A solid year

Last year was a very good year for Hampton Roads, giving it three straight years of solid growth.

The Hampton Roads Economic Development Alliance, which promotes the region around the globe, assisted in six company projects and almost $30 million in capital investment.

“From 2011 to 2013 we have had 18 new announcements that the Alliance has assisted,” says Darryl Gosnell, the alliance’s president and CEO, noting those companies have invested more than $242 million in the area. “We feel like overall that is pretty good considering the conditions we have been dealing with.”
Gosnell was surprised at last year’s results because the area saw fewer prospect visits. “It was down a little from 2012 but the number of announcements we had went up,” he says.

Three of the new companies — generator manufacturer Grandwatt Electric Corp. in Suffolk; Spain-based Consentino, N.A., an importer of quartz and natural stone surfaces, in Hampton and German-based manufacturer PRUFREX USA in Virginia Beach — were international deals. The remaining three — manufacturer Atomized Products Group in Chesapeake, peanut roaster Hampton Farms in Southampton County and Carson Helicopters in Hampton — were domestic deals.

Target industries for the region range from aerospace to advanced manufacturing. To diversify its targets, the alliance brought in a consultant to study the region and find companies in places such as New York and California that would benefit from relocating their operations. “We came up with a list of over 500 companies in eight different industry sectors,” says Gosnell. “We will communicate to those sectors every month or so to give them information relative to their industry and make them aware of the business advantages we have here.”

Newport News celebrated 2013 by opening of the new Apprentice School for Newport News Shipbuilding and by scoring three major expansions by existing businesses. “It was a very good year for economic development,” says Florence Kingston, director of development for Newport News Economic Development Authority. “We had some significant projects.”

The Apprentice School sits outside the shipyard’s gates in downtown Newport News. In addition to the 90,000-square-foot school building, the $70 million project includes workforce housing, retail space and a parking garage. Students began classes in January. “It’s important for the shipyard,” Kingston says. “It will ensure the workforce of the future.”

In addition, three manufacturers announced expansions. Liebherr Mining Equipment Newport News Co., a maker of construction and mining equipment, is investing $45.4 million in expanding operations in Newport News and Hampton. The project will create 174 jobs over a 48-month period. “They are doubling their plant,” Kingston says.

Another company, High Liner Foods, a processor and marketer of frozen seafood, is investing $6.6 million in expanding its U.S. food-service production. The company expects to add 57 new jobs in addition to retaining more than 400 employees.

Also, Canon Virginia Inc. is investing $27 million to add 30,000 square feet of upgraded space on its campus to start making toner for copiers.

In addition, the city, Virginia Tech and Newport News-based construction company W.M. Jordan are collaborating on the creation of a corporate research center adjacent to Jefferson Lab. They expect the project to attract technology and research-based companies. The research center is part of a $250 million development that will include retail and residential space.

Not including retail projects, Hampton had at least $11.5 million in new capital investment and added 179 jobs last year. Eight new companies joined the community. Announced projects include DLBA Robotics, a manufacturer in the composite industry; defense contractor Threat Tec; Spanish-based Consentino, N.A., an importer of quartz and natural stone surfaces; and Carson Helicopters, which will manufacture composite tail rotor blades.

The city also struck a deal for Bay Disposal and Recycling to construct a $1.5 million, 24,000-square-foot addition to its recycling facility. The expansion, will add 32 employees to the company’s existing workforce in Hampton. In addition, Rappahannock Concrete Corp. of Gloucester also built a new concrete plant at the Copeland Industrial Park, creating 15 new jobs.

The city continues to move forward to create the Science Park at Hampton Roads Center North, a public-private partnership between Hampton’s Economic Development Authority and North Carolina-based Craig Davis Properties. “The city continues to fund the Peninsula Technology Incubator located there,” says Leonard Sledge, the city’s director of economic development. “Seven companies are currently in the incubator.”

The land designed for the Science Park is already home to the National Institute of Aerospace. The Economic Development Authority provided a $200,000 grant to the NIA to buy a high-speed computer cluster to help expand its research capabilities. Other companies in the Science Park will be able to use the computer cluster, as well.

Norfolk kicked off 2013 with plans for the redevelopment of the aging Waterside marketplace, a project headed by The Cordish Cos., and the completion of the $25 million Bon Secours DePaul Medical Plaza, including a comprehensive cancer center. “People are so invested in this city. There is an immense energy,” says Steve Anderson, Norfolk’s director of economic development.

In June, Kinder Morgan Energy Partners LP purchased two liquids-handling facilities from Allied Terminals in Norfolk and Chesapeake for about $24 million. Combined, the two facilities, which sit on 119 acres along the Elizabeth River, have 40 tanks with a total capacity of almost 1.8 million barrels of storage. The primary commodities handled at the two locations are refined products, fertilizer and ethanol.

Ninety percent of the city’s economic development announcements last year involved expansions and consolidations. EOS Surfaces, a company that creates innovative surfaces and countertops, relocated to a new facility in the city’s St. Paul area.

Virginia Beach saw 17 new business locations and 20 expansions of existing companies last year with $141 million in new capital investment and plans for the creation of more than 1,200 jobs. “We are seeing signs of a positive uptick,” says Warren Harris, the city’s director of economic development.

The city started the year with a $20 million investment from Green Flash Brewing Co. It purchased 10 acres in Corporate Landing for a 52,000-square-foot microbrewery. In trying to establish an East Coast presence, the San Diego-based craft-beer company considered several locations, including Wilmington, N.C. “It was a real competition. We did our due diligence,” Harris says.

The city also competed with Gainesville, Ga., for the first U.S. manufacturing facility for Germany-based PRUFREX Innovative Power Products GmbH. The company’s $7.33 million investment is expected to create 60 jobs. The plant will supply ignition components for customers including power-tools manufacturer STIHL Inc. in Virginia Beach

Last year the city opened an office in a suburb of Dusseldorf, Germany, to create a presence in the European market. In addition to Germany, target countries include Belgium, The Netherlands, Austria, Switzerland and Italy.

In an effort to ensure a workforce for the future, the city established GrowSmart, an early childhood education program, as part of its workforce development initiative. The program was the recipient of one of 11 Excellence in Local Government awards from the Alliance for Innovation.

Suffolk had its share of large announcements last year, including Unilever’s investment of $96 million in Lipton Tea. (See related story)

The city is making progress on its efforts to revitalize downtown. It is working with The Monument Cos. from Richmond on an $8.8 million renovation of the 100 block of West Washington Street. The space, vacant for 25 years, is being converted into 68 apartments and 5,000 square feet of retail space. “This is Monument’s fourth project in downtown,” says Kevin Hughes, the city’s director of economic development. “This is their biggest project to date” in Suffolk.

The city also has been able to stave off the loss of 3,000 jobs and 600,000 square feet of space resulting from the disestablishment of the U.S. Joint Forces Command. Suffolk’s work with elected officials and decision makers resulted in a name change to the Joint Staff J7, which employs 1,500 and occupies more than 350,000 square feet of space. The Navy Cyber Command moved into 200,000 square feet of the original space and brought in 1,500 people. “It was no small feat,” Hughes says of the project. “It was so rewarding to keep what was originally gone and replace what we had lost.”

Major employers by number of jobs

Huntington Ingalls Industries Inc. (Newport News Shipbuilding)
Newport News
23,000 jobs

Sentara Healthcare
Norfolk
20,000 jobs

Virginia Beach City Public Schools
10,000 jobs

Norfolk Naval Shipyard
Portsmouth
9,000 jobs

Riverside Health System
Newport News
7,050 jobs

Norfolk City Public Schools
6,527 jobs

Chesapeake City Public Schools
6,000 jobs

City of Virginia Beach
6,000 jobs

Newport News City Public Schools
5,550 jobs

Naval Medical Center Portsmouth
5,400 jobs

Source: Hampton Roads Economic Development Alliance

Eastern Virginia’s recent deals

Mills Marine & Ship Repair
Suffolk
142 jobs

Bauer Compressors Inc.
Norfolk
130 jobs

Architectural Graphics Inc.
Virginia Beach
125 jobs

Franklin Lumber LLC
Isle of Wight County
72 jobs

Oceaneering International Inc.
Chesapeake
67 jobs

Urology of Virginia
Virginia Beach
66 jobs

PRUFREX Innovative Power Products
Virginia Beach
60 jobs

Hampton Farms
Southampton County
60 jobs

Plains All American Pipeline
York County
60 jobs

High Liner Foods Inc.
Newport News
57 jobs

Sources: Virginia Economic Development Partnership, Hampton Roads Economic Development Alliance