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Tag: infrastructure

Virginia is CNBC’s Top State for Business for record sixth time

Virginia regained its crown as the No. 1 state in CNBC’s annual America’s Top States for Business rankings released Thursday, winning the top spot for a record sixth time.

The cable business news network once again praised Virginia for having “the nation’s best education system and policies that give companies room — both literally and figuratively — to grow.” In particular, the Old Dominion ranked first place in the nation for education, third for infrastructure and fourth for artificial intelligence, with CNBC noting that the commonwealth is home to the world’s largest concentration of data centers, through which more than 70% of the world’s internet traffic travels.

“But where Virginia’s infrastructure really shines is in the wealth of shovel-ready sites the state offers for companies that want to build fast,” the network said. “The state’s economic development arm has certified dozens of sites across the commonwealth, promising that all utilities and infrastructure can be in place within 18 months.”

Virginia ranked fifth for business friendliness, with CNBC noting that the commonwealth wasn’t “friendly enough” to land a pet project of Virginia Gov. Glenn Youngkin, a failed proposal to build a $2 billion arena in Alexandria for the Washington Capitals and Wizards. (Democratic state Sen. Louise Lucas, chairman of the Senate Finance and Appropriations Committee and a key opponent of the deal, tweeted Thursday, “We wouldn’t be the number one state for business if we had wasted billions of taxpayer dollars on a vanity arena project. You’re welcome Wannabe VP Pick for Tyrannical Trump.”)

CNBC also pointed out that though the commonwealth was ranked No. 9 in the nation for workforce, it has a problem with outmigration, with “too many workers moving out [and] not enough moving in.” And it noted that while the commonwealth is rich in data centers, that’s caused a strain on the state’s power grid.

Virginia scored 1,595 out of a possible 2,500 points in the network’s Top States study, finishing in the top 50% or better in each of 10 major categories. The commonwealth came in second to North Carolina in 2023, but this year, the two states switched positions, with North Carolina ranking second. In 2022, Virginia ranked third overall.

In 2021, Virginia took the top spot in the annual rankings of business-friendly states for a second, consecutive time. Virginia also won the top ranking in 2019, 2011, 2009 and 2007, the first year CNBC began ranking the states. CNBC did not rank the states in 2020 due to the pandemic.

“How exciting and what an honor it is to have CNBC here recognizing Virginia as the top state for business,” Virginia Gov. Glenn Youngkin said during a live interview from Virginia Beach on CNBC’s “Squawk Box” Thursday. “I think we work incredibly well together. Economic development is a team sport, and our administration has taken huge strides over the last 2 1/2 years to address some real areas of importance. Talent is always top of the list, and our talent accelerator is now rated the top talent accelerator in America.

“Business-ready sites and infrastructure continue to be a top need for businesses, and we’ve allocated $550 million over the last three years to make sure that we have shovel-ready sites. And then, finally, of course, power — our all-American, all-of-the above power plan is taking big strides. Yesterday, we announced a big step for a potential siting of a small modular reactor in Virginia to be the first.”

Youngkin added that he believes $5 billion in tax cuts in the first two years of his term were key to Virginia’s success in attracting and retaining companies. “We made Virginia’s business climate even better by streamlining regulations and cutting the red tape,” the governor said, adding that the state has 240,000 more people employed than it did before his term began in January 2022. He also noted that former members of the military — including 700,000 veterans living in Virginia — are “one of the things that make Virginia great.”

Asked if Virginia is in play this year in the presidential election, Youngkin said he believes it is, even though President Joe Biden won Virginia by 10 points over former President Donald Trump in 2020. “The next year,” the governor said, “we’re able to win it by two.” Youngkin bypassed a question about whether he believed he was still a possible Trump vice presidential candidate pick, but said he is “very enthusiastic about the prospects for President Trump and whoever he chooses as his running mate.”

Highlighting the state’s divided government, House of Delegates Speaker Don Scott lauded Youngkin and Democratic legislators Sen. Louise Lucas and Del. Luke Torian, who chair the two legislative bodies’ finance committees. “We invested in our future — our children. Virginia is back on top,” Scott tweeted. “We raised minimum wages and gave teachers pay raises! More importantly, we protected reproductive freedom and bodily autonomy.”

CNBC based this year’s rankings on 128 metrics — up from 86 last year — across 10 categories: workforce; infrastructure; cost of doing business; economy; life, health and inclusion; technology and innovation; business friendliness; education; access to capital; and cost of living. Infrastructure was the most heavily weighted category this year.

“With six wins — and three in the last five years — Virginia is our most decorated state. It’s easy to see why,” CNBC special correspondent Scott Cohn said. “In both Republican and Democratic administrations, the state has shown how much it cares about business, and how carefully it can listen to companies. Plus, year after year, Virginia offers the training, talent, and the infrastructure for success.”

According to CNBC, Texas, Georgia and Florida rounded out the top five spots in this year’s rankings.

“Being named America’s Top State for Business is a testament to the incredible progress being made throughout the Commonwealth, not least by the many thousands of businesses who call Virginia home,” Virginia Economic Development Partnership President and CEO Jason El Koubi said in a statement. “This recognition is years in the making, and I am incredibly grateful to all of our state, regional and local partners that contributed to this distinction.”

Barry DuVal, president and CEO of the Virginia Chamber of Commerce and a former state secretary of commerce and trade, issued a statement as well: “Virginia’s ranking as the Top State for Business reaffirms our conviction that Virginia is the premier state for business. It highlights our strong education system, availability of business-ready sites and Virginia’s commitment to economic development and a culture of innovation and entrepreneurship. This recognition also supports our strategic approach to grow Virginia’s position as the leading state for business through our targeted policy recommendations in Blueprint Virginia 2030.”

Another former state secretary of commerce and trade, Todd Haymore, now managing director of Hunton Andrews Kurth’s Global Economic Development, Commerce, and Government Relations Group, said, “Over 25 years in public and private sector economic development, I’ve learned that the fundamentals like education, workforce, infrastructure and site readiness are what really matter, and that is where Virginia shines. Virginia is back in the top spot because we invest in the fundamentals, maintain a bipartisan commitment to pro-growth and pro-business policies, and because we have really smart, talented people working to create jobs and opportunity, from the governor’s office to the legislature, and from VEDP all the way down to the local level.”

Virginia’s category rankings in the 2024 CNBC Top States for Business were as follows:
  • First place — Education
  • Third — Infrastructure
  • Fifth — Business friendliness
  • Eighth — Access to capital
  • Ninth — Workforce
  • 10th — Economy
  • 15th — Technology and innovation
  • 19th — Cost of living
  • 19th — Quality of life
  • 24th — Cost of doing business

Virginia Business Deputy Editor Kate Andrews contributed to this article.

Biden executive order on Chinese cranes affects Port of Va.

President Joe Biden issued an executive order Wednesday addressing cybersecurity and espionage concerns over Chinese-made cranes in use at U.S. ports, including the Port of Virginia. Additionally, the Biden administration announced a plan to invest $20 billion on infrastructure security at U.S. ports, including support for domestic manufacturing of ship-to-shore cranes.

National security concerns about espionage and other cyber crime risks associated with ship-to-shore cranes manufactured by Shanghai Zhenhua Heavy Industries Co., known as ZPMC, became public in March 2023 following a report from The Wall Street Journal. ZPMC is owned by the Chinese government, and its major shareholder is China Communications Construction Co.

In a press briefing on Tuesday, Rear Adm. John Vann, commander of the U.S. Coast Guard Cyber Command, said: “The People’s Republic of China-manufactured ship-to-shore cranes make up the largest share of the global market and account for nearly 80% of cranes at U.S. ports. By design, these cranes may be controlled, serviced and programmed from remote locations. These features potentially leave PRC-manufactured cranes vulnerable to exploitation.”

Federal officials would not disclose if there have been any known cybersecurity incidents associated with the ZPMC cranes.

The issue is so critical, Vann said on Tuesday, because “America’s system of ports and waterways accounts for over $5.4 trillion of our nation’s annual economic activity, and our ports serve as a gateway for over 90% of all overseas trade.”

All 27 of the Port of Virginia’s ship-to-shore cranes were manufactured by ZPMC, according to Cathie Vick, the Virginia Port Authority’s chief development and public affairs officer. The port also has four cranes on order from ZPMC that will be delivered to the Virginia International Gateway terminal in December 2024 and another four cranes that will be delivered to Norfolk International Terminals in August 2025, Vick said Wednesday.

Biden’s executive order expands the Coast Guard’s authority to address cybersecurity concerns. Additionally, the Coast Guard will issue a maritime security directive listing risk management steps for owners and operators of Chinese-made ship-to-shore cranes.

“Before any new cranes are put into service they are subject to a detailed forensic cyber analysis that is performed by one of the nation’s federal law enforcement agencies,” Vick said in a statement. “New cranes awaiting analysis are isolated with dedicated firewalls to ensure there is no contact with port networks or the internet.

“At the Port of Virginia, we take the issue of cybersecurity very seriously and work continuously to protect our operations against outside threats,” Vick continued in the statement. “As part of this effort, we undertake regular cybersecurity exercises that include close collaboration with several federal entities [and] partners in Hampton Roads to ensure readiness for multiple types of cyber events or threats. We are confident that our protocols will satisfy the requirements of the executive order.”

Biden’s executive order broadens the Coast Guard’s authority to address cyber threats, including granting the authority “to control the movement of vessels that present a known or suspected cyber threat to U.S. maritime infrastructure,” according to the White House.

Some of the cybersecurity regulations implemented in the executive order, including mandatory reporting of cybersecurity incidents or active cyber threats and inspections of relevant vessels and facilities, were already voluntarily included in the Port of Virginia’s protocols, Vick said.

The Biden administration will also direct more than $20 billion to port infrastructure investments over the next five years, including supporting domestic manufacturing of cranes, according to a White House news release. That will include funding to help Paceco, a U.S.-based subsidiary of Japanese company Mitsui E&S Co., to manufacture ship-to-shore cranes in the United States. Paceco previously manufactured cranes in the U.S. from 1958 until the late 1980s, according to the White House.

Currently, no cranes comparable to ZPMC’s are manufactured in the U.S., according to reporting from The Wall Street Journal, and an alternative crane used by some U.S. ports from Finnish company Konecranes costs about a third more.

Speaking to reporters Tuesday, Anne Neuberger, U.S. deputy national security advisor for cyber and emerging technologies, said that the administration is not looking at a “rip and replace” strategy for ship-to-shore cranes already in use, but instead was focused on setting cybersecurity requirements “to secure the existing infrastructure” and to also make sure that ports “can go [back] to buying trusted cranes and to bringing back [crane] manufacturing to the United States, given how important cranes are to port operations.”

At this time, the Virginia Port Authority does not have plans to replace its ZPMC-made cranes, and port officials have not had any discussions with the federal government about that, Vick said.

Neuberger said that while the executive order “certainly ties to particular concerns about Chinese cyber activity, we also have concerns regarding criminal activity.” She cited a criminal ransomware attack that disrupted the Port of Nagoya in Japan for more than two days in July 2023.

There have been no reports of cybersecurity breaches affecting Port of Virginia cranes, according to Vick. The federal government has not alerted the port to any instances of cranes in Virginia being used for espionage.

“We are confident that all of the cranes owned and operated by the Port of Virginia are safe and secure and will already comply with the parameters set forth in the executive order,” Vick said in a statement. “We employ best practices and will continue to collaborate with multiple federal law enforcement agencies to ensure the equipment we purchase, own and operate is here for its intended use, which is to move cargo.”

Central Va. Transportation Authority names first leader

Chet Parsons will serve as the Central Virginia Transportation Authority’s first executive director, the organization announced Thursday.

Parsons has served as director of transportation for PlanRVA, also known as the Richmond Regional Planning District Commission, since 2019.

CVTA finances transportation projects across the Richmond region. It was established by the General Assembly in 2020 to provide and direct new funding opportunities for major transportation investments in the region. PlanRVA provides staffing to assist CVTA with administration, project evaluation and prioritization and other needs.

While Parsons will be the first person to serve in the CVTA’s executive director’s position, he has acted as its administrator since its inception.

“The appointment of Chet Parsons as the CVTA’s first-ever executive director reflects the high esteem he has engendered with members of the authority,” Richmond Mayor Levar Stoney, who also serves as CVTA chair, said in a statement. “Chet’s leadership, acumen and experience in the area of transportation are second to none and we are confident that he will help us move forward progressively and thoughtfully in addressing the region’s most important transportation needs.”

The CVTA has supported more than $460 million in regional transportation projects, in addition to more than $77 million in funding to the Greater Richmond Transit Co. (GRTC), which operates bus lines throughout the region. It has funded 45 projects, including widening 29 miles of Interstate 64 in New Kent County and developing parts of the 43-mile Fall Line Trail between Ashland and Petersburg, as well as a connector trail and bridge to the Henrico County’s upcoming GreenCity development.

Parsons has also served as a senior planner/project manager for Fortune 500 infrastructure engineering, planning and consulting firm AECOM, executive director of the Greater Morgantown Metropolitan Planning Organization in West Virginia and as a senior planner for Goochland County. He received a master’s degree in urban and regional planning from Virginia Commonwealth University and a bachelor’s degree from North Carolina State University. He holds certifications from the American Planning Association and its American Institute of Certified Planners.

“The CVTA has already made a significant contribution to the transportation infrastructure of Central Virginia, and I’m excited at this opportunity to build on the momentum moving forward,” Parsons said in a statement. “We are focused on ensuring that tax dollars going into the CVTA are leveraging critical investment in our communities — investments that will help grow the region and enhance our quality of life.”

Virginia rises to No. 2 in CNBC’s Top States for Business

Rated America’s best state for education, Virginia climbed to the No. 2 spot in CNBC’s 2023 Top States for Business rankings, with North Carolina taking the top spot for the second year in a row.

“Virginia is our most decorated state, a five-time winner,” the cable business news network said Tuesday, “but you’ll pay dearly for doing business here, one reason Virginia comes up just short this year.”

CNBC ranked Virginia the top state for business in 2021, 2019, 2011, 2009 and 2007. This year, while CNBC rated Virginia No. 1 for education and No. 4 in access to capital, it rated the commonwealth 34th for cost of doing business, giving it a C-minus grade. Virginia improved to a C-plus grade in cost of living, up from a D-plus in 2022. CNBC gave Virginia B grades in workforce; infrastructure; economy; life, health and inclusion; and technology and innovation. Virginia scored A’s in business friendliness; education; and access to capital.

Virginia was ranked the No. 3 state for business by CNBC in 2022.

Virginia Gov. Glenn Youngkin has noted that the high cost of living and doing business, especially in Northern Virginia and other urban sectors, is a major focus for his administration, offering tax cuts as a salve. Another administration focus is getting more industrial sites shovel-ready, to help prepare land for megaprojects like Lego Group’s $1 billion manufacturing plant in Chesterfield County, which broke ground in April.

A major reason Virginia doesn’t have as many big deals like this, compared with North Carolina and other Southern states, is because the state government hasn’t invested nearly as much money in prepping large land tracts for construction. Youngkin proposed $450 million more in the state budget for site preparation, but as of mid-July, Senate Democrats and House Republicans had not passed an amended budget.

“While the governor is always pleased with Virginia receiving accolades, rankings only tell part of the story,” Youngkin’s spokeswoman, Macaulay Porter, said. “Today’s CNBC rankings show that while Virginia has made gains under Governor Youngkin’s leadership, Senate Democrats need to come together to lower the cost of doing business and the cost of living. Virginia needs to move forward as a leader in business and become more competitive and fund critical priorities. The governor’s budget amendments addressed these issues head on with common-sense tax relief for Virginia families and local businesses. Virginians need a budget that moves the commonwealth forward and addresses these obstacles to growth so that Virginia can thrive.”

As for this year’s Top States for Business winner, North Carolina was also rated No. 1 for workforce this year, with CNBC saying of the Tar Heel State, “Educated workers are flocking here, and state worker training programs are among the most effective in the country.” North Carolina’s economy rated third in the nation, as CNBC lauded its “stable state finances and a healthy housing market.” It also ranked seventh for education.

“To win Top State for Business, you got to have the best workforce, and North Carolina has the most well-educated, dedicated and diverse workforce in the country. … We invest in our people. We know that they are the foundation of our success,” North Carolina Gov. Roy Cooper said Tuesday, speaking with CNBC’s “Squawk Box” on the lawn of the historic Biltmore Estate in Asheville.

However, CNBC noted political disharmony in North Carolina, with its Republican legislative supermajority this year passing a 12-week abortion ban over the veto of Cooper, a Democrat. CNBC, which included reproductive rights among its Top State metrics this year, rated North Carolina 34th in the nation for life, health and inclusion.

Also in this year’s rankings, Tennessee came in third place, with CNBC citing its infrastructure and community college system, but knocking the Volunteer State for “high crime and a crackdown on LGBTQ rights.” Georgia took the No. 4 slot, with CNBC noting that Hartsfield–Jackson Atlanta International Airport is the world’s busiest airport, but dinging the Peach State for “poor health care and limited worker protections,” rating it 43rd for life, health and inclusion. Minnesota came in fifth overall among states this year. While the North Star State ranked well for road infrastructure and its growing semiconductor industry, CNBC criticized it for higher tax rates and lesser economic development incentives.

CNBC based this year’s rankings on 86 metrics — down from 88 last year — across 10 categories: workforce; infrastructure; economy; life, health and inclusion; cost of doing business; technology and innovation; business friendliness; education; access to capital; and cost of living. Workforce is the most heavily weighted category and considers a state’s concentration of science, technology, engineering and math (STEM) workers, the percentage of workers with college degrees, and workers with associate degrees and industry-recognized certificates. 

Virginia Business Deputy Editor Kate Andrews and Associate Editor Katherine Schulte contributed to this story.

Maymont issues RFP for $10M infrastructure project

Maymont, a historic public park and estate in Richmond, issued a request for proposals this week for an estimated $10 million infrastructure improvement project for the Maymont Mansion and wildlife habitats.

Part of the Maymont 2025 campaign, the project includes replacing the roof of the mansion and modernizing its ventilation, fire suppression and safety. The project’s second scope is upgrading and retrofitting the park’s wildlife habitats, which house rescued native Virginia species, and adding habitats for two more species. Maymont plans to expand accessibility for disabled people and expand public viewing areas.

An $8 million grant from the U.S. Department of Commerce’s Economic Development Administration’s American Rescue Plan Travel Tourism and Outdoor Recreation program will help fund the project. Maymont will raise $2 million in matching funds.

“The EDA grant program is intended to bolster tourism in the Central Virginia region, and these funds will help Maymont build resiliency and capacity to handle more visitors more safely, long into the future,” Maymont Foundation Executive Director Parke Richeson said in a statement. “As we approach Maymont’s 100th anniversary as a public space in 2025, this investment will ensure Maymont continues to delight, educate and inspire people for another hundred years.”

The chosen bidder will design and coordinate the project’s construction phase. Proposal submissions are due by Dec. 21. Maymont expects to announce the winning bidder in June 2023, with construction set to start in July 2023 and be completed by July 2024.

Maymont has completed several projects lately, renovating the Maymont Farm in 2017, expanding the Robins Nature Center in 2020 and opening a new welcome center and classroom in September.

Maymont is a 100-acre estate that James and Sallie Dooley, who lived there from 1893 to 1925, gave to the public. It has more than 800,000 guests annually. Since 1975, the Maymont Foundation has maintained and operated the estate.

Everything is not awesome

When Lego Group representatives toured Chesterfield County’s Meadowville Technology Park on a winter day early this year, they didn’t speak.

As with most industrial site visits, the county economic development authority staffers conducting the tour didn’t yet know which company they were working with, although they’d answered a site consultant’s request for proposal. The execs from the Billund, Denmark-based toymaker sought to keep it that way, avoiding revealing their Danish accents by letting their consultants do the talking.

“They told us later on, ‘The day we saw the site, we knew it was where we wanted to build. It was instant,’” recalls Chesterfield Economic Development Director H. Garrett Hart III.

In June, Lego held a festive news conference with Virginia Gov. Glenn Youngkin, announcing the company’s plans to build a $1 billion manufacturing plant on 340 acres at Meadowville to turn out its brightly colored toy bricks.

The problem? Despite local and state efforts at  marketing industrial sites in the commonwealth, the Lego factory is the only manufacturing project requiring an estimated 250 or more acres that Virginia has landed in the past seven years.

From January 2015 through September 2022, 121 new industrial projects requiring an estimated 250 or more acres were announced in the Southeast, according to the Virginia Economic Development Partnership. Combined, those projects generated more than $25 billion in capital expenditures and an estimated 58,000 jobs.

And Virginia won just one: Lego. 

VEDP President and CEO Jason El Koubi says winning manufacturing megaprojects is critical to meeting Virginia’s job growth goals. Photo by James Lee

The commonwealth’s shortage of large, project-ready sites is the largest deterrent to Virginia landing these projects, economic development officials say.

Industrial megaprojects are worth competing for, says VEDP President and CEO Jason El Koubi: “If we want to achieve Gov. Youngkin’s goal of [creating] 400,000 jobs over his four-year term, if we want to position Virginia as a job growth leader, winning the big projects is critical.”

As of August, nearly 100,000 more Virginians were employed than at the end of January, when Youngkin began his term, figures that can be attributed partly to pandemic recovery. Even so, Youngkin, a former co-CEO of Washington, D.C.-based private equity firm The Carlyle Group, has said that he thinks the commonwealth has a long way to go in economic development — even as Virginia held the top ranking in CNBC’s Best State for Business report in 2019 and 2021 and currently ranks No. 3. (See related Youngkin interview)

Big sites have big payoffs. Between 2018 and 2021, large projects requiring 250 acres or more comprised 15% of companies’ site-search requests in Virginia but accounted for 51% of potential jobs and 78% of potential capital expenditures, according to VEDP.

Manufacturing projects also matter for small metro areas and rural regions of Virginia.

“For many regions of Virginia,” El Koubi says, “manufacturing projects represent the single largest industry sector by jobs of their announcements over the last five years. Winning in manufacturing and other industrial sectors is critical for the economic growth and vitality of many of Virginia’s regions.”

Virginia has reliably secured projects in the so-called “golden crescent” stretching from Northern Virginia south to Richmond and Hampton Roads but needs to diversify its economic development into other areas, says Gentry Locke Consulting President Greg Habeeb, a Republican former state delegate who represented Roanoke. Habeeb, who now represents companies exploring economic development deals in the commonwealth, would like to see Southwest or Southern Virginia land a car manufacturer or another project comparable to Lego.

“We have large swaths of Virginia with very talented workers, with low cost of living … where we have not been as good at landing the really big projects. That to me is kind of the next phase,” he says.

The lay of the land

Manufacturers’ decisions on where to locate are multifaceted, but site availability is the first step.

“If you didn’t even have the sites, then you couldn’t be out there doing your permitting activity, getting your utilities ready,” says Chris Lloyd, McGuireWoods Consulting LLC’s senior vice president of infrastructure and economic development.

“One of the most common reasons that Virginia has been eliminated [in the selection process] for large manufacturing projects is because we do not have an inventory of very large sites of sufficient readiness to meet the needs of those projects,” El Koubi says.

Virginia’s largest VEDP-certified site — those ready for construction in 12 to 18 months — is the Southern Virginia Megasite at Berry Hill, owned by the Danville-Pittsylvania County Regional Industrial Facilities Authority. Of the site’s 3,528 acres, about 1,900 are easily developable. The site has water, electricity and sewer infrastructure, and construction on a connector road will start in January.

Although Virginia economic development officials pitched the site to Hyundai Motor Co. executives, Hyundai selected a location near Savannah, Georgia, for its $5.5 billion electric vehicle and battery manufacturing plant. Announced in May, it’s expected to create 8,100 jobs.

Virginia has not kept up with other states’ site development efforts, says McGuireWoods Consulting’s Chris Lloyd. Photo courtesy McGuireWoods Consulting LLC

“We had a 2,200-acre megasite. Even though it wasn’t pad-ready, all the due diligence and the zoning had been complete. That’s a big, big thing that companies are looking for, especially [for] megaprojects like this, where time is everything,” says Hugh “Trip” Tollison, president and CEO of the Savannah Economic Development Authority, part of the joint development authority that acquired the Georgia site for $60 million in 2021. The authority started work on due diligence, zoning, wetland impact studies and other necessary prep for the site about eight years ago, completing it ahead of the acquisition.

Including the Berry Hill site, VEDP lists only six certified sites with 250 or more acres in Virginia, two of which are privately owned, and only two sites of 1,000 or more acres. The Southern Virginia Megasite is the only property of those six that VEDP lists as pad-ready — graded and ready for the development of flat parcels that can support construction — in its site database. So far, 200 acres of the Southern Virginia site have been graded, and another 65 acres are under development.

A farmland property in Chesapeake could become another 1,000-plus-acre site, but it’s currently privately owned and zoned for agriculture. In 2017, property owner Frank T. Williams proposed the city create a 1,420-acre megasite there — the Coastal Virginia Commerce Park. As of September, an application to rezone the land was set to go before the city planning commission in November. Chesapeake City Council in 2018 approved an amendment to the city’s comprehensive plan to allow for the park. Council must sign off on the rezoning application in order for the Chesapeake Economic Development Authority to purchase the site and begin development.

Public ownership is a major competitive advantage, as manufacturers are focused on speedy approvals and construction.

“The essential question throughout the last six years was, ‘Well, it’s a great site, but you don’t own it.’ And we said, ‘Yeah, you’re right. We don’t own it,’” says Tollison with Savannah’s EDA. “And until we really owned the site and could control our own destiny, it was a difficult proposition to convince a company like Hyundai to come to a site that we didn’t own.”

In contrast to Virginia, North Carolina has four sites available that are larger than 1,000 acres. The state realized it needed to develop sites to compete for megaprojects about 15 years ago, says Christopher Chung, CEO of the Economic Development Partnership of North Carolina (EDPNC).

“There were a lot of these automotive assembly plants that were announced in the late ’90s through probably [the] mid part of the 2000s,” he explains, “and during that stretch, we just did not have a good site that was under control, assembled, optioned [and] had design and engineering — if not actual infrastructure — extended to them, and other states did.”

North Carolina’s state legislature authorized a site-readiness program but didn’t always allocate funding to it. Nongovernmental agencies, like the Joseph M. Bryan Foundation of Greater Greensboro and the Golden LEAF Foundation, which administers tobacco settlement agreement funds to North Carolina’s rural and economically distressed areas, filled gaps.

In December 2021, Toyota announced it would build a $1.3 billion electric vehicle battery manufacturing facility, expected to generate 1,750 jobs, at North Carolina’s Greensboro-Randolph Megasite. In August 2022, Toyota announced an additional $2.5 billion capital investment in the project, adding 350 jobs.

North Carolina’s western neighbor also joined the race to land manufacturing megaprojects years ago. In 2009, Tennessee purchased 4,100 acres of former farmland that became the Memphis Regional Megasite. By the time it landed a project in September 2021, the state had invested at least $174 million into developing the site.

Its new tenant is a joint venture between Ford Motor Co. and SK Innovations for a $5.6 billion, 3,600-acre electric truck and EV battery plant, which will create a projected 5,600 jobs.

Below the curve

Why are these states lapping Virginia? It comes down to funding and priorities.

Virginia has historically made much smaller investments in site development than its neighbors.

Manufacturing megaprojects weren’t always a priority for Virginia, says Lloyd with McGuireWoods. “I think some of it was, we enjoyed several decades of success with economic development projects, and maybe we weren’t as focused on that as other places,” he says. “We were seeing the big office projects, the Northern Virginia economy was humming along and … we weren’t as diligent as some of the other states in order to pursue those.”

In 2021, the Virginia General Assembly allocated $5.5 million for the Virginia Business Ready Sites Program (VBRSP), a discretionary VEDP program that provides grants to localities for site characterization and development. But in previous years, the state dedicated about $1 million to the fund annually. It’s difficult to calculate the cost of developing Virginia’s sites, El Koubi says, as VEDP has only preliminary information for some sites, and the VBRSP wouldn’t bear some costs, like utility infrastructure.

In comparison, Tennessee this year announced nine site development grants that totaled about $7.6 million. In 2021, Tennessee awarded almost $12.8 million in these grants. North Carolina’s Golden LEAF Foundation budgeted $15 million for its site development program this fiscal year.

However, Virginia’s 2022-24 state budget, signed into law in June, included a historic $159 million for the VBRSP to support site development. In former Gov. Ralph Northam’s outgoing budget, he proposed the program receive $150 million. While campaigning in 2021, Youngkin said he would support shifting $200 million in federal stimulus funding toward improving site readiness.

Among the VBRSP’s goals are providing localities with grants to develop new, “high-win potential sites” — properties that can support market demand and are expected to land a big project within 18 months of becoming project-ready. In September, VEDP began reviewing localities’ site-development grant applications. VEDP expects to announce awards in January 2023.

This is not a one-and-done solution, however. Virginia needs to continue allocating funds of this magnitude to site readiness in order to be competitive, El Koubi says.

To the south, North Carolina is chugging ahead on further development. In its budget signed in July, North Carolina launched a megasite fund with an initial $1 million for EDPNC to work with a site selection consulting firm to identify the state’s next megasites. Next year, EDPNC will present up to five potential sites to the legislature for development funding.

A more nebulous problem for Virginia is how it’s perceived by potential investors. 

Although the commonwealth’s competitors know it isn’t the case, company executives might not see Virginia as a manufacturing state, North Carolina’s Chung says. “I just know being kind of next door to Virginia for eight years, Virginia’s perception in the market does tend to be heavily dominated by Northern Virginia,” which is driven by the defense contracting and technology sectors.

El Koubi acknowledges the same issue. “I would say that there’s a gap between the reality of Virginia’s strengths as a manufacturing state and the perceptions of Virginia, in part because of the underinvestment in marketing.”

VEDP’s current annual economic development marketing allocation, excluding tourism, is $2.7 million. Meanwhile, in June 2021, VEDP’s North Carolina counter-part launched a $3 million national advertising campaign focused on business recruitment. The EDPNC is set to receive $10 million each year for the next three fiscal years to continue the campaign.

Pittsylvania Economic Development Director Matthew Rowe agrees that companies’ perceptions of Virginia have been slow to change. “I think Virginia’s just now getting into the megasite game,” he says. “I think when a big company’s like, ‘I need a megasite,’ they’re automatically thinking of North Carolina, Kentucky, Tennessee, Georgia, Alabama.”

Gaining recognition and credibility once a state has a site takes time.

While having dinner with one company’s representatives, Rowe asked why they were looking at other Southeastern states when the Southern Virginia Megasite was closer to their customers. They answered that, in the eyes of their board, states that had recently won large projects must be doing something right.

But about 12 months ago, as its site-readiness advanced, the Pittsylvania site began receiving more interest, Rowe says.

Although he’s tight-lipped about the names of interested companies, Rowe hints that the Southern Virginia Megasite could land a deal comparable to Lego: “We literally do helicopter tours probably once a month with name-brand companies that most people would recognize.” 

Construction starts on I-495 express lanes extension

Virginia and Transurban North America officials held a groundbreaking Monday for the $660 million extension of the Interstate 495 express lanes in Fairfax County, Gov. Glenn Youngkin announced.

The 495 Express Lanes Northern Extension (495 NEXT) project is occurring on a 2.5-mile stretch between the Dulles Corridor and the George Washington Memorial Parkway and will add tolled express lanes in each direction. The project is estimated to generate more than $880 million in economic benefits and 6,300 jobs.

“The 495 NEXT project represents the commonwealth’s commitment to improving regional infrastructure and traffic flow for Virginians, our visitors and the broader business community,” Youngkin said in a statement. “Together with our partners from the public and private sectors, we are prioritizing investments in Virginia’s transportation network to keep people, goods and our economy moving.”

The project is designed to reduce congestion, support new transit services and minimize cut-through traffic in residential communities. It’s estimated to cut express lanes users’ travel times by up to 50% and reduce crashes by 20%.

Its scope includes the replacement or rehabilitation of seven bridges, replacement of nine noise walls and construction of another, environmental commitments to manage stormwater, four miles of bicycle and pedestrian construction and funding for new American Legion Bridge bus service connecting Virginia and Maryland.

Transurban, an Australian company with North American operations based in Falls Church, is Virginia’s private partner and operator of the interstates 495, 95 and 395 express lanes.

“495 NEXT expands the benefits of faster and more reliable travel to more drivers in the region,” Transurban North America President Pierce Coffee said in a statement. “We know at Transurban that regional mobility is strengthened when the public and private sectors come together and we are seeing another strong example of that marking today’s milestone.”

Transurban and the Virginia Department of Transportation completed an agreement for 495 NEXT in October 2021, and Transurban selected Lane Construction as the project’s design-build contractor. On Feb. 28, Transurban secured financing through a mix of equity and debt, including loans through the federal Transportation Infrastructure Finance and Innovation Act and the Virginia Transportation Infrastructure Bank.

The project includes the replacement or rehabilitation of seven bridges, replacement of nine noise walls and construction of another, environmental commitments to manage stormwater, four miles of bicycle and pedestrian construction and funding for new American Legion Bridge bus service connecting Virginia and Maryland.

Crews will continue early exploratory activities like surveying and begin to prepare for construction in the coming months. The extended lanes are scheduled to open in 2025.

HII division announces new VP of infrastructure and sustainability

Newport News-based Fortune 500 military shipbuilder HII announced Wednesday that Eric Crooker is the new  vice president of infrastructure and sustainability at its Pascagoula, Mississippi-based Ingalls Shipbuilding division.

In this role, Crooker will focus on compliance and enterprise risk management along with overseeing environmental; health; safety and security; and facilities and maintenance elements. His team will oversee environmental, social and governance expectations.

“I am pleased to announce this strategic alignment of several of the most critical elements of our business,” Ingalls Shipbuilding President Kari Wilkinson said in a statement. “The purpose of this organizational shift is to increase the collaboration between the teams already ensuring the health and protection of our people and our shipyard, and to enable sustainability for future generations of shipbuilders to come.”

Crooker has been with Ingalls for 10 years and worked in operations, facilities, legal and security. He previously worked in corporate law, compliance, emergency preparedness and crisis management.

He is a second-generation shipbuilder and holds a bachelor’s degree in economics and a law degree from Tulane University.

Coalfield Expressway could have $12.8B impact, study says

The cumulative economic impact of the Coalfields Expressway (CFX) during a 50-year span is estimated to be $12.8 billion in 2021 dollars, according to a study by Richmond-based Chmura Economics & Analytics presented Tuesday.

The CFX is a proposed limited-access highway that would run through Southwest Virginia and southern West Virginia. It is designated as U.S. Route 121 and a congressional high priority corridor.

West Virginia has started on the CFX. In Virginia, only a shared section with U.S. 460 in Buchanan County is funded.

The Virginia Coalfields Expressway Authority and the Virginia Coalfield Economic Development Authority requested that Chmura conduct the study, building on a study it finished in 2013. The Virginia CFX Authority Board heard the results Tuesday in Lebanon.

The study found that while the completed roadway would cost $3.1 billion, each dollar invested could yield $3.10 in economic impact over the highway’s lifespan.

The study conclusion anticipates that construction of the CFX would inject an annual average of $225.4 million into the local economy from 2013 through 2038 and that it would generate 1,543 jobs each year in that period. The construction’s one-time impact is expected to reach $5.9 billion in the corridor from 2013 to 2038, of which $4.1 billion would be in direct construction spending. The cumulative ripple effect of the capital investment could generate $1.8 billion in spending and 13,859 cumulative jobs in the corridor.

According to the study, “CFX can help improve travel efficiency and provide cost savings. The total user benefits are estimated to reach $89.2 million in 2039.”

Chmura estimated that the CRX could support 79 service businesses, which would likely be clustered around access points on the roadway, in 2039. The businesses could generate $151.9 million and create 1,236 jobs.

State and local governments would reap $7.8 million in 2039 from sales tax, corporate income tax and individual income tax, the study estimates.

The study notes that the CFX would benefit mining, manufacturing and agricultural businesses by providing easier access to markets. The presence of an interstate highway could also increase the appeal of the region to expanding and relocating firms, as well as increasing population and tourism growth and improving the region’s quality of life.

Parsons Corp. names connected communities business unit president

Peter Torrellas became president of Centreville-based defense contractor Parsons Corp.’s connected communities business unit on Monday.

Torrellas will be based in Centreville and will serve as a member of the company’s executive leadership team. He will report to Parsons President and CEO Carey Smith.

“Peter is a recognized leader in delivering results at the intersection of technology and critical infrastructure,” Smith said in a statement. “His deep industry experience across the markets where the Parsons connected communities business unit operates, combined with his expertise in driving game-changing infrastructure innovation, is invaluable at a time when the United States is shifting to smarter infrastructure.”

Torrellas previously served as managing partner and vice president of the digital cities and infrastructure practice at Siemens Advanta, the digital transformation consultancy and professional services arm of Siemens AG. Before that, he was head of smart cities and communities at Siemens Smart Infrastructure. He also served as chief technology officer at Siemens Infrastructure and Cities. He has been hosted by the United Nations, World Bank Group, United States Conference of Mayors, National Governors Association and other forums.

“Parsons is in a unique position to lead the digital transformation of our nation’s critical infrastructure,” Torrellas said in a statement. “I am excited to join the Parsons team at this moment and to be a part of that journey.”

Founded in 1944, Parsons, which employs more than 16,000 people in 24 countries, works in defense, intelligence, security and infrastructure engineering, focusing on technology.