Calm after the storm

Charlottesville-area residents have persevered through a year of classic small-town controversies that included debates over roads, growth, the homeless, jobs and discrimination. Then came the forced resignation of the University of Virginia’s president — a gaffe by the Board of Visitors that created national headlines.

June 10 will mark the one-year anniversary of U.Va. President Teresa Sullivan’s ouster by a group of board members headed by Rector Helen Dragas. The surprise move led to massive protests by students and faculty. That anger — which sparked letters to newspapers and calls to legislators — forced the board to do an about-face. Sixteen days after being shown the door, Sullivan was reinstated. As one professor put it: They put the toothpaste back in the tube.

Residents in Charlottesville and the surrounding counties followed the Sullivan story with intense interest.  Whatever happens at U.Va. reverberates throughout the region. The university is the economic engine of Charlottesville — population 44,000.  The school is the area’s largest employer with a full-time work force of more than 12,000 — many of whom are well paid — and a student population of about 21,000, many of whom spend money in the area’s shops and restaurants.

Tim Hulbert, president and CEO of the Charlottesville Regional Chamber of Commerce, has no doubt that, under Sullivan’s continued leadership, U.Va. will continue to bolster the economic strength of the region. “I have the highest regard for Terry Sullivan,” he says. “She was definitely a class act during the controversy. She knows what she’s doing.”

“We’ll get past this,” says Sullivan, who spoke freely about the turbulence of the past year in a recent interview. She also emphasizes the close ties she wants with local leaders. “I feel we’ve got a good relationship,” says Sullivan, who has joined the 100-year-old Charlottesville Regional Chamber of Commerce.

Sullivan understands the economic sway U.Va. has over Charlottesville. “We are an economic force in a number of ways,” she says, citing the number of students who live in the area and the many visitors to the school, including parents of students and prospective Wahoos. U.Va. athletic events — especially football — also bring tens of thousands of fans to the area. All of these U.Va. visitors “keep the hotel rooms here full,” she says.

Students also create a strong demand for housing, although U.Va. provides dormitories for all first-year students. As the university creeps up in size — an extra 300 to 400 first-year students will enroll in the coming school year — so does the demand for housing. Privately owned apartments for hundreds of students are under construction — one complex is near the law and business schools and another is on West Main Street.

U.Va.’s wealth of talent in the sciences also has lured dozens of bio-tech and defense-related companies to the area. “It’s a beneficial cycle in which we help the local economy and the local economy helps us,” says Sullivan.

‘People are optimistic’
George Cohen, a law professor and head of the U.Va. Faculty Senate, says last year’s turmoil had a “significant impact” on the school. “But I think people understand we did get the president back,” he says. “That was a good thing. Whatever the negative fallout, [it] was significantly mitigated.”

Cohen adds that “there will be a new rector come summer. That will certainly ease the anxiety.”  Gov. Bob McDonnell reappointed Dragas to a second four-year term on the board, but her two-year term as rector will end June 30. She will be succeeded by George Keith Martin, the vice rector, who is managing partner of the Richmond office for the law firm McGuireWoods.

As a result of the attempted ouster of Sullivan, U.Va. has been put on warning by the Southern Association of Colleges and Schools Commission on Colleges (SACS), the accrediting agency, which assures “constituents and the public of the quality and integrity of higher education institutions and programs.” SACS will send a team to U.Va. in September to decide whether to bestow full accreditation. “People are optimistic,” says Cohen. “The school will be in good graces come fall. It’s not had a strong impact on recruiting.”

Preliminary figures show the school received 29,277 applications this year compared with 28,251 last year and 23,971 in 2011.

Meanwhile the university is sprucing things up at the Rotunda and on the Lawn. The school is spending $50 million over five years to renovate the Rotunda — U.Va.’s signature building — which includes replacing the roof and redoing the building’s wings. The aging Range rooms, which flank the Lawn, and the Pavilions, where the school’s top professors live, are also targeted for repair.

In addition, the faculty also needs attention, says Cohen, noting that salaries for professors are falling behind peer groups and retention of good professors could become more difficult. “We’ve been under a salary freeze for five years or so compared to other schools,” he says. “Especially in the next 10 years we’re going to have a serious turnover” in part because of an aging faculty. “We’re heading into a sensitive time for recruiting and retention.” Sullivan says increasing faculty salaries is a top priority.
Over at its medical center, U.Va. is busy expanding its offerings. The Battle Building at the U.Va.’s Children’s Hospital is under construction.  The $141 million project, which will centralize medical care for children, will include a 200,000-square-foot, seven-story complex housing treatment areas, outpatient services and research. The building should be completed in 2014.

Regional economy rebounding
Hulbert, the chamber CEO, says the economy of the Charlottesville region is inching back to a good place. In 16 of the last 18 months, house sales have increased. Retail sales figures in 2012 in Charlottesville and Albemarle County were up 4.3 percent over 2011 to $2.29 billion. The high-water mark of retail sales in those two jurisdictions occurred in 2007 with $2.36 billion in goods sold. The low water mark netted only $2.08 billion in sales in 2009.

Job numbers are looking rosier, too, at least according to the most recent numbers available. In 2008, the region — which includes Charlottesville and Albemarle, Orange, Louisa, Nelson and Fluvanna counties — lost 4,000 jobs. In 2010, it netted 11 new jobs. Hulbert says the region added 1,772 jobs in 2011, the latest year that figures are available.  The entire region offers about 100,000 jobs.

“They showed growth everywhere but in the city of Charlottesville,” Hulbert says. Charlottesville has lost 3,200 jobs in the last decade — in part because companies are moving to the adjoining counties.

The 176-bed Martha Jefferson Hospital has moved out of Charlottesville to Albemarle County’s Pantops Mountain, taking more than 1,000 jobs with it, but the old hospital building is being renovated for a number of companies that are creating new jobs. The new occupants include the CFA Institute, an association of investment professionals. It will occupy about 130,000 square feet of the old hospital’s 240,000 square feet for offices, says Chris Engel, the director of Charlottesville’s Office of Economic Development. The $40 million CFA project could eventually bring 400 jobs to the city.

Another company, called Hemoshear, also will move into the building. Hemoshear is a biotech company that helps companies develop drugs through use of its human surrogate technology. The rest of the complex will be used as residential apartments.
Other businesses setting up shop in Charlottesville include the $20 million, 90,000-square-foot Waterhouse project, a mixed-use commercial and residential property located just south of the downtown mall. Its tenants will include WorldStrides, a student travel business that will employ 300 people.

Local controversies
Hulbert blames the city’s weakness in job growth compared with the rest of the region on its higher taxes and on local controversies such as the creation of a human rights commission to handle discrimination complaints. City Council is debating whether to give the commission enforcement powers.

The council also has waffled over construction of two major road projects proposed for the region — a parkway connecting Rio Road with the U.S. 250 bypass at McIntire Road and the U.S. 29 bypass. Both roads have been promoted, opposed, derided, celebrated and planned for more than four decades.  The parkway now is almost complete. The 29 bypass needs a federal environmental assessment before construction can begin, according to Hulbert.

But Engel says the city is “doing well overall. It could be a lot worse. We continue to see some bright spots.”

The city’s downtown pedestrian mall is one bright spot. It seems more economically robust every year. The tree-lined, brick mall is packed with shoppers and restaurant patrons almost any evening. The store vacancy rate on the mall sits at a mere 1 percent.  Nonetheless, the downtown mall has been assailed by store owners for attracting panhandlers, buskers and homeless people — all congregating for a good time and spare change.

The City Council instigated a program under which paid “ambassadors” along with police officers, will walk a beat on the mall to rein in aggressive panhandling and occasional brawls.

Stonefield development
Albemarle, meanwhile, is in an economic upturn, especially with the completion of The Shops at Stonefield, a major development that features retail, entertainment, dining, residential living and a boutique hotel. The project, located at U.S. 29 and Hydraulic Road, broke ground last May.

Approved nonresidential square footage of the shopping center is 1,265,000 with about 243,000 square feet built out as of mid-April, according to the county.

The Shops at Stonefield have provided approximately 1,775 jobs during construction and will create another 870 permanent jobs after completion, says Lee Catlin, a spokeswoman for Albemarle County.  During a 10-year period, Stonefield stores are expected to generate about $85 million in additional tax revenues.

Stonefield developers, however, have been sued by the owners of the nearby Seminole Square Shopping Center and the Pepsi-Cola Bottling Co. They accuse Stonefield of failing to abide by the state’s stormwater regulations. The plaintiffs’ suit claims their property could be flooded in a major storm. Stonefield’s developers, Edens of South Carolina, has denied that accusation and asked that the suit be dismissed.

Catlin said other businesses are flocking to the county. “We continue to see expansion in our advanced-manufacturing sector, including the opening of the new Siemens Energy facility” which makes gas turbines, said Catlin.

“Biotech/life sciences is a big economic story in our community,” she adds. “The Albemarle County/Charlottesville community is currently home to 20 percent of the biotech industry in the entire commonwealth and growing — considering that we comprise 2 percent of the state population, we think that is very impressive.”

Agribusiness also remains a strong economic driver for the county. Albemarle has almost 30 farm wineries, several cideries and two breweries selling products, Catlin says.

And the region has now gotten a new brand to better sell itself. The Thomas Jefferson Partnership for Economic Development — a public/private partnership that helps create new jobs and investment in Charlottesville and seven surrounding counties —  has a new name. The nonprofit is now known as the Central Virginia Partnership for Economic Development. Its motto is “Bold ventures begin here.”

The old name “didn’t resonate,” says Helen Cauthen, the president of the partnership.  The new name “tells us where we are and makes us strong and hopeful.”

As for the region’s current economy, she says, “We’re recovering. We’d still like to see more project activity. It’s still challenging. There are still layoffs. But we’re feeling positive.”

That’s a good feeling to have after the turmoil the area experienced a year ago.