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Tag: Hampton

SEC, Hampton managing partner of BFM Fund settle charges

The Securities and Exchange Commission settled charges in early October against a Hampton-based managing partner of The BFM Fund and a limited liability company for allegedly breaching their fiduciary duties and misleading investors.

Himalaya Rao-Potlapally of Hampton is a managing partner of Portland, Oregon-based BFM Fund, a seed-stage private venture capital fund focused on founders who are Black, Indigenous and people of color. It was founded in September 2020 as the Black Founders Matter Fund I.

“Traditional venture capital … [is] a pretty small, closed system,” Rao-Potlapally told Virginia Business in May. “It’s really difficult for different types of founders to be able to access capital when there’s not a broader understanding of different lived experiences that then shape how different people articulate problems, think about solutions, all of that.”

Rao-Potlapally is the sole member and manager of LDP Partners, an unregistered investment adviser organized in May 2021 in Oregon but with its primary place of business in Hampton. Since July 2022, LDP Partners has managed one client, BFM Fund I, according to the SEC.

The SEC’s Oct. 7 order alleged that LDP Partners and Rao-Potlapally willfully violated anti-fraud provisions of the Investment Advisers Act of 1940. It issued cease-and-desist orders and censures to LDP Partners and Rao-Potlapally and ordered Rao-Potlapally to pay a $10,000 civil penalty. The company and Rao-Potlapally agreed to the cease-and-desist orders and sanctions without admitting or denying the SEC’s findings.

As of August, the BFM Fund had sold about $4.6 million worth of securities to 53 investors in multiple states, according to the SEC order.

The BFM Fund is one of seven venture capital fund managers that the Virginia Innovation Partnership Corp. is partnering with to invest $100 million in 100 Virginia-based startups. Gov. Glenn Youngkin announced the partnership, Virginia Invests, in May.

In its order, the SEC alleged LDP Partners and Rao-Potlapally breached their fiduciary duties to the BFM Fund and misled the fund’s investors in three ways:

First, in March 2023, according to the SEC order, LDP Partners and Rao-Potlapally, without notifying all BFM Fund investors, allegedly transferred $600,000 in cash out of the BFM Fund bank account to three different non-BFM bank accounts, including a personal checking account Rao-Potlapally shared with her spouse.

The investment adviser and Rao-Potlapally initiated the transfers after telling the BFM Fund’s advisory committee about concerns that the BFM Fund’s bank account would not be fully protected by the Federal Deposit Insurance Corp., according to the SEC order. In April 2023, a representative from the bank told LDP Partners and Rao-Potlapally that the funds could be returned to the BFM bank account and be fully protected by FDIC insurance, according to the SEC. In August and September 2023, LDP Partners and Rao-Potlapally returned the money, according to the SEC order.

Second, the SEC alleged that in July 2023, LDP Partners and Rao-Potlapally misled BFM Fund investors by providing a financial statement that misrepresented the $600,000 as still in the fund’s control. In November 2023, they distributed a financial statement disclosing the March 2023 transfers.

Third, the SEC alleged, LDP Partners took approximately $55,000 total in improper advance management fees from the BFM Fund in February 2023 and September 2023.

LDP Partners and Rao-Potlapally received approval from BFM Fund advisory committee members to take the fees in advance rather than on a monthly basis, but the fund’s controlling documents did not allow that and the advisory committee wasn’t authorized to allow advance fees, the SEC stated in its order.

Rao-Potlapally could not be reached for comment.

Fahrenheit Advisors hires Hampton Roads leader

Richmond consulting firm Fahrenheit Advisors has hired Stephen Hoy as managing director of business development for the Hampton Roads area, the company announced Monday. 

Hoy will develop new relationships and support existing clients from Williamsburg to Virginia Beach. 

Most recently, Hoy was director of sales and strategic partnerships for Strive, a California company that offers app- and web-based employee resources, according to his LinkedIn profile. There, Hoy launched new divisions and tailored product offerings to clients, according to a news release.

Hoy’s past work experience also includes positions as a market executive at Paycor, a human capital management platform, and as an outside sales representative for Lansing Building Products, headquartered in Henrico County. 

Hoy has a bachelor’s degree in communications from Christopher Newport University. 

Fahrenheit Advisors was founded in 2010 and consults for middle-market, Fortune 1000, nonprofit and governmental organizations. It has 140 employees.

Construction begins on Hampton Logistics Center

New York’s Turnbridge Equities and Maryland’s Manekin, both real estate development and investment firms, have begun construction on two Class A industrial warehouse buildings in Hampton off Interstate 64, located less than 20 minutes from the Port of Virginia, according to an announcement this week.

The two companies, which raised about $70 million for the project, purchased the 32-acre site from the Hampton Economic Development Authority in May for $3.03 million. Knighthead Funding, a Connecticut real estate financing company, provided a $43.75 million construction loan, and Heitman, a Chicago real estate investment management fund, provided joint venture equity. The two buildings will be at 1008 and 1012 North Campus Parkway in Hampton, and they are expected to be completed by the second quarter of 2025.

Called the Hampton Logistics Center, the project will include a 230,874-square-foot warehouse and a 275,685-square-foot warehouse that will be built simultaneously. The warehouses will feature 36-foot clear height, 185-foot rear-load truck courts and 334 parking spaces. Developers designed the warehouses to achieve a gold-level LEED certification, a ranking system that rates green buildings.

“We have spent many years looking for opportunities to develop Class A industrial product around the Port of Virginia,” John Graham, Manekin’s managing director, stated in a news release. “The size of each of the buildings will appeal to a range of tenants serving both the port and local markets.”

Gregg Christoffersen of real estate company JLL will lease the warehouses.

Liebherr to expand Newport News-Hampton facility

Newport News-based Liebherr Mining Equipment will invest $72.3 million to expand a plant at the border of Newport News and Hampton, creating an estimated 175 jobs, Gov. Glenn Youngkin announced Tuesday.

“We thank Liebherr, an international leader in mining equipment manufacturing, for its commitment to the commonwealth of Virginia,” Youngkin said in a statement. “Liebherr has recognized that Virginia is strategically located to serve as its global production headquarters for mining trucks and service customers within the United States and across the world.”

Founded in 1949, Liebherr Group is a family-owned technology and equipment producer. Founded in 1995, Liebherr Mining Equipment Newport News Co. has more than 550 employees. It manufactures industrial-scale mining trucks used to transport material at open-cast mining operations. The trucks are partly assembled, tested and certified at the plant, and complete assembly occurs at the mine.

“We are excited to expand our mining equipment facility in Newport News … to better support Liebherr Mining customers around the world,” Cort Reiser, managing director of Liebherr Mining Equipment Newport News Co., said in a statement. “We’re thankful for the partnerships with the cities of Hampton and Newport News and the Commonwealth of Virginia that have greatly enriched our operations and enabled Liebherr to bring 175 new jobs and investment to the region.”

The Virginia Economic Development Partnership worked with Newport News and Hampton to secure the project. Youngkin approved a $1.5 million grant from the Commonwealth’s Opportunity Fund to assist the cities. Liebherr Mining Equipment is eligible to receive benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant program. VEDP will support the company’s employee training through the Virginia Jobs Investment Program, a three-year incentive program that provides cash grant reimbursements for associated human resources costs after a company has had new employees on the payroll for at least 90 days.

Virginia 500 Spotlight: CLAYTON TURNER

FIRST JOB: Stock boy at Sears

WHAT MAKES ME HAPPIEST: Family and NASA

MY MOST VALUED POSSESSION: Joy

HOW I BALANCE MY WORK AND PERSONAL LIVES: By being fully present in both for all activities and interactions and not allowing artificial urgency to encroach from one to the other

TRAIT I MOST ADMIRE IN OTHERS: Caring

IF I HAD A TIME MACHINE, I’D MEET: My maternal grandfather. He was a pathfinder in a difficult time, and I would love to hear his perspectives about then and now.

NEW LIFE EXPERIENCE: Our first grandchild was born in 2022, and he is the newest light of our lives.

FAVORITE APP: Photos (1,200 of grandbaby and counting), Buffalo Bills app and airlines apps.

DID YOU KNOW? A 30-year NASA veteran, Turner has led NASA’s Langley Research Center, where scientists are working to send astronauts back to the moon and prepare for the manned mission to Mars, since 2019. He is a 1990 graduate of the Rochester Institute of Technology and started as a design engineer at NASA. Turner leads 3,400 scientists, researchers and staff.

For more information about Turner and hundreds of Virginia’s other top executives in business, government, nonprofits and education, see Virginia Business’ exclusive annual Virginia 500 power list issue.

Small biz pilot program to aid Phoebus retailers

Five small retailers in Hampton’s Phoebus downtown historic district will receive micro grants and nearly a year of free professional guidance, thanks to funding from a state grant awarded to The Retail Alliance, a nonprofit trade association in Norfolk.

The Retail Alliance and the Phoebus Partnership, a nonprofit organization bolstering area small businesses, won the $100,000 grant in October 2023 from the Department of Housing and Community Development to launch a pilot program designed to help businesses in the 86-acre Hampton community grow.

Phoebus is already part of a Main Street program helping small businesses succeed, so it made a good candidate for the pilot program, says Jenny Crittenden, president and CEO of The Retail Alliance. The goal is to create a scalable model that can be replicated in multiple communities across the state, serving as a resource for small businesses.

The grant will pay for consultants with expertise in merchandising, e-commerce and preservation of historic building facades to conduct deep dives into the five selected businesses’ physical stores, online presences and financial health. 

At the end of January, organizers were scheduled to host an information session for interested retailers, and five winning businesses were expected to be selected in March. 

Through October, owners of the five businesses will meet with The Retail Alliance and consultants and receive data and insights on their customers. At the end of the process, they will receive grants of $3,000 to $5,000 to make suggested changes.

The DHCD grant is part of the Virginia Business District Resurgence Grant program, which leverages federal American Rescue Plan funds allocated to address post-COVID recovery needs. In addition to assisting the five businesses, the grant will fund three regional business improvement workshops to be held in Hampton through the fall.

Crittenden, who has 16 years of experience working with independent downtown businesses, notes that local shop owners have differing ranges of experience and knowledge, and the grant program will take that into account as it helps them improve their processes.

“Each retailer brings a set of skills to the table, but then there are things that they could learn to do better,” she says. “And as customers, we see small businesses from the outside and enjoy the experience, but we don’t understand everything behind the scenes.” 

Virginia Business Associate Editor Robyn Sidersky contributed to this story.

Developers put Fort Monroe marina redevelopment on indefinite hold

The redevelopment of Old Point Comfort Marina at Fort Monroe has been put on hold due to rising costs, with no timeline specified for when it could occur.

Instead of negotiating a long-term development agreement, the Fort Monroe Authority (FMA) and Smithfield-based hospitality management company Pack Brothers Hospitality (PBH) are now discussing a revised management agreement, the authority announced this week. PBH had been planning to invest $45 million to build a marina, renovate two existing historic buildings into conference space and a restaurant and hotel over the water, akin to its Smithfield Station development, in a development called 37 North at Fort Monroe.

The FMA’s long-term goal is to redevelop the marina, but rising construction costs and high-interest rates “have impacted the financial feasibility for PBH” to lead the renovation and reconstruction of the marina and portions of new construction for the restaurant, according to a news release. The marina can currently accommodate more than 300 boats that are up to 50 feet in length.

“The FMA does not have a timeline for the redevelopment of the marina,” FMA Executive Director Glenn Oder said in a statement to Virginia Business. “Our goal is to ensure the marina remains operational and the tenants as well as the public experience no change in the operating status of the marina.”

The original redevelopment plan was to start construction in fall 2024, with the marina and restaurant opening in fall 2025. The proposed hotel and conference center were planned to be completed 12 to 18 months later.

PBH is currently managing the marina under the terms of a revised letter agreement effective Dec. 29, 2023. The two parties have begun working on the terms of a longer-term marina management agreement that they aim to complete by Feb. 29, which would be “an annual arrangement that allows the management of the marina to continue while also still being nimble for future opportunities,” according to Oder.

“PBH looks forward to continuing its relationship with the Fort Monroe Authority and welcomes the opportunity to advance the initiatives of the FMA through this marina management agreement,” Randy Pack, PBH president and managing partner, said in a statement.

Leaseholders of the marina, including the Deadrise restaurant, are unaffected by the announcement, according to a news release.

The FMA oversees Fort Monroe, a national historic landmark in Hampton. The authority has more than $100 million in projected investment in the next two to five years, including public and private investment in preservation, renovation and utility projects.

Va. localities crack down on short-term rentals

RICHMOND, Va. — Several Virginia municipalities have recently drafted or passed ordinances to regulate short-term rentals.

Scrutiny of short-term rentals mirrors a nationwide trend. Companies like Airbnb and Vrbo have become popular lodging options for tourists, as well as people in need of temporary housing.

Municipalities have pushed back against the rental options for reasons that include parking issues, noise complaints, trash and septic tank use volume. Supervisors have also cited concern over loss of hospitality tax revenue, as well as limiting available housing inventory.

Approximately 30 localities throughout the U.S. have regulated short-term rentals, according to a Business Insider report.

Most Virginia short-term rentals are found in more populous areas and tourist destinations, according to Capital News Service analysis of the market research site AirDNA.

Louisa County

The Louisa County Board of Supervisors passed an ordinance earlier this month to add restrictions for short-term rentals and establish the zoning districts where they are allowed.

Rental owners must provide documentation of septic system inspections and repairs to the county. The renter must have the owner’s contact information as part of the new policy. One parking space per bedroom is now required. The changes don’t take effect until Jan. 1, 2025.

Citizens told county supervisors they are concerned about the septic tank failures caused by over-occupied rentals. The new occupancy restrictions hope to limit the impact on septic systems and prevent failures.

Rentals became a hot topic in Louisa due to Lake Anna tourism. There are fewer short-term rentals than in a city like Richmond or Alexandria, but the rentals are entire homes, and a majority larger than three bedrooms, according to AirDNA data.

Short-term rentals spiked in Louisa by 130% over a three-year period, according to AirDNA, with peak occupancy in the warmer months. There are just under 60 rentals, a fraction of offerings in larger cities.

Residents are worried about the water quality due to septic failures.

“We need to be inspecting these septic systems and particularly the ones where they are being overloaded in rentals,” said Phillip Winston, a Mineral resident who spoke at the meeting.

The Virginia Department of Environmental Quality added Lake Anna to the state’s impaired, or “dirty” waters list last year, due to algae blooms. Parts of the lake have been closed multiple times due to the blooms.

The Lake Anna Civic Association recommended that occupancy be limited to two guests per bedroom to reduce the risk of septic tank damage, according to its website. The Louisa Planning Commission advised county leaders to require conditional use permits for short-term rentals, which would have regulated occupancy.

The Board did not pass that as part of the new ordinance.

Part of Lake Anna is in Spotsylvania County. Spotsylvania has drafted its own ordinance similar to Louisa.

Richmond

There are over 1,000 listed units in Richmond as of September, an increase of 76% in a three-year period, according to AirDNA data. However, the majority of the units in Virginia are not operated legally, according to a VPM review of city permits in June.

Richmond City Council recently passed a long debated ordinance that put several new regulations on short-term rentals, including reducing the number of rentals allowed on a lot in residential zoned areas.

Other ordinance changes now require the rental to be located at the host’s primary residence in all residential-zoned districts and limit the maximum occupancy of a rental from 10 to eight people.

City leaders also extended the length of a short-term rental certificate to 730 days. And voted to allow homeowners to build an accessory dwelling unit, within parameters, without a permit. These are smaller units like an in-law suite or carriage house.

The changes will help create a “convenient, attractive, and harmonious community” by limiting the number of transient visitors in residential neighborhoods, according to city planners.

Only homeowners can offer short-term rentals, something that 1st District City Councilmember Andreas Addison said there is confusion about.

He heard from several renters upset that they would be unable to generate money from renting out their apartments.

“You can not rent out your rented apartment,” Addison said. It could be cause for eviction.

Richmond increased regulations because of disturbances to residents, such as parking, trash and late-night noise, according to Addison.

“Short-term rentals I do see as a potential cause of nuisance because if you are not an owner of that house, and you’re renting it out, you don’t really care about the neighborhood,” Addison said. “You’re just there for the money.”

Caroline McDonald is a physical therapy student who plans to use Airbnb during the four months she is temporarily placed at a Richmond hospital. She used Airbnb because of the ease of rental process, which is a monthly payment with an advance deposit.

“Someone still lives there, but I’m just detached from their house,” McDonald said.

Most rentals will primarily come from pre-existing additions, because of the costs of building a unit solely for a short-term rental, according to Addison.

“I feel like a lot of the concerns and objections being raised and elevated have a place of legitimacy, but I also think they may be a little excessive,” Addison said.

Tourism was a metric that Council heavily considered when passing the ordinance.

“We can’t expect people that are going to come to visit the James River with a kayak and a bike to stay in a hotel,” Addison said.

Hampton

Hampton City Council halted short-term rental permits in August. The decision gives the city time to receive legal guidance and consider its regulatory options, according to Hampton Mayor Donnie Tuck. The pause allows for public input on how to move forward without acting on new permits, Tuck said.

Nearby Virginia Beach, a popular tourist destination, has one of the highest short-term rental listing numbers in the state at over 2,000, per market data.

Danville

Danville has seen an over 800% increase in short-term rental listings in a three-year period, according to AirDNA. The market research indicates there are currently 154 listings. Caesars casino partially opened in Danville this year, with a full opening slated for 2024.

The Danville Planning Commission recently recommended capping the number of rentals allowed in the city, along with other regulations. A public hearing about the commission’s proposals will take place on Nov. 13

Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.

Old Point National Bank hires new CFO

Hampton-based Old Point Financial has named Paul M. Pickett senior vice president and chief financial officer of Old Point National Bank, effective Oct. 24, the bank announced Wednesday.

Pickett joins Old Point National Bank from Richlands-based First Sentinel Bank, a subsidiary of First Region Bancshares, where he had also been chief financial officer and senior vice president since 2020. Before that, he was CFO for Odyssey Engines, a multistate aviation holding company, for three years. Pickett spent 26 years in public accounting prior to those roles and worked with community banks and bank holding companies. He earned a bachelor’s in business administration in accounting from Radford University and is a certified public accountant.

“We are excited to welcome Paul to the Old Point family,” Rob Shuford Jr., chairman, president and CEO of Old Point Financial, said in a statement. “He is an accomplished addition to our high-performing executive team and reflects Old Point’s commitment to excellence. His wealth of financial services experience collaborating with many community banks will be integral for executing Old Point’s strategies for continued profitability and growth.”

Old Point National Bank has 15 local offices and $1.18 billion in deposits as of June 30, 2022, according to the Federal Deposit Insurance Corp.

Hampton industrial site sells for $2.3M

A vacant industrial site on 2.8 acres in Hampton has been sold for $2.3 million, Cushman & Wakefield | Thalhimer said.

Moir Park Industrial III LLC purchased the site, which includes warehouses, from Armistead & Riprap for development. The property is located at 402 Rip Rap Road off Interstate 64.

Robert L. Phillips Jr., of Cushman & Wakefield | Thalhimer, handled the sale negotiations on behalf of the seller.