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byline: Beth JoJack

Wallops Island lifts off with Rocket Lab addition

Rocket Lab USA is boosting the visibility of one of the United States’ lesser-known spaceports on Virginia’s Eastern Shore.

Since January, the California-based aerospace company has launched three successful missions from its Launch Complex 2 at Virginia’s Mid-Atlantic Regional Spaceport. Rocket Lab selected the spaceport, located within NASA’s Wallops Flight Facility in Accomack County, as the site of its first U.S. launch site in 2018.

Leaders of the U.S. Space Force have taken note of Rocket Lab’s relationship with the spaceport, according to Ted Mercer, CEO and executive director of the Virginia Commercial Space Flight Authority, also known as Virginia Space, the state agency that owns and operates the spaceport.

“When you listen to speeches or presentations that they give about the space ports, they are now including the Mid-Atlantic Regional Spaceport in their discussions [about] guaranteeing assured access to space for the nation,” Mercer says. “So that’s huge.”

It’s a win-win arrangement, according to Mercer. By using Virginia’s spaceport, Rocket Lab avoids the headache of operating out of NASA’s busier Kennedy Space Center in Florida. “If you want to launch a rocket out of Cape Canaveral, you’re going to have to kind of wait in line,” Mercer says. “We don’t have that issue.”

On Jan. 24, Rocket Lab launched its Electron rocket from Wallops Island — marking the first Electron mission to take off from U.S. soil. Previously, the Electron launched from Rocket Lab’s Launch Complex 1 in New Zealand, from which it launched a mission for the Space Force. For its January mission, Rocket Lab deployed satellites for Herndon-based HawkEye 360, a commercial provider of satellite-based radio frequency data and analytics.

Less than two months later, on March 16, Rocket Lab launched its second Electron mission from Wallops Island. That time, the rocket sent two satellites into orbit for Capella Space, a California-based space tech company.

Rocket Lab made headlines from Wallops again on June 17 when the company successfully launched its first suborbital testbed launch vehicle, dubbed HASTE (Hypersonic Accelerator Suborbital Test Electron), from the Virginia pad. The customer for that launch was Reston-based Leidos Holdings, which was completing a large-scale test for its Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) program. The MACH-TB is designed to increase the speed of testing for all commercially available hypersonic systems. According to Morgan Bailey, senior director of communications at Rocket Lab, Leidos is “looking to build on that cadence in the months and years to come.”

Rocket Lab is poised to make more news from Wallops Island. In February 2022, Gov. Glenn Youngkin announced the company had selected the area as the launch site and rocket production complex for its new Neutron rocket, a 130-foot, partially reusable launch vehicle. By comparison, the Electron is 59 feet tall. Another difference: the Electron is always an unmanned rocket.

“Electron does not fly humans, and neither will Neutron at first, but we are developing Neutron to be capable of … [manned missions] in the future,” Bailey says.

While the Electron allows Rocket Lab to deploy satellites “in the single digits” to orbit, the Neutron will be designed to serve “an explosion” of commercial customers who want to put numerous satellites into space at once, according to Bailey.

“We’re entering that era of mega-constellations, where you’re talking hundreds and thousands of satellites that need to be launched to specific orbits and quite quickly and quite cost effectively,”
she says.

Currently, she says, there aren’t enough launch vehicles available to quickly serve these customers, particularly since Russia invaded Ukraine. Since then, Russia has largely halted its launches of commercial satellites. According to a 2022 Reuters report, Russia has accounted for about 16% of the global launch market since 2017.

“We’re really bringing to market a reliable, cost-effective vehicle that’s going to open up the access to space,” Bailey says.

In April 2022, Rocket Lab broke ground on the rocket production complex where the company will manufacture the Neutron on 28 acres adjacent to the Wallops Island Flight Facility. However, “you won’t see much visible progress on that for a few more months because that’s sort of later in the development,” says Bailey, who declined to say how much the complex will cost to build.

Construction is further along on the Neutron’s launch pad, which will be located at the southern end of Wallops Island. Rocket Lab plans to launch the Neutron from there in 2024. The company doesn’t need the production complex to be completed before the launch pad because testing for the rocket will occur at other Rocket Lab sites, Bailey says. The Neutron’s upper stage is being developed with help from the Space Force, which awarded the company a $24.35 million contract in 2021.

Once Rocket Lab is in full production and launch mode on the Neutron, the company plans to hire up to 250 engineers, technicians and support staff to support the Neutron at Wallops Island. The company currently has about 20 to 30 employees there, according to Bailey. “The key function for that team at the moment is still Electron launch operations,” she says.

Local officials are making plans to accommodate the influx of new workers.

In May 2022, the Accomack County Board of Supervisors approved a rezoning and a conditional use permit for Maryland-based CCG Note to build a 140-unit townhome and commercial mixed-use development on property surrounded by the Captain’s Cove community in Greenbackville. That project, referred to as Hastings/Mariner, is stalled by a civil lawsuit filed in November 2022 by Captain’s Cove residents against CCG Note — which bought out the neighborhood’s original developer — as well as its property owners’ association. The plaintiffs contend that CCG Note’s plans to use a private street to access the proposed development and its sewer system in support of the new development violate the neighborhood’s covenants.

Accomack County Administrator Mike Mason says that if that project does not go forward, the county will continue efforts to attract more housing by removing “barriers to development” and by partnering with towns that “have a desire to extend or enhance town services.”

“We will be responsive to developers and builders interested in expanding housing stock by providing them with clear guidance and a ‘path to yes’ through county permitting,” Mason says.

Officials are also spending federal and state funds to prepare for the influx of workers. That includes $600,000 from the American Rescue Plan Act that the county spent at the beginning of the year to add 126 child care openings at new and existing facilities and a $15.6 million Virginia Department of Housing and Community Development grant awarded to Accomack and Northampton Counties to extend broadband service to currently unserved areas.

“The majority of funds in Accomack that came from that grant are being directed in the northeast portion of the county, particularly some communities out there that did not have access at all, and some of these communities are some of the ones that are closest to Wallops Island,” Mason says.

Earlier estimates that the Neutron facility will generate about $2 million in direct annual property tax revenue to the county have not changed, according to Mason. “We haven’t really started to see that,” he adds, “because the construction hasn’t yet commenced.” 

EarthLink support center approaches completion

By mid-August, construction workers had gotten up a big portion of the steel framework for the 28,000-square-foot, two-story building that will house EarthLink’s customer support center at Project Intersection, a new business and industrial park in Norton.

Employees of the Atlanta-based high-speed internet service provider should be able to move into the building by March 2024, says Duane Miller, executive director of the LENOWISCO Planning District.

In late 2019, when EarthLink executives and Southwest Virginia officials began discussing building a customer support center for the company in the region, the project cost was projected to be $5.4 million. 

“After COVID, the cost of the building is closer to $11 million,” Miller says.

EarthLink will lease the building from the Lonesome Pine Regional Industrial Facilities Authority, a multijurisdictional organization. 

The company has operated out of a temporary facility in the Lonesome Pine Regional Business & Technology Park in Wise County since early 2022, according to Jonathan Belcher, executive director of the Virginia Coalfield Economic Development Authority.

So far, EarthLink has hired about 50 employees who take inbound sales calls and offer customer support, says EarthLink CEO Glenn Goad. He hopes to have hired 100 employees by the time the new building is ready; however, recruiting workers has been more challenging than expected. “The one thing I was surprised at is [the difficulty in] getting people to show up for interviews and/or jobs and stay in [those jobs],” says Goad.

Nevertheless, Goad, a Florida native who grew up witnessing the region’s strong work ethic firsthand during childhood visits to his father’s family in Wise County, feels confident EarthLink will be able to find the right employees given additional time. He predicts the call center will eventually house between 250 and 285 workers.

On June 30, EarthLink acquired Texas-based voice and data services provider One Ring Networks. Eventually, the Norton center will also house employees who offer support to those business customers, Goad says.

Before agreeing to the deal bringing a call center to Norton, EarthLink executives stressed the building would need to be completed within a 24-month period. That period ends in October.

Considering that the builders faced a steel shortage and supply chain hurdles, Miller is proud that the building will likely be ready by March, even though they missed the target by a few months.   

Blue Ridge festival rocks on — for now

UPDATED SEPT. 11: The Blue Ridge Rock Festival was canceled on Sept. 9 due to severe weather, including storms and hail. The festival’s organizers said they would provide refund details early during the week of Sept. 11.

The Blue Ridge Rock Festival is on track to sell out this year, with organizers expecting more than 50,000 fans to descend upon the Virginia International Raceway in rural Alton for four days of concerts featuring bands like Megadeth, Five Finger Death Punch and Limp Bizkit, beginning Sept. 7. 

“Right now, I believe every hotel is sold out in like a 75-mile radius,” says Jon Slye, the festival’s founder and director of talent and curation. Since 2017, when Slye held the inaugural BRRF in Campbell County, the event has bounced around different venues in Central and Southern Virginia to accommodate an ever-increasing number of music fans. 

VIR first hosted the festival in 2022. “It went great,” says Kerrigan Smith, the raceway’s president and chief operating officer. So, in April, BRRF organizers announced they’d agreed to a deal to hold the event at the Halifax County raceway through 2025. 

“We’re now at the same spot,” Slye says. “We’re not starting from scratch and starting over every single year.”

Scott Simpson, county administrator of Halifax County, is also pleased the festival will remain at VIR. The county took in an estimated $480,000 directly from meals, lodging and sales taxes from the 2022 BRRF, and Simpson expects revenue from this year’s festival to increase by 15%. BRRF attendees spent additional money outside the raceway grounds — at restaurants, hotels and gas stations — but the county has not done an analysis of off-site revenues for the week of the 2022 event. 

Despite all the money generated by festivalgoers, the BRRF has yet to turn a profit, according to Slye. One reason for that, he says, is that it’s considerably more expensive to stage a rock festival in a remote area. “Everything from Porta-Johns to electrical to staging to production — everything is just more,” he says.

Even so, Slye is reluctant to take BRRF to a larger city, because the festival is known for its rural Virginia locale.

Although Slye plans for BRRF to be held at VIR through 2025, he acknowledges that he’s had discussions with multiple companies about selling the festival, but he declined to give specifics. 

“It is becoming really difficult for us to continue moving forward,” he says, “without a more feasible financial model.”

Satellite internet improves mobile health care

The Health Wagon got its start in 1980 when Sister Bernadette Kenny, a nurse practitioner, began dispensing free, much-needed health care to people in rural Appalachia from her Volkswagen Beetle.  

“She was thinking outside the box,” says Health Wagon President and CEO Teresa Tyson.

Kenny served as inspiration, Tyson says, when the health care provider’s leaders decided to switch to satellite internet service through SpaceX’s Starlink. The Elon Musk-owned service brings the web to hard-to-reach places via its constellation of low-Earth-orbiting satellites. For two years of service and hardware, Starlink internet will cost the Health Wagon $18,050, which has been covered through donations, Tyson says. 

The Health Wagon operates multiple mobile clinics that regularly visit 13 sites in Buchanan, Dickenson, Lee, Russell, Scott and Wise counties. The nonprofit also operates two stationary medical clinics, in Wise and Clintwood, and a dental clinic in Wise.

Previously, the mobile clinic’s health care workers relied on cellular hotspots that weren’t always reliable. “It’s just not ideal, especially if there’s more than two people using it,” says Bo Cash, IT system administrator for the Health Wagon. 

Three of the mobile clinic’s stops — all in Dickenson County — lacked cell service. That meant patients at those stops couldn’t access telehealth visits with specialists, and Health Wagon workers were “out there kind of blind without being able to look at electronic health records” to view patient medical histories and prescriptions, Tyson says. 

That is changing with Starlink, which also allows Health Wagon workers to use tools like a retina camera that can send images to UVA Health in real time. “Now, we can take that camera out on the road with us and do these retinal screenings for eye disease,” Tyson says.

In addition to extending internet access, Cash and Tyson feel confident Starlink will offer faster and more dependable service than the cellular hotspots. “It’s going to [produce] improved patient outcomes and that translates into improved health care and saved lives,” says Tyson. 

Dr. Joseph Aloi, Wake Forest Baptist Health’s section chief for endocrinology and metabolism, has volunteered with the Health Wagon for about two decades. With satellite internet, he’s hopeful the staff will have an easier time sending him patient data and that patients will have smoother telehealth visits.

“It’ll just minimize hiccups,” he says.  

Virginia Business Associate Editor Katherine Schulte contributed to this story.

Big deals

CENTRAL VIRGINIA

Appomattox: In November 2022, Virginia MetalFab, a precision sheet metal fabricator, moved from Nelson County’s Gladstone area to nearby Appomattox, where it’s leasing the former Thomasville Furniture plant, which shuttered in 2011. Founded in 2002, Virginia MetalFab manufactures metal parts and assemblies for industries ranging from utilities to transportation and technology. The company invested $9 million on the move, which is expected to create 130 jobs over the next
three years.

Chesterfield County: Germany-based Weidmüller Group announced plans in April to invest $16.4 million to increase its footprint in Chesterfield County where the family-owned company has operated for more than five decades. Weidmüller produces smart industrial connectivity products and solutions that connect and automate electrical power and signaling for components, machines and installations. The expansion, which will create more than 100 full-time jobs, is expected to be complete in summer 2024.

Caroline County: In November 2022, World Class Distribution Inc. said it will build a
$275 million, 1.2 million-square-foot spec distribution center in the Caroline 95 Logistics Park in Ruther Glen, creating 745 jobs. A subsidiary of California-based TACT Holding Inc. (parent company of the Trader Joe’s grocery chain), WCD is a distribution, warehousing and cold storage company.

Hanover County: SanMar Corp., a supplier of wholesale accessories and apparel, said in March that it is investing at least $50 million to move into a 1.1 million-square-foot spec distribution center in the East Coast Commerce Center in Hanover just north of Ashland. The company’s ninth distribution center in the United States, it will serve as the flagship facility for the company’s East Coast distribution network. Executives plan to ultimately hire 1,000 workers when the facility reaches full capacity.

Lynchburg: Delta Star Inc., a manufacturer of industrial electrical products like mobile power transformers and substations, announced plans in May to expand its manufacturing operation and headquarters in the Hill City, a move expected to create about 150 jobs. The company is investing $30.2 million in the facility, which was established in Lynchburg in 1962.

EASTERN VIRGINIA

Norfolk: Princo LLC, a manufacturer of adult incontinence pads and puppy training pads, officially opened its new 80,000-square-foot Norfolk manufacturing facility in April. A joint venture between health care companies Premier Inc., Vario Labs LLC and Caretrust LLC, Princo invested $23.8 million in the facility, which is expected to create 284 jobs. Workers there make incontinence pads to support more than 4,400 hospitals in Premier’s customer portfolio.

NORTHERN VIRGINIA

Arlington County: In November 2022, Technomics Inc. leased an additional 10,000 square feet of space in the company’s building at 1225 South Clark St. and was planning to add an additional 10,000 square feet elsewhere in Arlington. An employee-owned government consulting firm specializing in cost analysis, data management and data analytics, Technomics invested $1.7 million in the expansion, which was expected to generate 150 jobs. Created in 1984, Technomics opened its Arlington office in 2000.

Fairfax County: SmartRoof, a solar energy and roofing contractor, announced plans in November 2022 to invest $350,000 to relocate from McLean to Reston. Founded in 2016, the company plans to add more than 400 jobs during the next five years.

Fairfax County: In February, aerospace defense contractor Amentum Services Inc. said it would consolidate its operations and move its headquarters from Germantown, Maryland, to 4800 Westfields Blvd. in Chantilly. The company is investing $495 million to make the move, which will add 157 jobs. Amentum, which has more than 44,000 employees globally, completed a $1.9 billion all-cash purchase of Falls Church-based government contractor
PAE Inc. in 2022.

SHENANDOAH VALLEY

Harrisonburg: Farmer Focus, an organic poultry producer, plans to almost double processing capacity at its Harrisonburg facility over the next two years. A $3.6 million grant from the United States Department of Agriculture’s Meat and Poultry Processing Expansion Program will help pay for the $17.8 million expansion, which is expected to create more than 300 jobs.

SOUTHERN VIRGINIA

Halifax County: Switzerland-based Hitachi Energy Ltd. said in October 2022 that it was adding 26,000 square feet to its existing Halifax County facility to allow for a new production line of large power transformers. The company is investing $37 million in the expansion, creating 165 jobs.

SOUTHWEST VIRGINIA

Botetourt County: Birmingham, Alabama-based Altec Industries Inc. is expanding its footprint at the Botetourt Center at Greenfield. In May, the company announced plans to invest $1.4 million to expand production on its construction equipment products line, expected to create 150 jobs. A global manufacturer, Altec makes products like boom truck cranes and digger derricks for industrial customers like electric utilities, telecommunications companies and tree care businesses.

Salem: In March, German auto parts manufacturer STS Group AG said it would invest $32 million to establish its North American headquarters at the former General Electric Co. facility in Salem, creating 119 full-time positions. The move was a switch from plans to build the headquarters in Wythe County, as announced in 2021. STS Group develops, manufactures and supplies vehicle interior and exterior parts made from plastic or composite materials.

This story has been corrected since publication.

FloydFest cancelation causes economic ripples

FloydFest, a five-day celebration showcasing more than 100 performers, has had an annual regional economic impact of about $4 million since its 2002 founding, according to festival organizers.

Even so, county officials and local business owners seem to be taking a “c’est la vie” attitude to the cancelation in April of this year’s FloydFest, which was scheduled for July.

Organizers had hoped to move the festival this year from Patrick County to more than 200 acres off U.S. 221 in Floyd County but couldn’t get the site ready in time due to permitting issues.

“It’s just really sad … for all of the people who have been working hard on it,” says Lydeana Martin, Floyd County’s community and economic development director. “But ultimately, it was a mighty aggressive timeline anyway, so I really think it’ll be a better experience for everyone for having this extra year.”

With a lineup ranging from jam bands to bluegrass, FloydFest has drawn about 15,000 fans annually — save for 2020 when it was canceled due to the pandemic, according to Sam Calhoun, chief operating officer of FloydFest organizer Across-the-Way Productions Inc.

Hill Holler, another entity associated with FloydFest, paid $2.25 million for the Floyd County land, with plans for it to become FloydFest’s permanent location. Organizers made the move because festivalgoers routinely requested on-site parking and camping instead of taking shuttles, according to Calhoun. Organizers also wanted to hold the festival in its namesake county.

After the cancelation, about 70% of ticket holders rolled over their tickets to the 2024 festival instead of requesting a refund, Calhoun says.

Taking a glass-half-full view, James Houchins, Patrick County’s director of tourism and marketing, says organizers of Front Porch Fest, a four-day music festival held in Stuart over Labor Day weekend, have seen a recent uptick in interest. Front Porch Fest, he says, is a “smaller version” of FloydFest, and he suspects the increase in ticket sales is due to fans seeking a FloydFest substitute.

Houchins declined to estimate what Patrick County might lose in tax revenue from FloydFest’s cancelation. Martin didn’t have an approximation either.

“In a little community like this,” Martin says, “every dollar does matter.

Riverdale project could be ‘transformative’

Partnering with the city of Roanoke, developer Ed Walker started redevelopment of 100 acres encompassing the sprawling, former campus of American Viscose, a rayon plant that closed in 1958. 

“This is a chance we have as a community to really do something transformative,” Roanoke Economic Development Director Marc Nelson says.

Located in the city’s southeast quadrant and dubbed Riverdale after the historic name of the neighborhood, the project will include both historic rehab and new construction.

As part of his agreement with the city, Walker will invest at least $50 million over the next 17 years. Walker says it will be the last project of his career.

“These projects take a decade — and this one will take longer — so this is it,” he says. “If I’m lucky, I’ll live long enough to see it somewhat complete. It’s the kind of place that’s never finished. It’s so large and complex.” 

Before Walker’s company purchased the property, a group of investors operated it for decades as the Roanoke Industrial Center. Walker hopes to retain many of the businesses currently located there.

By 2043, he hopes the Riverdale neighborhood will offer “everything a great place has — lots of different kinds of people creating a diverse experience that’s enjoyable, safe, affordable, creative, economically powerful, experiential and healthy.” Specifically, he expects it will offer residences, offices, retailers and eateries as well as art studios and outdoors-focused programming.

Riverdale’s first phase, which could be completed by 2029, will include 375 apartments and at least one 3,000-square-foot commercial building.

In January, Roanoke City Council approved a $10 million loan to Walker’s company, Riverdale Southeast LLC, to cover property acquisition and site remediation. If developers invest at least $50 million over 17 years, the loan will be forgiven, according to a performance agreement. Additionally, the developer will receive a real estate tax rebate for 17 years. Currently, the property generates about $100,000 annually, according to Roanoke City Manager Bob Cowell.

A master plan for the project will be put together this year, factoring in input from area residents, city planners, leaders in outdoor sports and national consultants.

Richmond-based Chmura Economics & Analytics looked at the projected impact of Riverdale on construction, commercial operations and household spending in the city of Roanoke from 2023 to 2040 and estimated the initial development plan will have a cumulative economic impact of more than $326 million.

German auto parts maker revamps Salem GE plant

Most everyone in the Roanoke Valley either worked at the former General Electric Co. facility in Salem or knew someone who had, says Renée Turk, the city’s mayor.

“On some level, it meant a lot to the entire community,” she says of the manufacturing plant, which opened in 1955.

After employing more than 3,000 workers at its peak, General Electric closed the facility, which made power conversion controls, in 2019, citing a decline in orders. But 1501 Roanoke Blvd. is once again bustling — for now, with construction workers.

In March, Gov. Glenn Youngkin announced that German auto parts manufacturer STS Group AG plans to establish its North American headquarters in the former GE building. Executives plan to hire 119 full-time employees and invest $32 million in the new facility.

Turk is proud the prominent building will once again be used for “manufacturing some great parts right here in Salem.”

STS Group develops, manufactures and supplies vehicle interior and exterior parts made from plastic or composite materials. The parts produced will go to Volvo Trucks in Pulaski County as well as to other facilities, according to Youngkin’s office. The company declined to offer details other than to say STS Group AG “will supply existing customers both for trucks and cars.”

STS Group AG will lease approximately 200,000 square feet of existing space at the former GE facility, which Wisconsin-based Phoenix Investors purchased in 2022 for $11.4 million. The German auto parts maker is also building a 32,000-square-foot addition to accommodate hydraulic presses.

That leaves about 300,000 square feet available for other industrial and office use, according to Tommy Miller, director of economic development for Salem. “We really want to market that heavy and continue to see how we can creatively reuse portions of the building,” he says.

In March, STS Group was preparing to install machinery at the facility. The first prototypes of “exterior components” will come off the line by the end of 2023, with production beginning in 2024, company spokesperson Frédéric Thébaud told Virginia Business. He declined to specify the type of product the company will be making.

In 2021, STS Group AG announced plans to build its $39 million manufacturing facility at Progress Park in Wythe County. Rising construction costs, however, prompted STS Group to instead look for an existing building, which led the company to Salem.  

Westward ho!

Southwest Virginia’s leaders feel confident their region will be home to the state’s next inland port.

“The planets are aligning for us right now,” says state Sen. Todd Pillion, R-Washington County. “Our localities are excited about it. The state seems to be excited about it.”

During the Virginia General Assembly’s regular session, Pillion and two Southwest delegates requested a total of $65 million in state funding to acquire land and build an inland port in the Mount Rogers Planning District, which ranges from Bristol, Virginia, to Wytheville. If built, it would be the state’s second inland port, joining the Port of Virginia’s Virginia Inland Port in Warren County.

The General Assembly adjourned in February without amending the state’s biennial budget, and it was unclear whether legislators would come to an agreement on the budget before reconvening in April. Nonetheless, lawmakers from Southwest Virginia feel confident the final budget will include funds for establishing an inland port, an intermodal terminal where sea cargo moves by road or rail to inland destinations.

As of February, the state Senate’s proposed budget included $10 million for the Southwest inland port, while the House of Delegates’ budget added $55 million to cover preliminary engineering and design for the inland port, as well as property acquisition and construction and equipment costs.

“I think everyone is committed to putting enough money into it so that we can get as far as we can get before the end of the biennium,” and then allocate enough money to finish the project in the 2024-25 budget, says Del. Israel O’Quinn, R-Washington County.

The only question now, according to O’Quinn, will be whether the state’s budget conferees pick a number closer to $10 million or $55 million in the amended budget presented to the full General Assembly. Gov. Glenn Youngkin spoke positively about the idea of a second inland port last fall.

First in nation

Robert Martinez of global advisory firm Moffatt & Nichol found in his research that the idea of an inland port in Southwest Virginia has statewide support. Photo by Mark Rhodes

Virginia was the first U.S. state to build an inland port, when it opened the Virginia Inland Port on 161 acres near Front Royal in 1989. Sitting next to Norfolk Southern Corp.’s Crescent Corridor railway and near the intersection of interstates 66 and 81, VIP is owned by the Virginia Port Authority and connects to the Port of Virginia’s marine terminals in Hampton Roads by 220 miles of rail.

The VIP handled 31,282 containers in fiscal year 2021, and its total economic impact that year was $1.3 billion, with over $360 million in labor income from almost 6,000 indirect workers, according to a report released by William & Mary’s Raymond A. Mason School of Business in 2022. These are small numbers next to the Port of Virginia’s total economic impact of $100.1 billion in 2021, but the inland port is nonetheless an economic driver in the Shenandoah Valley, and a similar facility in Southwest would be, too, proponents hope.

In Front Royal, numerous distribution centers for companies like Home Depot Inc.,
Family Dollar Stores Inc. and Red Bull have opened near the inland port, and Harrisonburg-based InterChange Group Inc. has built a healthy business providing warehouses to national corporations.

Supporters of inland ports tout how the facilities alleviate highway traffic and increase capacity at busy coastal ports. 

By enabling freight to travel further by train instead of trucks, “the emissions will be less and you will also reduce congestion on the roads,” points out Ricardo Ungo, director of Old Dominion University’s International Maritime, Ports & Logistics Institute.

Since 1989, numerous other U.S. cities, from Dillon, South Carolina, to Dallas, have followed Virginia’s lead in establishing their own inland ports in hopes of spurring economic development, but not every U.S. inland port has been a success story. The elephant in the room is the $32 million Heartland Intermodal Gateway in Prichard, West Virginia, which opened in 2015. One study promised the port would create between 700 and 1,000 jobs. Instead, the facility shut down in 2019 due to lack of demand.

Moving freight

Del. Israel O’Quinn, who represents Washington County, notes that the proposed Southwest Virginia inland port sites would be within two hours’ drive of six interstates. Photo by Earl Neikirk

Local officials haven’t always embraced the logistics industry in Virginia. In 2008, Montgomery County sued to stop Norfolk Southern from building an intermodal freight terminal in Elliston, arguing that the facility didn’t fit with its long-term goals for smart growth and high-tech jobs. The state had agreed to pay 70% of the $35.5 million price tag.

The Virginia Supreme Court ultimately ruled against the county, but by then market conditions had changed, and Norfolk Southern hasn’t moved forward.

In recent years, state lawmakers asked for funding to study whether an area on U.S. Route 58 near Danville or somewhere in the Roanoke and New River valleys could work as sites for inland ports, but those bills failed to make it out of the General Assembly. 

In 2022, though, legislators approved funding for a state study to determine feasibility of a new inland port in Southwest Virginia or the Lynchburg region.

Robert Martinez, vice president for freight and economic development at global advisory firm Moffatt & Nichol, found while conducting the study that the idea of establishing a port in the Mount Rogers Planning Region had statewide support.

“There does seem to be quite a good echo in the General Assembly, including from folks who are not in Southwest Virginia, who say, ‘That’s kind of a good idea for Virginia,’” Martinez says.

Moffatt & Nichol’s data, used by the port authority and the Virginia Economic Development Partnership to complete the report, showed that the Lynchburg area didn’t “currently have the demand to justify the development of an inland port,” but Southwest Virginia meets “enough market-driven and physical conditions to warrant additional assessment.”

A new inland port could help entice businesses that have previously bypassed Virginia for ports further south, points out Will Payne, managing partner of consulting firm Coalfield Strategies LLC and head of business development for InvestSWVA, a business-attraction campaign for the region.

“The real coup would be grabbing freight business from northeast Tennessee that currently heads to Charleston,” he says. “Virginia’s port simply offers a better business proposition. We just need to convince [company executives] of that.”

The study confirmed what O’Quinn already understood.

“We’ve known all along that we are in a really good location for transportation and logistics,” the delegate says. “We’re a day’s drive from 60% of the United States. We’re less than two hours from five different interstates. We’re in a pretty sweet spot here.” continued on page 6

Thoughtful planning

Moffatt & Nichol selected two locations where an inland port would work in Southwest Virginia but did not identify the sites in the study. According to Pillion, one of the sites is Washington County’s Oak Park Center for Business and Industry, a 338-acre property along U.S. 11. He declined to name the second location, other than to say it’s in Wythe County.

The nation’s first inland port, Virginia Inland Port was established in 1989 in Warren County. Photo courtesy Port of Virginia

In January, Washington County’s Industrial Development Authority voted to “donate all acreage necessary” in Oak Park for the new inland port. Later in the month, Washington County supervisors passed a resolution in support of establishing an inland port in the county.

It may be too soon to plan a groundbreaking ceremony, though. Devon Anders, president of Mount Crawford-based  InterChange Group Inc. and a board member for the Virginia Maritime Association, cautions that careful planning will be key to building a successful inland port in Southwest Virginia.

“It’s worthwhile to continue to pursue [it],” he says, but “I would not just go there and put one in just because it looks like it’s a good location on Interstate 81.”

Will Fediw, vice president of industry and government affairs for the Virginia Maritime Association, agrees with Anders’ assessment. “The VEDP and the port authority will now basically have to figure out the best way to thoughtfully move forward with some sort of study in partnership with some of their stakeholders — like the railroad [and] their customers who are moving cargo — to figure out exactly what’s the right design,” he says. “When is the right time for this type of potential inland port?” 

The feasibility study noted that an inland port would need to make at least 20,000 freight transfers per year for the port to succeed. In the Mount Rogers area plus the broader geographic market of Giles and Pulaski counties and northeastern Tennessee, the study’s authors say, an inland port in Southwest Virginia could generate that volume.

Spokespersons from both the Port of Virginia and VEDP declined to comment for this story.

O’Quinn says VEDP and the port authority are currently identifying companies that would use a Southwest port, as well as whether they’d provide enough business to make the port cost-effective. As for Pillion and himself, O’Quinn says it’s time for action on a state level. 

“We actually just said flat-out to some people, ‘I’ll tell you one thing we’re not going to do and that is study this again, because here it is. The information is fresh. It’s going to work.’”  

Dickenson County to develop small industrial park

Work will start on a new industrial park on the site of a former strip mine in Dickenson County in late summer or early fall, says Dana Cronkhite, the county’s economic development director.

The Virginia Department of Energy announced in January that the county’s Industrial Development Authority will receive $869,584 from the federal Abandoned Mine Land Economic Revitalization (AMLER) program to establish the Red Onion Industrial Park. The Virginia Coalfield Economic Development Authority has contributed about $3 million toward the project since 2013. The Appalachian Regional Commission also allocated $500,000 in 2020.

Many Virginia counties are taking steps to prep industrial properties to lure businesses that want to build quickly.

Due to its hilly topography, Dickenson County has limited property that can be swiftly developed for industry. “The flat land around here is either on top of a ridge somewhere that God made or was made through mining,” explains Freddie Mullins, the IDA’s attorney.

The industrial park property, which the authority acquired in 2014 for $99,410, is about 100 acres; however, a lot of that land is hillside, Cronkhite notes. Developers plan to grade three pads of 15, 10 and 5 acres each on property that’s suitably level.

Construction will include building on-site access roads and structures to control stormwater and sediment, and installing redundant broadband fiber so if one provider has an outage, data can continue flowing.

The industrial park should be build-ready by April 2024, Cronkhite anticipates, and the site’s planners think the park could be a fit for businesses ranging from data centers to solar farms.

No matter what type of business comes, Cronkhite points out, “it’s going to be smaller industry because the pads are not ginormous.” (By comparison, Pittsylvania County’s Southern Virginia Megasite at Berry Hill has a 200-acre graded pad.)

Across the street from the industrial park, construction on the Wildwood Recovery Center — a residential addiction recovery facility that’s a joint project between Dickenson’s IDA and Kentucky-based Addiction Recovery Care — should be finished around the same time as Red Onion, according to Cronkhite.

The county would like to develop workforce training for the center’s graduates in hopes that they can work at the businesses that build facilities at Red Onion, Cronkhite says. “We’re going to have a workforce across the road, literally.”