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byline: Gary Robertson

DEI openers

Every movement has its moment.

And now appears to be the moment for diversity, equity and inclusion officers in C-suites, academia and government.

Black Lives Matters protests sparked by the police killing of George Floyd in May 2020 broadened awareness of race-based inequities that exist in the United States, including inequality in hiring and job promotions.

And for many companies, that awakening provided an impetus to hire executives tasked with changing culture and increasing diversity and fairness.

Fostering equity is simply good business practice, says Jon G. Muñoz, chief diversity, equity and inclusion officer at McLean-based Fortune 500 global management firm Booz Allen Hamilton Inc.

“The business case for diversity is clear,” Muñoz says. “For me, it’s not just the right thing to do. It creates a competitive advantage for the company. A company becomes more innovative; it becomes more creative.”

According to a national LinkedIn survey, chief diversity and inclusion officers led C-suite hires for the second year in a row in 2021. As a share of all hires in the C-suite, the hiring of chief diversity and inclusion officers soared 111% during the 12-month period ending Aug. 31, 2021. That surpassed an 84% increase during the previous year.

Virginia has been part of that trend, starting with its own state government. In 2019, Janice Underwood became the first state Cabinet-level DEI officer, tasked with creating the ONE Virginia Plan, a framework for Virginia government agencies and universities to create more inclusive practices.

DEI officers also are being hired across the commonwealth by large companies, universities and other institutions, with the expectation of ushering their organizations into more modern, equitable practices.

‘Lofty goals’

In a 2019 analysis of more than 1,000 companies worldwide, McKinsey & Co. reported that companies in the top quartile for gender diversity on executive teams were 25% more likely to see above-average profitability than companies in the bottom quartile. Equally compelling, companies in the top quartile with strong ethnic and cultural diversity outperformed those in the fourth quartile by 36% profitability.

Although there are solid economic reasons for increasing diversity, Underwood, who left her position on Jan. 14, says DEI professionals encounter some obstacles in their work.

“Some of the biggest challenges are that people try to do too much at once, and so some of these places with lofty goals, when they don’t achieve them right away, folks get discouraged or allies get disenchanted with the process,” says Underwood, who previously oversaw diversity initiatives at Old Dominion University. “There’s a battle of managing expectations. Inequity was born 402 years ago in this country, and the fact that it is so baked into our systems, it takes a lot to dismantle the inequities. It’s not going to happen in a year or two.”

“A diverse group of students in the classroom really enhances learning [and] enhances team dynamics,” says Janice Branch Hall, the assistant dean for DEI at Virginia Tech’s Pamplin College of Business.
“A diverse group of students in the classroom really enhances learning [and] enhances team dynamics,” says Janice Branch Hall, the assistant dean for DEI at Virginia Tech’s Pamplin College of Business.

Complacency and doubt — especially among employees who are wary of joining internal DEI committees — also are problems. Furthermore, some people “put DEI in a box and believe it to be only the DEI professional’s work,” Underwood says, but “it’s everyone’s work.” That includes white people, who are underrepresented in the field, she says, in part because many white professionals feel they may lack the authority needed to champion historically marginalized people.

Underwood says she hopes that belief will change over time, and that a Virginia university will start a dedicated training program for future DEI executives.

In the meantime, companies and other organizations are searching for their own paths toward increasing equity.

The notion of “belonging” also has become a larger part of the vocabulary in the DEI space. Muñoz pairs the term with “inclusion” to tie it to the creation of an environment where employees can bring their “whole selves to the job; they can bring all their identities.” 

“I’m gay and Hispanic,” Muñoz says, “and I can feel comfortable in celebrating that and being comfortable with who I am and not being afraid that I’m going to be judged for that. I can focus my energies instead on giving my discretionary effort and focus on my job and have satisfaction and gratification in doing that.”

In May 2019, Booz Allen received a Business of Pride Corporate Award at the Washington Business Journal’s 2019 Business of Pride awards, which recognizes Greater Washington, D.C., companies and business leaders for outstanding practices in advancing LGBTQ+ leadership and equality.

“For us,” Muñoz says, “it’s about helping [employees] understand that we’re aligned with their personal purpose, with their own difference and how they can find a home and a sense of belonging in the firm so that they can have a voice and exercise their talent in a way that’s productive.”

Learning ground

A primary emphasis of DEI efforts at Virginia Tech’s Pamplin College of Business is to prepare students for the workplace, says Janice Branch Hall, who became Pamplin’s assistant dean for diversity, equity, inclusion and belonging in 2019.

“Look at the news,” she says. “There’s usually an issue or matter that’s impacting a business from a cultural standpoint, a social standpoint. It requires a sense of cultural humility.”

The National Institutes of Health (NIH) defines cultural humility as “a lifelong process of self-reflection and self-critique whereby the individual not only learns about another’s culture, but one starts with an examination of her/his own beliefs and cultural identities.” Increasingly, work leaders and employees are being asked to confront unconscious biases that affect life at work.

Virginia Tech’s student body is becoming much more culturally diverse, reflecting society as a whole, and that can bring benefits, Hall and others say. 

“We know a diverse group of students in the classroom really enhances learning, enhances team dynamics,” says Hall.

According to data from the State Council of Higher Education for Virginia, about 20% of Virginia Tech’s students were people of color in 2012, a percentage that grew to 33% in fall 2021.

Pamplin also is working to diversify its faculty. That’s important, Hall says, because when students “see people who look like them in an organization, it enhances their sense of belonging.”

At Virginia Tech, Hall has led efforts to recruit and retain teaching and research faculty in underrepresented minority groups.

Today, about 19% of Pamplin’s faculty are underrepresented minorities, “which is really great for a top-tier business school,” Hall says, adding that more recruitment work is needed.

The market for diverse faculty is highly competitive, and other institutions are after prized candidates as well, says Hall, the first Black woman to reach the level of dean at Virginia Tech.

Universities, both nationally and within Virginia, have nowhere to go but up in terms of hiring more diverse full-time faculty members, who are for the most part white or Asian, according to a report released last year from The Chronicle of Higher Education focusing on 2019 demographics at more than 3,000 higher education institutions.

At Virginia Tech, only 3.3% of all faculty were Black and 3.4% were Hispanic in 2019, the study shows. Percentages of Black and Hispanic faculty at most of the state’s other large, public universities were similarly low.

Notable exceptions are Virginia’s historically Black colleges and universities (HBCUs), including Norfolk State and Virginia Union universities, where Black professors make up more than half of full-time faculty.

Focusing on diversity helps businesses to better attract talent, says Virginia ABC Chief Transformation Officer Elizabeth Chu. Photo by Matthew R.O. Brown
Focusing on diversity helps businesses to better attract talent, says Virginia ABC Chief Transformation Officer Elizabeth Chu. Photo by Matthew R.O. Brown

A culture shift

One of the biggest revenue producers for state government, the Virginia Alcoholic Beverage Control Authority (Virginia ABC) also is trying to up its DEI game.

In 2019, the ABC transitioned from a state agency to an authority, like the Virginia Lottery, enabling it to operate more like a business.

In 2021, the ABC hired Elizabeth Chu as its first chief transformation officer, overseeing project management and business transformation, as well as diversity, equity and inclusion.

“This is the first time we’re standing up a specific office for diversity, equity and inclusion,” Chu says. “We are currently in the process of conducting our first engagement and inclusion survey. We have to create relationships to ensure our projects are successful, [that] change is successful.”

State government relies on Virginia ABC as a major source of revenue, and legislators are likely to keep a close watch on the authority as it evolves. Over the past five years, Virginia ABC has contributed more than $2.6 billion to the general fund.

“The more focus we have on employee engagement and inclusivity and belonging, the more that we’ll be able to attract talent,” says Chu, who’s worked for Deloitte, Global Lead Management Consulting and Thought Logic LLC.

She points to a recent business article on “The Great Resignation.”

“Employers thought people were leaving because they were not getting paid enough. That was part of it,” Chu says. “But for employees, it was really about the culture of the organization. … It was so much more than pay and title.

“Employees and talents are just being much more careful about companies and where they decide to work,” she adds. “I think it’s a generational shift, but I also think it is a broader shift.”

Maria Pia Tamburri, director of diversity, equity and inclusion at Richmond-based Fortune 500 utility Dominion Energy Inc., believes that the appointment of DEI officers in corporate America is not just a temporary response to recent societal events.

According to Dominion’s first public DEI report, released in November 2021, Dominion’s workforce grew in racial and gender diversity by 13.4% between 2016 and 2020, with women and nonwhite employees making up 49.6% of all hires in 2020.

“It’s a permanent change that will continue to grow,” Tamburri says. “Companies with strong DE&I cultures will outperform their rivals over time, leading to broader adoption of DE&I programs one way or the other.”

Recognition that increasing equity and diversity is both good business and an ethical obligation is growing among businesses, she adds: “Companies that ignore DE&I will look increasingly out of step with the times, and will suffer for it.”

The Metropolitan Washington Airports Authority recently named 21-year airport veteran Tanisha Lewis as its first vice president of diversity, inclusion and social impact.

“In the past, diversity was your outside, what you looked like, the color of your skin, how you sounded — your accent — or your gender,” Lewis says. “Now, it includes things like who you love, your LGBTQ status. It also includes your religion. It also includes your background and experience. … Diversity has broadened significantly.”

Lewis says that change typically is accompanied by resistance to change, and she expects that may also be the case as MWAA unrolls its diversity efforts.

“First, we have to acknowledge that the conversation around diversity is a tough conversation,” Lewis says. “It’s about who you are and protecting who you are. But if you have the support of your leadership, you can have that conversation, you’re much more successful.”

Deputy Editor Kate Andrews contributed to this story. See more of Virginia Business’ Black business leaders issue.

Better together

“Cooperation” is a word Jim Noel uses a lot these days when speaking about the Greater Williamsburg region, which encompasses the city of Williamsburg and York and James City counties.

As York County’s economic development director, Noel has watched as one of the most historically significant areas of the nation has worked to revive and diversify its economy in the wake of the COVID-19 pandemic and its devastating effects on tourism.

In 2020, overnight visitation to Virginia declined by 33%, shrinking from 44 million visitors in 2019 to 29.3 million visitors, according to the Virginia Tourism Corp.

The Williamsburg region performed even worse.

“Williamsburg is still one of the lowest occupancy markets in the state,” says Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association (VRLTA). The major reasons, Terry says, are fewer visitors and shorter stays at Colonial Williamsburg.

“I think it’s a little more challenging to sell historic tourism these days,” he notes. “Vacations have now become four-day weekends, as opposed to weeklong.” Also, new hotels and resorts — which Williamsburg lacks, compared with nearby Virginia Beach, for instance — often tempt vacationers.

In October 2020, Williamsburg’s occupancy rate was 31.2%, the lowest of the 13 Virginia markets surveyed, according to VRLTA data. It rose to 52.5% by October 2021, but was still ranked lowest among markets surveyed and was below the state average of 64%.

Also, notes Old Dominion University’s 2021 State of the Region report, June 2021 hotel revenue in Williamsburg was at $17.7 million, a 514% increase from the previous year but 6% below June 2019. Some of this is due to lower per-room prices that sank to an average of $88 per night in July 2020. Prices rose to $163 in July 2021, with 67% occupancy, says Ron Kirkland, executive director of the Williamsburg Hotel and Motel Association.

But group and business travel are still lagging, Kirkland says, because many people aren’t yet ready to convene in large groups. Barring any further setbacks, he thinks it will be another year to 18 months before tourism and occupancy rates fully recover.

Colonial Williamsburg, historically one of the bellwethers of the Williamsburg region’s tourism industry, has seen a precipitous drop in ticket sales since a high point of 1.2 million tickets in 1988. By 2018, tickets sales plummeted to 550,171, the lowest point since the 1960s. And in 2020, due to the pandemic, the living history attraction was closed from mid-March to mid-June, reopening under state capacity limits for nearly a year.

“I’m happy to report that visitation to Colonial Williamsburg’s historic area and art museums has been strong through the summer and is gradually returning to pre-COVID-19 visitation levels,” notes Ellen Peltz, public relations manager for The Colonial Williamsburg Foundation, although she declined to provide current numbers on visits, financial data and employment.

Virginia Restaurant, Lodging & Travel Association President Eric Terry says sports tourism could help diversify and boost Williamsburg’s hospitality sector. Photo by Mark Rhodes
Virginia Restaurant, Lodging & Travel Association President Eric Terry says sports tourism could help diversify and boost Williamsburg’s hospitality sector. Photo by Mark Rhodes

From COVID to cooperation

Regional cooperation is seen as part of the path toward recovery and diversification in the region.

The city of Williamsburg and York and James City counties have shared interests that encourage cooperation, says Noel with York County: “We work together a lot, and it makes sense. Our economies are intertwined and while we have a mixed economy, the hospitality industry is important to all three of us.”

Food and drink and good times never seem to lose appeal, and Williamsburg-area localities are excited about the Edge District, a developing hospitality- and entertainment-driven area on the borders of the three localities, sited along Second Street, Merrimac Trail, Capitol Landing Road and the Virginia Route 143 corridor.

The district has drawn support from local governments and in short order has become an example of increasing regional cooperation in the face of economic adversity.

Robby Willey, who co-founded The Virginia Beer Co. brewery in 2016 on Second Street, is the Williamsburg Economic Development Authority liaison for the district. “The municipalities put their money where their mouth was,” he says, including setting up a website promoting the district to the public. Also, businesses in the area are planning to form an association to work on securing signage and infrastructure to attract more people to the district, he says.

Noel began promoting the Edge District in 2019 when he started thinking about ways to spur economic development on a regional level.

“It occurred to me that this is a real cool corridor,” says Noel, who took the idea to his local economic development counterparts, who also were enthusiastic about the concept. So were owners of restaurant and beverage businesses, which were hit harder than other sectors during the height of the pandemic and have encountered hiring difficulties during the widespread labor shortage.

“Both from an EDA and business perspective, we couldn’t do what we do without our visitors,” Willey says, noting that the localities’ marketing encourages residents and tourists to “step out of their comfort zone,” and try out new businesses.

Although the three local economic development authorities each donated $2,000 to create a starter fund for the Edge District, the big push came after the Environmental Protection Agency announced in June 2019 that it was awarding the Greater Williamsburg Partnership a $600,000 brownfields grant, which would be used to conduct environmental assessments in the Edge District, Grove, Tabb Lakes and Lightfoot, and make properties suitable for redevelopment.

“Redevelopment and revitalization” is the primary goal of the brownfields grants, says Tom Laughlin, a senior associate with Draper Aden Associates, the Blacksburg-based engineering, surveying and environmental services firm that was hired to manage the brownfields grant. The firm also hired Consociate Media of Gloucester to brand and market the Edge District.

Part of the grant funds an assessment process that identifies any potential hazards such as lead paint, asbestos or underground tanks so that potential buyers or developers of a distressed property know what they might face.

The grant also provides for conceptual designs and renderings of what a distressed property could look like after rehabilitation.

York County Economic Development Director Jim Noel has led regional efforts to promote the Edge District, which features 20 restaurants. Photos by Mark Rhodes
York County Economic Development Director Jim Noel has led regional efforts to promote the Edge District, which features 20 restaurants. Photo by Mark Rhodes

About a dozen projects have been examined so far, but Laughlin says he isn’t able to discuss them yet. Nevertheless, he adds, “projects are in motion, and we expect tangible evidence in a year or two.”

“We are excited to see this budding foodie/shopping destination get the attention that it deserves,” Yuri Adams, Williamsburg’s acting economic development director, says of the district.

“Chef-driven restaurants and destination boutique shopping are the central focus of the Edge District, and we wanted to create a way to market and celebrate all that these businesses offer our community — not just through the products they offer, but also through the community development and philanthropic efforts they provide our Greater Williamsburg region,” Adams says.

Growth through collaboration

Industrial development is another area where the Greater Williamsburg localities are finding opportunities for collaboration.

In 2018, the three principal Williamsburg-area localities, as well as seven other localities, including the cities of Chesapeake, Franklin, Hampton, Newport News and Poquoson, formed the Eastern Virginia Regional Industrial Facility Authority (EVRIFA).

“What a RIFA does is to allow localities to invest in an economic project and share the revenue,” Noel says, “but not everyone has to participate.” In 2020, the Eastern Virginia RIFA approved the $1.35 million acquisition of a 432-acre one-time naval fuel depot in York County, property formerly owned by the state.

The site, which is accessible to Interstate 64, will be occupied by a solar farm and an industrial park. CI Renewables of New Jersey, formerly known as KDC Solar, was slated to pay $1.35 million to EVRIFA for the site in a deal that was expected to close in mid-December 2021. In addition to building the 20-megawatt solar farm, CI Renewables will lease about 180 acres of the property for the construction of Kings Creek Commerce Center, a light industrial park.

Another potential cooperative effort between the localities is a proposed indoor sports complex. The Colonial Williamsburg Foundation has offered its underused, 100-acre regional visitors center property as the site for the project.

Williamsburg city government has been discussing the idea of an indoor sports complex since 2014 and more recently broached the idea of forming a Historic Triangle Recreational Authority with James City and York counties that would oversee the complex. In November, the counties officially joined the authority.

The localities also have cooperated on other objectives, but the proposed sports tourism complex would represent the largest intergovernmental project ever undertaken by the three governments.

Utah-based Victus Advisors, a consultant hired by the city, recommended in March 2021 that the facility be at least 150,000 square feet, which would accommodate 12 basketball courts that would convert into 24 volleyball courts. The project’s cost and timeline for construction and opening are still under study, according to a Williamsburg official.

Terry says sports tourism could be a big help to diversify and boost Williamsburg’s hospitality sector, especially during off-seasons, as it has in other localities.

“As we’ve seen the facilities built around Hampton and Virginia Beach, it’s been a real shot in the arm for them,” Terry says.

In October 2020, for example, Virginia Beach opened the $68 million Virginia Beach Sports Center, a 285,000-square-foot facility near the Oceanfront with seating for 5,000 spectators.

Rick Overy, chair of the Williamsburg Economic Development Authority, emphasizes the need for diversity in the economy and reiterates the growing importance of sports tourism.

“To host large athletic tournaments — that’s something [we’re] hoping to build on and not just rely on the historic tourism, which has been the stalwart of what we’ve had for 50 years,” he says. “When everybody thinks of Williamsburg, they think of historic tourism, so we’re trying to diversify that.”

Formed in 2016, the Greater Williamsburg Partnership is a yet another example of regional cooperation to attract business and industry to Williamsburg and York and James City counties.

James City County Economic Development Director Christopher Johnson says the partnership celebrates no matter what regional locality is selected for a new business or expansion. “It benefits us all.”

With the ongoing expansion of Interstate 64, the buildup of the Port of Virginia and the $3.8 billion Hampton Roads Bridge-Tunnel expansion, Johnson says cooperation will benefit the entire region.

“Development is a long game,” says Johnson, “not just a quick win.”

“When everybody thinks of Williamsburg, they think of historic tourism, so we’re trying to diversify that,” says Rick Overy, chair of the Williamsburg Economic Development Authority. Photo by Mark Rhodes
“When everybody thinks of Williamsburg, they think of historic tourism, so we’re trying to diversify that,” says Rick Overy, chair of the Williamsburg Economic Development Authority. Photo by Mark Rhodes

Overy also sees a higher degree of cooperation between Colonial Williamsburg, the city of Williamsburg and William & Mary.

Williamsburg City Council has asked the EDA to help make Williamsburg a Virginia Main Street community and to establish a downtown business association.

“We are seeking to unify not just businesses but also interested individuals, nonprofits — anyone who cares about our downtown,” Overy says.

“There aren’t that many areas that have a national college [and] a national museum in a historic city and they all try to work together, and that’s one of the strengths that Williamsburg has that we’re all trying to build on,” he adds. “That cooperation is now as good as it’s ever been in my 40 years in Williamsburg, and that bodes well for the future.” 

Virginia Business Deputy Editor Kate Andrews contributed to this story.

Getting off the road

For years, residents in the Fredericksburg region looked north for opportunity and higher-paying jobs.

But more homegrown jobs and remote work are signs of change for the area, says Curry Roberts, president of the Fredericksburg Regional Alliance, which includes Fredericksburg and the counties of Caroline, King George, Spotsylvania and Stafford. “We’re developing a distinct economy from Northern Virginia,” he says, including jobs with similar pay.

A few years ago, Amit Kapoor, president and CEO of First Line Technology, was looking for property to expand his emergency response equipment manufacturing business in Northern Virginia. Founded 18 years ago, First Line was based in Chantilly, near Dulles International Airport.

Priced out of Fairfax and Arlington counties, “we started looking at Prince William and Stafford,” and landed on a 24,000-square-foot facility in Stafford, where the company expanded in fall 2019.

Kapoor says that many of his 25 employees had long commutes to Chantilly, including First Line’s head of operations, who lives in King George County and often spent up to two hours on the road each day. “She was exhausted,” he says, and the move to Stafford has helped her and other employees reclaim their time. “Just the savings in money, the savings in time, the toll on your car. It also improves their time in the office.”

Also, he notes, purchasing property in Stafford saved the company about 50% compared with buying in Fairfax or Arlington, and First Line is able to pay everyone at the same salary level, no matter where they work. “We put a commitment on hiring folks from the Fredericksburg region,” says Kapoor, who splits his time between Chantilly and Stafford. “It’s been incredibly successful.”

Commuting from Fredericksburg to Northern Virginia or Washington, D.C., has largely been driven by economics, a 2019 commuter study indicated. People who commute north from Fredericksburg earn a median paycheck of $80,000, compared with $50,000 for those who work locally, according to the study by the University of Mary Washington, the Fredericksburg Regional Chamber of Commerce and the alliance.

The number of people commuting outside the region also rose — from 37% in 2013 to 42% in 2019. However, notes Roberts, the number of local jobs has grown in that time. “In 2019 and for the four years prior, we were in the top three [regions in the state] for job growth per capita, [according to the Virginia Economic Development Partnership]. In 2019, we were first.”

“We’re developing a distinct economy from Northern Virginia,” says Curry Roberts, president of the Fredericksburg Regional Alliance, which represents Fredericksburg and the counties of Caroline, King George, Spotsylvania and Stafford. Photo by Will Schermerhorn
“We’re developing a distinct economy from Northern Virginia,” says Curry Roberts, president of the Fredericksburg Regional Alliance, which represents Fredericksburg and the counties of Caroline, King George, Spotsylvania and Stafford. Photo by Will Schermerhorn

Over the past decade, the largest localities in the alliance have also seen solid demographic gains.

Fredericksburg’s population jumped by more than 18%, from 24,286 in 2010 to an estimated 28,766 in 2020, and Spotsylvania’s population rose 11% during that time to
140,032, according to the U.S. Census. Meanwhile, Stafford County’s population surged more than 20% to 156,927 in 2020.

As a whole, the region has a dynamic and ready workforce to meet employers’ needs, says Roberts, who served as the state’s secretary of economic development under Gov. Gerald Baliles.

In 2019 the region’s workforce participation rate — the number of people either working or actively seeking jobs — was pegged at 68.9%, which Roberts says was 3.4 points higher than the state average.

The state’s workforce participation rate dropped to 62.9% in August, reflecting the nation’s labor shortage, so Roberts estimates the Fredericksburg region’s rate to be about 66% for the month.

Companies and site consultants some-times view the region as being part of Northern Virginia — but that’s not the whole story, Roberts says. Land costs and taxes are significantly lower in the Fredericksburg area, with per capita local taxes averaging $1,639, compared with $2,978 in Northern Virginia, according to data compiled by the alliance.

Buying property south of Fairfax, Kapoor says he found land prices decreased by about 20%. He says First Line will still maintain a presence in Fairfax, but Stafford will be its primary facility.

Here are some of the other major economic development projects taking place around the area:

Spotsylvania County

One of the biggest new employers coming to the region is a U.S. Department of Veterans Affairs outpatient clinic on a 48-acre site along U.S. Route 1. The VA expects to hire more than 300 people when construction is completed in 2023. Employment is projected to grow to 550 by 2026.

Kevin Marshall, Spotsylvania’s business development manager, says the economic ripple effects of the four-story, 450,000-square-foot clinic will energize everything from hotel development to nursing programs at local colleges.

“It’s a big win,” Marshall says.

But Marshall and Debbie Sanders, the county’s interim economic development director, hasten to point out that the clinic is not the only headline project for the county, which also is the site of the largest solar energy project east of the Rockies.

That’s particularly relevant these days, with the Biden administration’s recently announced goal that solar energy should make up nearly 45% of U.S. electricity by 2050 and the Virginia Clean Economy Act’s 100% carbon-free electric production goal for the same year.

The 620-megawatt Spotsylvania Solar Energy Center is currently under construction and will encompass about 6,350 acres. Approximately 3,500 acres will be developed as part of the solar project and about 2,000 acres will be remain undeveloped.

About 800 temporary construction jobs are expected to be generated by the project, but only 35 permanent positions. Meanwhile, the economic development office remains on overdrive.

“We’re not slowing down,” Marshall says. “Last year, we opened up 200 new businesses.”

A U.S. Department of Veterans Affairs outpatient clinic is expected to open in Spotsylvania in 2023, employing up to 550 people by 2026. Carnegie Management and Development Corp.
A U.S. Department of Veterans Affairs outpatient clinic is expected to open in Spotsylvania in 2023, employing up to 550 people by 2026. Carnegie Management and Development Corp.

Stafford County

When he became Stafford’s economic development director in 2018, John Holden had a revelation: “One of the first things we did was to restructure and reposition some things that put us in position to attract a number of distribution and warehouse projects,” he says. “I knew that market was expanding and Stafford’s geographic position [along Interstate 95] … was pretty much designed for that kind of product.”

It’s worked out pretty well. In 2020, DHL Supply Chain invested $72 million to establish a distribution center in Stafford, yielding about 600 jobs. In September, Amazon.com Inc. announced that it would open a 200,000-square-foot delivery station, creating 100 jobs.

“Within the last three years, there will be permitted or built  2.5 million square feet of flex industrial/ distribution space in Stafford,” Holden says.

On another economic development front, there has been long been talk of creating a “Downtown Stafford,” but the original vision has recently changed from the idea of a conventional downtown to something much more high tech.

Working in conjunction with the Center for Innovative Technology, Stafford is the site of Virginia’s first Smart Community Testbed, an initiative for testing new technologies in a real world setting.

Plugged by state officials as a “living laboratory for entrepreneurs,” pilot projects will focus on public safety, data security and training, economic development and tourism, as well as 5G technology. McLean-based OST Inc., a systems integrator that works on local, state and federal government projects, is a founding partner and will integrate the testbed’s projects.

Holden suggests that the development of a “smart city” model could be a big step in further diversifying the county’s economy as new technologies emerge.

The Fredericksburg Nationals baseball team debuted this year after a one-year delay due to the pandemic. Matt Christian/Fredericksburg Nationals
The Fredericksburg Nationals baseball team debuted this year after a one-year delay due to the pandemic. Matt Christian/Fredericksburg Nationals

Fredericksburg

Among area localities, the city of Fredericksburg is the only one that has more workers commuting into the city than going out. Bill Freehling, the city’s economic development and tourism director, is proud of that.

But he also points to a number of big projects that have been in the works and are now completed or close to being finished.

One is the $90 million redevelopment of what used to be The Free Lance-Star newspaper’s headquarters, a 4-acre property that is being completely transformed into class A office space, along with new restaurants, residences and a hotel.

“People are interested in class A office space downtown,” Freehling says. Downtown Fredericksburg is eminently walkable, he says, with opportunities to stroll down to the Rappahannock River, which runs through the city, or to just duck into a nearby restaurant.

Another measure of pride for the city is its fielding of a Minor League Baseball team, the Fredericksburg Nationals (aka Fred Nats), which has a 5,000-seat stadium and attracts fans from throughout the region. The team debuted in 2021 after a one-year delay due to the pandemic.

Caroline County

Caroline has been having what economic development director Gary Wilson calls “a banner year.” Taking advantage of a surge in distribution centers along I-95, Wilson says the county recently rezoned land in Ruther Glen for a 1.1 million-square-foot speculative distribution center facility named Caroline 95 Logistics. It’s set to be available in the third quarter of 2022.

“It’s huge for us,” Wilson says.

On top of that, another developer also has plans to build an additional million-square-foot distribution center space.

In May, M.C. Dean Inc. broke ground on an 84,000-square-foot modular manufacturing and systems integration facility at its Center for Innovation and Industry in Caroline. The groundbreaking marks the second phase of a $25 million expansion announced in 2019, expected to create 100 jobs.

Headquartered in Tysons, M.C. Dean has a product line that focuses on large-scale, fully-integrated, modularized power, electronic security and telecom systems and rooms that are pre-commissioned before being transported to project and construction sites across the nation.

Caroline 95 Logistics, a 1.1 million-square-foot spec distribution center, will open this fall in Caroline County’s Ruther Glen area. Caroline County
Caroline 95 Logistics, a 1.1 million-square-foot spec distribution center, will open this fall in Caroline County’s Ruther Glen area. Caroline County

King George County

The convergence of three major projects in 2023 could change the face and future of King George’s nearly 27,000 residents.

Nick Minor, the county’s economic development and tourism director, cites broadband expansion, a $750 million four-lane bridge (replacing an existing two-lane structure) that will connect King George with Charles County, Maryland, and zoning updates that will open the way for more industry.

Also, there is the rapid evolution of the Naval Surface Warfare Center at Dahlgren into a digital proving ground for artificial intelligence, quantum computing and other technology areas that will be critical to the future of modern warfare. That in turn could provide new opportunities for technology transfer into commercial uses, and better paying jobs in the county.

With important changes on the horizon, Minor has high expectations about the future: “We can’t move quick enough.”  

World view

Want to see the world? Head for Blacksburg. Well, at least that’s one way you might look at it.

Virginia Tech, which sits in the New River Valley (population: approximately 44,300), boasts the largest number of international students of any college or university campus in the state.

In pre-COVID years, about 4,000 international students populated Virginia Tech’s Blacksburg campus every fall, making up about 11% of Tech’s student body.

“There are not many places in the world you can go where you have more than 4,000 people from 100 countries interspersed with more than 30,000 other students learning together,” says David Clubb, director of Virginia Tech’s Cranwell International Center.

International students also comprise roughly 40% of all graduate students at Virginia Tech. “That’s a huge percentage and something that is very important to us as we move forward. They are so important to graduate education here,” says Clubb. In fact, some graduate programs would not be possible without international students who fill the seats and provide the tuition that keep the wheels turning, Virginia Tech officials say.

However, the number of international students fluctuated last year, as the worldwide pandemic disrupted everything from travel to the availability of vaccines. From fall 2019 to fall 2020, Tech saw “a significant drop” in international students — about 12% fewer, says Clubb, who’s hoping this semester will be closer to normal.

For those international students, Tech’s Cranwell International Center is the heartbeat of campus.

The center helps international students deal with visas, immigration questions, enrollment and just about anything else a young person who has potentially traveled from the other side of the globe would want to know.

In June, Virginia Tech announced that the Cranwell family, for whom the Cranwell International Center is named, had donated $7 million to advance the work of the center. The amount was a record gift for Virginia Tech Student Affairs.

“Our family wants international students to know how valued they are by the entire Hokie community,” the Cranwells said in the news release announcing the donation.

Lonely no more

It all began with Bill Cranwell. A former Virginia Tech quarterback who graduated in 1957, he went on to become a hugely successful developer of health care facilities. Now 87, he says it was during his early years at Virginia Tech that he heard about international students. “There were only a handful of them then,” says Cranwell.

He remembers hearing about an international student becoming despondent and homesick because he couldn’t visit his family, even during the holidays. And “I kept thinking, ‘Here we were going home to our families and here’s this kid thousands of miles away from home, stuck there on campus.’”

Over the years, the idea of that student’s loneliness stuck with Cranwell, perhaps because his family had always been close and depended on each other.

Later, as his prosperity increased, thoughts about the lonely international student surfaced again for Cranwell.

His sister, Mary Ellen Deemer, put him in touch with then-Virginia Tech Provost David Roselle, who later became president of the University of Kentucky and the University of Delaware.

After talking with his sister and Roselle, Cranwell decided that he wanted to make a gift to Virginia Tech, which had awarded football scholarships to him and his two brothers, Bob and Dick Cranwell.

“Being an athlete, you’d think there was a tendency for me to donate to the athletic department,” Cranwell says, “but I wanted to do something different for our family.”

So, in 1986, Cranwell moved to Roanoke and donated his home in Blacksburg to Tech, creating the Cranwell International Center.

David Clubb, director of Virginia Tech’s Cranwell International Center Photo by Don Petersen
David Clubb, director of Virginia Tech’s Cranwell International Center Photo by Don Petersen

For nearly 30 years before the center moved to Harper Hall on campus, the former Cranwell home welcomed thousands of international students, offering them a sense of community.

Cranwell’s pleased at the way things have progressed, because he believes that international students are part of a successful future for Virginia Tech. And he has no plans to impose his will on what has already been a successful enterprise. “Like in my business life, I try to pick people who have succeeded. I make a contribution and then let them do what they do best,” Cranwell says.

Cranwell’s whole family backs the Cranwell International Center team and hopes to work with them for years to come, he says.

Home away from home

One of the ways Clubb hopes the Cranwell family’s latest gift to the university will be used is to improve the welcome that international students receive when they arrive in the U.S. That recommendation came directly from the international students themselves.

“We want to find a way that as soon as they get to the United States, we’re there to help them find their way to Virginia Tech. At other places I’ve worked, we had airport pickup or just had people stationed at the airport,” Clubb says.

He adds that it’s hugely important that the commonwealth and Virginia Tech keep the door open to international students. “They create jobs when they get out of here; they create companies. They’re the best and brightest from around the world. Those are the people we want to be coming here,” Clubb says.

In a July 2020 court declaration in support of a nationwide lawsuit filed against the Department of Homeland Security over a requirement that international students must attend in-person classes or leave the U.S., Clubb explained the importance of international students.

“Nearly 21,000 international students studying at colleges and universities in the commonwealth of Virginia contribute $757.9 million to the commonwealth’s economy and support 9,143 jobs. In the commonwealth’s U.S. Congressional
9th District alone, where Virginia Tech is located, international students contribute $164.9 million to the local economy and support 2,258 jobs,” Clubb wrote, adding that international students have contributed more than $100 million in revenue to Virginia Tech in tuition, fees, room and board, and the like.

The federal government eventually withdrew its proposals regarding international students.

Jianuo Huang, a Chinese student who earned an undergraduate degree in mechanical engineering at Virginia Tech and is now hoping to pursue a Ph.D. in renewable energy, has only praise for the Cranwell International Center’s efforts to help international students.

“Cranwell made us feel at home,” Huang says. “It made Virginia Tech feel like our second home.”

China sends more students to Virginia Tech than any other nation, with Chinese students representing about half of all international students. India and South Korea come next.

Broadening horizons

Huang says the Cranwell Center starts welcoming new international students even before they leave China. Every year until the pandemic struck, Virginia Tech hosted predeparture orientation sessions in Beijing and Shanghai for students and their parents.

Virginia Tech is known throughout China, and among international students generally, Huang says, for its technology, engineering and computer science courses, which are among the most popular for international students coming to the U.S.

Through international street fairs, café get-togethers and other activities, Virginia Tech gives international students a chance to meet each other and non-international Tech students, Huang says.

Such opportunities, he says, “make all international students feel proud of where they come from.”

Frank Shushok, vice president of student affairs at Virginia Tech, says international students help provide other university students with a global perspective and a point of view to which they might otherwise never be exposed.

“Many of our domestic students may have never had an opportunity to study abroad, may never have lived or traveled abroad,” Shushok says. “But engagement with international students at Virginia Tech and learning about cultures around the world is one way we bring a global land grant university to Southwest Virginia.”

Kabyl Oxikbayev, who hails from Kazakhstan, is a recent civil engineering graduate of Virginia Tech. He says the Cranwell International Center impressed him with its “super efficiency. … With Cranwell International, from the time I was accepted by the university, they were always in contact — do this, do this — and sending me all the documents on time.”

The center also helped Oxikbayev adjust to a new country and a completely different culture, helping him find an undiscovered interest in art.

He became involved with a living-learning program that brings together students from different majors in a creative environment. “It was a good way of relaxing and meeting my friends, and that’s where most of my friends come from,” Ozikbayev says.

Clubb, the Cranwell International Center’s director, says the new Cranwell family gift will enable the center to expand its reach to a wider audience at Virginia Tech.

“We want every single student, domestic or international, to engage with the Cranwell Center before they graduate,” Clubb says. “We will need to put experiences in place that result in students who leave here having engaged with people who are different, so they share and learn from each other and [become] globally competent.”

Virginia Tech At a glance

Founded

Virginia’s original land-grant university, Virginia Tech was known as Virginia Agricultural and Mechanical College when it was founded in 1872. Virginia Polytechnic Institute and State University is the state’s second-largest public university by enrollment.

Campus

Virginia Tech’s Blacksburg main campus stretches over 2,600 acres. Tech also has six regional presences statewide and a study-abroad campus in Switzerland. Currently, the university is building its $1 billion Innovation Campus in Alexandria, near Amazon.com Inc.’s HQ2. 

Enrollment
(2020-21 enrollment data)

Undergraduate: 30,020

Graduate: 6,332

First professional: 672

In-state: 24,479

International: 3,547

Minority: 10,032

Employees

Approximately 11,000 nonfaculty staff members

Faculty

2,070 full- and part-time faculty;
51% are tenured

Tuition and fees, housing and financial aid*

Undergraduate in-state tuition
and fees: $14,175

Undergraduate out-of-state tuition and fees: $33,857

Room and board and other fees: $9,876

Average financial aid awarded to full-time, in-state undergraduates seeking assistance in 2021-2: $8,588

*2021-22 figures

Preparing for the worst

Read about the 2021 Virginia CFO Award winners.

John Brocato’s coveted tickets to the Atlantic Coast Conference men’s basketball tournament suddenly became void in March 2020 after the ACC canceled the tournament as the COVID-19 pandemic began turning the world on its head.

And as the chief financial officer of a small building supply company with offices in Charlottesville and Fluvanna County, Brocato had to abruptly stop thinking about basketball and begin thinking how his company, Better Living Inc., founded in 1893, was going to continue operating.

Taking actions such as keeping employees on the payroll was critical not only during the pandemic but also to lay the foundation for a better recovery after the pandemic was under control.

CFOs in various sectors across Virginia — from banking to transportation to higher education — faced similar challenges, although circumstances differed widely. And in a trend accelerated by the pandemic, CFOs saw their roles expand far beyond spreadsheets and balancing books into administrative matters.

Some CFOs were responsible for shifting their workforce to remote work, creating a new paradigm that had implications beyond the pandemic. But for others, such as Brocato, keeping workers safe at an in-person job site was essential to staying in business.

Brocato sent out his first pandemic-related memo on March 25, 2020, outlining how Better Living would be responding to COVID-19.

A few days earlier, company officials learned that Better Living had been designated an essential business because of its affiliation with the construction industry and that industry’s contribution to the nation’s economic security. Only two of the company’s 90-plus employees had the ability to work remotely. All others had to be on site.

“Our first goal was to make sure our employees were taken care of emotionally, physically and financially. Kids were home from school and parents didn’t know what to do. People were stressed, and we wanted to take the work stress off,” Brocato says.

Social distancing

Better Living operates two locations. One is a three-story building in Charlottesville that houses administrative offices, a showroom and cabinetry design studio for bathrooms and kitchens, and a building supply department and hardware store. The company’s other site is in Fluvanna County, where its mill shop turns out everything from custom wooden stairs to remanufactured doors.

“We supply contractors and builders, and we do everything except brick and block from the ground up,” Brocato says.

Initially, some Better Living employees were resistant to wearing protective masks and gloves, so administrators wanted to set an example. “My wife made us cloth masks. She probably made around two dozen,” recalls Brocato.

He was able to get a buy-in on the personal protective equipment from managers and they sold the importance of the precautionary steps to workers. “In a short time, everybody was following the rules,” he says.

On the bottom floor of the company’s Charlottesville location, Better Living opened the windows and positioned sales personnel inside to assist customers. Gates were erected outside the windows to maintain a 6-foot social distancing gap between. Later, tents and structures were erected for customers.

Inside the building, office cubicles were moved 10 feet apart, and workers were cautioned not to interact with anyone in another department. “We used the elevator to move paperwork and supplies from floor to floor, wiped everything down with sanitary wipes, including the paperwork as much as we could do without ruining it,” Brocato says.

Overall, he says, company officials preferred an overabundance of caution to an outbreak that could force a shutdown.

In the lumberyard, customers were required to park their trucks, which they could pick up after the vehicles were loaded.

Some parts of Better Living’s business slowed down, principally the mill shop, but Brocato says he and other company officials worked hard to prevent any layoffs.

Meanwhile, “the really surprising thing for us is that the building supply industry just went crazy. People staying at home started working on decks and basements.”

He adds, “I think this industry is going to have a very strong summer, and from a numbers standpoint construction will still be strong through early fall.”

The downside of the business uptick was that the initial lead time for ordering some items increased from three weeks to three months due to supply chain issues and increased demand.

Also, lumber prices soared as remodelers, contractors and homeowners rushed in. In some instances, the cost of lumber tripled. “Lumber is a commodity, like oil,” Brocato says, and major lumber mills determine how much lumber they produce and set prices accordingly.

Brocato has been a CPA for 13 years and had a background in manufacturing and distribution before he joined Better Living.

The pandemic, he says, offered new lessons for the company in how to be creative, more efficient and push through adversity. As a result, Brocato says, Better Living is able to respond more quickly and more reliably as the recovery begins.

The Metropolitan Washington Airports Authority responded to the unprecedented drop in air traffic by cutting expenditures and deferring some capital projects, among other actions, CFO Andrew Rountree says. Photo by Will Schermerhorn
The Metropolitan Washington Airports Authority responded to the unprecedented drop in air traffic by cutting expenditures and deferring some capital projects, among other actions, CFO Andrew Rountree says. Photo by Will Schermerhorn

Turbulent year for airports

2020 was the most challenging year in the history of the airport industry, with passenger traffic dropping nearly 90% during the height of the pandemic shutdowns, according to the Metropolitan Washington Airports Authority, which oversees Washington Dulles International and Reagan National airports, in addition to the Dulles Toll Road.

Andrew Rountree, the authority’s CFO, says he and other airport officials suspected the pandemic was going to be lengthy and would take a negative financial toll — but like every other business, they didn’t know to what extent.

Rountree lives by a simple rule: “The best way to anticipate a downturn is to prepare for it.” And with that in mind, he says, “we must have run hundreds of financial scenarios to determine how we should be managing this both financially and operationally.”

Cutting expenditures was the first step. “The early target was 10% under budget for the pandemic year 2020. We ended up coming out 20% under budget, managing things carefully,” Rountree says.

Liquidity was key to keeping the authority running, and it’s also important for a robust recovery, the CFO says. “Our operating liquidity was good,” Rountree adds. “We had over a thousand operating days of cash on hand.”

In addition to that operating reserve, the authority also had set aside funds for ongoing construction projects, and it identified a combined $200 million in projects that could be deferred.

A successful $900 million bond sale in early June also positioned the authority for a strong recovery.

Hundreds of millions of dollars in grants obtained by the airports authority, including $229 million from the CARES Act, part of a $2.2 trillion federal economic stimulus bill, also helped the authority make it through the difficult period.

Rountree is hopeful that the Washington airports will be operating at pre-pandemic levels by the end of 2022.

“I’m very optimistic about the future,” he says, but he’s also preparing for whatever comes, good or bad.

It’s all part of his mantra to be prepared.

Switching to a largely virtual workforce opened up new opportunities for hiring talent in other cities and states, says Old Point Bank CFO Elizabeth Beale. Photo by Mark Rhodes
Switching to a largely virtual workforce opened up new opportunities for hiring talent in other cities and states, says Old Point Bank CFO Elizabeth Beale. Photo by Mark Rhodes

Drive-thru loans

At Old Point Bank, headquartered in Hampton, CFO Elizabeth Beale says the move to remote work during the pandemic enabled the bank to seek talent farther afield and to better prepare for a meaningful recovery.

“We’ve hired in Charlotte, in Richmond, in Roanoke, in Christiansburg. We know now how to do this. It really opens a door from a talent perspective,” Beale says. “My opinion is that the virtual workforce is going to be more useful for us going forward.”

Beale adds that Old Point also was quickly able to move from a nearly total in-office workforce to a 70% virtual workforce.

The pandemic also saw the bank innovate new ways for interacting with customers. “We were closing loans in the drive-thru,” Beale recalls.

More customers also engaged in mobile banking — there was a double-digit increase — and the bank created an online appointments system for booking customer meetings that could be held either virtually or in person.

“What we learned during the pandemic was that we could quickly implement significant change,” Beale says.

As the recovery unfolds, Old Point has benefited from a surge of assets — an 18% jump between the first quarter of 2020 and the first quarter of 2021, to $192.4 million.

CFO Aleksandra Harcum and other executives at Commonwealth Commercial Partners took a 10% pay cut amid pandemic revenue losses. Photo by Caroline Martin
CFO Aleksandra Harcum and other executives at Commonwealth Commercial Partners took a 10% pay cut amid pandemic revenue losses. Photo by Caroline Martin

“The industry did not anticipate that people who continued to work saved more,” Beale says, explaining the rapid rise in assets despite higher unemployment numbers during the pandemic.

“We’ve grown a lot,” Beale says, “but we’re challenged to earn as much on that growth as we possibly can.”

Another issue is that although Old Point made more than 1,400 loans through the federal Paycheck Protection Program to aid small businesses, the low 1% interest rate on PPP loans has the banking industry concerned about the loans’ ultimate return.

“Another challenge,” Beale says.

Sweat equity

CFO Aleksandra “Ola” Harcum and other top executives at Commonwealth Commercial Partners, a Richmond-based commercial real estate firm, took a 10% pay cut as the pandemic hit their industry.

Because many commercial properties began suffering revenue losses, Harcum says, her company worked with lenders to obtain commercial mortgage deferrals for companies and negotiated with four different banks to provide PPP loans to small businesses such as restaurants, retail shops and hotels impacted during the crisis.

Many of Commonwealth Commercial’s employees worked from home, and others such as brokers were sidelined because they weren’t able to show properties.

Now that business is beginning to return to normal, Harcum says, the company is investing in strategies to build camaraderie among colleagues.

“We’re organizing a bike race to meet outside the office. Now that we can be social again, we’re more aware of team building and making sure the emphasis is not just on work, work, work,” Harcum says.

Every CFO across Virginia has his or her own story about the challenges of the pandemic and their efforts and aspirations to make their institutions ready for a recovery.

“The thing I’m most proud of is that we kept every full-time and part-time employee fully paid, even when they weren’t working,” says David Hale, chief operating officer and treasurer at the University of Richmond. In July 2020, Hale walked his dog around campus and saw the “sweat equity” being contributed by many of those same employees to open UR for the fall semester. “That’s when I knew we could do this,” he says. 

Course corrections

Can an old college learn new tricks?

William & Mary, the second-oldest institution of higher education in the country by virtue of its establishment in February 1693, is proving that it can.

W&M Chief Operating Officer Amy Sebring had to figure out how to cut costs when the university projected a budget gap of up to $100 million for this fiscal year. Photo by Jim Agnew/William & Mary
W&M Chief Operating Officer Amy Sebring had to figure out how to cut costs when the university projected a budget gap of up to $100 million for this fiscal year. Photo by Jim Agnew/William & Mary

It has had little choice.

The pandemic pushed the faculty into a steep learning curve to master online teaching, with 2,000 courses moving online in just 10 days.

Then losses piled up from sharp revenue drops in study-abroad and summer programs, athletics and student housing, dining and parking plans, as well as rising technology costs associated with the university’s March 2020 shift to remote learning.

Financial damage inflicted by COVID-19 was exacerbated by an ongoing decline nationally in the college-age population, which is now at its lowest ebb in a decade, according to the National Student Clearinghouse Research Center.

If all that were not enough, the university reached the searing realization that tuition increases alone would not sustain W&M financially, nor would its current enrollment.

W&M President Katherine Rowe offers this assessment of the seismic impact the pandemic had on the university: “Five years’ worth of change in a year is the way I see it now.”

During a November 2020 board of visitors meeting, Rowe reiterated the realities of the road ahead, drawing from the observations of committees that had been preparing white papers as a prelude to developing a new strategic plan for the university.

She said the college needed to think more creatively about finding new streams of revenue and seeking additional methods for competing with other institutions for students.

“Enrollment via a four-year, traditional-aged student is not going to be sufficient,” Rowe told the board. “We won’t be successful if we only think in those terms, which is why we have groups thinking about continuing studies, thinking about adult learners, thinking about transfer students.”

Those changes are now at the university’s doorstep, she says.

Green and gold; red and black

As the pandemic raged last year, destroying the university’s budget projections, calls came from the board of visitors and others to cut costs and run William & Mary more like a business.

W&M responded by implementing a hiring freeze and carving $17 million out of the 2020 fiscal year budget, as the provost and college deans huddled to oversee a “mission-critical” curriculum review. Rowe herself put skin in the game, taking a 15% salary cut, while the university’s provost and chief operating officer also voluntarily cut their compensations. Along with travel restrictions, the university suspended discretionary spending and implemented other cuts. And it received some relief funding from the General Assembly.

The university finished fiscal year 2020 with a positive balance of $7.6 million, excluding depreciation and nonoperating expenses, according to a W&M financial report. Its fiscal 2020 operating expenses were $475.8 million.

At the same time, the university and its alumni rallied to raise $149.9 million in 2020, the largest fundraising year in university history. Additionally, W&M crossed the finish line on its decade long “For the Bold” fundraising campaign, raising $1.04 billion and solidifying the university’s position as the nation’s No.1 public university for alumni annual giving participation. As of June 30, 2020, the market value of W&M’s endowment was $995 million.

Nevertheless, the pandemic’s financial impact is still being felt.

Heading into fiscal year 2021, which began July 1, 2020, W&M was projecting a budget gap of $30 million to $100 million on the school’s $490 million annual operating budget.

The gap was due to several factors, including a loss of auxiliary revenue from dorms and dining halls and athletic events, as well as unanticipated costs related to COVID and remote teaching. The school also lost revenue by not increasing student tuition for the 2020-21 school year.

Because William & Mary is required by state law to meet a balanced budget, this gap necessitated continued belt-tightening measures and support from the state and federal government.

President Katherine Rowe says William & Mary underwent about five years’ worth of change in the past year. Photo by Skip Rowland/William & Mary
President Katherine Rowe says William & Mary underwent about five years’ worth of change in the past year. Photo by Skip Rowland/William & Mary

“We knew [the budget gap] would be at least $30 million. What we did not know is whether we would be able to sustain academic operations throughout the year. If we had had to shut down this fiscal year as we did March a year ago, we would have been at a $100 million [gap],” says Amy Sebring, the university’s chief operating officer.

“Given how we navigated the fall and how we’re positioned for the spring, [a] $40 million [gap] is where we’re landing,” Sebring says, taking a breath. “So, only $40 million. If you’d asked at any other part of my career that I would say $40 million and be pleased with that number, I would have absolutely been shocked. But we are doing a solid job of dealing with that, [giving] credit to faculty and staff, who’ve really worked hard to contain costs.”

In April, the university anticipated that it would close the $40 million gap via a combination of state and federal pandemic relief funds, cost reductions and “use of cash reserves from savings accrued during the fourth quarter of FY20 when we froze all hiring and took a number of immediate actions to contain costs,” William & Mary spokesperson Brian Whitson said.

Finances explained

Sebring says there is a long-acknowledged disconnect between the university’s financial model, which reflects its position as a public research university, and its operational model, which incorporates its virtues as a small liberal arts and science institution.

“As a ‘Public Ivy,’ William & Mary is known for its low faculty-to-student ratio, high level of student services and research-intensive mentoring of undergraduate students — all traits typically found only at the nation’s elite private institutions,” Sebring says. However, she says, W&M is a state-funded public university, and its finances have reflected that.

In October, W&M moved to stabilize its finances by selling $153.9 million in bonds, the first time that it had done so under its own AA credit rating. The
university had previously issued debt under the state’s debt programs.

Of that total:

$63.9 million went to refinance existing debt and issuance costs under more favorable interest rates. (That resulted in $10.7 million in annual savings.)

$70 million was general purpose debt for future needs.

$20 million supports planned dorm renovations.

Sebring frequently must explain how the college can have financial issues after just having completed its successful “For the Bold” billion-dollar fundraising campaign.

“The campaign raised over $1.04 billion,” Sebring explains. “However, almost 50% of the funds raised were in outstanding pledges or deferred gifts, so we will not fully realize the benefit of the campaign for years to come. In addition, over 90% of the funds raised were provided for restricted purposes: capital projects, scholarships, professorships or other donor-specified purposes.

“Those funds are vital to providing the university with the facilities and programs that provide our students with a margin of excellence that they can’t find at other institutions. They do not, however, provide income to cover the routine operating costs of running the university,” she says.

W&M frequently has been recognized by U.S. News & World Report as one of the most lean and efficient colleges in the country in terms of what it achieves in comparison with its financial resources, Sebring points out. “We’re among the lowest of the top 50 national universities in terms of financial resources, yet we rate within the top five in undergraduate teaching and maintain high quality.”

Making adjustments

Looking to the future, shifting demographics portend the enrollment of more first-generation and minority students, as well as military veterans.

W&M took a big step to help veterans in 2020 with the establishment of a “Veteran-to-Executive” transition program that was born out of an anonymous
$10 million gift.

W&M also is partnering with the New York-based nonprofit The Posse Foundation to award scholarships and expand its support for underrepresented academically talented students from low-income backgrounds. Beginning in fall 2021, William & Mary will provide full-tuition scholarships, including mandatory fees, for 10 Virginia students chosen in cooperation with Posse. These will include individuals who may be the first in their families to attend college.

University officials also say all students who qualify for aid and come from households with an income of $110,000 or less will borrow and pay less on average to attend W&M than any other four-year public institution in Virginia.

Rowe notes that the “For the Bold” campaign funded more than 500 new scholarships and says diversity and inclusion efforts will benefit as a result.

During a July 2020 board of visitors meeting, Rowe said she shared the board’s urgency for “antiracist culture change” and said the university was seeking pathways to help undocumented, first-generation, Indigenous and low-income students and also would strengthen its support for international students.

As state support for higher education has decreased in Virginia and nationally over the past decade, W&M also has acknowledged that increasing student population beyond its current enrollment of about 8,900 is an important part of supporting the university’s financial model.

Henry Broaddus, W&M’s vice president for strategic initiatives and public affairs, says that “smart growth” of 600 students over seven years or so is both desirable and achievable.

The university prides itself on being a “high touch” institution with a low student-to-faculty ratio, Broaddus says. Even with an increase of 600 students, the ratio would be a low 12-to-1. That’s within historic guidelines, he says.

W&M has received a record number of applications for the 2021-22 freshman class: 17,400. That’s 23% higher than the previous year, when the university received 14,200 applications.

In addition to on-campus students, online education is another growth area for the university, says Broaddus, pointing to a historic precedent in Virginia education: “George Washington was issued a surveyor’s license by correspondence.”

Although the pandemic affected teaching, enrollment and revenues, the university largely continued with many of its capital projects.

One is a $73 million integrated science center project that will house mathematics, computer science, kinesiology and design/engineering classes and faculty offices.

The $30 million Martha Wren Briggs Center for Visual Arts, which will also be the new home of the university’s Muscarelle Museum of Art, also will be underway this year, as will W&M’s $122 million Fine and Performing Arts Complex. 

Although the pandemic and other issues have presented challenges for William & Mary, President Rowe — a former Ultimate Frisbee player and coach — offers a sports analogy as she looks ahead and contemplates the development of a new strategic plan for the university that was paused during the pandemic.

“The hallmark of a really good coach are the adjustments you make at halftime,” Rowe says. “Restarting our strategic plan for us is that moment of taking stock and making adjustments at halftime in a game that we have played so well, so well above expectations, with everybody all in.”  

 

William and Mary At a glance

Founded

The second-oldest university in the United States, William & Mary was established in 1693 under a royal charter signed by King William III and Queen Mary II of England, Ireland and Scotland.

Campus

Stretching across 1,200 acres in downtown Williamsburg, William & Mary includes the Martha Wren Briggs Amphitheatre, Lake Matoaka and College Woods. Its circa-1695 Wren Building is the oldest U.S. university building still in use.

Enrollment (fall 2020) 

Undergraduate: 6,236
Graduate: 2,703
Class of 2024: 1,525

Student Profile 

African American/Black: 7%
Asian/Pacific Islander: 11%
Hispanic/Latino: 8%
White: 60%
Virginia residents: 67%
Female: 61%
Male: 39%

Employees

The largest employer in Williamsburg, William & Mary employs more than 2,400 people.

Faculty*

754 full-time and 181 part-time faculty

Tuition and fees, housing and financial aid*

In-state tuition and fees: $23,628
Out-of-state tuition and fees: $46,854
Room and board: $12,926

Average financial aid awarded to full-time, in-state freshmen seeking assistance in 2018-19: $19,449

*2019-20 data

Making it rain

For Hanover County Economic Development Director Linwood Thomas, things couldn’t get much better.

“It’s really been a perfect storm,” Thomas says.

That storm — the good type — is a deluge of distribution centers and warehouses that have opened recently or are currently in the pipeline for the county of about 108,000 residents, located about 20 miles north of Richmond.

Thomas says warehouse and distribution center development has insulated the county during the pandemic.

Over the past two years or so, Hanover has added about 1.5 million square feet of new space and about 80% of that has been leased.

“Then, we’ve got another almost 4 million square feet proposed in the next 24 months. These are tangible products that will put us over 5.5 million square feet of new space, which is huge,” says Thomas, noting that the new space will represent a nearly 40% increase over the county’s existing stock of 13.8 million square feet of industrial/warehouse space.

He forecasts the projects will employ about 2,000 workers at buildout, producing $3.3 million in new tax revenues.

Hanover’s “perfect storm” of warehouse and distribution center expansions is being repeated throughout Virginia, as the coronavirus pandemic has put e-commerce at the forefront of retail.

Nationwide, consumers spent $861.1 billion online with U.S. retailers in 2020, up 44% from $598 billion in 2019, according to an analysis by Digital Commerce 360, a media and research organization.

Online spending represented 21.3% of total retail sales last year, compared with 15.8% the prior year, according to Digital Commerce 360’s analysis.

Virginia has seen more than 10,000 new jobs and more than $1.15 billion in investment tied to distribution centers since 2016, according to the Virginia Economic Development Partnership.

Data from the Virginia Employment Commission indicates that average employment from warehousing and storage in Virginia increased at an average rate of 6.2% per year between the third quarter of 2015 and the third quarter of 2020, climbing to 32,954 employees statewide, according to VEDP.

Matt Anderson, executive vice president for the Virginia office of Colliers International, a real estate services and investment management firm, has seen it all unfold.

“We cover a lot of stuff between [Interstate] 95 and the Atlantic Ocean,” Anderson says. “Eighteen months ago, we were tracking a little over 5 million square feet of user demand,” the amount of warehouse space needed in the marketplace.

Today, Anderson says, user demand in the Richmond market has soared to more than 8 million square feet.

“We had a record year of 4.6 million square feet of industrial leasing last year. We’ve never seen that much before,” Anderson adds.

Down in Norfolk and the Hampton Roads area, it’s been much the same story, says Lang Williams, a Colliers senior vice president in Hampton Roads. “We’re at a 1.6% vacancy rate, which is at an all-time low since it’s been tracked over the past 30 years,” Williams says. “We have over 5 million square feet of new construction underway, which is an all-time high.”

Anderson, meanwhile, has seen a big shift in how the market is trending.

“Right now, we’re seeing more interest from speculative developers than we’ve ever seen,” he says. “It’s funny to think that 10 years ago, 100,000 square feet [of warehouse space] was a big deal in our market. Now, we’re beginning to see a lot of deals that are 500,000 square feet, a million square feet.”

If you’re looking for really big in Virginia, though, you should turn your gaze toward Suffolk, where Amazon.com Inc. is building a sprawling five-story, 3.8 million-square-foot robotic fulfillment center that will employ about 1,000 workers.

Gregory Byrd, Suffolk’s interim economic director, says Ace Hardware, Target and QVC all have distribution facilities in Suffolk, as do other companies.

“The activity is unreal,” Byrd says. “Our proximity to the Port [of Virginia] makes being in this area worthwhile for distribution. Our proximity to the port is one of the reasons we get looked at.”

Last year, the Port of Virginia completed a three-year, $800 million effort to increase capacity and productivity, and that has attracted developers of distribution centers and warehouses, says Russell Held, vice president of economic development for the port.

The American Journal of Transportation recently reported that the fourth quarter of 2020 was the most productive three-month period in the Port of Virginia’s history, with a year-over-year growth of more than 13%.

“During the pandemic, we’ve become an e-commerce gateway,” says Russell Young, director of economic development at the port.

Young, who lives in Suffolk, points to the ongoing construction of the Amazon robotics fulfillment center in his hometown as an example of how e-commerce has spurred economic development in the distribution sector.

Hanover County may never see a distribution center as large as the one Amazon is building in Suffolk.

But Thomas is still in awe of what’s coming out of the ground now in Hanover and what’s around the bend.

Wegman’s, the supermarket chain, is building a $175 million distribution center/regional headquarters near the intersection of Sliding Hill and Ashcake roads that will employ about 700 workers. The first three phases of the development are planned for a maximum of 1.3 million square feet, with a potential for an additional 400,000 square feet.

Several miles north, home improvement retailer Lowe’s Cos. Inc. has announced plans for a $50 million distribution center on a 200-acre site north of Hickory Hill Road, along the west side of Interstate 95, that will employ about 100 people. The 1.1 million-square-foot bulk distribution center will provide daily shipments of appliances, riding mowers, grills and other consumer goods.

The mix of groceries and home improvement goods illustrates the wide range of items that are filling warehouse and distribution centers across the state, bound for both retail stores and customers’ home.

“The trend of people shopping online is being compounded exponentially and there is a need to have distribution facilities to address those last-mile concerns,” Thomas says. “It’s been one heck of a run.” 

A growing legacy

Since his selection as president of Radford University five years ago, Brian Hemphill has fulfilled the mission he set when he was hired: to increase fundraising and open channels to boost enrollment. 

During Hemphill’s tenure, he has seen the university reach record enrollment numbers and grow its endowment by $20 million. But all things must come to an end — or at least be passed on to a successor.

In February, Hemphill announced that he will be leaving in June to become the ninth president of Old Dominion University in Norfolk. He will succeed John Broderick, who is retiring after 13 years at ODU’s helm.

Hemphill, who through a spokesperson declined to be interviewed for this story, came to Radford with a background of success in fundraising and boosting enrollment in his previous position as president of West Virginia State University (a historically Black university).

“Under [Hemphill’s] leadership, we have … seen a dramatic increase in fundraising that has directly benefited our students,” says Katie Hilden-Clouse, the university’s faculty senate president. “More than $55 million has been raised to directly benefit student aid and scholarships. President Hemphill is a student-focused leader.”

And there are more Radford students than ever — the university grew total enrollment from 9,401 students in fall 2016 to a record 11,870 students in fall 2019. In the wake of the pandemic, fall 2020 enrollment dropped to 10,695 students; it was still the university’s second-highest enrollment year.

Furthermore, Radford boosted enrollment in its online programs tenfold in just a few years, rising from 329 in 2016 to 3,312 in 2020. Hemphill also founded the Vinod Chachra IMPACT Lab, an online training program for K-12 teachers focused on cybersecurity, geospatial intelligence and education.

Meanwhile, the Radford University Foundation’s endowment and investments grew from $54.6 million in 2016 to
$77.7 million in 2021, a 42.3% increase.

Radford also received its largest-ever individual and alum gifts on Hemphill’s watch. In 2017, alumna Nancy E. Artis and her husband, Pat, donated $5 million to name the Artis College of Science and Technology. A year later, Blacksburg couple William and Sandra Davis donated
$8 million to name the Davis College of Business and Economics. (Nancy Artis and Sandra Davis are both former members of the Radford board of visitors.)

Larger footprint

Those are far from the only examples of growth during Hemphill’s presidency. In 2019, he negotiated a merger with the Jefferson College of Health Sciences, a Roanoke-based private health sciences college, and a partnership with Roanoke-based Carilion Clinic to create Radford University Carilion. The merger made Radford’s nursing program the second largest in Virginia and increased Radford’s enrollment by 1,200 students. RUC students learn from practicing clinicians at Carilion Roanoke Community Hospital.

Today, nearly 22% of Radford’s students are pursuing a degree in a health-related field, providing a pipeline for health care professionals in a region of the state that has a shortage of those workers.

The legacy Hemphill leaves behind at Radford is one that may repeat itself at ODU, where the university is seeking a partnership with Norfolk State University to develop a regional School of Public Health. Sentara Healthcare announced in January it has awarded a $4 million grant to the universities to pursue the collaborative school. 

“Dr. Hemphill’s successes range from enrollment management to fundraising, and many of his forward-thinking initiatives in such areas as health sciences and partnership-building mirror
Old Dominion’s longstanding strengths and priorities,” says Kay A. Kemper, rector of Old Dominion’s board of visitors. “We believe he will write an exciting new chapter for ODU.”

Hemphill has also expanded Radford’s footprint on and off campus.

“President Hemphill’s tenure has ushered in a new level of achievement and enthusiasm for the Radford family,” says Robert A. Archer, rector of the Radford University board of visitors. “He has certainly created a strong foundation for limitless opportunities well into the future.”

In early 2020 Radford completed the three-year, $34 million renovation of Reed and Curie halls into the Artis College of Science and Technology.

“With science on display, we’re creating a learning environment second to none,” Hemphill said during his December 2020 State of the University address. “A world of discovery has opened for students and faculty as they work side by side and showcase their work.” 

Radford will also get a boost from $101 million in state funding toward establishing the Center for Adaptive Innovation and Creativity, which will create a space that will facilitate interdisciplinary work between Artis, the College of Visual and Performing Arts and the Waldron College of Health and Human services. The center will take the place of McGuffey and Porterfield halls. Hemphill has called it a “game-changer.”

Off campus, the university is partnering
with its foundation to build a $20 million
to $25 million boutique hotel, The Highlander, at the intersection of Tyler Avenue and Calhoun Street in Radford. Virginia Beach-based S.B. Ballard Construction Co. and Atlanta-based architects Blur Workshop will build and design the hotel, which is being financed through Texas-based Preston Hollow Capital. Aimbridge Hospitality of Texas will manage the hotel. Ground is expected to be broken on the hotel in May, and it could potentially open in late 2022. No state funds will be involved, the university says. Radford has also announced that it is purchasing $23 million in property near the university for developments including parking lots and off-campus housing.

“His leadership has helped to advance our community in many ways and will continue to reverberate for years to come as the city of Radford and Radford University move forward together,” Radford Mayor David Horton says. “Projects he has championed and shepherded are helping grow the quality of life and robust economic health of this city.”

Erosion prevention

Another important focus for Hemphill has been student retention and maintaining enrollment.

Like many higher education leaders, he has warned of a looming “enrollment cliff” that is expected to make it even harder to recruit an optimum number of undergraduates. That’s because the overall number of college students nationwide is projected to fall more than 15% after 2025 due to a shrinking number of high school graduates and rising tuition costs.

Tricia Easterling, a professor of science education and a board member for the state chapter of the American Association of University Professors (AAUP), hopes Radford will emerge stronger for the challenge.

“We’re down, we’re hurting, we’re about to shrink,” she says. “You know sometimes you expand and sometimes you contract. This is a contracting
point. That just happens with industry change and the circumstances we find ourselves in.”

A massive tuition cut for Radford University Carilion should help. Starting in fall 2020, RUC’s  tuition will drop from $21,792 per year to approximately $12,000, bringing it in line with Radford’s regular undergraduate tuition. The cut is being funded via a $10 million allocation from the General Assembly.

In another move to stanch enrollment erosion, the university opened its Academic Success Center in fall 2020 to promote student success and retention, especially among freshmen.

“We’re being more intentional and thoughtful about our work with incoming students,” Hemphill said during his December 2020 address. “Their success is our success.”

 The center offers advising services as well as information for students about programs on and off campus. All incoming students are assigned an Academic Success Center adviser, who helps them navigate the college experience.

Bridge to RU, another enrollment initiative started under Hemphill, provides New River Community College students with automatic admission to Radford. As “visiting scholars,” New River students live in Radford campus residence halls, eat in dining halls and study on campus. After their first year of classes
at New River Community College, students also begin taking classes at Radford. Upon earning associate degrees, they are eligible to pursue further education at Radford.

Kyle Hall is the home of Radford’s Davis School of Business and Economics.The $44 million, 110,000-square-foot building opened in 2012. Photo courtesy Radford University
Kyle Hall is the home of Radford’s Davis School of Business and Economics.The $44 million, 110,000-square-foot building opened in 2012. Photo courtesy Radford University

And in 2019, Radford also began participating in the state’s Tech Talent Investment program. The university is expected to receive $17.3 million during
the next 20 years from the state in exchange for producing 400 additional graduates to fill the demand for tech workers statewide and particularly in Northern Virginia, where Amazon.com Inc. is hiring 25,000 workers over the next decade for its HQ2 East Coast headquarters in Arlington.

‘Power grab’

While Hemphill has guided Radford through the uncertainty of the COVID-19 pandemic and leaves the university a larger and wealthier institution, his tenure was not without challenges or controversy. He received criticism from some faculty members following a highly publicized June 2020 action by the Radford board of visitors that removed tenure protections. 

Radford faculty members began sounding alarms last summer after the board passed the resolution stating that a reduction in workforce might be necessary due to anticipated budget shortfalls at the school and in the biennial state government budget due to the pandemic.

Citing an urgent need for action, the board granted Hemphill unilateral authority to recommend the elimination of personnel and programs for fiscal years 2021 and 2022 “to ensure the long-term fiscal health of Radford University” and to rid itself of  “underperforming activities.”

In doing so, the board also rendered “inapplicable” portions of the Teaching and Research Faculty Handbook, ending job protection for tenured faculty and permitting the discontinuance of programs without following the previously established protocol to consult faculty. That decision created an uproar and drew widespread condemnation from state and national organizations representing college faculty.

The state government has allocated $101 million toward the construction of Radford’s Center for Adaptive Innovation and Creativity. The 177,820-square-foot facility will focus on interdisciplinary studies and research and will include simulation and virtual reality labs, as well as performance space. Rendering courtesy Radford University
The state government has allocated $101 million toward the construction of Radford’s Center for Adaptive Innovation and Creativity. The 177,820-square-foot facility will focus on interdisciplinary studies and research and will include simulation and virtual reality labs, as well as performance space. Rendering courtesy Radford University

“This attitude strikes at the very foundation of true higher education,” says Glen Martin, a philosophy professor and president of the Radford chapter of the AAUP. “It reduces Radford University to a second-rate diploma mill and degrades the significance and role of its faculty.”

“It sort of came across to faculty as a power grab,” adds Easterling.

Even though Hemphill’s relationship with some faculty members may have been strained by the controversy, Radford had not eliminated any staff positions or programs as of mid-March. Because the pandemic’s financial impact was not as bad as expected, the university hasn’t needed to cut jobs or salaries or institute furloughs, according to Ashley Schumaker, Hemphill’s chief of staff and Radford’s vice president for strategic operations. Some budget cuts will likely be announced in April, she adds, but no academic departments or programs will be eliminated, and cuts will be “far less” than the $20 million figure proposed last summer. 

“In his five years at Radford University, President Hemphill transformed the university and shepherded it through difficult challenges to make it a stronger, more streamlined institution,” says Sandy Cupp

Radford’s Artis College of Science and Technology opened in February 2020 following a $34 million renovation of Reed and Curie halls that included building the two-story Center for the Sciences. Photo courtesy Radford University
Radford’s Artis College of Science and Technology opened in February 2020 following a $34 million renovation of Reed and Curie halls that included building the two-story Center for the Sciences. Photo courtesy Radford University

Davis, namesake of Radford’s Davis College of Business and Economics. “The result is a university whose footprint in the commonwealth has grown dramatically, and whose recognition nationally is outpacing many of the university’s peers.”

Hemphill also leaves Radford with a 10-year master plan through 2030, with a strong focus on growth as well as construction, accessibility and sustainability. After Hemphill departs for ODU, Radford’s provost and vice president for academic affairs, Carolyn Ringer Lepre, will serve as the university’s interim president. A national, comprehensive search for a permanent successor is anticipated to begin in the fall.

Whoever becomes the new president, Caitlyn Scaggs, associate vice president for university relations, says the university is grateful for Hemphill’s leadership: “We feel confident he’s leaving us in a good place.”

 

 

University of Radford At A Glance

Founded

Radford University was established as the State Normal and Industrial School for Women at Radford in 1910. Later called the State Teachers College at Radford, it went coed in 1972 and became Radford University in 1979.

Campus

Set against the Blue Ridge Mountains along the New River, Radford’s 204-acre main campus includes three quadrangles and a pedestrian thoroughfare. Many of its structures are built in a red-brick Georgian style. Radford also operates Radford University Carilion in Roanoke and the Southwest Higher Education Center in Abingdon.

Enrollment

Undergraduate: 7,307

Graduate: 3,388

In-State: 8,896 (83%)

Minority: 2,714 (25%)

Faculty

507 full-time 

Academic Programs

Radford has 76 undergraduate degree programs in 47 disciplines — including economics, biology, criminal justice and theater — as well as 28 master’s programs and six doctoral programs, including health-related professions.

Tuition and fees

In-state tuition: $11,416

Out-of-state tuition: $23,498

Room & board: $9,720

Average financial aid awarded
to full-time, in-state freshmen:
$11,290

Statistics are based on fall 2020 data

Moving forward

In a difficult year haunted by the coronavirus pandemic, the Central Virginia region persevered — and in some cases made economic progress.

Henrico County led all other localities with a blockbuster endorsement of a $2.3 billion project, GreenCity, that would promote environmental sustainability and bring a 17,000-seat arena to the area. 

The 204-acre property off Interstate 95 would also include 2,400 housing units and two hotels in the state’s first ecodistrict.

“It’s been a year like no other. We had some phenomenal activity and very strong growth in key sectors, while at the same time we’ve had substantial challenges for the hospitality community,” says Anthony Romanello, executive director of the Henrico Economic Development Authority. Nonetheless, he adds, “I’m reluctant to take victory laps because we’re still dealing with [high] unemployment, and many businesses continue to struggle.”

By its own scorecard, Henrico tallied 2,500 jobs from new or expanding companies and an investment of $117 million in calendar year 2020, even before GreenCity came into public view at a December 2020 news conference.

The county also marked a signal event when the Facebook data center went online in August 2020 at White Oak Technology Park. Facebook has invested well over $1 billion in the center so far, and the park is home to the QTS data center, which has had several expansions.

The largest jobs announcement among Henrico’s list of wins was from wireless network operator T-Mobile, which is moving its customer service center from western Henrico to a site in the eastern part of the county, spending $30 million to renovate a former Sam’s Club while saving 800 jobs and adding 500 more over three years.

Two companies announced they were moving their headquarters to Henrico in 2020: Kroger, which is relocating its mid-Atlantic headquarters from Roanoke and bringing 77 jobs with it, and ASGN Inc., a Fortune 1000 recruiting firm that moved from Calabasas, California, to Henrico in October 2020.

ASGN is creating more than 700 jobs — including 121 in Henrico — across the commonwealth, including Roanoke and Virginia Beach.

“These are really good-paying jobs with an annual wage of over six figures working out of Innsbrook, our premier office park in western Henrico,” Romanello says of the ASGN headquarters, which shares space with Apex Systems, a Henrico-based ASGN subsidiary. Salaries for ASGN’s headquarters employees average $106,000.

ASGN plans to invest $12.4 million in the relocation, with $5 million devoted to its new headquarters facility.

Another big job producer for Henrico was SimpliSafe, a leading producer of self-installed home security systems that built a customer support center in the Willow Lawn shopping center employing more than 570 people with an investment of $5.5 million.

Even more good news could be coming. Henrico County Manager John Vithoulkas says, “We have a pending economic announcement where we’ll have more than 2,000 jobs in only one location.” He did not disclose further details.

Petersburg

In May 2020, Richmond-based drug manufacturer Phlow Corp., which incorporated in 2020, received a $354 million, four-year contract from the U.S. Biomedical Advanced Research and Development Authority (BARDA) to manufacture generic medicines and pharmaceutical ingredients for COVID-19 treatments.

The startup was part of a January economic development announcement with Utah-based pharmaceutical nonprofit company Civica Inc., which plans to invest $124.5 million to establish an in-house manufacturing operation in Petersburg, creating 186 jobs.

Civica has partnered with the Medicines for All Institute, AMPAC Fine Chemicals and Phlow, and the four-year contract could be extended to be worth $812 million over 10 years. Last year, Phlow CEO Dr. Eric Edwards said the company expects to create 350 jobs and that the partners will develop the nation’s first Strategic Active Pharmaceutical Ingredients Reserve.

Hanover County

Two state agencies began their move to Hanover County last year. The Virginia Alcoholic Beverage Control Authority broke ground in February 2020 on a $91 million, 40-acre headquarters complex that will employ 500 and is expected to open in 2021.

Also, the Virginia Department of Forensic Science, including the central laboratory and the chief medical examiner’s office, has announced plans to begin construction soon on a 283,000-square-foot facility near Atlee Station that will generate 300 jobs.

This was good news in light of the pandemic-driven closing of Kings Dominion, which opened only for a few weeks in late 2020 and is one of the county’s biggest economic drivers. The park hires about 4,000 seasonal workers, and visitors spent $258 million in Hanover in 2018.

Linwood Thomas, Hanover’s economic development director, also is optimistic that Wegmans Food Markets Inc. will receive the necessary permitting to build a $175 million middle office and distribution center near Ashland that would create 700 jobs.

However, community members and some state lawmakers have raised concerns about the placement of the 1.7 million-square-foot center near Brown Grove, a community settled by freed slaves after the Civil War. The state Department of Environmental Quality delayed its approval of permits last year after receiving public comments about the project’s potential environmental and historical impacts. A decision was expected in February. 

Chesterfield County

DuPont Spruance, one of Chesterfield County’s largest employers with 2,000 workers, announced in January 2020 it will add 60 jobs with an investment of more than $75 million. It also had a big production year due to the pandemic.

Although the plant has long produced Kevlar, Nomex and Tyvek materials for body armor, firefighters’ suits and weather-protective gear, DuPont ramped up production of Tyvek for protective suits for health care and emergency responders working with COVID-19 patients.

Over the years, Chesterfield has earned a reputation as one of the nation’s leading logistics sites, beginning in 2015 when the Boyd Co. Inc., a corporate site-selection firm, awarded Chesterfield the No. 1 ranking as the most logistics friendly location in the country.

Devon USA, a development firm based in Richmond, has made good use of the county’s logistics potential, building speculative warehouses and then leasing them.

Edward Mitchell, Devon’s managing director, says his company has found the county to be an ideal location for warehouse distribution centers because of its interstate highway infrastructure and easy access to major population centers.

The company has developed four distribution centers at its James River Logistics Center on Bellwood Road near Interstate 95 in Chesterfield, including a 321,000-square-foot facility that has been leased to Amazon.com Inc., creating 100 full- and part-time jobs. A 133,000-square-foot warehouse that will be leased by DuPont is coming to the property, Devon announced in October.

Although the hospitality industry has suffered during the pandemic, Chesterfield-based Shamin Hotels, the largest hotelier in Virginia, opened a 111-suite Residence Inn by Marriott last June. Shamin’s Short Pump Hilton in Henrico went into receivership in January, but CEO Neil Amin said in December the company has new properties in the works for 2021, including two hotels in Short Pump.

Charlottesville and Lynchburg

Although the Charlottesville area saw high unemployment in 2020, a bright spot amid the gloom was an October announcement that Silk City Printing LLC will be relocating its corporate headquarters from Paterson, New Jersey, to Fluvanna County, investing $5.7 million to establish a silk-screened apparel plant, creating 93 jobs.

Also, the Quirk Hotel Charlottesville, which hosted its grand opening in early March 2020, reopened in June with COVID protocols in place. Its managers say that the boutique hotel is already booked for the University of Virginia’s graduation weekend this May.

In Lynchburg, global eye health company Bausch + Lomb announced last July it is expanding again, with an investment of $35 million and 79 more jobs over the next several years. The 190,000-square-foot facility will be the company’s main distribution point in the U.S. for its medical device products, primarily contact lenses.

In nearby Bedford County, Custom Truck One Source expanded its manufacturing operation in Forest, adding 61 employees.

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Seeing green

You can almost see the dollar signs flashing as John Vithoulkas talks about the revenue that he hopes will flow to Henrico County from the $2.3 billion GreenCity development, anchored by a 17,000-seat, $250 million arena.

“Once it’s running and out of the ground, fully built, it will be producing revenues greater than our top 10 taxpayers combined,” says the county manager.

The project, which promotes economic development and environmental sustainability, is expected to have a total of 2,300 residential units, two 300-room hotels, 2.2 million square feet of office space and 280,000 square feet of retail by buildout in 2033. Protected trails and an interlinking series of parks also are part of the mix.

The proposed site — the 204-acre property that includes the former headquarters of Best Products Inc. in western Henrico — does not currently produce tax revenue for the county.

Developing GreenCity are two familiar names: Susan Eastridge, CEO and president of Fairfax-based Concord Eastridge Inc., and Michael Hallmark, founder of Los Angeles-based Future Cities LLC. Both were master developers of the $1.5 billion Navy Hill project rejected by Richmond City Council last year.

Richmond Mayor Levar Stoney championed the proposed arena and mixed-use development, but it was torpedoed by a council majority who feared the project would be a risk to taxpayers and siphon too many tax dollars away from other priorities, such as schools.

Now comes GreenCity, which tops the price tag on the failed Richmond project by $800 million, but with one big difference.

“No public bonds, no public debt, no risk to taxpayers,” is the way Vithoulkas puts it, a theme echoed by members of the Henrico Board of Supervisors, who endorsed GreenCity when it was announced in December 2020.

Construction of the arena will be financed by a sale of about $250 million in private bonds, which will not require approval by voters. GreenCity is asking the county to establish a Community Development Authority (CDA) to sell the bonds.

Certain taxes generated within the development would then be used to make debt payments over a period of 30 years. Henrico purchased the 93.6-acre Best Products tract in 2011 for $6.2 million, and it anticipates selling the property to GreenCity for the same price to help push the project along. 

Once the debt is retired, all taxes generated by the development, estimated by the developers at $20 million annually, would flow to Henrico’s general fund.

“There is no scarlet letter at the end of the day … that is associated with Henrico County, if anything happens with these bonds,” Vithoulkas emphasizes.

When GreenCity was unveiled after months of behind-the-scenes negotiations, Vithoulkas was quick to explain that CDAs are not new in the county, having been used in the development of Short Pump Town Center, White Oak Village and Reynolds Crossings.

“In Henrico, we have extensive experience with CDAs and understand how they can help deliver large-scale development projects that are rich with amenities and potentially transformative for the community,” Vithoulkas says.

Andrew A. Painter, an Arlington-based attorney whose firm, Walsh, Colucci, Lubeley & Walsh PC, has represented CDAs before the Supreme Court of Virginia — including a case involving Short Pump Town Center — echoed Henrico’s success at forming and working with community development authorities.

“The county maintains a relatively strong economy and AAA bond rating,” Painter says. “All this signals that the county has a good track record with these entities and is sophisticated enough to thoroughly evaluate and form fiscally responsible CDAs.”

While the former Best Products headquarters would form one part of the project, the other part would involve the 110.6-acre Scott Farm property, which is now in a land-use program.

“It’s being farmed right now,” Vithoulkas says. “We tax it at $600 to $700 an acre, but the value is significantly higher.”

Although the arena will have separate financing, the greater part of GreenCity will rely on attracting private investors in four separate capital raises.

Eastridge, whose company has done about $20 billion in development during the past 15 to 18 years, doesn’t anticipate any problem in attracting investors for this project.

“The thing that’s really going to be so attractive right now is the sustainability level of GreenCity,” Eastridge says.

“Most of the big institutional players — which are the Goldman Sachs, the JPMorgan Chases — they’re putting together really big sustainability funds, and they need good places to put that money because the investors who are investing want to see sustainable development happen.”

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