Elizabeth Cooper Archives - Page 10 of 11

No colonial ivory tower

Williamsburg did not exist in 1693 when England’s King William III and Queen Mary II chartered a “perpetual College of Divinity, Philosophy, Languages, and other good Arts and Sciences” in the Virginia colony. More than 320 years later, the city and the College of William & Mary enjoy a mutually beneficial relationship.

The nation’s second-oldest college (Harvard was founded in 1636), William & Mary is known as one of the nation’s “public ivy” universities, offering a private-college education at a public-school price. Its historic main campus covers 1,200 acres in downtown Williamsburg, with four undergraduate programs offered in Washington, D.C. The university’s Virginia Institute of Marine Sciences (VIMS), one of the nation’s top marine research and education centers, occupies 42 acres in Gloucester Point.

William & Mary enrolls 6,300 undergraduate and 2,100 graduate students and employs more than 2,300 people on its main campus. A 2006 study showed that spending by the university, students, staff, faculty and campus visitors had an economic impact of more than $500 million on the commonwealth. But the university’s financial contributions transcend the numbers, school officials say, with faculty, students and graduates applying their knowledge and skills to a variety of research, business and governmental endeavors.

James R. Golden groups the school’s impact into four categories: students, expenditures and research, connections to the broader business community and civic leadership. “Our biggest technology transfer happens every May when we send out our new graduates,” says Golden, who retired as William & Mary’s vice president for strategic initiatives last August and now serves as a voluntary senior counselor to university President Taylor Reveley. “That’s the heart of what we do, and William & Mary does that extremely well. We really deliver prepared folks who go out and have great careers.”

A valuable recruiting tool
That’s a view shared by local economic development officials who tout the venerable institution to companies considering relocating or expanding in Hampton Roads. Because of William & Mary’s long history as a good school, international companies, especially, “recognize the value of an education at that institution and will relocate their families here,” says Steve Cook, vice president of the Norfolk-based Hampton Roads Economic Development Alliance.
The university’s collaboration with Williamsburg and James City and York counties in the Triangle Business Incubator also helps attract new business. The Alan B. Miller Entrepreneurship Center in William & Mary’s Mason School of Business manages the incubator that assists fledgling businesses in getting off the ground. “Assets like that often provide enticement to companies to come to the region,” Cook says. “They see that William & Mary can help them get their business started.”

Cook and his HREDA colleagues make sure businesses touring the region visit the Mason School. “The Mason School of Business is a great school,” Cook adds. “It obviously produces a lot of great graduates. Their influence is drawn across a number of industries.”

Many Mason graduates remain in the region to start their own businesses or work for established companies, while others retire in Williamsburg. That signifies an important connection for the region and the commonwealth, Golden says, noting that William & Mary is the only U.S. school to give MBA students any-time access to an executive mentor. The business school’s Executive Partners Program pairs more than 100 senior business leaders with MBA students. “It’s a real strength to engage them in the life of the university,” he adds. “They enjoy the opportunity to share their expertise, and the students benefit from their guidance and connections.”

Beginning this fall, MBA students will be able to attain their degree online. “We recognize that many students don’t have the time and schedule to participate in a regular program,” Golden says.

Local involvement
Collaborating on economic development activities throughout Hampton Roads benefits the university, as well as businesses and the region as a whole. “We pitch in to help in ways that are pertinent to the university,” says Julie Summs, William & Mary’s director of economic development and business innovation. Students gain career experience interning with local businesses, while fledgling entrepreneurs can obtain advice and support, and faculty and students tackle a variety of research, including marine science, geriatrics, modeling and simulation and bioinformatics.

The university secures more than $50 million annually in sponsored research, including projects with NASA and Jefferson Lab. Last year, Forbes magazine placed William & Mary 22nd among research universities, not bad for an institution without an engineering or medical school. “We are very strong in the basic sciences of physics, biology, chemistry and computer science,” Golden notes. “Our small, but effective Department of Applied Sciences is world class in connections.”

In addition, VIMS provides a unique venue for the school’s economic development endeavors. Researchers meet quarterly with industry leaders to discuss their work, including efforts to develop disease-resistant, fast-growing oysters and innovations in measuring small concentrations of contaminants in the Chesapeake Bay. “VIMS does a lot of sponsored research and develops potential connections with the private sector, which lead to significant corporate investments,” Golden says.

Two years ago, the university received the largest single financial award in its history in the form of a $25 million, five-year grant from the U.S. Agency for International Development to track more than $5.5 trillion in foreign aid. Faculty and student research led to the development of AidData, the largest database of international investments by world governments. “AidData makes detailed information about more than one million aid distribution projects more accessible to a variety of stakeholders.” Summs says. “It creates the tools to allow people to target, deliver and evaluate aid.”

Helping startups
Getting university research into the public domain falls under the Technology Transfer Office. “We’re not a big research university, but a lot of very good research goes on here,” says Jason McDevitt, president of the William & Mary Intellectual Fund and director of the Technology Transfer Office, which licenses research findings to companies to use in commercialized ventures. “We want to use it to benefit the economy.”
Startups are particularly attractive, McDevitt adds. “We like to do startups because there are additional economic benefits. For example, professionals looking to start companies in computer software can provide jobs for recent graduates where they wouldn’t have to leave the area.”

That was the case with Vertical Carbon Technologies, a Newport News startup founded by William & Mary doctoral graduate Xin Zhao, who is using university research on graphene (pure carbon in the form of a thin sheet) to improve energy density in batteries. “They’re doing well and making progress in developing new materials,” McDevitt says.

Researchers also worked with Mobjack Binnacle Products of Richmond to develop biodegradable escape panels for sunken fishing traps that can no longer be used for fishing but still deplete the marine population. “The traps land at the bottom of the water, capturing sea animals that won’t be harvested,” McDevitt explains. “The biodegradable panel lasts during the fishing season and breaks down after the fisherman’s use is done, allowing unwanted animals caught in the trap to escape.”

William & Mary’s business innovation program, launched in late 2013, aims to make the university more financially self-sufficient in an era of diminishing public funding. The program looks for cost-effective ways to promote innovation in business processes, find new revenue sources and redistribute funds to the school’s top priorities. “We want to do our part to make sure we spend the dollars we have in the best way possible and make sure we are the most effective, efficient and organized business operation we can be,” Summs says.

Development projects
The initiative includes signing onto projects that enhance the university’s financial status while meeting student needs. In 2000, the nonprofit William & Mary Foundation partnered with C.C. Casey Limited Co. to develop 365 acres adjacent to the west end of campus into a mixed-used, urban community called New Town. Today, New Town has a variety of homes, more than 170 shops and restaurants and Discovery Business Park, which offers office sites where firms can collaborate on research and development with William & Mary faculty and students. “I definitely think it’s a draw for both residents and tourists,” Summs says. “Our employees are patrons of the shops, restaurants and services.”

A student-focused development with apartments and restaurants opened in 2011 as Tribe Square. A student survey had indicated a lack of off-campus retail and dining establishments for students. “Students felt that the academics here were wonderful, but they needed more things to do,” says Nancy Buchanan, executive director of the William & Mary Real Estate Foundation, which developed Tribe Square. “The restaurants were built to satisfy that need, and it made a lot of sense to add housing and maximize the use of the property.”

Developments like Tribe Square and New Town, along with companies that market university research and a steady stream of new graduates can provide leverage for Williamsburg to capitalize on its position at the center of a Hampton Roads-Richmond mega-region. “We’re halfway between Richmond and Norfolk and can actively promote a conversation of how these two regions can work together more effectively in areas like transportation and economic diversification,” Golden says. “We want to convince people that this is a great place to come and do business.”

Reshaping a 400-year-old city

Cutting chains off the front door of the former Hampton Post Office, Mike Sinclair stepped inside the century-old building to find rotting wood, stacks of debris and a basement filled with standing water.

Sinclair, president and executive producer of m2 Pictures, had just purchased the historic, downtown structure at an auction for $300,000. Now he was faced with shelling out even more money to renovate the building into a studio for the television production company, which makes nonfiction cable TV programs. “We had no idea what we were getting into when we bought it,” he says. “We were distressed when we saw the shape the building was in, but we were committed to bringing it back. We wanted to see if we could get the grime off.”

That task relied not on cinematic magic, but on grit and determination. Nearly two years later, the building has been completely renovated, the façade restored to its 1914 appearance, crumbling bricks replaced and the limestone exterior hand washed. Inside, there are offices, a studio and space to house props and costumes.

The rejuvenated former post office is just one of several facilities throughout Hampton that have been revitalized or are in the process of major renovations, including longtime city fixtures NASA Langley Research Center, Peninsula Town Center and Fort Monroe.

Reshaping the old into the new prevails in a city that traces its history to 1607 and is bordered on two sides by the Chesapeake Bay and the York River. “We don’t have much undeveloped land,” notes Leonard Sledge, Hampton’s economic development director. “We have to think strategically and critically about areas for redevelopment.”

Polishing old gems
Hampton may be hemmed in, but it still offers an assortment of locales, says Sinclair, who launched m2 Pictures in 2006. “Hampton is a great city for a company like ours,” he adds. “The real strength of the city is the diversity not only in its population, but in its landscape and architecture. We can make Buckroe Beach look like Santa Monica or the desert, and Queen’s Way in downtown can become Brooklyn.”

With m2 Pictures operating out of three buildings in downtown Hampton, Sinclair has a great deal invested in a city he has come to love. “I have a strong passion for the city of Hampton,” he says, noting that the refurbished post office, coupled with Old Point National Bank’s new early 20th-century-style headquarters, has helped reinvigorate the downtown. “We’re really proud of it. It’s helped spruce up Queen Street, and this block of the city has come back to life.”

Hampton’s Coliseum district also has been revitalized, thanks to the success of Peninsula Town Center. The mixed-use development, featuring retail, office space and high-end apartments, opened in 2010 replacing the aging Coliseum Mall. In October, the Dallas-based Tabani Group became the development’s third owner in three years, purchasing the property for $48.5 million. The retail investment company plans to build 100 additional residential units and develop vacant areas on the 1.1 million–square-foot property.

As Hampton’s largest economic development project, Peninsula Town Center is a tremendous asset to the city, Sledge notes. “In terms of replacing an aging, enclosed mall and creating a vibrant town-center atmosphere, Peninsula Town Center has been great. We want to continue to improve on a great product with the new owners.” Last year, the city announced that Faneuil Inc., a customer-service center for government and commercial organizations, is investing more than $2 million to set up operations in a 22,000-square-foot space at Town Center. Up to 400 customer service representatives will be employed at the center.

Hampton officials hope to replicate Peninsula Town Center’s success at Harbor Square, a former downtown apartment complex that had fallen into disrepair. The city purchased the 14-acre property and has begun construction of a courthouse, planning to follow it up with a mixed-used development of high-density, multifamily homes, restaurants and a grocery store. “It will be mostly residential with market-rate housing and a small commercial space,” Sledge says.

Reveille at Fort Monroe
The 400-year-old city has an abundance of older housing, including more than 170 units at Fort Monroe, the national historic site that was decommissioned as a military installation in 2011. Fort Monroe is boasting 100 percent occupancy of its available residential properties, adding credence to officials’ contention that the 565-acre stone fort has steadily come into its own as a housing, business and tourist destination. “Our housing is leading the charge and shows there is interest in Fort Monroe,” says Glenn Oder, executive director of the Fort

Monroe Authority, which manages the site. “Compared to what we have seen in BRAC [Base Realignment and Closure process] closings around the country, we are a shining star,” he adds “Fort Monroe is an almost perfect mixed-use community.”

However, businesses have been slower to take advantage of Fort Monroe’s 1.1 million square feet of commercial space. At issue, says Oder, are the major renovations needed on the nearly 200-year-old fort’s commercial buildings, many of which were built before the Americans with Disabilities Act necessitated elevators and other accommodations. “We have a wide spectrum of office buildings in various conditions and from various construction periods,” says Joe DosReis, the authority’s real estate director. “Most of the improvements are needed because of aged electrical systems and plumbing. As you get deeper in the buildings, it becomes a little more challenging.”

While the authority has been handling renovations, DosReis says it does not want to become a developer for the fort. “By improving buildings, we actually add value to them, but the more expensive renovations are better done by private entrepreneurs because they can get state historic tax credits.”

Several buildings are ready for tenants, and renovations are starting on the fort’s former post office, which will house the authority’s staff. In addition, Liberty Source opened its headquarters in Fort Monroe in 2014, investing about $1.56 million to renovate two buildings. The company, which performs office functions for large corporations that had previously outsourced those practices overseas, plans to employ almost 600 workers in Hampton during the next few years.

There are also plans to use up to 19 buildings for a statewide residential science and engineering school called STEAM Academy. Lease negotiations are underway, DosReis says. “It’s still in process. Those plans are moving ahead.”

Set on an island in the Chesapeake Bay, Fort Monroe offers a unique business setting, DosReis notes. “People enjoy walking out the front door of their office onto the bay. Very few offices offer that kind of amenity.” On the financial side, Fort Monroe’s debt-free status enables it to offer competitive lease rates and tenant improvement packages. Average rents run about $1,250 per month for the more modern buildings.

“Our process was very clear from the beginning,” DosReis adds. “We intended to get people back to Fort Monroe. If we could get people to visit Fort Monroe, we could get them to live here, and if [they] live here, work here. We led with special events, fixed up houses, and now we’re working on commercial properties.”

New era at NASA Langley
A century younger than Fort Monroe, NASA Langley Research Center is also sprucing up to its infrastructure for the 21st century. NASA’s oldest field center has embarked on a 20-year revitalization program that includes replacing aging structures with new research and development facilities. Officials say the plan will save $100 million in maintenance and utilities over 20 years while bolstering Langley’s efforts to attract the nation’s top scientists and engineers.

“Langley is known as the Mother Center, and a lot of our buildings are 40 to 50 years old,” says Cathy Mangum, director of NASA Langley Research Center Operations Directorate. “We’re facing competition from Google and Amazon for the best and brightest engineers and scientists. Having modern infrastructure and workforce strategies such as flex time and teleworking can help Langley continue to attract the best and brightest.”

Langley’s first new building in 35 years, a $28 million, 79,000-square-foot headquarters, opened in 2011. The Integrated Engineering Services building was completed in the fall, and construction is expected to start late this summer on the $23 million Computational Research Facility, a consolidated data center for advanced computational research and development slated to open in fall 2016. Langley also plans to start construction on a 175,000-square-foot Measurement Systems Laboratory featuring a high-tech laser/lidar and electromagnetics lab in late 2016.

It’s an ambitious but pragmatic construction plan, Mangum says, especially since the new facilities are replacing older, less efficient structures. “We’re very mindful of the costs to manage infrastructure. For every square foot we build, we will tear down two square feet.”
Established by the National Advisory Committee for Aeronautics in 1917, Langley had a 2014 budget of $848 million. Its economic impact on Hampton Roads in 2014 came to $779.1 million, while it poured $870.2 million and $2.3 billion into state and federal coffers. The facility employs 1,900 civil service and 1,700 contract workers.

Science park
Hampton officials hope to capitalize on the center’s economic and technological contributions by building a 21st-century science park on the city’s last large, undeveloped parcel just a mile from Langley’s main gate. The city has formed a public-private partnership with North Carolina commercial real estate firm Craig Davis Properties to build five, 20,000-square-foot, Class-A office buildings, each with a price tag of at least $3 million. The Hampton Economic Development Authority awarded Craig Davis Properties a $428,000 grant over five years to help attain financing for the project.

“It creates an area of the city in close proximity to NASA Langley, Langley Air Force Base and other federal facilities for an office and work environment,” Sledge says. “Our hope is all of those things will create a synergy conducive to new companies starting up, conducive to people thinking strategically about how to create an environment that leverages the intellectual capacity of all people traditionally working in the federal environment to create a commercial environment and services.”

Craig Davis Properties has made significant investments in the city during the past 15 years, including about $30 million on buildings in Hampton Roads Center north, the site of the future science park, says Steve Mallon, the company’s executive vice president for Virginia. The firm owns 10 acres in the park and has the option to purchase 11 additional acres from the Hampton Economic Development Authority. “It’s still in the planning stages,” Mallon adds, noting that the project’s development will rely upon the economy’s continued growth. Although research and development and technology companies would be the park’s major tenants, a retail component is also on the drawing board. “We’ll look at all aspects of commercial real estate,” Mallon says. “We’re building on the assets of the community.”

Those assets combine Hampton’s bountiful past, present and future. “We’ve had a lot of firsts in our city,” Sledge says. “Our objective is to continue to attract new capital into our city and create an environment conducive to existing and new businesses to grow and expand here.”

Hitting the beach

When he graduated from Virginia Tech four years ago, AJ Medina could have returned home to job-rich Northern Virginia. Instead, he moved to Virginia Beach.

Today, he’s designing buildings for colleges and universities as an architect with Clark Nexsen, while settling into a new house and enjoying the amenities that Virginia’s largest city offers.

Medina is one of a growing number of millennials — born between the early 1980s and the late 1990s — who are flocking to Virginia Beach. Seventeen percent of the city’s residents fall into the 20-29 age group, an increase of 5.6 percent from 2010 to 2013. The city has become a magnet of sorts for millennials in search of diverse employment, housing and entertainment options — so much so that in August, Forbes designated the city a “millennial boomtown.”

For Medina, Virginia Beach is a good blend of urban and suburban life, with beaches thrown in as an added bonus. “On the weekends, my friends and I do anything from going to Town Center to bumming it out on the beach.” And, the cost of living is affordable for recent college graduates, he adds, noting that four years out of college he most likely would not have been able to purchase a home in Northern Virginia. Based on data from 2012, the median house price was $480,200 in Fairfax County, compared with $272,700 in Virginia Beach.

Medina and his fellow millennials are fueling Virginia Beach’s growth, says Gerald S. Divaris, chairman and CEO of Divaris Real Estate, who notes that the average age of resort city residents is in the early 30s. “We have a lot of younger folks, but they’re working and more educated and have money to spend,” Divaris says. Millennials, he adds, are drawn to the city’s expansive oceanfront, varied housing options and highly regarded public schools.

Town Center
City leaders also attribute much of Virginia Beach’s growing popularity among young professionals to Town Center, the 17-block, mixed-used development, which has become the core of the city’s central business district. Since opening in 2003, Town Center has evolved into a trendy destination, setting its sights on upscale retailers that are unique to the region.

“It’s a very nice live-work-play environment,” says Warren Harris, Virginia Beach’s economic development director. “A lot of people are looking to work and live within walking distance. You can walk to work and then at 5, 6 or 7, leave the office building, and you have the choice of multiple restaurants for dinner. Later, you can go to a performance at the Funny Bone or at the Sandler Center for the Performing Arts.”

Starting this fall, a cluster of retailers will be making their first foray into Hampton Roads at the Town Center. The trendy women’s clothing chain Anthropologie will anchor retail in Town Center’s newly constructed 15-story Main Street Tower, which also features office space, 288 luxury apartments and an 890-car parking garage. Meanwhile, clothing and housewares retailer Free People and yoga-inspired athletic retailer Lululemon will move into the Armada Hoffler office tower in space that previously housed Red Star Tavern. Upscale furniture and housewares dealer West Elm, specialty store Francesca’s and eateries Twist Martini and Tupelo Honey Café also are moving into the Hampton Roads market via Town Center this fall.

Divaris, whose company leases and manages Town Center, believes the development’s success in attracting upscale shops reflects Virginia Beach’s growing affluence, as well as the development’s central location in the city. “Town Center is equidistant to everybody,” he says. “It has a terrific combination of uses so it’s not just dependent on offices, retail or restaurants. That enables these types of stores to succeed.”

Clark Nexsen CEO Tom Winborne also believes the trendy retailers and entertainment options will help him attract young engineers and architects like Medina. Based in Hampton Roads since the early 1970s, the architectural design firm had leased space in Norfolk for almost 30 years when it began looking for updated headquarters. With its work-play-live environment, Town Center fit the bill, and about 300 Clark Nexsen employees moved into Main Street Tower in July.

“Where we were really didn’t have the downtown feel that all our young employees were looking for,” Winborne says. “They pay a lot of attention to where they’re located. Town Center has the amenities we were looking for: housing for lots of different age groups, tons of walk-to places for breakfast, lunch and after work. It’s got that young, vibrant environment we’re looking for.”

In addition to anchoring Main Street Tower, Clark Nexsen architects and engineers designed the building, customizing the firm’s 80,000 square feet of office space to include an open layout and lighting controlled by sensors for time of day and occupancy.

Winborne, however, stresses that the company did not set out to leave Norfolk. The firm checked out rental options in downtown Norfolk and other areas of the city before committing to Town Center. “It’s never been a Norfolk thing or a Virginia Beach thing,” he adds. “I’m a staunch believer in regionalism. The thing most important to me is to keep Clark Nexsen here in Hampton Roads.”

Princess Anne Commons
Virginia Beach’s economic development department has also set up shop in Main Street Tower. Harris hopes the glistening new building will be another tool in the city’s arsenal to attract new businesses. “Having that Class A product on the market allows us to go across the world and showcase that facility, Town Center and the other facilities available here in Virginia Beach.” He adds that the city is already looking at options for Town Center’s next phase.

Harris and his team also are focusing on other business sites in the sprawling city. Princess Anne Commons, home to several medical facilities — including Sentara Princess Anne Hospital, LifeNet and Operation Smile, as well as the Virginia Beach Higher Education Center — is slated to become the city’s next corridor of economic development.

Earlier this year, Mayor Will Sessoms established a task force charged with attracting more industries focusing on biotechnology, pharmaceuticals and health-care delivery. In preparation, the city has hired a bioscience consultant, opened a new shopping center along the corridor and is improving roads in the area. In September, the task force announced preliminary plans for a new bio-medical park in the Princess Anne corridor that would be developed as a public/private partnership.

“We really haven’t necessarily leveraged bioscience as an industrial cluster,” Harris adds. “But we’re always looking to diversify our economy, and we think this is a great new industry cluster.”

Sports arena
Fifty-four businesses moved to Virginia Beach or expanded their operations in the city last year, leading to the creation of more than 2,200 jobs, a 100 percent increase over the previous year. The city also garnered $260 million in new capital investment, factors leading to CNNMoney.com naming it the “Easiest Place to Start a Business” and the second “Most Business-Friendly City” in the United States.

Harris and other city officials believe a new sports and entertainment facility would contribute to Virginia Beach’s business-friendly status. This spring, City Council entered negotiations with United States Management to build an 18,000-seat arena. USM has lined up $200 million in private financing to construct the facility, with the city contributing $52 million to $78 million for infrastructure improvements. “It would expand our goal to have a year-round experience in the resort area,” Harris says, noting that the arena would host entertainment and sporting events primarily from October through May, the “shoulder season” for tourism when the number of visitors typically drops off.

While an arena would not be completed until 2016, the city could welcome the Virginia Beach Neptunes, its first minor league professional baseball team, as early as next spring. Under the auspices of Virginia Beach Professional Baseball LLC, the $40 million project would be financed through private bonds and would include a 5,000-seat stadium and 13 baseball and softball fields adjacent to the Virginia Beach SportsPlex. “It will help brand Virginia Beach as an amateur sports mecca for teams to come to,” Harris says.

New superintendent
Millennials who have children in Virginia Beach Public Schools are among the citizens Aaron Spence is talking to as he settles into his new position as the city’s school superintendent. The Virginia Beach native graduated from the city’s Green Run High School and returned home this summer after stints as the chief high school officer for the Houston Independent School District and superintendent of Moore County (N.C.) Public Schools. “It was a unique opportunity for me to come back and serve the school district that meant so much to me and served me so well,” he says.

As part of his 120-day transition plan, Spence has been meeting with community leaders, principals, teachers, parents and students to get to know Virginia Beach’s 86 schools and their needs. “We’re having frank conversations about where we are today versus what we say our expectations are for our students,” Spence adds. “That gives us areas where we need to focus and work.”

Spence’s initial goals are straightforward: keep the schools focused on student learning and establish Virginia Beach Schools as the nation’s foremost school division. A complete shift in the system’s priorities is not on the drawing board, even as he formulates a new strategic plan.

“I don’t foresee overturning the apple cart,” he says. “Virginia Beach is an excellent school system, and community support for our schools is exceptional, but there are opportunities to strengthen and extend the work and focus on rising challenges.”

Those include closing achievement gaps because of a growing number of students living in poverty, responding to a business community seeking graduates immersed in globally competitive skills and boosting students’ critical thinking skills. The school system has forged connections with local community colleges and vocational schools, with students taking advanced courses and attaining certification in industries ranging from health care to advanced manufacturing. All are part of creating multiple pathways for success, Spence adds.

“A student can turn left when they graduate from high school and be employable immediately if they choose or continue on to postsecondary education. No one size fits all solutions for our students,” he says. “We want to make sure no matter what our students want to do, they understand the options they have and what those options mean in terms of becoming productive members of society.”

Options that include remaining in or — like Spence — returning to Virginia Beach.

Calmer seas

After six years of operating losses and turbulence in its executive office and boardroom, things are starting to look up at the Port of Virginia. The East Coast’s third-busiest port moved a record 2.3 million containers in 2013 and operating losses have dropped.

But state and port officials admit that financial sustainability is still far off and will require long-term, deliberate solutions to bolster one of the state’s most important economic assets. “We can’t do quick fixes,” says Virginia Secretary of Transportation Aubrey Layne. “When we put a fix in place, we want to make sure it’s the right thing to do for the long term — not just knee-jerk reflexes.”

Solving the troubled port’s finances was John R. Reinhart’s top priority when he took over as CEO and executive director at the Virginia Port Authority last February. Six months on the job, and Reinhart is well on the way to achieving that objective. The former CEO of Maersk Line Ltd. quickly tackled the challenge of reining in the port’s operating losses, which totaled $137 million over the last six fiscal years, according to Gov. Terry McAuliffe’s administration. In his first “State of the Port” address shortly after taking over the helm, Reinhart pulled no punches, noting, “We’ve got to stop the bleeding.”

So far, it looks like the wound has been partly stitched. To keep the port on pace with the surge of cargo coming through its Hampton Roads marine terminals, Reinhart accelerated plans to overhaul terminal systems to move cargo faster, created a task force to address issues raised by motor carriers and renegotiated incentives with rail carriers — all while the VPA endured an overhaul of its board of commissioners and integrated functions with those of its operating arm, Virginia International Terminals.

Reinhart is getting high marks from state officials and board members, who are applauding his efforts to improve port operations. In January, the month before he came on board, the port was operating at a “burn rate,” or operating loss, of $71,437 per day. That had been reduced to a loss of $7,205 per day in the port’s fiscal fourth quarter. The operating loss for the fiscal year that ended June 30 was $17.1 million — $6 million less than had been predicted in January. The port’s fourth-quarter loss was the smallest in the last seven years.And while the bottom line improved, the port had handled a record-setting 2.3 million-plus containers during the year.

“Right off the bat, John was able to bring leadership and coordinated effort to the port,” says Layne, noting that under Reinhart, the port was able to halt its $2 million monthly operating losses. “He was able to make the hard decisions and arrest that precipitous decline and get hold of finances through leadership and operating fixes.”

Renegotiated incentives
One fix renegotiated incentives offered to rail carriers, a move Layne wholeheartedly supports. “Railroads are very important to the port,” he notes. “I don’t blame them if the port and previous management gave incentives, but it’s pretty obvious we were losing money on every train car that they loaded.”

Rail incentives bore a particularly large hole in the port’s budget since handling the freight led to overtime labor and lease costs. The incentives were put in place to bolster rail traffic, which ultimately led to more overtime pay for workers handling the additional cargo.

Reinhart renegotiated some of the leases and allowed others to lapse, Layne adds. “We’ll work on incentives that make economic sense, not just drive throughput. If we’re running the port efficiently, people will want to bring goods here.”

To further improve port performance, in April McAuliffe removed five of the 11 appointed members of the VPA’s board of commissioners before their terms expired. The overhaul came less than three years after former Gov. Bob McDonnell replaced 10 members of the board when the port recorded its third consecutive year of operating losses. McAuliffe brought back one of those members, Northern Virginia attorney and former state Transportation Secretary John Milliken, who reclaimed his chairman’s gavel.

“I’m delighted to have the opportunity to come back and take a role down here again,” says Milliken, who had served as board chairman for a decade before McDonnell removed him.

“Do I feel excited and challenged? Absolutely, but there’s no pressure.”

Other new McAuliffe appointees include former state Del. Alan Diamonstein and TowneBank CEO Robert Aston, a member of the VIT board that was dissolved when it merged with VPA. The new board hit the ground running, approving a breakeven budget for the 2015 fiscal year and supporting Reinhart’s efforts to shore up the port’s operations. “John Reinhart has been spectacular. He’s brought a burst of energy and a sense of urgency,” Milliken says. “I give the prior board full credit for selecting him. Our job is to push [Reinhart] on the operating side because we’ve committed to the governor to run a port that’s self-sustaining.”

The previous board, according to Layne, had become encumbered by a lack of direction and ineffective port leadership, which ultimately impacted its performance. “The board had taken its eye off its real charge for being a good policy board for arguably the commonwealth’s most significant economic asset.” The new board, he adds, is focused on making the port a strong economic generator for its customers, Hampton Roads and the state. “We’ve got a long ways to go but at least we’re headed in the right direction.”

Stretched capacity
The goal now is to achieve financial stability while determining the best way to handle the record volume of containers moving through the port. “The purpose of the port is job creation and economic development,” Milliken says, adding that the biggest short-term barrier is reaching optimal operating capacity of 85 to 90 percent. “We don’t want to be a drain on anybody.”

High cargo volumes passing through the East Coast’s deepest channel have stretched capacity, choking terminal operations. (see chart) “We’ve just come off our heaviest volume year in history,” Milliken notes. “In some ways, that’s a curse as well as a blessing. We weren’t organizationally set up to handle it effectively, and we lost money.”

With volumes expected to continue to grow, the VPA is focused on enlarging facilities, including APM Terminals Virginia. Four years ago, the port authority agreed to lease the Portsmouth terminal from APM North America for 20 years at an approximate annual cost of $50 million, but that agreement could be renegotiated when APM sells the facility to a partnership between infrastructure investor Alinda Capital Partners and British pension fund Universities Superannuation Scheme Ltd.

The deal is expected to go through this fall, and APM Terminals would be renamed Virginia International Gateway. “The VPA has the authority under its lease to double the capacity of the existing APM Terminal,” Milliken notes. “We want to do that, but it gets into the question of we’re not sure we want to do that without knowing how long we’ll control it.”

VPA officials met with the buyers before the transaction was announced and see the sale as a positive for the port. “These folks are passive investors and will look to us to help them maximize their investment,” Milliken says, adding that officials look forward to discussing the port’s long-term plans for APM with its new owners. “We made it clear to them that our long-term goal is to own or at least control the APM Terminals. They may be interested in doing a long-term deal with us.”

Layne has advocated renegotiating the port’s lease of APM Terminals and ultimately bringing the facility under the state’s control. “It would be great to control it,” he says. “If we did, we could put money in the facilities. From our perspective, why would we just lease for a few years and turn it over to a competitor?”

If an agreement can’t be reached on the Portsmouth terminal, the port’s backup plan is to fast-track the Craney Island eastward expansion, which would nearly double the port’s marine terminal capacity. “If we can’t use APM, we’ll accelerate Craney Island,” Milliken says. He adds that if the port gains long-term control of APM and expands that facility, the Craney Island expansion will be pushed back from the mid-2020s to the early 2030s.

Terminal reopens
Meanwhile, the Portsmouth Marine Terminal, which the VPA shuttered in 2011 when container operations were consolidated at APM, reopened in April as a staging facility for Chryslers bound for China and will reopen to container cargo traffic this fall. Between 75,000 and 100,000 containers are expected to pass through PMT annually, relieving the burden at Norfolk International Terminals and APM. “We’re operating at greater than optimal capacity at the other two terminals,” Milliken notes. “By shifting business to PMT, we can take some of the pressure off, and it gives us a better bottom line.”

Reinhart and the board also want to expand operational capacity at Norfolk International Terminals (NIT), which handles the largest volume of business at the port. Reinhart has become a constant presence around NIT, where he frequently performs on-site inspections and meets with workers. “He puts on boots, a hard hat and vest and walks up and down the lanes and asks very pointed questions and expects candid answers,” says Joe Harris, media relations manager for the VPA. “He talks with everybody, from the guy who’s the terminal manager down to the couriers and lashing gang.”

Those comments have helped to drive changes at the port, says Milliken. “He’s come back with ideas from talking to people at the terminals.” One conversation led to the creation of the Motor Carrier Task Force after truck drivers, who move about two-thirds of the terminal’s traffic, complained of long wait times and traffic congestion. Composed of truckers, longshoremen, shipping firm representatives and other port constituents, the task force is looking at all phases of terminal operations, from communication with the port authority to the time truckers spend at the port. “If he gets held up at the port, that hinders his ability to make four trips per day,” Milliken says. “NIT’s goal is to have a 60-minute turn time. That allows the trucker to get the level of work he needs to make a livelihood.”

To improve traffic flow, the Port of Virginia is installing automated gates and setting up an appointment system for truck arrivals and departures this fall at NIT. Improvements have also been made in nighttime lighting and in striping and numbering on the trucking lanes at the terminal. Although the port has not met its 60-minute arrival-to-departure goal, “congestion and wait times have improved,” says Milliken. “The trends are all in the right direction.”

NIT’s new terminal operating system is handling the appointments. Installed in June as part of the port’s move to a more modern technology infrastructure, Navis N4 replaced a 25-year-old system that had outlived its usefulness. The N4 software package gives the port a real-time look at the length of time truckers spend at the port, the dwell time of boxes on and off rail, and ship moves per hour.

“It’s a critical component of smoothing out day-to-day operations,” says Harris. “If we look at Tuesday appointments Monday evening, we’re able to better build labor and other needs based on the number of appointments.”

N4 lets port officials set the workload. “We’ve said to John Reinhart, ‘We’re holding you and the staff responsible for efficient operations of the terminal,’” Milliken says. “This system gives them tools they didn’t have before.” Along with the new terminal operating system, NIT added 32 new yard hustlers to support rail operations and will place new GPS systems on straddle carriers, the vehicles that move containers around the terminal. The onboard computer synchronizes moves for drivers, directing them to find specific containers and move them along the most efficient route.

Limiting the number of hourly appointments allows the port to better spread traffic flow throughout the day and take trucks off local roads during rush hours. To that end, the port authority has asked the City of Norfolk to extend the hours trucks can access Hampton Boulevard to better align with NIT times. Under a ban that went into effect in 2007, large trucks are restricted from driving on Hampton Boulevard beginning at 4 p.m., a deadline the port says limits late afternoon appointments. “We’re reaching out to the community to talk about it,” Milliken says. “With the shift to set up appointments and have a more regular flow of traffic into and out of the port, it makes a lot of sense. No trucks after 4 p.m. provides a disadvantage to other Hampton Boulevard traffic whose rush hour is at the time of our 4 o’clock deadline.”

Layne acknowledges that neighborhoods along Hampton Boulevard may be reluctant to support expanding truck hours to 7 p.m., but he adds that the VPA will be upfront with the city. “Anything that involves infrastructure, somebody is not going to be happy, but we strive to be very transparent. Even if you don’t agree, at the least, you’ll know why we’re doing it.”
The goal of the McAuliffe administration, is to make the Port of Virginia the nation’s best. “The directive from the governor is to make sure that this is the best port and to be a good fiscal steward,” says Layne. “We’re doing it correctly and getting a handle on operations and financial data.”

Hotel brokerage

From Washington, D.C.’s famous Watergate Hotel to the historic Cavalier property in Virginia Beach, Douglas Henkel has played major roles in some of the most substantial real estate deals in the hospitality industry, closing more than $1 billion in hotel deals in the past two years alone.

Not bad for a guy who began selling residential properties 43 years ago because he couldn’t afford graduate school. Today, Henkel, executive vice president with CBRE/MidSouth, leads the company’s hotel brokerage practice out of its Norfolk office, closing deals on hospitality properties throughout the U.S., Mexico and the Caribbean.

The top producer for CBRE/Hampton Roads and the firm’s Mid-South region in 2013, he was also recognized in the company’s Colbert Coldwell Circle of the Top 100 performers in North America last year. “For a Norfolk broker to be in the top 100 CBRE brokers nationally is an incredible accomplishment we all take pride in,” J. Scott Adams, president of CBRE’s Mid-South region, said of the award.

As a principal in CBRE’s Norfolk, Richmond, Charlottesville, Raleigh and Greensboro affiliate offices and a member of the company’s board of directors, Henkel has focused on commercial real estate for more than three decades. At the start of his career, he co-owned Read Commercial Properties with Craig Read from 1979 to 1994. The firm had grown to three locations with more than 100 employees when Henkel and Read sold it to Robinson Sigma Commercial Real Estate Inc. Henkel joined Robinson Sigma and soon found his niche in hotel brokerage. “Whatever needed to be done I worked on,” he says. “Land, broker, investments, sales, leasing.”

It’s not awards or the opportunity to broker major deals that drives Henkel. He simply enjoys his work. “I like doing real estate,” he says. “It’s interesting and allows me to travel and meet a lot of interesting people. Every deal is different, and every property is different.”

A case in point: two huge deals Henkel orchestrated last year. As the exclusive broker for the $35.7 million sale of the 87-year-old Cavalier Hotel, Henkel worked with the city to provide off-site infrastructure support and cash incentives for potential buyers. “The property is very important to Virginia Beach because it’s their northern gateway,” he notes. “The city was very anxious to see that hotel being preserved.” Henkel believes the buyer, Cavalier Associates LLC, led by Virginia Beach developer Bruce Thompson, can successfully revitalize the original seven-story Cavalier on the Hill and a newer oceanfront hotel directly across the street. “He always does things over the top. It will be quite a landmark.”

Along with negotiating the sale of The Cavalier, Henkel advised Real Resorts on its partnership with Playa Hotels & Resorts BV to buy four luxury resorts in Cancun and Playa del Carmen, Mexico. “That was pretty challenging because the transaction was from the outright sale to the advisory role in structuring the merger of two companies,” he says. “The sale incorporated not only the client receiving cash but taking part of the first deed of trust as well as stock in the new company.”

Other high-profile transactions in Henkel’s portfolio include the $53 million sale of The Driskill Hotel in Austin, Texas, the $27 million sale of the Barcelo Radisson Hotel in Orlando, Fla., the $40 million sale of the Kingsmill Golf Resort & Spa in Williamsburg, the $13.7 million sale of the Sanderling Resort & Spa in Duck, N.C., and the $41.9 million sale of The Watergate Hotel. In addition, he was a member of the CBRE group that secured a $550 million deal for Hilton Hotels to develop a 500-room Waldorf Astoria and a 1,000-room Hilton at Bonnet Creek Resort outside Orlando.

Henkel also has sold his share of golf courses. That list includes Williamsburg National, Honey Bee and Hell’s Point in Virginia Beach and Harbour View in Suffolk. “Hotels and golf course are not real estate assets,” Henkel notes. “You’re really selling an operating business as opposed to office buildings with all the pieces in place, but the process and focus are the same.”

Challenges and complications can be expected when dealing with sales of high-profile properties, especially during a down economy when hotels and golf courses tend to take more of a battering than other commercial properties. “It does not come easy,” Henkel says. “You’ve got to go out and make a lot of calls, secure good listings and execute on your responsibility to clients. If you do that, you’ll make good money and get good clients.”

Henkel’s attention to detail inspires colleagues throughout the company, says Adams. “With all of his incredible wealth of experience, Doug still brings an energy and enthusiasm that we would want from any of our agents that we expect to achieve high levels.”

While sales slowed in the wake of the 2008 economic downturn, the market has steadily improved. “There’s a very high demand for hotel investments,” Henkel says. “Major private equity funds are aggressively looking to acquire hotel assets of all classes.”

Another sign of the improving market? Henkel’s own frequent hotel stays. “I’m gone some part of 35-40 weeks a year,” he says. “I go wherever a deal arises. If I can do a good job for my clients, I’m happy.”

A perfect partnership?

It’s nearly impossible to go anywhere on Virginia Beach’s resort strip without seeing the results of a nearly two-decade-long partnership between developer Bruce Thompson and construction executive John R. Lawson II.

Thompson, CEO of Gold Key/PHR Hotels & Resorts in Virginia Beach, and Lawson, CEO of W.M. Jordan Co. in Newport News, have collaborated on 10 major oceanfront developments since the late 1990s, while separately spearheading other large projects throughout the region. Now, they’re taking on the massive renovation of the historic Cavalier Hotel while extending their combined reach into downtown Norfolk where they’ve broken ground on a $126 million, 23-story hotel and convention center.

For Thompson, an entrepreneur who never envisioned himself in the development business, and Lawson, the former rector of Virginia Tech’s board of visitors, it’s a productive union of creativity vs. discipline, energy vs. perfectionism and casual chic vs. button-down style. The collaboration comes naturally through a shared vision for Hampton Roads and complementary skill sets that they say lend harmony and balance to their projects.

“We each bring something different to the table,” Lawson says. “I bring the construction experience, and Bruce is a great promoter with unusual imagination and creativity.”

“John knows the construction business inside and out,” Thompson adds. “He’s a consummate professional in every aspect of construction. He appreciates quality and is not afraid to invest in it.”

They grew up in the same time and place. Both were born in 1951 — Lawson is older by three months. Both are Hampton Roads natives — Thompson was raised in Norfolk and Virginia Beach, while Lawson grew up in Newport News. Both attended Virginia Tech — Thompson left before graduating after opening a sub shop that he later sold to pay debts, while Lawson earned a degree in geophysics.

Both started out at the bottom of the ladder and climbed their way to the top. Thompson worked at a Virginia Beach hog farm during the day and tended bar at night before getting into the hotel business in the 1980s. Today Gold Key Resorts employs about 2,500 people and had about $180 million in revenue last year, according to published reports. Lawson worked his way up in the family business. His father co-founded W.M. Jordan Co. in 1958, and he began as a laborer pouring concrete on construction sites.

These days Thompson and Lawson are firmly ensconced in the executive offices at their respective companies. Last year, Gold Key moved into sparkling fifth-floor corporate offices at 31 Ocean, a mixed-use project that Thompson developed and Lawson built. Sweeping views of the Virginia Beach oceanfront predominate in airy, spotless offices where employees are not allowed to eat at their desks. (A company café is provided as a gathering place.)

W.M. Jordan has 300 employees in four offices in Roanoke, Richmond, Wilmington, North Carolina, and Newport News where its sedate headquarters in a tidy, brick building has been located on Jefferson Avenue since 1960. Behind the headquarters is a community garden where fruits, vegetables and flowers are grown for employees and residents of a nearby group home for developmentally disabled adults.

Thompson and Lawson met more than 20 years ago as Thompson was pursuing hospitality projects along the Virginia Beach oceanfront. “We had development opportunities, and W.M. Jordan is a successful builder,” Thompson says. “John and I realized we both have a real commitment to quality people and communities. It was only natural we form a strategic relationship that grew into a wonderful business relationship.”

Joking that he brings the “cool factor” to the relationship, Thompson says Lawson’s thorough knowledge of the construction industry drives projects to their completion. “I get a big kick out of a visualized property with a hotel and restaurant on it. I can take that vision to an architect, and he’s the intermediary. From there it goes to John, and he builds it.”

Lawson offers similar praise for Thompson. “I’ve always been attracted to quality, and his properties are the best at the beach from landscaping to customer service,” he says. “He’s always thinking, and he comes up with unbelievable ideas. He’s pulled off some things that have caused me to scratch my head and say, how can that be done?”

Like rehabbing the 87-year-old Cavalier Hotel. Last year, Thompson, Lawson and other investors formed Cavalier Associates LLC to purchase the 22-acre hotel site for $35.1 million. They’re preparing to renovate the historic structure and construct about 100 homes, while rebuilding its newer, sister hotel into the city’s first full-service Marriott and the first Marriott in Gold Key’s portfolio. The city has agreed to kick in $18 million for the project, which is expected to take two years to complete.

“It’s a great way for us to give back to the community,” says Thompson. “We both appreciate the history of the area and being able to look in the rearview mirror and influence the way development takes place in the community in which we were raised.”

Thompson didn’t realize how much people revered the stately hotel until a liquidation sale of its contents. “Six thousand people stood in line three days in a row to buy a doorknob, a room key, pieces of wallpaper, a Gideon Bible,” he notes. “That’s how important the building is to the community. It’s a big responsibility, and we’re taking it very seriously.”

There could be some new amenities. Thompson wants to bring horses and a bourbon distillery to the property. The multifaceted project offers a set of challenges neither partner has encountered before. “The Cavalier is as tough as it comes,” says Lawson. “That’s a tough building to conserve and restore, but we’ll get there, and it will be something everybody can be proud of and admire.”

As scaffolding goes up on The Cavalier, Thompson and Lawson also are overseeing construction on the new hotel and convention center in downtown Norfolk, a public/private initiative. Slated to open in 2016, the 294-room Hilton Norfolk at the Main will offer 24 luxury suites, views of the Elizabeth River, a 120-foot-tall atrium and parking in a 600-space garage. Revenue from the parking system will cover the cost of the garage while a 1 percent tax on meals and lodging will cover the debt service on the conference center.

Other perks? Convention-goers will meet in one of the most technologically advanced meeting facilities in the country. Exchange at the Main, as the meeting center will be called, will be designed to accommodate government and defense contractors’ strict security specifications. It will include a 50,000-square-foot ballroom to accommodate 1,500 people, the largest meeting space in Norfolk.

In their free time, visitors can relax in a rooftop entertainment venue, a seafood bistro on the first floor or an Italian-inspired restaurant on the second floor with a wine lounge and piano bar. A reclaimed chandelier from the Cavalier Hotel ballroom will hang in the restaurant’s dining room.

“It’s far more than a hotel and conference center,” Thompson says of the project. “It’s both a place maker and a market maker. The city sees this as a transformational element at the corner of Granby and Main.”

The project’s design, from the Atlanta-based architecture firm of Cooper Carry, will preserve the facades of adjacent buildings — a byproduct of Thompson’s creativity, says Lawson. “He’s very visionary and innovative. He’s always thinking.”

So much so that Lawson frequently receives emails from Thompson long after most people have retired for the night. “I can get an email from him at 2 in the morning as easily as 5 in the morning.” He doesn’t mind, though. “We push each other to get better and find new ways to build projects and add unique features while adhering to difficult budgets.”

That, says Thompson, is the key to the duo’s success. “We don’t nickel and dime jobs. We both believe the customer sees and realizes quality and is willing to pay for it. Every project we’ve done, we’ve pushed ourselves and raised the bar to another level.”

Hampton Roads business leaders welcome new developments from the duo. “Everyone I know in the business community is thrilled to have world-class, high-end, mixed-use properties throughout the region,” says Scott Adams, regional president of CBRE. “The quality of what they’re doing raises the bar and shows other potential investors in Hampton Roads what’s happening.”

Some people in the local hospitality industry are concerned that the new Norfolk Downtown Hilton will take away business from other nearby hotels. Such concerns aren’t unfounded, notes Adams. “Nice and new generally wins. But it will set a higher-level option that may attract clientele that wouldn’t previously have come to downtown Norfolk.”

While new projects get underway, Thompson and Lawson’s latest venture — the 168-room Oceanfront Hilton Garden Inn — is enjoying its first summer season. The $50 million hotel opened for business Memorial Day weekend. “It’s truly the nicest Hilton Garden Inn in the franchise,” Thompson said of the Atlantic Avenue hotel at 33rd Street which includes two swimming pools, two restaurants and a parking garage.

Thompson and Lawson’s previous hotel under the Hilton brand — the 31st Street Hilton — opened in 2005. To date, it’s Lawson’s favorite of the projects he’s completed with Thompson. “It was an asphalt parking lot,” he recalls. “We turned it into a high-quality, full-service hotel and park and donated the King Neptune statue and stage to the city. It increased visitation and created additional revenue for the city. That was an absolute homerun.”

Their first project was Boardwalk Resort & Villas. Their most challenging, according to Thompson, was 31 Ocean. “It was a mixed-use project on a small site and a tight schedule in Virginia Beach in the middle of the summer. However, he adds, those challenges will likely pale in comparison with The Cavalier’s renovation. “I believe it will be trumped by the old Cavalier Hotel.”

While Thompson and Lawson have had a golden touch with most of their projects, Virginia Beach City Council cast aside their latest high-profile plan to shape the oceanfront. W.M. Jordan had submitted a public/private proposal to build a sports and entertainment arena, with the city and state paying $187.5 million of the costs and the city liable for the facility’s $262.5 million annual debt service over 25 years. However, council opted to go with a privately financed bid by United States Management, contending that it would pose the least risk to taxpayers.

“If they don’t reach an agreement with them, we hope they’ll come back to us,” Lawson says. “It’s appealing to be financed by the private sector, but the city loses a certain amount of control in operating it. If the city owns it, it can create its booking and entertainment policy that would work for the city and the region.”

Aside from working together, Thompson and Lawson each continue to scope out major projects. Thompson is pursuing real estate opportunities on North Carolina’s Outer Banks and has expressed interest in developing Rudee Loop at Rudee Inlet, which he calls the most valuable property in the mid-Atlantic region. He believes that construction of an arena will spur development of the parcel, and whatever is built should bookend The Cavalier. “We need to have a first-quality unique development at each end of the oceanfront district. The vision has to be broader than just building a hotel, time-share and restaurant, but if that’s what they (the city) want to do, I’ll compete for it.”

Lawson, meanwhile, is overseeing construction of the $250 million Tech Center at Oyster Point, a 44-acre, mixed-use development in Newport News next to the Thomas Jefferson National Accelerator Facility. On this project, W.M. Jordan is partnering with Virginia Tech, Jefferson Lab and the city of Newport News. “This will be something that will have lots of area for thinking and congregating to get these very bright people to share ideas,” he says. Tech Center is nearly 90 percent leased with restaurants and stores such as P.F. Chang’s and Whole Foods. Monarch Bank also plans to locate its Peninsula office there. The first stores are expected to open in July 2015.

With the marriage of research and entrepreneurship, Tech Center represents a new kind of development for Hampton Roads. “The ultimate satisfaction in business is having a dream and seeing it become a reality,” says Lawson.

So far, for Lawson and Thompson, those dreams have included oceanfront developments, the chance to rehabilitate a grand old dame and the opportunity to leave a lasting legacy in downtown Norfolk, undoubtedly catalysts to continue their profitable partnership.

Or as Lawson says, “Construction and development is the ultimate team sport.”

More than philanthropy

Messy and mucky are not the typical labels ascribed to the Hampton Roads Community Foundation’s philanthropic work, but those are the adjectives its president and CEO uses when discussing the organization’s new focus, tackling regional economic competitiveness.

Considering the at-times divisive competition among Hampton Roads’ various economic, political and civic entities, those words may offer the clearest depiction of the foundation’s latest efforts to improve life in the region.

“It’s a rather messy, mucky business,” says Deborah DiCroce. “It’s obviously a very large, complex matter. Nor is there a quick fix that brings a resolution.” A challenge, yes, but one that DiCroce relishes for her “second act in doing good for the region I call home.” The Hampton Roads native took charge of the foundation in 2012 after serving as president of Tidewater Community College for 14 years.

With its philanthropic roots stretching back more than 60 years, the Hampton Roads Community Foundation (HRCF) has awarded more than $164 million in grants and scholarships to improve the lives of the region’s residents.

Focusing on education, human services and the arts, the foundation helped form and later expand Eastern Virginia Medical School, Virginia Wesleyan College and the Virginia Aquarium & Marine Science Center.

‘We make a difference’
The second-largest of the state’s 27 community foundations and the 47th largest in the nation, HRCF’s latest incarnation came in 2010 with the merger of the Norfolk and Virginia Beach community foundations. With an asset value of about $300 million, the HRCF’s recent endeavors include helping to launch the region’s early childhood education initiative, Smart Beginnings, and joining forces with Norfolk and Virginia Beach to address homelessness.

“In Hampton Roads, we make a difference,” DiCroce notes. “By any measure, we’re big. You couldn’t find a project of great import to the region that somewhere doesn’t have our finger on it.” That’s one reason why the foundation has opted to delve into Hampton Roads’ longstanding efforts to shore up its economic competitiveness. “It’s the kind of issue some of the more progressive community foundations across the country are beginning to tackle,” she adds. “We want to play a role in resolving these larger issues confronting the region.”

But she quickly points out that the foundation will not be driving the discussions. “Our role is one that convenes, incentivizes, facilitates.”

That role includes launching the Hampton Roads Regional Council with representatives from economic development entities such as the Hampton Roads and Virginia Peninsula chambers of commerce, the Hampton Roads Economic Development Alliance and the Future of Hampton Roads, a nonpartisan research group that promotes regional development.

The group’s objective? Form strategic alliances to develop strategies for enhancing regional competitiveness beyond the historical economic drivers of the port, the military and tourism. “The common thread,” says DiCroce, “is collaborate, collaborate, collaborate. The way you compete today to be successful is to join forces to a greater goal.”

It’s a goal Bryan Stephens enthusiastically supports. Having previously lived in Hampton Roads while serving in the military, Stephens returned to the area late last year when he was named president and CEO of the Hampton Roads Chamber of Commerce. Now he represents the chamber on the regional council. “We just want to partner and contribute,” he says of the HRCF’s objective. “This region has so much potential as far as economic prosperity. A lot of organizations within the region are doing a great job, but there is not one single organization to pull all those efforts together to facilitate coordination and collaboration.”

He adds that the council will determine the region’s pressing issues and priorities, including how to ensure that its three traditional economic drivers remain healthy.

While the military, the port and tourism have cushioned Hampton Roads during economic downturns, DiCroce says it’s time for the region to develop new aspirations. “It’s a clarion call that says let’s go for some power and look to other areas that have the potential to enhance the economic competitiveness of the region.”

Stephens, previously the president and CEO of a manufacturing company in San Antonio, thinks Hampton Roads could diversify its economy by bringing into the mix more companies involved in manufacturing, technology and pharmaceuticals. “The area is absolutely fertile for economic prosperity,” he says. “The potential is phenomenal. I can’t think of another region in the nation that has the potential we have.”

That potential attracted 100 Hampton Roads business and civic leaders to join the community foundation’s study groups looking at the region’s initiatives in entrepreneurialship, industry, workforce development and civic leadership. The foundation has asked the groups to complete their work and offer recommendations by the end of the summer. “This is a marathon, not a sprint. We think we’ve got the right questions at this stage,” DiCroce says, “We want to continue with that focus of looking at the right thing.”

Despite expanding its focus to regional economic competitiveness, the foundation is not relinquishing its philanthropic role in awarding scholarships, supporting nonprofit agencies and attracting new audiences to arts organizations. “We’re building on the Hampton Roads Community Foundation’s foundation, not abandoning its roots,” DiCroce says.

CEO roundtable
The HRCF embraced its expanded focus by commissioning Austin, Texas-based consulting firm Greyhill Advisors to examine the effectiveness of the region’s “business-voice” entities, including the Hampton Roads and Virginia Peninsula chambers of commerce, the Hampton Roads Economic Development Alliance, the Future of Hampton Roads, the Hampton Roads Military and Federal Facilities Alliance and the Hampton Roads Partnership, many of whom shared the same purpose. Begun in September 2012, the $120,000, year-and-a-half-long study also compared Hampton Roads to areas like Austin, Pittsburgh, Jacksonville, Fla., and Charlotte, N.C. The consultants ultimately determined that Hampton Roads’ biggest obstacles are its lack of coordination and cohesiveness. Regions that get things done, they note, are those employing a roundtable group composed of local CEOs.

Confirmation, says Vincent Mastracco, of the informal work already being undertaken by more than two dozen of the region’s top business executives to foster regional economic development and support business-friendly legislation. The group evolved from the Hampton Roads Partnership, which dissolved last year. “The partnership was a good idea initially,” says Mastracco, who served as its legal counsel. “But it became a little unworkable because the politics of each city and county varied and paralyzed the partnership from taking a position. Corporate paralysis set in, and its usefulness was limited.”

Mastracco, an attorney with the law firm Kaufman and Canoles who also serves on the HRCF’s board of directors, believes that the Hampton Roads Business Roundtable can overcome political roadblocks. “We’re really looking at more institutional support rather than political support.” The 29-member group, which organized formally last year, remains nonpartisan, although it has hired lobbyists and formed a political action committee. “Hopefully we will be effective because we will shoot for as close to unanimity as we can in advancing the benefits of the region.”

While complete harmony may not be possible, in the end, it’s all about collaboration, says DiCroce. As part of that collaborative effort, the community foundation will take a step back as the regional council gets off the ground. “We’re helping launch the council,” she notes. “At the end of the day, what happens to that council is up to that council. There’s huge potential, but it demands individual and collective accountability to collaborate and join forces on the big strategic priorities.”

And, if collaboration does not succeed at advancing Hampton Roads’ regional competitiveness? “We’ll regroup and try something else,” DiCroce says. “We’re encouraged, but the journey has just begun.”

What’s in a name?

If Will Sessoms had his way, the name Hampton Roads would be removed from signs, maps, marketing material and anything else describing Southeastern Virginia.

In its place, the Virginia Beach mayor wants a moniker that he believes more effectively identifies the sprawling region of 10 cities, five counties and 1.7 million residents. It’s been 31 years since civic and business leaders christened the region Hampton Roads, a name that identifies the channel through which the waters of the James, Nansemond and Elizabeth rivers pass into the Chesapeake Bay and the Atlantic Ocean. Sessoms says the name has failed to catch on. “People don’t know where Hampton Roads is,” he says. “It’s a problem for our region. We’ve got to do something better.”

He proposes “Coastal Virginia” as the region’s new designation, mentioning the name nine times during his 2014 “State of the City” address in March. “I’m willing to try anything,” he says. “It makes more sense. Coastal Virginia is where we’re located.”

The Hampton Roads Economic Development Alliance, which markets the region to companies worldwide, isn’t ready to change its name, but Darryl Gosnell, its president and CEO, acknowledges that the area is hindered by not being identified by a dominant municipality.

“Everybody knows where Atlanta is,” he says. “We don’t have that. We have to explain a little more about where Hampton Roads is, but once we have the opportunity to talk to companies and get them to come here to visit, the area sells itself.”

He says companies are attracted to the region’s advantages such as the Port of Virginia, a high-quality workforce, relatively low tax rates and 12 colleges and universities that graduate 14,000 students each year.

“Overall, this area is very competitive,” Gosnell says. “We compete with everyone from Charlotte to San Antonio to Mexico.” While the name sometimes leads to confusion, it also creates marketing opportunities, Gosnell says. “We have 10 very distinct cities that make up the region. Employees moving here can live at the oceanfront, downtown Norfolk, the suburbs or on a horse farm and be within 30 minutes of where they’re employed.”

An increasing number of advanced manufacturing companies have checked out the area, he notes, while many of the more than 160 international companies with operations in Hampton Roads, including Canon Virginia Inc. in Newport News and Stihl Inc. in Virginia Beach, continue to hire and invest.
“More companies are looking,” Gosnell notes. “I wouldn’t say things are back to where they were five years ago, but they’re improving slowly.”

Dealing with uncertainty
Hampton Roads lost almost 50,000 civilian jobs during the recession and has grappled with declining home values, military personnel cuts and economic uncertainty in the face of federal budget cuts. About 44 percent of Hampton Roads’ economy is linked to defense spending, leading many businesses to postpone hiring and new investment amid last year’s partial government shutdown and looming budget cuts.

However, Vinod Agarwal, director of Old Dominion University’s Economic Forecasting Project, sees a light at the end of the tunnel. “2013 was a year of uncertainty and anxiety,” he says, “but Congress agreed on a federal budget, and the uncertainty was removed.” The budget blunted the worst effects of sequestration, automatic across-the-board defense cuts.

Agarwal believes increased port activity, health-care industry growth and increased tourism spending likely will raise regional income this year. Not all worries about federal spending cuts, however, have vanished. Sequestration could return in 2016, raising the possibility of retiring one Norfolk-based aircraft carrier.

New developments
Rising optimism in the local economy is reflected in new developments and a major redevelopment.

Big-name retailers, including P.F. Chang’s, Whole Foods, Starbucks and DSW, signed up to lease space before the first shovel of dirt was turned at Newport News’ $250 million Tech Center. Along with shopping and restaurants, the center plans more than 250 apartments, office space and a technology and research center built on 100 acres next to the Thomas Jefferson National Accelerator Facility.

John Lawson, president and CEO of W.M. Jordan Co., is spearheading the development with support from Georgia retail developer S.J. Collins Enterprises, the city of Newport News, Jefferson Lab and the Virginia Tech Foundation. The mixed-use portion of the development could be ready within two years, while the research and technology center could take up to 10 years.

Meanwhile in Norfolk, Waterside Festival Marketplace is preparing to undergo a complete makeover. Baltimore developer The Cordish Cos. plans to invest up to $38 million to transform the 30-year-old facility into Waterside Live!, with a focus on dining and entertainment. Construction is slated to start later this year and be complete by summer 2016.

Also slated for a 2016 opening in downtown Norfolk: a 20-story, 300-room luxury hotel with a state-of-the-art 50,000-square-foot convention center. The city has partnered with Gold Key/PHR Hotels & Resorts on the $126 million project that is expected to pump $2 million into the city’s tax coffers.

More direct flights
Despite an upswing in the regional economy, some area officials think Hampton Roads is hobbled by a lack of direct air service to many major U.S. cities. “That’s one thing holding Hampton Roads back from attracting more Fortune 500 firms,” Gosnell says.

Sessoms agrees. “The city of Virginia Beach and the region need a strong regional airport,” he says. “We’ve got to do something about it. Businesses are frustrated with the time and cost it takes to travel from the area.”

The mayor believes that Hampton Roads’ two major airports — Norfolk International and Newport News/Williamsburg International — and Richmond International harm each other in competing for air travelers. “We have to work with airports to get more direct flights and have a truly international airport. I don’t want us to ever take that off the table.”

Extended light rail
Chalk up Sessoms’ determination to his long battle to extend light rail into Virginia Beach, a move supported by more than 60 percent of the city’s voters in a 2012 referendum. Hampton Roads Transit has put a $1.1 billion-to-$1.3 billion price tag on plans to extend its light rail system, The Tide, from its terminus at the Norfolk-Virginia Beach city line to the oceanfront. The cost may necessitate starting off with a shorter route.

“I hope we can get it to Town Center. That is the logical place,” Sessoms says. “Town Center is a high-density area with work, recreation and residences. It fits like a glove with light rail.”

Passenger rail would have a different look and feel if Virginia Beach contracts with American Maglev Technology Inc., one of three groups vying to develop and operate the transit system. The company has yet to build a maglev system in the United States, although it made an unsuccessful attempt at Old Dominion University in 2001. Maglev trains float over a guideway using magnets to replace the steel-wheel-and-track train. Federal funding that failed to materialize, along with suspension problems, doomed the ODU project.

American Maglev Technology’s $334 million proposal is one-third the cost of other proposals for a public-financed light rail system. “It gives us a lot of options to continue with light rail or other types of mass transit technology,” Sessoms says. “Shame on us if we don’t give it a serious look.”

Virginia Beach also is weighing two proposals to build a sports and entertainment facility.

United States Management has lined up $200 million in private financing to build an 18,000-seat arena that could be ready by 2016. The city would be asked to contribute the land and parking, as well as offsite improvements and related city services. USM also would receive about $7 million annually in tax revenues.

W.M. Jordan Co. would build an arena under a different model. It’s requesting that the city and the state pay $300 million, including $10.5 million in yearly debt costs for 25 years.

Sessoms believes City Council will accept one of the proposals and hopes construction will begin by the end of the year.

Transportation projects
Meanwhile, approximately $25 billion in federal, state and local revenue is expected to flow into Hampton Roads over the next 26 years, allowing the region to tackle nine significant, longstanding transportation projects, including the construction of a third crossing between the Southside cities and the Peninsula and widening a section of Interstate 64 to six lanes from Newport News to Williamsburg. At least $6 billion would be new monies generated within the region because of the transportation law that went into effect in 2013. State monies account for an additional $2.5 billion. The total also includes $16 billion in state and federal funding for construction and maintenance.

“When you put all that together, it makes an enormous difference in our mobility and access for commerce, commuters and tourism,” says Dwight Farmer, executive director of the Hampton Roads Transportation Planning Organization (HRTPO). “I don’t think anybody ever added it up this far out. It’s a big number, but when you’re doing mega-projects from planning to ribbon cutting, it can be 20 to 25 years.”

The funding allows Hampton Roads leaders to dream, with Norfolk Mayor Paul Fraim and Newport News Mayor McKinley L. Price seeking a dedicated bus lane or light rail line as part of the third crossing. Fraim also wants the HRTPO to determine the feasibility of developing a light rail system to connect Virginia Beach to Williamsburg.

The Hampton Roads Transportation Accountability Commission, created during this year’s General Assembly session, will oversee the region’s transportation revenue. Chief executives of Hampton Roads’ 14 local governments will make up the commission, which can issue bonds and set tolls.
“It will be nothing but local elected officials calling the shots on prioritization and how to spend money,” Farmer says. Such a setup, he adds, would prevent another contract like the controversial one the state inked with Elizabeth River Crossings imposing tolls on the Downtown and Midtown tunnels. “The deal done at the Downtown and Midtown tunnels will never be done again. All will be done here with locally elected officials calling the shots.”

Health-care institute
Sessoms also is counting on local collaboration to propel Virginia Beach into a destination for groundbreaking innovations in biotechnology, pharmaceuticals and health-care delivery. He envisions an advanced health-care institute situated on 1,500 acres in the city’s Princess Anne Commons where the Virginia Beach Advanced Technology Center, the Virginia Beach Higher Education Center, Sentara Princess Anne Hospital, LifeNet and Operation Smile already have facilities.

“It would absolutely be regional,” Sessoms says, noting that colleges and universities throughout Hampton Roads have signed on to the project, along with Sentara Healthcare and Bon Secours Health System, LifeNet Health and WellPoint’s Amerigroup. “Our city, region and commonwealth have been so dependent on defense dollars for way too long. We need to find other ways to diversify the economy. This is a wonderful opportunity to start a new economy.”

Not another boring meeting

You’ve spent day one of a two-day business conference exploring your leadership and communication styles while on the back of a horse. Now, you’re rolling up your sleeves and preparing a gourmet dinner with your team.

Welcome to meetings and conventions in 2014. Though still in the midst of a slowly recovering economy, conference venues throughout Virginia are doing more than simply laying out the welcome mat. With sequestration a not-too-distant memory and additional budget cuts looming, government and military meetings are held at a premium. Corporate groups, trade associations and individual participants also are carefully considering expenditures for off-site meetings. So that calls for something creative.

People want time away from the office to be productive, cost-effective and yes, fun. According to the U.S. Travel Association, personalized, customized service, with a nod toward simple, local foods and activities, are trending for 2014.

“Our clients are asking themselves what is the return on their investment on the meeting, and their attendees are doing the same sort of thing,” says Rick Eisenman of Eisenman & Associates Inc., an association management, meeting planning and consulting company in Glen Allen. “It’s a money crunch, and it’s a time crunch,” adds Eisenman. “Attendees want something that helps them with their job. They don’t want to just go to some nice resort for three days and go back and do the same thing.”

Fortune 500 companies, as well as other firms seeking a different take on meetings, are booking space at the 168-room Salamander Resort and Spa in Middleburg. It’s easy to reach — an hour’s drive from Washington, D.C., and 30 minutes from Washington Dulles International Airport. Opened last August, the 340-acre resort features a cooking studio with daily culinary classes and corporate team-building events. About 53 percent of the resort’s business so far has come from groups, with 65 percent of that figure made up of corporate groups, says Matt Owen, corporate director of public relations.

Salamander was designed with corporate meetings and retreats in mind. “There’s the ability to have a sense of exclusivity,” he says. “They can keep the group together in an environment in which everyone is comfortable.”

That comfort extends to the stables where meeting-goers mount horses as part of the resort’s Equi-Spective Experience or visit the cooking studio where they participate in a cook-off using recipes submitted by the company CEO. “People look for unusual things,” Owen says, noting that the equestrian program develops leadership and relationship skills. “It’s a very, very powerful program of self-discipline that you cannot conduct anywhere else.”

While Salamander capitalizes on its location in the middle of Virginia’s horse country, The Homestead is counting on its new owner, Omni Resorts, to generate new meeting business for the resort, which was founded in 1766. “We’re no longer leading the battle ourselves,” says Jeff Ford, the Homestead’s director of sales. “We’re part of a national chain, and that opens up a lot of doors from the group-meeting perspective. To have a company that good of a match with our principles should lead to a lot of future reward.”

Omni, which purchased the Hot Springs resort in July 2013, is inviting meeting planners from major markets such as Atlanta and Washington, D.C, to take a personalized look at the Homestead during a weekend visit. “Lots of people have heard of the Homestead, but not everybody has been here, so we want to bring people in to kick the tires, so to speak, and see what we offer,” Ford says. “Once people come here and see it, then they’ll buy it.”

During the recession, group business mostly came from regional organizations within driving distance of the Homestead. “Now it’s becoming more far-flung from that three or four-hour drive,” Ford notes. “It’s expanded out to five or six hours, and it will keep expanding as the economy gets better.”

Omni’s Select Rewards program also is attracting the attention of meeting planners. “They can contract with us and choose rewards, such as a donation to the group’s favorite charity or money for group training,” Ford explains. “Wherever the hot spot is with that particular organization, Select Rewards can address that.”

Most of the Homestead’s business comes from corporate groups, as well as national and state associations. Virginia state associations have held meetings at the Homestead for more than 100 years. Although the property recently completed a $26 million renovation, it still sells itself on old-style Southern hospitality. “When you come to the Homestead, you’re really not looking for anything different,” Ford says. “You’re looking for what the Homestead is known for: quality food, quality service, spa and golf.”

Salamander and the Homestead are among Virginia resort properties seeing a resurgence in meetings business. “At the beginning and middle of the recession, a lot of planners shied away from resorts, but those properties are definitely springing back,” says Joni Johnson, national sales manager for the Virginia Tourism Corp.

However, the state’s largest regions still are dealing with hotel vacancies, largely due to the decline in government meetings. “Over the past year, hotel occupancy has been down across the state, particularly in Northern Virginia and Hampton Roads as a result of the government shutdown and sequestration,” says Eric Terry, president of the Virginia Hospitality and Travel Association.

“The industry is refocusing on corporate and nonprofit users in the wake of that government meeting drop off.”

Meeting planners, especially those representing government offices, also are following shorter booking windows. Fifteen to 20 percent of Salamander’s meetings are booked within 30 days of the group’s arrival, says Owen. “Ten years ago that was unheard of.” The economic downturn, though, changed habits. “Everyone’s become a lot more flexible.”

Planners are taking on more duties at the office, making it that much harder to effectively plan conferences. “A lot of folks are getting stretched down,” says Devin Heath, vice president of sales and services for Richmond Region Tourism. “They’re doing jobs two people had done before.” To assist, Richmond Region Tourism staff often does the legwork for companies or associations, reaching out to venues, hotels and restaurants. “We look at it as a partnership,” Heath adds.

Richmond recorded its best ever year for meetings as well as overall tourism in 2013. “It was a very positive year,” Heath says, adding that the Capital city made it onto Frommer’s list of Top Destinations for 2014. “Richmond became noticed. We’ve really become a hip and nouveau style destination.”

Richmond’s tourism office has developed a Dine Around package where conventioneers can spend an evening sampling food at three or more of the city’s 900-plus restaurants. “Food is a big part of meetings and conventions,” Heath notes. “People want a creative culinary experience. When you have the opportunity to try something new with a group, it can be a fun experience.”

Groups also can hear the chef explain the menu while creating the meal, or they can take matters into their own hands, working as a team of chefs to prepare a meal. “There are all kinds of really neat, exciting experiences,” Heath says.

In the end, it’s those kinds of hands-on experiences that leave lasting impressions on meeting-goers while at the same time recharging their batteries. “It’s a good thing,” says Eisenman of Eisenman and Associates, “because you don’t do a meeting just because you’ve done it for the last 100 years.”

Far more than peanuts

It’s been 40 years since the small cities of Suffolk and Nansemond joined to form Virginia’s largest municipality in land area, a milestone city leaders say puts Suffolk not on the cusp of middle age but in the center of adolescence.

“Suffolk is in its teenage years,” says Mayor Linda Johnson. “I see us maturing daily, becoming a vibrant community and knowing who we are and where we’re going in the future.”

Unlike many of its Hampton Roads neighbors, Virginia’s fastest-growing city has room to expand. As more businesses and housing developments move into the once sleepy farming community, however, city leaders want to make sure that growth is managed responsibly, especially in regard to public safety, education and quality of life. “We’re planning for the future and how we want the city to look 25 years from now with a balance in the tax base between residential and commercial,” Johnson says.

One hundred years after Italian immigrant Amedeo Obici opened a peanut processing plant in Suffolk, peanut farming and Obici’s Planters Peanut Co. are still major industries, but the city’s agrarian economy and way of life have evolved into a high-tech market. Last year, 66 expanded and new businesses announced plans to create more than 1,950 jobs and invest upward of $94 million in Suffolk, with modeling and simulation and cyberdefense emerging as prime economic drivers.

That’s welcome news coming just three years after the U.S. Department of Defense announced plans to shutter the U.S. Joint Forces Command in Suffolk. While the city lost 1,200 to 1,500 positions with the closure, it ultimately gained more than 1,500 jobs last fall when the U.S. Navy moved four commands related to cyberdefense into the Joint Forces space.

Along with the budding high-tech environment, an array of middle-income and upscale housing developments, shopping centers and office and industrial parks have sprung up where corn, soybeans and peanuts once grew. During the past decade, the city’s population rose 34.6 percent, an increase nearly three times as much as any other Hampton Roads city. It now hovers around 85,700.

In addition, the number of jobs in the city jumped 43 percent from 2000 to 2011, the ninth highest growth in the nation, a feat factoring into CNN Money Magazine’s ranking Suffolk among its Best Places to live in 2012. The city’s median household income is now the second highest in Hampton Roads. “More people are moving out here and spending money,” says Kevin Hughes, the city’s economic development director. “People want to be here because they can grow and prosper.”

City slogan on the mark
The city’s slogan — “It’s a good time to be in Suffolk” — appears to be on the mark as Suffolk celebrates the 40th anniversary of the merger between Suffolk and Nansemond. So good, in fact, that late last year, Kroger purchased an 11.6-acre site in northern Suffolk to build its third Kroger Marketplace in Hampton Roads, a 113,000-square-foot hybrid grocery store. Kroger’s $21.7 million investment will bring up to 350 new jobs to Suffolk when the store opens this fall.

That development dovetails with major expansions of current Suffolk businesses. Last year Unilever announced that it would invest $96.2 million to expand and upgrade its nearly 60-year-old Lipton Tea manufacturing plant near downtown. The largest tea-processing facility in the U.S., the plant makes almost all of the Lipton tea bags sold in North America.

Meanwhile, California Cartage Co. has leased the first of three buildings in the Virginia Commerce Center, a 100-acre site that eventually will provide 1.3 million square feet of industrial space. The Long Beach, Calif.-based distribution and shipping firm employs more than 200 people at its 385,320-square-foot facility.

With firms expanding and new businesses and residents moving into Suffolk, city leaders are on the lookout to prevent growing pains. While enthusiastic about the growing business sectors, they are equally proud of Suffolk’s agricultural legacy, recognizing that the farms provide jobs and consumer goods.
“Agriculture remains a strong industry, but we’re not actively promoting it,” Hughes says, pointing to Suffolk’s 20-year effort to diversify. “As we get sharper and make more good investment decisions, we’re promoting Suffolk as a good location for a lot of industries. We spend a lot of time making sure we make the right decisions.”

Eight targeted industries
The city’s economic development department currently targets eight industries, including warehousing and distribution, modeling and simulation technology, medical, retail, advanced manufacturing, hospitality, food and beverage processing, and office administration.

Burgeoning developments along Route 17 in northern Suffolk have helped shape Suffolk’s “teen” years. Harbour View, the 2,000-acre planned community launched in the late 1980s, features upscale homes, a medical office park and shopping centers. The latest is Riverfront Shoppes, a high-end retail, office and medical development that will cover 3.9 acres and is slated to open later this year.

“There’s a void in Harbour View on the retail side in terms of a high-quality, neighborhood shopping center with a neighborhood feel,” says J.C. Wynkoop, a broker with S.L. Nusbaum’s retail brokerage and development, who is handling the project’s leasing for The Gee’s Group, a Virginia Beach developer.
Wynkoop envisions the retail component featuring a fine dining restaurant, as well as high-end family eateries and fashionable shops. “It’s a nice strong territory with a mix of professional and high-end users. We’re designing it to recruit high-end tenants. There’s not going to be pawn shops or car title businesses here.”

TowneBank already has a stake in Harbour View. The Hampton Roads financial institution built a member service center on a 22-acre site there in 2003 and expanded it in 2012 with a 45,000-square-foot operations center and a 16,000-square-foot education facility. “It’s been a very attractive and convenient place,” says Ward Robinett, president of Hampton Roads-based TowneBank. “There is that westward and northwestward migration from the cities of Portsmouth and Chesapeake.”

The opening of the Monitor Merrimac Bridge Tunnel and Interstate 664 two decades ago improved access to Suffolk from other South Hampton Roads cities, as well as the Peninsula. “That spurred a significant amount of growth that continues today,” Robinett notes. “Connectivity probably is the biggest thing there, and Suffolk has a very bright future, primarily because of its geographic location.”

Cyberforces command move
That prime location was one reason the Navy opted to move its cyberforces commands from Joint Expeditionary Base Little Creek-Fort Story to the former Joint Forces command campus on the outskirts of Harbour View. A $54 million investment, the move places the technology-related commands just down the street from the Virginia Modeling, Analysis and Simulation Center. As one of the world’s foremost research centers for computer modeling, simulation and visualization, VMASC initially focused on military defense and homeland security but has diversified into transportation, social sciences, education and health care.

“The modeling and simulation industry remains an important technology with immense opportunities through its endless applications, and VMASC needs to be at the forefront as Virginia’s research leader in this field,” Johnson says.

The modeling and simulation center is housed in a high-tech center in Hampton Roads Crossing, a mixed-use office, retail and residential development where the Kroger Suffolk Marketplace is under construction. Encompassing 130 acres in Suffolk and an adjacent 18 acres in Portsmouth, Hampton Roads Crossing is The Terry Peterson Cos.’ largest investment in Suffolk. “It’s one of the largest undeveloped pieces of property within a relatively short radius to everything,” says John Peterson III, the Virginia Beach developer’s senior vice president. “This is the growth corridor not only in Suffolk but largely in Hampton Roads.”

The Terry Peterson Cos. has built several residential projects in Suffolk, including one near downtown and three in the northern section and is considering several other projects in the city. The company’s condominium development, Kings Fork Farm, offers more than 300 homes from the low $200,000s to the low $300,000s. While sales slowed significantly during the economic downturn, Peterson says things picked up in the first half of 2012, and it is now one of the two or three best-selling in Suffolk. “We’re going to continue to be in Suffolk for a long time,” he adds.

Retaining a small-town feel
Other developers also are making their mark on Suffolk. In 2012, the Monument Cos. contributed to the downtown revitalization by transforming a city block of historic buildings into apartment and commercial spaces. “Suffolk is unique because we offer so much,” Johnson says. “All residential options are available — rural, urban, suburban.”

Also under construction downtown: a new municipal building and 911 call center expected to promote further revitalization and growth. The facility is expected to be completed this year.

Despite the flood of newcomers to both the business and housing markets, Suffolk retains its small-town feel, thanks to close-knit communities like Whaleyville in the south, Driver in the north and Holland in the west. “It’s part of the beauty and charm of Suffolk, and I don’t think we’ll ever lose that,” Johnson says. “It’s within our citizens and the joy they have in living here.”

Community spirit inspires Suffolk residents to look out for one another, she adds. In 2012, a Chronicle of Philanthropy study found that Suffolk residents donate more of their disposable income to charity than the state or nation as a whole. “We believe very much in neighbor helping neighbor,” Johnson says.

Suffolkians are also coming together to help the youngest residents. After state health officials found that 11.8 percent of babies born in Suffolk weighed 5 pounds, 8 ounces, or less, the Western Tidewater Health District and Sentara Obici Hospital teamed up to promote healthy, full-term pregnancies. “Here We Grow Suffolk” offers parents support during pregnancy and in the first few months of the newborn’s life. Since November 2011, more than 2,800 families have been screened, and birth weights are gradually rising. “We’re teaching people to become more self-sufficient and get better prenatal care,” Johnson notes. “We’re working hard, but the problem is prevalent in a lot of areas.”

Overall, the city continues to improve in the annual County Health Rankings by the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation. In the most recent survey, Suffolk ranked 66th out of 133 Virginia localities, moving up six positions from 2010. Especially striking was the improvement in the city’s mortality rate, as well as declines in sexually transmitted infections and the teen birth rate.

City leaders expect Suffolk to continue making strides, seeing a wealth of potential in their 40-year-old city that is just now beginning to be realized. “Suffolk is a very vibrant city with a tremendous ability for people to come here to live, work, play,” Johnson says. “It’s a place on the map that people want to remain for a long time.”

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byline: Elizabeth Cooper