Composite decking and railing manufacturer Trex Co. Inc. broke ground in January on its new $7 million global headquarters in Winchester.
The 64,000-square-foot office facility will be located on 8 acres along Crossover Boulevard near Interstate 81. The company’s corporate offices are currently located on Exeter Drive in Frederick County.
The decision was “years in the making and is a direct result of our growth over the years, coupled with expected growth for years to come,” says Leslie Adkins, the company’s vice president of marketing.
Trex considered a variety of locations in Winchester and Frederick County, Adkins says. Driving factors included ample space for current needs and future expansion, proximity to Trex’s manufacturing facilities, easy access to transportation routes and local amenities.
“Ultimately, the selected site offered all this plus visibility alongside the heavily traveled Interstate 81,” Adkins says.
Trex also will receive a tax break from the city, according to Shawn Hershberger, Winchester’s development services director. Under the agreement, Trex will pay all assessed property taxes on the new building but, for the first seven years, the Winchester Economic Development Authority will refund any portion of Trex’s tax payment that exceeds the amount currently being generated by the site.
The new headquarters, which is expected to open in mid-2023, will house approximately 200 employees and will feature eco-friendly elements such as electric vehicle charging stations and rooftop solar panels, reflecting Trex’s commitment to sustainability. The company expects to hire about 150 additional employees across all of its divisions, including at its newly expanded Shawnee Drive decking production facility in Frederick County.
Hershberger says Trex’s new corporate offices will help enhance Winchester’s Pleasant Valley Road corridor, which the city has prioritized for growth. “It has already helped spur additional interest in the acreage around it,” he says.
In 2020, Fortune magazine named Trex one of the nation’s 100 fastest-growing companies. The manufacturer is coming off a 12-month period that ended in September 2021 in which it reached $1 billion in revenue.
“While many companies shifted to remote work and halted building expansions, Trex is in somewhat rarefied air in that demand for our products has grown consistently over the last decade and surged during COVID as more and more homeowners focused on improving their homes and outdoor living spaces,” Adkins says.
After taking a hit from the coronavirus, economic activity in the Shenandoah Valley recovered in the second half of 2020, powered by the transportation, manufacturing and food-processing sectors.
“The valley really showed its resilience,” says Jay Langston, executive director of the Shenandoah Valley Partnership, a regional economic development group serving Augusta, Bath, Highland, Page, Rockbridge, Rockingham and Shenandoah counties.
In the spring, as the pandemic settled in, SVP was focused on helping local businesses survive. “We were able to pivot some of our manufacturing operations, secure loans for our businesses and respond to the needs of our customers, our citizens and our communities,” Langston says.
The partnership also invested in its own operations by stepping up advertising and promotion of the region, developing virtual site tours, expanding its digital outreach and facilitating local workforce development.
“It was an amazingly productive year, one of the busiest of my career,” Langston said. At one point during the fall, SVP hosted four new business prospects, in person, in a span of seven days. “I don’t remember that ever happening.”
By year’s end, he says, “some of our homegrown companies came through for us in a big way.”
In the air
In November 2020, Dynamic Aviation Group Inc. announced a $48 million expansion that is expected to create more than 200 jobs.
The company, which provides custom aircraft, flight crews and maintenance services for government, research-based and commercial customers, is constructing an office building and composite shop at its 750-acre airpark near Bridgewater, as well as a hangar for its legacy aircraft fleet, which includes the original Air Force One used by President Dwight Eisenhower.
Dynamic Aviation President and CEO Michael Stoltzfus says the investment also covers a contract to customize Boeing 737s for a federal client facing new regulations. The majority of the company’s new hires will be aircraft maintenance technicians in Bridgewater.
The expansion should be completed by mid-2022. Dynamic Aviation’s headquarters in Rockingham County features a 300,000-square-foot heavy maintenance and modifications center, an engine shop and a private airport for its 140 aircraft. In February, the company confirmed it had laid off an undisclosed number of workers but that it was unrelated to the expansion, which is moving forward.
The pandemic presented a number of challenges for the company, not the least of which involved “the logistics of moving people and parts,” Stoltzfus says. “All of our operations were heavily disrupted, but the way we overcame that was by the strength of our team and everyone’s ability to show up every day, accept that day’s reality, adjust and implement.”
In December 2020, Silent Falcon UAS Technologies, an unmanned aircraft systems service provider and manufacturer, announced it would create 249 jobs by locating its East Coast headquarters at the Front Royal-Warren County Airport. The New Mexico-based company also plans to partner with Randolph-Macon Academy, which has a drone program preparing students for careers in the field.
Investing in rail
The Shenandoah Valley Railroad, a privately owned, 22-mile short line track, gained a new partner in 2020.
InterChange Group Inc., a third-party logistics company based in Harrisonburg, purchased a minority ownership stake in the railroad, which provides service to commercial customers between Staunton and the Pleasant Valley area just south of Harrisonburg. The line’s connections allow customers to access both the Norfolk Southern and CSX Class 1 railroads.
“We are excited to become a part of the Shenandoah Valley Railroad family, both as owners and as a new user,” says Devon Anders, president of InterChange Group Inc.
The company opened a 250,000-square-foot cold storage facility in Mount Crawford in 2019, with room to expand to 600,000 square feet. A rail spur currently under construction, along with local road improvements, will connect the facility with area manufacturers and the Virginia Inland Port system, offering exporting opportunities for the valley’s agricultural producers.
Langston says InterChange’s investment in the railroad will not only help keep local freight off Interstate 81, but also keep jobs in the valley.
Fitting automobiles
Meanwhile, International Automotive Components is adding new product lines to its manufacturing facility in Strasburg. The $4.6 million investment, announced in December 2020, is expected to create 47 jobs.
Headquartered in Luxembourg, IAC Group is a global supplier of automotive components, including instrument panels, consoles, door panels, headliners and overhead systems.
The company has been a major employer in Shenandoah County since 2007, when it purchased the global interiors division of Lear Corp.
“Strasburg couldn’t be more excited about the announcement that one of our mainstay businesses is expanding and investing in our community again,” Michelle Bixler, the town’s director of community development, said in a statement.
Chocolates and chickens
Food processing in the valley remained strong last year.
In May, The Hershey Co. announced plans to increase capacity at its factory in Augusta County. The $135 million expansion is expected to add 90,000 square feet of production space and 110 jobs.
The Stuarts Draft location is the company’s second largest in the United States and makes many of Hershey’s peanut-based products, such as Reese’s Peanut Butter Cups.
In November 2020, family-owned organic chicken producer Farmer Focus — previously known as Shenandoah Valley Organic — announced plans to increase production capacity and retail packaging in Harrisonburg, allowing for more product availability in leading grocery stores across the United States.
Brian Shull, Harrisonburg’s economic development director, says the company purchased all 67.5 acres in the Acorn Industrial Park and will build the retail packaging facility first. Phase two will involve construction of a second 75,000-square-foot processing facility, and the project is expected to create 110 jobs.
“We chose Harrisonburg to expand because this community and city is a big part of our success to date,” says CEO Corwin Heatwole, a sixth-generation valley poultry farmer. “Our production team and our farmers live here and come with tremendous experience in the poultry industry.”
In 2014, he purchased a shuttered poultry plant and began converting it into a processing facility. Farmer Focus is currently Harrisonburg’s sixth-largest employer, with more than 500 workers.
Waynesboro: A case study
Like many localities, Waynesboro endured its share of challenges in 2020.
Greg Hitchin, the city’s director of economic development and tourism, says Waynesboro entered the year with some positive momentum, having seen job growth toward the end of 2019.
Tourism revenue was strong and expected to continue with the newly planned Virginia Museum of Natural History on the horizon. At the time, the project was a line item in the governor’s budget.
In January 2020, South Dakota-based Raven Engineered Films chose Waynesboro for its East Coast operations, citing the city’s manufacturing heritage and proximity to major transportation and shipping hubs. The company makes plastic sheeting for large-scale agricultural and industrial uses.
“If you had asked me how things were going on March 1, I would have told you we were on a roll,” Hitchin says.
When the pandemic hit, many community development projects were put on the shelf. Waynesboro instead focused on helping keep its businesses afloat with grants and fundraising efforts.
By the fall, things were looking up. Electronics manufacturer Virtex announced it would be adding a new product line to its existing facility in the former General Electric facility on Hopeman Parkway, resulting in up to 50 new jobs. The company assembles circuit boards for military, aerospace and medical customers.
Waynesboro closed out the year on a high note, with Amazon.com Inc. leasing the former Kmart building on West Main Street for use as a delivery station beginning this year.
“Transformation of this former retail building into a vital e-commerce facility is important to the city as we rebuild our economy and prepare for the future,” Hitchin says.
After 16 years in the making, the $135 million FBI Central Records Complex opened in Frederick County in August 2020.
The 225,000-square-foot facility off Millwood Pike (U.S. 50) is designed to archive billions of pages of FBI records — some dating back to the bureau’s earliest days — from its 56 field offices and other locations around the country. It also provides the infrastructure and technology for the FBI to continue to digitize records on demand.
The FBI first announced plans in 2004 to consolidate and relocate its Records Management Division to a secure location near Winchester, and the U.S. General Services Administration identified a site in the White Hall section of Frederick County, near the West Virginia line. The facility was expected to be operational by 2010, but escalating costs and a major economic downturn delayed the project until Virginia’s congressional delegation, led by former U.S. Rep. Frank Wolf and U.S. Sens. Mark Warner and Tim Kaine, once again secured funding for it in 2014.
“I know the importance of ensuring that our law enforcement and intelligence agencies have the resources they need to carry out their missions with accuracy and efficiency,” says Warner, chairman of the Senate Intelligence Committee. “That’s why I worked to secure [the] Winchester [area] as the site for the FBI Central Records Complex. Now that it’s up and running, this complex is not just a significant economic investment in Frederick County — it’s also a testament to the strength of Virginia’s workforce and the commonwealth’s ability to contribute to our national security.”
Indeed, says Patrick Barker, executive director of the Frederick County Economic Development Authority, “it’s a project that has been working its way through the various channels for many, many years.”
Barker, who has helped secure a number of federal projects during a 20-year career in economic development, says the complex was unique “in that they were planning something for which there really wasn’t a playbook.”
“It took a while,” he says, “to find the right location, the right equipment and the right processes” to be able to take on the Herculean task of filing and digitizing the FBI’s vast collection of paper records — which the bureau refers to as “miles of files.”
In 2014, the FBI signed a 10-year lease to house records in a 100,000-square-foot building in an industrial park off U.S. 522 near Stephens City. That space is still being used.
In June 2016, the GSA released a Supplemental Environmental Impact Statement naming the Arcadia site at 2117 Millwood Pike as the preferred location for the new facility. The 59-acre tract was purchased for $4.75 million.
Construction began in late 2017. The first records began arriving in June 2020.
The facility shares an intersection with Navy Federal Credit Union’s Frederick County call center campus, which expanded in 2019 and now employs nearly 3,000 people locally.
“At the time of the FBI announcement, we were just starting a conversation with Navy Federal and we realized there was a win-win situation here,” Barker says. “The county worked with both parties to the make sure the transportation system would be of suitable capacity for the safety of all employees and others in that area.”
The highly secured FBI Central Records Complex features a dedicated access road, visitor and truck screening facilities, a guard booth and parking lot.
Inside the high-tech warehouse, robots shelve and retrieve the records from their climate-controlled confines along a grid. The facility’s 450 human employees perform higher-level tasks, such as confirming the contents of each incoming file, digitizing records and determining which files should be preserved and which should be scheduled for destruction, in accordance with National Archives and Records Administration guidelines.
The staff consists of a mix of veteran FBI employees and new hires.
The facility directly supports the bureau’s counterterrorism, counterintelligence and homeland security efforts. It is designed to handle a multitude of requests from agents, investigators, prosecutors and members of the public seeking access to FBI files, as well as from other federal agencies trying to determine whether an individual has ever been the subject of, or mentioned in, an FBI investigation.
Despite its insular nature, the FBI Central Records Complex is a feather in Frederick County’s cap, Barker says.
“Having the FBI select Frederick County for a facility like this, and to be able to find the workforce and the infrastructure — the roads, the telecommunications — speaks volumes for us,” he says. “If you combine that with our corporate partners, like Navy Federal, like [decking and railing manufacturer] Trex, like [cabinet-maker] American Woodmark … you’re able to tell a really strong story.”
The town of Front Royal is moving forward with its own economic development authority independent from its cooperative EDA with Warren County, which is still reeling under the weight of a high-profile embezzlement scandal.
Front Royal is the only locality in the state with two EDAs. The move was granted earlier this year in legislation passed by the General Assembly. The Town Council passed a December resolution saying Front Royal needed to “forge its own path forward in the future, unencumbered by the tremendous financial, legal and reputational burdens” saddling the Front Royal-Warren County EDA.
The town is suing the town-county EDA for $15 million and no longer funds the joint authority or appoints members to its board of directors.
The joint authority’s former director, Jennifer McDonald, was indicted last year on more than 30 felony counts of misappropriation of EDA and town funds, $21.3 million in all,but the charges were dropped in April. However, the special prosecutor said charges could be refiled later, and McDonald and others face civil actions. The FBI and Virginia State Police removed records from the joint EDA in April, indicating a federal investigation.
Meanwhile, the Town Council voted 4-1 to approve its new town EDA in July and interim Town Manager Matt Tederick expects to see a new EDA board of directors named by late September.
Front Royal had used the joint EDA to assist in seeking funding for a number of government projects, including the extension of West Main Street, a new police department headquarters and a parkway along which a new middle school and hospital will be constructed.
The scandal, which went public in 2019, has made promoting the town’s economic development assets through the existing EDA “next to impossible,” Tederick says. “The brand is tarnished.”
Douglas Parsons, the new executive director of the town-county EDA, has made some changes, creating several layers of financial oversight and paying off $1.9 million in debt, as well as setting up a small business loan program in the wake of the COVID-19 pandemic. But the lawsuit, he noted during a presentation to the county Board of Supervisors in July, makes it difficult to attract business.
Tederick said town officials harbor no ill will toward the joint EDA’s current members, and that there is room for cooperation between the town and county on economic development projects in the future.
Virginia is strengthening its claim as a leading port on the East Coast.
The Port of Virginia is midway through a $700 million project to expand its two largest terminals, which will allow the port to handle an additional 1 million container units per year.
The $320 million expansion of Virginia International Gateway in Portsmouth was completed last summer ahead of schedule and under budget, according to Port of Virginia spokesman Joe Harris, and construction began in January on the expansion of Norfolk International Terminals across the Elizabeth River.
The 800-foot extension of the berth at VIG allows the terminal to service as many as three ultra-large container vessels (ULCVs) simultaneously. VIG also boasts 19,600 feet of new railroad tracks and more room to stack and sort containers. The facility has 26 new rail-mounted gantry cranes serving 13 new container stacks, and in January the port installed four new 170-foot-tall ship-to-shore cranes. The largest on the East Coast, the new cranes are able to service container vessels of all sizes.
“That terminal is now operating at full speed,” Harris says. “The investment is really paying off. It’s efficient, it’s predictable, and ocean carriers have taken notice.”
Throughout the expansion at VIG, which began in February 2017, the Port of Virginia maintained service levels, handling a record 2.93 million 20-foot equivalent units, or TEUs, of cargo in 2019. Imports were up 3%, while export TEUs were up 10%. Barge volume jumped more than 18%, and the amount of cargo moving over the Richmond Marine Terminal was up 19.5% last year. Truck volumes climbed 2%, and rail volume was static.
VIG is seeing turn times for motor carriers that are well below the industry standard, thanks to its Truck Reservation System, which debuted in 2018. As of spring 2020, 92% of all trucks had turn times of less than 60 minutes and 55% were under 40 minutes. VIG also has increased the number of lanes at the truck-processing gate to four. A larger rail yard, greater capacity for refrigerated cargo and other advancements have also contributed to productivity.
Deeper and wider
The other major port project is the deepening and widening of the Norfolk Harbor, which got underway more than two years early in December 2019. The Port of Virginia and the U.S. Army Corps of Engineers are pushing ahead with a $350 million project to dredge the main Norfolk channel to a depth of 55 feet and widen the Thimble Shoal Channel to 1,400 feet.
“That’s a big deal because it will allow these big ships to be coming and going at the same time,” Harris says. As-is, the Thimble Shoal Channel is too narrow for two-way traffic, and the Coast Guard must restrict the flow of ships in the channel for up to four hours at a time. When completed in 2024, the harbor will once again be the deepest port on the East Coast. (Virginia’s port is currently tied with Baltimore, Miami and New York, but Charleston, South Carolina, which is dredging to 52 feet, will temporarily hold the title of deepest port from 2022 to 2024.)
“Having deep channels and efficient terminals, with cargo moving inland into the Midwest by rail really sets us up for success,” Harris says. “That’s where we become really competitive.”
The dredging project, because it is expected to bring in more business, required the port to expand the terminals so they can handle more volume in turn. The expansion at NIT includes 18 new semi-automated container stacks served by 36 new cranes. Six stacks were added in late 2019, and 12 more came online earlier this year. When completed, the project will increase NIT’s capacity by 400,000 container units, or 46%, to 1.25 million container units.
Harris says the NIT expansion, a $375 million investment, is on schedule for completion this fall. During the coronavirus outbreak, workers were still on site at the dredging and NIT projects, Harris says, while maintaining safe distances to avoid COVID-19 exposure. Using cranes and other machines outside, they aren’t at as high a risk as people who work in enclosed, smaller spaces, he notes.
The broader impact
The Port of Virginia is currently the third-largest container port on the East Coast, behind New York-New Jersey, which serves the populous Northeast states, and Savannah, Georgia, which receives cargo bound for the growing Southwest region of the country.
The ports at Savannah and Charleston, South Carolina, have observed the value of inland terminals like the Virginia Inland Port and the Richmond Marine Terminal, Harris says, and are taking steps to add these kinds of facilities to their systems.
Vinod Agarwal, a professor and economist at Old Dominion University, says it’s crucial for the Port of Virginia to market its competitive advantage.
“You may not see the impact of the investment in the port in the near future,” Agarwal says. “However, the port needs to continue to market its competitive advantage to shipping companies and keep attracting firms by showing what it can do for them.”
In December, William & Mary released an economic impact study
that found that port activity was responsible for more than 397,000 jobs and $92 billion in spending in Virginia during fiscal year 2018.
As the Port of Virginia expands its terminals and cargo capacity grows to 4.4 million TEUs, Vinod says, jobs will follow at the gate. But economic impact across the state is harder to measure. “When cargo, especially finished product, moves through to the Midwest, it doesn’t affect Virginia,” he says. “Some of it goes to distribution centers and the Virginia Inland Port, but these facilities are becoming more capital-intensive. Manpower is not needed as much anymore, so economic growth is limited.”
However, if Virginia is able to attract business as a result of the port system, some of the cargo will stay in the commonwealth, Vinod says. “Parts will be assembled here. Businesses will locate here. That can add value. Those firms are much more important in the long run.”
The Port of Virginia is investing in its two inland ports to boost capacity and maintain efficiency while handling greater volume from its Hampton Roads terminals.
A record 2.93 million 20-foot equivalent units, or TEUs, passed through the Port of Virginia system in 2019, a 3% increase over 2018.
“As we expand our primary terminals in the Norfolk Harbor and widen and deepen the channels to accommodate larger ships, our inland ports become critical,” says Port of Virginia spokesman Joe Harris. “We have to move that cargo into as many inland points as quickly as we can.”
The Virginia Inland Port, which is situated on 161 acres in Front Royal and connected by rail to the Norfolk and Portsmouth terminals, is scheduled to receive $26 million in upgrades.
Although the coronavirus has forced many industries to change plans, Harris says the projects at VIP and Richmond Marine Terminal are still on track. This spring, workers were still on site while maintaining social distancing recommendations by the state and the Centers for Disease Control and Prevention.
An $11 million cost-share project with the state will add three new railroad tracks at VIP later this year, bringing the total number of tracks on site to eight and lengthening existing tracks. The port also plans to purchase two straddle carriers to move cargo more efficiently. The port’s $3.3 million investment will be matched by a $7.7 million grant from the Virginia Railroad Enhancement Fund.
The Virginia Inland Port is adding three railroad tracks later in 2020. Photo by Norm Shafer
A second VIP building project is a bridge on Route 658 outside the terminal above existing tracks to improve traffic flow, funded by a $15.5 million federal grant awarded in December 2018.
“We’re in the final design phase of the VIP expansion right now and hope to start work this summer,” Harris says. The project is expected to be completed in about two years.
VIP is an important inland destination within the Port of Virginia system. The facility receives cargo via rail from Hampton Roads and transfers it onto tracks owned by CSX Corp., Norfolk Southern Corp. and smaller carriers to reach customers in the Northeast and Midwest.
Likewise, the Richmond Marine Terminal, the Virginia’s other inland port, is boosting capacity.
The port launched a second barge, the Virginia Express, last year to move more cargo along the James River between RMT and the Norfolk Harbor. A recent $1.8 million grant from the U.S. Department of Transportation will be used to expand the route, which is expected to reduce gridlock on Interstate 64.
Barge traffic within the port’s system was up more than 18% in 2019 over the previous year.
Both inland ports also serve as engines for their local economies.
Since VIP opened in 1989, nearly 40 companies have opened distribution centers in the Shenandoah Valley, including The Home Depot Inc., Kohl’s Corp., Rite Aid Corp. and Red Bull GmbH.
Shenandoah Valley rail connections also provide transport to major markets through Norfolk Southern CSX Corp., and through strong short-line railroads like Shenandoah Valley Railroad and Buckingham Branch Railroad.
InterChange Cold Storage opened a refrigerated warehousing facility in Rockingham County last fall, creating more than 100 new jobs. The facility, which supports the region’s growing food and beverage industry by storing products locally, totals about 230,000 square feet, with room on site to expand up to 600,000 square feet. The company also operates logistics centers in Front Royal, adjacent to VIP, and in Portsmouth, about nine miles from the port’s ocean terminals.
To increase efficiency, InterChange is looking to bring in a 2,800-foot rail spur off the Shenandoah Valley Railroad line to its Mount Crawford facility. The short-line railroad connects with a Norfolk Southern line about a mile north of the site, and with a CSX line in Staunton through another network. The $1.2 million rail spur project, which includes a $450,000 grant from the state and $150,000 from Rockingham County, is scheduled to be completed in August.
Connecting with two Class 1 railroads will allow better access to the Port of Virginia system, says Devon Anders, president of InterChange Group Inc. “At this point, we’re anticipating more inbound than outbound product from the rail spur,” he says, but longer term, the company wants to be able to help the region’s agricultural producers, including farmers specializing in poultry and other proteins, with export overseas.
Speculative development around the RMT has been a phenomenon in recent years, says Russell Held, vice president of economic development for the Port of Virginia.
In July, Amazon.com Inc. announced it will open a new fulfillment center in Richmond, creating 150 jobs. Virginia Secretary of Commerce and Trade Brian Ball says access to national and global markets through RMT and I-95 helped the city seal the deal with the online retail giant.
“The region has become a hub for the global logistics and distribution industry, providing businesses direct connectivity to customers on the East Coast,” Ball says.
You’d be hard pressed to find an economic development official who had a better first year on the job than Jay Langston did in 2019.
With Langston at the helm, the Shenandoah Valley Partnership, a regional economic development group, announced a record $1.5 billion in business investment last year, anchored by Merck & Co.’s expansion of its longstanding pharmaceutical production facility in Rockingham County.
“It was a banner year for us in terms of what we were able to achieve and what we can achieve in the future,” says Langston, who left the Virginia Economic Development Partnership in late 2018 to become executive director of SVP, which serves the region including Augusta, Bath, Highland, Page, Rockbridge, Rockingham and Shenandoah counties.
The record investment was a testament to the valley’s many assets, Langston says, including workforce development, a strategic location, robust infrastructure and the willingness of key players in the region “to work together for a common cause.”
That spirit of cooperation was evident in Merck’s decision to invest up to $1 billion over the next three years to boost local production of its human papillomavirus (HPV) vaccines, creating 100 jobs and building a 120,000-square-foot addition to its Elkton plant. To help supply the workforce, James Madison University and Blue Ridge Community College will team up to develop curriculum and training programs in advanced manufacturing, biotechnology and process engineering. (Read story here.)
A sweet deal
While the Merck investment grabbed most of the headlines in 2019, it wasn’t the valley’s only significant expansion.
Chocolate-maker The Hershey Co. announced plans to invest $104 million to grow its Stuarts Draft plant by 110,000 square feet. The addition will allow for the production of penuche — a fudgelike candy made from brown sugar, milk, butter and a hint of vanilla — and peanut cream that will be distributed to other Hershey facilities on the East Coast.
Hershey evaluated its production facilities nationwide before ultimately choosing Augusta County for the project, which will create 65 jobs. The facility already employs more than 1,000 people.
Langston says the valley’s pro-business environment was invaluable in landing the Merck and Hershey expansions. “These are international companies,” he says. “For them to be willing to invest here, you have to have an environment that’s conducive for growth.”
A ‘market to watch’
The year began rather auspiciously for the region when Colliers International, a global commercial real estate organization, identified the Shenandoah Valley/Interstate 81 region as one of its “10 Emerging U.S. Industrial Markets to Watch in 2019.”
“That really set the tone,” Langston says of the report, which highlighted mostly metro areas such as Las Vegas, Minneapolis, Sacramento and Seattle. The report paints the Shenandoah Valley as a great option for industries aiming to build facilities with easy access to rail lines and ports.
The I-81 corridor in Virginia offers many commercial advantages, according to the report, including available land and proximity to the metro Washington, D.C., Baltimore and Ohio Valley population bases.
InterChange Cold Storage is one of the latest companies to move into the corridor. The homegrown third-party logistics provider held a grand opening in September for its 250,000-square-foot refrigerated warehouse in Mount Crawford.
InterChange Group President Devon Anders says the warehouse, a $41.6 million investment that will eventually create 88 jobs, is the company’s largest project to date. “We designed and built this project for the food and beverage companies that rely on our local agriculture, productive and skilled workforce, transportation infrastructure and friendly business climate to produce, store and ship their products around the world,” he says.
The cold-storage facility has the potential to expand to 600,000 square feet across multiple rooms, along with blast freezing and other services. New rail service and road improvements will connect the facility to area manufacturers and the Virginia Inland Port, providing opportunities for international export of food products.
In the northern valley, WCS Logistics — formerly Winchester Cold Storage — held a ribbon-cutting in July for its new 63,000-square-foot warehousing facility in Frederick County. The building, the company’s seventh in the Winchester area, quadruples its freezer capacity for storing foreign and domestic food products for distribution.
Trex to add production capacity
Decking and railing manufacturer Trex Co. Inc. broke ground in November on a new plant adjacent to its existing production facility in Frederick County. The facility will create more than 150 jobs in manufacturing, skilled trades and engineering.
The new facility is part of a $200 million, multiyear capital investment program that will allow Trex to meet demand for its wood-alternative decking and railing. The company is also increasing capacity at its Nevada site. The Frederick County location is scheduled to open in early 2021.
Also last year, Chicago-based CareerBuilder announced plans to invest $2.5 million to establish a 20,000-square-foot call center and research facility in Frederick, creating 250 jobs.
And Navy Federal Credit Union is in the midst of a $100 million expansion of its Frederick call center that’s expected to create more than 1,400 jobs.
Airport traffic taking off
Shenandoah Valley Regional Airport has seen tremendous growth in passenger traffic since switching carriers in April 2018 to United Express, which is operated by SkyWest Airlines. In December 2019, the airport in Weyers Cave launched new flights to and from United’s hubs at Washington Dulles International and Chicago O’Hare International. The airport also rolled out scheduling improvements designed to help ensure maximum connection opportunities at both hubs and more convenient flight times for local customers.
Langston says having reliable commercial air service in the central valley is a boon for economic development and puts local travelers “one step from anywhere in the world.”
“How many rural localities can say that?” he asks.
While grocery shopping one evening in February 2019, Melissa Lubin received a phone call from Jay Langston, the new executive director of the Shenandoah Valley Partnership.
A major employer in the region was looking to expand its operations, Langston told her, with more than 100 high-paying jobs and a multiyear investment that could reach $1 billion. State economic development officials, along with a representative from Blue Ridge Community College, were going to attend the meeting, he said. “We need someone from JMU. Can you be there?”
The next morning, Lubin, dean of professional and continuing education at James Madison University, and John Downey, president of Blue Ridge Community College, listened as officials outlined the company’s workforce needs, which included curriculum and training programs in advanced manufacturing, biotechnology and process engineering.
“Jay wanted to know, ‘Can we deliver, can we work together?’” Lubin recalls. “And John and I looked at each other and said, ‘Yes, absolutely.’”
The company, later identified as pharmaceutical giant Merck & Co. Inc., was expanding operations at its Elkton plant to boost production of its human papillomavirus vaccines.
“We really played to our strengths,” Lubin says.
JMU is one of the only schools on the East Coast to offer undergraduate biotechnology programs. The program draws on faculty and staff in two colleges to provide instruction in biology, chemistry, biochemistry, integrated science and technology. Meanwhile, BRCC’s new bioscience building is specifically designed to support industry needs.
As part of the Merck agreement, JMU and BRCC will receive up to $2.5 million in state economic development incentives over the next five years to address the workforce needs of major employers in the region.
The committee’s proposal included funding for a post-degree manufacturing boot camp, led by Blue Ridge, to train recent graduates at the community college and university levels who lack manufacturing experience, as well as current workers.
For its part, JMU has agreed to hire a biotechnology director to oversee curriculum development to meet Merck’s workforce needs over the next several years.
JMU is also charged with developing adult degree program courses and certificates to prepare workers to take on more responsibilities and management positions in the future.
In addition, the proposal contained funding for two regional manufacturing liaisons — one at each school — who would help ensure that workforce development needs are being met at Merck and other area employers.
Finally, the proposal allowed graduates of BRCC’s advanced manufacturing program with a specialization in biotechnology to matriculate at JMU to earn a four-year degree.
Last September, Merck put in a request for 12 to 15 student interns to begin working full time at the Elkton plant this year.
“It was a tight turnaround, but we delivered,” Lubin says. “This is a win-win for everybody. It’s a win-win for Merck because they needed these positions quickly. It’s a win-win for the students because they’re getting work experience, and they’re getting connected to a local employer. And they’re going to be able to figure out, ‘Is this what I want to do?’”
Ultimately, it was JMU and BRCC’s commitment to work together that won Merck’s investment.
Lubin says JMU’s collaboration with BRCC offers a model for economic development across the commonwealth.
“Workforce is on a continuum, a continuum of learning,” she says. “It’s not an either/or [situation]. It’s not my students/your students. We’re one big, long continuum. And there are gateways in and out. The more we can figure out how to work together so that workers are free to get trained and retrained as needed over the course of their careers, the better off we’ll be.”
As Harrisonburg awakens on a summer Saturday morning, young people emerge from downtown apartment buildings and lofts to get in a run or to walk their dogs along the city’s tree-lined streets. Neighbors stop to exchange pleasantries en route to the post office, the library or the grocery store.
A crowd gathers at Turner Pavilion, behind the newly expanded City Hall, for the local farmers market, which offers seasonal produce, baked goods, meats, eggs, wines, ice cream and honey.
Downtown merchants prepare their shops for the day’s patrons — the regulars whom the owners know by name as well as passersby who stop in to browse.
The smell of roasted coffees, fresh pastries and homemade breads fills the air. In a few hours, Main Street sidewalk cafés will be full, and the taps will be flowing at craft breweries.
Not your father’s city
Harrisonburg in 2019 is a far cry from the sleepy college town of decades ago. With an estimated 54,606 residents as of July 1, 2018, the city’s population has nearly doubled since 1990, according to the Weldon Cooper Center for Public Service at the University of Virginia.
Much of that growth, officials say, can be attributed to James Madison University, which has followed a similar trajectory during that span, increasing its enrollment from 10,000 to 20,000 students.
“That certainly has been an accelerator for us,” says Brian Shull, the city’s director of economic development, who arrived in Harrisonburg in 1994. “It has been fun to grow alongside JMU.”
Some of the university’s nearly 4,000 employees settle in Rockingham County, says county administrator Stephen G. King. The county’s population has increased 6.7% since the April 2010 Census, to an estimated 81,422 residents.
The combined growth of Harrisonburg and Rockingham since 2010 has been 8.6%, the third-fastest among Virginia metropolitan areas. It trails only Northern Virginia (12.4%) and Winchester (11.1%), according to Census data.
Boosting growth in their hometowns is nothing new for Virginia colleges and universities. Charlottesville, Blacksburg and Lynchburg all have blossomed around educational institutions. These schools spur commercial and residential development while producing a steady stream of graduates, many of whom stay in the area to work, start businesses and raise families.
Harrisonburg and Rockingham are capitalizing on their own group of schools, which include not only JMU, but also Eastern Mennonite University on the city’s north end, Bridgewater College near Dayton and Blue Ridge Community College in nearby Weyers Cave. Together these institutions produce more than 7,000 graduates per year.
Shull says the region’s diverse economy, natural beauty and recreational amenities are a major draw for young professionals. “Workers now are often picking where they’re going to live, and then they find the job. That was unheard of 20 years ago. … But this area certainly checks all of the boxes.”
In April, Reviews.org ranked Harrisonburg seventh out of 325 metro areas nationwide on its 2019 “Best Places for Millennials to Move” list. (Lynchburg was No. 1.) The survey was based on factors such as unemployment rates, immigration flows, housing costs and crime rates. The report states that Harrisonburg is “great for outdoor activities, strolls to the local breweries and restaurants, or bringing out your artistic and creative side.” The city is also “a wonderful place for ethnic and linguistic diversity,” it says. That’s a nod to Harrisonburg’s status as a Church World Service refugee resettlement area since 1988. Children from families speaking more than 50 languages attend the city’s public schools.
Now a destination
A generation ago, downtown Harrisonburg was not much of a destination. Aside from a smattering of restaurants and bars, an ice cream stand and the Court Square Theater, there were few businesses to attract residents and visitors to the area. The Downtown Merchants Association was active, but many stores had abandoned Main Street for the growing U.S. 33 commercial corridor.
Beginning in the late 1990s several revitalization efforts were undertaken by citizens’ groups and the city. “One of the first things that was on my desk when I arrived [as economic development director] in 1998 was the idea that we were going to try to do a revitalization of downtown,” Shull says. However, such efforts were largely volunteer-driven and lacked substantial funding.
With the launch of Harrisonburg Downtown Renaissance in 2003, the seeds for a vibrant community were planted. The nonprofit soon hitched its wagon to the National Trust for Historic Preservation’s Main Street America program, with its four-point plan for revitalization: economic vitality, design, promotion and organization.
“It’s all open source, so we had that framework and the methodology, and we got to customize it to our local needs,” says HDR Executive Director Andrea Dono. “We had a bunch of people roll up their sleeves and take a piece of everything.”
As a designated Virginia Main Street community, Harrisonburg was able to leverage state funds for feasibility studies, training, streetscape projects, tax incentives and public-private partnerships.
From the beginning, HDR has worked with the city and area developers to meet the demand for housing downtown. The number of residences in the district increased from 150 in 2003 to 586 at the end of last year. Many of those units are part of mixed-use developments, with apartments and lofts above shops on the ground floor.
“That was huge for us,” Shull says, “because now you have 24/7 activity downtown. And that led to more restaurants and retail popping up and just more vibrancy.”
King says that, with the growth of JMU, Rockingham is seeing more urban-style development, including student housing. Two new apartment complexes are expected to open along Port Republic Road, just outside the city limits, next year.
Technology, food and the arts
When tech startups showed interest in locating downtown, the city responded by creating a technology zone. The language-learning software company Rosetta Stone was one of the first to take advantage of the zone’s tax incentives. Jenzabar, a Boston-based higher education technology firm, soon followed, opening an office on Liberty Street. One of the newest ventures is Chiedo Labs, a web and mobile app developer started in 2012 by a JMU graduate, Chiedo John.
Dono of HDR says the tech sector is growing — and clustering — organically. “Some people who left Rosetta Stone started their own ventures. And Chiedo … I’ll see the owner networking with somebody at a coffee shop or somewhere … and he’ll say to me, ‘Hey, this is so-and-so from New York and I’m trying to recruit him.’ There are people who love it here so much. And they want to have peers in their field. … So those conversations are happening, and new companies are opening up.”
In 2014, downtown Harrisonburg was designated as Virginia’s first culinary district. It boasts 38 eateries, the most recent of which, the Habana Café on Court Square, serves Cuban cuisine. “We have this critical mass of restaurants,” Dono says, “from ethnic eateries to farm-to-table to longstanding icons like Jess’ Quick Lunch … There’s something for everyone.” Dono recently was able to help the owner of a longtime Korean food truck in the city, Mashita, find a space downtown to expand.
Downtown also includes a thriving arts scene, with boutiques, craft stores and makerspaces. “When you come to downtown Harrisonburg, you’re not just doing a simple transaction,” Dono said. “You’re actually having an experience where you get to meet the people who are making the products, and in some places you get to even watch it being made.”
As HDR has matured and added staff, “we’ve taken on more and bigger projects,” Dono says. “That cycle of disinvestment has been reversed, essentially.”
Today, Harrisonburg and HDR are held up as models for downtown revitalization. “We have people coming here from other towns in Virginia and all across the United States,” Dono says. “We even hosted a delegation from Japan.” The organization won the National Main Street Center’s Great American Main Street Award in 2014 and recently was contacted about serving as a case study for an upcoming report by the Brookings Institution.
Downtown also has become a major recruitment tool for Harrisonburg and Rockingham. “I know that JMU [is] bringing people down here to show off the downtown,” Dono says. “So are the hospitals and the major employers. … We hear stories about people who stopped because they had to get off the highway or they had a flat tire or they’re tired or needed to stop for food. And next thing you know, they want to move here.”
A catalyst for development
JMU also has been a major factor in commercial development as well as the redevelopment of real estate in Harrisonburg and Rockingham.
The university’s acquisition of older properties, such as the former Rockingham Memorial Hospital and the old Harrisonburg High School, have been important to the revitalization of areas adjacent to the campus.
The Hotel Madison and Shenandoah Valley Conference Center — a joint venture involving the city, the JMU Foundation and a private developer — is helping grow the area’s hospitality and tourism sector.
The university also was instrumental in the decision of a leading research and development firm, SRI International, to locate a 40,000-square-foot biosciences center on a 25-acre campus in Harrisonburg in 2009. JMU has developed a close relationship with SRI by placing interns and graduates and by sponsoring joint research projects.
As part of the recently announced $1 billion expansion of the Merck pharmaceutical plant in Elkton, JMU and Blue Ridge Community College will receive up to $2.5 million over five years from the state. The grant will be used to address Merck’s workforce needs and those of other major employers in the Shenandoah Valley, including MillerCoors, Danone/WhiteWave, Shamrock Farms and Hershey Foods.
With colleges and universities leading the way, local officials are optimistic about the region’s future. But they also want to ensure smart growth.
“We don’t want to grow just for growth’s sake,” Shull says. “We want to make sure that we have all the right infrastructure to accommodate growth that leads to better jobs and better economic well-being for our residents.”
Five companies have been approved to open the state’s first medical cannabis dispensaries, including one in Staunton.
Illinois-based PharmaCann plans to open a facility at the Green Hills Industry and Technology Center off Technology Drive and Commerce Avenue in Staunton by the end of this year.
Staunton Mayor Carolyn Dull was one of the early supporters of the project.
“Not only will this pharmaceutical processor help improve the lives of citizens who are suffering from chronic illnesses, but it will support our local economy with significant capital investment and new, high-wage jobs,” Dull wrote in a letter to the chairman of the Virginia Board of Pharmacy in June.
Staunton is all too familiar with the negative impact of the nation’s opioid epidemic, the mayor says. “It is my hope that PharmaCann will assist in providing local medical professionals with additional resources to help combat this problem locally.”
One company was chosen to supply each of Virginia’s five health districts. The Staunton facility will serve the Shenandoah Valley and the Charlottesville area.
“Our economic development team believes the operation will fit well with the other industries located here and be easily accessible to those in need of its services,” Dull says.
Founded in 2014, PharmaCann is one of the largest medical cannabis providers in the U.S. The company was purchased in October by California-based MedMen, creating a combined company with operating licenses in 12 states. PharmaCann recently rebranded its dispensaries and production centers as Verilife and Veriplant, respectively.
The Staunton facility will consist of approximately 25,000 square feet of production, retail and office space.
Patients with a doctor’s recommendation will be able to buy CBD and THC-A oils, which help alleviate pain and calm the nervous system, on site. These oils contain less than 5 percent THC, the main psychoactive ingredient in marijuana.
Approved patients must register with the program in their health service area and receive their recommended medical cannabis products at that location.
Under Virginia law, the dispensaries will be vertically integrated, meaning the cannabis must be grown, processed and dispensed in the same location.
Legislation to allow cannabidiol processors in Virginia was introduced last year by Del. Ben Cline (now a congressman representing Virginia’s 6th District) and signed into law by Gov. Ralph Northam. The law, known as Let Doctors Decide, allows any practicing doctor in Virginia to recommend the use of medical cannabis oils as a course of treatment.
The five approved medical cannabis facilities across Virginia will have one year to become operational and begin dispensing medical cannabis oils to registered Virginia patients.
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“It’s all open source, so we had that framework and the methodology, and we got to customize it to our local needs,” says HDR Executive Director Andrea Dono. “We had a bunch of people roll up their sleeves and take a piece of everything.” 
The Staunton facility will consist of approximately 25,000 square feet of production, retail and office space.