Please ensure Javascript is enabled for purposes of website accessibility
Upcoming Event

Best Places to Work in Virginia

Hamburger Menu Hamburger Menu

Tag: site development

Seeing the sites

Despite boasting a world-class port, a highly skilled workforce and easily accessible transportation infrastructures, Hampton Roads perennially comes away empty-handed in attracting large-scale industrial developments.

Chalk it up to the region’s lack of shovel-ready sites, a situation that state and local economic development and political leaders are fervently working to change. Last year, the Virginia Economic Development Partnership’s Virginia Business Ready Sites Program awarded $90 million in matching grants to 21 sites statewide with at least 100 contiguous, developable acres (or at least 50 acres in western Virginia). Three Hampton Roads sites made the list: Chesapeake’s Coastal Virginia Commerce Park, Fairwinds Landing in Norfolk and Hazelwood Farms in James City County.

VEDP President and CEO Jason El Koubi acknowledges that the state has only recently begun to significantly invest in site development, in contrast with other Southeastern states that have sunk billions into producing shovel-ready sites. In its 2022-24 budget, the state allocated $159 million to the Ready Sites Program, up from $5.5 million in 2021 — itself a bump up from about $1 million previously allocated annually by the state. In 2023, the General Assembly added an additional $200 million to the biennial state budget for the program, and in the 2024-26 budget, Gov. Glenn Youngkin has proposed $150 million in fiscal 2025 and $50 million in 2026.

With so little funding allocated for industrial site development in previous years, Virginia lost out on more than 55,000 direct jobs, 110,000-plus estimated indirect jobs and more than $124 billion in capital investment since 2016, El Koubi says. There are fewer than 10 sites larger than 250 acres ready for development across the state — and Virginia has won only one industrial megaproject in recent years: the $1 billion Lego Group toy factory, currently under construction in Chesterfield County.

Several Hampton Roads localities have teamed up to form the Eastern Virginia Regional Industrial Facility Authority, pooling resources into regional site development projects. It’s overseen by the Hampton Roads Alliance, led by President and CEO Doug Smith. Photo by Mark Rhodes

Despite more site preparation funding under Youngkin’s administration, Hampton Roads still has challenges, with fewer available land tracts for development compared with other regions. But, with some tweaks, El Koubi believes, the region can become a competitor in the industrial sweepstakes.

“There are multiple exciting site development opportunities in Hampton Roads. It’s a place where you find virtually every strength a location needs,” he says. “But because Hampton Roads has a very diverse economy with a long history and a lot of development already, most sites that are easy to be developed have already been developed, so we want to make sure we’ve very strategic about where we invest. It’s important that the region work together to invest and strategize to maximize opportunities in a way that everybody wins.”

Pooling resources

Building a successful industrial strategy is where the Eastern Virginia Regional Industrial Facility Authority (EVRIFA) comes into play. As the only entity of its type in the eastern part of the state and one of 11 in Virginia, the authority is a mechanism for multiple localities to pool regional resources into site development opportunities that benefit all of Hampton Roads.

Currently, the counties of Gloucester, James City, York and Isle of Wight and the cities of Hampton, Newport News, Poquoson, Williamsburg, Franklin and Chesapeake are members of EVRIFA, with Virginia Beach City Council voting in November 2023 to join the group in January.

Member localities invest in project sites, sharing costs and tax revenues. Municipalities with populations of less than 50,000 pay $2,000 per year for EVRIFA membership, while those with more than 50,000 residents join for $4,000 annually. Each locality has two primary and two alternate members represented on the authority’s board.

“Some communities are land-rich and cash-poor,” notes Doug Smith, president and CEO of the Hampton Roads Alliance. The region’s economic development arm, the alliance has managed EVRIFA since fall 2022. “Some have revenues but don’t have developable land. They can now team up.”

Localities are not obligated to fund site projects, with members deciding to join or pass on each proposed venture, Smith adds. “Each project is a distinct opportunity, and participation in revenues is based on the share of investment each community puts in.”

City and county officials on the Peninsula proposed establishing the authority back in 2018, with the idea that Southern Virginia localities could join later. “We’ve had conversations to get all of them in the authority,” Smith says. “We’re hopeful that all of them will by June 2024.”

Hampton, Newport News, Poquoson, Williamsburg and York and Isle of Wight counties are backing EVRIFA’s first project, Kings Creek Commerce Center in York County. The authority acquired the 432-acre parcel in 2022 from the state for $1.35 million, ultimately leasing it to Dominion Energy for a solar energy farm and is marketing the remaining 109 acres for light industrial development. “We’re showing the site to prospects and expect to see some results in the next year,” says Hampton Roads Alliance Chief Operating Officer Steve Harrison. “It’s been very well-received.”

Along with shovel-ready properties, developers want a skilled workforce, good transportation infrastructure, adequate energy supply and access to the port. “Ultimately, decisions are made on how quickly they can get a facility up and running,” Harrison adds. “That’s a driving factor. If they can’t get a site up and running quickly, they will go to a community where they can.”

Typically, sites in the region can become shovel-ready in six to 12 months. From there, the facility would open within 18 to 24 months of the contract being signed. Those time spans are significantly shorter than they were a decade ago, yet another consequence of the pandemic. “COVID impacted supply chains,” notes Smith. “You see a lot of reshoring, and folks need to move quickly to get businesses open and products moving.”

New and emerging industries such as battery storage, chip manufacturing and electric vehicle projects have bypassed Hampton Roads and Virginia for more competitive areas. “Without preparing sites and developing EVRIFA into a robust organization, we’re not going to be able to land those projects — period,” Smith says. “Everything is a cost of getting into the game.”

Hampton Roads leaders are eager for the region to become a player in the industrial site sweepstakes. Smith says whenever a large economic development project is announced in another state, he can expect a telephone call from a local political or business leader asking why Hampton Roads didn’t get the project. And “the answer,” he says, “is always that we didn’t have 1,500 or 500 acres prepared to meet their development criteria.”

Smith anticipates fewer of those calls in the future as the region and the state invest more funding into developing large sites. “Now, they’ll be calling wanting to come to the ribbon cutting.”

Moving forward

A ribbon cutting could soon take place at Hampton Roads’ lone industrial megasite, the Coastal Virginia Commerce Park in Chesapeake. Situated near the North Carolina border, the park has been touted as a good fit for computer and electrical products manufacturing, semiconductor microchip manufacturing or general advanced manufacturing. The City of Chesapeake and VEDP have received multiple applications, and Deputy City Manager Brian Solis anticipates a contract could be signed by mid-2024, although he declined to give further details. Industries interested in the park include companies involved in advanced manufacturing, sustainable energy and emerging sectors such as energy storage and battery manufacturing. Tracts will be a minimum of 250 acres.

“We’re preparing the site to get it to shovel-ready with all utilities in place,” Solis says. “It has substantial large tracts ready to be built on. The entire site was farmed with a sophisticated drainage infrastructure. It’s ready to go from a development standpoint.”

The city received a $750,000 grant in 2023 from the Virginia Business Ready Sites Program for surveying and environmental assessment work on the 1,420-acre site, which was rezoned from farmland to industrial in 2022. The Chesapeake Economic Development Authority entered a contract in 2022 to purchase the land for $37 million from Virginia Beach farmer Frank T. Williams and has an option to buy 2,600 adjacent acres for $54 million. The sale will be finalized once site studies are completed.

According to Solis, market analyses of comparable megasites along the East Coast give the Coastal Virginia Commerce Park high marks for its proximity to the Port of Virginia and the region’s skilled workforce, as well as the convergence of four interstates in Chesapeake, allowing for multiple shipping and transportation options. “Chesapeake is unique in Hampton Roads because it is in the central part of the region from a transportation standpoint and is a direct 15-minute drive to the port.”

Although Chesapeake has struggled with the tension between preserving rural, agricultural land and developing industrial centers, Solis says, the megasite has been relatively well-received as a future employment center. “We’re very conscious of industry’s proximity to residential areas and put it in the furthest proximity to our population as possible,” he says. “It’s a positive difference-maker in that you always look for opportunities to provide more employment opportunities to our Hampton Roads residents.”

Industrial tenants also alleviate the tax burden on residents, Solis adds. “We want to have a healthy balance of nonresidential and residential tax base. For every tax dollar the business pays, that helps contribute to the quality of life for our residents.”

Neighboring Suffolk, the state’s largest city in land area, is promoting 6 million square feet of industrial development on more than 500 acres at the Port 460 Logistics Center. Maryland developer Matan is working with Rockefeller Group to construct the 10-building warehouse project which is zoned for heavy industrial, logistics, advanced manufacturing, life sciences and warehouse uses. The initial phase encompassing five buildings with about 2.4 million square feet is expected to be under construction in the summer of 2024.

“Things are going full steam ahead,” says Suffolk Economic Development Director Nic Langford. “With any development, we’re open to all possibilities as long as it makes sense for our investments. This will be a very big addition and nice new industrial development for the city.”

Langford says Port 460 would be a good fit for a large manufacturer such as Mercedes-Benz or Volvo. “We would love to get big manufacturers here,” he adds. “We chase those projects all the time. It seems they don’t land in Hampton Roads.”

Along with available land, Langford believes a lack of housing curbs large manufacturers’ interest in the region. “To attract large manufacturers, you need all range of housing. Suffolk is one of the few municipalities that’s building new housing.”

The city is revisiting its 2045 comprehensive development plan as it determines how to meet demand for all types of growth. “Suffolk has quite a bit of land,” Langford notes. “We’re next on the agenda in Hampton Roads for development, but we have to strike a balance between the pressures of the private market and smart growth. We have an obligation to our taxpayers to ensure we don’t expand too rapidly.”

Suffolk has not joined EVRIFA, but Langford says city officials have been talking to authority leaders to determine future participation. “There’s some value in municipal and economic development authorities purchasing land. When they do that, the ultimate decision-maker is the city or the economic development authority, and they can be more picky about who comes in and what happens.”

Smith says the authority is “in conversations” with the cities of Norfolk and Portsmouth and other localities, and he is hopeful all Hampton Roads municipalities will become members in 2024.

Benefits of cooperation

Joining the regional authority positions Virginia Beach to be a leader in regionalism, long cited by Hampton Roads business leaders as a necessity for economic advancement, says Chuck Rigney, the city’s interim director of economic development. “EVRIFA allows the region to make a better case to land large, significant projects and moves the needle to position Hampton Roads as a leading metro area.”

Virginia Beach’s lack of large tracts suitable for industrial development strengthens its rationale for joining EVRIFA, Rigney adds. “Virginia Beach has matured to the point of looking at strategic redevelopment and realignment of existing assets to be sure they are for the highest and best use. By supporting this partnership, we hope to grow the wealth of Hampton Roads.”

However, lack of suitable acreage will continue to prevent the region from securing large-scale industrial investments, says commercial real estate broker Lang Williams, an executive vice president with Colliers International Virginia. “So much of our land has been developed for other uses or is wetlands and not suitable for development.”

However, Williams notes that companies are investing in Hampton Roads, just not on as grand a scale compared to areas like Savannah, Georgia. He points to logistics service provider Katoen Natie’s November 2023 announcement that it will invest $59.9 million to expand its Norfolk facility with a 450,000-square-foot warehouse and rail yard, adding an expected 76 jobs. “We have a diverse set of smaller projects in the tens of millions of dollars as opposed to billions of dollars, but they are a strong indication of companies tracking to the region.”

Hampton Roads also can expect to benefit from Lego’s impending Chesterfield County facility, which is expected to open for production in 2025, adding 1,760 jobs over a decade. “Suppliers will look down here for warehousing in other space,” Williams says. “Lego was a huge win for Virginia.”

It’s a win that VEDP’s El Koubi believes can be replicated. “Virginia is steadily closing the gap with other states in site development,” he says. “We’ll see the impact accelerate over the next couple of years and see Virginia have one of the top site development programs in the nation.” 

 

Hampton Roads at a glance

Virginia’s second most populous region, Hampton Roads is comprised of 17 localities, including the cities of Virginia Beach, Norfolk, Chesapeake, Newport News, Hampton, Portsmouth, Suffolk, Williamsburg, Franklin and Poquoson, and the counties of Gloucester, James City, Isle of Wight, Mathews, Southampton and York.

Chrysler Museum of Art Photo courtesy Chrysler Museum of Art

Bordering the Atlantic Ocean and the Chesapeake Bay, Hampton Roads is home to the Port of Virginia and the largest naval complex in the world, Naval Station Norfolk, as well as Naval Air Station Oceana. Colleges and universities in the region include William &
Mary, Hampton University, Old Dominion University, Norfolk State University, Virginia Wesleyan University and Regent University.

Population

1.79 million (2020)

Top employers

Huntington Ingalls Industries (Newport News)

Smithfield Foods (Isle of Wight)

Bon Secours Maryview Medical Center (Portsmouth)

Science Applications International Corp. (Suffolk)

Children’s Hospital of The King’s Daughters (Norfolk)

Major attractions

Hampton Roads offers an abundance of natural, historic and cultural attractions, including the Virginia Beach Oceanfront, Colonial Williamsburg, Historic Jamestowne, the Virginia Aquarium & Marine Science Center, Chrysler Museum of Art, Busch Gardens, Ocean Breeze Waterpark, the Virginia Air & Space Center and Nauticus.

A sampling of hotels

The Cavalier Resort (including Embassy Suites by Hilton, The Historic Cavalier Hotel and Marriott Resort Virginia Beach Oceanfront)

547 guest rooms,
70,875 square feet
of event space

Hilton Norfolk The Main

300 guest rooms,
71,500 square feet
of event space

Embassy Suites by Hilton Hampton Convention Center

295 guest rooms,
161,974 square feet
of event space (including
connected convention center)

The Founders Inn and Spa

240 rooms,
40,125 square feet
of event space

Glass Light Hotel and Gallery

113 rooms,
1,625 square feet
of meeting space

Notable restaurants

Varia (Norfolk)
Italian, varianorfolk.com

Byrd & Baldwin Bros. Steakhouse (Norfolk)
American steakhouse, byrdbaldwin.com

Cantina Laredo (Virginia Beach)
Mexican, cantinalaredo.com

Freemason Abbey (Norfolk)
American and seafood, freemasonabbey.com

Betting on success

Thousands of new jobs are flowing into Southern Virginia as Caesars Virginia prepares to open its permanent casino resort next year, and industries move into the region or expand.

Meanwhile, local economic developers have been pitching the vacant 3,500-acre Southern Virginia Megasite at Berry Hill for megaprojects like electric vehicle assembly and battery manufacturing plants that could employ as many as 8,500 people.

But how far will companies have to cast their nets to find workers to fill those positions?

Since 2015, companies have invested more than $1.55 billion in the Danville region, including Pittsylvania and Halifax counties, bringing more than 4,800 jobs to an area still regaining its economic footing following the shuttering of textile, apparel and furniture factories in recent decades.

When considering locations, companies look at the population and available labor force within a 45- to 60-mile radius. According to 2022 U.S. Census figures, just over 136,000 people live in the Danville region, including Pittsylvania and Halifax counties, including nearly 74,000 between ages 20 and 65, but about 1.2 million people reside within 45 to 65 miles. That includes Lynchburg and Roanoke, as well as the North Carolina metropolitan areas of Raleigh-Durham-Chapel Hill and Greensboro-Winston-Salem-High Point. Combined, those areas have a labor shed of more than 540,000 potential workers.

“Our population numbers are extremely impressive,” says Pittsylvania County Economic Development Director Matt Rowe. “That labor force is larger than the one within 60 miles of downtown Richmond.”

Higher-paying positions often attract employees from up to 60 miles away, while lower-skilled jobs can draw workers from within a 45-mile radius. “It comes down to getting as many qualified candidates as possible,” Rowe adds. “It’s in a company’s best interest to cast a wide net for workers – the bigger the funnel, the more fish they can catch, and from there, they can funnel it down to a specific skill set.”

About 30% of workers drive into the region, while approximately 13,000 Danville and Pittsylvania residents commute outside the area for job opportunities, says Corrie Bobe, Danville’s economic development director. “That’s a great market for new and existing industries to target. If people have the opportunity to remain here and not have to drive distances for quality jobs, they would prefer to do so.”

‘Building a pipeline’

The outflow includes residents who gained skills through local workforce training programs. Over the past decade, Danville and Pittsylvania County have allocated more than $70 million to ensure a pipeline of skilled workers, an investment Bobe touts to prospective industries. As part of site visits, business representatives tour local educational institutions, including Danville Community College, the Institute for Advanced Learning and Research (IALR) and middle and high schools where IALR’s GO TEC (Great Opportunities in Technology and Engineering Careers) program introduces students to the possibilities of careers in manufacturing. “Companies have been blown away by the large number of skilled [workers] that are training and have been trained here,” she says.

Established two decades ago to diversify Southern Virginia’s economy, IALR provides training in skills such as advanced manufacturing, information technology, automotive manufacturing and cybersecurity. “We’re building a pipeline of skilled workers,” says IALR President Telly Tucker. “Our strategy is to produce a well of talent because companies want to be close to … talent.”

Last fall, IALR opened its $28.8 million Center for Manufacturing Advancement, which provides new or expanding companies space to collaborate and integrate emerging and new technologies. The U.S. Navy also opened its Additive Manufacturing Center of Excellence at IALR to expand the military’s industrial base and provide defense contractors with workers trained in additive manufacturing. In addition, IALR hosts the Department of Defense’s Accelerated Training in Defense Manufacturing, a four-month program that trains workers from throughout the U.S. for jobs in the defense industry. About 800 to 1,000 workers are expected to complete the program by 2025.

IALR’s partnerships with businesses, high schools and community colleges show students the abundance of career options in their own backyard, adds Todd Yeatts, the institute’s executive vice president of manufacturing advancement. “Students with associate degrees or an adult with work experience can get industry credentials to allow them to step into leadership positions. It gives students an opportunity to pursue their dreams.”

Tucker believes that many students graduating from IALR programs will take advantage of increasing job prospects in Southern Virginia, reversing a population decline fueled by the exodus of textile and manufacturing jobs. “Many people will choose to stay in the region if jobs are available with good wages,” he says. “We’ll see a reverse of the population decline.”

Mark Funkey, who came to Danville Community College in January as vice president of workforce services, has been meeting with local businesses to determine their staffing needs. “There is a ton of need in the manufacturing industry for maintenance technicians, robotics and automation,” he says. “We’re working on developing customized training to focus on what individual companies need to fill their workforce or upscale the workforce they already have to take on higher level technical jobs.”

The challenge is getting the training programs up and running. “We have to have industry professionals to teach skills and the space and money to build or lease a building,” he adds. “These kinds of things are not inexpensive and don’t happen overnight.”

Funkey also has identified about 15,000 people in Danville and Pittsylvania and Halifax counties who have a GED or are eligible to obtain one. He wants to establish a program at the college to help residents earn their GED and move into workforce training. “Most jobs that need filling have skill components,” he notes. “We’re trying to get folks to attain the skills to be able to access those opportunities.”

He acknowledges there may not be enough locals to fill the influx of jobs. “We are limited in population. That’s a struggle, but we are working to the best of our ability to build the workforce. That’s why it’s important to upscale the local workforce.”

Trend reversal

U.S. Census figures show the region’s population declined by 9% between 2000 and 2021, with the prime working age group between 20 and 50 dropping by 27%. However, between 2020 and 2022, Danville saw a net gain of 509 more residents moving into the city than those leaving, though the overall population decreased slightly due to 751 deaths among the city’s aging populace during the same time period, according to a report from the Weldon Cooper Center for Public Service at the University of Virginia.

Linda Green, executive director of the Southern Virginia Regional Alliance, takes the increased migration to Danville as a good sign. “We’re seeing a new trend that reverses the population decline,” she says. “People are moving here for jobs with highly competitive wages.”

Green believes also that a cultural shift is occurring as middle and high school students are exposed to career paths in technology and consider staying in the area. “We’re used to seeing sports banners hanging in local high school gyms,” she says. “Now we’re seeing banners recognizing student accomplishments in technology competitions. It’s saying our programs are validated by some of the top companies in the nation. That impresses companies looking to move into the region.”

Danville and Pittsylvania County officials highlight the region’s skilled workforce when attempting to woo industries to the Southern Virginia Megasite at Berry Hill.

Earlier this year, Albemarle Corp. considered establishing a $1.3 billion lithium hydroxide processing facility at Berry Hill before choosing property in South Carolina, creating 300 jobs. The megasite also was in contention for Hyundai’s $5.5 billion electric vehicle assembly plant, which would have brought 8,500 jobs to the area, but the auto manufacturer selected a site near Savannah, Georgia. Additionally, in December 2022, Gov. Glenn Youngkin took the megasite out of the running for a $3.5 billion Ford Motor Co. electric vehicle battery factory over concerns that a Chinese company would be operating the facility; Ford instead chose a Michigan site for the plant, which is creating 2,500 manufacturing jobs.

Workforce issues did not factor into any of those rejections, says Bobe. “The access to talent has not been a component for the megasite being eliminated from projects. Usually, that’s our very strong point.”

In fact, the region’s labor pool played a large role in IperionX Ltd.’s decision last year to open its recycled titanium metal powder facility in South Boston. The Charlotte, North Carolina-based mineral company is investing $82.1 million and plans to hire more than 100 employees by 2025, with the potential for expansion, says IperionX founder and CEO Anastasios “Taso” Arima.

“Excellent community support, excellent infrastructure and political structure and a strong community workforce training program really made the choice straightforward to move to Southern Virginia,” Arima adds. “A lot of training programs are already in place to develop the labor we need, and we’re confident that we will be able to secure a labor force from a 45-minute to an hour’s drive away.”

Selling points

Caesars Virginia also expects to hire employees from within a 45-minute drive’s radius of Danville for its $650 million permanent resort hotel and casino, expected to open in late 2024. “That was the thinking that people would be willing to drive for a job,” says the casino’s general manager and senior vice president, Chris Albrecht, “but we’ve definitely gotten interest from areas beyond that.”

Economic development directors Matthew Rowe with Pittsylvania County and Corrie Bobe with Danville have been pitching the Southern Virginia Megasite at Berry Hill for megaprojects that could create thousands of jobs. Photo by Hannah King
Economic development directors Matthew Rowe with Pittsylvania County and Corrie Bobe with Danville have been pitching the Southern Virginia Megasite at Berry Hill for megaprojects that could create thousands of jobs. Photo by Hannah King

The multimillion-dollar resort casino opened a temporary facility this spring with about 400 workers; casino management plans to have about 1,300 employees onboard when the permanent casino opens. Caesars has held hiring events, including one in Greensboro, and participated in career fairs at colleges and universities in Virginia and North Carolina.

Most of the casino’s employees so far live in the Danville area, Albrecht adds, with some transferring to the region from other Caesars facilities. “In the first wave of jobs, we were able to get employees from within 45 minutes. We’ll consider more options as the permanent facility gets built.”

Since arriving in Danville last year, Albrecht has been impressed with the area’s revitalization efforts. “The city has a lot of great economic development, and we’re looking forward to the casino helping bring further development to the area.”

About $50 million in public funds and $355 million in private monies have been invested in revitalizing Danville’s River District as a catalyst for attracting people back to the city. “Now it’s an attractive place for visitors and residents to enjoy,” says Bobe. “We look forward to substantial population growth in our community and are preparing for both the city and county to grow significantly.”

The projected growth is driving up demand for single and multifamily homes. An average of only 10 single-family dwellings have been built in Danville each year during the past decade, and officials say about 2,400 new units are needed for the influx of new workers. The city has identified several areas for construction or rehabilitation, including the struggling Danville Mall and the 60-acre Monument-Berryman Redevelopment Area. “We have a large pipeline for new housing options in development, whether in permitting or under construction, in both the city and the county,” notes Bobe.

Regional and national developers got a firsthand look at residential development opportunities during the Southern Virginia Regional Housing Summit last August. A second conference is scheduled for September. “National developers are already in the Raleigh-Durham and Greensboro areas,” says Pittsylvania’s Rowe. “It’s an easy process for them to come here, but our market has been neglected.”

Growing up in Pittsylvania, David Bennett was eager to leave the rural community as soon as he graduated from high school in 1980. “The minute I could go, I took off,” Bennett recalls. He returned seven years later after he accepted a job with Intertape Polymer Group Inc., a packaging products and systems company in Ringgold. In the interim, he’s come to appreciate Southern Virginia and its amenities.

“There have been a lot of improvements in schools, health care and housing,” Bennett says. He adds that many Intertape managers and technical staff have built homes in the area, a shift from just a few years ago when many salaried employees commuted from Greensboro. “The quality of life in this area is terrific. We’ve set up Danville to be successful.”

IALR’s Tucker says quality of life and cost of living are Southern Virginia’s main selling points. “There’s tremendous value in being a resident of this region. We have a lower cost of living, less traffic congestion and access to metro areas within an hour. Great things are happening in Southern Virginia.” 

Southern Virginia at a glance

Running along a large stretch of the Virginia-North Carolina border, Southern Virginia includes Brunswick, Charlotte, Greensville, Halifax, Henry, Lunenburg, Mecklenburg, Patrick and Pittsylvania counties, plus the cities of Danville, Emporia and Martinsville. Once rooted in tobacco processing and textile manufacturing, the area has pivoted toward becoming an advanced manufacturing hub known for its innovative workforce training. Area higher education institutions include Averett University, Danville Community College, New College Institute, Patrick & Henry Community College and Southside Virginia Community College. The Institute for Advanced Learning and Research is a regional catalyst for workforce development, manufacturing advancement and economic development.

Danville Museum of Fine Arts & History Photo courtesy Virginia Tourism Corp.
Danville Museum of Fine Arts & History Photo courtesy Virginia Tourism Corp.

Population

Danville: 42,348

Martinsville: 13,234

Pittsylvania County: 59,366

Halifax County: 33,257

Mecklenburg County: 30,179

Henry County: 48,835

Patrick County: 17,080

Brunswick County: 15,849

Lunenberg County: 11,936

Greensville County: 11,391

Charlotte County: 11,029

Emporia: 5,766

Top Employers

Goodyear Tire & Rubber Co.

Sovah Health

Hooker Furnishings Corp.

Eastman Performance Films LLC

Monogram Food Solutions LLC

Bassett Furniture Industries Inc.

Morgan Olson LLC

Tyson Foods

Nestlé Refrigerated Food Co.

Springs Global U.S. Inc.

Professional Sports

Martinsville Speedway is a short track — half a mile — and hosts multiple major NASCAR race weekends each year in the spring and the fall. With a 3.27-mile road course, Virginia International Raceway hosts multiple race weekends each year, including its biggest event, the International Motor Sport Association (IMSA) Weathertech Championship in late August.

Major Attractions

While auto racing is the region’s top draw, other attractions include the Virginia Museum of Natural History, with dinosaur and prehistoric whale fossils; the AAF Tank Museum, which has more than 120 armored tanks and artillery pieces on exhibit; Danville Science Center; and the Danville Museum of Fine Arts & History. Danville’s downtown River District features bars, restaurants, shopping and boutique hotel The Bee. For those who like to get outdoors, hike the scenic Riverwalk Trail or go kayaking, rafting and tubing on the Dan River.

Making the grade

For Virginia Gov. Glenn Youngkin, this is the state’s rebuilding era.

Although his Democratic predecessor, Gov. Ralph Northam, trumpeted Virginia’s unprecedented consecutive two-time run as CNBC’s Top State for Business, Youngkin has been critical of the state missing out to our Southern neighboring states on big manufacturing deals because of Virginia’s dearth of project-ready industrial land that would enable large facilities to be built within 12 to 18 months.

In this year’s General Assembly, Youngkin proposed adding $450 million to the state budget for industrial site development, on top of $150 million already allocated in the two-year budget. To place this in perspective, Virginia spent about
$1 million a year on site development before 2021. Meanwhile, other Southern states like Georgia and North Carolina far outspent Virginia, and they also won more megaprojects that are expected to yield billions in investments and thousands of jobs.

Between 2015 and 2022, when neighboring states were awarded 120 industrial megaprojects, Virginia won one: Lego Group’s $1 billion toy manufacturing plant in Chesterfield County, announced last June. The Virginia Economic Development Partnership estimated the state lost out on 52,000 jobs and $120 billion in capital expenditures over that seven-year period.

“We’re behind,” Youngkin said in an October 2022 interview with Virginia Business. “It takes time to catch back up. The funding is important. We are … prioritizing the best sites around the commonwealth and starting to invest in them. I think this is going to be our last step of really going to the forefront for these megaprojects. We want them all in Virginia.”

As of this publication’s mid-February deadline, Youngkin’s amendment was still under consideration at the Virginia General Assembly, although it looked likely that Youngkin would get less than the $450 million he requested. 

In January, the Virginia Business Ready Sites Program, a discretionary fund run by the Virginia Economic Development Partnership, awarded $90 million in grants for 21 industrial sites statewide. More than half of the money — $25 million and $22.2 million, respectively — went to Upper Magnolia Green, a 1,728-acre site being developed as a technology park by Chesterfield County, and Commonwealth Crossing Business Centre in Henry County, which would have the state’s only 150-acre pad with rail access and utilities.

Curiously, in December 2022, Youngkin veered off the predicted path, when it was reported that he pulled the state from consideration for a $3.5 billion Ford Motor Co. electric vehicle battery manufacturing plant, citing Ford’s ties to a Chinese company that would have run the plant.

Democratic lawmakers cried foul, claiming that Youngkin was playing politics, following the leads of potential GOP presidential candidates Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, who have both taken stances against Chinese residents or companies buying land in their states.

In January, answering reporters’ questions about the thwarted Ford deal, which would have produced at least 2,500 jobs in Pittsylvania County, Youngkin said he didn’t want the U.S. automaker to serve as “a front for China” in Virginia. In February, it was announced the plant would locate in Michigan, about 100 miles west of Detroit, with production beginning in 2026.

Aside from Lego, the state notched other economic development wins in 2022, including Plenty Unlimited Inc.’s $300 million indoor vertical farm operation in Chesterfield County and the Richmond and Henrico County expansions of Thermo Fisher Scientific Inc., which is expected to create 500 jobs across three new bioanalytical labs.

Elsewhere in the commonwealth, Hilton Worldwide Holdings Inc. plans to add 350 jobs through an expansion of its Fairfax County-based global headquarters, and Virginia Beach-based DroneUp LLC is expanding its headquarters and building a testing and training center in Dinwiddie County, creating more than 650 jobs. In Caroline County, World Class Distribution Inc., a food and beverage distributor, announced it’s building a $275 million distribution center expected to generate 745 jobs.

Virginia’s casino industry also made a stylish entrance in July 2022, with a temporary version of the Hard Rock Hotel & Casino Bristol debuting with about 600 jobs, and the $340 million Rivers Casino Portsmouth opening in January as the state’s first permanent casino. Danville’s Caesars Virginia resort and Norfolk’s HeadWaters Resort & Casino are expected to open their permanent casino resorts in 2024.

 

Democrats call out Youngkin on Ford plant decision

Democratic state delegates excoriated Virginia Gov. Glenn Youngkin on Tuesday for taking Virginia out of the running for a $3.5 billion Ford Motor Co. battery manufacturing plant that would have created at least 2,500 jobs in Southern Virginia. The governor said last week that although Virginia was a finalist for the economic development project, he called a stop to the plant because of its ties to a Chinese company, saying that he didn’t want Ford to serve as “a front for China” in Virginia.

“We all thought we were trying to achieve the same bipartisan goals of bringing good-paying jobs and economic development to Virginia, but apparently, in his absence last year, the governor missed that part of the transition briefing,” Loudoun County Del. David Reid, a Democrat, said on the House of Delegates’ floor. Reid was referring to Youngkin’s extensive 2022 domestic travel schedule, which many political onlookers saw as Youngkin testing the waters for a 2024 presidential run. “At this point, the governor needs to go to Southside, hold a town hall and explain why it is OK for him to make tens of millions of dollars off of investments in China and Chinese investments in the United States when he was in Carlyle Group, but he decided to play politics when it came to the livelihood for an entire region.”

According to a Richmond Times-Dispatch report, Ford was considering building a plant for electric vehicle batteries at Pittsylvania County’s 3,528-acre Southern Virginia Mega Site at Berry Hill, which so far has no tenants, while the state and other investors have spent more than $200 million to prepare the site for industrial use. The plant would have been run by Chinese company Contemporary Amperex Technology Co. Ltd. (CATL), which builds lithium iron phosphate batteries.

Reid, who served as an intelligence officer in the Navy Reserves and worked as a defense contractor, said that “no one in the intel community has ever even remotely implied that Ford was a front company for the Chinese.”

However, Chinese influence in the U.S. has become an increasingly popular talking point among GOP political leaders, including Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, who are both considered potential candidates for the Republican presidential nomination. DeSantis has said in recent days that he will ask Florida lawmakers to bar Chinese investors from buying farmland and residences, and a Texas legislator has filed a bill that would prevent residents, governments and entities of China, Iran, North Korea and Russia from buying land in Texas.

Former President Donald Trump, the only announced GOP presidential candidate, criticized Youngkin in November 2022, claiming credit for his gubernatorial win and using an anti-Asian slur, saying that Youngkin’s name — spelled by Trump as “Young Kin” — “sounds Chinese.” The governor declined to criticize Trump, saying “I do not call people names.”

Youngkin, like Abbott, also barred all state employees from using state-issued phones or Wi-Fi networks to access Chinese-owned phone apps TikTok and WeChat in a December 2022 executive order, saying in a statement that “TikTok and WeChat data are a channel to the Chinese Communist Party, and their continued presence represents a threat to national security, the intelligence community and the personal privacy of every single American.” During his State of the Commonwealth speech last week, Youngkin called on the state legislature to ban selling Virginia farmland to Chinese investors.

“It is deeply disappointing that Gov. Youngkin would turn away business investment and jobs from Ford Motor Co. due to political considerations and a new obsession with China. It’s clear that the governor has put his personal politics above jobs for Virginia communities,” Democratic state Sen. Jennifer McClellan, who is running for the late Donald McEachin’s congressional seat, said Friday.

However, as Reid noted, when Youngkin was co-CEO of Carlyle Group Inc., a Washington, D.C.-based private equity fund, he benefited financially from the company’s investments in Chinese industries, including ByteDance, TikTok’s parent company. In 2021, when he was running for governor, Youngkin had an estimated net worth of about $400 million, making him the wealthiest governor in the state’s history.

Republican delegates defended Youngkin’s decision to pull Virginia from consideration for the Ford plant. “Bringing the right jobs to Danville … is critical,” said Del. Terry Kilgore, a Republican who serves on the state Tobacco Region Revitalization Commission, which assists localities in Southern and Southwest Virginia in boosting economic development projects with funds from tobacco civil lawsuits settled decades ago. “But Bloomberg reported in December that Ford Motor Co. was planning to run this proposed electric vehicle plant through a conglomerate that coordinates closely with the Chinese Communist Party.”

The Dec. 15, 2022, Bloomberg news article notes that former U.S. House of Representatives Speaker Nancy Pelosi’s trip to Taiwan last year strained relations between the U.S. and China, leading to CATL’s delay in building a new facility in North America, which would have been constructed in Virginia or Michigan, according to multiple news reports. Under Ford’s agreement with CATL, the American vehicle builder would own 100% of the plant while CATL would operate the plant and own the technology to build the batteries.

Meanwhile, Virginia Beach Republican Del. Tim Anderson cautioned against the use of cobalt in electric car batteries, arguing that “child slaves” are mining cobalt used in batteries and other tech devices. “If we’re going to bring new business to Virginia, I would like to bring something to Virginia that doesn’t have slave trade supply-chain issues.”

Siddharth Kara, a Harvard visiting professor, has written a book being published later this month about horrifying conditions at cobalt mines in the Democratic Republic of the Congo, including child labor, which has also been reported by The New Yorker and other media outlets. The mineral is used in the production of lithium-ion batteries. According to the 2021 New Yorker story, cobalt keeps the batteries from catching fire, and cobalt’s value has gone up significantly in recent years.

However, lithium iron phosphate batteries — the kind that would be produced by the Ford plant — do not use cobalt, and electric vehicle manufacturers, including Tesla, are increasingly moving toward cobalt-free batteries, according to news reports.

21 Va. industrial sites awarded $90M for development

Virginia Gov. Glenn Youngkin announced $90 million in grants for the development of 21 industrial sites across the state Monday, helping localities get shovel-ready for big economic development projects.

The two biggest winners are Chesterfield and Henry counties, which received $25 million and $22.2 million respectively from the Virginia Business Ready Sites Program (VBRSP), which is a discretionary fund run by the Virginia Economic Development Partnership. Upper Magnolia Green, a 1,728-acre site in Chesterfield, was purchased in 2020 by the county’s Economic Development Authority and rezoned in May 2022 to allow construction of manufacturing and research and development facilities, plus offices. Intel Corp. considered the site for its $20 billion, 100-acre semiconductor chip facility before choosing a site in Ohio.

Near the Virginia-North Carolina border, the Commonwealth Crossing Business Centre in Henry County is home to Press Glass and Crown Holdings, and after further land grading, it’s expected to have a 150-acre pad with rail access and utilities.

The VEDP’s program’s goal, according to a news release, is to identify, assess and improve the readiness of industrial sites with at least 100 contiguous, developable acres, or 50 acres in the western part of the state.

“The leading priority of the Virginia Business Ready Sites Program is to increase our project-ready sites portfolio across the commonwealth, and this unprecedented site development funding is an important step forward in strengthening Virginia’s infrastructure,” Youngkin said in a statement. “Prepared sites drive economic growth, and we have to move faster to attract new businesses.”

Getting land ready for major manufacturing projects has been one of the governor’s highest priorities since he took office a year ago, although last week, he said that he pulled Virginia out of competition for a Ford Motor Co. electric battery plant in the state because the plant would have been operated by a Chinese company, Contemporary Amperex Technology Co. He said in a short news conference that he did not want to “recruit Ford as a front for China to America,” although according to the Richmond Times-Dispatch, the $3.5 billion project would have created at least 2,500 jobs in Pittsylvania County, at its Southern Virginia Megasite at Berry Hill.

Virginia Democrats have expressed surprise about Youngkin’s decision, which some have suggested has more to do with his national political ambitions than what is best for the state. “It is deeply disappointing that Gov. Youngkin would turn away business investment and jobs from Ford Motor Co. due to political considerations and a new obsession with China. It’s clear that the governor has put his personal politics above jobs for Virginia communities,” state Sen. Jennifer McClellan, who is running for the late Donald McEachin’s congressional seat, said Friday.

The 3,528-acre Berry Hill megasite, which was recently a finalist for a $5.5 billion, 8,100-job Hyundai Motor Co. project that ultimately went to Savannah, Georgia, is set to receive $1.5 million from VEDP in Monday’s announcement.

Another recipient is the city of Chesapeake, which will receive $750,000 for the 1,420-acre Coastal Virginia Commerce Park. Larger sites can attract megaprojects with 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.

Although 1,900 acres of the Southern Virginia Megasite are pad-ready, Chesapeake City Council only recently approved the rezoning of the Coastal Virginia Commerce Park, clearing the way for development to begin.

Getting project-ready

Virginia lacks project-ready sites, meaning those ready for construction to start in 12 to 18 months, compared to its neighbors. From 2016 to September 2022, Virginia missed out on more than 52,000 jobs and $120 billion in capital expenditures at least in part because companies were unable to find acceptable ready-to-build locations in the commonwealth, according to a September 2022 analysis by VEDP. Virginia won only one megaproject — Lego Group Inc.’s $1 billion development in Chesterfield County — while other Southern states won 120 between January 2015 and September 2022.

“It is critical for Virginia to create a diverse portfolio of sites that are attractive to different industry sectors and meet varying location and infrastructure needs, and these grants are a major step in the right direction to help the commonwealth catch up on site development,” VEDP President and CEO Jason El Koubi said in a statement. “Additional funding for the Virginia Business Ready Sites Program will allow VEDP to expand the program and invest in more sites, enhancing the commonwealth’s infrastructure and accelerating economic development in Virginia.”

Youngkin announced in December 2022 he would propose allocating an additional $350 million to the VBRSP this General Assembly session, which would add onto the $159 million that the state allocated the program in the 2022-24 budget signed in June 2022. The initial $159 million is a historic amount; in 2021, the General Assembly allocated $5.5 million for the program, already a jump from the roughly $1 million annually that the state had provided in previous years.

The governor’s budget amendments will be considered near the end of the General Assembly session, which started last week.

The remaining recipients are:

  • Louisa County, Shannon Hill Regional Business Park, $11.59 million
  • Frederick County, Valley Innovation Park, $7.225 million
  • Staunton, Staunton Crossing, $4.56 million
  • Waynesboro, Nature’s Crossing Technology Center, $3.91 million
  • Norfolk, Fairwinds Landing, $3.25 million
  • Alleghany County, Alleghany Regional Commerce Center, $3.29 million
  • Albemarle County, North Fork – A U.Va. Discovery Park, $3 million
  • Wise County, Lonesome Pine Business and Technology Park, $750,000
  • Roanoke County, Wood Haven, $504,149
  • James City County, Hazelwood Farms, $485,500
  • Giles County, Wheatland EcoPark, $387,865
  • Amherst County, Dillard Tract, $322,071
  • Lynchburg, Ivy Creek Innovation Park Sites A & B, $261,750
  • Essex County, Tappahannock Industrial Park, $261,300
  • Sussex County, Sussex Megasite, $247,900
  • Roanoke, Roanoke Centre for Industry and Technology, Tract 8, $85,000
  • Bedford County, New London Business and Technology Center, Phase 2, $63,750
  • Multiple recipients, site characterization grants and other uses, $220,000.

December 2022 Top Five

The top five most-read daily news stories on VirginiaBusiness.com from Nov. 14 to Dec. 14, 2022, included a Virginia Business scoop about a restaurant on the culture-war frontlines that became a national news story.

1  |  Richmond restaurant refuses service to conservative Christian group

Metzger Bar & Butchery canceled The Family Foundation’s reservation, citing the advocacy group’s stances against abortion and LGBTQ rights. (Dec. 2)

2  |  Youngkin proposes $350M for site development

Gov. Glenn Youngkin said he would propose allocating an additional $350 million to prep industrial sites for megaprojects. (Dec. 2)

3  |  Octo to be acquired by IBM

The Reston-based federal contractor’s 1,500 employees were slated to become part of IBM Consulting’s U.S. public and federal market arm, in a deal expected to close by the end of 2022. (Dec. 8)

4  |  Rivers Casino Portsmouth plans Jan. 15 opening

The $340 million resort casino will be the first permanent casino facility to open in Virginia. (Nov. 21)

5  |  Martin Agency CEO named global head of MullenLowe Group

Kristen Cavallo, CEO of Richmond ad firm The Martin Agency, is also now global CEO of MullenLowe Group, which has 20 offices worldwide. (Nov. 17)

Youngkin to propose $350M for site development

Gov. Glenn Youngkin will propose allocating a new $350 million investment for industrial site development next week, the governor said in a speech delivered Friday at the Virginia Chamber’s Virginia Economic Summit & Forum on International Trade.

In the 2022-24 budget, which Youngkin signed in June, the state allocated $150 million for the Virginia Economic Development Partnership’s Virginia Business Ready Sites program, which would also receive the proposed $350 million. If approved by the General Assembly in its 2023 session, the new allocation would bring the state’s total recent investments for site development to $500 million.

“To support the recruitment of high-growth companies, and to enhance Virginia’s ability to win, the commonwealth requires massive investment to create project-ready sites,” Youngkin said.

Industrial development officials generally define project-ready sites as those ready for construction to begin in 12 to 18 months.

“I want ‘made in America’ to mean ‘made in Virginia,’” Youngkin said.

From 2016 to September 2022, Virginia missed out on more than 52,000 jobs and $120 billion in capital expenditures at least in part because companies were unable to find acceptable ready-to-build locations in the commonwealth, according to a September analysis by the Virginia Economic Development Partnership.

Within that shortage, Virginia lacks large, 250-or-more-acre sites that can attract megaprojects. From January 2015 through September 2022, 121 new industrial projects requiring an estimated 250 or more acres were announced in the Southeast U.S., according to the Virginia Economic Development Partnership. Combined, those projects generated more than $25 billion in capital expenditures and an estimated 58,000 jobs. But Virginia won just one of those 121 projects — the planned $1 billion Lego Group factory in Chesterfield County, expected to create more than 1,760 jobs.

“We are behind. We are not closing the gap, and those most competitive states continue to pull away,” Youngkin said Friday.

Virginia currently has two megasites. The 3,528-acre Southern Virginia Megasite at Berry Hill, owned by the Danville-Pittsylvania County Regional Industrial Facilities Authority, has 1,900 acres that are easily developable and is pad-ready. And in Chesapeake, the City Council approved the rezoning of the 1,420-acre Coastal Virginia Commerce Park, which will allow development to begin once the Chesapeake Economic Development Association purchases the property.

In early November, Site Selection magazine named Virginia No. 1 in its 2022 Business Climate Rankings, a jump from 10th place.

During his speech Friday, Youngkin also spoke on other aspects of state competition, including state tax structures and workforce development.

“Competing to win starts with taxes, and that’s both corporate and individual taxes,” he said.

He touted Virginia’s 2022-24 budget, which provided $4 billion in tax cuts, including an increase in the standard income tax deduction and the elimination of the statewide grocery tax, although not the local levy. “I am committed to do even more. Otherwise, we will find ourselves relegated with those high-tax, high-cost states that are being left behind,” Youngkin said.

Youngkin’s administration also is working to restructure the way government delivers workforce support, he said, by consolidating workforce development programs, which includes the community college system: “Workforce development is currently spread out over six Cabinet secretaries, 12 state agencies, 25 workforce programs with over 1,500 training programs, spending roughly $485 million in federal and state resources.”

“Our upcoming budget,” he said, “will prioritize expanding these career pathways for students by launching multiple dual-enrollment acceleration programs in partnership with our community colleges and local schools,” so that more students, and eventually all Virginia students, can graduate with industry-recognized credentials.

The General Assembly will convene Jan. 11, 2023.

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.”