A good showing

Hampton Roads attracted a diverse mix of businesses last year. New business announcements included projects ranging from health care and biotech to technology and advanced manufacturing.

In terms of jobs, the WPS Health Solutions project was the largest of the year for Hampton Roads Economic Development Alliance and the city of Hampton.

A Wisconsin-based company, WPS, leased a 100,000-square-foot office in Hampton to administer a military health-care contract, providing customer service and claims payments services. The project, now up and running, originally was expected to create 645 jobs but now has a staff of 750. “This type of project is important because it provides quality payroll opportunities with benefits to our region’s workers,” says Rick Weddle, the alliance’s president and CEO.

While 2017 was a good year for economic development, Hampton Roads has a long list of “needs,” such as competitively priced, shovel-ready sites. It also needs prime office and industrial facilities for lease as well as “an increased workforce supply, especially in mid-level skill sets,” Weddle says, adding that “The Port of Virginia’s significant investments will continue to position the region in the competitive site-selection process.”

Virginia Beach
Virginia Beach’s efforts last year resulted in about 2,500 new jobs and capital investments of more than $240 million. It also retained more than 5,300 jobs that could have gone elsewhere.

“By all accounts this was a very successful year for us,” says Warren D. Harris, the city’s director of economic development. “Our efforts were led by City Council to diversify the economy and target specific industry sectors that provide value-added job opportunities for our citizens.”

The year started with Mythics, a systems integrator and managed-services provider,  deciding to stay in Virginia Beach instead of relocating its headquarters to Washington, D.C. “Mythics is a homegrown success story that started in a living room and has since grown to $900 million-plus in sales,” Harris says.

Mythics will relocate 143 full-time employees to its new 50,000-square-foot headquarters at the Town Center of Virginia Beach, creating another 30 full-time positions. The capital investment in real estate improvements, business property and machinery and tools exceeds $7.5 million.

Another big save involved Global Technical Systems (GTS). The company is expanding operations at its Virginia Beach headquarters, investing $54.7 million and creating 1,100 jobs (see related story on Page 23).
Virginia Beach also expects to benefit from completion of two transatlantic cables. One of the projects is Marea, a high-speed cable running 4,000 miles from Bilbao, Spain, to Virginia Beach. The cable, which is expected to begin operation this year, is the result of a partnership involving Microsoft, Facebook and Telxius, a subsidiary of telecom provider Telefónica. Telefónica also has a second cable, Brusa, running between Virginia Beach and Brazil, which also is expected to begin operation this year.

The cables are expected to attract data centers and data-related companies to Virginia Beach. “To assist in that effort, our City Council reduced its tax rate as it relates to data centers from $4 on materials, products and services to 40 cents per $100,” Harris says. “Our depreciation schedule is lower and different from other localities. This will position Virginia Beach to be competitive for growth in data-center development.”

The city also saw an increase in biosciences and health-care firms as well as the expansion of power-tool manufacturer Stihl Inc. Stihl plans to spend $25 million tearing down its existing building to construct a 70,000-square-foot North America headquarters facility on its campus in Virginia Beach. “It is a reaffirmation of their support,” Harris says.

Suffolk
Suffolk, meanwhile, recruited prospects promising more than 700 jobs and $100 million of capital investment last year. The wins include companies in manufacturing, distribution, health care and retail. “We had a nice, diverse project mix,” says Kevin Hughes, the city’s director of economic development.  

Spain-based Atarfil, which makes thermoplastic geomembranes, has opened its first U.S. manufacturing and distribution facility in Suffolk, a $5.1 million investment. Peet’s Coffee has started construction on the first phase of its $58 million roasting plant, which should be completed in 2020. 

In addition, India-based Welspun Group has occupied 200,000 square feet of space in a speculative building constructed by Panattoni Development in the Virginia Regional Commerce Park. The company, which invested $1 million in the building, manages distribution of linens and towels for its U.S. retail and hospitality customers.

Also, Sentara Healthcare is expanding its BelleHarbour campus, a $34 million project that the health system expects to complete early next year.

One of Suffolk’s goals this year is recruiting “those companies in distribution along the West Coast that don’t have East Coast operations,” Hughes says. The initiative builds on the city’s recent success with West Coast-based companies such as Peet’s, Emser Tile and Friant and Associates.

Portsmouth
Portsmouth saw investment climb in 2017 while 420 jobs were created or saved. The city’s largest deal was the completion of the nearly 200,000-square-foot building for Harrisonburg-based InterChange Group Inc. in the former Gwaltney hot dog plant. “It’s right off the interstate. It’s a great location,” says Robert D. Moore, Portsmouth’s director of development, noting the deal represented an $11 million investment. 

Richmond-based Legend Brewing expanded into the city in July, occupying the Seaboard Coastline Building in Olde Towne Portsmouth. The $400,000 investment is expected to create up to 30 jobs.

Portsmouth also landed its first microbrewery, MoMac Brewing, which made a  $500,000 investment, as well as its first micro-distillery, Copper and Oak Craft Spirits, which is investing $200,000.

PortRail Crane Service added 30 employees with an investment of $400,000, thanks to the Port of Virginia’s order of 86 specialized cranes. The contract is the largest one-time order for automated stacking cranes in industry history. PortRail will assemble and service the cranes.

Newport News
Last year was a year of “economic growth, diversification, leveraging successful partnerships, major business expansions and continued redevelopment throughout the city,” says Florence G. Kingston, director of the Newport News department of development. 

The bigger projects included Ferguson Enterprises’ nearly $83 million plan to expand its headquarters to City Center at Oyster Point. That campus will house 1,400 Ferguson employees working in information technology and other corporate functions. The move is expected to create 434 jobs. 

Newport News Shipbuilding, a division of Huntington Ingalls Industries, will work jointly with Connecticut-based Electric Boat to build a new fleet of submarines for the Navy. To support this effort, the company expects to invest more than $750 million in its facilities and add 1,000 jobs by 2025. 

Mühlbauer Inc., which manufactures automated machinery, expanded its existing facility 51,000 square feet. The $12 million investment is expected to add up to 20 jobs.

Fairlead Boatworks also is expanding operations in the Seafood Industrial Park, an investment of more than $1 million. The company, which specializes in the repair of commercial and military vessels, will create 25 jobs and work to establish a second facility, North Yard. The second expansion will include more than $4 million in investment.

Hampton
Steven L. Lynch, interim director of economic development in Hampton, calls 2017 a clear “demonstration of the city’s viability as a destination for business investment and growth.”

Hampton announced 46 new projects last year, which represented total investment of $97 million and 1,097 new jobs. Those numbers include the WPS Health Solutions deal.

Last year lodging was a strong focus for the city.  “It was essential for the city’s tourism, entertainment and sports venues to develop quality hotel rooms to support the venues,” Lynch says.

Hotel projects included the $11.2 million Hyatt Place and the $11.3 million Element by Westin. Other projects include The Vanguard, a $2.3 million live entertainment venue project, and Lumen, a $42.9 million new luxury rental residential project.

Norfolk
Chuck Rigney, director of development for the city of Norfolk, last year worked with companies on projects that are expected to add about 1,150 jobs.

Deals included the expansion of apparel company Tegra Global, representing a $2.5 million-plus investment and 300 jobs. Colonna’s Shipyard also invested $23 million for pier improvements and its new 600-foot floating dry dock. The shipyard is adding up to 100 jobs.

Norfolk Commerce Park is gaining Instant Systems, a medical packaging firm. The company is leasing 6,968 square feet and investing more than $900,000 to expand its production and distribution capabilities. Instant Systems will retain its current location in Norfolk’s Central Business Park as a research and development facility. The expansion is expected to generate more than 72 jobs within the next five years. 

Also, Optima Health now occupies 45,000 square feet at the former J.C. Penney building at Military Circle Mall and is adding 200 jobs.

Last year also saw the openings of the $40 million Waterside District; a $164 million 300-room luxury hotel, The Main Hotel and Exchange Conference Center; the $75 million Simon Norfolk Premium Outlets; and the groundbreaking for Norfolk’s $75 million Ikea store. 

Eastern Virginia’s recent deals

Source: The Hampton Roads Economic Development Alliance, 2017