager Ildiko Furjesova said that the specific number of hires is unknown at this point. “It’s too early to say, but it will create several new jobs,” she said in a news release. Recruitment for the new positions has started. Positions will be posted with the local employment office. The new line will produce lightweight wood-based home furnishing products. (GoDanRiver.com)
Students, parents, teachers and school board members gathered at the former Woodlawn Academy in Chatham in September to formally dedicate the county’s new STEM Academy, focused on science, technology, engineering and mathematics education. Guests toured the building’s various labs and classrooms, and were also able to walk through the second purpose for the purchase of the building — a permanent home for the county’s alternative school. (Danville Register & Bee)
In September, the Virginia Tobacco Commission approved a grant application to establish an IT Academy at the Southern Virginia Higher Education Center in South Boston. The academy will provide a core curriculum leading to CompTIA certification in A+, Network+ and Server+. The academy will also offer intermediate- and advanced-level training based on industry needs and employer demands. SVHEC plans to enroll the first group of students in the spring 2015 semester. (Work It, SoVa)
Danville Community College received a $2.5 million grant from the U.S. Department of Labor’s Trade Adjustment Assistance Community College and Career Training initiative. The grant will be used to incorporate workplace experiential learning in advanced manufacturing in an educational setting. The new program, Retooling America, focuses on realistic, fully integrated training experiences in a full-scale manufacturing facility. Four other Virginia colleges also received grants from the initiative. (VirginiaBusiness.com)
Altec Industries plans to purchase 30 acres at the Greenfield business park from Botetourt County for $241,000, less than a quarter of its value. Altec will invest $1 million in building improvements and $2 million in machinery and tools by next year and hire at least 100 new full-time workers between now and 2016. County Administrator Kathleen Guzi said Altec will pay “liquidated damages” to the county should it fail to meet these conditions. (The Roanoke Times)
Luna Innovations Inc. said in October it would expand its Blacksburg office in Montgomery County. The company plans a $500,000 investment into a newly renovated 41,000-square-foot suite in the Technology Manufacturing Building where Luna is currently located. Luna’s space will include a renovated executive office, lab and manufacturing space at the Technology Manufacturing Building. Built in 2001, the building is a 109,000-square-foot facility owned and managed by the Montgomery County Economic Development Authority. (VirginiaBusiness.com)
Roanoke-Blacksburg Regional Airport will no longer offer direct flights to Detroit, ending a service that’s been available for more than 20 years. The airport said that Delta Air Lines decided to cancel the service Nov. 1 because the route loses money. On the flip side, Delta will expand its service between Roanoke and its main hub, Hartsfield-Jackson Atlanta International Airport. On Nov. 1, the airline will adjust aircraft assignments, resulting in the number of daily outbound seats to Atlanta growing from 276 to 320. (The Roanoke Times)
Wells Fargo Bank told 115 employees at its Roanoke County call center they will be terminated later this year, which will eliminate 6.4 percent of the facility’s workforce. Wells Fargo spokeswoman Kristy Marshall tied the cuts to a reduction in foreclosures and delinquency. Demand for mortgage financing and refinancing also is down, she said. The cuts are scheduled to take effect in mid-December, Marshall said. The Plantation Road facility employs 1,800 people. (The Roanoke Times)
Paris-based Daher-TLI will make nuclear waste containers in Washington County to ship globally. Daher-TLI moved into the old Steel Fab building along Lee Highway this summer and has been cleaning and outfitting the building to fit its needs, company officials said in September at a ribbon-cutting ceremony. The building is about 90,000 square feet and was empty for about a year. The company moved from nearby Bristol, Va., to have a larger manufacturing space. (Bristol Herald Courier)
The Western Virginia Workforce Development Board recognized Roanoke-based Carilion Clinic as the 2014 “Business of the Year.” The award recognizes a company that encourages and supports professional development of new and current employees; supports the efforts of workforce centers, agencies and/or partners; provides training and retraining opportunities for employees; promotes career advancement opportunities and shows significant increased employment. (News release)
Roanoke Mountain Adventures will open in spring 2015 in Roanoke. The business will provide guides, tours, transportation and equipment for mountain biking, road cycling, kayaking and other outdoor recreation activities. Roanoke Mountain Adventures will operate from Wasena Station alongside the Roanoke River Greenway. (News release)
Bristol-based Alpha Natural Resources Inc. says more than 250 jobs have been eliminated at coal mines in West Virginia. In updating its Worker Adjustment and Retraining Notification (WARN) Act announcement from last July affecting mines and some support facilities, the company said three of its affiliates have notified employees that the coal mines where they worked have been idled. Meanwhile, one mine that had expected to be idled will continue to operate, while eight other mines have extended the period of time they will continue to operate. (VirginiaBusiness.com)
Hollister Inc. held a ribbon-cutting in September for a $29 million expansion project at its Stuarts Draft plant. The project increases the overall size of the plant by more than 25 percent, adding 50,000 square feet of space. The project also includes new equipment to automate processes, enhance products and increase production volume. Hollister is an employee-owned company that develops, manufactures and markets medical devices. It is based in Libertyville, Ill., 40 miles north of downtown Chicago. (VirginiaBusiness.com)
InterChange Group Inc. purchased the former Invista Stone Fort II facility outside of Waynesboro, also known as the South Oak Lane Warehouse. The company purchased the site for $4 million, making it the 13th facility for the company — most of which are located along the Interstate 81 corridor. The logistics company based in Harrisonburg specializes in warehousing services for local and regional food processing and manufacturing segments, according to its website. (News Leader)
McKee Foods Corp. plans to spend $34 million to expand production at its manufacturing facility in Augusta County, a project that is expected to create 54 jobs. The Stuarts Draft plant currently employs 1,000 workers and is one of the largest employers in Augusta County. McKee Foods, a privately held company based in Collegedale, Tenn., produces snack foods, cereals and baked goods. Gov. Terry McAuliffe approved a $300,000 performance-based grant from the Virginia Investment Partnership program for the project. (VirginiaBusiness.com)
The Virginia General Assembly has filled spots in the 26th Judicial District. Clark Ritchie, an assistant commonwealth’s attorney in Rockingham County, will serve as a circuit judge, while a fellow assistant, Anthony Bailey, was appointed a juvenile and domestic relations judge. Harrisonburg lawyer John Hart was selected for general district court. Domestic Relations Judge Ronald Napier was also selected for circuit court, and Front Royal lawyer Kim Athey was picked to replace him. The appointments are effective Dec. 1. (ShenValleyNow.com)
FedEx Ground plans to finish construction of a new 200,000-square-foot distribution center near Langley Speedway next September, the company confirmed. The 22-acre site in Langley Research and Development Park in Hampton is close to customers’ distribution centers and is part of the company’s nationwide network expansion. (Daily Press)
Friant and Associates, a California-based maker of custom office furniture, plans to create 166 jobs in Suffolk. The company will invest $17.4 million in its first Virginia manufacturing operation at the CenterPoint Intermodal Center. Gov. Terry McAuliffe approved a $200,000 grant from the Governor’s Opportunity Fund for the project. The company also will receive benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant Program as well as funding and services from Virginia Jobs Investment Program. (VirginiaBusiness.com)
Huntington Ingalls Industries awarded a contract to Jacksonville, Fla.-based JackQuadMed to manage and operate HII’s family health-care centers for the company’s employees and their families in Newport News and Mississippi. The health-care centers, scheduled to open next year, will provide primary-care services that focus on prevention, wellness, early intervention and chronic condition management. (VirginiaBusiness.com)
A $38 million multimodal transportation center in Newport News is scheduled to begin construction in 2016. The station will be able to accommodate four Amtrak trains a day and will include room for taxis, bays for Hampton Roads Transit and Greyhound buses and 125 parking spaces. The project is scheduled for completion in 2018. (Daily Press)
The Port of Virginia’s Portsmouth Marine Terminal reopened to cargo operations in September after being closed for nearly three years. The terminal, which will process 75,000 to 100,000 containers annually, is expected to help relieve congestion at the Virginia International Gateway (formerly known as APM Terminals) in Portsmouth and Norfolk International Terminals. The marine terminals have become more congested as container-moving through the port continues at record levels. (VirginiaBusiness.com)
The Port of Virginia also has received a $15 million Transportation Investment Generating Economic Recovery (TIGER) grant for construction of the Norfolk International Terminal Intermodal Gate Complex and Interstate 564 Connector project. The project aims to improve the daily commute for thousands in Hampton Roads by lightening congestion on Hampton and Terminal boulevards in Norfolk. (VirginiaBusiness.com)
Virginia Beach, Alexandria and Chesapeake, named to “America’s 50 Best Cities to Live” compiled by 24/7 Wall St., a financial news and opinion website. Virginia Beach ranked No. 37 on the list, while Alexandria was 43rd and Chesapeake was 48th. To compile the list, 24/7 Wall St. looked at 550 cities that the U.S. Census Bureau reported as having populations of more than 65,000 in 2012. Information was collected in seven major categories: crime, economy, education, housing, environment, leisure and infrastructure. (VirginiaBusiness.com)
Chesapeake-based Priority Automotive opened Priority Nissan in Williamsburg, the company’s third new-car dealership on the Peninsula and its ninth in Hampton Roads. The company, which also owns dealerships in Richmond, Petersburg and Charlotte, N.C., also has plans for additional locations on the Peninsula. They include Priority Collision Center, Priority Certified Used Cars and Priority Value Center, a used-car dealership specializing in “credit-challenged” buyers. (VirginiaBusiness.com)
Hilton Worldwide Holdings Inc. in McLean has agreed to sell the Waldorf Astoria New York for $1.95 billion to Anbang Insurance Group Co. Ltd., based in Beijing. As part of a long-term strategic partnership, Anbang will grant Hilton Worldwide a management agreement to continue to operate the property for the next 100 years, and the hotel will undergo a major renovation. (VirginiaBusiness.com)
Tysons Corner-based analytics firm MicroStrategy plans to cut 770 jobs over the next few months, a reduction that would reduce its workforce by roughly 20 percent. The company said it had 3,186 employees worldwide in late 2013, and employed 1,428 locally. (The Washington Post)
Reston-based NII Holdings filed for Chapter 11 bankruptcy in September. The mobile communications provider said in August it would likely file for bankruptcy protection from creditors. NII said it and some of its U.S. and Luxembourg-based subsidiaries had begun voluntary Chapter 11 proceedings, the first step in restructuring its debt and improving liquidity. The company’s subsidiaries in Brazil, Mexico and Argentina are not part of the bankruptcy filings and will continue “business as usual,” NII said. (VirginiaBusiness.com)
The Peterson Cos., a developer in Fairfax, and Brandywine Realty Trust, a real estate company based in Radnor, Pa., announced the formation of a 50-50 venture to develop a 300,000-square-foot mixed-use town center in Herndon. Peterson will be the lead developer for the retail and entertainment components that will serve as an amenity base for Brandywine Realty Trust’s existing 1.86 million square feet of office buildings and the surrounding community. The companies hope to start development in 2016. (Richmond Times-Dispatch)
Falls Church-based contractor USIS has laid off more than 2,500 employees. The company suffered a cyberattack in August and subsequently lost its contracts with the Office of Personnel Management. USIS, which had performed the bulk of background checks for federal security clearances, said in a statement that the loss of two contracts with OPM led to the job cuts. Both contracts were set to expire on Sept. 30, and the government agency said it would not renew them with USIS. (The Washington Post)
Fredericksburg-based Mary Washington Healthcare cut 66 jobs Sept. 3 as part of an ongoing effort to pare $30 million in expenses. MWHC reduced the hours of 46 employees, and 157 additional workers will be transferred to other jobs within the system. The cuts represent about 2 percent of the system’s employees. The lost positions were mainly in support fields and were divided between Mary Washington and Stafford hospitals, said Eric Fletcher, senior vice president of strategy, marketing and business development for MWHC. (The Free Lance–Star)
Richmond-based McCandlish Holton opened a new law office in Fairfax Sept. 1. Scott C. Ford, a vice president at McCandlish Holton, said the firm transferred one attorney from the Richmond office, Kwabena Akowuah, to the new Fairfax office. It will hire a paralegal and other support staff for the office in the short term and hopes to add more attorneys there over time. The new office is at 8280 Willow Oaks Corporate Drive, near the Capital Beltway’s intersection with Interstate 66. (RichmondBizSense.com)
Vienna-based Ratner Cos. is celebrating 40 years in business this fall. Ratner, the largest family-owned and operated chain of hair salons, has nearly 1,000 salons in 16 states. Its brands include Hair Cuttery, Bubbles, Salon Cielo and Spa, ColorWorks, Salon Plaza and the Cibu International hair care line. Over the past 40 years, Ratner Cos. has surpassed $15 billion in sales and employed more than 100,000 licensed stylists. (News release)
Nine Virginia companies have made lists of the nation’s largest black-owned companies. Seven of the companies are on Black Enterprise magazine’s list of the 100 biggest black-owned industrial and services companies. Two more are on the magazine’s list of 60 top black-owned auto dealerships. The biggest Virginia company on the industrial/service list is Reston-based Thompson Hospitality. The other six companies were Fairfax-based SoBran Inc.; Alexandria-based SENTEL Corp., Capston Corp. and Advanced Systems Development Inc.; McLean-based Metters Industries Inc. and Reston-based InScope Internation al. The two companies on the Black Enterprise list of largest black-owned auto dealerships were BMW , of Sterling, and Infiniti, of Chantilly. (VirginiaBusiness.com)
Used car dealership chain CarMax says it plans to hire more than 1,000 workers across the country. The Richmond-based company said that the positions include sales, service operations, purchasing and the business office. Full- and part-time positions are included. (The Associated Press)
Richmond-based Cary Street Partners LLC, a wealth management and investment banking firm, plans to acquire The Breckenridge Group Inc., a privately held Atlanta-based investment bank. The deal is subject to regulatory approval. Financial details were not disclosed. The Breckenridge Group, founded in 1987, provides investment banking services to middle-market businesses. (VirginiaBusiness.com)
The Greater Richmond Transit Co. was awarded a $24.9 million Transportation Investment Generating Economic Recovery grant to build a rapid transit bus line from Willow Lawn in Henrico County to Rocketts Landing in Richmond’s East End. The money for the 7.6-mile line will be matched with state and local funds. According to GRTC’s website, the total project has an estimated price tag of almost $54 million and would include 14 stations and over three miles of dedicated travel lanes for buses. (VirginiaBusiness.com)
Charlottesville-based Relay Foods is investing $710,000 to expand its Richmond fulfillment center, a move that’s expected to create 75 jobs. Relay’s goal is to increase mid-Atlantic sales by $3 million during the next three years. Gov. Terry McAuliffe approved a $50,000 Agriculture and Forestry Industries Development Fund for the project. Relay has committed to purchasing at least $406,000 worth of Virginia products during the next three years. Relay is an online grocery store and farmers market that offers Virginia-based products. (VirginiaBusiness.com)
Virginia has filed a lawsuit seeking $1.15 billion in damages against 13 banks accused of misleading the Virginia Retirement System (VRS). The case stems from the sale of residential mortgage-backed securities to VRS from 2004 to 2010. The retirement system was forced to sell most of the securities, taking a loss of $383 million. The suit charges that these banks knew, or should have known, that claims they made about the quality of the mortgages were false. (VirginiaBusiness.com)
Mechanicsville-based Bowlmor AMF completed a $270 million acquisition of the bowling alley operations of Brunswick Corp. last week. As part of the deal, Bowlmor AMF will take on 85 Brunswick bowling alley properties around the U.S. and Canada. It now has more than 340 locations and 9,000 employees. The addition of the Brunswick operations will bring Bowlmor AMF’s annual revenue to approximately $600 million, the company said. (RichmondBizSense.com)
Winston-Salem-based Krispy Kreme signed an agreement with Richmond-based Monument Restaurants VII LLC to develop 20 new Krispy Kreme shops in Southern Maryland, Washington, D.C., Northern Virginia and nearby counties over the next several years. Monument Restaurants has acquired ownership of Krispy Kreme’s Rockville, Md., location while Krispy Kreme still owns its remaining Washington, D.C., and Northern Virginia locations. Krispy Kreme has over 260 shops in the United States, approximately 160 of which are franchised. (News release)
Universal Sports Network, a division of NBC, will air 64 hours of original programming across several networks during the UCI Road World Championships in Richmond next year, the most airtime the championship has ever received in the United States. Financial details were not made public. The championship is the largest road cycling event in the world outside of the Tour de France and the Olympics. (Richmond Times-Dispatch)
2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/SOVA_danville.pngThe Dan River Technology Park offers up to 1.9 million sq. ft. for future development. Image courtesy City of Danville
Danville markets former mill site as technology park
http://www.virginiabusiness.com/news/article/danville-markets-former-mill-site-as-technology-park#When:10:00:00ZThe 80-acre site that was once a center of textile manufacturing in Danville for more than 100 years is now primed to be a center of technology.
Dan River Technology Park, which includes several existing structures, has its own electrical substation, unlimited water supply and is hooked into nDanville’s high-capacity broadband services.
“It has unmatched electrical and fiber infrastructure,” says Telly Tucker, the city’s director of economic development. “The transferability capacity is one gig per second. We tested how quickly data could be sent from Danville versus Northern Virginia, and it was quicker from Danville.”
The city Industrial Development Authority owns the site, once home to Dan River Mills, and would like to sell or lease the property. It offers up to 1.9 million square feet for future development.
“All options are on the table, leasing, build-to-suit and land lease as well as selling,” says Tucker. “We will consider selling to one user or multiple users. That’s one of our options. We have so much flexibility with this site because of the infrastructure.”
One option for the site would be a data center. The city, which is known as an established technology location, is home to the first Cray XMT2 supercomputer located outside a government agency or university campus.
Because it is located on a different power grid than most facilities, Danville is a strategic disaster recovery location for major cities on the East Coast. That helps it avoid problems with blackouts or brownouts. “It’s also more than four and a half hours from Washington, D.C., so it’s out of the threat of terrorism to D.C.,” Tucker says.
Danville is marketing the site to domestic and international companies.
“We’ve been marketing it for a few months,” Tucker says. “We have seen some interest. Several prospects have called, and some have taken site visits. If we can land an anchor tenant, it will be more attractive to other tenants. We probably have a higher likelihood of multiple companies coming in and having a multi-tenant facility.”2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/GLOBAL_Torc.pngAn unmanned vehicle carries an injured Marine. Photo courtesy TORC Robotics LLC
Look, Mom: no hands
http://www.virginiabusiness.com/news/article/look-mom-no-hands#When:10:00:00ZAutonomous or driverless vehicles may be a new buzzword within the auto industry, but the technology behind those vehicles isn’t new to Michael Fleming, CEO of TORC Robotics LLC in Blacksburg. The company has been working with the technology since it opened its doors in 2007.
“The autonomous technology is not yet being used by consumers, but it is coming,” says Fleming. “ … It’s the same technology we are working on and have deployed.”
The year TORC opened, it partnered with Virginia Tech to compete in a challenge sponsored by the Department of Defense Advanced Research Projects Agency (DARPA). Teams were tasked with developing a fully autonomous vehicle that had to travel 60 miles of urban and off-road environments in less than six hours. “We were competing with 89 teams from around the world,” Fleming recalls. “We were one of three teams [Carnegie Mellon and Stanford were the other two] that finished the challenge. That was our claim to fame.”
Since then the company has been working with the Department of Defense as well as the transportation and mining industries. Fifty percent of its revenue comes from defense projects. The remaining 50 percent is related to commercial customers. “We also work with agriculture, but we focus on the other three [defense, transportation and mining] sectors,” Fleming says.
Fleming was a graduate student in engineering when he started his company. He began with four partners, all Virginia Tech engineering professors and graduate students. The five had been working on a robotic project at Virginia Tech when they discovered that industries were interested in their technology. “We were working with technology that is decades out. They came and said ‘we would like to buy it,’” Fleming says. “I said, ‘Let’s spin out a company.’”
The DoD has used the company’s technology in its military vehicles (humvees and mine-resistant ambush protected vehicles) in Iraq and Afghanistan. The mining industry is implementing the technology in open pit mines that already use autonomous excavators and haul trucks.
TORC has grown from five to 40 employees. It currently has three facilities in Blacksburg. The company continued its expansion in August by breaking ground on a new 20,000-square-foot robotics building that is scheduled to open next March. “We will be able to consolidate into one central facility,” Fleming says. The project is adjacent to the company’s 22-acre, off-road test site and Virginia Tech’s “Smart Road,” which is used for transportation testing. “It will serve as a training and demonstration facility. It will allow us to test our products and also allow customers to travel to us … It’s something we have needed for a while.”
TORC recruits employees from Virginia Tech and other institutions such as Carnegie Mellon, Cornell University and Massachusetts Institute of Technology (MIT). “Most of our employees have advanced degrees, masters and Ph.D.s,” Fleming says. “We are an engineer, technology-heavy company.”
He says the private company’s revenue has been on an upward swing, although Fleming doesn’t release figures. “Since 2010 we have grown 60 percent each year in revenue,” Fleming says.
International companies began showing interest in the technology for both defense and commercial applications in 2009 at a time when TORC had high demand from U.S. customers. “A lot of times when you are in rapid growth, it can be very painful, so it was important for us to be focused on our priorities,” Fleming says of the decision at that time to not focus on international markets. “We didn’t see as much demand on the international side.”
By 2012, though, that mindset changed because there was international demand, particularly in the military and defense sectors. “We became engaged with the Virginia Economic Development Partnership. We have been working with them for several years now,” says Fleming.
International business currently accounts for less than 15 percent of overall revenue, “but we see it growing.”
The company works with Australia and Singapore but also has customers in Europe. “We are now seeing a demand from South America. We also work with the Middle East through partners,” says Fleming.
He finds that customers in Singapore are aggressive in adopting new technology. “They are forward thinking,” he says. “They are very business savvy. I have a lot of respect for our customers there.”
It’s important to build relationships in Singapore. “That’s not always done in a conference room,” he says. “It’s also done over lunch and dinner and by having our partners in Singapore come to Virginia.”
Most of his customers are fluent in English. “There is not much of a language barrier,” he says. Before doing business in a foreign county, Fleming says, it’s important to research the culture. “You want to become well versed. The most important thing is to be polite and spend more time listening than talking,” says Fleming.
Economy in Blacksburg
Startup businesses in Blacksburg and Montgomery County are on the rise. This spring four local startups in Blacksburg – Fitnet, a mobile fitness app; Heyo, which provides a social marketing platform for small businesses; LawnStarter and VirtualU, which works with 3D scanning and human avatars – secured $4.1 million of angel and venture financing to grow their companies. The Virginia Tech Corporate Research Center, adjacent to Virginia Tech, has grown to more than 150 research, technology and support companies. Local entrepreneurs founded about 60 percent of the companies in the park. Major employers in Blacksburg include Virginia Tech, Dish Network, Moog, which manufactures motion control products, aerospace company Alliant Techsystems and the Montgomery County School Board.
Economy in Singapore
Singapore is one of the world’s largest exporters. The country has a large petroleum and petrochemical industry as well as a prominent manufacturing sector that includes digital and electronics manufacturing. Tourism and financial business services also factor in the country’s economy. One of the country’s growing economic sectors is biotechnology. Major employers include Pan Pacific Hotel Groups, Singapore Airlines, Shell Eastern Trading (a supplier of liquified natural gas) and agribusiness group Wilmar International Limited.2014-10-30T10:00:00+00:00http://www.virginiabusiness.com/uploads2/NOV_Bernie1395.png
Higher taxes, please
http://www.virginiabusiness.com/opinion/article/higher-taxes-please#When:10:00:00ZGov. Terry McAuliffe’s administration has made diversifying Virginia’s economy a major initiative and rightfully so.
Imagine a giant vortex, the whirling sound of Virginia’s economy dancing around the drainpipe. After decades of over-reliance on the public sector, is this the nightmarish endgame? If so, it’s enough to make one wake up in a cold sweat.
Public sector or public-sector contractors account for 13 of Virginia’s top 20 employers. Overall, the commonwealth ranks fourth behind the District of Columbia, Maryland and Alaska with 22.4 percent of its employed residents working for federal, state or local government. That’s more than one in five Virginia workers.
For some time the public sector’s been getting hit by a double whammy: Most of the focus tends to be on federal sequestration — remember the political deal that was supposed to be so bad that neither party would let it happen? Well, it’s been happening for some time now.
The second part of this disaster scenario is largely self-created. Long before sequestration began, Virginia’s state government dialed back its own revenue growth. For three successive governorships — under the leadership of both Democrats and Republicans — the commonwealth has largely avoided all tax increases. When’s the last time that our General Assembly did not have to spend an inordinate amount of time breaking a self-inflicted budget crisis?
Roughly 70 percent of Virginia’s general fund revenue comes from income taxes, and another 20 percent arises from sales taxes. That’s 90 percent of the general fund. Without increasing either of these taxes, the commonwealth has no choice but to make cuts in other areas, notably higher education, as well as perennially underfunding transportation and other infrastructure needs. This problem is particularly acute during periods of economic contraction.
The unfixed potholes in our highways ultimately become a tax, requiring front-end work on our automobiles. For well over a decade, Virginia’s governors have been forced to call for all state departments to produce plans reducing their spending. Metaphorically speaking, these reductions are creating potholes that need filling in many areas other than roads.
The citizens of the commonwealth have witnessed a variety of gimmicks employed by elected officials to supposedly close budget gaps: a rainy day fund that will ultimately run dry, borrowing from state pension contributions, as well as imaginary revenues dependent on federal action, such as still-non-existent offshore oil leases and a yet-to-be passed Internet sales tax.
Recently, Virginia’s unemployment rate has been rising at a time when national rates are falling. Looking backward, we’ve seen Virginia go from being above average on nearly all measures to having less favorable ratings. In 2013, Virginia ranked 48th in the U.S. for GDP growth with just one-tenth of one percent, barely positive. The two states behind us, Maryland and Alaska, not coincidentally, are also highly dependent on government employment.
Diversifying Virginia’s economy is certainly important, but what about the existing businesses that have long counted the public sector as their best — and in some instances their only — customers? We’re already experiencing some consolidation among government contractors in Northern Virginia and Hampton Roads. Building a new Virginia economy will undoubtedly take money. We say we need it, we say we want it, but are we willing to pay for it?
Economists and economic developers often cite monetary multipliers that result from government spending or business recruitment. These multipliers arise from income and retail sales taxes generated by job growth.
Using a conservative multiplier of 1.5 to 1.6, it can be inferred that a billion dollar expenditure would generate indirect economic growth of $500 million to $600 million. That makes public spending look like a pretty good deal.
Conversely, when expenditures are reduced, there is a similar reduction in indirect spending, meaning that the economy loses a lot more than just the nominal amount of the budget cut. We can leave it to economists to argue the specific multiples and how they differ for expansion and contraction, but you get the general idea.
No one likes taxes, but at some point we’ve got to restore effectiveness and public trust in government. It is not reasonable to expect the business community to pay for all economic development.
As a businessperson, I’d gladly pay slightly higher personal taxes if it meant that my business had a better chance. The benefits of greater commercial success would far outweigh the personal cost and also serve the greater good of the commonwealth’s overall productivity.
Instead, it seems that our legislative and executive branches are in a permanent fight. Separation of powers is intended to help rather than hinder good governance. It’s time to realize that being a low-tax state may be a cause of underperformance.2014-10-30T10:00:00+00:00
Followups - November 2014
http://www.virginiabusiness.com/opinion/article/followups-november-2014#When:10:00:00ZJudges rule Virginia’s congressional redistricting maps are unconstitutional
In early October a three-judge federal panel ruled that Virginia’s congressional redistricting maps, passed by the General Assembly in 2012, are unconstitutional because they pack too many minority voters into one district.
The 2-1 ruling by the U.S. District Court for the Eastern District of Virginia orders the legislature to come up with new maps by April.
The decision focuses on Virginia’s 3rd District, a “minority majority” district that runs from Richmond to Hampton Roads. U.S. Rep. Bobby Scott, a Democrat, has held the seat since the early 1990s. The Washington Post says the percentage of minorities among the district’s voting age adults rose from 53 to 56 percent when boundaries were redrawn two years ago.
If the judges’ ruling is not overturned on appeal, the redrawn 3rd District could affect the makeup of other districts, possibly challenging the Republican Party’s 8-3 majority in the commonwealth’s congressional delegation.
The Richmond Times-Dispatch reports that, because the governor must approve new congressional maps, the ruling could give Democratic Gov. Terry McAuliffe new leverage with a legislature dominated by Republicans.
Earlier this year, McAuliffe lost a months-long bid to expand Medicaid coverage in Virginia when a Democratic state senator resigned, giving Republicans control of both the Senate and House of Delegates.
The columns of Virginia Business’ publisher, Bernie Niemeier, and editor, Robert Powell, have explored the need for an independent, bipartisan redistricting commission for several years, most recently in the October issue.
Discount airline suspends service
Newport News-based discount airliner Peopl­­Express suspended service in September after encountering problems with crew availability, maintenance and aircraft, according to The Virginian-Pilot.
One of the airline’s two planes was damaged when it was hit by a vendor’s truck.
Based at Newport News/Williamsburg International Airport, PeoplExpress began operations in late June.
Virginia Business looked at PeoplExpress’ plans in an Eastern Virginia Regional View story in the August issue.2014-10-30T10:00:00+00:00
Orbital Sciences doesn’t expect rocket launch failure to impact 2014 outlook
http://www.virginiabusiness.com/news/article/orbital-sciences-doesnt-expect-rocket-launch-failure-to-impact-2014-outlook#When:21:03:00ZDulles-based Orbital Sciences said Wednesday that it does not expect Tuesday’s Antares rocket launch failure to affect its 2014 outlook, but is unclear what impact the incident will have on the company next year.
Orbital intended to launch the Antares rocket carrying the Cygnus spacecraft from NASA’s Wallops Flight Facility on Wallops Island. Seconds after launching, the rocket and spacecraft, exploded into a fireball. The spacecraft was carrying noncritical supplies to NASA’s International Space Station.
No one was injured from the incident and Orbital is conducting an investigation along with NASA, the Mid-Atlantic Regional Spaceport and the National Transportation Safety Board.
Investors reacted negatively to the news Wednesday. When the New York Stock Exchange closed, Orbital’s stock had fallen by nearly 17 percent, closing at $25.27 per share.
In a conference call Wednesday, the company said its 2014 outlook remains unchanged because insurance will cover facility repairs and payment holdbacks because of the launch failure.
Orbital’s Chairman and CEO David W. Thompson also said that, to his knowledge, the company’s proposed merger with ATK’s aerospace and defense businesses will continue.
In a separate statement issued Wednesday, Arlington-based ATK said it was conducting its own investigation, “including current operating plans, long-term strategies, and the proposed transaction to merge the company's Aerospace and Defense businesses with Orbital.”
Orbital Chief Financial Officer Garrett E. Pierce said it is unclear how long it will take for Antares to return to flight status. Antares’ next scheduled flight was originally set for April. Thompson said the investigation may or may not lead Orbital to conclude that the accident was caused by the AJ-26 rocket engine.
“As most of you know the AJ-26 rocket engine used in that system have presented us with some serious technical and supply challenges in the past, so notwithstanding the previous successful flights of Antares before yesterday, Orbital has been reviewing alternatives since the middle of last year and recently selected a different main propulsion system for future use by Antares,” Thompson said. “It is possible that we may decide to accelerate this change if the [rocket’s] AJ26 turns out to be implicated in the failure but this has not yet been decided.”
Thompson said that the launch pad complex appears to have been spared from major damage. The Antares vehicle assembly building and Cygnus spacecraft processing facilities in the Wallops area were not affected, he says.
In the past three decades, Orbital noted it had conducted 284 major rocket launches with a 95 percent success rate. In the last 10 years, the success rate was 96 percent in 106 major rocket launches. Orbital reported revenues of more than $1.3 billion for 2013.2014-10-29T21:03:00+00:00
New retail in Richmond
http://www.virginiabusiness.com/news/article/new-retail-in-richmond#When:20:31:00ZSephora, a beauty and cosmetics retailer, will open a 5,605-square-foot store in Short Pump Town Center on Nov. 7. The store will carry more than 13,000 products from 200 brands, including Sephora’s collection of makeup, skin care, tools and accessories.
As part of its opening festivities, the store will offer complimentary mini makeover sessions at its Short Pump location, one of three in the Richmond market.
Sephora also recently opened a new store at Springfield Town Center in Northern Virginia.
The retail chain’s North American headquarters is located in San Francisco, with corporate offices in New York and Montreal.
In another store opening, nTelos Wireless has a new location in the Hancock Village Shopping Center in Chesterfield County. The store on Hancock Village Drive offers a display of smart phones, accessories and auxiliary products such as Bluetooth speakers and headphones.
The Hancock store is one of 11 nTelos-branded retail locations in and around the Richmond area.2014-10-29T20:31:00+00:00http://www.virginiabusiness.com/uploads2/Untitled.png
NRC assigns new resident inspector to North Anna nuclear power station
Nuclear Regulatory Commission officials in Atlanta have selected Gwynne Skaggs Ryan to serve as the new resident inspector at Dominion’s North Anna nuclear station.
The station is located near Mineral, about 40 miles northwest of Richmond. Ryan joins Senior Resident Inspector Greg Kolcum, who was assigned to the North Anna site in 2011.
She joined the NRC in 2011 as a reactor inspector in the Nuclear Safety Professional Development Program in the NRC’s Region IV office in Arlington, Texas.
Ryan completed the agency’s Nuclear Safety Professional Development Program and was qualified as a reactor inspector in 2013. She worked as a reactor inspector in the Region IV Division of Reactor Safety where she conducted individual and team engineering inspections at operating nuclear power plants. She also provided resident inspector support to the River Bend plant in Louisiana in 2013 and served as an acting resident inspector at the Palo Verde plant in Arizona earlier this year.
Ryan holds bachelor’s and master’s degrees in mechanical engineering from New Mexico State University.
At least two NRC resident inspectors are assigned to each operating U.S. commercial nuclear plant. They serve as the agency’s eyes and ears at the facility, conducting inspections, monitoring major work projects and interacting with plant workers and the public. Resident inspectors can serve at one site for up to seven years.
The North Anna resident inspectors can be reached at 540-894-5421.2014-10-29T19:46:00+00:00
Test facilities in Halifax County now are under new name, structure
http://www.virginiabusiness.com/news/article/test-facilities-in-halifax-county-now-are-under-new-name-structure#When:19:36:00ZTwo test facilities in Halifax County, the National Tire Research Center and Southern Virginia Vehicle Motion Labs, are now part of the Global Center for Automotive Performance Simulation.
Virginia Tech announced the change on Wednesday, saying the new structure reflects the international impact made by the facilities’ testing and research.
A third component, a virtual design and integration laboratory, will be added to group, Tech said.
Frank Della Pia will head the organization. He has been executive director at the tire center since its opening last year.
“A very large percentage of our clients come to us from outside of North America; therefore, we are very much a company making a global impact,” Della Pia said in a statement.
The new structure and name “tells the industry that we are much more than a tire research and test facility. We offer a wide range of services and expertise, including tire characterization and test vehicle characterization and test tire and vehicle modeling and simulation. We offer services that cover the physical and the virtual, enabling a systematic approach to optimizing complex systems.”
The original tire center was the result of a grant from the Virginia Tobacco Indemnification and Community Revitalization Commission. Matching funds were supplied by General Motors — one of the other major users of the facility — with additional funding provided by Virginia Tech and the Institute for Advanced Learning and Research in Danville.
The center started with 13 employees, a number that has doubled to 26 and is expected to grow beyond 30 in the coming year.
The facilities will be dedicated to full performance testing — physical and virtual design integration — of highway and racetrack vehicles, including tire wear and noise, fuel economy, comfort and safety of drivers, and lap time performance data for NASCAR and other motorsports teams and series.
The Virginia Tech Transportation Institute conducts research to save lives, time, money, and protect the environment. It is one of the seven university-level research institutes created by Virginia Tech.2014-10-29T19:36:00+00:00
Metro area unemployment rates fall
http://www.virginiabusiness.com/news/article/metro-area-unemployment-rates-fall#When:16:23:00ZUnemployment rates in Virginia metro areas fell in September, according to data from the Virginia Employment Commission.
The jobless numbers, which are not seasonally adjusted, fell in all 11 metropolitan statistical areas tracked by the VEC.
The most dramatic declines occurred in the Danville and Bristol areas, where unemployment dropped by 1.1 percentage points.
The smallest decrease was found in the Winchester area, down three-tenths of a percentage point.
Northern Virginia continued to post the lowest jobless rate among the metro areas, 4.3 percent. The Danville area had the highest rate, 7.2 percent.
In addition to Northern Virginia, Charlottesville and Winchester also had rates below 5 percent.
A breakdown on the metro areas shows:
Blacksburg-Christiansburg-Radford: 5.4 percent in September, down from 6.2 percent in August.
Bristol: 6.1 percent, down from 7.2 percent.
Charlottesville: 4.5 percent, down from 5.1 percent.
Danville: 7.2 percent, down from 8.3 percent.
Hampton Roads: 5.6 percent, down from 6.1 percent.
Harrisonburg: 5 percent, down from 5.5 percent.
Lynchburg: 5.9 percent, down from 6.6 percent.
Richmond: 5.5 percent, down from 6.1 percent.
Roanoke: 5.4 percent, down from 6.1 percent.
Winchester: 4.8 percent, down from 5.1 percent.
Because the figures are not seasonally adjusted they do not take into account seasonal fluctuations in the labor market.2014-10-29T16:23:00+00:00
Biodiesel producer to open in Russell
http://www.virginiabusiness.com/news/article/biodiesel-producer-to-open-in-russell#When:16:00:00ZA biodiesel producer is planning to establish its headquarters and production facility in Russell County, creating 40 new jobs.
Appalachian Biofuels LLC will spend $3.5 million to convert a vacant property into its headquarters and biodiesel production facility.
The company will process waste feedstock material at the facility, and refine it with an enzyme made in Haifa, Israel.
"We are proud to be hiring former coal miners in the region who will transfer their significant experience in mining energy underground to our new green energy above ground in beautiful Russell County," Chuck Lessin, president and CEO of Appalachian Biofuels, said in a statement. "We are excited to call Virginia our home, and we hope to grow and expand our business here in Southwest."
Virginia competed against South Carolina for the project. Gov. Terry McAuliffe approved a $200,000 grant from the Governor's Opportunity Fund for the project, and the Virginia Tobacco Indemnification and Community Revitalization Commission approved $210,000.2014-10-29T16:00:00+00:00
http://www.virginiabusiness.com/news/article/what-vacancy#When:14:04:00ZWhile much of Northern Virginia is seeing office vacancy rates of more than 25 percent, Reston Town Center is a bright spot in the market. For the third quarter, it had a vacancy rate of 1.4 percent.
According to a market report from Cushman/Wakefield, offices at the center are consistently near full occupancy and command some of the highest rents in the region, at $45 per square foot,. The reason? The center’s strong amenity base.
The report notes that in addition to 2.8 million square feet of office space, Reston Town Center is home to 50 retail shops, 30 restaurants and three residential high-rise projects. Even with a suburban location 20 miles outside of Washington, D.C., and a lack of Metro accessibility until at least 2018, the center’s density, mixed-uses and walkability give the center an urban feel that attracts tenants and residents, the report said.
Major tenants include Leidos, the company that was created when McLean-based SAIC split into two companies. It relocated from Tysons Corner early this year.2014-10-29T14:04:00+00:00
Dulles-based Cigital acquires iViZ Security
http://www.virginiabusiness.com/news/article/dulles-baed-cigital-acquires-iviz-security#When:21:25:00ZDulles-based software security company Cigital Inc. has acquired iViZ Security, a cloud-based application security testing provider.
Under the deal, iViZ Security, which was based in Bangalore, India, will operate as a wholly owned subsidiary of Cigital. Financial details of the transaction were not disclosed.
Cigital said the deal would enhance its application security testing services, giving it additional flexibility in the number of tests provided, the depth of those tests and the number of applications tested.
Cigital said the integration of the iViZ Security testing capabilities with Cigital testing services is complete.
The company said the iViZ Security user portal has been incorporated to provide Cigital customers a web-based interface to schedule scans and view results.
Before the acquisition, iViZ Security had more than 300 customers.
Cigital has regional offices throughout North America, Europe and Asia.2014-10-28T21:25:00+00:00
Gillespie narrows gap, but still trails Warner by 13 points
http://www.virginiabusiness.com/news/article/gillespie-narrows-gap-but-still-trails-warner-by-13-points#When:21:14:00ZRepublican Ed Gillespie has gained ground in his bid to unseat Sen. Mark Warner, but the Democrat still holds a 13-point lead, according to the Roanoke College Poll.
The incumbent senator once held a 25 point lead in the race, which will be decided in the Nov. 4 general election. Warner now leads Gillespie 45 to 32 percent, with Libertarian candidate Robert Sarvis polling 3 percent.
"Gillespie has narrowed Warner's lead, but he needs to pick up more momentum," Harry Wilson, director of the Institute for Policy and Opinion Research, said in a statement.
Wilson said reports of Warner’s controversial efforts to prevent the resignation of Democratic state Sen. Phil Puckett “have not hurt as much as they might have...even among those relatively few Virginians who are paying attention to the story. It is the most partisan citizens who are following the story closely, and their positions are not likely to be swayed."
Puckett’s resignation switched the Virginia Senate from Democratic to Republican control at a time when Gov. Terry McAuliffe was trying to expand Medicaid coverage to uninsured Virginia residents.
“Likely voters are disgruntled,” Wilson said. “Favorable ratings are down for everyone except Gillespie, who was previously very low."
In fact, the poll of 738 likely Virginia voters showed they are united on one issue, distrust of both major parties. Forty-seven percent hold unfavorable views of Democrats while 46 percent dislike Republicans. Only one-third (33 percent) have favorable views of Democrats while the favorable nod for Republicans are even lower, 28 percent.
The poll asked voters about several current events, including the spread of the Ebola virus, concerns about the Islamic State (known as ISIS) and their views of the country and Virginia as a whole.
More than half of the respondents said they are at least somewhat concerned that there will be a major outbreak of Ebola in the Unites States. A larger percentage of those polled are concerned that ISIS will stage an attack in the United States, while 47 percent believe that President Obama isn't doing enough to stop the Islamic group.
Obama's job approval has dropped to 32 percent, the lowest seen in the Roanoke College Poll. The 54 percent disapproval is also an all-time high. Congressional approval is up slightly to a dismal 11 percent.
Virginians' views of the country have been essentially stagnant since the July 2014 Roanoke College Poll, the most pessimistic in more than two years. Only 22 percent think the country is headed in the right direction, while 67 percent said it is on the wrong track.
For the first time in the Roanoke College Poll, voters are more likely to be pessimistic than optimistic regarding the state of the commonwealth (41 percent right direction, 45 percent wrong track). At the same time, McAuliffe's job approval has declined to 41 percent, with 26 percent disapproving.
The poll, conducted on Oct. 20-25, has a margin of error of plus or minus 3.6 percent.2014-10-28T21:14:00+00:00
Cox Communications is bringing gigabit speeds to Virginia residences
Cox Communications announced Tuesday that it will offer gigabit internet service for its residential customers in Virginia.
The option offers internet speeds that are 100 times faster than the average speed in the U.S. today. The company made the announcement today at the Viridian Reserve at Hickory in Chesapeake, where Cox's service will first become available in Virginia.
Cox, which has been providing gigabit-speed services to business customers for 10 years, said it launched a gigabit service in the Phoenix metropolitan area this month and that it would be available in all of Cox's market by 2016.
The gigabit service will offer internet speeds as fast as 1,000 megabits per second. Currently, Cox's two most popular tiers of Internet service offer 50 and 100 megabits per second.
Cox said Tuesday that it is the first national communications provider to offer gigabit internet service to residential customers in Virginia. Some smaller providers, such as Bristol Virginia Utilities, offer gigabit speeds.2014-10-28T20:03:00+00:00
Arlington County agency expands at Sequoia Plaza
http://www.virginiabusiness.com/news/article/arlington-county-agency-expands-at-sequoia-plaza#When:17:58:00ZArlington County Department of Human Services (DHS) has signed a lease for 217,000 square feet at Sequoia Plaza, a three-building complex on Washington Boulevard in Arlington. Savills Studley, a commercial real estate services firm specializing in tenant representation, advised the county in the transaction to consolidate the agency’s administrative offices, health clinic, community-based rehabilitation, crisis intervention, mental health, substance abuse and psychiatric services.
“After occupying several leased and owned facilities across Arlington County, consolidating at one location was a smart decision for DHS. Not only are they upgrading the quality of their facilities, but providing an accessible one-stop centralized location for their clients, improving space utilization and creating significant operational and economic efficiencies,” Savills Studley Corporate Managing Director Mark Roberts said in a statement.
He led the transaction on behalf of DHS along with Managing Director Tim Foley, and Assistant Director David Cornbrooks.2014-10-28T17:58:00+00:00
Kaleo donates EVZIO to local law enforcement agencies
http://www.virginiabusiness.com/news/article/kaleo-donates-evzio-to-local-law-enforcement-agencies#When:13:40:00ZRichmond-based Kaleo has announced a program that allows local law enforcement agencies to receive medicine to treat emergency opioid overdoses for free.
The pharmaceutical company says the Henrico County Sheriff's Office is the first law enforcement agency to receive the donation of EVZIO, a handheld auto-injector used for the emergency treatment of opioid overdoses.
Opioids include pain medicine like hydrocodone (e.g., Vicodin), oxycodone (e.g.,OxyContin, Percocet), morphine and heroin. According to the Centers for Disease Control and Prevention Website, 72 percent of the 22,114 deaths related to pharmaceutical overdoses in 2012 involved opioid pain relievers.
EVZIO delivers naloxone, a drug usually administered with a syringe to counterattack an overdose. The product uses voice and visual cues to assist users through the injection process.
Kaleo will take applications to receive the product donation on a rolling submission basis for a limited time. A maximum of 200 EVZIO naloxone auto-injectors will be provided to each local law enforcement agency.
EVZIO, which is available by prescription, was approved by the U.S. Food and Drug Administration on April 3.2014-10-28T13:40:00+00:00
Carilion Clinic names chief medical officer
http://www.virginiabusiness.com/companies/article/carilion-clinic-names-chief-medical-officer#When:08:32:00ZCarilion Clinic has named Dr. Patrice M. Weiss its next chief medical officer.
Weiss, who is chair of Chair of the Department of Obstetrics and Gynecology at Carilion and a professor of OB/GYN at the Virginia Tech Carilion School of Medicine, will become CMO on Nov. 1.
“I am not surprised that our national search for the best candidate led us to Patrice,” Carilion President and CEO Nancy Howell Agee said in a statement.. “Over the past seven years at Carilion she has distinguished herself as an inspirational leader, innovative thinker and tireless advocate for quality and safety in health care.”
Weiss will be responsible for Carilion's physicians group, Carilion Clinic Physicians, which employs more than 650 physicians and 200 nurse practitioners.
Weiss is a member of the Accreditation Council for Graduate Medical Education OB/GYN Residency Review Committee and the Council of Residency Education in OB/GYN. She is a founding board member of the Society of Academic Specialists in General OB/GYN and has served on the board of directors for the Association of Professors of Gynecology and Obstetrics. She is also the current Program Chair for the Council of Residency Education of OB/GYN (CREOG).
She received her medical degree from Hahnemann University (Drexel) School of Medicine in Philadelphia.2014-10-28T08:32:00+00:00
Virginia Beach approves land for new veterans care center
The Virginia Beach City Council has voted to reserve 15 to 25 acres of city land as the site of a proposed Veterans Care Center in Hampton Roads. The actual location of the site has not been determined.
House Bill 1275, introduced by House Majority Leader Kirk Cox (R-Colonial Heights) and Del. Chris Stolle (R-Virginia Beach), dedicates $28.5 million in funding for a proposed 240-bed, long-term care facility. However, the state must obtain funds from the federal government for the project to move forward.
“Securing a potential site for the construction of the Hampton Roads area veterans care center is a milestone step in our efforts to complete this project,” Cox said in a statement. “The commonwealth needs additional veterans care centers to provide quality long-term care to our veterans. The Hampton Roads and Northern Virginia facilities are two of our top legislative priorities this year.”
Del. Stolle requested the resolution passed Friday by the council.
“Virginia Beach is home to tens of thousands of active-duty and retired armed forces members. Dedicating land for this important project is another example of just how committed this city and its leaders are to caring for our nation’s heroes,” Stolle said in a statement. “I believe very strongly that Virginia Beach is the right location for a Hampton Roads care center and look forward to making that a reality very soon.”
Virginia currently has Veterans Care Centers in Salem and Richmond. The centers provide long-term care to veterans. Virginia is home to more than 800,000 veterans, the seventh-highest total of any state, but ranks 44th in the ratio of veterans to available care centers.
Virginia first authorized funding for the Hampton Roads care center in 2006, and the Northern Virginia care center in 2008. Through the efforts of Del. Rich Anderson (R-Prince William) two sites have been identified for the Northern Virginia Care Center, one in Innovation Park, Prince William County and another site on George Mason University’s Prince William County Campus. However, both projects have been stalled at the federal level. Care centers are built with 65 percent federal funding and 35 percent state funding.2014-10-27T20:37:00+00:00http://www.virginiabusiness.com/uploads2/Tysons_Overlook_view_from_Gannett_copy_SMALL.jpg
Tysons Overlook makes its debut
http://www.virginiabusiness.com/news/article/tysons-overlook-makes-its-debut#When:16:03:00ZOne of Tyson’s new office towers is ready for business. MRP Realty, a Washington, D.C.-based company and Rockpoint Group LLC, a Boston-based real estate private equity firm, unveiled Tysons Overlook last week.
The new 11-story office tower is located at 7940 Jones Branch Drive at the newly constructed Jones Branch Drive/HOT Lanes and Jones Branch Connector Road intersection.
The primary tenant in the 308,000-square-foot Class A office will be LMI, a government-consulting firm currently based in McLean. In a presale deal, LMI agreed to occupy the first six floors, or about 138,000 square feet, as co-owners of the property.
“The Northern Virginia office market, particularly the submarket of Tysons Corner, is commanding a premium today with the arrival of the Silver Line, and Tysons Overlook with its proximity to many transportation gateways will make it a desirable location for businesses to locate,” Bob Murphy, managing partner of MRP Realty said in a statement. “Tysons Overlook offers flexible workplace solutions so that the changing needs of today’s businesses in our area will be able to customize what their operations require.”
Tysons Overlook features a 8,500-square-foot café and outdoor patio, a 3,500-square-foot, fitness center and a furnished event terrace with a water feature and landscape views.2014-10-27T16:03:00+00:00
Small businesses and startups are most active tenants in Richmond area
http://www.virginiabusiness.com/news/article/small-businesses-and-startups-are-most-active-tenants-in-richmond-area#When:15:11:00ZSmall businesses and startups remain the most active tenants in the greater Richmond marketplace, where 76 percent of office space users occupy less than 10,000 square feet, according to research analysis from JLL.
"Smaller tenants are really the 'bread and butter' of the Richmond office market," Scott P. Harrison, a vice president in JLL’s Richmond office, said in a statement.
According to him, Richmond area tenants increasingly are trading up from their current space and finding better, more efficient space for the same, or sometimes even lower, rates per square foot.
"The enthusiasm over the stock market's success, particularly in the second and third quarter this year, gave a lot of local tenants the confidence to expand or relocate," Harrison said.
Tenants who occupy 2,500 to 10,000 square feet of space in Richmond account for 25 percent of the market's total occupied inventory. The reduction of their footprints in the market, typically ranging between 20 and 30 percent, has contributed to a negative net absorption of 115,223 square feet in the market year-to-date.
But some submarkets, particularly the West End and South Side, have few desirable options remaining.
"Space in the West End is filling up, but there's still no speculative development in the pipeline," said Harrison. "It will be interesting to see how the appetite for speculative development increases as product fills up over the next couple quarters."
While small tenants account for the bulk of activity in the market, midsized firms remain the largest space users, according to JLL. Nearly 30 percent of Richmond’s office market is occupied by tenants ranging from 10,000 to 25,000 square feet. Large tenants occupying between 75,000 and 250,000 square feet account for 24 percent of the market's inventory.
Large users of more than 250,000 square feet of space account for only 5 percent of Richmond's occupied office inventory.2014-10-27T15:11:00+00:00http://www.virginiabusiness.com/uploads2/Peninsula_town_Center.JPG
New owner of Peninsula Town Center selects Thalhimer for leasing services
The Tabani Group has selected Cushman & Wakefield | Thalhimer to provide retail leasing services at Peninsula Town Center, Hampton’s 1.1-million-square- foot, mixed-use development located at Interstate 64 and Mercury Boulevard.
Tabani bought the development in Coliseum Central earlier this month for $48.5 million. According to published reports, the deal covers18 subdivided parcels including the Chapman Apartments, a movie theater and many storefronts. Two of the project’s anchors, Target and J.C. Penney Co., own their buildings.
With more than 850,000 square feet of retail space, 115,000 square feet of office space and 158 residential units, Peninsula Town Center is Hampton’s largest economic development projects to date.
Opened in March 2010, the center’s other anchors includes Macy’s, Barnes & Noble, PetSmart and CinéBistro, and it is home to more than 100 specialty retailers.
The Cushman & Wakefield | Thalhimer team will consist of retail leasing representatives Connie Jordan Nielsen, David Tunnicliffe, and Dean Martin.
Divaris Real Estate Inc. in Virginia Beach will represent Tabani in leasing the 34,023 square feet of office space in the Claiborne Building. Existing tenants there include Bryant & Stratton University, Regus Executive Office Suites and Faneuil.
The Tabani Group, based in Dallas, is a commercial real estate company with a 10 million-square-foot commercial and residential real estate portfolio that’s valued at more than $1 billion.
The company said at the time of purchase that it plans to build an additional 100 residential units originally planned for the property and to develop vacant blocks along Kilgore Avenue and along other portions of the property.2014-10-27T14:25:00+00:00
Virginia Partners Bank to sell 500,000 shares of its common stock
http://www.virginiabusiness.com/news/article/virginia-partners-bank-to-sell-500000-shares-of-its-common-stock#When:16:47:00ZFredericksburg-based Virginia Partners Bank has begun an offering of up to 500,000 shares of its common stock.
The offering price is $10.75 per share. The offering is being made through the efforts of Virginia Partners Bank's directors and executive officers with the assistance of FinPro Capital Advisors Inc.
The bank has the option of increasing the number of shares offered by an additional 500,000 shares in the event the offering is oversubscribed.
The offering is expected to close on or about Dec. 30, but can be extended at the bank’s discretion until Feb. 1.
Virginia Partners Bank has three branches in Fredericksburg and a loan production office in La Plata, Maryland.
As of June 30, the bank had total assets of $250.6 million.2014-10-24T16:47:00+00:00
Wheeler REIT acquires its operating companies
http://www.virginiabusiness.com/news/article/wheeler-reit-acquires-its-operating-companies#When:16:44:00ZVirginia Beach-based Wheeler Real Estate Investment Trust Inc. has acquired its operating companies.
The deal involved Wheeler Interests LLC, Wheeler Real Estate LLC and WHLR Management LLC (Wheeler Management).
Wheeler Interests and Wheeler Management were wholly-owned by Jon S. Wheeler, the company’s chairman and CEO, while Wheeler Real Estate is wholly-owned by Wheeler Interests.
The company expected to pay for the operating companies through the issuance of $6.75 million in operating partnership units shares. The transition was scheduled to be completed on Oct. 24.
Concurrent with the transaction, all of the company’s assets and properties will be completely managed internally and fully-integrated. Wheeler will have development, redevelopment, acquisition, leasing and property management services all in–house and under the same umbrella.
“We have always stated our intention of becoming a self-managed REIT when the company reached the appropriate size and scale. I am proud to say we have accomplished the task.” Jon Wheeler said. “This is a significant step forward in the company’s development and one that will benefit Wheeler, as well as our shareholders, over the long-term.”2014-10-24T16:44:00+00:00
Canal Center in Alexandria is purchased
A joint venture including American Real Estate Partners and Investcorp announced Friday the $176 million acquisition of the Canal Center in Alexandria.
The Canal Center is a 540,000-square-foot Class A Office complex located on the banks of the Potomac River. The complex includes four buildings.
"The northern Old Town Alexandria submarket has been going through a dramatic redevelopment in the last several years and is one of the few urban mixed-use markets outside of Washington, D.C.," Brian Katz, president of American Real Estate Partners, said in a statement. "Alexandria is one of the strongest markets in the Washington metropolitan area and Canal Center enjoys an unparalleled location within the city and the Washington, DC region.'
Canal Center's four building were developed in 1987 and have panoramic views of the Potomac River and Washington, D.C. Skyline. The complex is 83 percent leased with no major tenant expirations until 2018.
The office complex features public spaces that includes sculptures, fountains and landscaping. Just north of the rebuilt original canal lock is "Promenade Classique," a sculpture garden created by Anne and Patrick Poirier, French artists who incorporate archaeological and mythological references in their works. A brick plaza leads to a rectangular pool, a cascading waterfall that leads to twin spiral staircases and a grotto of sculpted ruins overlooking an amphitheater and culminating in a 40-foot high marble obelisk.2014-10-24T16:30:00+00:00
VCU conference outlines real estate trends, ‘freakonomics’
http://www.virginiabusiness.com/news/article/vcu-conference-outlines-real-estate-trends-freakonomics#When:13:36:00ZA real estate conference held this week in Richmond kicked off with an economic overview and ended with advice from the co-author of “Freakonomics.”
The 2014 Real Estate Trends Conference, held at the Greater Richmond Convention Center, was presented by the VCU Kornblau Real Estate Program.
In his overview, Ken Riggs, the president and CEO of Real Estate Research Corp. in Iowa, said the commercial real estate market is approaching an inflection point.
“I view what will happen in the next 12 months to be most critical event that we’ve seen since the credit crisis,” he said. “At that point [Federal Reserve] policy, especially in terms of low interest rates, is going to be more clear in terms of direction and impact.”
Also important are market expectations. “It’s not about what happens. It’s about what do you expect to happen,” Riggs said.
He noted that 10-year Treasury rates remain about 2.2 percent although many economists last year predicted rates to be much higher by now.
Riggs said commercial real estate remains a popular investment because it involves hard assets with dependable income and moderate growth in a time of uncertainty. His research also shows that, despite growing pressure on real estate prices, prices and real estate values remain in balance.
Riggs said the questions facing investors are: Where are we in the cycle? How much of the present situation is sustainable?
Through a series of comedic anecdotes, Stephen J. Dubner, co-author of “Freakonomics,” and its most recent counterpart, “Think Like a Freak,” offered ideas on ways to think more productively, rationally and creatively. The three rules were:
1) Acknowledge what you don’t know and maybe can never know: “One cardinal rule that we give in [‘Think like a freak’] is that we should all get more comfortable saying three words that most of us loathe to say and, those three words are, ‘I don’t know,’” Dubner said.
2) Collect data and sort out the good data from the bad: “Let me tell you, there’s a lot of data that gets thrown around, in the media, in your businesses, certainly in politics, that is nothing more than survey data, and I’ve got to tell you—survey data is the lowest form of data,” said Dubner.
3) Understand how incentives work: “Incentives are hugely important, and understanding how people really respond to incentives in the real world is, I think, one of the most powerful things we can do, especially using the tools of economics,” he said.
Since being published in 2005 and 2009 respectively, “Freakonomics” and “Superfreakonomics” have sold more than 5 million copies in 35 languages. Since then, the books have spawned an enterprise that includes an award-winning blog, documentary film and weekly podcasts.2014-10-24T13:36:00+00:00
Northern Virginia Community College launching STEM initiative
http://www.virginiabusiness.com/news/article/northern-virginia-community-college-launching-stem-initiative#When:08:50:00ZNorthern Virginia Community College is launching a program to encourage students to pursue degrees in science, technology, engineering and math.
The college plans to spend $2.2. million over the next three years for equipment and faculty development to offer the most current STEM training for students at the college.
Students in these courses will have access to electron scanning microscopes, atomic force microscopes and other cutting-edge technologies. In addition, each of NOVA’s six campuses will designate a flagship STEM program that will receive resources for further development.
“An urgent need exists to increase the number of STEM graduates to help the Northern Virginia region remain viable competitors in the international knowledge-based marketplace and NOVA’s collegewide STEM initiative answers this challenge,” Manassas Provost Roger Ramsammy said in a statement.
The plan also aims to enrich student experiences with new curricular and extra-curricula STEM opportunities, advanced professional development opportunities and improved diversity in the college's STEM enrollment.2014-10-24T08:50:00+00:00
USI Insurance relocates to the Town Center of Virginia Beach
http://www.virginiabusiness.com/news/article/usi-insurance-relocates-to-the-town-center-of-virginia-beach#When:08:48:00ZThe brokerage and consulting firm USI Insurance Services is leasing 19,335 square feet of office space in the Town Center of Virginia Beach.
The Virginia Beach-based commercial real estate firm Divaris Real Estate Inc. said USI is moving to newly renovated space at 4605 Columbus St. The company currently has Hampton Roads offices in Norfolk and will retain a presence there.
USI will bring about 150 employees to Virginia Beach. The New York-based company has more than 4,000 employees at more than 140 offices throughout the U.S.
The lease negotiations were handled on behalf of the landlord, Armada Hoffler Properties, by Michael Divaris, Vivian Turok and Krista Costa of Divaris Real Estate’s Virginia Beach office. Cushman & Wakefield Thalhimer represented USI in the transaction. According to Thalhimer, the company relocate from from Main Street Tower in Norfolk and will occupy 12,949 square feet within the World Trade Center in Norfolk, in addition to its new space at Town Center of Virginia Beach.
The center is leased by Divaris Real Estate, Inc., and managed by Divaris Property Management Corp.2014-10-24T08:48:00+00:00
Virginia Company Bank shareholders approve deal with EVB
http://www.virginiabusiness.com/news/article/virginia-company-bank-shareholders-approve-deal-with-evb#When:08:45:00ZShareholders of Newport News-based Virginia Company Bank have approved the acquisition of the company by Eastern Virginia Bankshares Inc., the parent company of Tappahannock-based EVB.
All regulatory approvals have been received, allowing the merger of Virginia Company Bank and EVB to proceed.
“We are very excited about the future prospects of our combined organization and the expanded branch network that VCB brings to the existing EVB organization," Joe A. Shearin, the president and CEO of the parent company and EVB, said in a statement.
At the time the merger was announced in late May, the deal was valued at $9.6 million.
Virginia Company Bank has three branches, in Hampton, Newport News and Williamsburg.
EVB has 21 full-service branches in eastern Virginia.
Geico hiring more than 100 people in Virginia Beach
http://www.virginiabusiness.com/news/article/geico-hiring-more-than-100-people-in-virginia-beach#When:17:16:00ZGeico is seeking to hire more than 100 people in Virginia Beach by the end of the year, the company announced Thursday.
The insurance company is looking to fill jobs in entry-level sales, customer service and auto damage adjuster positions. Geico also is hiring college graduates for its Management Development Program (MDP), a leadership program.
Geico is one of Virginia Business' Best Places to Work in Virginia. The company is the second-largest private passenger auto insurance company in the United States. It employs more than 2,650 people in Virginia Beach.2014-10-23T17:16:00+00:00
Fauquier Bank opens new Branch in Manassas
http://www.virginiabusiness.com/news/article/fauquier-bank-opens-new-branch-in-manassas#When:20:40:00ZFauquier Bank has opened a 9,000-square-foot branch at 8780 Centreville Road in Manassas. The bank will hold a grand opening for the new location on Saturday, Nov. 1 from 10 a.m.-2 p.m.
Shirley Tong will be in charge of leading the branch’s retail associates, and Phillip Quintana will lead its commercial lending group.
The Fauquier Bank has four other branches in Prince William County: Sudley Road-Manassas, Bristow, Haymarket and Gainesville.
Fauquier Bankshares Inc., and its subsidiary The Fauquier Bank, had combined assets of $600.8 million and total shareholders' equity of $53.5 million as of June 30. The Fauquier Bank is an independent, locally-owned, community bank offering a full range of services, including internet banking, commercial, retail, insurance, wealth management and financial planning.2014-10-22T20:40:00+00:00
Company earnings roundup
http://www.virginiabusiness.com/news/article/company-earnings-roundup1#When:20:29:00ZIt’s earnings season. Here is the performance of three of Virginia’s largest companies:
Norfolk Southern reported a 7 percent revenue increase during the third quarter to $3 billion, compared with $2.8 billion the previous year. Net income was up 16 percent at $559 million, or $1.79 per diluted share, compared with $482 million, or $1.53 per diluted share, during the third quarter of 2013. General merchandise and intermodal revenues were up, while coal revenues were down 2 percent. The Norfolk-based railroad said its financials set a record for third-quarter numbers.
Revenues at Falls Church defense contractor General Dynamics remained fairly flat in the third quarter. The company reported revenues of $7.75 billion, up 0.2 percent from revenues of $7.74 billion in the same period the prior year. Profits, however, grew 6.9 percent to $696 million, or $2.06 per diluted share, compared with $651 million, or $1.84 per diluted share, in the previous third quarter. Revenues grew in the company’s aerospace, combat systems, and marine systems, but fell 12.9 percent in its information systems and technology units.
Revenues fell 2 percent at Northrop Grumman, a defense contractor based in Falls Church. Revenues for the third quarter were $5.98 billion, down from $6.1 billion the previous year. Profit fell to $473 million, or $2.26 per diluted share, from $497 million, or $2.14 per diluted share, the previous year, primarily because of pension costs related to federal legislation. The company beat analyst expectations, however.2014-10-22T20:29:00+00:00
Dynax America Corp. to create 75 jobs in Botetourt County
http://www.virginiabusiness.com/news/article/dynax-america-corp.-to-create-75-jobs-in-botetourt-county#When:15:50:00ZDynax America Corp. announced Wednesday it is investing $32.6 million to expand its automotive components manufacturing facility in Botetourt County. The expansion is expected to create 75 new jobs.
The company makes automatic transmission components, friction disks, mating plates and assemblies. Dynax America Corp., a subsidiary of Japan-based Dynax Corp., employs almost 600 people at the Botetourt plant.
Gov. Terry McAuliffe approved a $225,000 Governor’s Opportunity Fund grant for the project and a $250,000 performance-based grant from the Virginia Investment Partnership program. Dynax America Corp. also will receive benefits from the Port of Virginia Economic and Infrastructure Development Grant Program. The Virginia Jobs Investment Program will provide funding and services for employee training and Dynax America Corp. also will be eligible for sales and use tax exemptions on manufacturing equipment.
Virginia competed against Shanghai for the project.2014-10-22T15:50:00+00:00
Aetna Insulated Wire expands operations in Virginia Beach
http://www.virginiabusiness.com/news/article/aetna-insulated-wire-expands-operations-in-virginia-beach#When:19:52:00ZAetna Insulated Wire, a producer of specialty cable and building wire, has expanded its manufacturing operations in Virginia Beach.
The addition of one product line and the expansion of another manufacturing segment created 25 new jobs
The company occupies 380,000 square feet at 1537 Air Rail Blvd. in Virginia Beach and employs approximately 115 people.
The Virginia Beach Economic Development Authority awarded a $40,000 Economic Development Investment Program grant to the company based on its $6.3 million investment in new machinery and tooling and the number of jobs created in the city.
Aetna has operated in Virginia Beach sincee 1976. The company said factors contributing to its decision to expand in the city include the availability of a skilled retired military and veteran workforce and the growth capacity in its local facility.
Virginia Beach company to add 150 jobs
http://www.virginiabusiness.com/news/article/virginia-beach-company-to-add-150-jobs#When:19:49:00ZDOMA Technologies LLC, a Virginia Beach-based company, specializing in cloud-based data and document management, plans to create 150 jobs and lease an additional 15,000 square feet of office space.
The expansion will support the company’s recent $50 million, four-year contract from the U.S. Department of Veterans Affairs to help improve timeliness in the processing of claims for disability benefits.
The additional office space will be adjacent to DOMA Technologies’ corporate headquarters location at 2875 Sabre St., where it occupies 21,200 square feet.
Claims support representatives in DOMA’s Virginia Beach offices will work with 54 regional Veteran’s Affairs Regional offices, health-care providers and third-party organizations from across the country in processing up to 32,500 requests per month.
DOMA Technologies was founded in 2000 and is a certified small, women- and minority-owned (SWaM) business.
Funding and services to support the company’s employee training activities will be provided through the Virginia Economic Development Partnership’s Virginia Jobs Investment Program.2014-10-21T19:49:00+00:00
Carroll County expansion to create 51 jobs
http://www.virginiabusiness.com/news/article/carroll-county-expansion-to-create-51-jobs#When:19:46:00ZAndrews Farming Inc. and its sister company, ANDCO Logistics Inc., plan to invest more than $5.6 million to expand their operations in Carroll County, creating 51 jobs.
The companies are involved in agricultural production, warehousing and distribution.
Andrews Farming is a family-operated company that was established in 1975 by Keith Andrews.
ANDCO Logistics handles long-haul shipping of agricultural products.
The expanded operations will be located in the Carroll County Industrial Park.
The Virginia Economic Development Partnership worked with Carroll County, the Carroll County Industrial Development Authority, and Virginia’s aCorridor to help secure the project.
The Virginia Tobacco Indemnification and Community Revitalization Commission approved $225,000 in Tobacco Region Opportunity Funds for the project.
Funding and services to support the company’s employee training activities also will be provided through the Virginia Jobs Investment Program.2014-10-21T19:46:00+00:00
Reckitt Benckiser Pharmaceuticals spinoff expected by end of the year
http://www.virginiabusiness.com/news/article/reckitt-benckiser-pharmaceuticals-spinoff-expected-by-end-of-the-year#When:19:30:00ZRichmond-based Reckitt Benckiser Pharmaceuticals Inc. (RBP) should be spun-off from its parent company by the end of the year, the company said Tuesday.
The pharmaceutical company should be separated from United Kingdom-based Reckitt Benckiser Group plc (RB) by Dec. 31. RB, a consumer goods company, announced the spinoff plans in July.
RBP offers medicine to treat opioid dependence, including Suboxone Sublingual Film, a dissolvable film which is placed under the tongue to help reduce opioid withdrawals and cravings. It also recently partnered with AntiOp Inc. to develop a nasal spray to help treat opioid overdoses.
RBP will operate independently under Indivior PLC, which will be listed on the London Stock Exchange.2014-10-21T19:30:00+00:00
Virginia unemployment rate remains steady in September at 5.5 percent
http://www.virginiabusiness.com/news/article/virginia-unemployment-rate-remains-steady-in-september-at-5.5-percent#When:16:55:00ZVirginia’s unemployment rate remained unchanged in September at 5.5 percent, according to the Virginia Employment Commission.
The commonwealth’s seasonally adjusted jobless rate for August was revised downward by one-tenth of a percentage point, from 5.6 percent to 5.5 percent. The unemployment rate in Virginia had risen three out of four months from May through August.
The September number was the same rate recorded in September 2013. Virginia’s unemployment numbers remain lower than the national rate, 5.9 percent in September. VEC, however, noted that the gap has narrowed in recent months as Virginia’s unemployment rate has risen and the national rate has fallen.
The seasonally adjusted figures take into account seasonal fluctuations in the labor market.
Virginia’s nonfarm employment fell by 7,400 jobs in September to 3.78 million, the second consecutive monthly loss. The VEC also revised the numbers for August employment. Virginia lost 5,400 jobs that month, 3,900 more than originally reported.
In September, employment fell in six major industry divisions while rising in two. The biggest drop was in private education and health services, down 2,700 jobs to 510,200. The biggest job gains, 2,100, occurred in finance.2014-10-21T16:55:00+00:00
Richmond company signs export deals in China
http://www.virginiabusiness.com/news/article/richmond-company-signs-export-deals-in-china#When:13:39:00ZA Richmond producer of animal feed additives has signed export deals with China for 2014 and 2015, Gov. Terry McAuliffe announced during his trade mission to Asia.
Richmond-based Agrivita Biogroup Inc. specializes in bioscience and animal nutrition. The agreements were made during the VIV Beijing large animal feed trade show in September. Agrivita had been exploring sales opportunities in China with help from the international marketing staff of the Virginia Department of Agriculture and Consumer Services (VDACS).
The company already has five distributors in China and is planning to add another four. This year, the company made $400,000 in sales, but that is expected to grow in 2015 to over $1.5 million, according to a statement from Arunas Vanagas, President of Agrivita Biogroup Inc.
Agrivita worked with VDACS in 2013 to register its product in China. Earlier this year, the company shipped samples to be used in feeding trials. The trials showed increased milk from dairy cattle, more efficient growth in poultry and greater weight gain in swine production, the governor’s office said.
McAuliffe announced the deal on the second leg of his two-week trade mission to Japan, China, Hong Kong and South Korea.2014-10-21T13:39:00+00:00
Booz Allen Hamilton purchases health-care business
http://www.virginiabusiness.com/news/article/booz-allen-hamilton-purchases-health-care-business#When:18:28:00ZBooz Allen Hamilton announced Monday it has purchased the health-care unit of Genova Technologies.
The acquisition includes a facility in Baltimore with a staff of 40 people who provide IT solutions and strategy for the U.S. government’s Centers for Medicare and Medicaid Services (CMS).
The move will expand Booz Allen Hamilton’s IT support of the Department of Health and Human Services and expands its engineering and technology expertise for government and commercial clients.
Genova Technologies, which is based in Cedar Rapids, Iowa, will retain its defense and commercial businesses.2014-10-20T18:28:00+00:00
Blue Ridge Railcar Repair to add 37 jobs in Charlotte County
http://www.virginiabusiness.com/news/article/blue-ridge-railcar-repair-to-add-37-jobs-in-charlotte-county#When:16:56:00ZKeysville-based Blue Ridge Railcar Repair LLC unveiled Monday a $2.4 million expansion plan that’s expected to create 37 jobs.
Blue Ridge Railcar, which repairs, cleans and paints railcars, will expand to meet increased marketplace demand and grow its customer base. The company was created earlier this year when Patriot Rail Co. LLC acquired Alderman Railcar Services Inc. Jacksonville, Fla.-based Patriot Rail operates 500 miles of railroads and railcar repair facilities in 14 states.
“Patriot Rail’s investment in our Virginia-based Blue Ridge Railcar Repair is directly related to the support received from the state and local economic development councils,” John Fenton, Patriot Rail’s president and CEO, said in a statement. “We were also attracted to the facility’s unique locale which will allow for expansion, as well as access to a nearby community college with a vocational training program to support new hires and continuing education for employees.”
Gov. Terry McAuliffe approved a $100,000 grant from the Governor’s Opportunity Fund for the project. The Virginia Tobacco Indemnification and Community Revitalization Commission also approved a $155,000 grant for the project. The company may be able to receive benefits from the Virginia Enterprise Zone Program, and The Virginia Jobs Investment Program will provide funding and services for Blue Ridge Railcar’s employee training.2014-10-20T16:56:00+00:00
Stafford property sells for $1.04 million
http://www.virginiabusiness.com/news/article/stafford-property-sells-for-1.04-million#When:14:54:00ZA Stafford County industrial park property has been sold for $1.04 million.
The commercial real estate firm Cushman & Wakefield | Thalhimer said the 23,500-square-foot property is on 4.47 acres at 29 Synan Road in the Synan Industrial Park in Falmouth.
The buyer is 29 Synan Road LLC and the seller is L.C. Smith Inc. L.C. Smith and Creation Iron will operate from the building.
Wilson H. Greelaw Jr. of Cushman & Wakefield | Thalhimer handled negotiations on behalf of the buyer.2014-10-20T14:54:00+00:00
Richmond building sold for $1.3 million
http://www.virginiabusiness.com/news/article/richmond-building-sold-for-1.3-million#When:14:52:00ZROWVA Properties LLC has bought a 38,976-square-foot building in Richmond for $1.3 million.
The commercial real estate company Cushman & Wakefield | Thalhimer said the freestanding three-story building at 501 Oliver Hill Way was purchased from Richmond Art Colony LLC as an investment.
Connie Jordan Nielsen of Cushman & Wakefield | Thalhimer handled the sale negotiations on behalf of the buyer.2014-10-20T14:52:00+00:00
Sale of MacArthur Center and Stony Point Fashion Park completed
http://www.virginiabusiness.com/news/article/sale-of-macarthur-center-and-stony-point-fashion-park-completed#When:14:19:00ZConnecticut-based Starwood Capital Group has completed its $1.4 billion purchase of seven regional shopping malls, including MacArthur Center in Norfolk and Stony Point Fashion Park in Richmond.
The seller was Taubman Centers Inc., based in Bloomfield Hills, Mich.
Under the deal announced in June, Starwood paid $785 million in cash and assumed $620 million in debt.
The seven properties total more than 7 million square feet. They will become part of the portfolio of Starwood Retail Partners, which redevelops and manages retail real estate properties.
The company said existing management teams will continue to operate the properties under the direction of Starwood Retail Partners.
In addition to the Virginia malls, the deal includes:
• Northlake Mall in Charlotte, N.C.
• The Mall at Wellington Green in Wellington, Fla.
• The Shops at Willow Bend in Plano, Texas.
• The Mall at Partridge Creek in Clinton Township, Mich.
• Fairlane Town Center in Dearborn, Mich.
The 660,000-square-foot Stony Point Fashion Park opened in 2003.
MacArthur Center, which has 1 million square feet, opened in downtown Norfolk in 1999.2014-10-20T14:19:00+00:00
Three Virginia companies make list of fastest-growing inner-city businesses
http://www.virginiabusiness.com/news/article/three-virginia-companies-make-list-of-fastest-growing-inner-city-businesses#When:16:42:00ZThree Virginia companies have been named to a list of the 100 fastest-growing inner-city businesses in the country.
Team Henry Enterprises in Newport News ranked No. 12, River City Comprehensive Counseling Services in Richmond was No. 13 and The Pediatric Connection in Richmond was No. 97 on the 2014 Inner City 100 compiled by Initiative for a Competitive Inner City (ICIC) and Fortune magazine.
Team Henry Enterprises provides construction management, environmental, marine and emergency response services.
It has a five-year growth rate of 555.8 percent and posted revenue of $11.4 million last year. The company ranked second on the list among construction companies.
In addition to the company's Newport News headquarters, it has satellite offices throughout the South and employs more than 60 people. Its CEO is Devon Henry.
River City Comprehensive Counseling Services had revenue of $3.86 million last year and a five-year growth rate of 530 percent.
It ranked first on the list among health-care and biotechnology companies.
The CEO is James Christmas, who started River City Comprehensive Counseling in 2008. Its workforce grew from four to 150 in five years.
The Pediatric Connection has a five-year growth rate of 56.8 percent and posted revenue of $15.95 million last year.
It ranks ninth among health-care and biotech companies on the list.
CEO Beth Bailey founded The Pediatric Connection with her partner Bruce Green in 1999. The company provides equipment, supplies and home nursing services to children in Virginia and Georgia.
The rankings for each company were announced at an awards ceremony Thursday in Boston.
Winners also attended a two-day small business conference for urban companies featuring management case studies presented by Harvard Business School professors and sessions led by the CEOs of fast-growing firms.
The 2014 Inner City 100 winners are from 53 cities and 23 states. The companies grew at an average compound annual growth rate of 39 percent and an average gross growth rate of 336 percent from 2009 to 2013.2014-10-17T16:42:00+00:00
Booz Allen Hamilton launches online data-science program
http://www.virginiabusiness.com/news/article/booz-allen-hamilton-launches-online-data-science-program#When:16:27:00ZMcLean-based Booz Allen Hamilton is starting a data-science training program.
The program offers 40 hours of content, teaching common data-science principles while guiding students through advanced, scenario-based challenges.
The program offers 32 “missions” that allow users with basic programming proficiency to transform raw data into business-critical insights. Participants ear points, awards and badges when they complete a level that they can share on social media.
“We’re…seeing a clear demand — across all industries — for data science expertise, but it far exceeds the available supply of trained professionals,” Booz Allen Hamilton’s Peter Guerra said in a statement. “By introducing training like Explore Data Science, we’re providing companies and interested individuals with an invaluable resource while empowering an increasingly data-drive workforce.”
The program for an individual is a one-time fee of $1,250.2014-10-17T16:27:00+00:00
Shamrock Farms opens Augusta County milk plant
http://www.virginiabusiness.com/news/article/shamrock-farms-opens-augusta-county-milk-plant#When:15:42:00ZArizona-based Shamrock Farms has officially opened its Augusta County milk plant at the Mill Place Commerce Park in Verona.
The 190,000-square-foot building was constructed in 13 months on a 40-acre parcel of land. The property has room for expansion.
Shamrock Farms said the plant features newly developed extended shelf life (ESL) technology, which allows milk to stay fresh longer.
The facility, which currently employs 50 people, will produce protein-fortified milk beverages.
When the project was announced last year, the anticipated cost was $50 million.
The builder is Howard Shockey & Sons, Inc. of Winchester.
Shamrock Farms is one of the largest family-owned-and-operated dairies in the U.S. Based in Phoenix, Shamrock’s family farm hosts a herd of more than 10,000 cows. The company was founded in 1922 in Tucson, Ariz.
In 2013, then-Gov. Bob McDonnell approved a $250,000 grant from the Governor’s Opportunity Fund to assist Augusta County in securing the project. He 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.
Through its Virginia Jobs Investment Program, the Virginia Department of Business Assistance also was expected to provide funding and services to support the company’s recruitment, training and retraining activities.2014-10-17T15:42:00+00:00
Revamped and renamed Springfield Town Center holds grand opening
http://www.virginiabusiness.com/news/article/revamped-and-renamed-springfield-town-center-holds-grand-opening#When:15:38:00ZPennsylvania Real Estate Investment Trust (PREIT) on Friday marked the grand opening of the Springfield Town Center in Fairfax County.
New York-based Vornado Realty Trust spent two years and $250 million revamping the former Springfield Mall. The company announced in March it was selling the property to Philadelphia-based PREIT for $465 million..
PREIT said the mall is at approximately 81 percent total occupancy, including anchor tenants. Non-anchor is more than 60 percent, the company said, but more than 80 percent of the non-anchor space had tenant commitments (consisting of executed leases and leases being negotiated) on opening day.
Before the holiday shopping season, additional stores occupying about 50,000 square feet are expected to open, the company said. Non-anchor tenant occupancy is expected to reach more than 90 percent by the end of next year.
A list of nearly 100 mall tenants includes department stores such as Macy’s, J.C. Penney and Target plus discount specialty retailer Nordstrom Rack.
The mall also includes popular retailers such as Forever 21 and H&M and will feature a 12-screen Regal Cinema.
More than 15 retailers on the list were expected to open in the mall after Oct. 17.
Bank of Lancaster to open new Richmond branch
http://www.virginiabusiness.com/news/article/bank-of-lancaster-to-open-new-richmond-branch#When:14:20:00ZBank of Lancaster is opening a branch in Richmond’s West End on Nov. 3.
The 1,500-square-foot location will be on the corner of Libbie and Patterson avenues.
The Kilmarnock-based bank already has an office in the western part of the city at 6800 Paragon Place. It also plans to open a location on Robious Road in spring 2015.
In addition to the Richmond office, Bank of Lancaster has eight branches in the Northern Neck and a residential lending office in Middlesex County. The bank’s services include retail and commercial banking, investment services and mortgage banking.2014-10-17T14:20:00+00:00
Capital One giving five-year, $5 million gift to the Kennedy Center
http://www.virginiabusiness.com/news/article/capital-one-giving-five-year-5-million-gift-to-the-kennedy-center#When:20:24:00ZThe John F. Kennedy Center for the Performing Arts in Washington, D.C. is receiving a five-year, $5 million gift from McLean-based Capital One Financial Corp.
The money will fund “Comedy at the Kennedy Center,” a series of events aimed at elevating comedy as an art form.
The program will include the annual Mark Twain Prize for American Humor, main-stage productions such as “Shear Madness” and a comedy series that will bring three high-profile comedians to the center.
This season's comedy events include Mark Twain Prize recipient Jay Leno on April 8 and Kathy Griffin on June 20. A third comedy event will be announced at a later date.2014-10-16T20:24:00+00:00
Cigital Inc. names new executives
http://www.virginiabusiness.com/companies/article/cigital-inc.-names-new-executives#When:19:59:00ZDulles-based software security services and products firm Cigital Inc. has named John Salmon vice president for North America sales and James Paul managing director of the Central Region.
Salmon was vice president of enterprise solutions at Trustwave. Before joining Trustwave, he served in business development leadership positions at ICONS and the Salinas Group.
Paul also joins Cigital from Trustwave, where he was the senior vice president of product management for compliance and risk.
Cigital has regional offices in North America, Europe and Asia.2014-10-16T19:59:00+00:00
Michael & Son Services buys Alexandria property for new headquarters
http://www.virginiabusiness.com/news/article/michael-sons-services-buys-alexandria-property-for-new-headquarters#When:18:55:00ZCafferty Commercial Real Estate Services in McLean is working with Michael & Son Services Inc. on a new headquarters project in Alexandria.
According to President Tom Cafferty, Michael & Son, which provides electrical, plumbing and HVAC services, purchased a six-acre site at 6375 Bren Mar Drive for $3.4 million. It plans to build a 61,000-square-foot office building there that will consolidate several of the company’s operations in the Alexandria area.
Cafferty says his firm will provide development services for the new project, which will be constructed of brick and reflective glass.2014-10-16T18:55:00+00:00
Virginia nursery acquired by major greenhouse operation
http://www.virginiabusiness.com/news/article/virginia-nursery-acquired-by-major-greenhouse-operation#When:18:49:00ZOne of the nation’s largest greenhouse growers has acquired a Virginia nursery.
Elkridge, Md.-based Bell Nursery has acquired Blue Ridge Growers’ 110 acres in Stevensburg and 150 acres of Bentwood Farms in North Carolina. Bell supplies The Home Depot in seven states and the District of Columbia.
Blue Ridge Growers will grow annuals, perennials, mums and poinsettias for Home Depots. According to Bell, the acquisition of Blue Ridge Growers will allow it to expand in-house production and provide future growth.2014-10-16T18:49:00+00:00http://www.virginiabusiness.com/uploads2/Building-5-9325_small.jpg
Archway 60 Office Park reopens as Fountain Park
http://www.virginiabusiness.com/news/article/archway-60-office-park-reopens-as-fountain-park#When:18:48:00ZArchway 60 Office Park on Midlothian Turnpike in Chesterfield County has been reopened under the name of Fountain Park after a major renovation.
The new name highlights the park’s existing fountain plaza. The four-building office park has 65,000 square feet of space and has been refurbished with a new façade, including stone columns, new trim, paint and a new roof. In addition, directional signage was added so tenants and visitors could easily locate businesses within the park.
Midlothian Partners of Virginia LLC said in a statement that it invested in the renovation to refresh the look and better position the property, taking full advantage of its location. “We have spent the better part of a year enhancing a very well-located office park to attract medical, service and office tenants. It’s a great opportunity to take advantage of a superior location, with terrific accessibility and visibility from Midlothian Turnpike and close proximity to major hospitals,” said Sanford M. “Sandy” Cohen of Midlothian Partners.
Divaris Real Estate is handling the leasing and management of the project on behalf of Midlothian Partners. Currently the office park is home to Old Dominion Pediatrics, Brothers’ Keeper Inc., Rehabilitation Associations PC, Olmeja Advocacy LLC, CML Pizza Inc. and Personal Dental Care.2014-10-16T18:48:00+00:00
Orthopedic practices to merge
http://www.virginiabusiness.com/news/article/orthopedic-practices-to-merge#When:18:21:00ZFairfax-based Commonwealth Orthopaedics and Richmond-based OrthoVirginia will merge their practices.
When the merger takes effect on Jan. 1, Commonwealth Orthopaedics will change its name to OrthoVirginia.
The combination is expected to create the largest orthopedic specialty group practice in Virginia, with 82 physicians, 21 office locations, an MRI facility, and multiple physical and occupational therapy clinics and outpatient surgery centers.
Financial details of the merger were not released.
In a statement, Dr. David Miller, president of OrthoVirginia, said the merger “will improve the delivery of orthopedic care in Virginia, provide a stronger network of high-quality orthopedic physicians, and position both organizations for future success in a rapidly changing health-care environment.”
Dr. Mark Madden, chairman of Commonwealth Orthopaedics, said in a statement that, except for the name change, “the merger will be seamless to patients. Day-to-day operations at both organizations will not change.”
Commonwealth Orthopaedics is the largest orthopedic specialty group practice in Northern Virginia with 37 physicians. Established in 1994, it has 10 office locations in the region, including seven physical-therapy facilities and an outpatient-surgery center.
OrthoVirginia is a 45-physician orthopedic specialty group practice with 11 locations in the Richmond, Prince George County, Kilmarnock and Farmville areas, including seven physical-therapy locations and two outpatient-surgery centers. It was founded in 1960.2014-10-16T18:21:00+00:00
Workforce training program expands list of assessment centers
http://www.virginiabusiness.com/news/article/workforce-training-program-expands-list-of-assessment-centers#When:18:18:00ZNine Virginia community colleges have been designated as assessment centers for the Manufacturing Skills Institute (MSI), the workforce development affiliate of the Virginia Manufacturers Association.
The schools include: Blue Ridge Community College, Community College Workforce Alliance (John Tyler Community College and J. Sargent Reynolds Community College), Mountain Empire Community College, Southside Virginia Community College, Tidewater Community College, Thomas Nelson Community College, Virginia Highlands Community College and Virginia Western Community College.
The new assessment centers will expand opportunities for workers to gain credentials for their skills.
The initial focus of the partnership will be to expand the MSI Manufacturing Technician 1 (MT1) certificate program as a baseline credential for Virginia's 6,000 manufacturers as well as integrating it into degree pathways and dual enrollment opportunities.
The goal is to create an emerging workforce that has the 12 critical technical skills that are fundamental to occupations in advanced technology industries.
"We knew in 2007 that manufacturers would have a skills gap of approximately 11,000 people a year,” Brett Vassey, VMA’s President and CEO, said in a statement. “We also knew that the largest need was in the manufacturing technician occupation and 96 percent of manufacturers wanted people with these applied and measurable skills. Although the economic challenges of the last few years slowed demand, it is back and we need to move quickly and this partnership between MSI and Virginia's community colleges will help close the skills gaps for manufacturers"
The community college-based assessment centers will join ECPI University, which has six assessment centers, and the Southern Virginia Higher Education Center in offering MT1 resources.
Dixon Hughes Goodman adds partner
http://www.virginiabusiness.com/companies/article/dixon-hughes-goodman-adds-partner#When:14:51:00ZDixon Hughes Goodman (DHG) announced that Nicholas Harrison has joined the firm’s Richmond office as a partner.
He will lead the DHG’S Virginia Tax Advisory Services Group. Harrison has more than 12 years experience providing tax consulting and compliance services to middle market and large public and private companies.
He has helped clients with income tax provision review and compliance, nexus reviews, voluntary disclosure agreements, Sarbanes Oxley 404 tax reviews and transaction analysis.
Previously, Harrison was a senior manager at KPMG.2014-10-16T14:51:00+00:00
VCU’s Institute for Contemporary Art will drive new development, director says
http://www.virginiabusiness.com/news/article/vcus-institute-for-contemporary-art-will-drive-new-development-director-say#When:21:41:00ZWhy is a new contemporary art institute significant for Richmond? VCU’s Institute for Contemporary Art will add to the city’s sense of distinction and help drive new economic development, the institute’s director Lisa Freiman said Wednesday.
In remarks to the Richmond chapter of Commercial Real Estate Women, Freiman said nearly $33 million of a $37 million funding goal has been raised for the facility, designed by Steven Holl, an award-winning New York architect. With its multiple galleries, including a 36-foot high third-floor gallery, modern design and outdoor sculpture garden and plaza, Holl designed the building as a gateway between the university and the city.
Construction got underway at the building’s site last month at the intersection of Broad and Belvedere, not far from Interstate 95 near Virginia Commonwealth University.
The intersection is one of the city’s busiest, with 60,000 cars passing through it every day, said Freiman. She predicts the ICA will be an economic spark for the area. “A lot of economic transformation is coming in, restaurants, boutiques, even a petite Wal-Mart,” Freiman said, referring to a new convenience-store size Wal-Mart that will occupy ground-floor space in a seven-story classroom-and-office building under construction on Grace Street on VCU’s Monroe Park Campus.
The center will have double entrances, one facing Richmond at the intersection and another fronting VCU’s campus.
Freiman noted that Richmond already is ahead of many cities in terms of having a distinct sense of place because of its well-preserved historical structures. This pleasing and unique aesthetic is lacking in many American cities, Freiman told the real estate group, where similar large-box retailers tend to build the same size and type stores.
While Richmond already has many museums, including the Virginia Museum of Fine Arts, the new institute will fulfill a specific niche of showcasing contemporary art and by providing a museum space for VCU, one of the country’s top-rated art schools, Freiman said.
It will function as a noncollecting institution, showcasing a changing array of exhibitions not only by VCU artists, “but the best of contemporary art from around the world,” said Freiman. She predicts that the 43,000-square-foot institute “will create opportunities for cultural tourism and community revitalization.”
The building’s exterior walls will be done in zinc. Clear and translucent glass walls will create transparency, bringing natural light into the building. Freiman said the building, with 43 geothermal wells, three green roofs and other sustainable building features, plans to seek platinum certification from LEED, the highest rating from the Leadership in Energy and Environmental Design.
VCU announced on Tuesday the naming of the first-floor gallery in the Markel Center of the Institute for Contemporary Arts in honor of Beverly W. Reynolds, a longtime gallery owner, VCU School of the Arts advocate and a community leader in the arts.
The tribute to Reynolds was made possible by gifts to the ICA fundraising campaign in her honor by more than 80 donors and a recent significant contribution by her close friends, Harmon and George Logan of Charlottesville. Campaign co-chairs Pam and Bill Royall and ICA donors Carolyn and John Snow also directed a portion of their gifts in her honor, bringing the total gifts and pledges in Reynolds’ name to $3 million.
“It is appropriate and wonderful that one of the most prominent spaces in the ICA be named for Bev Reynolds, one of the most prominent supporters of the arts in our city’s history,” VCU President Michael Rao said in a statement. “Bev has been a catalyst in bringing innovative and inspiring works of art to Richmond for many years, and her impact on the campaign for the ICA has been just as profound. Her generosity, vision and spirit have inspired so many others, and I am proud that her transformative and indelible legacy will be permanently honored at the ICA.”2014-10-15T21:41:00+00:00
Shoppers get a look at Portsmouth’s new Kroger Marketplace
http://www.virginiabusiness.com/news/article/shoppers-get-a-look-at-portsmouths-new-kroger-marketplace#When:21:36:00ZPortsmouth shoppers got a look at the region’s newest Kroger Marketplace store Wednesday with the opening of a 124,000-square-foot store at 1301 Frederick Blvd., the former home of I.C. Norcom High School.
Like Kroger’s other large stores, the Portsmouth Midtown Kroger Marketplace stocks more than groceries. Thestore offers 30,000 square feet of non-grocery space where customers can shop in departments ranging from apparel, home décor and baby and infant gear.
The store also offers a natural foods department, a Fred Meyer Jewelers, a pharmacy with drive-through service, a Starbucks kiosk with seating area and free Wi-Fi and a Kroger Fuel Center.
Unique to the Kroger stores in the Hampton Roads area, Portsmouth Midtown Marketplace amenities include an expanded gourmet wine and cheese pairing station and a more efficient layout to help customers navigate the store. According to Kroger, the added features were largely based upon customer feedback and shopping behaviors.
The store’s community room will be named the I.C. Norcom Room in honor of the school that formerly stood on the grounds. The high school was renamed to honor its first supervising principal, Israel Charles Norcom, a pioneer educator in the region.
“Our goal for this store is to make a positive impact on the community and bring an enjoyable shopping experience to our customers,” store Manager Terry Lucas said in a statement.
The Portsmouth Kroger Marketplace, which will employ nearly 350 full- and part-time workers, is the second Marketplace store in Hampton Roads. The next Marketplace store is planned to open in December in Suffolk.
Kroger Mid-Atlantic also operates two Marketplace stores in the Richmond market, with plans to open more in the next several years.2014-10-15T21:36:00+00:00
Clearview Logix to acquire health-care practice of Evenspring
http://www.virginiabusiness.com/news/article/clearview-logix-to-acquire-health-care-practice-of-evenspring#When:20:19:00ZClearview Logix, a healthcare analytics and application development company, is acquiring the health-care practice of Evenspring, a software development consultancy.
Both companies are based in Richmond. The deal is expected to close on Nov. 1.
As part of the transaction, Evenspring partner Allen Hatzimanolis will join Clearview as its chief technology officer.
Clearview used Evenspring to develop its web-based employer-branded health plan selection tool for employees.
“The combination of Clearview Logix’s problem-solving approach with Evenspring’s software development capabilities will allow us to capitalize on emergent opportunities in the rapidly changing health-care market, and also offer our partners enhanced decision support solutions,” Tim O’Shea, a Clearview founder, said in a statement..
Founded by Aujang Abadi, Tyler Carbone, and Hatzimanolis, Evenspring’s health division specializes in health-care related software development, primarily serving health consumers, employers and insurance distribution channels such as marketplaces and exchanges.
Evenspring is the development partner of BeneFinder, an individual insurance marketplace.
Clearview was started last year by O’Shea and Dr. Larry Colley, the developers of patented analytic decision support models for health insurance purchasers.
The company is marketing the My Clearview model, which aids consumers in selecting health plan options that minimizes their total expected cost.
Clearview also developed Quote Master, a small group multi-carrier quoting engine that helps brokers to identify the optimal carrier and plans for a small-group clients.2014-10-15T20:19:00+00:00
American Staffing Association releases list of ‘hard-to-fill’ jobs in the U.S.
http://www.virginiabusiness.com/news/article/american-staffing-association-releases-list-of-hard-to-fill-jobs-in-the-u.s#When:20:19:00ZWhat are the hardest jobs to fill in the U.S.? Alexandria-based American Staffing Association has an idea.
The association has released a list of the hardest-to-fill jobs in the U.S., with occupational and physical therapists taking the No. 1 and 2 spots, respectively.
The finding is based on ASA’s Skills Gap Index, which tracks the number of hardest-to-fill occupations in the country. The index found 207 occupations that are hard to fill. The top 10 are:
1. Occupational therapists
2. Physical therapists
3. Truck drivers, heavy and tractor-trailer
4. Occupational therapist assistants
5. Speech-language pathologists
6. Physician assistants
7. Merchandise displayers and window trimmers
8. Physical therapist assistants
9. Nursing instructors and teachers, postsecondary
10. Computer software engineers, applications
The skills gap index, updated quarterly, uses Career Builder's hiring indicator, which measures the level of difficulty to recruit for a specific job based on demand, supply of active candidates and total population working in it on a scale of 1-100. Occupations with a score less than 50 and demand of 2,000 jobs or more were considered hard to fill.2014-10-15T20:19:00+00:00
Grant Thornton promotes six employees in Virginia
http://www.virginiabusiness.com/companies/article/grant-thornton-promotes-six-employees-in-virginia#When:18:01:00ZChicago-based accounting firm Grant Thornton LLP has announced a number of promotions at its Virginia offices.
Eric Heffernan is now global public sector advisory principal at Grant Thornton LLP’s Alexandria location. The McLean office promoted Tim O’Neil to audit partner; Rob Spence to international tax partner; Jeremy Cusimano to forensic and valuation services managing director; Nishit Mehta to audit managing director and Margery Van Vleet to tax managing director. It also promoted Bryan Keith to tax managing director in the Washington, D.C. Office
According to Grant Thornton LLP, partners and principals have consistently demonstrated an ability to understand and meet the needs of companies and industries. They have also demonstrated long-term leadership in the accounting profession and the community. Managing directors are the company’s highest-level employee position.
Heffernan has been with Grant Thornton LLP since 2002. His expertise lies in organizational improvement, human capital management and sourcing operations to help transform large federal agencies operations.
O’Neil began working at the firm in 2004. He has 13 years of experience in accounting, business operations, and information technology.
Spence and Cusimano have been with Grant Thornton since 2012. Spence experience includes foreign tax credits, post-merger integration and structuring for expansion and disposition. Prior to joining Grant Thornton LLP, Cusimano served as economic advisor to the enforcement director at the U.S. Commodity Futures Trading Commission and chief economist for petroleum reserves at the U.S. Department of Energy.
Mehta joined Grant Thornton in 2008 and specializes in real estate issues. Van Vleet started working at Grant Thornton in 2011 and focuses on tax technology implementation and support.
Overall, Grant Thornton added 32 new partners and principals and promoted 21 workers to managing director. The company is the U.S. member company of Grant Thornton International Ltd. In the United States, Grant Thornton has revenue of more than $1.3 billion and has more than 6,000 employees.2014-10-15T18:01:00+00:00
Hilton unveils lifestyle hotel brand
http://www.virginiabusiness.com/news/article/hilton-unveils-lifestyle-hotel-brand#When:17:41:00ZHilton Worldwide announced Wednesday the launch of its new lifestyle brand, Canopy by Hilton.
The new brand, set to open at hotels in 11 locations, will feature individualized features from the properties' local neighborhood, a comfortable lobby and "extra-value" items such as a welcome gift and local food and beer tastings.
“Built on extensive market research, our highly anticipated Canopy by Hilton brand delivers a fresh approach to hospitality and the guest experience,” Hilton CEO Christopher Nassetta said in a statement. “We saw an opportunity to not only enter the lifestyle space by developing a new brand, but also to redefine this category by creating a more accessible lifestyle brand. We identified the need to take the emphasis off of capital-intensive design and deliver exactly what the target consumer desires: an energizing, comfortable stay with more included value.”
The hotels will begin opening in 2015. Canopy by Hilton has signed letters of intent to open in neighborhoods in Portland, London, Miami, Bethesda, Md., San Diego, Nashville, Savannah, Ga., Indianapolis, Charlotte, Oklahoma City and Ithaca, N.Y.
Canopy has already attracted the interest of ownership groups including The Buccini/Pollin Group, KeyStone Corporation, Anish Hotel Group, Baywood Hotels, North Point Hospitality Group, J Street Hospitality, and Levine Properties.2014-10-15T17:41:00+00:00
Governor unveils 2014 Virginia Energy Plan
http://www.virginiabusiness.com/news/article/governor-unveils-2014-virginia-energy-plan#When:21:04:00ZAmid a backdrop of protestors who railed against a proposed new natural-gas pipeline, Gov. Terry McAuliffe formally presented his 2014 Virginia Energy Plan Tuesday to a standing room only crowd of nearly 200 people.
The Virginia Chamber of Commerce and the Virginia League of Conservation Voters co-sponsored the event at the Virginia Science Museum in Richmond. In front of the museum, a crowd of about 30 people, including college students and residents of Nelson County, voiced their opposition to a new pipeline with signs and cheers amplified by a megaphone.
“We are the people. We are united. We won’t let you build this pipeline,” they said.
The group was referring to a $4.5 billion, 550-mile natural-gas pipeline proposed by four energy companies, including Virginia-based Dominion, that would run from Harrison County, W. Va., through Virginia including Nelson County, and south through central North Carolina.
While speakers at the event briefly referenced the controversial pipeline, the governor’s nearly 500-page energy plan focuses on a broad vision for state energy policy that advocates an “all of the above” approach.
In his remarks, McAuliffe said, “If we are going to build the economy Virginia families deserve, we must begin by giving them the energy plan our economy demands.’’
McAuliffe’s stamp on Virginia’s Energy Plan, mandated by state law to be updated by Oct. 1 of this year, primarily focuses on four areas: growing the state’s energy industry, delivering best-in-class infrastructure, incorporating energy conservation and innovation and addressing workforce needs with many workers in the energy sectors preparing for retirement.
Currently, about 6 percent of Virginia’s energy comes from renewable sources, Maurice Jones, Virginia’s secretary of commerce and trade, said. The plan calls for the formation of a new public/private authority to help facilitate renewable projects, particularly in the solar sector.
His remarks were followed by panel discussion on energy issues. One of those speakers noted that Virginia is far behind other states in solar development. Of the 6 percent renewable figure, only one half of one percent of that comes from renewables sources that are solar- or wind-based, according to Angela Navarro, a staff attorney with the Southern Environmental Law Center who works with six states in the Southeast on energy issues. “That’s not a balanced portfolio,” she said.
Compared with Virginia, which currently has 15 megawatts of solar power installed, she said Georgia has 700 megawatts and North Carolina generates 650 megawatts of solar power. These states have solar tax credits, and North Carolina mandates a renewable portfolio standard -- policies that drive significant change, Navarro said.
While the natural-gas sector is experiencing rapid growth and low prices now due to the discovery of the Marcellus shale, Navarro said prices for the commodity are historically volatile. “Wind and solar provide a hedge to natural gas prices,” she said.
The energy plan calls for 15 percent of Virginia’s energy to come from renewables by 2025 and a 10 percent reduction in energy consumption by 2020. Currently, most of the state’s energy comes from nuclear power (about 36 percent), natural gas (30 percent) and coal (29 percent).
Navarro commended the new plan’s recommendations for pilot programs that allow individuals to invest in solar.
Besides renewables, Jones says the state sees big opportunities in offshore wind and in energy efficiency, particularly by converting petro-fueled state vehicles to other forms of energy and by assisting local governments with conservation and retrofitting efforts.
State facilities alone, including colleges and universities, consume about $200 million a year in energy, so a 10 percent savings could bring $20 million to $30 million in savings a year, said Conrad Spangler, director of the state’s department of Mines, Mineral and Energy.
One new initiative for the state’s coal industry would help them find new international markets for their services and technology, Jones said, much like the state did for the defense industry.
“The market for coal is still robust abroad,” he said. “ Going global would help the coal supply chain,” which has seen mines close and jobs cut under new federal emission standards.
Providing new energy infrastructure is important to growing the state’s energy sector, Jones, said, and the state would be open to special utility rates to enhance such growth. “I know this is a sensitive topic, and we will have to do it in a way that balances interests,” he said.
Another panel speaker, Keith Togna, global energy lead for Honeywell Performance Materials and Technologies, reminded the audience that energy costs are one of a manufacturer’s highest expenses. “The cost of energy impacts our ability to be competitive in the global marketplace,” he said.
Large manufacturers need access, reliability and affordable energy. “It’s paramount to where we will site a facility.”
During the wide-ranging discussion on energy, the shouts of protestors could periodically be heard, punctuating the timeliness of the topic. Several students from the University of Virginia and Virginia Commonwealth University were among the protesters, and some of them attended the event as well. They belong to the Virginia Student Environmental Coalition, a relatively new group that brings student networks together.
Laura Cross, a student at the U.Va. said, “We’re trying to unify our voices as students." As Jake Turner, a graduate student at U.Va. put it, “We’re the ones who are going to be around for a long time.”
According to Turner, the students are protesting the pipeline, because they would rather see money invested in renewables.2014-10-14T21:04:00+00:00
Virginia to use federal grant to boost health-care enrollment
http://www.virginiabusiness.com/news/article/virginia-to-use-federal-grant-to-boost-health-care-enrollment#When:20:55:00ZVirginia has been awarded a $9.3 million federal grant to hire more than 100 people to help residents sign up for health care.
Gov. Terry McAuliffe said the grant would play a significant role in his efforts to expand health care coverage. “We will use this money to put more boots on the ground to make sure individuals and families find the best low-cost insurance options for them, and to make sure they know about the financial assistance that is available,” the governor said in a statement.
During the 2013-14 sign-up period, more than 216,000 Virginians purchased health plans. Nonetheless, the governor’s office said an estimated 300,000 Virginians who would have qualified for tax credits if they had bought insurance on healthcare.gov remain uninsured.
McAuliffe has set a goal to enroll up to 160,000 more Virginians on the federal website during the enrollment period that ends Feb. 15.
The grant, one of only four given to the states, was awarded by the Centers for Medicare and Medicaid Services. It will be administered by the Virginia Department of Medical Assistance Services.
The commonwealth will partner with the Virginia Community Healthcare Association and the Virginia Poverty Law Center in hiring enrollment assistants.2014-10-14T20:55:00+00:00
Virginia Economic Development Partnership announces new roles in UK, Ireland office
http://www.virginiabusiness.com/companies/article/virginia-economic-development-partnership-announces-new-roles-in-uk-ireland#When:20:52:00ZThe Virginia Economic Development Partnership (VEDP) has tapped two marketing professionals to attract business from the United Kingdom and Ireland to Virginia.
Andrew Harfoot will serve as VEDP’s director of state of Virginia for the United Kingdom and Ireland, and Heather Wells will serve as the organization’s business attraction manager.
Harfoot and Wells are directors of Springboard Marketing Ltd., a business-to-business marketing firm in Kent County (located in South East England). During the last decade, Hartfoot and Wells have represented Richmond in Northern Europe. Springboard, established in 1992, has 10 employees.
VEDP established operations in the UK and Ireland in 2010.2014-10-14T20:52:00+00:00
Wheeler REIT to acquire Tennessee shopping center
http://www.virginiabusiness.com/news/article/wheeler-reit-to-acquire-tennessee-shopping-center#When:20:49:00ZVirginia Beach-based Wheeler Real Estate Investment Trust Inc. has signed a contract to acquire a shopping center in Tennessee for $9.75 million.
The acquisition involves Crockett Square, a 107,122-square-foot retail center in Morristown, Tenn., a city of nearly 30,000 people. The property is totally leased by national retail chains such as Hobby Lobby, Dollar Tree, Pier 1 and Ross.
The shopping center, built in 2005, is near a Walmart store and is directly across the street from Walters State Community College, both of which generate traffic in the area.
The company plans to make the acquisition using a combination of cash and bank debt.2014-10-14T20:49:00+00:00
CIT releases progress report on Commonwealth Research Commercialization Fund
http://www.virginiabusiness.com/news/article/cit-releases-progress-report-on-the-commonwealth-research-commercialization#When:20:47:00ZOrganizations funded by The Commonwealth Research Commercialization Fund (CRCF) produced more than 12 patents and created at least four new life science/cyber security companies in Fiscal Year 2014, according to a new report by the Center for Innovative Technology (CIT).
Herndon-based CIT, which manages the fund, released the report detailing CRCF’s performance on Tuesday. The fund invests in projects that address challenges in the life sciences, cyber security, advanced manufacturing and energy sectors. The Virginia General Assembly appropriated $4.8 million to the fund for FY2014. CIT used $4.2 million of those funds that year to invest in 52 projects, which received $7.4 million in matching funds. The report also found the following about companies funded by CRCF:
• At least seven companies posted sales and/or revenue totaling more than $3 million.
• More than 50 patents have been filed by the grantees or are pending.
• At least one CRCF recipient expanded its operations across the state, and at least two non-Virginia companies located all or a portion of their operations to the commonwealth.
• CRCF award recipients reported nearly $30 million in additional investments made in research and technology work after CRCF projects ended.
The program was established in 2011 and since then, has received nearly 400 applications. To date, CRCF has announced 146 awards.2014-10-14T20:47:00+00:00
Virginia revenues up 5.3 percent in September
http://www.virginiabusiness.com/news/article/virginia-revenues-up-5.3-percent-in-september#When:19:40:00ZVirginia's revenues great 5.3 percent in September, Gov. Terry McAuliffe announced Tuesday.
All major sources of revenue grew during the month. It also marked the first time revenues have increased for three consecutive months since April through June of 2013.
September is a major revenue collection month for Virginia. It marks the last month of the first quarter, and estimate payments from individuals, corporations and insurance companies all are due in September.
“I am pleased to see that our revenue collections are up, however, we must remain cautious because the commonwealth has only collected about one-quarter of its general fund revenue estimate to date. My administration will continue to take a prudent approach to help ensure that Virginia remains fiscally strong,” McAuliffe said in a statement.
On a fiscal year-to-date basis, total revenue collections rose 6.7 percent compared with the same time period last year. That is ahead of the revised annual forecast growth of 2.9 percent. Rises in the individual income, corporate and sales taxes contributed to the increases.
On a year-to-date basis, collections of payroll withholding taxes rose 6.3 percent, compared with a 2.7 percent estimate in the state's revised forecast. Non-withholding collections grew 14.7 percent, and sales tax collections grew 4.6 percent, slightly above the 4.4 percent predicted increase. Through the first quarter of the fiscal year, corporate income tax collections grew 12.4 percent, ahead of an estimated 0.9 percent decline.2014-10-14T19:40:00+00:00http://www.virginiabusiness.com/uploads2/Green_Flash_Brewing_Co._in_Virginia_Beach.jpg
Green Flash Brewing Co. breaks ground in Virginia Beach
http://www.virginiabusiness.com/news/article/green-flash-brewing-co.-breaks-ground-in-virginia-beach#When:21:25:00ZThe co-founders of Green Flash Brewing Co., Mike and Lisa Hinkley, joined local and state officials Monday in a groundbreaking in Virginia Beach for the San Diego-based brewery’s first East Coast location.
Brewmaster Chuck Silva, state Sen.Jeffrey McWaters, Secretary of Commerce and Trade Maurice Jones and Virginia Beach Mayor William D. Sessoms were on hand to mark the official start of construction of the 58,000-square-foot brewery, tasting room and beer garden at the corner of General Booth Boulevard and Corporate Landing.
Green Flash partnered with Hampton Roads-based developers, The Miller Group, to proceed with land acquisition, design and permitting.
“When they reach capacity, Green Flash will be producing 100,000 barrels of beer every year from Virginia Beach, and that is certainly something to celebrate,” Mayor William D. Sessoms of Virginia Beach said in a statement.
“We extend many thanks to everyone in the community for making us feel welcome and at home from day one and look forward to celebrating our opening upon completion of construction in 2016,” said Mike Hinkley.
According to the city of Virginia Beach, a steadily growing demand for Green Flash beers on the East Coast prompted the need for a second brewery. Virginia Beach was chosen because of its ease of access from mid-Atlantic corridors as well as for its coastal landscape and cultural similarities to San Diego.
The Virginia brewery will allow Green Flash to cold-ship fresh beer via second-day freight. This will result in lower pricing at retail and a smaller carbon footprint.
“Most importantly,” said Green Flash co-founder and vice president of Marketing Lisa Hinkley, “we will have the chance to further connect with our customers on the East Coast … Our most powerful brand building comes when we are face to face with our customers and they can see, hear, feel and taste our beer at the source. It is then that they are able to experience our passion for brewing innovation and explore our craft first-hand.”
From a production standpoint, the new brewery will replicate the production capabilities of the Green Flash headquarters in San Diego. The brewery’s interior footprint will follow the same plan with most equipment installed prior to opening. The fermentation tanks will be delivered in three phases: 50 percent of capacity up front, with 25 percent added as needed until reaching the operation’s full capacity to meet demand. Upon opening, the Virginia Beach facility will employ 40 people and represent $20 million of invested capital.2014-10-13T21:25:00+00:00
AES selling its interest in Turkish joint venture for $125 million
http://www.virginiabusiness.com/news/article/aes-selling-its-interest-in-turkish-joint-venture-for-125-million#When:21:25:00ZArlington-based AES Corp. has agreed to sell for $125 million its interest in a Turkish joint venture to its partners.
AES held 49.62 percent equity interest in AES Entek Elektrik Üretimi A.Ş. (AES Entek), a joint venture with partners KOÇ HOLDİNG A.Ş. and AYGAZ A.Ş.
The sale represents 100 percent of AES’ interest in assets in Turkey.
“With the sale of our Turkish assets, we will have exited nine countries and received proceeds of $2.4 billion from asset sales over the past three years," Andrés Gluski, AES’ president and CEO said in a statement. “In line with our strategy, we have focused on simplifying our portfolio and exiting those markets where we do not have a sustainable competitive advantage.”
AES is a Fortune 200 global power company providing energy to 20 countries.
The company has 17,800 employees and its 2013 revenues were $16 billion.2014-10-13T21:25:00+00:00
McGuireWoods names new partner
http://www.virginiabusiness.com/companies/article/mcguirewoods-names-new-partner#When:16:16:00ZMcGuireWoods has named Brad R. Newberg partner in its Tysons Corner office. Newberg will join the firm’s intellectual property litigation and patents department.
Newberg most recently worked for Reed Smith’s Falls Church office where he was lead attorney on different intellectual property matters.
Overall, Newberg has 15 years of intellectual property experience, including copyright, trademark and domain name issues.
Newberg earned his law degree from the University of Pennsylvania Law School in 1997. He also received two undergraduate degrees in economics from Penn, including a degree from Penn’s Wharton School of Business.
McGuireWoods LLP employs more than 900 lawyers in 20 offices around the world.2014-10-13T16:16:00+00:00
New Kroger Marketplace will open in Portsmouth Oct. 15
http://www.virginiabusiness.com/news/article/new-kroger-marketplace-will-open-in-portsmouth-oct.-15#When:16:02:00ZThe Portsmouth Midtown Kroger Marketplace, located at 1301 Frederick Blvd., will open this Wednesday, Oct. 15, at 7 a.m.
Kroger Limited Partnership, an affiliate of The Kroger Co., developed the store at the former home of I.C. Norcom High School.
“We’re thrilled to be welcoming the Kroger Marketplace to the Portsmouth community,” Portsmouth Mayor Kenny Wright said in a statement. “This store will create approximately 350 jobs and provide an opportunity for our residents to shop and work where they live. This is another step in rebuilding our city and restoring quality services in our neighborhoods."
Similar to the Virginia Beach Marketplace, the Portsmouth store will offer shoppers more than groceries with 30,000 square feet set aside for home-store offerings ranging from apparel to home décor.2014-10-13T16:02:00+00:00
Franklin Johnston Group picks up large residential portfolio
http://www.virginiabusiness.com/news/article/franklin-johnston-group-picks-up-large-residential-portfolio#When:15:27:00ZThe Franklin Johnston Group, a Virginia Beach-based apartment developer and manager, announced an agreement Monday to manage all Waverton Associates Communities, which include 2,200 residences in the Richmond and Hampton Roads areas.
Waverton Associates in Portsmouth has developed and built many residential and commercial properties throughout the region with an estimated value of more than $800 million. The Waverton portfolio includes Meridian Watermark, Chesterfield County; Impressions, Newport News; Meridian Parkside, Newport News; Meridian Harbourview, Suffolk; and Waverton Chesapeake, Chesapeake. The portfolio consists of both market rate and tax-credit communities.
The FJG management team took over on Oct. 1.
The Franklin Johnston Group, which opened for business a little more than a year ago, owns and manages more than 7,000 units and 45 properties throughout the Eastern U.S. The portfolio includes its own properties as well as those owned in partnership with various individual and institutional investors.
FJG employs more than 300 people throughout the mid-Atlantic and Southeast.2014-10-13T15:27:00+00:00
2015 will see many CMBS loans mature in Virginia
http://www.virginiabusiness.com/news/article/2015-will-see-many-cmbs-loans-mature-in-virginia#When:15:24:00ZVirginia has 166 commercial mortgage-backed backed security (CMBS) loans, with a balance of $1.8 billion, coming due during the next 12 months.
Of that amount, 15 percent, or 25 of the loans, are delinquent in the amount of $311,444,891, which could open the door to possible note sales, discounted payoffs or restructurings according to Trepp, a commercial real estate analytics firm based in New York.
Its Southeast Market Snapshot report on maturing loans shows that Virginia is doing better than some other states.
The region is dominated by Florida, Virginia, Georgia, and North Carolina, making it the second-largest region in the country in terms of outstanding CMBS loan balance. Of the $95.6 billion in outstanding CMBS loans, just over 13 percent of that balance will mature during the next twelve months. Of the $12.8 billion in maturing loans, more than 200 of them — totaling $2.1 billion — are currently delinquent.
Alabama and Tennessee have the lowest amount of healthy loans in their region with 35.6 percent of Alabama’s loans delinquent and 21.5 percent of Tennessee’s loans in delinquency.
The Trepp snapshot is updated on a quarterly basis. CMBS loans are a type of mortgage-backed security backed by commercial mortgages rather than residential real estate.2014-10-13T15:24:00+00:00
JLL assisted Stone Brewing Co. in its bid to come to Richmond
http://www.virginiabusiness.com/news/article/jll-assisted-stone-brewing-co.-in-its-bid-to-come-to-richmond#When:14:12:00ZCommercial real estate services firm JLL worked with Stone Brewing Co. of Escondido, Calif., on the selection of its Richmond East Coast production and distribution facility.
The city of Richmond Economic Development Authority will build Stone’s 192,800-square-foot production and distribution project. Located in the Fulton Bottom area of the city at the intersection of Williamsburg Avenue and Nicholson Street, brewery plans also include a bistro and gift shop located in the adjacent Intermediate Terminal building.
According to JLL, Stone received more than of 300 responses to its original Request for Proposal (RFP) for an East Coast facility and engaged JLL to assist with the selection process.
JLL helped Stone evaluate different cities and sites, as well as water quality, supply chain, incentives and other metrics. In the end, JLL said Richmond was the top choice given its location and other attributes, not the least of which was a site with access to the James River.
Scott Keeton, vice president, JLL, provided site selection and other services.
“Richmond prevailed among a large pool of options because of the city’s thriving artisan, craft food and beverage scene,” Keeton said in a statement. “Lots of credit is due to both the Commonwealth of Virginia and the city of Richmond for their hard work in bringing Stone to Richmond.”2014-10-13T14:12:00+00:00
Darden ranks No. 3 in top MBA schools in the world
http://www.virginiabusiness.com/news/article/darden-ranks-no.-3-in-top-mba-schools-in-the-world#When:16:30:00ZThe Economist has ranked the University of Virginia’s Darden School of Business No. 3 on its list of best full-time MBA programs in the world.
The magazine said Darden provided “MBA students with the ultimate educational experience.” In 2013, Darden ranked fourth on the list.
The ranking highlighted Darden’s “case method learning and top-ranked teaching faculty.” The magazine also mentioned the school’s W.L. Lyons Brown III Innovation Laboratory, which serves as an entrepreneurial hub for U.Va. and the community.
Schools were ranked in 17 criteria, ranging from its education experience to its diversity and alumni network. The magazine surveys students and alumni and collects data from business schools.
Darden ranked first out of all schools in the personal development and educational experience and diversity of recruiters categories.
Darden was the only school in Virginia to be named to the list.
The University of Chicago’s Booth School of Business and Dartmouth College’s Tuck School of Business were ranked No. 1 and No. 2.2014-10-10T16:30:00+00:00
Commonwealth approves adoption by same-sex couples
http://www.virginiabusiness.com/news/article/commonwealth-approves-adoption-by-same-sex-couples#When:16:16:00ZThe Virginia Department of Social Services released a bulletin on Friday informing local social services divisions that adoption by same-sex spouses is now legal in the commonwealth.
“Now that same-sex marriage in Virginia is officially legal, we owe it to all Virginians to ensure that every couple is treated equally under all of our laws, no matter whom they love,” Gov. Terry McAuliffe said in a statement.
Virginia law states that a “married couple or an unmarried individual shall be eligible to receive placement of a child for purposes of adoption.”
The bulletin says that when determining the appropriateness of a foster or adoptive home, “Virginia, in response to the Fourth Circuit ruling, now recognizes any legally-performed marriage (same-sex or opposite-sex), whether performed in Virginia or another state. This ruling does not confer legal status to civil unions or domestic partnerships. Any married couple is a married couple for purposes of adoptive placements.”
.2014-10-10T16:16:00+00:00http://www.virginiabusiness.com/uploads2/STONE_LARGE.jpgStone Brewing's beers on display at the Governor's Mansion.
Stone Brewing to locate first East Coast facility in Richmond
http://www.virginiabusiness.com/news/article/stone-brewing-to-locate-first-east-coast-facility-in-richmond#When:19:56:00ZIt’s official. San Diego-based Stone Brewing Co. will invest $74 million to open its first East Coast production facility in Richmond. The venture is expected to create more than 288 jobs.
“I have that feeling in my heart like we made the right choice,” Steve Wagner, Stone Brewing’s president and co-founder, said at the announcement ceremony held Thursday outside the Executive Mansion in Richmond. “This is so great.”
The River City beat out two other finalists — Norfolk and Columbus, Ohio, to land the major craft brewery. Roanoke also was in the top five. Overall, Stone received more than 200 requests for proposals and made 40 site visits.
Stone Brewing’s facility will include a brewery, packaging hall, restaurant, gardens and retail store in the city’s Greater Fulton neighborhood. The facilities will be built in phases, with the brewery expected to be in operation in late 2015 or early 2016.
In its first year, the brewery expects to produce 120,000 barrels of beer. That will almost double the barrels of craft beer produced in Virginia last year (130,000). According to the Brewers Association, Virginia currently has 72 craft breweries operating, up from 58 in June 2013.
Gov. Terry McAuliffe approved a $5 million Governor’s Opportunity Fund grant for the project. Stone Brewing also will be able to receive a grant up to $250,000 from the Governor’s Agriculture and Forestry Industries Development Fund, depending on its procurement and its use of Virginia grown products. The company will also receive benefits from the Virginia Enterprise Zone Program as well as funding and services from the Virginia Jobs Investment Program for employee training. The city’s incentive package is even bigger, totaling more than $30 million. It includes $23 million in bonds for the facility’s construction, $8 million in bonds for Stone Brewing’s restaurant and beer garden and $2 million in grants.
Stone Brewing is not the only craft brewery making a splash in the state. Green Flash Brewing Co., also based in San Diego, will break ground Monday on its East Coast brewery in Virginia Beach. According to Green Flash’s website, it expects to make an investment of $20 million in the Virginia Beach facility and hire more than 40 people.
Stone Brewing says it is the 10th largest craft brewer in the United States. Earlier this year, the brewery made the Inc. 5000 list of the fastest-growing private companies in the U.S. The company also is making its mark overseas. It plans to open the first American-owned craft brewery in Europe in late 2015 or early 2016. The company was founded in 1996 by Wagner and Greg Koch.
Michaele L. White Photo2014-10-09T19:56:00+00:00
Washington D.C. office market benefits from migration from the suburbs
http://www.virginiabusiness.com/news/article/washington-d.c.-office-market-benefits-from-migration-from-the-suburbs#When:19:54:00ZThe District of Columbia has seen growth in leasing due to businesses and associations relocating from the suburbs to downtown Washington, D.C. The trend comes despite negative absorption (when more companies are downsizing or subleasing space than expanding and adding space) and high office vacancies in other areas of the overall region.
JLL reports that over the past 24 months, there has been more than 300,000 square feet of new leasing activity in the District as a result of tenants from Maryland and Virginia migrating into the city.
“The migration of suburban tenants into the District and robust expansion activity among startups and high-technology companies helped fill a gap in an otherwise tepid demand environment during the third quarter,” Scott Homa, senior vice president research at JLL, said in a statement.
While creative industries such as digital media, software engineering, advertising and consumer technology represent a relatively small portion of the metro D.C. tenant base, Homa said incremental growth – primarily concentrated downtown – helped offset contractions within the region’s core industries of legal services and government contracting.
Doug Mueller, a senior vice president at JLL, noted that the migration is heavily populated by associations, technology companies and professional services firms. “The quality and location of office space with easy access to mass transit, abundant amenities and housing options also has a visible and tangible impact on attracting and retaining top talent,” he said in a statement.
According to JLL’s Office Insight report for the third quarter, since the start of 2014, a total of 21,200 private-sector office jobs have been added to the metro D.C. economy. Although substantial declines in federal payrolls continue to offset the private sector growth, regional unemployment (5.4 percent) remains significantly below the national average (6.1 percent).
JLL’s snapshot of the Metro D.C. office market:
· Total vacancy, 17.2 percent
· Year-to-date net absorption in square feet (s.f.), -2,069,130
· Q3 2014 net absorption (s.f.), -1,346,328
· 12-month rent growth, 7.6 percent
· Total under construction (s.f.), 4,619,612
· Preleased under construction, 56.9 percent
“We feel the D.C. market has finally bottomed and that there are early signs of a resurgence in tenant demand,” said Homa. “Although tenants still hold strong negotiating leverage in today’s marketplace, the tightening of the top segment of the market suggests that the downtown market has found stability.”2014-10-09T19:54:00+00:00