The top trending stories on VirginiaBusiness.com from July 15 to Aug. 14 were led by an exclusive update on the Virginia Beach Oceanfront surf park, which is being developed by music icon Pharrell Williams and Venture Realty Group.
Starting construction in October or November, the $350 million mixed-use surf park development will also include a 5,000-seat indoor/outdoor performing arts venue. (July 28)
The 640,000-square-foot processing facility is Amazon.com Inc.’s first cross-dock fulfillment center in Virginia. (Aug. 5)
Construction will begin in October or November on the Atlantic Park surf park development planned for Virginia Beach’s Oceanfront. Rendering courtesy Venture Realty Group
In a two-year post, Old Dominion University Chief Integration Officer Alicia Monroe will oversee the creation of an academic health sciences center in partnership with Eastern Virginia Medical School and Sentara Healthcare.(July 19)
The State Corporation Commission greenlighted Dominion Energy Inc.’s 2.6-gigawatt, 176-turbine Coastal Virginia Offshore Wind project, slated to be the nation’s largest offshore wind farm.(Aug. 5)
Last week Amazon.com Inc. opened its new, 640,000-square-foot processing facility in Chesapeake, the global e-tailer’s first cross-dock fulfillment center in Virginia.
About 900 of the 1,000 workers that Amazon announced it would be hiring for the facility are already on the job, an Amazon spokeswoman told Virginia Business.
Located at 5045 Portsmouth Blvd., the Chesapeake center receives and consolidates products from vendors and ships them to surrounding fulfillment centers within Amazon’s network. A similar facility planned for Stafford County will create 500 jobs and is expected to be operational by the second half of the year.
“Amazon has quickly become one of Hampton Roads’ largest and most engaged employers,” Hampton Roads Alliance President and CEO Douglas L. Smith said in a statement. “The opening of this facility in Chesapeake represents yet another milestone in their tremendous growth in the region, aided by the impressive collaboration between our partners in the city of Chesapeake, [the] Virginia Economic Development Partnership and the Port of Virginia. We are confident that this is only the beginning of Amazon’s relationship with the Hampton Roads community.”
Full-time employees at the Amazon facility make $18 an hour, and earn benefits such as a 401(k) with 50% company match and up to 20 weeks of parental leave, the company says.
Amazon has opened facilities all over the commonwealth, first launching its Virginia operations in Sterling in 2006. Since 2010, Amazon has invested more than $34 billion in Virginia through fulfillment centers, cloud infrastructure and research facilities. The e-commerce giant has made 30,000 direct hires and created 96,000 indirect jobs, according to a news release. Amazon is also building out its multibillion-dollar HQ2 East Coast headquarters in Arlington County.
In Virginia Beach, most tourists flock to the Oceanfront. But just a couple blocks west, you’ll find an area that feels a little more artsy and a lot more local.
In the 15-block ViBe Creative District, situated between the Virginia Beach Convention Center and the Oceanfront, coffee shops and restaurants operate out of former industrial spaces, alongside fences and crosswalks decorated with colorful murals.
Local business owners started discussing the need for creating a unified district around 2011. Over the next few years, the effort grew. By 2015, Virginia Beach City Council passed an ordinance establishing the ViBe as the city’s official creative district. What was once an underdeveloped and rundown industrial area — a place that was “not for people,” as one longtime resident puts it — has blossomed into a cultural mecca with trendy shops and weekend farmers markets.
Kate Pittman, executive director of the nonprofit ViBe Creative District organization, which supports and promotes the district, says the district’s founders deliberately planned for it to become the “No. 3 destination” in Virginia Beach, behind the Oceanfront and the upscale Town Center, a mixed-use district with a blend of retail, restaurants, hotels and office towers.
“The ViBe district is something that has very much that local flavor and really is the kind of locals’ opportunity to win and live the life of their dreams in their own hometown,” she says. “So, for us, we think it’s a beautiful asset [for] tourism because while [tourists are] here in Virginia Beach exploring the Oceanfront, they can come inland just a few blocks and get to meet and see local business leaders and local artists engaging in beautifying Virginia Beach and making it just something new and different and really enriching.”
The ViBe district’s creation was no coincidence. It’s a primary example of placemaking — a term developers use to describe the purposeful development of people-centric public spaces and districts. Placemaking is defined by vibrant, transit-oriented walkable neighborhoods and a mix of retail, offices, residential and even hotels.
From farm to metropolis
Placemaking is more than just physical buildings or a design philosophy, says Juanita Hardy, managing principal of Silver Spring, Maryland-based Tiger Management Consulting Group LLC and a former senior visiting fellow for creative placemaking at the Urban Land Institute. It’s about what goes on around a development, including parks, public art and events programming — everything that attracts people to spend time in an area.
While there are multiple ways of interpreting it, placemaking in Virginia dates back at least 60 years, when developers had a vision for the transformation of Tysons Corner. What had once been a rural crossroads marked by farms and a mom-and-pop gas station has grown into a thriving edge city lauded by planners and developers as one of the nation’s premier examples of placemaking.
Now known as simply Tysons, it evolved from office parks and a sprawling shopping mall into a budding metropolis that is now home to corporate headquarters for Fortune 500 companies such as Freddie Mac, Capital One Financial Corp., Hilton Worldwide Holdings Inc. and Booz Allen Hamilton Inc.
Tysons “represented something new and profoundly different for Fairfax and all of the suburbs,” says Terry Clower, a professor of public policy at George Mason University and director of Mason’s Center for Regional Analysis.
Featured in the 1991 book “Edge City: Life on the New Frontier,” by Joel Garreau, Tysons forged the way for the success of other planned communities and developments.
“I don’t think Reston could have happened without the success of Tysons,” Clower says, referring to the similarly successful Fairfax County community that also began as a planned development in the 1960s and has now grown into a nearly 16-square-mile district featuring suburban neighborhoods, corporate office towers and the mixed-use Reston Town Center.
While placemaking is hardly a new trend, the idea of placemaking as an economic development panacea and redevelopment tool has gained popularity, with local governments even creating positions to support it.
“In conversation after conversation with business executives, we hear that a sense of place is paramount,” says Anthony Romanello, executive director of the Henrico County Economic Development Authority, which appointed a dedicated placemaking manager this year. “Creating workplaces that are attractive, fun, walkable and engaging is as essential to economic development as low taxes, good roads, quality schools and a pro-business climate.”
Virginia offers a variety of examples of placemaking in different stages of development, ranging from billion-dollar projects in the planning stages to mature communities like Tysons.
Changing identities
In Arlington County, a new neighborhood, National Landing, is rising around Amazon.com Inc.’s $2.5 billion-plus HQ2 East Coast headquarters.
Bethesda, Maryland-based JBG Smith Properties, the real estate company developing HQ2 and the surrounding area, is aiming to create a “vibrant, transit-oriented, walkable” neighborhood there, “with ground-floor retail and a mix of uses,” says company Vice President Jack Kelly.
National Landing encompasses three older neighborhoods: Potomac Yard (straddling the Alexandria-Arlington line), Crystal City and Pentagon City (both in Arlington). In decades past, these were largely business districts that emptied out at the end of the day, encouraging car-centric commuting back and forth from the suburbs. But local economic developers and JBG Smith are hoping to unite them under the National Landing moniker as one downtown district — a place where people can live, work and play.
The late 2018 announcement that HQ2 was coming to Arlington presented the opportunity for a “big shift in our planning and development … to move toward good urbanism,” says Tracy Gabriel, president and executive director of the National Landing Business Improvement District (formerly known as the Crystal City Business Improvement District).
Amazon HQ2 will have about 4.9 million square feet of office space, divided across two phases: Metropolitan Park, the first phase, is set to open in 2023, with two 22-floor office towers, a 2-acre public park and 65,000 square feet of ground floor retail. The second phase, PenPlace, slated to open in 2025, includes plans for three additional 22-story towers. It’s also expected to feature HQ2’s centerpiece, the distinctive, 354-foot-high spiral-shaped Helix building.
But more than that is planned for National Landing.
“Everything we do is rooted in that idea that we’ve got a big opportunity to really change the identity of a place that’s been around a long time,” Kelly says.
That means creating public spaces where people can gather, as well as adding design elements to create a sense of continuity in the neighborhood. “It’s really all about that civic space,” he says, “identifying those areas that are meaningful to the community … and then creating a landscape and streetscape that is attractive and unifying … across large areas.”
While National Landing is already well underway to fulfilling its vision of becoming a new community, other placemaking projects in Virginia are in earlier stages.
In Henrico County, developers are preparing to redevelop the former Best Products Co. corporate headquarters campus, which closed in 1997, into GreenCity, a $2.3 billion, 200-acre mixed-use “ecodistrict” that will include an up-to-17,000-seat multipurpose arena; two or three hotels; about 2,200 housing units; and 2.2 million square feet of office space.
Developers Susan Eastridge and Michael Hallmark brought the privately funded GreenCity project to Henrico after a similar, publicly funded project they pitched to Richmond, the $1.5 billion Navy Hill development, failed to receive support from Richmond City Council.
Henrico’s government has embraced GreenCity, which was announced in December 2020 and approved for rezoning by the Henrico County Board of Supervisors less than 10 months later. GreenCity’s full buildout will take 10 to 12 years, says Eastridge, CEO of Fairfax-based Concord Eastridge Inc. Construction is expected to begin by late 2023 or early 2024.
One of the core components of the project is the arena, which developers hope will attract major sporting and entertainment events. Hallmark, founder of Los Angeles-based Future Cities LLC, has a background in designing arenas. The co-founder of a handful of sports arena architecture firms, he helped lead the design of projects such as Los Angeles’ Crypto.com Arena. He hopes that GreenCity’s status as an ecodistrict — a development focused on environmental sustainability — will draw interest from large music acts that have pledged to make their tours ecologically friendly.
He and Eastridge also anticipate that GreenCity will be a magnet for businesses and residents who care about saving the planet. GreenCity’s sustainability features include devoting more than 20 acres of rooftops for a solar energy farm and harvesting and reusing rainwater.
JBG Smith Properties is developing National Landing as a “vibrant, transit-oriented, walkable” mixed-use neighborhood around Amazon.com’s HQ2 East Coast headquarters in Arlington, says company Vice President Jack Kelly. Photo by Will Schermerhorn
Places in the pipeline
Around the commonwealth, placemaking can also be seen in the planning and creation of new buzzworthy downtown districts. Examples range from Norfolk’s Military Circle Mall redevelopment and Richmond’s Diamond District to Chesapeake’s Summit Pointe.
Norfolk is in early negotiations with developers, including music icon and Virginia Beach native Pharrell Williams, to redevelop the old Military Circle Mall property into Wellness Circle, a proposed $1.1 billion mixed-use community with 1 million square feet of office space, a 200-room hotel, 1,100 new housing units and a 15,000-seat arena. The project’s other developers include Virginia Beach-based Venture Realty Group and California arena management company Oak View Group. (Two other development teams, including groups connected with Virginia Beach hotelier Bruce Thompson and Pro Football Hall of Famer Emmitt Smith, submitted competing proposals for the project.)
In nearby Chesapeake, Fortune 500 discount retailer Dollar Tree Inc. is developing a downtown district around its 12-story corporate headquarters built in 2018. The $300 million Summit Pointe development is expected to have 1 million square feet of office space, 500,000 square feet of retail and 1,400 residences when all 70 acres are fully built out.
In 2018, Chesapeake Mayor Rick West described Summit Pointe as “the beginning of a new downtown Chesapeake.”
That’s how Chris Williams, a senior vice president with Dollar Tree and its Summit Pointe Realty subsidiary, sees it, too.
“There really isn’t a place [like this] in Chesapeake, so I think between the restaurant and the residential spaces we are building, it gives the community a place to come and enjoy,” says Williams, who now sees people in Summit Pointe gathering at Wasserhund Brewing Co. in the evenings or jogging around the streets. “It really becomes a community.”
Another district primed for placemaking is the area around the Diamond, the aging stadium that’s home to Richmond’s Minor League Baseball team, the Flying Squirrels. The city wants to build a new baseball stadium as the centerpiece of a new, pedestrian-friendly residential, business and entertainment district. It’s planned for a 67-acre site that currently includes the stadium and underdeveloped properties alongside Interstates 64 and 95, not far from the popular Scott’s Addition neighborhood. Three teams have submitted competing redevelopment proposals. The city’s evaluation panel was expected to recommend a developer in late July to Richmond City Council, which would have to approve the development agreement.
Good ViBes
While National Landing, GreenCity and other places are in earlier stages of development, Virginia Beach’s ViBe Creative District, which has been around for about seven years, is blossoming.
After the city redeveloped the convention center in 2005, there wasn’t anything nearby to attract convention-goers — just lots of vacant storefronts and industrial properties. “There was a real need to … breathe new life into this area,” says Pittman with the ViBe’s nonprofit booster organization.
In response to that problem, local business owners Laura Wood, whose family owns Croc’s 19th Street Bistro, and Andrew Fine, co-chairman of The Runnymede Corp., came up with the idea for the ViBe, rallying businesses and property owners to develop the community.
Together, Wood and Fine co-founded the ViBe. Working with the city and the Hampton Roads Community Foundation, they were able to launch the nonprofit group and hire Pittman in 2016. The nonprofit, which has raised more than $1 million since its founding, has evolved into an entity that is able to collaborate with the city’s economic development office to create a matching grant program for the district’s small businesses.
Today, the ViBe has a coworking space, restaurants and artsy shops, and hosts bustling flea markets and farmers markets during weekends.
The ViBe’s nonprofit developed a cohesive identity for the ViBe by engaging local artists to produce an array of colorful neighborhood identifiers such as fence murals and brightly painted street meters, signaling the district’s emphasis on creativity.
Michael Hallmark, founder of Future Cities LLC, is co-developing GreenCity, a $2.3 billion redevelopment of the former Best Products corporate headquarters in Henrico County into a mixed-use ecodistrict with hotels, housing, offices and a multipurpose arena. Photo by Matthew R.O. Brown
“Creative placemaking through art supports a triple bottom line for sustainable communities and creative energy enhanced by creative arts,” says Wood, and that translates into economic benefits, health and environmental benefits, and social cohesion.
“We believed these creative and public art spaces must be discovered, seen, felt, heard, tasted, smelled and touched,” Wood says. “It could be explored on fence walls, streets, sidewalks, parking lots, open spaces and gardens, alleyways and buildings. I saw a blank canvas for ViBe and the 19th Street corridor via the Old Beach Farmers Market to create a heartbeat in our neglected neighborhood that could be filled with authentic local food, farmers, spaces with paint, native gardens and an environmentally friendly, artful soul and emotion to entice, with creative opportunities to be discovered.”
Another integral figure in the ViBe’s development is L.G. Shaw, president of Wave Riding Vehicles, a Virginia Beach-based retailer and manufacturer of surfboards and sporting apparel and goods.
Growing a community is not a new concept to Shaw. “Being surfers first, we’ve always had to build our own sort of clubhouse and community here in Virginia Beach,” he says. “Surf shops have always been a placemaking headquarters on accident — that’s where [surfers] went back in the day.”
WRV had unused warehouse spaces around the district, so Shaw decided to lease the spaces to “cool little artistic” businesses like North End Bag Co., where shoppers can buy handbags made by hand right on premises. Nearby, Igor’s Custom Signs & Stripes makes hand-painted signs, banners and murals, and Jars of Dust makes and sells handcrafted ceramics carried by national retailer Anthropologie.
More than 50 businesses have opened or expanded operations in the ViBe since 2015, and real estate values within the district rose by more than $45 million collectively between 2015 and 2021.
It shouldn’t come as a surprise, then, that other developers are hoping to capture some of the ViBe’s vibe.
“I think the ViBe district has organically and authentically evolved into a vision of what Virginia Beach could be,” says Donna MacMillan-Whitaker, managing partner of Venture Realty Group, which is co-developing the nearby
$350 million Atlantic Park with Pharrell Williams. “We want to expand on and help anchor that.”
Tysons is a nationally recognized example of placemaking, evolving from a rural crossroads in the early 1960s to a budding metropolis that is a headquarters for several major global companies, including Capital One Financial Corp. and Mars Inc. Photo by Will Schermerhorn
In its first phase, set to break ground in October, the Atlantic Park project, which will be about three blocks from the ViBe, calls for a 2-acre, manmade wave lagoon, 120,000 square feet of retail, 310,000 square feet of residential living space, 15,000 square feet of office space and a 3,500-seat entertainment venue.
The ViBe was “a true grassroots effort by a passionate and dedicated community group,” MacMillan-Whitaker says. “Look around the country at other successful cities — which cities are expanding, retaining their talented youth, growing their population, their tourism, and even their wages? Art and culture and placemaking are what people want to be a part of.”
Ardine Williams, vice president of HQ2 workforce development for Amazon.com Inc., has retired — again — Amazon confirmed this week.
Williams, who had been one of Amazon’s most high-profile Virginia executives, was leading the effort to hire 25,000 workers by 2030 for Amazon’s multibillion-dollar HQ2 East Coast headquarters in Arlington. So far, about 5,000 HQ2 workers have been hired, as of April.
Williams retired from Amazon within the past few weeks, and a replacement has not yet been named, an Amazon spokesperson told Virginia Business. She could not be immediately reached for comment.
The HQ2 executive went to work for Amazon in 2014 as vice president, Amazon Web Services, Global Talent Acquisition, after initially retiring from Intel Corp., where she had served as vice president of HR enterprise services.
In a January 2020 interview with Virginia Business, Williams described how Amazon lured her out of retirement just five months after she left Intel. First, she worked in recruiting for Amazon Web Services, then, in 2017, she became vice president, people operations, for Amazon’s global human resources. Following Amazon’s 2018 announcement that it would be building its East Coast headquarters in Virginia, Williams was named vice president of HQ2 workforce development.
From 2018 until the COVID-19 pandemic hit, Williams often served as the public face of Amazon HQ2.
Undertaking a series of well-publicized listening tours around Virginia in 2019, she met with state and local officials, school superintendents, chambers of commerce, and other organizations. One of the tours took her through Southwest Virginia with then-Gov. Ralph Northam to promote workforce development. She also addressed a crowd of about 5,000 job seekers during a September 2019 career fair Amazon held in Arlington.
Before joining Amazon, Williams worked in multiple roles for Intel Corp. from 1997 to 2014. She also worked for Hewlett Packard and Behring Co.
Prior to that, she served in the U.S. Army, working technology jobs in the Signal Corps before being attached to DARPA (the Defense Advanced Research Projects Agency). While at Amazon, she was recognized for her work supporting job recruitment for military veterans and their spouses.
When it comes to building warehouses and distribution centers, one company has sought out Virginia over and over again: Amazon.com Inc.
The e-commerce giant began opening facilities in Virginia in 2006 and since then has opened more than 30 facilities in the commonwealth, with more on the way as it seeks to shrink the time between a customer’s click and the delivery of their package — in spite of the nation’s labor shortage and supply chain woes.
Virginia’s economic development officials have made a flurry of announcements of new Amazon fulfillment and distribution centers, which now employ more than 30,000 full- and part-time workers in the state, following the company’s 2018 decision to build its East Coast headquarters — HQ2 — in Arlington. The company expects to hire at least 4,000 more people in the commonwealth after current industrial projects are completed during the next two years.
In February, Amazon announced it will bring a 1 million-square-foot, nonsortable fulfillment center to Augusta County, creating 500 jobs. It’s expected to be operational in spring 2023. Before that, in November 2021, Amazon said it would build a 630,000-square-foot facility at Northern Virginia Gateway in Stafford County, set to open in the second half of 2022, creating 500 jobs. A similar facility is planned in Chesapeake, set to open by July. And those are just a few of the recent announcements.
“Amazon operates more than 30 facilities in Virginia, from Norfolk to Bristol and everywhere in between. We are proud to provide jobs for more than 30,000 [workers] while boosting the overall economy,” says Maura Kennedy, Amazon’s economic development manager for Virginia. “Amazon’s success and our ongoing expansion efforts in the Old Dominion are a tribute to the diverse and skilled workers that call Virginia home. I look forward to seeing our continued growth for years to come.”
Some of Amazon’s largest projects in Virginia are set to come online this year, including the 3.8 million-square-foot multistory robotics fulfillment center in Suffolk that is set to create 1,000 jobs. When it opens this spring, it will be the largest industrial building in the state. Meanwhile, in Henrico County, a 650,000-square-foot Amazon robotics fulfillment center is being built on a 119-acre site adjacent to Richmond International Raceway. Set to be finished in October, that project also is expected to create 1,000 jobs.
Amazon has “a pretty significant presence in Henrico, beyond the facility that they’re building,” says Anthony Romanello, executive director of the Henrico Economic Development Authority. Amazon rents space for last-mile delivery in Westwood and near the racetrack, and Romanello says Amazon’s expansion there has been well-received by other county businesses.
“Everything I’m hearing has been very positive,” Romanello says. “There’s a lot of excitement about the project. Certainly right now, in industrial construction, it’s been challenging to find materials [and] to find skilled labor, so when you have a project of this magnitude, it certainly exacerbates the market forces there.”
However, he notes, those challenges were in place before the Amazon project came along.
Compared with industrial projects that require megasites of more than 100 acres, Amazon needs less land for its buildings, says Virginia Economic Development Partnership President and CEO Jason El Koubi. However, the e-tailer does have to have utilities, fiber-optic cable and other “shovel-ready” components in place, Romanello says.
Amazon is building a 650,000-square-foot robotics fulfillment center expected to open in October in eastern Henrico County. Photo by Kira Jenkins
Giant footprints
Aside from job creation, Amazon also is having a major impact on commercial real estate, both in creating higher demand for land and causing prices to rise in some markets.
“They’re growing at such a rapid pace, they are singlehandedly driving a lot of demand and taking up a lot of space all on their own,” says Geoff Poston, senior vice president of Cushman & Wakefield | Thalhimer’s Hampton Roads industrial group.
Amazon mostly leases property, but sometimes the company buys land, though Poston expects the company will acquire more properties once the pandemic-driven demand for warehousing slows down.
Going back to 2020, he points out, five of the top six commercial real estate deals in the Hampton Roads region that year were made by Amazon.
“It’s pretty astonishing for our market,” he says. “Hampton Roads is the 38th [largest] metro [area in the nation], and to have them take down that much space in our market, it’s got to have an effect. As the market tightens and there is less space, rates will go up and demand gets higher, and there is more competition. Maybe in an indirect way or a small way, they are having an effect.”
For example, Poston says, in Suffolk, land near Amazon’s robotics fulfillment center is at a premium, and individual leasing costs also have been affected by the e-tailer. “They have so much money and are able to afford more and muscle other tenants out if they are competing over a space,” he says. “They’re not afraid to pay.”
Amazon is likely to remain a significant player in the state’s industrial real estate market for some time to come, driving prices up but also increasing interest in Virginia among other companies, particularly in the logistics space.
In essence, says El Koubi, Amazon’s outsized Virginia presence has allowed the state to attract and retain other industrial projects during the past couple of years, “reinforcing the advantages that make the commonwealth a leader in the supply chain industry.” ν
AutoZone Inc. plans to build a $185.2 million warehouse and distribution center in New Kent County, creating 352 jobs, Gov. Glenn Youngkin announced in February. The 800,000-square-foot facility will serve as the auto parts company’s East Coast distribution operation. Based in Memphis, Tennessee, AutoZone has more than 6,000 stores nationwide and reported $14.6 billion in sales in fiscal 2021. The deal includes a $2.5 million grant from the Commonwealth’s Opportunity Fund that former Gov. Ralph Northam approved to assist the county, and AutoZone is eligible for benefits from the Port of Virginia Economic and Infrastructure Development Zone grant program. (VirginiaBusiness.com)
Churchill Downs Inc. entered into an agreement to acquire Peninsula Pacific Entertainment LLC, the parent company of Colonial Downs Group and Rosie’s Gaming Emporiums, for $2.48 billion, Churchill Downs announced in late February. The acquisition is expected to close by the end of the year, although it is dependent on approval from the Virginia Racing Commission and similar entities in New York and Iowa. Pacific’s assets in Virginia include the Colonial Downs Racetrack in New Kent and six Rosie’s sites across the state, as well as The Rose, a $400 million gaming facility and hotel being built in Dumfries, set to open in late 2023. (VirginiaBusiness.com)
Massachusetts-based scientific equipment and software supply company Thermo Fisher Scientific Inc. will invest $97 million to expand its laboratory operations into three new locations in the greater Richmond area, a project expected to create more than 500 jobs, Gov. Glenn Youngkin announced in March. Two of the labs will be at the former Toys “R” Us store in western Henrico County, and the third will be at the VA Bio+Tech Park in downtown Richmond. (VirginiaBusiness.com)
The University of Virginia Foundation wants to add a massive new mixed-use development with up to 1,400 homes to its North Fork industrial park property in Albemarle County, but concerns about water infrastructure could stop it in its tracks. In February, the foundation requested a rezoning of 172 acres of its approximately 540 acres from Planned Development Industrial Park to Neighborhood Model Development, to allow residential, commercial and retail uses. The Rivanna Water and Sewer Authority, though, has expressed concerns around the size and timing of the project. (The Daily Progress)
Virginia Commonwealth University received an unprecedented $104 million donation from Dr. Richard Todd Stravitz and his family’s Barbara Brunckhorst Foundation to support liver research, President Michael Rao announced in February. It’s the largest gift in VCU’s history and also believed to be the largest publicly shared gift to support liver research in the country. It will support the liver institute that VCU first announced in December 2021. The gift also establishes two endowed chairs for medicine and microbiology at the School of Medicine. Stravitz, whose maternal grandfather founded Boar’s Head Provisions Co. Inc., is a clinical professor at VCU and was medical director of liver transplantation at VCU Health’s Hume-Lee Transplant Center for a decade. (VirginiaBusiness.com)
Walgreens will invest $34.2 million to establish a micro-fulfillment center in Hanover County, a project expected to create 249 jobs, Gov. Glenn
Youngkin announced in late February. The 65,686-square-foot facility will be located at the Atlee Station Logistics Center and outfitted with automated machinery to allow a flexible operating model. Walgreens operates nearly 9,000 stores across the country and its territories, including 200 stores in Virginia, where it employs 4,600 people. The Virginia Economic Development Partnership worked with the county and the Greater Richmond Partnership to secure the project. (VirginiaBusiness.com)
NORTHERN VIRGINIA
Alarm.com announced in late February it will expand its technology research and development division at its Tysons headquarters, investing $2.6 million and creating 180 jobs, according to Gov. Glenn Youngkin’s office. The technology company already has several hundred workers in Virginia, and the expansion is expected to create additional engineering positions within its research and development division. Alarm.com was named to Fortune magazine’s list of 100 Fastest Growing Companies in 2021, and the company’s platform that integrates with a growing variety of Internet of Things (IoT) devices has more than 8.4 million subscribers. (VirginiaBusiness.com)
Reston-based Leidos Holdings Inc. won an $11.5 billion contract to consolidate and streamline the Department of Defense’s Fourth Estate information technology systems into one common network, the Pentagon announced in March. More than 380,000 employees comprise the Fourth Estate, the nickname for DOD’s nearly two dozen defense agencies and field activities outside the military services and intelligence community. Under the contract, the Fortune 500 government contractor is expected to unify the agencies on one Defense Information Systems Agency network, with a potential 10-year period of performance and a base ordering period through February 2026. (VirginiaBusiness.com)
Reston-based cybersecurity firm Mandiant Inc. has entered into an agreement to be acquired by Google LLC in an all-cash transaction valued at $5.4 billion, the companies announced in March. If approved, it would be Google’s second-largest acquisition ever, behind the $12.5 billion Motorola deal in 2012. When the deal closes later this year, Mandiant will join Google Cloud.(VirginiaBusiness.com)
The $1.9 billion, all-cash acquisition of Falls Church-based government contractor PAE Inc. by an affiliate of Maryland-based aerospace defense contractor Amentum Services Inc. closed on Feb. 15. Founded 67 years ago, PAE was acquired by Lockheed Martin Corp. in 2006, sold to two other owners, and then became a publicly traded company in 2020 onthe Nasdaq. Following the sale, former PAE CEO John Heller was tapped as Amentum’s next CEO. He was set to take his new post March 28. (VirginiaBusiness.com)
Tysons-based broadcast and digital media giant Tegna Inc. will be acquired in a $5.4 billion cash deal by an affiliate of New York hedge fund Standard General LP, the company announced in February. Standard General is one of Tegna’s largest shareholders and will team up with New York-based private equity firm Apollo Global Management to buy the media company for $24 per share in cash, with the deal set to close in the second half of the year. Tegna, which owns 64 TV stations in 51 U.S. markets, said the deal has an enterprise value of $8.6 billion, including the assumption of debt. The company was created in 2015 after Gannett Co. Inc., the nation’s largest newspaper publisher, spun off its broadcast and digital media divisions. (VirginiaBusiness.com)
The Washington Commanders NFL team is considering three sites in Virginia for a new stadium, which would serve as the centerpiece to a vast entertainment complex, according to planning documents prepared for the project. The Ashburn-based team is considering options in Sterling, Woodbridge and Dumfries, sites all at least 27 miles from Washington, D.C., and only the Sterling site would be accessible by Metro, assuming the Dulles extension on the Silver Line opens. The state’s efforts to lure the Commanders to the commonwealth have intensified, coinciding with the franchise’s rebrand in early February. (The Washington Post)
EASTERN VIRGINIA
Breeze Airways will expand flight offerings from Norfolk International Airport to Jacksonville, Florida; Los Angeles; Savannah, Georgia; and Las Vegas this summer. The new flights will range in price from $49 to $99 one-way, and increase based on customer comfort level. Breeze CEO David Neeleman said his company has five bases, including Norfolk. He says the expansion will also lead to more jobs. Breeze added flights to Long Island and Palm Beach, Florida, in February. (WAVY)
The most expensive Hampton Roads home sale on record happened in February for $9.5 million. A nearly 11,000-square-foot mansion on 3.7 acres overlooking Linkhorn Bay in Virginia Beach sold after about 18 months and was reduced from $11.8 million. The home features a saltwater pool, private sand beach and dock and was sold by former Virginia state Sen. and entrepreneur Jeff McWaters to Harbor Group International President T. Richard Litton Jr. (The Virginian-Pilot)
Demolition of the 65-year-old Ridley Place Housing Community in Newport News’ Southeast Community began in mid-February and is expected to take four months. The public housing complex will be replaced by a mixed-use, mixed-income development, including homes, commercial spaces, an early childhood center and a walking/biking trail and is part of a phased plan to revitalize the area. The $58 million Ridley project is funded by a $30 million grant from the U.S. Department of Housing and Urban Development’s Choice Neighborhood Initiative. The city devoted an additional $26.7 million of its American Rescue Plan Act dollars for the project. (Daily Press)
On Feb. 28, California-based Rocket Lab USA Inc. picked Wallops Island as the location to manufacture, assemble and launch its Neutron rocket, a move that’s expected to create as many as 250 jobs. A 250,000-square-foot complex will be built next to the NASA Wallops Flight Facility and Mid-Atlantic Regional Spaceport. Rocket Lab recently landed a $24 million contract from U.S. Space Force’s Systems Command in support of Neutron’s capability to aid national security and defense missions. (VirginiaBusiness.com)
Health care workers resigned in droves as the pandemic raged. During the past two years, Sentara Healthcare has spent more than $310 million on employee raises, benefits, gifts and other compensation to attract and retain workers. Bon Secours spent $100 million in 2021 on market adjustment pay increases and more than $87 million in bonuses related to the pandemic. Riverside Health System employees received a pay increase of up to 17% in January. Sentara says its actions led to a below average turnover rate of 14.5%, compared with a national average of 19.5%. (The Virginian-Pilot)
Former Virginia Beach Economic Development Director Warren Harris will serve no jail time after admitting to embezzling nearly $79,479 from city taxpayers during his 11-year tenure. Harris, who served from 2007 to 2018, was sentenced in Circuit Court in February and is required to repay the city. Among the expenses he charged was a 2018 trip to Spain. The city changed its policy allowing department heads to approve their own expenses after Harris’ resignation. (The Virginian-Pilot)
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Kern
Sentara Healthcare President and CEO Howard P. Kern announced his retirement from the Norfolk-based health system in early February. Kern worked in hospital administration, finance and insurance for Sentara for 42 years and has led the $9.8 billion system since 2016. Sentara was listed as one of the nation’s top five large health systems in the 2021 annual ranking by Fortune and IBM Watson Health. It employs more than 1,200 physicians and 30,000 other people. Kern said he would continue in his position until his replacement starts later this year; a search for a new CEO is underway. (VirginiaBusiness.com)
ROANOKE / NEW RIVER VALLEY
A new $11 million Lowe’s warehouse and distribution center is expected to create 70 jobs in Roanoke County, the project’s developer announced Feb. 7. Lowe’s Cos. Inc. has hired Roanoke-based Cherney Development, in partnership with North Carolina-based Samet Corp., to build a 60,000-square-foot distribution warehouse and distribution center on an 8.45-acre site in Roanoke County’s Valley TechPark. Construction is expected to begin in the next few months and be completed within about a year. (VirginiaBusiness.com)
The Mountain Valley Pipeline is facing what it calls “greater uncertainty” after losing two crucial permits and the confidence of one of its five corporate partners. Yet developers of the natural gas pipeline are not giving up, they said Feb. 22 in a conference call with financial analysts. “We’re all hands on deck to find the right path forward for MVP,” said Thomas Karam, chairman and CEO of Equitrans Midstream Corp., the venture’s lead partner. Mountain Valley, which had hoped to complete the often-delayed project by this summer, no longer expects that to happen. (The Roanoke Times)
The location of the New River Valley’s proposed rail station has been narrowed to one of two sites, each of which are in proximity to the Uptown Christiansburg mall, based on work performed by the Virginia Passenger Rail Authority. The VPRA began a feasibility study this past fall to look at potential station locations in the New River Valley and then conducted a survey that ran from Dec. 22, 2021, to Jan. 31. Respondents’ general preferences were for the two Christiansburg mall sites. The start of the New River Valley service is not expected until at least 2025. (The Roanoke Times)
Virginia Tech leaders and donors broke ground Feb. 2 on the university’s $85 million, 100,000-square-foot Hitt Hall, which will house the Myers-Lawson School of Construction. The building, which is expected to be completed in spring 2024, will feature general assignment classrooms and a 600-seat multivenue dining facility. The Myers-Lawson School is a collaboration between the College of Architecture and Urban Studies and the College of Engineering. The Virginia Tech board of visitors approved funding for the hall in August 2021. W.M. Jordan Co. is the construction manager, and the building is designed to obtain
or exceed the LEED Silver certification. (VirginiaBusiness.com)
Officials from LewisGale Hospital Montgomery celebrated the groundbreaking of the facility’s new surgical wing Feb. 24 in Blacksburg. The hospital will add more than 7,500 square feet to its surgery department, including two new operating rooms, a 15-bed post-anesthesia care unit and additional storage space. Crews will also renovate 4,800 square feet of the existing surgery center. Construction is expected to finish in spring 2023. “What we’re trying to do is continue to stay with the community as it grows,” CEO Alan Fabian said. “We’re excited to provide services here at LewisGale Hospital Montgomery rather than have people travel outside of the area.” (The Roanoke Times)
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Maxey
Roanoke College President Michael C. Maxey was elected chair of the Council of Independent Colleges’ board of directors, the council announced Feb. 7. Maxey joined the board in January 2018 and became vice chair for programs in 2021. Maxey, who has been with Roanoke College since 1985, announced in September 2021 that he would be retiring from his college presidency at the end of this academic year. He has served the longest of any Roanoke College president, having assumed the role in 2007. (VirginiaBusiness.com)
SOUTHERN VIRGINIA
The Blue Ridge Rock Festival — an event that brought a record crowd of 33,000 people to Pittsylvania County in 2021 — is steering down the road this year to a new venue at Virginia International Raceway in Halifax County. The new location was officially announced Feb. 18 when tickets went on sale for the four-day festival set Sept. 8-11. The event will be the largest on record for the road racing course tucked away in rural Alton. (Danville Register & Bee)
A spot next to the Olde Dominion Agricultural Complex in Chatham could be a good fit for a new hotel, according to a feasibility study released in February. The hotel would have easy accessibility because of its location along U.S. 29 and provide good proximity to four airports, including those in Danville, Lynchburg, and Greensboro and Raleigh, North Carolina, according to the study performed by Horwath HTL, an Atlanta-based hospitality consulting firm. The ag complex brings in more than 100,000 visitors per year for a variety of events, and a hotel there would face no direct competition from Chatham. (Danville Register & Bee)
In late February, Danville announced it had been chosen to join an initiative led by the National League of Cities and commit to increase economic inclusion and resilience for communities of color. As part of the Southern Cities Economic Inclusion initiative, Danville joins 15 other cities in the Southeast that will receive up to $30,000 in grant funding and opportunities to learn from national experts and other cities. Economic inclusion strategies involve intentional engagement by cities to implement policies and programs to expand the participation of businesses and residents of color in the economy. (WDBJ)
A subsidiary of Lowell, Arkansas-based transportation company J.B. Hunt Transport Services Inc. has acquired a subsidiary of Bassett-based home furniture and marketer Bassett Furniture Industries Inc. for $87 million. J.B. Hunt Transport Inc. finalized the purchase of Zenith Freight Lines LLC on Feb. 28, a deal funded by Hunt’s existing cash balance. (VirginiaBusiness.com)
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A familiar face will take the helm of the Danville Pittsylvania Chamber of Commerce in April. Anne Moore-Sparks will serve as the chamber’s next president and CEO, the chamber announced March 7. She replaces Alexis Ehrhardt, who left last year to become the University of Virginia’s executive director for state government relations. “Anne is well-known in the community and will bring her connections and strong interpersonal skills to the Chamber,” said John Settle, chair of the search committee. A Danville native, Moore-Sparks worked for the city school system as a community engagement and business partnership specialist, a teacher quality specialist and as director of the Danville Public Schools Education Foundation. (VirginiaBusiness.com)
Martinsville-based ValleyStar Credit Union promoted three executives to C suite-level positions in mid-February. Justin Barnes was appointed the credit union’s chief lending officer, Mendy Shaffer was tapped as interim chief financial officer and Robert Sparrow is ValleyStar’s new chief risk officer. Barnes joined the credit union in 2018 and was most recently vice president of commercial lending. Shaffer joined ValleyStar in 2018 as vice president of accounting. Sparrow joined the credit union in 2013 and was most recently vice president of risk management. (VirginiaBusiness.com)
SHENANDOAH VALLEY
Amazon.com Inc. will open a 1 million-square-foot fulfillment center in Augusta County, creating 500 jobs, Gov. Glenn Youngkin announced Feb. 23. The facility at 32 Trader Road in Fishersville will open in spring 2023 and will pick, pack and ship bulky or larger-size items, such as patio furniture, outdoor equipment or rugs. Amazon has more than 30 fulfillment and sorting centers and delivery stations in Virginia. The first opened in Sterling in 2006. (VirginiaBusiness.com)
Developer Echelon Resources Inc. of South Boston is proposing a residential and commercial complex for the 1900 and 2000 blocks of Valley Avenue in Winchester. According to information presented March 1 to the Winchester Planning Commission, Echelon intends to buy the 17.34 acres needed to accommodate the Winchester Grove mixed-use complex from its current owners — Virginia Apple Storage Services LLC and Elms Properties LLC. The property has a total assessed value of $5.76 million. Echelon would construct and manage seven buildings containing 440 apartments, 19,457 square feet of commercial and restaurant space and 13,038 square feet of indoor amenities. The rezoning will go before the Planning Commission, the Planning and Economic Development Committee and City Council. (The Winchester Star)
Harrisonburg City Council voted Feb. 22 to approve Simms Pointe, an 80-unit affordable housing development on Lucy Drive. The development is geared toward nonstudent housing. Neighbors of the property had encouraged the council to vote against the proposal, citing concerns with the traffic, safety and other impacts to the neighborhood, as well as questioning the character of the Ohio-based developer, Woda Cooper Development. The approved special-use permit requires the complex to include a 6-foot fence and at least a 10-foot-tall landscaping buffer along the southern boundary of the property (Daily News-Record)
The Rockingham County Board of Supervisors voted Feb. 23 to deny Pennsylvania-based Dynamic Energy Solutions’ request for a special-use permit to build a large-scale solar energy facility outside Dayton. The project would have encompassed about 22 acres of a 50.7-acre parcel on the west side of John Wayland Highway, southwest of Huffman Drive. Dayton Mayor Cary Jackson and the town manager, Angela Lawrence, had asked the board to deny the project, and one of the concerns board members had was that the proposed facility would have been located in Dayton‘s annexation area for future growth. (Daily News-Record)
The Winchester-Frederick County Tourism Board decided Feb. 17 that it would release $290,000 in American Rescue Plan Act funds to the Winchester-Frederick County Convention and Visitors Bureau in two phases over the next two years. Since it is jointly funded by the governments of Winchester and Frederick County, the CVB will receive $160,000 in ARPA funds from the county and $130,000 from the city. The funds are intended to support new marketing initiatives to bolster local tourism and can be used for expenses such as print, broadcast and online advertising; video production; social media campaigns; and targeted promotions. (The Winchester Star)
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William
Brandy William was appointed the next president and CEO of United Way of Northern Shenandoah Valley, effective March 15. William leads a staff of six at a United Way branch that has more than 50 community partners, 4,000 donors and 2,000 volunteers serving Winchester and the counties of Clarke, Frederick, Page and Shenandoah. She succeeds Nadine Bullock-Pottinga, who stepped down Dec. 31.
William was previously a fundraising and development specialist for the American College of Radiology and the development director for the Lorton Community Action Center. (The Northern Virginia Daily)
SOUTHWEST VIRGINIA
The Appalachian Regional Commission announced on Feb. 22 funding for two projects in Southwest Virginia. The town of Lebanon will receive $500,000 for the Russell Theater Restoration Project to renovate and reopen the 5,590-square-foot Russell Theater. The restored theater is expected to attract businesses for live performances, concerts and other events. The second project, in the town of Wise, will also receive $500,000. The project will install 5,540 linear feet of sewer line to the Hamiltontown community located along Virginia State Route 758. (Bristol Herald Courier)
The Bristol Virginia Industrial Development Authority unanimously approved transferring a 2.88-acre tract of land at retail development The Falls to Georgia-based Tidal Wave Auto Spa Properties on Feb. 23. Tidal Wave Auto Spa Properties will develop a $5 million car wash project on its half of the parcel. Developer Martie Murphy said the company hopes to open it in the fourth quarter of this year. The business will employ 12 to 15 people. The company has pledged to grade the site and prepare the pad for an adjoining business, an unnamed fast food restaurant. (Bristol Herald Courier)
Project Fuse, a regional cooperative initiative to make Southwest Virginia a location of choice for remote employment, launched Feb. 18 with the release of a playbook to attract businesses. The Lonesome Pine Regional Industrial Facilities Authority commissioned the playbook with support from the state’s GO Virginia economic development initiative and the U.S. Economic Development Administration. InvestSWVA brought project members together. The study states that to attract businesses, localities need to have ubiquitous internet connectivity and reliable transportation networks; downtown office buildings with meeting space; affordable, diverse housing options in walkable areas; and established networks with academic partners. (VirginiaBusiness.com)
Chicago-based custom sign manufacturer Signco Inc. will invest $650,000 to take over the former MC Signs facility at 334 Industrial Park Road in Bluefield, Gov. Glenn Youngkin announced March 4. Signco, which is owned by Anthony Morrone and Vince Sclafani, designs, manufactures and installs signs for many industries, and the company has developed a new manufacturing process using 3D printing to make multidimensional LED letters. Signco expects to hire 19 workers at the facility. The company employs welders, painters, assemblers and computer numeric controlled (CNC) operators. (VirginiaBusiness.com)
PEOPLE
On Feb. 22, Hard Rock International Inc. announced Allie Evangelista had been appointed as its president of hotel and casino operations in Bristol. She most recently served three years as a vice president and general manager for Penn National Gaming Inc. operations. Evangelista joined the gaming industry in 2006 as an assistant slot operations manager in Missouri and worked her way up into vice president and managerial roles at casinos in Iowa and Ohio. (VirginiaBusiness.com)
Carl Snodgrass, Wise County’s chief economic development professional for three decades, died on Feb. 3 at age 84. Snodgrass began working for the county in 1992 and remained active with its Industrial Development Authority projects. He was instrumental in recruiting Dominion Energy Inc. to build the Virginia City Hybrid Energy Center, renovating the Inn at Wise, and creating the Lonesome Pine Business and Technology Park and bringing the Mineral Gap data center to it. He had served on Wise Town Council and as mayor. Before his county employment, Snodgrass helped launch the First State Bank, of which he became president. (The Coalfield Progress)
Casey Renner has worked in four states over the course of her teaching career, and she’s never liked a school more than Arlington County’s Wakefield High School, where she teaches science and special education.
But she has also never had as much difficulty finding housing near work as she has during her 17 years teaching in Arlington. While Renner searches every year for an affordable rental where she can live with her cat and border collie, her searches repeatedly come up empty, and she has learned the art of reading the traffic tea leaves before starting her daily commute home to District Heights in Maryland, where she rents a basement apartment at below-market rate from friends.
“On a good day, my commute is 35 to 45 minutes,” she says. “On bad days, I just give up and do some errands or grade papers at Ted’s Montana Grill and drive home after 7 p.m.”
The long commutes discourage Renner and other teachers from attending students’ games and performances and offering extra help after the final bell rings.
“A big dream of mine has always been to live where I work, because I think you can make a bigger difference when you are actually part of the community where you teach,” says Kimberly Pearson, a middle school language arts teacher in Arlington.
As a single mother, Pearson had to get financial help from her parents to pay the rent on her two-bedroom apartment, which took up 56% of her annual salary.
Hoping to escape rising rents, and to invest in the community where she was teaching, she stretched to purchase a house in the Fairlington neighborhood of Arlington.
“I tried for two years to make it work, but the costs and taxes have gone up so much,” says Pearson, who tried unsuccessfully to get homeownership assistance through Arlington County’s housing office, tutored after school for extra money and worked summer school to try to make ends meet. The burden was so severe that she sold her home, moved to Manassas, and plans to seek employment closer to home.
“It felt like a judgment from the community, a message that, ‘We want someone educated and highly skilled to be here, but we don’t want you to be our neighbor,’” she says.
Casey Renner, who teaches science and special education classes at Arlington’s Wakefield High School, lives about 45 minutes away in a Maryland basement apartment she rents from friends. Photo by Will Schermerhorn
Joshua Folb, a math teacher at Washington-Liberty High School in Arlington, says the problem impacts not only teachers, but also bus drivers, custodians, cafeteria workers and others critical to school operations.
“There is almost no place left in Arlington that somebody working a job in our cafeteria could look out the door of the school and afford renting,” he says. “You really are coming in to serve the kids of other people.”
In his work on the Virginia Education Association’s resolutions committee, Folb sees the problem impacting educators across the state, to the point that the group has added housing affordability to its list of belief statements. “One of the things we believe is that school districts should pay wages that allow for an employee to live with dignity in the location in which they work,” he says. “Part of living with dignity would be not having to drive an hour and a half to make just above minimum wage.”
Across Virginia, workers at many different income levels are finding it increasingly harder to rent or buy a home in the communities where they work. This is sparking new discussions among local governments, economic development leaders and employers about how to tackle the age-old problem of affordable housing.
What is ‘affordable’?
The federal government defines housing as “affordable” if it costs no more than 30% of a household’s monthly gross income. Federal programs to support affordable housing base their qualifications on what percentage of area median income (AMI) a household earns. Most of these programs serve households making under 80% of AMI, and many are limited to those under 60% of AMI.
An analysis of federal wage data shows that an increasing portion of the workforce fits into this definition in Virginia’s most populous areas.
The average elementary school teacher in the Washington, D.C., metro area, which includes Alexandria and Arlington, makes 66% of area median income. The average police patrol salary in the Richmond area is 65% of AMI. And in tourism-heavy Hampton Roads, the average waiter or waitress brings home 29% of AMI.
In all of these markets, child care workers and home health aides — two professions that are greatly in demand — make on average under 30% of area median income. The federal government defines this as “extremely low income.”
When higher-paying jobs raise an area’s median income, but the wages of service-based jobs that are essential to the community don’t follow, many of these workers find themselves priced out of the market.
Steve Lawson, board chairman of Virginia Beach-based Lawson Cos., a multifamily development, construction and management firm, says his company is now developing more affordable housing than market-rate housing, specifically because the demand is so high. But he notes that the resources available to finance affordable housing — particularly the federal low-income housing tax credit (LIHTC) — are nowhere near enough to meet the need that exists.
While LIHTC properties are generally limited to tenants making 60% AMI or less, Lawson says there is a large segment of the renters’ market he calls “no man’s land” — people who don’t qualify for low-income housing but also can’t afford market-rate housing.
“There is a real need there,” he says. “For years, we have seen when we build a new community [that] people walk in to apply and say, ‘Please don’t tell me I make too much money to live here, because I have looked all over town for a decent place.’”
Renovating older multifamily properties is an important way to keep affordable housing on the market, says Tim Faulkner, president and CEO of The Breeden Co. in Virginia Beach. Photo by Richard George
This is a trend that Arlington County Housing Director Anne Venezia has observed in her 14 years with the county.
“We are seeing less income diversity in Arlington than we were a decade ago,” she says. Housing affordability presents an issue for some workers making up to 100% of Arlington’s median family income of $129,000. Moderate-income workers such as teachers and firefighters are having an even harder time finding a place to live.
“A decade ago, these households were able to rent in Arlington fairly easily and could pursue homeownership in some of our neighborhoods,” she says. “But the availability of housing for those groups is increasingly limited because of increasing prices and the ability of higher-earning households to pay more.”
Historically low interest rates and limited inventory drove the median home sales price for the entire state of Virginia to $350,000 in 2021, according to data from Virginia Realtors. That’s a 9.4% jump from 2020’s median home sales price, the largest increase in several years. As mortgage rates ticked up in early 2022, these homes became even less affordable.
Meanwhile, demand for rental housing has increased, driven by higher sales prices, and the average effective monthly rent cost went up 11.3% in the fourth quarter of 2021 compared with prices a year earlier. Virginia Realtors reported that it was the greatest year-over-year growth since at least 2000.
“Affordability is a growing challenge throughout Virginia,” says Lisa Sturtevant, chief economist for Virginia Realtors.
Supply-demand mismatch
Housing production in Virginia has never recovered to levels that predated the 2007-2009 Great Recession, according to a statewide housing study completed this year by Virginia Housing and the state Department of Housing and Community Development. Localities in Virginia issued 63,215 residential building permits in 2004, but that number shrank to a mere 33,813 in 2020.
Demographics compound the problem. Since 2008, Virginia’s population has grown by 10.2%. The housing supply, however, has grown by only 8.7%, according to the study. Add to this the fact that the number of households with only one or two people is growing faster than the number of larger households, and Virginia faces a crucial need to adapt its housing stock for a population that looks a lot different from just a decade ago.
“There is a real imbalance between the housing supply and the demand that is out there,” says Jonathan Knopf, vice president of Richmond-based affordable housing consultancy HDAdvisors and a researcher on the state housing study. He says the numbers tell a story that is starting to change the way state policymakers talk about affordable housing.
“Pre-2008, most of the affordable housing discussion was around very low-income people,” he explains. “But more recently, because of that lack of supply, folks in the middle-income space, especially in high-growth areas, are starting to say, ‘I make a decent amount of money; I am not a minimum-wage worker. Why is it tough for me to find affordable housing in the community that I work in?’”
Developers point out that the market is so supply-constrained that slightly older apartments don’t come at the discount they once did.
“If you look at the gap between 10-year-old product and brand-new product, that gap is not nearly what it was 10 years ago,” says Tim Faulkner, president and CEO of The Breeden Co., a Virginia Beach-based residential developer.
This means that preserving the oldest rental housing stock — and preventing it from being bought by an investor who intends to reposition it as a luxury product — has become an important piece of the affordable housing solution.
Faulkner says Breeden sees the investments it makes in its oldest housing stock — such as a $15 million renovation recently completed at Emerald Point, an 863-unit apartment and townhome community in Virginia Beach originally built in 1968 — as an important way to keep affordable housing on the market.
“The rent gaps between that level of housing and the Class A product may be as much as $1,600 a month,” he says, adding that a 5-year-old residence may carry only a $500 monthly discount compared with a brand-new development.
About 20% of units at the Monroe Gates Apartments in Hampton’s Phoebus area are reserved for renters making 80% or less of area median income. Photo by Mark Rhodes
Businesses seek a role
Bill Flattery, CEO of Carilion New River Valley Medical Center in Christiansburg, leads a group within The Blacksburg Partnership business organization seeking strategies to address the growing affordability problem in the New River Valley region.
The New River Valley Regional Commission teamed with the Virginia Center for Housing Research at Virginia Tech to conduct a housing study starting in 2018. The study identified a need for at least 5,500 income-restricted units in the region to stabilize low- and moderate-income residents who were spending more than 50% of their income on housing. Another 9,000 residents were found to be paying more than 30% of their income for housing.
Flattery says the problem threatens to make Blacksburg a less diverse community, a place where only people who make a certain income — or college students who get help from their parents — can afford to live. On a practical level, the problem is having a direct impact on business expansion plans, Flattery says, including his own hospital.
“We are competing for workers now. In order for us to keep people here, we have to do considerable wage consideration, and part of that is the affordability of housing in our area,” he says. “That middle-income group just can’t access it. This does impact our expansion plans, our ability to recruit and retain, and I know that’s true for other businesses in our area.”
Jason El Koubi, director of the Virginia Economic Development Partnership, says housing availability became an issue when Virginia was in the running recently for a major advanced manufacturing project with the potential to bring several thousand new jobs to a small metro area with a large, high-quality industrial site.
“During the recruitment process, the company expressed concerns around the housing inventory within the community that would be required to accommodate the growth from a project of its scale,” he says. “Virginia was ultimately eliminated for various different reasons, but we believe workforce housing issues were a chief concern.”
Zoning shortfalls
Housing experts and developers agree that local zoning ordinances skewed toward detached single-family homes are a major barrier to increasing the state’s housing inventory.
“The artificial restrictions on supply and land for new housing via local land-use regulation is pretty much the No. 1 challenge that we hear from housing providers across the state,” Knopf says.
In many localities, zoning policy favors traditional cul-de-sac neighborhoods in part because of the perception that denser residential developments cost more than they contribute to local coffers, with residents requiring more spending on schools, roads and other services, without bringing in the taxes that retail and employers generate.
Builders and many housing equity advocates counter that this line of analysis leaves out the benefits that new residents bring in terms of purchasing power and manpower for employers.
“It’s almost like doing a cost-benefit analysis where you only talk about the costs,” says Sturtevant, who has studied housing market trends for more than two decades. “What doesn’t get told is to what extent not having sufficient housing could hurt your overall local economy.”
A 2021 study by the Joint Legislative Audit and Review Commission (JLARC) noted that while multifamily residential is the most-needed housing type in the state, very few Virginia localities zone more than 50% of their land for multifamily. Efforts to have a parcel rezoned for this type of development can cost as much as $1 million, the report states, making it cost-prohibitive to finance a development with affordable rents.
Financing solutions
Controlling costs and providing capital lie at the heart of boosting the production of affordable housing.
Virginia Housing, previously known as the Virginia Housing Development Authority, is the state’s affordable housing finance entity. The not-for-profit organization offers a wide array of financing programs for affordable rental housing, as well as homeowner assistance, education and grants to communities.
The agency’s mixed-use, mixed-income financing has proven successful in supporting the construction of workforce housing for those making 80% of area median income or below, Virginia Housing CEO Susan Dewey says. It was an important part of the Monroe Gates Apartments complex in Hampton’s Phoebus community, where 33 of 163 units will be reserved for households in this category. The program was also used to finance the Hydro apartment complex nearing completion in Richmond’s Manchester area. Forty-six of Hydro’s 226 units will be income-restricted.
“It’s important that we talk about mixed income, and having some workforce housing mixed in with market-rate housing has been tremendous for a lot of our jurisdictions,” Dewey says.
Local governments also are exploring ways to incentivize housing production that better meets the needs of their communities.
Blacksburg is exploring a number of zoning-related changes that could make it easier for developers to build affordable housing, including expedited plan reviews for affordable projects, a density bonus in exchange for a certain percentage of below-market units, and allowing projects with affordable units to build fewer parking spaces, thereby requiring less land.
Kim Thurlow, the town’s housing and community development initiatives manager, says leaders are also looking at establishing a community land trust to promote homeownership. Under this model, which also exists in Richmond and Charlottesville, a nonprofit trust owns the land on which an affordable home is built.
This greatly reduces the cost for a first-time homebuyer, who purchases only the improvements and takes out a 99-year ground lease on the land. Deed restrictions dictate that the house be sold at a restricted price that keeps the home affordable in perpetuity, and the homeowner benefits from any appreciation in the home’s value while they live there.
“What we have learned in our research is that it is really hard for first-time homebuyers to enter into the market,” Thurlow says. “The hope is the community land trust would provide an ability to get into the market, and then when folks have the chance to establish themselves, they would reenter the traditional marketplace.”
Faulkner, Breeden’s CEO, is part of a committee examining affordable housing solutions in Norfolk. Solving the problem, he says, will require close collaboration among developers, localities, architects, real estate attorneys and the business community.
“Developers won’t do it alone,” says Faulkner. “There is going to have to be a team effort to figure this problem out.”
Virginia Tech announced Thursday morning that it is partnering with Amazon.com Inc. on an artificial intelligence and machine learning research initiative that will have a presence at both Tech’s Blacksburg campus and its emerging Innovation Campus in Alexandria.
Dubbed the Amazon-Virginia Tech Initiative for Efficient and Robust Machine Learning, the program will include doctoral student fellowships, research projects and community outreach, as well as a shared advisory board. It will be housed at Virginia Tech’s College of Engineering in Blacksburg and at the Sanghani Center for Artificial Intelligence and Data Analytics, which will be in the first building at the Innovation Campus, a $302 million center currently under construction.
“This partnership affirms the value of our connection to Amazon as we scale up project-based learning and research programs in artificial intelligence and machine learning,” Virginia Tech President Tim Sands said in a statement. “Building Virginia Tech’s strength and expertise in these fields will support critical technological advancements and our commitment to fuel workforce development in the commonwealth.”
Virginia Tech played a major role in luring the e-tail giant to Arlington, where it is building its $2.5 billion-plus HQ2 East Coast headquarters, where 25,000 people are expected to be employed by 2030. Tech has started construction of its $1 billion Innovation Campus in Alexandria, just a short distance from HQ2, and the university has pledged to produce about 16,000 more computer science and engineering bachelor’s and master’s degree graduates over the next 20 years.
“We are delighted to collaborate with Virginia Tech in launching this new initiative, which brings together the top talent in our two organizations in a joint mission to achieve groundbreaking advances in robust machine learning,” said Prem Natarajan, Amazon’s vice president of Alexa AI – natural understanding. “The proximity of this initiative to Amazon’s HQ2 will catalyze research efforts that leverage the depth of talent in the Northern Virginia area to address some of the most pressing challenges in AI.”
The Sanghani Center is supported by a $10 million gift from Reston-based Octo Consulting Group CEO Mehul Sanghani and his wife, Hema, who are both Tech graduates. According to the university, graduate and doctoral students, as well as faculty members, will have the opportunity to submit machine learning sponsored research projects for Amazon. Machine learning is a branch of artificial intelligence that focuses on algorithms that can improve performance through experience and the use of data.
Also part of the program will be a group of fellowships awarded to Virginia Tech doctoral students in the engineering school. Each Amazon Fellow will be invited to interview for a paid Amazon internship during the summer after winning the fellowship. Tech also will co-host two annual workshops, as well as training and recruiting events for students, and the partners will establish a collaborative advisory board to provide input for the program’s direction and review research proposals.
“Virginia Tech is growing research and graduate programs in critical disciplines to meet the needs of industry and fuel the tech sector economy across the commonwealth and beyond,” said Julia M. Ross, Tech’s Paul and Dorothea Torgersen Dean of Engineering. “This new partnership with Amazon will fuel ongoing and future investment in research and education in AI-centric fields, and will provide important support for graduate students in these areas. We’re also excited to have engineering faculty and students working alongside industry leaders on these important technological advances and discoveries.”
Amazon.com Inc. will partner with more than 140 colleges and universities, including five in Virginia, to provide fully-funded college tuition for its hourly employees, the company announced Thursday.
In the Richmond area, Amazon employees will have access to degrees at Virginia Commonwealth University, Reynolds Community College and John Tyler Community College. In Northern Virginia, they can go to Lord Fairfax Community College and Northern Virginia Community College. The courses can be taken in person, online or on-site at many of the company’s distribution centers.
It’s all part of Amazon’s Career Choice program, which is open to employees after 90 days of employment. They can pursue a bachelor’s degree, earn industry certifications and build other skills. The e-commerce giant made a pledge to commit more than $1.2 billion to provide free education and skills training opportunities to 300,000 of its employees by 2025.
“We’re committed to empowering our employees with easy access to the education and training they need to grow their careers, whether that’s with us or elsewhere,” Alicia Boler Davis, senior vice president of global customer fulfillment, said in a statement. “We’re thrilled today to be adding more education partners to our Career Choice program, which we hope will give our team access to the educational paths that fit their passions. Whether someone is looking to build their English proficiency skills, prepare for GED testing or earn their bachelor’s degree, we’re working to meet our employees wherever they are on their educational journey.”
Amazon has more than 30,000 full- and part-time workers in Virginia. It has 30 fulfillment, sorting and delivery stations across the state. Across the country, Amazon has more than 750,000 employees.
Amazon.com Inc. will open a 1 million-square-foot, nonsortable fulfillment center in Augusta County, creating 500 jobs, Gov. Glenn Youngkin announced Wednesday.
The facility at 32 Trader Road in Fishersville will open in spring 2023 and will pick, pack and ship bulky or larger-sized items, such as patio furniture, outdoor equipment or rugs.
“This new 1 million-square-foot fulfillment center in Augusta County will enhance Amazon’s supply chain and create 500 valuable jobs for the Shenandoah Valley,” Secretary of Commerce and Trade Caren Merrick said in a statement. “Virginia’s position as a premier logistics destination is bolstered by continued investments from industry leaders like Amazon, which is catalyzing economic development in regions across the commonwealth.”
Amazon has more than 30 fulfillment and sorting centers and delivery stations in Virginia. The first opened in Sterling in 2006.
“We are proud to expand our Virginia operations with this Fishersville fulfillment center,” said Amazon’s Vice President of North America Customer Fulfillment Melissa Nick. “This facility joins two recently launched delivery stations in Waynesboro and Louisa and will be vital to our ability to serve customers and provide great selection and fast Prime shipping speeds across the region.”
The Virginia Economic Development Partnership worked with Augusta County and the Shenandoah Valley Partnership to secure the project for Virginia. Amazon is eligible to receive benefits from the state’s Major Business Facility Job Tax Credit for new, full-time jobs created.
Other Amazon projects coming in 2022 include an inbound cross-dock fulfillment center in Chesapeake and a robotics fulfillment center in Suffolk, both opening in spring.
“Jump-starting the economy is a top priority for my administration, and we celebrate the 500 new jobs in Augusta County and a strengthened partnership with Amazon,” Youngkin said. “Amazon’s new fulfillment center in Virginia is a testament to the commonwealth’s exceptional infrastructure, competitive business costs and long-term commitment that I’ve made to make sure we are developing talent and training workers to make Virginia the best state for business.”
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