CoStar project moved rapidly after city became a finalist
Operating in the dark is a skill that those working in economic development have to acquire and perfect. Patience helps a lot, too.
Both came into play when Washington, D.C.-based CoStar Group Inc., a major provider of commercial real estate information with about 3,300 employees worldwide, came calling on the Richmond area as a possible site for a research center.
In keeping with standard practice for many economic prospects, CoStar kept its identity hidden in the early stages.
Brian Berkey, senior vice president at the Richmond office of Cushman & Wakefield|Thalhimer, a commercial brokerage firm, worked with Amy Broderick, an associate at the firm, in representing CoStar locally. They informed the Greater Richmond Partnership that a major company was looking at possibly establishing a presence in the area and hiring hundreds of employees.
“When we got the contact, we were told that it was between us, Atlanta, Charlotte and Kansas City. When we found out who the competitors were, we began our own research analysis of how we stacked up,” says Barry Matherly, CEO and president of the Greater Richmond Partnership, a regional economic development group.
It was June 2016 when Matherly alerted the partnership’s member localities that a major prospect was looking at the area. CoStar quickly narrowed its choices between Richmond and Henrico County, Matherly says.
Meanwhile, Berkey and Broderick, who had worked with CoStar earlier in finding a site for a local sales office, were searching for a building that would be a good match for the company’s culture and exacting standards.
Berkey says CoStar wanted modern, Class A office space that required minimal improvements because it was on a tight schedule.
They found a property in Richmond that checked all the boxes, the WestRock building overlooking the James River.
The 310,000- square-foot building is the former headquarters of the packaging company MeadWestvaco, which merged with Georgia-based Rock-Tenn in 2015 to form WestRock. The deal had created vacant space in the nine-story structure, which was built in 2009. CoStar signaled it would occupy the top four floors of the building, hiring about 730 employees.
“CoStar was looking for a workplace environment to satisfy the millennial generation,” Berkey says. “The building’s walkability/bikeability, proximity to amenities and attention to sustainability were all attractive features.”
Ken Campbell, Kit Tyler and Matt Hamilton of Colliers|Richmond represented WestRock in negotiations for the office space.
As the site selection moved forward, incentives were put forward to secure the company, which is investing $8.7 million in the project.
Gov. Terry McAuliffe approved a $4 million grant from the Commonwealth’s Opportunity Fund, an amount that the city had to match.
Meanwhile, Lee Downey, director of the city’s economic development office, and Jane Ferrara, the chief operating officer, were racing to find ways to sweeten the offer in ways that CoStar would be hard pressed to pass up.
Richmond decided that three-quarters of its local match would come in the form of workforce development. “We knew they were hiring over 700 people very quickly, and those resources became increasingly important,” Ferrara says.
As part of the effort, the city provided the means to identify and screen prospective applicants, train them and then test those selected to see whether they would make a good fit for CoStar.
Ferrara says candidates who were not a good match still had training and experience that would aid them in other jobs.
Then, there was the matter of transportation options. “CoStar told us loud and clear that public transit was important,” Ferrara says.
The city’s upcoming high-speed bus line along its main thoroughfare, Broad Street, was part of what CoStar was looking for.
But the initial route of the Bus Rapid Transit (BRT), from Rocketts Landing in the city’s East End to The Shops at Willow Lawn in the West End, would run blocks away from CoStar’s offices.
To address that issue, Downey and Ferrara say they will work with the transit agency, GRTC, to provide a connector service for CoStar, which is located on South Fifth Street, and possibly for other sites, such as Dominion Resources’ announced 20-story office tower on South Sixth Street.
To further accommodate CoStar, the city is installing one of its new bike-share stations near the company’s research center.
Users will be able to pick up a bike at one station and drop it off at another. Prices vary from an annual pass of $96 to a per-ride price of $1.75.
“CoStar loved all of this,” Ferrara says of the transportation initiatives.
The company’s decision to locate its research center in Richmond was announced in October, about five months after the Greater Richmond Partnership first got word about the project.
“It was super quick,” says Matherly, the partnership’s CEO.
On average, he says, it takes about 13 months to bring a company to the announcement stage after first contact. Sometimes the process can stretch out for years.
Central Virginia’s recent deals
|CoStar Group Inc.||Richmond||730|
|Direct Mail Solutions||Henrico County||243|
|Standard Insurance Co.||Altavista||200|
|Apex Clean Energy||Charlottesville||184|
|Aldi U.S.||Dinwiddie County||145|
|L. Knife & Son Inc.||Henrico County||110|
|Hudson Industries||Henrico County||87|
Source: Virginia Economic Development Partnership, 2016.