Site Selection ranks Va. 1st for biz climate
State rose from 10th place in magazine's rankings
Virginia rose to first place in Site Selection magazine’s 2022 Business Climate Rankings.
The commonwealth unseated North Carolina and ranked above Georgia, which had an eight-year streak in the top spot. Last year, Virginia was tied for 10th place.
“I’m pleased that Virginia has won the best business climate; it’s incredibly exciting to see the pace Virginia is moving at,” Gov. Glenn Youngkin said in a statement. “Virginia companies want confidence that their environment will provide long-term stability, a long-term partnership. We are working on putting in place frameworks around a tax-friendly world, a business-friendly regulatory environment, an education system that supports the development of the best workforce, safe communities and a government that supports efficiency.”
For one of nine categories, Site Selection asked professional site selectors to rank states in order of attractiveness based on their experiences in locating projects. Virginia placed 11th in the survey results but did well enough in the eight other categories to claim the top spot overall. Survey respondents’ top choices were Tennessee, North Carolina and Georgia.
Virginia lags other Southeastern states in having 250-acre or larger sites that can support the start of construction on large industrial projects within 12 to 18 months. This year, the commonwealth notably lost a $5.5 billion Hyundai Motor Co. electric vehicle plant to Georgia. Youngkin spoke about the problem in his November 2022 interview with Virginia Business.
However, Virginia scored a victory this year with the $1 billion Lego Group toy factory that will be built in Chesterfield County, and the state has seen multiple headquarters locate here, including Amazon.com Inc.’s HQ2 East Coast headquarters, as well as the recent headquarters relocations of The Boeing Co. and Raytheon Technologies Corp. to Arlington.
In 2021, the Virginia Economic Development Partnership announced 130 projects in Virginia, expected to bring more than 18,000 jobs and $2.1 billion in investment. And since January, VEDP has announced 65 more projects, VEDP CEO and President Jason El Koubi told Site Selection.
Virginia has been most successful attracting projects in advanced materials, supply chain management, data centers and life sciences, El Koubi said.
The surveyed site selector executives’ No. 1 criteria for site location was workforce skills. Tax climate and workforce development resources tied for second in their criteria.
Part of Virginia’s bid for HQ2 was the Virginia Tech Talent Investment Program, which aims to produce 31,000 in-demand computer science graduates during the next two decades through a cooperative program with 11 Virginia universities.
Additionally, VEDP and the Virginia Community College System run the Virginia Talent Accelerator Program, which provides customizable job training and other support to qualifying companies at no cost.
During the groundbreaking for CoStar Group Inc.’s $460 million Richmond expansion, CoStar founder and CEO Andrew Florance said Virginia’s higher education contributed to his company’s decision to expand in Richmond: “I remember the day that we made the decision to invest in Richmond, and honestly one of the key moments where we committed to the city was as I walked through the campus of VCU, and I saw 25,000 students getting a great education, and that joins Virginia Tech, University of Virginia, Virginia Union, all sorts of great colleges and higher education here in Virginia.”
Along with the site selectors survey, Site Selection considers total qualifying projects in 2021 cumulatively and per capita from the Conway Data Projects Database; total projects year-to-date in 2022 cumulatively and per capita from Conway; 2022 Tax Foundation state business tax climate data; Inc. 5000 firms cumulatively and per capita; performance in the January Rankings that Matter in Site Selection’s State of the States report; CNBC’s Top States for Business (Virginia placed third this year); Cyberstates 2022 tech employment and percentage of overall employment; and bipartisan infrastructure bill projects and funding as of September.