Richmond region notches big deals
In the greater Richmond region, local economic development authorities have been hard at work landing new business and securing expansions, and this year those efforts bore fruit, they say.
In fact, 2022 has outpaced the past two decades, declares Jennifer Wakefield, the Greater Richmond Partnership’s president and CEO, as the region landed two “megaprojects” — The Lego Group’s $1 billion toy factory in Chesterfield County (See related November 2022 cover story) and CoStar Group Inc.’s $460 million expansion in Richmond — as well as other major deals.
Representing the city of Richmond and the counties of Henrico, Hanover and Chesterfield, GRP was instrumental in bringing in 13 projects in the past fiscal year that are expected to produce nearly 5,000 jobs, totaling $1.62 billion in capital investment and 4.45 million square feet of development.
Lego’s announcement in June that it will build a $1 billion plant in Chesterfield County’s Meadowville Technology Park, creating more than 1,760 jobs over the next decade, is the Richmond region’s marquee deal this year, although CoStar’s expansion is making a big impact in the city. In May, the real estate data company purchased the former SunTrust building south of the James River for $20 million, and on the other side of the river, adjacent to its current footprint, will be a $460 million campus expected to employ 2,000 people.
“It doesn’t look like there’s an end in sight, which is good,” says Wakefield, who joined GRP in 2017 and was promoted to CEO in February 2021. “It has been absolutely insane lately.”
The Richmond region continues to be a popular destination for the manufacturing and distribution sectors, as well as tech and pharmaceutical businesses. Much of that is due to its location near major highways, airports, railways and the Port of Virginia’s terminals in Richmond and Hampton Roads, Wakefield says.
“I think that we have all the right mix of ingredients for companies who are interested in being in what I like to call a Goldilocks location,” she says. “We’re not too big. We’re not too small. We’re just right.”
If you’ve ever dunked an Oreo in milk, chances are it came from the Mondelez bakery in eastern Henrico. Chicago-based Mondelez International Inc., a $26 billion-plus food and confectionary company, owns all Nabisco products.
The Mondelez bakery in Henrico has been around for about 50 years, and in late 2021, the company announced a $102.5 million expansion, expected to create 80 jobs. The expansion also includes new manufacturing equipment, which has the power to produce 10,000 Oreos per minute, says Anthony Romanello, executive director of the Henrico County Economic Development Authority.
Coca-Cola also announced it would spend $23 million on upgrades and expansions to its Henrico plant, which includes new bottling technology. Bottles about the size of a test tube will be shipped to the Henrico facility, and a blow-mold machine expands the plastic to a larger 20 oz. size. This means that 60 to 70 fewer trucks are coming to the Coke plant per week because they can carry more of the consolidated bottles. This investment saves the company on transportation costs and reduces truck traffic on county roads, explains Romanello.
Because of Henrico’s long history in food distribution, he adds, “In the eastern part of the county, we’ve got substantial infrastructure that they need for the investments and a really good road network, so they can get the product out quickly.”
Henrico also landed a $144 million investment from QTS, a data center company that set up a network access point for three subsea telecommunications cables from Virginia Beach, which connect to data networks in Europe, South America and the United States. QTS announced in July it would expand its White Oak Technology Park data center by 1.5 million square feet, near Meta Platforms Inc.’s 970,000-square-foot data center.
On the western side of Henrico County, pharmaceutical giant Thermo Fisher Scientific Inc. announced in March a
$97 million investment to build two bioanalytical labs in the former Toys “R” Us location near Regency Square, as well as a third lab in downtown Richmond near VCU Medical Center. The company is targeting Virginia college-educated scientists to fill about 400 jobs in the county.
Another high-profile project, GreenCity, is coming to the former Best Products Co. campus, just off interstates 64 and 95.
Groundbreaking on the $2.3 billion mixed-use development — which will include a sustainably built and operated 17,000-seat arena expected to open by 2025 — is set to take place in early 2023. The 204-acre property will also include residential, retail, office and hotel space, with full completion by 2034.
This project is in step with Henrico’s master plan, which focuses on redevelopment on the west side of the county and new buildings on the east, Romanello says.
“We’re seeing more residential [space]. We’re seeing buildings being upgraded,” he says. “You’re going to see further densities there that we haven’t had before.”
This year has been very busy for Meadowville Technology Park in eastern Chesterfield.
In September, Plenty Unlimited Co. announced its plans to build the nation’s largest indoor vertical farming facility at the tech park, a $300 million investment expected to produce 300 jobs in the next six years. The first building, expected to be complete in late 2023, will feature 30-foot towers to grow Driscoll’s strawberries at scale, a major change for the agribusiness, which has typically sourced fruit from traditional farms in California and Mexico.
The goal is to grow strawberries in Virginia and be able to ship them to an estimated 100 million customers in the mid-Atlantic and Northeast within hours.
“[Plenty] had some pretty specific needs around power,” says Matt McLaren, senior project manager with Chesterfield Economic Development. “Meadowville Technology Park has a great relationship and infrastructure with Dominion, and we’re able to plan for the future with power needs.”
One of Petersburg’s major pharmaceutical players, nonprofit drugmaker Civica Rx, also is setting up shop at the tech park, investing $27.8 million on a 55,000-square-foot lab to support its North American headquarters being built in Petersburg and expected to open in 2024.
Of course, the arrival of Danish toymaker Lego, which plans to start hiring workers late this year or in early 2023 for its moulding, processing and packing plant on 340 acres at Meadowville, is the biggest development for the region.
“The Lego project initially was driven here because of our location, because they can get to a lot of customers,” Wakefield says. “One of the biggest things that we bill is that you can get to half of the U.S. customers within a day’s drive.”
While economic development projects usually take years to come to fruition, there will already be a groundbreaking on the 1.7 million-square-foot facility later this year at the technology park. Lego said in its announcement in June it will begin operations in a temporary building in early 2024, and the permanent plant will start production in the second half of 2025.
“This is a legacy company that continues to innovate. We’re excited to partner them with our workforce,” McLaren says. “We share a lot of their values. It just felt like a perfect fit.”
In October 2021, the city of Richmond announced the marketing of the Diamond baseball stadium property as an area for redevelopment. Now, plans for the rebranded Diamond District are steaming ahead with City Council approval.
The center of the $2.44 billion multiuse development will be a new baseball stadium for the Richmond Flying Squirrels AA team — a necessity under new Minor League Baseball regulations to keep baseball in Richmond — and accompanying residential, office, retail and hotel space, as well as walkable green space.
One of the aims of the project is to connect the new neighborhood to Richmond’s popular Scott’s Addition community, just across the high-traffic Arthur Ashe Jr. Boulevard.
In September, a 10-person city panel chose a development group for the project that includes Richmond-based Thalhimer Realty Partners, Washington, D.C.-based Republic Properties Corp., Chicago-based Loop Capital Holdings LLC and San Diego venue developer JMI Sports. The joint venture’s proposal beat out 14 other applicants.
Unlike earlier big proposals (including the unsuccessful Navy Hill plan), the Diamond District follows the Richmond 300 masterplan, and the stadium will be funded with Community Development Authority (CDA) bond financing. Tax revenue from the 67-acre property, as well as leasing fees from the Squirrels and Virginia Commonwealth University athletics, will pay off the bonds.
“I also cannot stress enough the importance of land-use planning that has paved the way for large-scale redevelopment projects in the city,” says Leonard Sledge, the city’s economic development director and a member of the panel. Phase one will include the baseball park, which is expected to open for the 2025 MiLB season.
Downtown, CoStar has started work on its $460 million campus, which will include a 26-story, 1 million-square-foot building, the tallest among Richmond’s skyline. The former SunTrust bank office across the James River will be home for about 400 more employees. Essentially, Richmond will serve as a second headquarters for the Washington, D.C.-based company, which currently has about 1,200 employees in Virginia’s capital.
Richmond’s next large-scale economic development focus will be centered around the Greater Richmond Convention Center, Sledge says, part of a new “innovation district” that would add office and lab space for the growing biotech sector and more residential and park land.
“Richmond continues to be a great place for people and companies — large and small,” Sledge says. “More importantly, the economic development work of the city continues to emphasize the importance of equitable economic growth.”
Perhaps the unofficial nickname for the town of Ashland — “The Center of the Universe” — is starting to also apply to Hanover County.
Hanover has seen more commercial development in the past five years than in the previous 15, says E. Linwood Thomas IV,
director of Hanover County Economic Development. In 2022, the county announced more than $240 million in new projects.
“The overall consensus is that Hanover has been consistently strong,” Thomas says. “We’ve been punching above our weight class for the last five years.”
Nonetheless, the county has lured Performance Food Group, a Goochland-based Fortune 500 company that plans to build an $80 million sales and distribution facility in Ashland, producing an expected 125 jobs.
Pennsylvania-based Lutron Electronics Co. Inc., which produces residential and commercial lighting products, also plans to build in Ashland, investing $28.3 million in a manufacturing plant that is set to employ 200. The governor’s office announced that deal in September. Also, pharmaceutical giant Walgreens announced in February that it will build a $34.2 million automated packaging and distribution facility in eastern Hanover, creating 249 jobs. Meanwhile, the Wegmans $175 million, 1.7 million-square-foot distribution center is under construction.
Part of Hanover’s success in securing new economic development opportunities has been its engagement with the Virginia Business Ready Sites Program, which helps localities get land shovel-ready for businesses to move in quickly.
“They start to build the shell, and the next thing you know, you’ve got these big corporations who see the Richmond region and Hanover County as a strategic location on the Eastern Seaboard,” Thomas says. “We do a lot of this work up front, so we don’t have to compete as hard on the back end.”
Currently, Hanover County has 5.4 million square feet of new commercially zoned space, either approved or being developed. The county’s vacancy rates in the industrial market are less than 1.6%.
Most of this space is being leased before completion because of the county’s “strategic location and low cost to do business,” Thomas adds. “Hanover is just really starting to see the fruits of those labors in this past year because of all the new development taking place.”
Richmond at a glance
Founded in 1737 by Col. William Byrd II, Richmond is known as the River City for its location on the James River. The state’s capital, Richmond is home to the Virginia General Assembly and much of state government, and the metro region is headquarters for eight Fortune 500 companies. The region also is home to the University of Richmond, Virginia Commonwealth University, Virginia State University and Virginia Union University.
226,604 (city); 1.3 million (metro region)
VCU Health System/VCU: 21,332 employees
Capital One Financial Corp.: 13,000
HCA Virginia Health System: 11,000
Bon Secours Richmond: 8,416
Dominion Energy Inc.: 5,433
Richmond is home to historical and cultural attractions such as the Poe Museum, American Civil War Museum, the Virginia Museum of Fine Arts, the Virginia Museum of History & Culture and the Black History Museum and Cultural Center of Virginia. Visitors can also enjoy time outside at Maymont park or the Kings Dominion amusement park about 20 miles north of the city. Carytown, the Fan District and Scott’s Addition offer many options for shopping, dining and entertainment.
Top convention hotels
413 rooms, 26,760 square feet
of event space
DoubleTree by Hilton Hotel
Richmond – Midlothian
237 rooms, 26,039 square feet
of event space
181 rooms, 26,000 square feet
of event space
Hilton Richmond Short Pump
Hotel and Spa
254 rooms, 21,937 square feet
of event space
Lemaire — New American, lemairerestaurant.com
Longoven — New American, longovenrva.com
L’Opossum — Modern French, lopossum.com
Shagbark — New American/Southern, shagbarkrva.com
Stella’s — Greek, stellasrichmond.com
Fortune 500 companies
Performance Food Group Co.
Altria Group Inc.
Dominion Energy Inc.
Owens & Minor Inc.