In transition

Southside Region is working to overcome a legacy of lost jobs

Published February 28, 2014 by Veronica Garabelli

Southern Virginia is relying on more than Southern charm to drive economic development in the region.

“One thing we say is, ‘We don’t win in a fair fight,’ so we want to have the tools and resources that other communities our size don’t have in terms of that type of product, and our leadership here has been very good and very strong to give us those resources,” says Mark Heath, the president and CEO of Martinsville Henry County Economic Development.

Southern Virginia lost thousands of jobs when its textile, furniture and tobacco industries declined. One way the area hopes to stand out is by having a skilled workforce, particularly in areas like advanced manufacturing where more technical skills are now needed.

Greg Sides, Pittsylvania County’s assistant county administrator for planning and development, points to a project in which students can begin a precision machining program at the Pittsylvania Career and Technical Center while they are still in high school. These students then can obtain a standard precision machining certificate at  Danville Community College (DCC) and finish a more advanced version of the certificate  at The Institute for Advanced Learning and Research in Danville. The county also is working on a similar path for an industrial maintenance program, he says.

Another big effort has been to develop industrial sites, particularly megaparks. One site that’s being developed is the Mid-Atlantic Advanced Manufacturing Center in Greensville County, which spans almost 1,600 acres. The project is a partnership involving Emporia and Greensville and Mecklenburg counties.

“The purpose of developing such a large area is to bring one large … manufacturer, somebody like a Volkswagen or Toyota,” says Natalie Slate, Greensville’s director of economic development. Although the park currently has no tenants, local officials are working to get the site as “shovel ready” as possible for business prospects, Slate says.     

Preparing two other megaparks, Berry Hill Road Industrial Park in Pittsylvania County (jointly owned by the county and Danville) and the Commonwealth Crossing Business Centre in Henry County, has posed challenges. Economic development officials haven’t been able to get grading permits for the sites from the U.S. Army Corps of Engineers (USACE) because they say it wants a specified end user before issuing a permit. USACE is charged with finding the least environmentally damaging practical alternative before it issues a permit. To do that it must have certain project details, says Tom Walker, chief of USACE’s Norfolk district regulatory branch.

In the case of the Commonwealth Crossing Business Centre, Henry County officials “actually found us the detail that we needed. [The  problem] was not necessarily not knowing whose name was going to be on the wall, but it’s more about knowing enough detail about what’s driving the site design in order to look at alternatives that would accomplish the project purpose, and we have that now,” Walker says.

Henry County was able to provide USACE with two companies that are interested in locating at Commonwealth Crossing.

“That’s gone beyond the speculative nature, those are real companies and so that’s kind of where we are,” Heath says. “But we still have to go through the design phase, and we have to meet all the legal requirements, and we have to do the mitigation and all the issues around grading and developing large sites, so we’re still not there. We’re a lot farther along now that we have potential end users, but that has been the case with us all along, that’s what’s enabled us to advance our effort.”

Danville and Pittsylvania recently provided USACE with a market analysis on the Berry Hill site to advance permit efforts there.

“That study has been … furnished to the Corp of Engineers, so after they have a chance to review that study, then we’ll be in touch with them to see where we go next but that’s the latest update on the Berry Hill situation,” Sides says.

In the meantime, a bill has been introduced in Congress to amend the Clean Water Act so that regulators can’t deny a permit because of the lack of an end user, if all other permit requirements are met.

Other projects have had less difficulty getting moving. The State Corporation Commission recently gave Dominion Virginia Power the go-ahead to build a 1,358-megawatt, natural gas-fueled power station in Brunswick County. The $1.3 billion investment is the largest the county has ever seen, says Joan V. Moore, executive director of Brunswick County’s Industrial Development Authority. The facility, expected to be operational by 2016, is slated to create 30 jobs at the plant (and 600 to 1,000 construction jobs during peak construction). Once the Dominion plant is fully operational, the county expects more than $4 million in additional local taxes, Moore also says.

Another big win for Southern Virginia was Microsoft’s plan, announced in early 2013, to expand its data center in Mecklenburg County, a $348 million investment that would create 30 jobs. “That’s one of the biggest deals in Virginia; it continues to grow and build out,” says Jeff Reed, executive director of Virginia’s Growth Alliance. The economic development organization serves Emporia and the counties of Brunswick, Charlotte, Greensville, Lunenburg, Mecklenburg and Nottoway.

Helping attract data centers to Southern Virginia is the Mid-Atlantic Broadband (MBC), a nonprofit broadband network for underserved communities. Danville also has its own broadband network, nDanville, that’s connected to MBC.

Other recent coups in the region include AllergEase’s move from Northern Virginia to Danville’s River District. Last year, the allergy medicine company announced it would invest $7.5 million and create 150 jobs to establish its headquarters plus a warehouse and distribution center in Danville.

The city is seeing more act-ivity from startups like AllergEase (which was founded in 2011) rather than established companies, says Joe King, Danville’s city manager. One exception, however, has been Chinese companies wanting to break into the U.S. market. Chinese furniture company GOK International already operates at Cane Creek Centre, an industrial park owned by Danville and Pittsylvania. Chinese wood flooring company Zeyuan Flooring International Corp. also plans to move into the park. The $15 million investment by Zeyuan will create 100 jobs over three years.

“That’s primarily because they have not gotten into the American consumer market, interestingly enough,” King says about Chinese companies’ interest in setting up shop in the U.S. “They may have had dec-ades of profitable experience in China, but they haven’t touched the American market yet, and they see huge opportunities. So, China is unusual right now compared to other countries in that it’s looking to establish operations.”

Danville also has seen a good return on investment on its River District Development Project, which aims to revitalize downtown Danville and drive economic development in the area. Since the project began three years ago, the city has attracted $100 million in investments, King says. Danville also has seen $3 in private investment for every dollar put into the project. To refine its economic development strategy, the Danville and Pittsylvania County Chamber of Commerce recently held the Danville Economic Development Summit.

The city is seeing a slow improvement in the economy, Kings says, but officials know change doesn’t happen overnight. When existing businesses are asked how they are doing, “they’re all responding [that] they’re doing well,” King says. “They’re not growing at a robust rate, but they are holding their own, and they’re growing slowly, and we are seeing some evidence of that in our tax receipts, in our unemployment rates, but we still [have] a long way to go.”

Major employers by number of jobs

The Goodyear Tire & Rubber Co.
Danville
1,500-2,499 jobs

Greensville Correctional Center
Jarratt
1,000-1,499 jobs

Danville Regional Medical Center
1,000 – 1,499 jobs

Danville Public Schools
1,000 – 1,499 jobs

City of Danville
1,000 – 1,499 jobs

Henry County Public Schools
1,000+ jobs

Memorial Hospital of Martinsville
500-1,000 jobs

Telvista Inc.
Danville
600 – 999 jobs

Community Memorial Healthcenter
South Hill
600-999 jobs

Dollar General
Halifax County
600 – 999 jobs

_{Sources: Martinsville-Henry County Economic Development Corp., Southern Virginia Regional Alliance, Virginia’s Growth Alliance}

Southern Virginia’s recent deals

Kilgour Industries Ltd.
Henry County
155 jobs

AllergEase LLC
Danville
150 jobs

North American Mold Technology
Danville
120 jobs

Monogram Snacks
Henry County
100 jobs

Zeyuan Flooring International Corp.
Danville
100 jobs

Macerata Wheels LLC
Danville
100 jobs

Faneuil Inc.
Martinsville
100 jobs

Nestlé Refrigerated Foods
Danville
50 jobs

Kimball Hospitality
Henry County
45 jobs

Stone Dynamics
Henry County
44 jobs

_{Source: Virginia Economic Development Partnership}