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byline: Gary Robertson

Ready for a comeback?

In 2006, a joint subcommittee of the Virginia legislature studying the needs of the manufacturing sector and the future of manufacturing in the commonwealth found disturbing statistics.

Since peaking at 432,500 in 1989, Virginia’s manufacturing employment had fallen to 296,600 by June 2004.

The numbers haven’t improved since then.

In June, the Virginia Employment Commission reported Virginia’s manufacturing employment at 229,100, a more than 20 percent dip in a decade.

Despite those statistics, the outlook for manufacturing in Virginia seems to be improving.

You have to look no further than a recent announcement by China’s Shandong Tranlin Paper Co. Ltd., which says it will invest $2 billion in an advanced manufacturing operation in Chesterfield County. It is expected to employ 2,000 workers by the end of the decade.

In July, the Brookings Institution reported that the Hampton Roads area, rich in technologically oriented defense contractors such as Huntington Ingalls Industries, led the nation in its share of job openings — 18 percent — for science, technology, engineering and math (STEM) jobs that did not require a bachelor’s degree.

For Tranlin and defense contractors in Hampton Roads, developing a skilled manufacturing workforce is key.

Everyone from the governor to the Virginia Manufacturers Association says that workforce training is one of the surest ways to help revive manufacturing in the commonwealth. (see related story)

One example of how the pipeline of able workers can be achieved is at the Advanced Technology Center in Hampton Roads.

The center is the product of a partnership involving the Virginia Beach City Public Schools, Tidewater Community College (TCC) and the city of Virginia Beach to train students in technical fields.

Michael Summers, provost of TCC's Virginia Beach campus, says the experiment began when the school district and the college began talking in 2001-02.

“We were trying to put together the critical pieces in an economic development puzzle,” Summers says.

The participating parties wanted a place where public school students could receive technical training, where community college students could receive STEM training with courses in information technology and other disciplines, and where Virginia’s Beach’s economic development office could set up shop.

“The school kids would be across the hall from the college kids, and they could see a continuum of training that would put them in good-paying jobs,” Summers says. “It sounded like a good deal.”

Public school students with the aptitude and interest also were eligible to participate in a dual-enrollment program in which they could earn college credits while they were in high school.

Summers says one problem was that some of the brightest high schoolers were from families of limited means. They didn’t take the college courses because of the expense.

“We didn’t have permission to discount the tuition,” Summers says.

Within the last year or two, college officials received that permission. For dual-enrollment students, tuition was slashed by two-thirds. It’s now $45 a credit hour, compared with more than $150.

Summers says STEM industries in the Hampton Roads area are driving development of the Advanced Technology Center.

“They want more kids in the pipeline,” he says. “We’re just at the tip of the iceberg.”

Newport News Shipbuilding is Virginia’s largest industrial employer with a workforce of more than 21,000. In 2013, the company hired 900 workers, and it is expected to add 1,100 workers this year, including engineers, electricians, machinists and mechanics.

The shipbuilder recently opened a new vocational educational building for its Apprentice School in Newport News to help supply the shipyard’s demand for skilled workers.

What’s happening in Hampton Roads is only part of the story of how public and private groups are working to build a workforce for the skilled manufacturing jobs of the future.

The Virginia Manufacturers Association has the ball and is running with it.

“We’re on the tipping point of manufacturing being sexy again,” says Katherine DeRosear, VMA’s director of workforce development.

DeRosear and Betty Adams, executive director of the Southern Virginia Higher Education Center in South Boston, use the association’s Manufacturing Skills Institute (MSI) to provide what they say is one-stop access to world-class workforce training programs.

The focus of the MSI is to give residents in Southern Virginia opportunities to earn industry-recognized technical skills credentials, including the Manufacturing Technician Level 1 certification (MT1).

MT1 certification tells potential employers that the worker has an understanding of modern manufacturing and has attained mastery of certain core competency areas, DeRosear says.

The core competency areas are math and measurement; spatial reasoning and manufacturing technology; and business acumen and quality.

When workers achieve MT1 certification, they can — depending on their abilities — continue at other institutions or pursue additional training programs and certifications.

Thousands of manufacturing jobs will be opening during the next several years as a result of retirements alone, according to the VMA, and even more highly skilled workers will be needed in advanced manufacturing operations.

DeRosear hopes the program that the manufacturers’ association has established in collaboration with the Southern Virginia Higher Education Center (SVHEC), will evolve into a national training model.

In August, the SVHEC began offering the area’s first NCCER (National Center for Construction Education and Research) credentialed welding program in its new welding lab, in collaboration with Virginia Technical Institute (VTI) in Altavista.

Nettie L. Simon-Owens, director of workforce services at the SVHEC, says the center also is working with existing employers in the area to upgrade the skills and knowledge of current workers to meet changing workplace requirements.

She pointed to the more than 10,000 hours of training that the center has coordinated for 440 employees at the local Presto Products Co., a supplier of products ranging from private label food and disposer bags to specialty stretching films.

Recently, SVHEC was designated as a regional Center of Excellence for advanced manufacturing workforce training.

The centers are being funded by the Virginia Tobacco Commission. They have been called spokes of a hub for the Advanced Manufacturing Academy at the Commonwealth Center for Advanced Manufacturing (CCAM) in Prince George County.

The Centers of Excellence will focus on three main job classifications: machinists, welders and industrial machinery mechanics.

Producing individuals who earn industry recognized certifications is the goal.

The American Welding Society, the National Institute for Metalworking Skills and Siemens are among those providing the certifications and credentialing.

The newly minted trainees are being targeted for, though not limited to, aerospace, automotive and heavy machine manufacturers.

A second regional center of excellence is at the New College Institute in Martinsville, a city that in recent years has consistently had one of the state’s highest unemployment rates.

Former state Sen. William Wampler Jr., New College’s executive director, says the center — along with the advanced manufacturing training equipment and instructors it has in place — already has helped attract a new manufacturer to the region, Kilgour Industries Ltd.

Kilgour is a United Kingdom-based company that, among other things, supplies aircraft airframe and engine machined products for the aerospace industry.

The company is investing $27.3 million to establish its first U.S. operation and plans to hire more than 150 skilled workers.

Wampler says one of the factors persuading Kilgour to choose the Martinsville area was the display of equipment to be used to train local students, a machining device for producing precision parts.

“’That’s exactly what we use in Blackpool [England],’” Wampler quoted Kilgour officials as saying.

“Through targeted efforts, we were able to attract our first European prospect,” Wampler says.

He emphasizes that the pipeline providing highly skilled employees goes through the region’s two community colleges, Patrick Henry and Danville.

“What we’re trying to do,” Wampler says, “is create a culture where you can not just go to work, but make a career out of it and raise a family.”

In 2012, Wampler toured Rolls-Royce’s manufacturing, educational and research facilities in the English cities of Derby and Sheffield to help target the training programs at the New College Institute.

Rolls-Royce, a global power systems company, is an organizing member of CCAM and has a highly developed apprenticeship program in the United Kingdom.

Its Virginia plant is on the 1,000-acre Crosspointe Centre campus in Prince George. John Tyler Community College in Chester currently is providing customized training to Rolls-Royce employees in Virginia.

Craig Herndon, the community college system’s vice chancellor for workforce development, says community colleges are passionate about developing a highly skilled workforce in Virginia that can compete globally.

He says community college counselors also do a lot of myth-busting about what’s involved in 21st-century manufacturing, as they talk with high school students and others.

“The perception is that you need a university degree to be successful. But today it’s less about where you study and more about what you study,” Herndon says.

“My father worked in manufacturing over the course of a lifetime, and it’s changed tremendously. Most folks still have the idea that manufacturing is a dirty, hot, low-skill environment. It’s not.”

Herndon says world-class manufacturing operations are technologically intensive and often require a high level of critical thinking.

An understanding of that new level of sophistication in manufacturing might be gleaned from a recently announced donation by Siemens Corp. of $2 billion in computer software to seven Virginia universities and community colleges.

Siemens, a Germany-based firm and a global power in engineering and electronics, made the donation to help train students for high-tech manufacturing careers.

“The engagement of business is absolutely essential,” Herndon emphasizes.

He adds that if manufacturing is going to make a comeback in Virginia, it begins with training workers with the right skills.

Changing times

News about American investment and jobs going to China has become routine. That’s why a June announcement put the Richmond region in the international spotlight.

China’s Shandong Tranlin Paper Co. Ltd., a pulp and paper company, plans to invest $2 billion in building an advanced manufacturing plant in Chesterfield County, its first in the U.S. The factory will employ 2,000 people.

At a news conference, Gov. Terry McAuliffe characterized the move as “transformational” for the region’s economy.

Economic change, in fact, already is taking place throughout the Richmond region, despite its longstanding reputation for stodginess.

Downtown Richmond is attracting millennials like a magnet; retail and residential development is booming in Henrico County’s Short Pump area; and Hanover County has become a home for massive distribution centers. This time next year the region will host a nine-day international cycling competition that is expected to attract 450,000 spectators.

Some things in the Richmond area, however, never seem to change. After more than a decade of haggling, there still is no agreement on where to put a new minor-league baseball stadium.

Corn stalks to paper
The ripple effects from the new Chesterfield paper plant could be profound. In addition to creating thousands of jobs — with average annual salaries of $45,000 — the company will buy agricultural “residuals,” corn stalks and wheat straw typically left in the field by farmers. This material will be used to produce paper products ranging from napkins to paper bowls.

Virginia agricultural officials project that the purchase of the residuals could provide $50 million a year for farmers in  the Richmond region alone.

Additionally, the spinoff of jobs for suppliers and other small businesses is expected to create a mini-boom.

Chesterfield County Administrator Jay Stegmaier hopes the deal opens the door for more investment. He wants Chesterfield and Virginia to become “trusted partners” for Asian businesses seeking to invest on the East Coast.

Millennials move in
While a Chinese company is helping to drive change in Chesterfield, millennials — people born between the early 1980s and the late 1990s — are redefining downtown Richmond.

RealtyTrac lists Richmond as one of the nation’s top 50 rental markets for this generation. People in their 20s and 30s make up nearly one-third (32.2 percent) of Richmond’s population.

They are giving the old capital city a youthful vibe and, as RealtyTrac observes, they also are fueling an apartment boom.

According to Venture Richmond, a downtown promotion booster group, the downtown area has seen the construction of 2,400 apartments during the past four years.

Lucy Meade, director of marketing and development for Venture Richmond, says the growth trend continues.

“Manchester is on fire,” Meade says, referring to the former independent city on the south bank of the James River, which has been part of Richmond for more than a century.

Tara Carter, the owner and managing member of Luxe Residential Services, a consulting and asset management company, says Manchester is an eclectic area that has great appeal for people involved in the arts and design.

“There’s a lot of buzz in Manchester. People are going there for the energy,” Carter says.

Robin Miller of Miller & Associates in Richmond has been involved in the development of more than 600 residential housing units over the years.

“What keeps the motor running is the demand for quality residential apartments and condos,” he says.  “The demand is high in Manchester because it’s such a unique neighborhood … lots of trees and sidewalks, a true historic neighborhood.”

Miller is involved in projects worth more than $50 million — from apartments to midrise towers — in the downtown area.

Another big player in downtown development is Genesis Properties. It has four apartment complexes either under construction, being leased or planned in various parts of the downtown area. Together, they total more than 500 apartments.

VCU art institute
In addition to apartments, a new cultural site also is in the works. Virginia Commonwealth University begun construction on its Institute for Contemporary Art (ICA), a $35 million building at the corner of Broad and Belvidere streets.

At the request of director Lisa Freiman, the thoroughly modern structure also will have a basement.

“You always run out of space. It was a practical consideration,” Freiman says with a laugh, noting that basements often are an overlooked item in a building’s planning, even a building like the ICA, which was designed by Steven Holl, one of the world’s most famous living architects.

The VCU School of the Arts is the No. 1 public art and design school in the nation as ranked by U.S. News & World Report. Its master’s in fine arts sculpture program also is ranked No. 1.

Freiman and others believe the center will evolve into one of Richmond’s most spectacular gateways and a cultural linchpin for the city’s Arts & Culture District.

“I think the ICA is going to be the public face of the School of the Arts in many ways,” Freiman says.

Children’s hospital
Just as the ICA is expected to bolster Richmond’s arts community, backers of a proposed, free-standing children’s hospital believe it will add a much-needed new dimension to medical care in the region.

The hospital would be independent of the area’s health systems.

Richmond philanthropists Bill and Alice Goodwin have offered to pay as much as a third of the hospital’s cost, an estimated $150 million.

In addition to the Goodwins, the partners in planning the hospital include Bon Secours Virginia Health System, VCU Health System and a physicians group organized as Pediatricians Associated to Care for Kids.

Katherine Busser, a former Capital One Financial Corp. executive, has been hired as the hospital’s CEO.  She says she accepted the position to help get the project off the ground.

“There’s a lot of energy and enthusiasm in the community broadly,” Busser says.

Supporters believe that the hospital will become a focal point for regional medical treatment for children. Busser says the facility also will have an economic impact.

“This children’s hospital could be really important in the economic development landscape, not just in the region but in Virginia,” she says. “It will create jobs, and other businesses will be located around it.”

Short Pump thrives
In western Henrico County, one institution changing the economic landscape is the sprawling Short Pump Town Center, which serves not only the county’s 320,000 residents but shoppers throughout Central Virginia.

The Richmond Times-Dispatch reported that Short Pump’s total sales in 2012, the last year for which numbers were available, totaled $352 million, more than double the sales of any of the area’s other malls.

“We lead the state in per-capita taxable sales, and we’re only behind Fairfax [County] in actual taxable sales,” says Gary McLaren, executive director of the Henrico Economic Development Authority.
New residential, retail and office developments continue to spring up in the Short Pump area, facilitated by the web of major highways, including Interstates 64 and 295, as well as state Route 288.

One new development, West Broad Marketplace, is planned for 62 acres between West Broad Street and I-64. Its tenants will include a Wegmans, a sought-after high-end grocery store, and Cabela’s, a well-known  outdoor sports retailer, along with at least 10 other shops.

McLaren points out that Henrico is not all about retail. He says it has a mix of other job-producing companies and industries. Altogether, 25,000 businesses call Henrico home.

He notes that the county provides 180,000 jobs, the most in Central Virginia, and is second only to Fairfax County in the commonwealth.

“We’re able to recruit companies from all over the world,” McLaren says. “We have a high quality of life, great schools and great services.”

Distribution centers
Nearby Hanover County has had difficulty with one of its biggest development projects, the Winding Brook property off Interstate 95, but it has been very successful in attracting new distribution centers.
Until the recession hit, there were big plans for Winding Brook, a 185-acre development anchored by Bass Pro Shop. To help the project get back on track, the Hanover Board of Supervisors recently agreed to restructure $37.6 million in bonds that were in default.

Better news for Hanover has come from its growing reputation as a distribution site.

Owens & Minor, a Fortune 500 company based in the Mechanicsville area, is acquiring New York-based Medical Action Industries Inc. in a $208 million deal.  Medical Action makes custom procedure trays and minor procedure kits. Owens & Minor is a health-care logistics company that distributes a wide range of medical supplies.

Ashland, which is the only incorporated town in Hanover, has landed its second large distribution center in recent years. Republic National Distributing Co., the nation’s second-largest distributor of premium wines and spirits, plans to open a 260,000-square-foot distribution center.

It will be located next to The Vitamin Shoppe’s nearly 312,000-square-foot distribution center that began making shipments to company stores last fall.

Big bike race
Next September, however, the region will be focused on bicycles whizzing down city streets rather than trucks loading up at distribution centers. Richmond will be the host of the 2015 World Road Cycling Championships.

A study by Richmond-based Chmura Economics & Analytics says the economic impact of the international competition on the region could be $129 million.

In addition to drawing 450,000 spectators and a thousand athletes, the event, scheduled  for Sept. 19-27, is expected to have a worldwide television audience that could top 300 million.

The organizers of Richmond 2015 warmed up for the big race with the USA Cycling Collegiate Road National Championships in May.

Lee Kallman, vice president of marketing and development of Richmond 2015, says response to the collegiate races from businesses, participants and spectators has been overwhelmingly positive.

But he acknowledges that “a couple of businesses were not happy about things,” because the event failed to attract as many customers as they had hoped.

Some local companies also have expressed concerns about road closures along the routes of the upcoming World Championship races.

Richmond 2015 officials, however, believe businesses will make up in foot traffic what they might lose in vehicular traffic.

Nancy Thomas, pres­­­­­­­­i­­­­­dent/CEO of the Richmond-based Retail Merchants Association, says its members encountered “no real effect on their businesses” from street closures during the collegiate races.

“Now, we’re helping educate businesses on how to take advantage of the large numbers on the way,” Thomas says.

One goal in hosting the international competition is to promote cycling in the Richmond region.

One example of growing interest in the sport is the construction of the Virginia Capital Trail, a path connecting Richmond and Jamestown.

“It’s like a 52-mile sidewalk,” says Beth Weisbrod, executive director of the Virginia Capital Trail Foundation.

The Capital Trail, which is supported by donations and grants, is scheduled to open Sept. 1.

Ballpark squabble
Although Richmond successfully bid on an international cycling competition, its leaders repeatedly have failed to reach consensus on a location for a new baseball stadium.

Mayor Dwight Jones has proposed an ambitious project involving new development at the site of the existing stadium in North Richmond while building a new stadium plus a hotel, grocery store and apartments in the city’s Shockoe  Bottom area. Plans for Shockoe Bottom also include a pavilion commemorating the area’s history as a major slave trading center before the Civil War.  The city share of the project would total $79.6 million.

The mayor withdrew the proposal from consideration by City Council where it likely faced defeat because of many concerns about its cost and location.

Jones, however, has not given up on the plan and has dismissed as second-rate an alternative proposal advanced by private developers to build a new stadium near its current site on the Boulevard.

Adding to the debate was the announcement that the National Trust for Historic Preservation named the Shockoe Bottom to its list of America’s 11 Most Endangered Historic Places because of the stadium proposal.

The controversy looks like a replay of the tug of war over a stadium site that began more than 10 years ago. The Richmond Braves, the city’s AAA minor league team for more than 40 years, pulled up stakes and moved to Gwinnett County, Ga., in 2008 when no decision was made about replacing The Diamond, the current stadium, which was built in 1985.

The team that replaced the Braves — the Flying Squirrels, a farm team of the San Francisco Giants — quickly came to the same conclusion, the stadium needs to be replaced.

The team owner has backed the mayor’s proposal but has said he will support “a consensus of the community” in finding a solution.

Challenging work

CFOs can expect a multitude of challenges — from managing assets to dealing with a company’s contraction or growth.

Sometimes, even your name can present a challenge.

When your last name is “Crook,” and you’re a banker, you can always expect some questions, some jokes and, of course, some odd looks.

Michelle A. Crook, senior vice president and chief financial officer at the Bank of Botetourt in Southwest Virginia, has heard it all.

But as her husband’s grandmother says, “Crook by name, but not by nature.”

“I’ve just embraced the name,” Crook says with a laugh.

Crook was one of 48 chief financial officers nominated this year for the Virginia CFOs Awards.

Since 2006 Virginia Business has examined the trials and achievements of chief financial officers as part of the awards program.

The awards were presented at a June 19 banquet at The Jefferson Hotel in Richmond.

Although having a sense of humor is not a requirement for a CFO, it does help lighten dark moments.

One of Crook’s darkest moments came in 2011. That was the year that the Bank of Botetourt sustained a loss of $2.9 million.

Crook says the economic meltdown that laid low many banks in 2008 and 2009 didn’t catch up with her bank until then.

One of the bank’s best markets, Smith Mountain Lake — a popular second-home community favored by retirees and recreation enthusiasts — stagnated as spec homes and other properties stopped selling, and that hurt a lot.

Conspicuous frugality hit with a bang. Builders and developers were especially hard hit.

“All those industries tied to houses were affected, and our customers were unable to pay us,” Crook says. “We had to work through our problem assets.”

Fortunately, Crook says, the problem assets were isolated, and the bank’s exposure was limited.

The Bank of Botetourt was able to recover quickly,  Crook says, and turned a profit in 2012, with an even better year in 2013.

No dividends were paid in 2011, but Crook explains it was not the crisis it could have been.

“Our shareholders were incredibly supportive during that time, and it was tremendously rewarding to see that level of support as we went through this,” she says.

The bank gave every shareholder an opportunity to buy more stock.

“We raised $1.2 million in additional capital — we were hoping for half a million — and we were able to weather the storm,” Crook says.

She notes that the Bank of Botetourt had turned down TARP (Troubled Asset Relief Program) funding when it was offered. “We were philosophically opposed to government intervention,” she says.

Crook says 2014 is on track to be another good year, as the economy continues to shake off the effects of the recession.

From corporate to nonprofit
Working in finance, Peter Pastore knows change from many perspectives.

One of his biggest personal changes was moving from a career with multinational corporations — first Reynolds Metals and then Alcoa — to a venerable private girls school, St. Catherine’s School in Richmond.

Five years ago, he was named St. Catherine’s chief financial and chief operating officer.

Now, it’s safe to say he made a smooth adjustment to his new career.

In 2013, Pastore was named recipient of the Business Officers Association’s Will Hancock “Unsung Hero” Award, given to business officers in independent schools who made significant differences in their schools.

Pastore says one of the biggest differences between his role with a multinational corporation versus a small nonprofit is the speed with which he can see the results of a new initiative.

“It’s another piece of the job that I love,” Pastore says. “We study issues. We get counsel from the right folks and then we act. In the corporate world, a solution can take years to put in place.”

Among the initiatives Pastore has put in place at St. Catherine’s has been an aggressive cost-saving program that has involved issues ranging from an energy audit to closer partnerships with the school’s suppliers to implement cost-saving initiatives.

On the energy side, a survey found that 30 percent of the time lights were on in classrooms and other public spaces when nobody was present.

The solution was the installation of motion detectors that turn lights off when they aren’t needed, along with 200 solar panels to generate electricity, with the excess being sold back to the power company.

By reducing its environmental footprints, St. Catherine’s has been able to give its students a lesson in energy savings. “We could have charged over 15,000 cell phones,” with the saved energy. “That’s something the girls really get,” Pastore says with a laugh.

With 957 students scheduled to begin classes in the fall, Pastore says, St. Catherine’s continues to earn the trust of parents who send their children there.

“Our sole mission is to be the best at educating young women. It’s our unwavering purpose,” he says.

Managing growth
For Robert Senter managing growth has been a major issue. Senter was recently promoted to senior vice president for finance and corporate operations at Zeiders Enterprises Inc. in Woodbridge.

Zeiders, which provides human and social services programs to more than 2.25 million military personnel, had about 500 employees when Senter joined the company in 2011. Today, it has more than 1,000 employees.
The company recently won two large contracts, increasing the number of employees 30 to 40 percent within a compressed period.

“Growth is always a good thing, but you have to manage it,” Senter says. “There was a whole lot of new going around, and you have to transition successfully. It stresses all systems.”

One of Senter’s most gratifying moments is talking with college-age students who’ve been brought in for summer internships.

He’s told them to find mentors when they move into full-time jobs. Senter also advised them to take on projects nobody else wants, “the dogs,” as he calls them.

“You have to take risks. You have to make your mistakes,” he says. “You’ll learn more from your mistakes than any successful program you’ve done.”
        
Going public
Growth also has been at the heart of challenges for Steven Belote, chief financial officer at Wheeler Real Estate Investment Trust in Virginia Beach.

A former bank president, Belote became Wheeler’s CFO in August 2011 while moves were underway to take the company public. The November 2012 IPO raised $15.8 million.

Wheeler acquires, leases and manages shopping centers. When Belote joined the company, Wheeler had eight assets that were acquired from a private portfolio. Now, it has more than 20 in markets east of the Mississippi, with a pipeline of other properties in its sights.

“From our viewpoint, we see nothing but positive [territory] for the next five years,” Belote says. “My challenge is just finding the right people for the positions that are needed. We’re busting at the seams.”

The difficulty in hiring, Belote explains, is that the pool of highly qualified people who have experience with public companies in his industry is not large.

For his part, Belote says he and other key executives are nearly always on the road talking to potential investors.

“In this business, you’re constantly raising capital,” he says.

Changes in Front Royal
Kim Gilkey-Breeden, finance director of the Town of Front Royal, a community of more than 14,000 in Warren County, has seen a lot of change since she began working in the finance department 32 years ago. Not all of the changes have been good.

There was the closing of an Avtex Fibers plant in 1989, and the loss of 800 jobs. Then came the plant’s designation as a Superfund site. (After decades of cleanup, the site now is ready to be returned to the community.)

More recently, real estate values nosedived and homebuilding was idled as the recession set in six years ago.

Changes also have included unusually high turnover, with five town managers over the past decade, as well as departures in her own department, with retirements and employees leaving to take higher paying jobs in Northern Virginia.

Meanwhile, Front Royal has increasingly become a commuting community for those traveling to work in the Washington, D.C., area, and it’s gained recognition as a tourist town near the Shenandoah River.

“The town has had peaks and valleys,” Gilkey-Breeden says.

Front Royal is one of the few municipalities in Virginia that sells electricity to its residents. The finance department collects those bills as well as other utility payments.

To provide better customer service, Gilkey-Breeden instituted an online payment system as well as drive-through hours.

Looking ahead, she says Front Royal is still debating its future.

In April the Town Council approved “Envision Front Royal: A Vision for the Town of Front Royal.”

The plan calls for a strong and well-preserved historic core focused on arts and cultural amenities, a diverse economy and the community’s development as a tourist and travel destination — linking the mountains, the river, history, and the national and state parks and forests.

Another leg of the plan calls for redeveloping the Avtex site and transforming it into productive use with jobs in clean energy, research and development, or light industry.

More change is coming. For the CFO of Front Royal who also has had stints as interim town manager, change is what she has come to expect.

“There will always be challenges. That’s a given,” Gilkey-Breeden says.

2014 Virginia CFO Award Nominees

2014 Virginia CFO Award Winner Profiles:

Small nonprofit organizations:
Clyde A. Cornett, CPA
Virginia Community Capital Inc., Christiansburg
Institution’s CFO aims for the double bottom line
by Joan Tupponce

Large nonprofit organizations:
Farrell E. Hanzaker
Virginia Beach City  Public Schools
He reduced school system costs without cutting jobs
by Joan Tupponce

Small private companies:
Robin A. Ransom, CPA
Commonwealth Commercial Partners LLC, Glen Allen
Ransom thrives on change at rapidly growing company
by Joan Tupponce

Large private companies:
Joseph D. Cheely, CPA
LeClairRyan, Richmond
CPA helped law firm grow in a turbulent environment
by Donna Gregory Burch

Publicly traded companies:
Mark Thomson
Measurement Specialties Inc., Hampton
Financial management helped company soar
by Donna Gregory Burch

Tuition break

In late April, Virginia Attorney General Mark Herring, a Democrat, extended a welcoming hand — along with eligibility for in-state college tuition — to a category of young undocumented immigrants living in Virginia. (see related story)

Previously, they would have had to pay much higher out-of-state tuition.

These students often are called “DREAMers” (because of the proposed federal Development, Relief and Education for Alien Minors Act). Herring says about 8,100 of them are “lawfully present” in the commonwealth under the Deferred Action for Childhood Arrivals (DACA) program.

That’s a program initiated by President Obama to permit thousands of young people — who in most cases were brought to the U.S. as children by their parents — to remain in the country.

“These ‘DREAMers’ are already Virginians in some very important ways,” Herring said in a statement accompanying his opinion.

“In most cases, they were raised here, they graduated from Virginia schools, and they have known no home but Virginia. They might be the valedictorian or salutatorian of their high school, but because they were brought here as children many years ago, an affordable education remains out of their reach,” Herring said.
The new policy is taking effect at a time when immigration has again become a hot-button issue in national politics.

Too early to tell
As colleges are preparing to open this fall, what repercussions Herring’s opinion will have on them is still unclear.

“It’s too early to say how this might affect admission and enrollment here or elsewhere,” says McGregor McCance, spokesperson for the University of Virginia.

Last fall, U.Va. had 10,183 in-state undergraduates, but only three students with DACA status, according to McCance.

He says U.Va. will follow the attorney general’s guidance, and await further information from the commonwealth about how to treat DACA students.

The State Council of Higher Education for Virginia (SCHEV) has provided institutions with a long Q&A to help them understand the process involved in admitting DACA students.

One of the most prickly questions is: Who decides whether an undocumented student has established residence in the state?

SCHEV answers the question this way: “Ultimately … the institutions are responsible for determining if a student is domiciled in Virginia.”

At the College of William & Mary, Henry Broaddus, a former dean of admissions who was recently named vice president of strategic initiatives, says that having more DACA students eligible for in-state status is not likely to significantly change the dynamic of W&M’s applicant pool. “But I expect it will vary by institution,” he says.

Broaddus adds that, during the past few years, William & Mary has increased the number of slots for in-state freshmen. “That more than offsets any increase in competition created by making DACA students eligible for in-state tuition,” he says.

Because the college has a target of 65 percent in-state students and 35 percent out-of-state, the change in DACA students’ eligibility would not change the volume or proportion of out-of-state students, he says.

Big difference in costs
For the thousands of students potentially impacted by Herring’s opinion, the bottom-line costs for their families could be profound. See Tuition comparison chart.

Consider that at U.Va., with its most recent increases, in-state tuition and mandatory fees total $12,998 in the coming academic year. An out-of-state student would pay $42,184.

Overall in 2013-14, full-time, in-state undergraduate tuition and fees averaged $6,829 at four-year public institutions, according to the SCHEV. Out-of-state undergraduates paid more than three times that much, $22, 706.

If there is a surge of DREAMers entering Virginia’s public colleges and universities as a result of Herring’s opinion, Robert G. Templin Jr., president of the sprawling 75,000-student Northern Virginia Community College (NOVA), believes it will not occur this year.

“I think there will be a surge that will occur a year from now,” he says. “DACA-eligible students have to have that status for one-year. A lot of these young people have not achieved DACA.”

Templin expects an “increase this year, a larger increase next year, a larger increase the year after that.”

The qualifications for DACA eligibility include age at arrival in the U.S., length of residency here, no criminal record and enrollment or graduation from a high school, receipt of GED or honorable discharge from the U.S. military.

Community colleges
Templin believes that most DACA students will start in community colleges because of the lower costs. He estimates that about 300 students enrolled at NOVA in the most recent academic year were undocumented.

For a student paying in-state rates at a community college the tuition runs $3,570, a relative bargain.

Currently, approximately 60 percent of Virginia’s undergraduate students are enrolled in community colleges.

Templin notes that more than a third of Latino students in higher education in Virginia are at NOVA, and Latinos represent the nation’s fastest-growing minority in the nation’s colleges and universities.

This past year, NOVA had 9,500 Latino students and 7,300 Asian students.

“I expect an increase of 8 to 10 percent per year for the next four or five years in those categories,” Templin says.

The NOVA president says the news from the attorney general’s office was welcomed in Northern Virginia. “From the Virginia business perspective, all business groups have been in favor of this action for quite some time,” he says.  “We have a shortage of highly qualified workers, and Virginia needs a highly skilled workforce. It is important to our future and in our own collective self-interest.”

Demographic shift
The latest turn of events reflects a massive demographic shift that has been occurring in Virginia.

A March 2014 census brief from the Weldon Cooper Center for Public Service at the University of Virginia notes that today one in nine Virginians is foreign-born.  Compare that with 1970, when only one in 100 were born outside the U.S.

Moreover, 68 percent of all foreign-born Virginia residents are clustered in Northern Virginia, where they account for 23 percent of the area’s population, according to the Weldon Cooper report.

A report last year by the Western Interstate Commission for Higher Education (WICHE), forecast a sharp rise in the percentage of Hispanic and Asian/Pacific Islander high school graduates in Virginia during the next decade.

Hispanics are projected to increase from 6 percent of Virginia’s high school graduates in 2008-09 to 16 percent in 2023-24, and Asian/Pacific Islanders will double from 6 to 12 percent of the total over approximately the same period.

Meanwhile, white non-Hispanics will decline from 63 percent of the public high school graduating class in 2008-09 to 52 percent by 2017-18. Black non-Hispanics will drop from 24 percent to 21 percent, according to WICHE projections.

Political opposition
The DREAMers opinion from Herring brushed past the state legislature’s decision not to approve Dream Act bills during this year’s session.

It also drew a sharp rebuke from William J. Howell, the speaker of the Republican-dominated House of Delegates, who decried what he said was Herring’s unilateral action.

“These decisions should be decided through the legislative and democratic processes,” Howell said in a statement.

Across the country, 19 states, including Virginia’s northern neighbor, Maryland, have enacted some form of in-state tuition for qualified young DREAMer students.

The other states are: Texas, California, Utah, New York, Washington, Illinois, Kansas, New Mexico, Nebraska, Wisconsin, Connecticut, Colorado, Minnesota, New Jersey, Oregon, Hawaii, Michigan and Rhode Island.

In Maryland, the high school graduation rate among Latinos increased in one year from 72.5 to 75.1 percent, when DREAMers were offered in-state tuition.

The surge among Hispanics was the largest percentage gain of any racial or ethnic subgroup.

Herring says Maryland officials believe it is because students who may have once dropped out are now completing high school because they see realistic options for continuing education.

Stella Flores, an associate professor of public policy at Vanderbilt University, found in a 2010 study that foreign-born, noncitizen Latinos living in states offering in-state tuition were 1.5 times more likely to enroll in college.

“The advantage is that you increase human capital,” Flores says. “There is a large economic benefit out of this.”

Moving forward, Herring’s action has potentially far-reaching political, educational and financial implications for Virginia.

On the political side, longtime U.S. Rep. Eric Cantor, who had reached the rank of House Majority Leader, was ousted during a primary battle in June by a tea party-backed opponent, Randolph-Macon College professor David Brat, who criticized Cantor’s position on immigration.

In a 2013 address at the American Enterprise Institute, for example, Cantor endorsed a path to citizenship for DREAMers.

In the last days of the campaign, Cantor seemed to backpedal on immigration reform, sending out a mailer stressing his opposition to “amnesty” for “illegal aliens.”

The immigration issue dominated headlines in July as the U.S. dealt with a wave of unaccompanied children from Central America trying to enter the country. President Obama asked Congress for $3.7 billion in emergency funds to beef up border security, care for the children and expedite deportation proceedings.

But for Herring, talking about immigration policies and in-state tuition for DREAMers was smart politics, says Stephen J. Farnsworth, director of the Center for Leadership and Media Studies at the University of Mary Washington.

Farnsworth says Herring is getting his name out front as he eyes a run for governor in the next gubernatorial election cycle.

In that respect, Farnsworth says that Herring is taking a page from Ken Cuccinelli, his Republican predecessor as attorney general. Cuccinelli’s opinions on hot-topic issues raised his profile and helped him capture the GOP nomination for governor, a race he eventually lost to Democrat Terry McAuliffe.

“Ken Cuccinelli and Mark Herring may not agree on much,” Farnsworth says, but what they do agree on is that “an attorney general is best served by being a vigorous partisan advocate.”

Pursuing a goal

For Aide Sanchez of Fredericksburg, Attorney General Mark Herring’s announcement that DREAMers would be eligible for in-state college tuition was a godsend.

“It means in the spring semester [2015], I will be able to go back to school and finish my degree,” Sanchez says.

After earning an associate degree in 2012 at Germanna Community College with an emphasis in biology and the sciences, she enrolled at George Mason University in Northern Virginia with the hope of pursuing a degree in neuroscience.

“I went there for two classes. It was $9,000. It was just too expensive,” Sanchez says.

She says George Mason officials have told her that by being eligible for in-state tuition, she will now be paying only $3,000 to $4,000 per semester for a full load of classes.

She, however, will not qualify for federal financial aid. As a rule, no DREAMers do. But Sanchez holds out the hope that she may be able to find private scholarship help.
Sanchez, 26, came to the U.S. with her family — her father is a welder and her mother a homemaker — when she was 12 and moved to Virginia when she was 13. She has lived in the commonwealth ever since.

When she graduated from high school, she accepted but didn’t understand why she wouldn’t qualify for in-state tuition. Her parents, she says, were paying taxes like everyone else.

“When I received deferred action, I could get a driver’s license, a Social Security number and a work permit. But I still didn’t qualify for in-state tuition — that was the hardest part for me,” she says.

Sanchez says she worked 50 hours a week to help pay her way through community college and became a manager of a Five Guys restaurant.

She now is working as a prevention specialist for the Fredericksburg Area HIV/AIDS Support Services and will continue to work and commute to George Mason.

“My parents have always supported me, especially my dad,” she says. “He said to pursue my dreams.”

Where the jobs are

College graduates with a bachelor’s degree in petroleum engineering earned the highest average salary — by more than a third — of any undergraduate major in 2013, the latest year for which data is available.

Petroleum engineers’ starting salary of $97,000 was tops in all categories, according to a salary survey by the National Association of Colleges and Employers (NACE) and reported by Forbes.

But if you want a degree in petroleum engineering, you’ll have to go somewhere besides Virginia. No state engineering school offers the degree despite a recent revival in U.S. oil production.

Virginia’s engineering school deans say that petroleum engineering is one of those specialty programs better addressed by schools in states where oil exploration and production are big business —Texas and Oklahoma, for example.

Petroleum engineering also has been an area that has seen cyclical demand in the past due to the boom-and-bust swings of the oil industry.

But the absence of a degree-granting program in petroleum engineering does not mean that Virginia is shut out of the nation’s petroleum and natural gas renaissance.

David Cox, head of Virginia Tech’s chemical engineering program, says that petroleum and chemical engineers are like cousins.

“The petroleum industry employs a lot of chemical engineers,” Cox says.

He notes that once a well is drilled and oil is produced, the oil still has to be processed and refined, and that’s where chemical engineers come into play.

Cox says that along with a boom in the petroleum industry, an uptick in the national conversation about the use of nontraditional sources of energy, such as biofuels, has a lot more people interested in chemical engineering.

“We’re bursting at the seams with undergraduates in our department,” Cox says. “The enrollments in chemical engineering have doubled in the past five years. We’re turning students away.”

With starting pay of $67,500, chemical engineering graduates are third on the list of undergraduate majors with the highest beginning salaries in engineering.

Natural-gas engineering
Richard Benson, dean of Virginia Tech’s College of Engineering, says the university soon will take another step forward in the rapidly developing energy sector, with the creation of an undergraduate degree in natural-gas engineering.

The development of high-volume horizontal hydraulic fracturing (fracking) has enabled drillers to release the gas and oil trapped inside shale, providing the U.S. with an increasing surplus of fossil fuels.

“It’s a game-changer,” Benson says. “It will diminish the need for coal and nuclear power, and slow down wind and solar.”

He notes that sometimes there are regional issues that help drive the creation of a particular university program.

For example, Virginia Tech has one of North America’s largest mining and minerals engineering departments, reflecting the historic mining industry in Southwest Virginia and nearby states.

The department’s graduates also boast the highest job placement rate at the university, 100 percent, according to the department’s website.

Big-data positions
At the University of Virginia School of Engineering and Applied Science, Dean James Aylor says that computer science majors typically head the list of highest starting salaries for U.Va. graduates.

“Northern Virginia drives it,” Aylor explains. “It is sort of an information-engineering culture, big data.”

Nationally, computer engineering graduates earn the second-highest starting salary, $70,900, behind petroleum engineers.

Aylor believes that U.Va.’s engineering school is meeting the demands of an accelerating market for engineers, in a STEM-centric (Science Technology Engineering and Math) economy.

“The demand has been growing almost exponentially,” Aylor says. “For this coming year, we had 5,800 applications for 600 positions.”

For engineers, Aylor says he’s never seen a job market so good.

George Mason University’s Volgenau School of Engineering also is responding to the influence of big data.

The school recently created a master’s in data analytics engineering.  “We started the program because of the demand for ‘big data’,” says Senior Associate Dean Stephen Nash.

Volgenau School has more than 5,000 undergraduate and graduate students. The school’s Applied Information Technology program is thriving, with an enrollment of more than 1,250 students.

Nash says the region’s ever expanding high technology industry needed the program to create a pipeline for skilled employees.

He notes that the Volgenau School recently was named one of the nation’s top 10 engineering schools for return on investment by Affordable Colleges Online.

“Our students are getting jobs before they graduate,” Nash says, especially in key areas such as information security.

Nuclear programs
In Virginia, U.Va. once had a vigorous undergraduate nuclear engineering degree program, but the market for nuclear engineers started falling.

“During the late ’80s, the market went to zero, and we got rid of the undergraduate program. It was too expensive to maintain,” Aylor says.

Nonetheless, Mark Pierson, director of the nuclear engineering program at Virginia Tech, says that Virginia is still very oriented toward nuclear power.

About a third of the power generated in Virginia comes from nuclear facilities, according to Dominion Virginia Power.

Moreover, Pierson says that Newport News Shipbuilding constructs all of the Navy’s nuclear power aircraft carriers and, in conjunction with General Dynamics’ Electric Boat Division in Connecticut, all of its nuclear submarines.

Virginia Tech offers only master’s and doctoral degrees in nuclear engineering, but Pierson says the university is developing an undergraduate minor in the field.

At the behest and with the support of the industry, Virginia Commonwealth University’s engineering school has embraced nuclear engineering, offering what the school says is the most comprehensive program in the state.

According to the school’s website, about 65 students are enrolled in the undergraduate nuclear engineering track and about 25 graduate students are enrolled in master’s and doctoral programs.

“Nuclear engineering is one of our star programs.  Remember, nuclear engineering impacts not only the power industry but also the health-care industry,” VCU School of Engineering Dean Barbara Boyan says in an email.

With the VCU Medical Center less than two miles away, the School of Engineering has a strong biomedical engineering program, Boyan says, and the school is developing one of the nation’s first programs in pharmaceutical engineering.

The goal of that program, Boyan says, is “providing technologically advanced methods for manufacturing the drugs that will be needed globally, and at the same time bring the industry back to the U.S. and to the commonwealth.”

The dean notes that adding a new program is often more difficult than ending one, because new programs can require new faculty and equipment or investments to kick-start research.

Modeling and simulation
At the Batten College of Engineering & Technology at Old Dominion University, Dean Oktay Baysal says that sometimes a sudden opportunity will dictate a program that had not been considered before.

Baysal said that when the U.S. Joint Forces Command was established in Hampton Roads — it has since closed — the school of engineering saw an opportunity to gain expertise in modeling and simulation, which the military uses for virtual training and engagement exercises.

In 2010, Batten School created the first undergraduate modeling, simulation and visualization engineering program in the U.S. to complement existing graduate programs.

“Nothing happens with­­­­­­­­­out resistance,” Baysal says, noting that ODU officials had to sell the program to SCHEV to gain approval.

“They said, ‘What is this? We’ve never heard of it,’” Baysal recalled.

In 2013, ODU graduated its first class of engineering students in modeling, simulation and visualization.

Baysal says there are thousands of open jobs for engineers with that degree, and the applications can range from the military to health care to transportation.

West Virginia partnership
If Virginia students still want to earn a degree in petroleum engineering, they might want to apply to West Virginia University.

West Virginia is the closest state that offers the degree participating in the Academic Common Market (ACM).

The ACM is a tuition-savings program administered by the Southern Regional Education Board and 16 member states, including Virginia. The arrangement allows students to pay in-state tuition rates at out-of-state schools if they are enrolled in certain programs not available in their home state.

Ryan Sigler, coordinator of enrollment management at WVU’s Benjamin M. Statler College of Engineering and Mineral Resources, says enrollment in its petroleum and natural gas engineering program has jumped 79 percent in the past five years (from 150 students in 2009 to 269 students in 2014).

“Our students … are highly recruited both nationally and internationally with an average starting salary this year of $87,500,” Sigler says.

Online courses

For a growing number of executive education programs at Virginia’s colleges and universities, the heat is on.

The temperature is being turned up because of greater competition in the marketplace from other institutions and, to a degree, from online programs.

Public schools are hustling for every dollar they can get in the face of resistance over rising undergraduate tuition.

“Institutions are scrambling to raise revenue, and the only place they can do that is executive education” fees, says Jean Gasen, executive director of corporate education at the Virginia Commonwealth University School of Business.

Executive education generally involves noncredit programs designed to sharpen the skills of managers and executives.

“All the state funded universities … are trying to reduce costs and increase revenue,” Gasen says. “The competition has become intense for more revenue.”

Roy Hinton, associate dean of executive programs at George Mason University School of Management, agrees.

“Executive education is a good financial stream. We can’t continue to make tuition hikes,” Hinton says.

Growing acceptance
To keep executive education programs prosperous and better serve their students, business schools are evaluating all the possibilities, including online offerings.

From 2002 to 2012, online education in the U.S. rose from 1.6 million students to 7.1 million, according to a recent report by the Babson College in collaboration with the College Board.

The survey also found that the percentage of academic leaders rating the learning outcomes in online education as the same or superior to face-to-face instruction grew from 57.2 percent in 2003 to 74 percent in 2013.

What the findings mean for executive education is still unclear, but what is clear is that online classes of all types are proliferating.

Gasen believes that executive education — particularly for senior management — is best delivered face to face.

“I am not convinced that the online programs for leadership and management are really making significant inroads. I don’t see a huge threat,” Gasen says.

The strength of personal relationships in executive education also can be seen in the increasing popularity of executive coaching, Gasen says.

“Years ago, executive coaching was something you did when you were in trouble. Now, it’s seen as a special opportunity for high performers to do better,” she adds.

The value of interaction
Lou Centini, senior director of executive education at the University of Virginia’s Darden School of Business, says online learning is at an inflection point where it’s being more widely adopted by individuals and organizations.

But he does not believe it will encroach on the high-level executive education that an institution with Darden’s reputation can offer.

“The way I look at it, the real threat … is not to the top 20 or 30 schools, but to the next several hundred,” Centini says.

He says that mid- and senior-level executives thrive in programs where they can talk to each other, interact with instructors and use their experience to bring ideas to the table.

None of that, he says, can be adequately duplicated online. 

Centini points out that a recent survey of the 100 top executive education programs in the world found that 90 percent used face-to-face learning as their primary teaching method.

Hybrid approach
Hinton says executive education programs at George Mason University increasingly have become hybrid, a mixture of online and classroom instruction.

He also says programs are becoming more multidisciplinary, borrowing content from engineering and the sciences.

Hinton points out that Angel Cabrera, who became George Mason’s president in 2012, built a noted executive education program at his previous post, The Thunderbird School of Global Management in Arizona, and he brings new energy and insights to Mason’s programs.

Richard Coughlan, senior associate dean at the Robins School of Business at the University of Richmond, says programs customized to clients’ needs are very much in demand in executive education.

“They’re company-specific and industry-specific,” Coughlan says of the customized programs, which are increasingly part of the university’s portfolio. “We’ve got faculty who are willing to get inside a firm and truly understand them.”

Coughlan says companies see great returns when they invest in these tailored programs. Online education can’t offer that brand of personal attention and detailed instruction, he says.

Still, Coughlan notes that online education is knocking at the door of business schools throughout the country.

“UNC [University of North Carolina] at Chapel Hill has launched an online MBA,” Coughlan notes.

Grim prediction
In fact, Bloomberg BusinessWeek recently reported a dire prediction by Richard Lyons, dean of the University of California, Berkeley’s Haas School of Business. He believes half the country’s business schools might disappear by 2020 as more top MBA programs offer degrees online and the acceptance of online education increases.

In Virginia, some business schools have embraced the online culture while others have not.

In Lynchburg, two deans have very different views about the benefits of the online experience.

“What we’ve found is that most of us in business are very driven people … especially, when coming back for an MBA or [executive education],” says Scott Hicks, dean of the business school at Liberty University.

“They want the most education at the lowest possible cost. Education will be forced to deliver: bigger, better, faster. And, the best way to do that is through this medium of online education.”

Liberty offers residential and online MBAs, as well as a dozen or so other online master’s programs in the business sector.

“We’re still in our infancy online,” Hicks says. “There’s about to be a paradigm shift, and everybody is waiting to see what’s going to happen long term.”

But Joe Turek, dean of the School of Business and Economics at Lynchburg College, is skeptical of predictions about online business education.

“I don’t buy it,” Turek says. “In my opinion, there’s no comparison between an online program and face-to-face [instruction]. I understand the convenience and flexibility of online courses. But it comes at a cost, and the cost is quality.”

Students tell him that the relationships they build in the classroom bring value to their courses.

Turek is convinced that many business schools are rushing to create online MBA programs because they see others doing it.

“I think we’re seeing a market response, not necessarily a thorough analysis,” he says.

High marks at JMU
At James Madison University, MBA director Mike Busing believes the great shakeout among business schools will be among for-profit institutions and marginal programs.

“My opinion is that if half the schools are gone, maybe they deserve to be,” Busing says.

JMU’s information security MBA program has been ranked ninth in the nation for online graduate business programs by U.S. News & World Report, and its MBA program was ranked in the top 50 for online graduate business programs.

“That ranking didn’t happen overnight,” Busing said. “We’ve been in the online business since before 2000. “There’s quite a learning curve to online education. When we started this model, it was basically teaching in a chat room.”

Longwood University’s College of Business & Economics went online with its MBA programs in 2006, in part because of its rural location. “Farmville is not a hotbed of industry. There are not a lot of people here wanting an MBA. We thought [going online] would open up our marketplace,” said Assistant Dean Abbey O’Connor, who also is director of the university’s MBA programs.

Longwood’s online MBA programs include concentrations in general business, retail management and, beginning this fall, real estate.

The programs also include summer residencies, in which online students come to campus to meet professors and hear special speakers. The focus is to help build relationships.

O’Connor believes the online presence will continue to grow and become more competitive.

She says the challenge for business schools is to differentiate their programs in an increasingly crowded field.

“Are Harvard and Longwood ever going to be competing for the same students — I don’t think so,” O’Connor says. “We’re going after a different target market.”

Target audience
At Virginia State University, business Dean Mirta Martin has approached an online MBA warily.

She says many institutions VSU partners with have online MBA programs and are not selling out the seats.

“For us, it doesn’t make sense to cannibalize a market that is already at capacity,” says Martin, who will become president of Fort Hays State University in Kansas in July.

VSU is exploring the possibility of targeting a specific audience — nearby Fort Lee, an Army installation with a daily population of 34,000 — for an MBA using classroom and online instruction.

Online programs, Martin says, are one of the ways to help reduce the cost of higher education at a time when crushing student debt has become a crisis.

“Children are going out of college with debt larger than the mortgage on my first house. That’s what keeps me up at night,” says the departing business dean.

Another institution that took a long look at an online MBA was Radford University, which will launch its first program this fall.

“We will offer an accredited, quality program and in-state tuition. We think that will be attractive to our alumni and many others,” says Associate Dean George D. Santopietro of the College of Business and Economics.

One of the biggest challenges that schools like Radford face, he suggests, is not big-name schools but unaccredited institutions that offer inferior degrees for a low fee.

“Diploma mills,” he says. “They’ve been around for decades. Now, they have moved online.”

16 stores in 60 days

The traffic is brisk at Avail Vapor, an e-vapor store on West Cary Street in Richmond.

It’s a scene repeated across Virginia and the nation, where e-vapor stores are springing up as a new retail model.

James Xu, an Avail founder, is trying to develop Avail Vapor into a multimillion dollar business. The Cary Street store, which opened last August, was his first location.

By March, he had seven stores across the state, from Virginia Beach to Blacksburg. But he says that’s just the beginning. “We’re going to 16 more within the next 60 days. Then, have at least 60 stores by the end of the year,” Xu says.

He says investors who want to get into the e-vapor business are showing up daily but adds the company can go a long way on the capital it has.

Xu comes from an entrepreneurial background. His family’s business, Richmond-based Evergreen Enterprises, employs 800 people in Virginia. Evergreen makes and distributes a wide variety of products and accessories for gift shops and national chains.  It bought Virginia-based Plow & Hearth in 2010.

So far, most of Xu’s Avail Vapor customers are smokers looking to quit. He says some will dispose of cigarette packs when they come in the store, and others will even stomp on them as a gesture of disgust.

“Almost every single one of our customers is a smoker looking for an alternative,” he says. “We do have every once in a while some young college kids who come here, because they want to look cool.”

Xu says the company has a policy to not sell e-vapor products to anyone under the age of 18. That policy is in line with proposed Food and Drug Administration regulation that would ban sales of electronic cigarettes to minors.

The store sells e-vapor products in a wide range of flavorings ranging from “Belgian Waffles” to “Crispy Pops,” as well as traditional tobacco flavors.

The nicotine content ranges from zero to 2.4 percent of the vapor liquid, and customers can choose from e-vapor models ranging in size from 3 inches to 18 inches. There are even e-vapor pipes.

Like Altria, Xu says his company would embrace FDA regulation. The agency announced its first proposed regulations in late April.

“You might think it’s funny that we welcome regulation,” Xu says. “But without regulation, you’re without a rulebook. And certain bad seeds could ruin the whole industry.”

With more entrepreneurs entering the e-cigarette industry every day, Xu believes that the big players will be the ones that survive.

“So, it is a race — with ourselves — to become a national brand,” Xu says.

Assessing the risks

In a windowless basement office on the medical campus of Virginia Commonwealth University in Richmond, the hard science of investigating the health effects of electronic cigarettes has begun.

Thomas Eissenberg, professor of psychology and director of VCU’s Clinical Behavioral Pharmacology Laboratory, and Robert Balster, professor of pharmacology and toxicology in the VCU School of Medicine, are co-investigators studying novel tobacco products under an $18.1 million grant from the Food and Drug Administration and the National Institutes of Health.

Their charge is to develop evaluation tools that will help the FDA as it crafts rules in regulating the manufacture, distribution and marketing of electronic cigarettes and other new tobacco products. (The FDA announced its first proposed regulations in late April.) “With respect to e-cigarettes, there are a lot of opinions floating around out there, and there aren’t a lot of answers,” Eissenberg says.

“For me, the most important thing to remember is that the past 150 years of public health and successes in public health haven’t been driven by opinion — they’ve been driven by data.”

Eissenberg has been studying tobacco products for more than a decade, and electronic cigarettes are only the latest product to come under his review.
Electronic cigarettes have divided public health officials into opposing camps, according to The New York Times.

Some believe the devices eventually will make cigarettes obsolete, while others fear e-cigs provide a gateway for children to become smokers.

“We need to find what the effects of these products are likely to be,” Eissenberg says. “There is no data on the long-term use of electronic cigarettes and its effects on human health.”

He says existing data show that some people are using electronic cigarettes to get away from tobacco use altogether. Others, however, are using e-cigarettes to supplement their tobacco use, “vaping” in places that they might not be able to smoke.

One of the questions Eissenberg is exploring is whether people in this second group eventually will give up smoking entirely or give up electronic cigarette use completely.

“The answer to that question is something we don’t have data on. But I think it’s a key question,” Eissenberg says.

Janie Heath, associate dean and professor at the University of Virginia School of Nursing, is among those who fear the allure of e-cigarettes for the young.  She writes and lectures frequently about smoking, smoking cessation and tobacco products.

Heath describes the current e-cigarette market as a “wild, wild West” in terms of the claims made about some products and ads showing them being used by celebrities.

“You look at movie stars that are vaping, and you’re thinking, ‘Vaping must be okay,’” Heath says.

She adds that the wide variety of flavors available for e-vapor products — “Captain Crunch, chocolate, cotton candy, you name it!” — can be particularly appealing to young people.

Heath notes that the Centers for Disease Control found last year that e-cigarette use among high schoolers more than doubled, from 4.7 percent to 10 percent, between 2011 and 2012.

“Smoking rates are going down. Cigarettes aren’t being purchased as much,” Heath says. “I think big tobacco companies are looking at how they can replace their cigarette base.”

But David Sylvia, senior manager, corporate communications, at Altria Group, says that one of the main reasons that the company wants FDA regulation of e-cigarettes is to keep e-vapor products out of the hands of children.

He adds that Altria has tried to pass legislation in every state setting a minimum age for purchase. “We don’t believe that underage kids should use any tobacco products,” Sylvia says.

In April, the Centers for Disease Control and Prevention reported that the number of calls to poison centers involving liquid nicotine used in e-cigarettes has surged in recent years. After averaging one a month nationally in September 2010, these calls had increased to 215 a month in February. More than half the calls involved children under 6 who became ill after ingesting liquid nicotine.

The American Academy of Pediatrics called on the federal government to develop a national plan of action to keep children safe from liquid nicotine. 
In response to concerns about the potential health effects of e-cigarettes, a growing number of cities — Philadelphia,New York, Los Angeles and Chicago —  have restricted their use.

Seeking uncommon students

The face of Virginia is changing. More immigrants and minorities make up its population, more veterans are returning home, and more rural residents are planning a different future as mining and agricultural jobs disappear.

What do they all have in common?

They are part of a group that could largely be defined as nontraditional students, and they’re the ones that Virginia’s community colleges say may be the answer to keeping Virginia competitive in the 21st century.

Robert Templin, president of Northern Virginia Community College (NOVA), has been thinking a lot about the jobs of the future and who’s going to fill them.
NOVA already has more than 50,000 students, but Templin argues that the doors have to be opened even wider so that more qualified workers can be brought into the job stream, especially those who have an aptitude for scientific and technical positions.

“We’re going to have many more job vacancies in Virginia than we currently have qualified workers to fill them — 840,000 new jobs [that require training beyond high school] between now and the year 2022,” Templin says. “An equal number of jobs will be vacant, because baby boomers will be retiring.”
Turning to nontraditional students is part of the answer for building a qualified workforce, Templin adds.

Under his leadership, NOVA has created a strategic plan to increase college access to more than 25,000 additional students drawn from low-income and immigrant communities by creating closer relationships with area high schools and nonprofit organizations.

“Over the next 30 years, Virginia will grow by 2.3 million [people]. Eighty-five percent of that growth will come from minorities and immigrants,” Templin says.
The Boulder, Colo.-based Western Interstate Commission for Higher Education, an authority in forecasting student trends, says the proportion of Hispanic students among Virginia’s high school graduates will soar from 6 percent in 2008-09 to 16 percent by 2023-24.

Asian/Pacific Island students will double from 6 percent of the class to 12 percent by 2027-28.

Meanwhile, the proportion of white and African-American students will de­­cline over the same period.

Oscar Lopez, a second-year student at NOVA, is part of Virginia’s changing face.

His parents were immigrants, and he is the first member of his family to go to college — his dad is a mail handler, his mom a cafeteria worker — and he wants to become a physician. He has declared a major in biology.

“Right now I’m taking chemistry and physics, basic calculus. It’s hard. I stay up a lot of nights, but I want to study medicine — I want to be a doctor,” Lopez says.

Lopez, 20, came to NOVA from Annandale High School in Fairfax County through a program known as the Pathway to a Baccalaureate, which is one of several initiatives to put nontraditional students on the road to higher education.

The Pathway to a Baccalaureate program helps underprepared students, through a web of support services and counselors, make the transition from high school to college.

“We identify students with potential who are not likely to go to college, unless someone guides them,” Templin says. “This year we have 10,000 students in that program, and they’re going to college at a rate of 90 percent. Historically, it’s half of that.”

If there is one kind of worker that technology-driven Northern Virginia craves perhaps more than any other, it’s the one who has the ability and the drive to enter a STEM-H career.

The acronym, a rallying cry for those who believe the U.S. is trailing in high-skill areas, stands for science, technology, engineering, math and health.

At a November economic summit in Williamsburg sponsored by the Virginia Chamber of Commerce, Templin told business leaders about a NOVA program that focuses on low-income, immigrant, first-generation college-goers interested in STEM-H careers.

By signing a contract in the 11th grade, the students trigger a college preparation program that provides them with counselors and a support network.

Those who successfully complete the program are guaranteed admission to George Mason University.

Templin told the economic summit that NOVA now has 8,000 of these students who are graduating from the community college at twice the rate of other students.

The program operates under the rubric of SySTEMic Solutions, and the goal is to develop a sustainable STEM pipeline in Northern Virginia.

The program hopes to reach 40,000 K-12 students across Northern Virginia in 2016.

Science and engineering occupations are projected to grow at more than double the rate (20.6 percent) of the overall U.S. labor force (10.1 percent) through 2018, according to data from the Bureau of Labor Statistics.

“If we don’t produce enough STEM workers, technology companies in Northern Virginia will reach out to foreign countries and other states to get the people they need,” says Roger Ramsammy, provost of the NOVA’s Manassas campus who heads the college’s STEM program. 
  
Returning vets
Veterans returning from America’s wars and others exiting service branches as the military downsizes also are part of the cohort of nontraditional students receiving special attention from community colleges.

Last year, for example, Virginia’s community college system served 65 percent more veterans (9,404) than they did in the 2008-2009 school year (5,703).
Of those, women accounted for nearly one-third of the veterans enrolled, compared with only 10 percent of the U.S. veteran population.

At the same time, the number of Hispanic/Latino veteran students grew by 165 percent during the period, and the number of African-American veteran students by 96 percent.

Nnamdi Small, who worked for six years as an avionics technician on Marine 1, the president’s helicopter, now assists veterans at Germanna Community College in Fredericksburg.

Germanna has experienced a 61 percent increase in its number of veteran students since 2008-09.

Small, who is a former Germanna student, says there once was a huge support gap for veterans leaving the military for a civilian education.

But community colleges such as Germanna have worked hard to close the gap, by bolstering transition services and outreach to veterans at a centralized point.

“Co-location is key,” Small says. “A vet is used to going to one office and getting 15 things done.  So, now they can go to one office and get their benefits and plan their curriculum. It’s a one-stop shop.”

Rural residents
Virginia’s rural residents represent another segment of nontraditional students community colleges want to reach.

Community College Chancellor Glenn DuBois often has outlined the sharp educational disparities that exist across the commonwealth.

More than 6 million of the state’s 8.2 million residents live in Virginia’s urban crescent, stretching from Northern Virginia to Richmond to Hampton Roads.

If it were a state, DuBois says, this urban area would rank No. 2 nationally for educational attainment, with 90 percent of the population having high school diplomas and 38 percent holding at least a bachelor’s degree.

By contrast, if the rest of Virginia — stretching from the Eastern Shore through Southern Virginia to Southwest Virginia and up through the Shenandoah Valley — were a state, the chancellor says, it would rank last in the nation for educational attainment, with one in four people there failing to finish high school and only 19 percent holding at least a bachelor’s degree.

Scott Hamilton, president of Mountain Empire Community College in Big Stone Gap, is trying to change that picture. He has been stressing in chamber of commerce meetings that his school has to be a major player in the area’s economic development.

Hamilton says many Southwest Virginia wage earners have been pushed out of well-paid jobs in the coal mining industry, which has fallen on hard times.

“The jobs of the future will require a two-year associate [degree] in a technical field or a four-year degree,” says Hamilton, who once worked in the mining industry.

“Our role is to provide highly qualified workers, to retrain coal miners or to bring in people who want to better themselves.”

The Virginia Tobacco Indemnification and Community Revitalization Commission has worked with Mountain Empire in providing scholarships to students in the college’s four-county service area, where the poverty level is twice the state average of 11 percent and median family income is about half the state average of $63,636.

Recently, for example, the Tobacco Commission — funded by the 1998 settlement with the nation’s four biggest tobacco companies — presented a $420,000 award to Mountain Empire for its Tobacco Family Scholarship and AIMS Higher Scholarship programs.

The college presented 190 students with Tobacco Commission scholarships this year, including 48 students eligible for Tobacco Family Scholarships and 142 students eligible for AIMS Higher Scholarships. 

The scholarship programs encourage high school students in Lee, Scott, Wise and Dickenson Counties, and the city of Norton, to pursue higher education.

Overall, the Tobacco Commission has given $7.5 million in grants, including $6.3 million in scholarship money, to Mountain Empire over the years.

“I believe education will be one of the enduring legacies of the Tobacco Commission,” says Donna Stanley, Mountain Empire’s vice president for institutional advancement.

NOVA’s Templin says that community colleges from every part of Virginia must engage nontraditional students — whether immigrants or minorities, veterans or rural resident dealing with economic shifts.

“It has to be done, or we’re all losers,” Templin says. “Business loses, and society loses.”