‘Not a one-trick year’
Big projects make a splash in Southeast Virginia
The Hampton Roads area scored big in 2016 with localities landing business prospects ranging from a human resources management giant to a growing national coffee company.
“It was our best year since 2000, largely because of Automatic Data Processing (ADP) coming into Norfolk and ramping up, adding 1,800 jobs,” says Rick Weddle, president and CEO of the Hampton Roads Economic Development Alliance.
Weddle’s group, which works with 10 jurisdictions in the region, handled 38 active projects in 2016. Three projects it helped bring in — ADP in Norfolk, Sanjo FineBlanking in Virginia Beach and Peet’s Coffee in Suffolk — totaled 2,020 jobs with capital investments of more than $107 million.
“Our capital investments are up considerably from last year,” Weddle says. “The pipeline for projects is more robust. We are working on two additional projects that would account for an additional 660 jobs and $7.7 million in capital investment that will be announced in the first quarter of this year.”
Chuck Rigney, director of development for Norfolk, sums up 2016 as “an amazing year” with numerous major project announcements totaling more than $800 million in new investment and close to 6,000 jobs. “It was not a one-trick year. It was a multifaceted success story,” he says.
“Obviously it was several years of work culminating in a fantastic year.”
The city’s biggest win was ADP, a global provider of cloud-based human capital management solutions. ADP is investing more than $32.5 million and bringing more than 1,800 new jobs to downtown Norfolk. It will occupy 286,000 square feet of Class A office space in a formerly empty office tower. Once fully staffed, the facility will be one of ADP’s largest centers in the United States.
The first 220 employees are already in the building, which should be fully occupied by May (see related story on Page 20). “This is the biggest economic development deal the Hampton Roads region has seen in over 20 years,” Rigney says.
Other notable projects last year include the long-awaited Simon’s Norfolk Premium Outlets. The first phase of the $75 million retail center, which will eventually have about 90 stores, is expected to open this summer.
IKEA is constructing a 332,000-square-foot building near the outlet center on the other side of Interstate 64 and Northampton Boulevard. The store hopes to open in 2018. “That represents 500 construction jobs and 250 permanent positions,” Rigney says. “Everybody is excited about IKEA. It’s a big win for the region.”
The $40 million Waterside District being developed in downtown Norfolk by Baltimore-based Cordish Cos. is completely leased and on schedule to open in late April.
The Main Hotel and Conference Center, a $150 million public/private partnership that includes a 300-room luxury Hilton hotel, opens in April.
In Suffolk, one of the city’s biggest announcements involves West Coast-based flooring and tile importer Emser Tile, which will open a $16.25 million, 400,000-square-foot facility early this year. It will employ 98 people. “They needed a facility on the East Coast and did a port search,” says Kevin Hughes, the city’s director of economic development. “Their search got down to Virginia and the Port of Baltimore.”
The city’s strong cluster of food and beverage companies was a plus for Peet’s Coffee, another huge win. The California-based company is investing $58 million to establish a manufacturing site in the city. The 175,000-square-foot roastery will produce a variety of coffee and create 135 jobs.
Meanwhile, Virginia Beach added more than 1,500 jobs and more than $100 million in new capital investment last year.
Facebook and Microsoft (MAREA Cable) and Telefonica (BRUSA Cable) tapped the city as the mid-Atlantic landing site for the next generation of ultra-high-speed subsea telecommunications cables. The deal includes the construction of a 24,000-square-foot cable-landing center in Corporate Landing Business Park, a capital investment of more than $11 million.
“This project significantly advances Virginia Beach’s potential for future projects of this kind,” says Warren Harris, the city’s economic development director. “Additionally, we anticipate even more interest because the stronger telecom infrastructure will have great appeal to businesses that require big data.”
Virginia Beach-based Globalinx Data Center LLC sees the value in the cable project. It is buying 10 acres of land in Corporate Landing Business Park from the Virginia Beach Development Authority for $2 million. The company plans to develop a 138,000-square-foot international data center.
The city also has broken ground on the fourth phase of Town Center of Virginia Beach, a $42 million mixed-use project, and was selected by Barcelona-based Sanjo FineBlanking as its North American headquarters and manufacturing center. The $17.5 million investment is expected to create 75 jobs. Construction will start this month.
Newport News is getting a boost from the Newport News Shipbuilding North Yard and Foundry-Defense Production Zone project. Newport News Shipbuilding will build a new foundry for production of component parts, engineering and design for Virginia-class and Ohio-class submarines. A $750 million investment, the project is expected to create 1,000 jobs.
The city made a number of announcements, including a $25.7 million investment from Printpack, a flexible packaging converter. It has plans for a 150,000-square-foot expansion of its manufacturing operation in Newport News. The project will create 50 jobs.
Florence Kingston, director of development of the Newport News Economic Development Authority, is particularly proud of the $7.2 million Brooks Crossing project where a grocery, Jim’s Local Market, opened in a former “food desert” in the city’s Southeast community.
Brooks Crossing is also home to the Newport News Shipbuilding Collaboration Project. Virginia Beach-based real estate company Armada Hoffler, in conjunction with former NFL quarterback Aaron Brooks, will build a 95,000-square-foot building with 80,000 of the square feet leased by the shipyard for design and engineering applications.
Marketplace at Tech Center continues to grow as new retailers and restaurants open in the 250,000-square-foot retail center. It is part of Tech Center, the 100-acre mixed-use development in Newport News being developed by W.M. Jordan Co. The center also includes the 50-acre Tech Center Research Park where a research building will be constructed, building a nearly 200,000-square-foot speculative facility that will include 20 drop trailer locations, 28 docks and food-grade specifications. The $11 million investment is under construction.
In 2016, Hampton announced projects involving more than $83 million in capital investment and 498 new jobs. The city’s largest deal: The $60 million acquisition, redevelopment and repositioning of the Riverdale Shopping Center, which will be renamed Riverpointe. Southeastern Development Associates will redevelop the 50-acre center, which will include a 123,000-square-foot Kroger Marketplace.
Maximus, a contractor of program management and administrative services for government agencies, is investing $1.87 million to establish a customer support center in the city, a project expected to create 189 jobs.
Hampton also had several other redevelopment projects announced last year. The city’s historic National Guard Armory is being repurposed as a craft brewery, restaurant, distillery and live entertainment venue called the Vanguard.
In Chesapeake, the big news was the August announcement that Dollar Tree Inc. will spend $110 million to expand its headquarters, adding 600 new jobs over the next six years. The discount retailer now has 14,000 stores following its $9.1 billion acquisition of Family Dollar. Virginia competed with North Carolina for the project, which also retains 825 jobs in Chesapeake.
Another major expansion involves 200 new jobs at Sutherland Global Services, which is investing $2.2 million in its Chesapeake facility. Before the May announcement, the company had 320 employees providing insurance business process outsourcing services.
Last year Portsmouth saw five multifamily investment projects come to fruition, including Harbor Vista, Sterling King One and Two, Tower 507 and the Seaboard Coastline Building with Legend Brewing leasing space on the ground floor of the Seaboard property and opening this year.
In addition, Shenandoah Valley-based InterChange Group Inc., a provider of warehousing and third-party logistics, is building a nearly 200,000-square-foot speculative facility. The $11 million building is under construction.