Region’s location, workforce and schools help it snare business prospects
No one likes to be called names, but sometimes it’s okay.
Much of the name-calling last year about Richmond was appreciated.
CNBC identified Richmond (population 221,000) as one of the 20 top cities in America to start a business.
Zillow described Richmond as a millennial-leaning city, with more of its people in the 23-to-34-year-old age group living alone than any other U.S. metro area, because of the city’s vibrant labor market.
Cushman & Wakefield, a global real-estate services firm, called Carytown, a boutique-filled shopping district in the city, one of the top 15 trendiest retail markets in the country for connecting to millennials and incubating retail trends.
Men’s Journal, in a travel story, said Richmond is the “modern cultural capital of the South.”
Richmond’s expanding restaurant scene also drew raves. Recently, OpenTable, an online restaurant reservation service, named L’Opossum one of the “100 Best Restaurants For Foodies in America,” based on more than 5 million restaurant reviews.
“All the accolades that come out during the year build on the last, whether it’s the food scene or being one of the most tattooed cities in America” says Jane Ferrara, chief operating officer in Richmond’s economic development office. “It paints a compelling story of who we are as a city.” The accolades also catch the eye of business prospects.
“Companies want to see vibrancy, cities that are growing and active, with … a sense of excitement,” Ferrara says.
That sense of vibrancy throughout Central Virginia has helped it land projects in a variety of industries in the past year. In addition to a young, well-educated population, the region is capitalizing on its logistical advantages as a relatively low-cost hub in the middle of the East Coast.
One of Richmond’s most significant business announcements came in October. Washington, D.C.-based CoStar, listed by Fortune magazine as one of the country’s 100 fastest-growing companies, said it plans to hire 730 employees in establishing an operations and global research center near the James River.
CoStar, which has about 3,300 employees worldwide, performs research and analysis for the commercial real estate industry. The research center project is expected to contribute about $250 million in leases, payroll taxes and capital spending to Richmond’s economy during the next several years.
A few months before CoStar’s announcement, another company, ICMA-RC, announced it was opening an office with 100 employees in downtown Richmond. The firm, which manages public-sector retirement plans, hopes to hire another 100 workers in coming years.
The city was not alone in generating jobs in the region. The surrounding counties of Chesterfield (population, 337,000), Henrico (306,000) and Hanover (103,000) shared in the growth.
“For us, it was a great year. All told we generated $300 million in direct investment in the region, and 1,400 jobs,” says Barry Matherly, president and CEO of the Greater Richmond Partnership (GRP), an economic development marketing organization.
Matherly says Richmond was not battered as badly as Northern Virginia and Hampton Roads by the federal defense spending cuts. But it was hurt by the 2007-09 recession, and about eight years ago, the calculus changed in terms of economic prospects. With U.S. companies retrenching, GRP began a more aggressive search for international prospects. That search has been fruitful.
“Sixty-seven percent of the current prospects looking at the Richmond region are international,” Matherly says.
One international company coming to the region this year was Polykon. The French company started work in October on a $60 million plant in Henrico. It will manufacture the ingredients used in cosmetics produced by companies such as Estée Lauder and L’Oreal.
Another French company, Fareva, recently expanded in Henrico, adding about 80 jobs for a new product line, aerosol elements for spray-on sunscreen and dry shampoo. The company’s move was part of a previously announced $40 million investment in its facility. The plant already produces well-known brands such as Robitussin cough medicine and ChapStick lip balm.
The region’s largest single investment announcement last year came from a California-based bottled-beverage company. Niagara Bottling said in August that it would invest $95 million in a manufacturing and bottling operation in Chesterfield County’s Meadowville Technology Park, creating 76 jobs.
Garrett Hart, Chesterfield’s economic development director, says the county seeks to increase its tax base as much as possible. Companies that use a significant amount of automation help accomplish that.
“So projects like Niagara and Amazon, who invest hundreds of millions of dollars in automation, give us a greater tax base per square foot. This is why we target them,” Hart says.
Amazon has fulfillment centers in Chesterfield and Dinwiddie counties employing more than 3,800 workers.
Amazon’s presence points to the region’s growing reputation as a prime logistics hub.
In 2015, The Boyd Co., a Princeton, N.J.-based firm that provides location advice to U.S. and foreign corporations, named Chesterfield the top location on the East Coast for operating a new distribution warehouse. The study pointed to the county’s strategic position at the crossroads of major interstates in the middle of the East Coast.
In addition to making a name for itself in logistics, Chesterfield has sought to make its mark in sports tourism. Last year, the county acquired the 115-acre River City Sportsplex, which bills itself as having the largest collection of synthetic fields in the U.S.
Hart says the regional economic impact of sports tourism was $76.8 million in fiscal year 2016, principally from hotel bookings. The economic impact in the county alone was $37.7 million, a nearly 13 percent increase from the previous year.
Tri-Cities and Charlottesville areas
Virginia’s Gateway Region, a regional organization serving the Tri-Cities — Colonial Heights, Hopewell and Petersburg — plus five surrounding counties, also is gaining a reputation for its logistics expertise.
The group’s CEO, Renee Chapline, points to plans by German discount grocer Aldi to invest $57 million in Dinwiddie establishing a division headquarters and a 500,000-square-foot distribution center. In the U.S., Aldi has 1,500 stores in 34 states.
Chapline also is helping lead an export initiative begun by the Greater Richmond Partnership. The program is focused on increasing Central Virginia exports to foreign countries as a way to stimulate economic growth and create jobs.
The Central Virginia Partnership for Economic Development, an economic development group serving Charlottesville and surrounding counties, is proud of a big gain in Culpeper where Euro-Composites announced a $10.5 million expansion, with the creation of 58 additional jobs.
The Charlottesville-Albemarle County retail hub also continues to perform well, with retail sales poised for a third-straight record year, according to the Charlottesville Regional Chamber of Commerce.
In the Lynchburg area, Megan Lucas, CEO of the Lynchburg Regional Business Alliance, points to the 619 new jobs and $48 million in capital investment recorded last year as signs of a growing local economy.
The region expects to gain 300 jobs with the arrival of Pacific Life in Lynchburg and more than 200 with Standard Insurance setting up in Altavista.
Health care and higher education are top drivers in the region. In the health-care sector, for example, Centra, a nonprofit regional health system, has grown through mergers to become the employer of more than 6,400 people.
But it’s in higher education that Lynchburg really stands out.
The area has four, four-year institutions of higher learning: Lynchburg College, Randolph College, Sweet Briar College and Liberty University.
Liberty, with more than 35,000 full-time and 38,000 part-time students, has been on a juggernaut with a compounded annual growth rate of 13.9 percent from the 2007-08 to 2015-16 academic years.
With 8,800 on the payroll, Liberty now is Lynchburg’s largest employer, accounting for one out of every five jobs in the region, according to various studies.
With so many colleges, Lucas says, the area has an educated workforce that can be utilized by nearly any industry.
“I believe we’re the center of excellence for higher education in this region, and Liberty University is the economic engine for the higher education sector,” Lucas says. “It affects everything we do.”