Making the grade

For Virginia Gov. Glenn Youngkin, this is the state’s rebuilding era.

Although his Democratic predecessor, Gov. Ralph Northam, trumpeted Virginia’s unprecedented consecutive two-time run as CNBC’s Top State for Business, Youngkin has been critical of the state missing out to our Southern neighboring states on big manufacturing deals because of Virginia’s dearth of project-ready industrial land that would enable large facilities to be built within 12 to 18 months.

In this year’s General Assembly, Youngkin proposed adding $450 million to the state budget for industrial site development, on top of $150 million already allocated in the two-year budget. To place this in perspective, Virginia spent about
$1 million a year on site development before 2021. Meanwhile, other Southern states like Georgia and North Carolina far outspent Virginia, and they also won more megaprojects that are expected to yield billions in investments and thousands of jobs.

Between 2015 and 2022, when neighboring states were awarded 120 industrial megaprojects, Virginia won one: Lego Group’s $1 billion toy manufacturing plant in Chesterfield County, announced last June. The Virginia Economic Development Partnership estimated the state lost out on 52,000 jobs and $120 billion in capital expenditures over that seven-year period.

“We’re behind,” Youngkin said in an October 2022 interview with Virginia Business. “It takes time to catch back up. The funding is important. We are … prioritizing the best sites around the commonwealth and starting to invest in them. I think this is going to be our last step of really going to the forefront for these megaprojects. We want them all in Virginia.”

As of this publication’s mid-February deadline, Youngkin’s amendment was still under consideration at the Virginia General Assembly, although it looked likely that Youngkin would get less than the $450 million he requested. 

In January, the Virginia Business Ready Sites Program, a discretionary fund run by the Virginia Economic Development Partnership, awarded $90 million in grants for 21 industrial sites statewide. More than half of the money — $25 million and $22.2 million, respectively — went to Upper Magnolia Green, a 1,728-acre site being developed as a technology park by Chesterfield County, and Commonwealth Crossing Business Centre in Henry County, which would have the state’s only 150-acre pad with rail access and utilities.

Curiously, in December 2022, Youngkin veered off the predicted path, when it was reported that he pulled the state from consideration for a $3.5 billion Ford Motor Co. electric vehicle battery manufacturing plant, citing Ford’s ties to a Chinese company that would have run the plant.

Democratic lawmakers cried foul, claiming that Youngkin was playing politics, following the leads of potential GOP presidential candidates Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, who have both taken stances against Chinese residents or companies buying land in their states.

In January, answering reporters’ questions about the thwarted Ford deal, which would have produced at least 2,500 jobs in Pittsylvania County, Youngkin said he didn’t want the U.S. automaker to serve as “a front for China” in Virginia. In February, it was announced the plant would locate in Michigan, about 100 miles west of Detroit, with production beginning in 2026.

Aside from Lego, the state notched other economic development wins in 2022, including Plenty Unlimited Inc.’s $300 million indoor vertical farm operation in Chesterfield County and the Richmond and Henrico County expansions of Thermo Fisher Scientific Inc., which is expected to create 500 jobs across three new bioanalytical labs.

Elsewhere in the commonwealth, Hilton Worldwide Holdings Inc. plans to add 350 jobs through an expansion of its Fairfax County-based global headquarters, and Virginia Beach-based DroneUp LLC is expanding its headquarters and building a testing and training center in Dinwiddie County, creating more than 650 jobs. In Caroline County, World Class Distribution Inc., a food and beverage distributor, announced it’s building a $275 million distribution center expected to generate 745 jobs.

Virginia’s casino industry also made a stylish entrance in July 2022, with a temporary version of the Hard Rock Hotel & Casino Bristol debuting with about 600 jobs, and the $340 million Rivers Casino Portsmouth opening in January as the state’s first permanent casino. Danville’s Caesars Virginia resort and Norfolk’s HeadWaters Resort & Casino are expected to open their permanent casino resorts in 2024.