Port of call
Deep-water harbor drives local economy
Hampton Roads’ deep-water port continued to be a dominant factor in attracting companies to the region in 2019, especially cold storage and warehousing and logistics firms.
“As we try to bring industry into this area, the port is a significant driver of our economic development,” says Doug Smith, president and CEO of the Hampton Roads Economic Development Alliance. In 2019, the 11 Hampton Roads localities in the alliance announced projects totaling $239 million in capital investment and 2,652 jobs.
With additional capacity, including increased abilities to handle refrigerated and temperature-controlled cargo, the port has upped the ante in attracting food and beverage companies to Virginia. “The port authority has recognized a real opportunity in the food and beverage space from an economic development standpoint,” says David White, executive director of the Virginia Maritime Association. Improvements at the port, including expanded facilities and dredging and widening channels, he adds, give Virginia a competitive edge.
In December, the Navysigned its largest-ever ship-building contract, a $22.2 billion deal with General Dynamics Electric Boat and Huntington Ingalls Industries’ Newport News Shipbuilding to produce nine Virginia-class submarines.
Newport News Shipbuilding will deliver five of the nine submarines from 2025 through 2029.
In preparation for increased workloads from the Virginia class and other shipbuilding programs, Newport News Shipbuilding has hired about 10,000 people during the past three years. Huntington Ingalls has also invested more than $1 billion in capital improvements, about two-thirds of which include Newport News’ operations.
Old Dominion University has partnered with Newport News Shipbuilding and the city to open the Brooks Crossing Innovation and Opportunity Center, offering workforce development and STEM (science, technology, engineering and math-focused learning) education opportunities to residents, students and businesses.
ODU also is collaborating with LAVLE USA Inc. to establish the Marine Electric Propulsion Simulation Laboratory downtown. The $12 million, 22,000-square-foot facility will have state-of-the-art equipment to develop marine electric propulsion, advanced energy storage and autonomous systems to advance marine vessels for military and commercial use.
A surf park promoted by music superstar Pharrell Williams is one step closer after Virginia Beach City Council approved a deal last fall with Venture Realty Group to develop the $325 million project on a 10-acre site near the oceanfront. Atlantic Park, featuring a Wavegarden Lagoon surf park, will also include a 3,500-seat entertainment venue, offices, retail, apartments and parking garages. The city is pitching in about $95 million for parking, streetscapes and the entertainment center, and City Council approved spending $9 million for land acquisition. The project is expected to employ 3,600 workers during construction and 2,000 people after opening in four to five years.
Also in Virginia Beach, LifeNet Health, the state’s only federally designated organ procurement organization, is investing almost $8 million to expand its facilities. In April, the company unveiled the first phase of about $6 million in upgrades at its processing plant near Norfolk International Airport. Once the expansion is completed in 2021, the site will be the largest of LifeNet’s four tissue graft-processing facilities. LifeNet also is investing nearly $1.8 million to expand its facility in the Lynnhaven business corridor. With the upgrades, the nonprofit plans to add 44 positions over the next year.
Meanwhile, SRP Cos. Inc., a supplier of cell phone accessories and sunglasses to more than 60,000 U.S. retailers, is spending $1.16 million to relocate a significant part of its warehouse operations to Virginia Beach, where it expects to hire up to 130 more people this year. And DroneUp, a web and mobile platform for on-demand drone pilot services, is investing $130,000 to expand its headquarters and create 41 jobs.
While the General Assembly debates whether to legalize casino gambling, the city has hired Chicago-based Rush Street Gaming LLC to develop and manage a casino resort that would be built on 50 acres near Tidewater Community College’s Portsmouth campus. If casinos are legalized, the company plans to purchase the site from the city at a minimum price of $10 million. The nonbinding agreement specifies that the site must have enough space to build a parking garage and “first-class” hotel.
Preferred Freezer Services Inc., one of the world’s largest public refrigerated warehousing companies, last April announced plans to spend $60 million to build a 200,000-square-foot cold storage warehouse in Portsmouth, hiring 60 employees. The following month, Michigan-based warehousing and logistics company Lineage Logistics completed its acquisition of Preferred Freezer Services.
Collins Machine Works is expanding its naval and maritime machining business in Portsmouth after purchasing and renovating an industrial facility in the Port Centre Commerce Park, adding 20 employees. The $3.3 million investment gives the company an additional 32,000 square feet.
In June, the Naval Sea Systems command broke ground on a $64.7 million, 157,000-square-foot training facility at the Norfolk Naval Shipyard, part of NAVSEA’s $21 billion Shipyard Infrastructure Optimization Plan to upgrade infrastructure at its four public nuclear fleet shipyards. Slated to be completed by 2021, the facility will consolidate training classes now held at 26 sites.
The second phase of the $300 million Summit Pointe mixed-use development in Greenbrier got underway last May, including Dollar Tree Inc.’s new 12-story headquarters. The 555 Belaire development is a 150,000-square-foot office building, while the Helix will be a mixed-use facility with 133 apartments and first-floor retail and restaurant space. The projects are slated to be complete by this summer.
Cloverleaf Cold Storage is investing $21 million to add more than 100,000 square feet to its refrigerated warehouse in Chesapeake’s Cavalier Industrial Park. With the expansion, the company will hire 33 employees.
Nordstrom, the upscale department store that had been an anchor at MacArthur Center, vacated its lease in April, with several other stores following its lead. In the aftermath, the city is working with MacArthur Center owner Starwood Retail Partners to reinvigorate the space by bringing in residences and a hotel on a vacant property adjacent to the mall. Starwood missed loan payments for the $161 million debt secured by Stony Point Fashion Park in Richmond, according to news reports in January, but that deal does not affect MacArthur.
Meanwhile, Swedish home goods retailer Ikea opened its second Virginia location last April in Norfolk. Located at Interstate 64 and Northampton Boulevard, the 331,000-square-foot store has 250 employees.
Norfolk, too, is preparing to get into the gaming business if casinos are legalized, with the Pamunkey Indian Tribe’s hotel and casino project next to Harbor Park, a project approved last year by City Council. In December, Mayor Kenneth Alexander downgraded a $700 million estimate of the casino’s anticipated economic impact to around $200 million, with about 1,000 jobs expected.
Target Corp. announced plans to expand its Suffolk Upstream Distribution Center, adding a new packaging department and 225 jobs. The expansion represents a $2.8 million capital investment.
Late last year, Amazon.com Services Inc. purchased more than 94 acres in Suffolk’s Northgate Commerce Park for more than $4.5 million, but the company has not revealed its plans for the vacant site.
Isle of Wight, Franklin, Southampton
In the rural counties of the region, there is also plenty of activity. In Isle of Wight, M&M Milling, an Arkansas-based toll processor, is investing $2.3 million to establish its first East Coast milling location. The company has committed to purchasing 575,000 bushels of Virginia-grown corn over the next three years.
A familiar name — Hubbard Peanut Company Inc. (Hubs), Virginia’s original gourmet peanut company — is setting up operation in a former Franklin grocery store and investing $1.66 million to build a processing, warehousing and logistics facility, as well as a marketplace to showcase its products. The company plans to hire 10 people and complete the project within the next three years.
Southampton County is betting on a new hemp production facility to stimulate its economy. Bon Bon Farms LLC is investing $8.5 million to renovate the former Asheboro Elastics Corp. facility into a plant that will grow hemp plugs to sell to Southeast farmers and produce CBD oil. The company plans to hire 162 people and work began last November on the 230,000-square-foot facility.