Love at first site

Home to eight Fortune 500 companies and three Fortune 1000 companies, metro Richmond is “punching above our weight” for a region of 1.3 million residents, says Jennifer Wakefield, president and CEO of the Greater Richmond Partnership.

For the third year in a row, the Richmond region was named by Business Facilities magazine as a top 10 location for corporate headquarters and corporate campuses. Richmond ranked No. 9, coming in just behind the Washington, D.C.-Arlington-Alexandria region.

Business Facilities’ rankings consider the number of corporate headquarters in a location and what resources that area offers for business operations, such as the cost of doing business and quality of life for workers. Richmond scores high in those factors and offers companies a strong business climate, workforce availability and solid infrastructure, say regional economic development officials.

The region’s star also is rising among those who make business location decisions, according to annual surveys of site selection consultants and corporate officials conducted for GRP, the lead regional economic development organization. A 2021 survey found that 20% of site selection consultants had considered Richmond previously, but only 2% of corporate executives had. But by the 2023 survey, nearly 40% of both groups said they’d considered the region, and site selection consultants said they short-listed Richmond about 40% of the time. 

Friendly business climate

While cost is never the only factor companies prioritize when weighing locations, businesses want to locate headquarters or major assets in places with low taxes and stable, business-friendly policies, Wakefield says. Ranked second on CNBC’s Best States for Business list in 2023, Virginia checks those boxes; the state’s 6% corporate tax rate hasn’t changed in 50 years.

GRP compared the costs for operating a 50-person office — including rent, salaries and benefits, and utilities for a year — and found Richmond is less expensive than seven other major cities, including Atlanta, Charlotte, North Carolina, and Washington, D.C. Companies settling in Richmond pay lower costs for office rents, state unemployment insurance and commercial electric rates than in the comparison cities.

Fortune 500 utility Dominion Energy, which has its corporate headquarters and 5,400 employees in Richmond, charges industrial electric rates in Virginia that are more than 16% below the national average, according to Dominion Energy Virginia President Ed Baine. The company’s array of solar and wind projects under development also helps attract businesses that want renewable energy to help meet sustainability goals.

By the time company executives contact a local economic development office about a relocation, they’re ready to move quickly, so the locality must be ready, too, says Anthony J. Romanello, executive director of the Henrico Economic Development Authority.

Take for example Facebook (now Meta Platforms), which approached the county in late 2016 about building a 970,000-square-foot data center complex and was able to start construction by fall 2017 because the county offers a quick permitting process.

Additionally, last year, to attract more companies with lab and research activities, the Henrico Board of Supervisors lowered its research and development tax rate from $3.50 to $0.90 per $100 of assessed value. Last year, Thermo Fisher Scientific announced a $92.3 million expansion of lab operations in Henrico, and diagnostic lab testing company Genetworx also said it would double the size of its facility in the county’s Innsbrook area.

In recent years, Henrico also raised the threshold for exemption from BPOL (business, professional and occupational license) taxes to $500,000 in annual gross receipts. Supervisors “recognize that if we reduce the tax burden on the business community, they will respond in kind. We have seen substantial investment since taxes were reduced,” Romanello adds.

In the city of Richmond, business-friendly policies such as a citywide technology zone to encourage the growth of tech firms and a commercial area revitalization program to keep commercial corridors vibrant have helped attract and retain businesses, says Leonard Sledge, director of Richmond’s Department of Economic Development.

“We endeavor to move at the speed of business to help businesses grow in the city,” he says.

Worker availability

Many companies with Richmond operations praise the availability of skilled workers, due in part to the city’s proximity to several colleges and universities.

“One of the attractions of having a big base of operations in Richmond is a deep talent pool,” particularly in information technology, says Ted Hanson, CEO of ASGN, which occupies 78,000 square feet across multiple offices in the city. The company moved its headquarters from California to Henrico three years ago. Its largest business unit, Apex Systems, also has its headquarters and about 530 employees in Henrico.

The 17 counties of the Richmond Metropolitan Statistical Area have a workforce of 695,000 people, which rises to 1.2 million for the broader Central Virginia area. The greater Richmond region is home to more than 20 higher education institutions — including public schools like Virginia Commonwealth University, private universities like the University of Richmond, and two historically Black colleges and universities, Virginia State University and Virginia Union University.  Collectively, they graduate thousands of students annually. With about 1.7 million higher education students within a 150-mile radius of Richmond, recruitment opportunities are unlimited. Additionally, nearly 40% of the region’s working-age population, ages 25 to 64, have at least a bachelor’s degree, compared with the national average of 33.5%.

“The state’s top-tier universities and thriving business communities help create a strong pipeline of candidates for a range of positions,” says Bill Nash, CEO of Goochland County-based Fortune 500 used-car retailer CarMax, which has 2,300 associates in metro Richmond.

Performance Food Group, a Fortune 500 company that employs nearly 1,000 workers at its Goochland headquarters and two area distribution centers, has “been very successful building the Performance family with local residents,” says company spokesperson Scott Golden. While PFG makes “some strategic hires outside of greater Richmond,” the company recruits locally for information technology, human resources and finance professionals, as well as skilled warehouse workers, truck drivers and front office workers.

Metro Richmond’s labor pool is also increasing because the region’s population is growing at a faster rate than the state as a whole — by 9.8% between 2010 and 2020, compared with 7% statewide. People relocating from Northern Virginia make up the largest group moving to the region, Wakefield says.

Occasionally, companies tell GRP that they’re worried about the potential number of available workers in Richmond, but in those cases, the market may be too small for their needs, Wakefield says. “If they’re looking for an Atlanta-sized market,” Richmond isn’t the right place, she adds.

Quality of life

Richmond’s quality of life is vital in attracting and retaining companies and their employees, economic development officials and company representatives agree.

The region’s low cost of living grabs people’s attention, says Matt McLaren, managing director of business attraction for Chesterfield County Economic Development. “People from larger metros nationally and internationally are surprised by the affordability, low congestion and sophistication of our market,” he says. “Taking them through neighborhoods and seeing them look at their real estate apps is always fun as they compare what they could afford in our region versus back home.”

Richmond’s cost of living is better than some markets with which the city directly competes for business relocations, including Charlotte, North Carolina, and Nashville, Tennessee. Richmond home prices averaged about $383,000 last year, substantially lower than the national average of $452,000.

Henrico EDA’s Live Your Best campaign focuses on the region’s quality of life and promotes it as a place “where workers and families are going to want to be,” Romanello says. The campaign touts Henrico’s top-ranked public schools, variety of housing and neighborhood options, low cost of living, and recreational attractions ranging from the James River to craft breweries.

Many projects coming to Chesterfield involve relocating employees, McLaren says. “Once they visit, it is an easy decision for them to choose to locate to a region rich with diversity and affordability of housing, amazing educational opportunities … [and] amazing recreational and cultural attractions.”

CarMax’s Nash echoes those comments: “Our hometown of Richmond is a vibrant place to live and work and attracts top talent from across the country.” He highlights the city’s restaurants, museums, and proximity to mountains and beaches as things his company’s employees love about the region.

Just as geography provides Richmonders a central location that’s two hours from mountains, beaches or the cultural offerings of Washington, D.C., it also offers companies a central location on the East Coast, approximately halfway between Florida and Maine and two hours from the nation’s capital. With three interstates serving the city, 45% of the U.S. population is within a day’s drive, including major markets in the Northeast and Southeast. Port access is available via river barge, trains and trucking.

For commuters, the city’s traffic is relatively light. “Richmond’s central location is a real benefit. You have the advantages of being in the state capital but not having to battle the hustle and bustle of traffic that you may get in other areas of the state,” ASGN’s Hanson says.

One of the region’s few weaknesses site selectors mention in GRP’s annual survey is the limited number of direct flights from Richmond International Airport. “Our location is an advantage but also a disadvantage because airlines look at the largest markets,” Wakefield says, adding that Perry Miller, president and CEO of the Capital Region Airport Commission, “has done a tremendous job of attracting new direct flights,” and the airport now has direct flights to
35 destinations. “That’s needed because we’re being counted out of projects.”

Regional cooperation

While economic development officials use phrases like “secret sauce” to describe Richmond’s brew of positive qualities, one of the biggest attractions for corporate headquarters and campuses is simply the fact that so many companies already have settled in Richmond. “Other companies like to cluster where there are headquarters and corporate service firms,” Wakefield says.

Henrico’s economic development staff is happy to tell corporate prospects that it has six Fortune 1000 companies and to namedrop Markel Group, Altria Group and others with major operations in the county. “Worldwide companies have double-downed on Richmond, and the rest of the world takes note of that,” Romanello says.

“Success begets success,” Sledge says, offering CoStar Group’s major investment in Richmond as an example. The D.C.-based real estate analytics and information company, with 1,500 area employees, has been in Richmond since 2016, and broke ground on a $460 million, 750,000-square-foot expansion of its riverfront campus in 2022. “Because of the business they are in,” Sledge says, “that investment sends a strong message about the city, region and commonwealth.”

Richmond-based companies also do their part to help economic development. Dominion Energy, for instance, has a team of energy experts that assists businesses seeking to expand or relocate in Virginia. Many companies, whether long established in Richmond or newcomers, contribute to the quality of life by being good corporate citizens, providing grants and volunteers for local nonprofits, sponsoring cultural events, and working to keep Richmond a vibrant community, Sledge says, adding that regional cooperation around economic development is also a plus.

“We are equally as excited and enthused about growth in the city as we are about growth of our partners in the counties. We need and want each other to be successful,” Sledge says.

Ranking among Business Facilities’ Top 10 metro areas for corporate locations is a bonus. Choosing a corporate site involves “some subjectivity,” but also plenty of analysis and objective criteria, Wakefield says, so when an executive sees Richmond in the Top 10, he or she might think, “if someone else put them on a list, maybe I shouldn’t discount them.” 

Richmond at a glance

Founded in 1737 by Col. William Byrd II, Richmond is known as the River City for its location on the James River. The state’s capital, Richmond, is home to the Virginia General Assembly and much of state government. The metro region, which includes Chesterfield, Goochland, Hanover and Henrico counties, is headquarters to 11 Fortune 1000 companies. The region is also home to the University of Richmond, Virginia Commonwealth University, Randolph-Macon College, Virginia State University and Virginia Union University.

Population

226,604 (city); 1.3 million (metro region)

Top employers

• VCU Health System/VCU: 21,332 employees
• Capital One Financial: 13,000
• HCA Virginia Health System: 11,000
• Bon Secours Richmond: 8,416
• Dominion Energy: 5,433

Major attractions

Richmond is home to historical and cultural attractions such as the Poe Museum, the American Civil War Museum, the Virginia Museum of Fine Arts, the Virginia Museum of History & Culture and the Black History Museum and Cultural Center of Virginia. Visitors can also enjoy time outside at Maymont park, Lewis Ginter Botanical Garden or the Kings Dominion amusement park. Carytown, the Fan District and Scott’s Addition offer many options for shopping, dining and entertainment.

Top convention hotels

Richmond Marriott
413 rooms, 26,760 square feet of event space

DoubleTree by Hilton Hotel Richmond – Midlothian
237 rooms, 26,039 square feet of event space

The Jefferson
181 rooms, 26,000 square feet of event space

Hilton Richmond Short Pump Hotel and Spa
254 rooms, 21,937 square feet of event space

Notable restaurants

Lemaire
New American, lemairerestaurant.com

Longoven
New American, longovenrva.com

L’Opossum
Modern French, lopossum.com

Shagbark
New American/Southern, shagbarkrva.com

Stella’s
Greek, stellasrichmond.com

Fortune 500 companies

• Performance Food Group
• CarMax
• Altria Group
• Dominion Energy
• Markel Group
• Owens & Minor
• Arko
• Genworth Financial