With Merck and Hershey deals, valley hits investment record
You’d be hard pressed to find an economic development official who had a better first year on the job than Jay Langston did in 2019.
With Langston at the helm, the Shenandoah Valley Partnership, a regional economic development group, announced a record $1.5 billion in business investment last year, anchored by Merck & Co.’s expansion of its longstanding pharmaceutical production facility in Rockingham County.
“It was a banner year for us in terms of what we were able to achieve and what we can achieve in the future,” says Langston, who left the Virginia Economic Development Partnership in late 2018 to become executive director of SVP, which serves the region including Augusta, Bath, Highland, Page, Rockbridge, Rockingham and Shenandoah counties.
The record investment was a testament to the valley’s many assets, Langston says, including workforce development, a strategic location, robust infrastructure and the willingness of key players in the region “to work together for a common cause.”
That spirit of cooperation was evident in Merck’s decision to invest up to $1 billion over the next three years to boost local production of its human papillomavirus (HPV) vaccines, creating 100 jobs and building a 120,000-square-foot addition to its Elkton plant. To help supply the workforce, James Madison University and Blue Ridge Community College will team up to develop curriculum and training programs in advanced manufacturing, biotechnology and process engineering. (Read story here.)
A sweet deal
While the Merck investment grabbed most of the headlines in 2019, it wasn’t the valley’s only significant expansion.
Chocolate-maker The Hershey Co. announced plans to invest $104 million to grow its Stuarts Draft plant by 110,000 square feet. The addition will allow for the production of penuche — a fudgelike candy made from brown sugar, milk, butter and a hint of vanilla — and peanut cream that will be distributed to other Hershey facilities on the East Coast.
Hershey evaluated its production facilities nationwide before ultimately choosing Augusta County for the project, which will create 65 jobs. The facility already employs more than 1,000 people.
Langston says the valley’s pro-business environment was invaluable in landing the Merck and Hershey expansions. “These are international companies,” he says. “For them to be willing to invest here, you have to have an environment that’s conducive for growth.”
A ‘market to watch’
The year began rather auspiciously for the region when Colliers International, a global commercial real estate organization, identified the Shenandoah Valley/Interstate 81 region as one of its “10 Emerging U.S. Industrial Markets to Watch in 2019.”
“That really set the tone,” Langston says of the report, which highlighted mostly metro areas such as Las Vegas, Minneapolis, Sacramento and Seattle. The report paints the Shenandoah Valley as a great option for industries aiming to build facilities with easy access to rail lines and ports.
The I-81 corridor in Virginia offers many commercial advantages, according to the report, including available land and proximity to the metro Washington, D.C., Baltimore and Ohio Valley population bases.
InterChange Cold Storage is one of the latest companies to move into the corridor. The homegrown third-party logistics provider held a grand opening in September for its 250,000-square-foot refrigerated warehouse in Mount Crawford.
InterChange Group President Devon Anders says the warehouse, a $41.6 million investment that will eventually create 88 jobs, is the company’s largest project to date. “We designed and built this project for the food and beverage companies that rely on our local agriculture, productive and skilled workforce, transportation infrastructure and friendly business climate to produce, store and ship their products around the world,” he says.
The cold-storage facility has the potential to expand to 600,000 square feet across multiple rooms, along with blast freezing and other services. New rail service and road improvements will connect the facility to area manufacturers and the Virginia Inland Port, providing opportunities for international export of food products.
In the northern valley, WCS Logistics — formerly Winchester Cold Storage — held a ribbon-cutting in July for its new 63,000-square-foot warehousing facility in Frederick County. The building, the company’s seventh in the Winchester area, quadruples its freezer capacity for storing foreign and domestic food products for distribution.
Trex to add production capacity
Decking and railing manufacturer Trex Co. Inc. broke ground in November on a new plant adjacent to its existing production facility in Frederick County. The facility will create more than 150 jobs in manufacturing, skilled trades and engineering.
The new facility is part of a $200 million, multiyear capital investment program that will allow Trex to meet demand for its wood-alternative decking and railing. The company is also increasing capacity at its Nevada site. The Frederick County location is scheduled to open in early 2021.
Also last year, Chicago-based CareerBuilder announced plans to invest $2.5 million to establish a 20,000-square-foot call center and research facility in Frederick, creating 250 jobs.
And Navy Federal Credit Union is in the midst of a $100 million expansion of its Frederick call center that’s expected to create more than 1,400 jobs.
Airport traffic taking off
Shenandoah Valley Regional Airport has seen tremendous growth in passenger traffic since switching carriers in April 2018 to United Express, which is operated by SkyWest Airlines. In December 2019, the airport in Weyers Cave launched new flights to and from United’s hubs at Washington Dulles International and Chicago O’Hare International. The airport also rolled out scheduling improvements designed to help ensure maximum connection opportunities at both hubs and more convenient flight times for local customers.
Langston says having reliable commercial air service in the central valley is a boon for economic development and puts local travelers “one step from anywhere in the world.”
“How many rural localities can say that?” he asks.