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byline: Joan Tupponce

Gas exchange

Alternative fuels such as hydrogen and compressed natural gas are attracting interest from trucking companies as the federal government prepares to reduce emissions limits by 2027.

The Environmental Protection Agency’s new rules on heavy-duty diesel engine standards starting with 2027 models includes stricter standards aimed at lowering air pollutant emissions.

“As these emissions standards get more stringent, there is increased opportunity for [compressed natural gas] to be a winner in this market,” says George Faatz, director of marketing and commercial strategy for Atlanta-based Southern Company Gas, parent company of Virginia Natural Gas.

Compressed natural gas is the same natural gas used in homes and businesses, but it’s compressed and dispensed at a higher pressure so it can be used in vehicles. CNG vehicles produce up to 90% fewer nitrogen oxide emissions than gasoline or diesel and can reduce greenhouse gases by up to 21%, compared with gasoline or diesel.

“Transit buses and other fleet operators have used it for decades,” Faatz says.

When diesel prices hit a two-year high in November 2020, interest in CNG surged. “The price of CNG is generally less than diesel. It offers affordability and sustainability. It’s also cleaner than diesel,” Faatz says. “It doesn’t need additional exhaust treatment technology to clean up the diesel emissions on trucks.”

National companies such as UPS have made significant investments in CNG, as has Chesapeake-based TFC Recycling. “We were, to my understanding, the first company in Virginia to not only use CNG but to also put in a CNG fueling station, which was completed in 2011,” says Mike “Recycle” Benedetto, president of TFC.

Using alternative fuel coincides with the company’s core business of recycling. “We wanted to walk the talk, leave a legacy,” Benedetto says, adding that TFC made a $1.5 million investment in the fueling station and initially invested more than $7 million to acquire about 20 CNG vehicles. “We wanted to be in the forefront when it came to reducing emissions.”

TFC’s trucks are refueled overnight via a slow-fill process. “We don’t have to worry about diesel fuel spilling,” Benedetto says. “Our drivers enjoy the convenience of just having to hook it up and not wait until the tank fills, and the tanks fill themselves overnight.”

Hydrogen gas has some of the same advantages as CNG when it comes to lowering greenhouse gas emissions, as well as fueling.

“Hydrogen features higher energy and faster refuel time in heavy trucks compared to batteries, giving fleet operators longer range and faster turnaround time,” says Brett Malone, president of the Virginia Tech Corporate Research Center. “Also, it’s a known entity. Industry has been using hydrogen for years. We know how to produce it, store it and transport it. It’s now a matter of harnessing this abundant resource to support industry’s transition to a more sustainable fuel source.”

The research center is partnering with the Hampton Roads Alliance and the cities of Newport News, Norfolk, Portsmouth and Virginia Beach to create a green hydrogen fuel program and production facility at Newport News’ Tech Center Research Park.

“As a center for innovation, VTCRC is where industry and university researchers come together to explore the adoption of these emerging fuel technologies,” says Malone, adding, “We aim to launch our hydrogen demonstrator by 2025.” 

The center has had a great deal of interest from companies, especially those with aggressive sustainability goals. “They are looking to be net-zero in the next 10 years. Our goal is to help them get there,” Malone says.

Faatz of Southern Company Gas says he’s seen a growing interest in CNG from the Hampton Roads business community, especially around new fleet purchases. “We view the future as bright,” he says. “This is a solution that is proven.” 

Shenandoah Valley Big Deal: Advance guard

Northrop Grumman’s $200 million investment to establish an advanced electronics manufacturing and testing facility in Waynesboro paves the way for long-term growth for the Shenandoah Valley, local officials hope.

“It is a huge win for us,” says Jay Langston, executive director of the Shenandoah Valley Partnership. “If Northrop Grumman puts faith in our footprint, that can get the attention of other companies. It further diversifies our manufacturing economy.”

The Falls Church-based Fortune 500 aerospace and defense contractor broke ground Feb. 2 on the project. Located on Shenandoah Village Drive, the planned 315,000-square-foot building is being developed by Pennsylvania-based Equus Capital Partners, which will own the property and lease it to Northrop Grumman. (It was “an optimal solution for the company,” says Virginia Economic Development Partnership President and CEO Jason El Koubi.)

Northrop Grumman plans to create about 300 jobs — varied engineering and manufacturing roles — at the facility during the next five years. Recruitment and training will be supported through VEDP’s Virginia Talent Accelerator Program, a state workforce incentive program. Northrop Grumman anticipates the building will open in 2025 and be ready for production in 2026, according to a company spokesperson.

Northrop Grumman had been evaluating site options for several months prior to approaching VEDP and Waynesboro city officials about the property in December 2022.

“They were looking for the right location that offered infrastructure such as a road network and utilities to include electric, water and sewer,” says Greg Hitchin, Waynesboro’s director of economic development and tourism. “They needed a site that was real estate-ready to develop to meet their schedule.”

Receiving support from VEDP and the city government to ensure the project could meet development timelines “was key to selecting Waynesboro for the project,” says El Koubi.

As with any major economic development project, Northrop Grumman and Equus Capital Partners carefully studied the site and had several questions that needed to be settled before making a decision. “The company had very specific needs for infrastructure that we had to make sure we are able to deliver,” says Hitchin.

“We [took] multiple factors into account that would help us to continue to deliver for our customers and ultimately selected Waynesboro,” a Northrop Grumman spokesperson said in a statement. “The … facility expands our technology presence in the commonwealth and the ability to add new people to our team, continually driving innovation across the company.”

The Waynesboro facility, El Koubi says, will “attract and retain skilled talent and create a transformational economic impact for the entire region.”

Building on the aerospace and defense ecosystem in Virginia, El Koubi continues, the project will importantly “expand the industry’s footprint out of the higher density areas of Northern Virginia and Hampton Roads.”

Northrop Grumman employs roughly 95,000 employees — 6,800 in Virginia — and reported $39.29 billion in 2023 revenue. The company ranked No. 413 on Fortune magazine’s Global 500 list for 2023, and No. 113 on its annual 1000 list of U.S. corporations for the year.

Northrop Grumman’s expansion fits into the city and region’s strategic plans for building up the local manufacturing sector and increasing employment opportunities. Average employee salaries at the Waynesboro plant will be about $94,000 per year, Hitchin says. Median household income for Waynesboro is about $52,500, according to 2022 U.S. Census data.

“What Northrop Grumman will produce is electronics unlike anything that we have in the region, thus opening a new opportunity to advance electronics-based manufacturing,” Langston says. “We are excited. We are very fortunate.” 

Shenandoah Valley Year-in-Review: Green valley

Just a couple years later, an $821,000 site development grant awarded to the Shenandoah Valley Partnership by the state’s GO Virginia economic development initiative has already been paying off, says Jay Langston, the partnership’s executive director.

The grant, which paid for work including site evaluation and related environmental reviews and surveys, was focused on improving six regional sites for development. And now, Langston says, two of those sites that the partnership did due diligence on through the 2021 grant are being developed for some of the past year’s biggest economic development announcements — Northrop Grumman’s $200 million advanced electronics manufacturing and testing facility in Waynesboro (see related story) and Leiber’s $19 million plant in Rockingham County.

In fact, the Shenandoah Valley saw $339 million in investments announced last year, with plans to create a total of 793 jobs. “We had a good year,” Langston says.

The region was able to diversify its manufacturing base and strengthen its agricultural business environment, Langston says. “While we are led by food and beverage manufacturing, … we are always working to recruit companies.”

Augusta County

Manufacturing and distribution continue to be the largest workforce sectors in Augusta, boosted by the May 2023 opening of a new 1 million-square-foot Amazon.com fulfillment center in Fishersville, creating 500 jobs. Amazon has opened more than 30 fulfillment and sorting centers and delivery stations in Virginia since 2006.

Speaking at a ribbon-cutting for the center, Augusta County Administrator Tim Fitzgerald said, “It is a testament to making economic development a strategic priority for the county.”

Additionally, early this year, Washington, D.C.-based fast-casual Mediterranean restaurant chain CAVA was poised to open its $30 million, 57,000-square-foot processing and packaging facility at Mill Place Commerce Park in Verona, a project expected to create more than 50 jobs.

“All in all, 2023 was a stable year with some steady growth,” says Rebekah Castle, the county’s director of economic development and marketing.

Culpeper County

Culpeper is carving out a niche in data centers. A pair of rezonings in the town and county paves the way for Peterson Cos. to build a 150-acre, 2 million-square-foot data center campus along McDevitt Drive and East Chandler Street. Additionally, cloudHQ has acquired 116 acres along the same corridor with reported plans for the similarly sized Copper Ridge Data Center Campus.

“In the last two years, we’ve added about 10 million square feet of data space,” says Bryan Rothamel, the county’s director of economic development.

Frederick County

In Frederick, developers are seeking tenants for two large spec industrial parks.

Colliers is marketing One Logistics Park, a $150 million, 2.7 million-square-foot industrial complex being developed by The Meridian Group and Wickshire Group just outside Winchester. Meanwhile, Peterson Cos. is promoting its Valley Innovation Park, a 145-acre industrial park near Interstate 81, which has the potential to house nearly 2 million square feet of manufacturing, industrial and life science facilities.

“The property is already graded. Having large sites project-ready … will give us good options to be competitive,” says Patrick Barker, executive director of the Frederick County Economic Development Authority.

In other county economic development news, packaging manufacturer Monoflo International announced in September 2023 the completion of its new 325,000-square-foot warehouse facility on the border with Winchester. Additionally, ZM Sheet Metal, an HVAC steel component manufacturer, announced plans to expand in Frederick. ZM purchased 23 acres in Stonewall Industrial Park and plans to start construction on a new 160,000-square-foot manufacturing facility in the second quarter of 2024. The company says the facility will be able to accommodate 300 workers.      

Harrisonburg

Farmer Focus, which handles processing, packaging and sales of poultry products for about 100 regional farmers, embarked on a $17.8 million expansion of its Harrisonburg processing plant last year, aided by a $3.6 million U.S. Department of Agriculture grant. The company plans to add 300 jobs by 2025.

“Farmer Focus was a startup in 2014 and has now surpassed 1,000 employees and has become our largest private sector employer in the city,” says Brian Shull, Harrisonburg’s economic development director.

In September 2023, Montebello Packaging, a manufacturer serving the pharmaceutical and cosmetic industries, announced a $12 million expansion with a new production line.

Additionally, Staunton Innovation Hub co-founder Peter Denbigh is renovating the historic Wetsel Seed Complex in downtown Harrisonburg into the $4.5 million Harrisonburg Innovation Hub, scheduled to open by the end of this year. 

Page County

Luray RV Resort on Shenandoah River, previously Outlanders River Camp, opened in August 2023 following a $30 million expansion by its new owner, Blue Water. Campsites increased from 73 to 350.

Rockingham County

“We like focusing on the food and beverage industry because of our agricultural base. It is what comes naturally for our community,” says Joshua Gooden, the county’s economic development and tourism coordinator. 

In September 2023, Leiber, a German manufacturer that processes brewers’ yeast into animal nutrition, biotechnology and nutraceutical products, announced it would invest up to $20 million to establish its first U.S. manufacturing facility in the county’s Innovation Village. It’s expected to create 35 jobs, with plans to open by late 2025.

Also, Veronesi Holding, an Italian cured meats producer, opened its first U.S. production operation for its Negroni deli meats brand in the Innovation Village at Rockingham. The nearly $100 million project broke ground in 2022 and plans to hire more than 150 workers. Currently, the company has 50 employees there.

Among the most anticipated county economic development projects underway is Virginia’s first Buc-ee’s travel center. The Texas-based convenience store chain broke ground on the project in January during a ceremony attended by Gov. Glenn Youngkin and Buc-ee’s founder and CEO Arch “Beaver” Aplin III.

Located at the intersection of Interstate 81 and Friedens Church Road, the 74,000-square-foot center will include 120 fueling positions. Buc-ee’s expects construction to take about 17 months, according to a spokesperson, and it plans to hire more than 200 workers.

Shenandoah County

Shenandoah County continues to see growth in tourism and investment in the downtown Mount Jackson area with retail shops and restaurants.

Alexandria-based Logan Food is investing $15 million to build a meat-processing facility, with plans to add up to 60 jobs. It’s expected to open in 2025, according to Jenna French, the county’s director of economic development. 

Warren County

Last year, Warren County had success with industrial and commercial economic development as well as “re-engaging with the small business market,” says Joe Petty, the county’s director of economic development and tourism.

Nature’s Touch Frozen Foods moved into its new 126,000-square-foot, $40.3 million facility, adding more than 70 employees.

And the Port of Virginia’s Virginia Inland Port (VIP) is partnering with the Virginia Department of Transportation to construct a bridge over the Norfolk Southern Railway on Route 658. The $20 million-plus project is funded by a U.S. Department of Transportation grant and scheduled for completion in 2025.

“This is a huge capital improvement project that will add rail capacity for VIP and, ultimately, uninterrupted access for the community,” says Petty. 

Waynesboro

“I’m very pleased with this past year,” says Greg Hitchin, the city’s director of economic development and tourism. “We’ve had a lot of success on different fronts.”

The city landed the largest deal in the region with global aerospace and defense technology company, Northrop Grumman, investing more than $200 million to build a new advanced electronic manufacturing and testing facility, which plans to hire more than 300 workers over the next five years.

Additionally, Innovation Management, which manages the Staunton Innovation Hub, is opening a 6,000-square-foot innovation hub in Waynesboro in spring 2024 in the former Virginia MetalCrafters building. The hub will provide coworking space, private offices and conference rooms.

“It’s really gratifying to see the reuse of an historic building,” Hitchin says. 

Flying high

Norfolk International Airport is on track to have the best year since its 1938 opening. In June, the airport reported a 7.5% increase in passenger activity, with 431,637 passengers — up from last June’s figure of 401,517, marking the largest number of June passengers in the airport’s history.

During the first six months of 2023, the airport’s passenger count increased 8.7% to 2,083,371 passengers, compared with 1,915,866 for the same period in 2022.

One contributing factor is Norfolk International’s ability to grow its number of airlines and flights. “It has eight airlines, so customers have lots of options,” says Vinod Agarwal, deputy director of the Dragas Center for Economic Analysis at Old Dominion University.

Airlines serving the Norfolk airport include Allegiant, American, Breeze, Delta, Frontier, Southwest, Spirit, United and their regional airline partners. The airport began adding low-cost carriers in 2017, starting with Allegiant, followed by Frontier in 2018, Breeze in 2021 and Spirit in 2023.

In 2021, Breeze airlines selected Norfolk as a crew base for pilots and flight crews. Passengers can fly to 16 cities nonstop on Breeze from Norfolk, including the addition of Fort Myers, Florida, in July.

“We currently have 41 locations we can now fly nonstop,” says Norfolk International Airport President and CEO Mark Perryman. “We are continuing to grow that number and move up.”

The addition of Spirit Airlines in March, with flights to Fort Lauderdale and Orlando, was another boost to passenger count.

“They are a growth-stimulator type of airline, and they are doing that. Spirit went from 0% in March to now serving 3% to 4% of our total traffic. There is huge growth in low-cost carriers,” Perryman says. “We are talking with other airlines all the time. We have two other airlines that are extremely interested,” but Perryman declined to name them.

The airport’s positive growth hasn’t gone unnoticed. This year, it received a 4-Star Regional Airport rating from London-based Skytrax. The annual ratings, which go up to five stars,  are a global benchmark of airport standards.

Of the 572 airports rated in the 2023 survey, Norfolk International was one of only seven U.S. 4-Star airports, a group that includes the Cincinnati, Houston, Indianapolis, New York (LaGuardia), Portland and Seattle airports. Skytrax also ranked NIA sixth place among the World’s Best Domestic Airports.

To keep its standards steady, Norfolk International is undertaking a $30 million runway rehabilitation project to repair aging asphalt and concrete portions of two runways. The work is being performed in two $15 million phases, with phase one’s completion expected in November and phase two anticipated to be completed in November 2024.

In August, the airport released a request for proposals for a construction manager for a concourse gate expansion and a customs and border control facility, aimed at helping NIA attract international flights. The project is currently in the conceptual design phase.

In May, the airport issued a request for proposals for development of a new hotel on airport property. Perryman was set to provide the airport’s board with a recommended developer in September, after this publication’s deadline.

Like Norfolk, many U.S. airports are beginning to see some of the largest increases in air traffic since the start of the pandemic, a sign of a pent-up consumer demand for recreational travel.

“We are predominantly domestic, and our numbers rebounded faster than some others in the country. The big international airports with flights internationally are still struggling,” Perryman says. “Anecdotally, I think the pandemic opened people’s eyes to what the Hampton Roads region has to offer, but we don’t have hard evidence.”

Regionally, though, the story is different at the Newport News-Williamsburg Airport, which has a single airline — American Airlines, which serves only flights to Charlotte, North Carolina. In 2018, Newport News recorded 403,575 total passengers. In 2022, that number fell to 129,971. In February, the airport’s board dismissed airport Executive Director Mike Giardino. Avelo Airlines ended service at the airport in April, less than a year after it began offering flights from Newport News to Florida. In 2022, Delta left the airport.

“In the last 10 years or so, Newport News has seen a decline in its number of airlines. Supply and demand factors indicate the airport is having a tough time coming back to where it used to be,” says Agarwal. “If it flew to other places, it would attract more people.”

This summer, the Hampton Roads Alliance received a $100,000 GO Virginia grant to conduct a regional air transportation study, which will focus on both regional airports and include $50,000 in funding from Norfolk, Newport News, the Norfolk Airport Authority and the Peninsula Airport Commission.

The Peninsula Airport Commission’s members declined to discuss plans for Newport News’ airport until after the study is completed in early 2024. 

Under construction

Atlantic Park

Virginia Beach

Proposed in 2017 by music icon Pharrell Williams and Venture Realty Group, Atlantic Park finally got underway in March with a groundbreaking on the first phase of the $350 million surf park project. Phase one will involve 10.95 acres, including 309 multifamily units, 10,000 square feet of office space, a 70,000-square-foot indoor/outdoor entertainment venue and a 2.67-acre indoor lagoon — the first Wavegarden Cove facility in the nation — and two public parking decks. Various components of the project are estimated to open between December 2024 and March 2025, developers expect. The second phase will consist of additional attractions, retail, public parking and residential space. A conceptual plan has been in place for Phase Two for quite some time, and the development firm is in the process of finalizing the plan.

Photo courtesy Virginia Department of Transportation

Hampton Roads Bridge-Tunnel

Hampton and Norfolk

Work continues on the $3.9 billion transportation project — Virginia’s largest ever — in all areas along the nearly 10-mile corridor of Interstate 64. As of July, the project was more than 50% complete. In early March, construction crews completed the first traffic shift onto the temporary I-64 East south trestle, and contracting group Hampton Roads Connector Partners continues to work on the three other marine trestles that connect both Norfolk and Hampton to the islands. Mary, the project’s tunnel boring machine, has been digging two new tunnels between Norfolk and Hampton at a rate of 50 feet a day since April. The twin tunnels will take more than two years to complete, and the machine must be reconstructed when it reaches the North Island, before it can turn around and dig the second tunnel back to the South Island.

Crews have finished construction of the Slurry Treatment Plant, dubbed Katherine for late NASA Langley Research Center mathematician Katherine Johnson. The four-story treatment plant, which processes and removes dirt and other tunneling byproducts, is the largest of its kind in North America. Mining operations began in late April and, to date, have mined more than 500 feet and installed 91 rings for the tunnel construction. The contract completion date for the HRBT project is November 2025 — although work is behind schedule by more than a year. Nonetheless, the Virginia Department of Transportation continues to work closely with HRCP to mitigate delays and reach project milestones.

 

Photo courtesy Dominion Energy

Fairwinds Landing

Norfolk

On June 29, developers held a groundbreaking event for Dominion Energy’s two-building Monitoring and Coordination Center (MCC). It joins Newport News Shipbuilding as the two largest tenants to date in Fairwinds Landing, a maritime operations and logistics center supporting Hampton Roads’ offshore wind, defense and transportation industries. Set to occupy the 122-acre Lambert’s Point Docks, the $100 million project is expected to be home for other major tenants, officials say. Fairwinds Landing is beginning to see an increase in vessels berthing at its facility that are supporting Dominion’s
$9.8 billion Coastal Virginia Offshore Wind farm, under development 27 miles off the Virginia Beach coast. A limited liability corporation, Fairwinds Landing is a partnership between The Miller Group, Balicore Construction and Fairlead Integrated. Developers continue to predict the project will be largely completed in three to five years, with the MCC ready by 2025 and accommodating 200 construction and engineering jobs.

 

Photo courtesy Stihl Inc.Photo courtesy Stihl Inc.

Stihl Inc. headquarters

Virginia Beach

Last year, Stihl Inc., the U.S. subsidiary of the German chainsaw and outdoor power equipment manufacturer, announced a $49 million expansion, adding 26,000 square feet to its 60,000-square-foot headquarters and manufacturing facility in Virginia Beach. The company plans to increase its capacity to manufacture chainsaw guide bars by a third, creating 15 jobs.
The site for the guide-bar facility expansion was cleared in October 2022, and the building structure was completed in February. The construction is currently in the commissioning phase, with all machines expected to be installed by the end of this year. Production is estimated to begin in early 2024, the company said in June. Stihl is also expanding its battery manufacturing operations, with plans set to be announced later this year.

 

Photo courtesy Fairbanks Morse Defense

Fairbanks Morse Defense

Chesapeake

Fairbanks Morse Defense, which builds, maintains and services naval power and propulsion systems, opened its newest training and service center campus in Chesapeake on May 17. FMD moved 40 jobs from its former service center in Norfolk to Chesapeake and also added
10 jobs. The $13 million, 45,000-square-foot facility offers fully integrated service and technology solutions to the Navy, Military Sealift Command and Coast Guard fleets. The move to Chesapeake came after the Navy informed FMD it was interested in increasing the number of field service technicians and having the training facility close by. All equipment can now be serviced in the 25,000-square-foot service area in Chesapeake, and training across all products sold by FMD can be completed at the new facility’s 20,000-square-foot training space, instead of in Wisconsin, where it was previously conducted.

 

 

Building blocks

If you ask economic development officials in Central Virginia about 2022, they might respond with a familiar slogan: “Everything is awesome.”

With almost 5,000 announced jobs and $1.6 billion in capital investment, the Richmond region had one of its best years
in the last two decades.

By October 2022, the region recovered 100% of jobs lost during the pandemic, says Greater Richmond Partnership President and CEO Jennifer Wakefield, but the recovery was lopsided. The IT, finance and insurance sectors continue to lag, she explains, “but we’re looking to attract more companies in these areas since they include high-paying wages.”

Heading into 2023, the region may look to build on megadeals such as the June 2022 announcement that Danish toy maker Lego Group had picked Chesterfield County for a $1 billion manufacturing plant. (See related story, Page 15.) In September, San Francisco-based Plenty Unlimited Inc. announced plans to invest $300 million to build the world’s largest indoor vertical farm in the county, bringing 300 jobs to Meadowville Technology Park.

“We’ve never seen this volume of megaprojects before,” says Henrico Economic Development Authority Executive Director Anthony Romanello.

Richmond

In November 2022, Washington, D.C.-based commercial real estate data and analytics provider CoStar Group Inc. broke ground on an expanded research and technology campus on the downtown riverfront. The $460 million expansion will bring nearly 2,000 employees to the city. The project, announced in December 2021, is expected to be complete in early 2026. The company also purchased a 117,500-square-foot, $20 million office building across the river in the city’s Manchester area in May 2022.

“Having a new corporate campus shows that companies are still investing in office projects and creating jobs in Richmond,” says Richmond Director of Economic Development Leonard Sledge.

Between July 1, 2021, and June 30, 2022, the city landed $552 million in capital investment, creating an expected 2,237 jobs. Those projects include an expansion by Massachusetts-based Thermo Fisher Scientific Inc., which in March 2022 announced it would invest $97 million to expand its clinical research operations by nearly 150,000 square feet while adding 500 employees in the Richmond area during the next three years. The project is a joint one with Henrico County, and while much of the investment will be there, including two labs, Thermo Fisher will add significant space to its operations in the city at the
VA Bio+Tech Park. 

Also in March 2022, Pennsylvania-based warehousing and logistics company A. Duie Pyle Inc. announced it would invest $20 million and add 75 jobs to establish three cross-dock service centers in Manassas, Roanoke and Richmond, where 25 of those jobs will be located.

Meanwhile, Richmond’s city government has been sparking some of the region’s largest projects ahead. In September 2022, Richmond selected the RVA Diamond Partners LLC development team, led by Thalhimer Realty Partners, to develop the Diamond District, a $2.44 billion neighborhood redevelopment project. Being built on 67 acres along the Interstate 95 corridor, the mixed-use project will include 2,800 residential units and a new baseball stadium for the Richmond Flying Squirrels, expected to open for the 2025 Minor League Baseball season.

Additionally, in December, the Richmond Economic Development Authority and the Greater Richmond Convention Center Authority received five development proposals for the City Center Innovation District, a 9.4-acre mixed-use downtown redevelopment project that will include demolishing the closed Richmond Coliseum and adding a hotel.

Henrico County

Henrico had not landed a $1 billion economic development project since Facebook announced a data center there in 2017. That changed in 2022 when the county saw a record six $1 billion-plus projects, says Romanello. Henrico saw total economic development investments of $264.2 million, adding 1,271 jobs, in fiscal year 2022, which ended June 30, 2022.

“What made 2022 unique was the number of advanced manufacturing and data center megaprojects that came to us,” Romanello says, “and we continue to work dozens of projects, from the megaprojects to small businesses and everything in between.”

Last year marked a year of expansions in the county as well.

Boston-based SimpliSafe, a producer of DIY home security systems, announced in July 2021 it was investing more than $3 million to expand its Henrico operations, adding 250 jobs. The company opened its first customer service call center in Willow Lawn in 2020; it opened a second location in Innsbrook last year. “They liked us so well, they doubled down and made a second investment,” says Romanello.

On the sweeter side, snack food maker Mondelez International Inc. opened a new distribution site in Henrico in November 2022, part of a $122.5 million investment and expansion in the county, creating about 80 jobs. The company produces brands such as Oreo, Ritz, Wheat Thins and Chips Ahoy!

Additionally, EAB, an education research, technology and marketing company, announced in June that it would invest $6 million and add more than 200 jobs in Henrico during the next five years, relocating and consolidating from two area locations into a 70,000-square-foot space on West Broad Street.

Gov. Glenn Youngkin and friend at the June 2022 announcement event for Lego Group’s $1 billion Chesterfield County manufacturing facility Photo by Shaban Athuman/Richmond Times-Dispatch
via Associated Press

Chesterfield County

Aside from its massive, headline-generating Lego factory announcement, Chesterfield County scored big wins in agriculture and pharmaceuticals in 2022, tallying a record $1.47 billion in investments and 2,658 jobs during fiscal 2022.

Announcements from agriculture company Plenty Unlimited Inc. and nonprofit drugmaker Civica Rx in September 2022 added to the county’s gains. Plenty is slated to open the first phase of its 120-acre $300 million indoor vertical farming campus, billed as the world’s largest such facility, late this year or in early 2024. Civica is investing $27.8 million to construct a 55,000-square-foot laboratory testing facility in Chesterfield to support its Petersburg pharmaceutical manufacturing operation. The project expects to create 51 jobs.

Also in the works is a $108 million, 179,000-square-foot renovation and expansion of Bon Secours St. Francis Medical Center, near Midlothian.

Hanover County

Hanover Director of Economic Development E. Linwood Thomas IV says the county has seen “significant demand in manufacturing and logistics space, and we are seeing emerging growth taking place in the bio and life sciences segments of our local and regional economy as well.” 

For the 12-month period ending June 30, 2022, the county added more than 1,960 jobs across all industry sectors and announced more than $243 million in new projects.

In February 2022, Walgreens Co. announced an investment of $34.2 million to establish a pharmaceutical micro-fulfillment center at Atlee Station Logistics Center. The project will create 249 jobs and is scheduled to be completed in the first quarter of this year. That was followed by a July 2022 announcement from Toronto-based Unilock, which manufactures concrete paving stones and segmental wall products. The company plans to invest $55.6 million to establish a manufacturing campus in Doswell, adding 50 jobs. Construction is expected to begin this year. Finally, Pennsylvania-based Lutron Electronics announced in September 2022 that it will invest $28.3 million to build a 145,000-square-foot manufacturing facility, adding about 200 jobs.

Lynchburg and Charlottesville

Lynchburg continued to capitalize on its LYH Loves You branding campaign, which launched in summer 2021. The campaign, part of the city’s five-year strategic plan, aims to attract business investment and talent, says Anna Bentson, the city’s assistant director of economic development and tourism. In 2022, Lynchburg’s economic development authority directly supported expansions by Flowers Baking Co. and Bausch & Lomb, resulting in $65 million in investment and 94 new jobs.

Meanwhile, Charlottesville continues to see growth as an innovation hub for technology and life sciences, says Chris Engel, who directs the city’s Office of Economic Development.

In January, the University of Virginia announced it will build a $300 million biotechnology institute funded in part by a $100 million donation from Charlottesville investor Paul Manning and his wife, Diane. Expected to open around 2027 at U.Va.’s Fontaine Research Park, the Paul and Diane Manning Institute of Biotechnology will focus on translational medical research to produce new treatments — such as cellular and gene therapies, nanotechnology and immunotherapy — that are expected to treat many different diseases. UVA Health is recruiting researchers who will work for now in the system’s existing facilities.  

Here to stay

Composite decking and railing manufacturer Trex Company Inc. has called the Winchester community home for more than 25 years, so when it came time for the company to construct a new global headquarters, Winchester was top of mind.

“Trex was already based in the area, so they were familiar with the city and approached us when they began considering sites for their new headquarters,” says Winchester City Manager Dan Hoffman. “From there, it was important to start building a relationship and listening.”

Last spring, the publicly traded company broke ground on its 64,000-square-foot, $7 million global headquarters on eight acres along Crossover Boulevard near Interstate 81. The company’s corporate offices, approximately 40,000 square feet, are currently located on Exeter Drive in Frederick County.

About 200 people will work in the new headquarters, which is set to open midyear. In 2020, Trex was one of the nation’s 100 fastest-growing companies, according to Fortune magazine, and it brought in more than $1.2 billion in fiscal 2022.

“Trex has experienced tremendous growth in recent years. As the company rose to meet the demands of our customers, it quickly became clear that our current headquarters location could no longer support the growth of our team,” says Bryan Fairbanks, its president and CEO. “We began to look for an opportunity that would afford us the space we needed but also the modern work environment and technologies that our team members desired.”

Early in the process, the company had considered other locations in Winchester and Frederick County but was drawn to the I-81 corridor.

There are limited sites along I-81 that are already prime for development and also have access “to the amenities that Winchester has to offer, such as an excellent school system, an extensive network of parks and trails, and a historic downtown,” Hoffman says.

The location along Crossover Boulevard also offered space for future expansion as well as easy access to transportation routes and visibility along I-81. The new headquarters will feature eco-friendly elements such as electric vehicle charging stations and rooftop solar panels.

As with any modern workspace, the new corporate headquarters “will provide opportunities for greater collaboration and recruitment of top talent,” Fairbanks says. “Additionally, the location is closer to our Winchester manufacturing campus, which will support synergies across our work streams and sustain growth moving forward.”

Between the new corporate headquarters and a 200,000-square-foot expansion for decking production added to its Frederick County manufacturing campus on Shawnee Drive in 2021, Trex expects to create about 350 jobs in the Winchester and Frederick area, including 150 manufacturing jobs, many of which the company says already have been filled.

One of the components of the headquarters deal was the promise of incentives. “The incentive itself was fairly straightforward, so it just needed to go through the proper approval processes. Our economic development authority and city council both had to approve it,” Hoffman says.

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 deal went smoothly, Hoffman says. “We were very upfront about what was possible, and the executive team at Trex was great to work with. My hope is that this sends a message to other companies looking for a new home,” he continues. “We have other sites in the city that would be ideal landing spots for a large or midsized company.”

“We are honored the city of Winchester is the destination for Trex corporate headquarters,” says Rick Cobert, executive director of the Winchester EDA, adding that having “one of IndustryWeek’s 50 best U.S. manufacturers exemplifies our focus on target industry attraction.”

Trex has a long, rich “history in the Winchester and Frederick County area and is proud to be part of such a strong and supportive community,” Fairbanks said in a statement. “This is our home, and we are pleased to be able to contribute to the health and prosperity of the area through jobs creation, community involvement and national recognition from our industry-leading products and brand.” 

A time to build

The Shenandoah Valley Partnership had more economic development activity than “anyone anticipated in 2022,” says Jay Langston, the partnership’s executive director.

During the calendar year, the partnership saw close to $140 million in investment and 520 jobs. 

In Fishersville, Amazon.com Inc. is building a $120 million, 1 million-square-foot nonsortable fulfillment center, which handles bulky or large items such as patio furniture, outdoor equipment or rugs. The building, 85% complete as of late January, is expected to be finished this spring, according to Langston.

“I’ve been in this business for 38 years and never had a project like that come in so fast,” he adds. “It was the right place and the right time. Augusta County did a superb job working with consultants and engineers. It was a huge team effort.”

Additionally, Rockingham Cooperative in Rockingham County will invest nearly $17 million to upgrade and expand its grain handling and feed manufacturing operations, adding up to 20 jobs.

“This is a major investment because of the growth of agriculture in the region,” Langston says. “We have four of the top five agriculture top-producing counties in Virginia in this region.”

Augusta County

Augusta County’s economy held strong with the February 2022 announcement of Amazon’s nonsortable fulfillment center.

With 21% of the county’s workforce in manufacturing, “job openings in that sector, particularly, continued to grow,” says Rebekah Castle, the county’s director of economic development and marketing. “There continues to be great potential for growth with growing job openings and programs like Blue Ridge Community College’s Job Starter, paid training providing the skills … needed to be successful starting a job in advanced manufacturing.”

Harrisonburg

“Active and productive” are the words Brian Shull, Harrisonburg’s economic development director, uses to describe the city’s economic development in 2022.

Farmer Focus completed construction on its organic chicken packaging facility, a $65 million-plus project in northern Harrisonburg, in February 2022.

“This project led to enhanced business interest in surrounding greenfield sites,” undeveloped land that can be used for commercial or residential development, Shull says. 

Lauf Cycling, an Icelandic high-end bicycle manufacturer, selected Harrisonburg for its U.S. headquarters, including a showroom and distribution center. The company made the announcement in April 2022 and signed a five-year lease for a 6,500-square-foot shell building in downtown Harrisonburg at 156 E. Washington St., which the bike maker plans to build out. Lauf’s projections call for hiring approximately eight employees in three years. Capital investment figures for the facility build-out have not been released.

“Harrisonburg has such a strong cycling and outdoor recreation culture,” Shull says. “Lauf quickly recognized this asset and wanted to be part of it.”

Harrisonburg Innovation Hub (HIH), a coworking center, is expected to open in the former Wetsel Seed building downtown late this year. The HIH team purchased the 25,648-square-foot building for $2.88 million and expects the purchase and renovation costs to total $4.5 million. The space will offer up to 60 offices, rooftop event space and an AV production studio, developers say.

In addition, Blue Ridge Rubber & Industrial Products Co., an industrial rubber hose fabricator, is investing $700,000 to expand its Harrisonburg manufacturing facility on Acorn Drive, near Eastern Mennonite University.

Thanks to increased tourism spending and James Madison University’s first year in the Sun Belt Conference, Harrisonburg also experienced a healthy bounce in hospitality sector tax revenue in 2022. Compared with 2021, Harrisonburg saw a 15.8% jump in meals tax revenue, a 12.1% rise in lodging tax revenue and a 9.2% increase in sales tax revenue.

Rockbridge County

The past year was the most productive year Rockbridge County had seen in economic development over the last five years.

“In addition to establishing an office of economic development, the county started developing its first strategic economic development plan to guide future economic development efforts,” reports Brandy Flint, the county’s director of economic development. “We have two new commercial construction projects underway and two more to start next year.”

The estimated value of all 2022 commercial building permits, including new construction and renovations, was “approximately $18.6 million,” she adds.

The conversion of a Modine Manufacturing Co. warehouse into a manufacturing plant was a $7 million project that kicked off in 2021, with work completed in November 2022. “That project has continued into 2022 with an increased scope of work and additional employment,” Flint says, noting the plant’s projected 60 jobs has increased to 73 because of an increase in sales.

Rockingham County

Rockingham County’s growth in 2022 was a balance of new and existing business expansions and announcements.

“The county is fortunate to have such a diverse economic base of manufacturing, food and beverage and service-related businesses throughout the community,” says Joshua Gooden, the county’s economic development and tourism coordinator.

In 2021, Veronesi Holding S.p.A. selected the county to become the first North American location for its cured meat processing facility located in Innovation Village @ Rockingham. The Italian company broke ground in February 2022 on the facility, which is anticipated to be completed this spring. The plant is expected to bring 150 jobs to the county.

Meanwhile, Gooden says, the $6.5 million expansion of Virginia Industrial Plastics Inc.’s plant in Rockingham, a project that was expected to create 92 jobs, has been delayed. The project was announced in 2021.

Shenandoah County

Shenandoah County saw a dramatic increase in the number of leads and interest in properties throughout 2022, says Jenna French, the county’s director of tourism and economic development.

“Our industrial development authority entered into an option-to-purchase agreement on a 21-acre parcel in the Northern Shenandoah Business Park in Strasburg, and one of our larger parcels of industrially zoned land recently sold in the Toms Brook area,” she says.

Shenandoah crossed the finish line with one of its larger tourism projects, a $109 million wellness and nature resort known as Simply Shenandoah, which is slated to break ground this spring and open to guests in 2024. The deal is expected to create 125 jobs.

“With tourism being the second largest industry in our county, this is a welcome addition that fills a unique niche for the county, offering a higher end experience and additional lodging opportunities,” French says.

Waynesboro

Waynesboro’s economic development wins were a bit smaller than those in other localities, but Greg Hitchin, the city’s director of economic development and tourism, notes, “We opened five businesses this summer, and all are doing well.”

Also, the Virginia Museum of Natural History’s Waynesboro campus is moving forward, with the design phase set to end in June 2023. Contingent on General Assembly funding, groundbreaking is tentatively scheduled for 2024, with a spring or summer 2026 opening. The city expects the museum to draw more than 65,000 visitors annually.

Winchester

In Winchester, one of 2022’s major economic wins was the redevelopment of the Winchester Towers property, with Lynx Ventures LLC leading a mixed-use project with 175 residential units and a structured parking facility, as well as retail and dining space.

“Combining the housing with the services enhances socialization and provides the businesses with ready consumer activity. It’s a win-win for all involved,” says Winchester Mayor John David Smith Jr.

The city’s economic development authority leveraged the state’s enterprise zone program to facilitate an $11 million expansion of Continental AG, generating 67 manufacturing jobs as well as other investments. The authority didn’t provide incentive details.

In December 2021, TFC Poultry LLC announced it would invest $31.5 million to establish its second U.S. production facility in Winchester at the former Sunshine’s Pride Dairy facility, which was expected to open by April. The project is anticipated to create 111 jobs.

Trex Company Inc., one of the major brands of composite decking, is building a $7 million, 64,000-square-foot global headquarters and adding 200 employees. (See related story.) Announced in January 2022, construction is underway with completion anticipated in the third quarter of 2023.

A ‘golden unicorn’

Chesterfield County Economic Development Director Garrett Hart and Managing Director Matt McLaren had no idea which global client a site selection consultant was representing when the county was approached in November 2021 to discuss a potential major economic development megaproject.

“All we knew is that they were in manufacturing, and it was around a $700 million project,” and that the company wanted to include a large a solar energy component and for the project to be carbon-neutral, Hart recalls.

And he also knew that Chesterfield was one of a handful of localities short-listed by the global client company during its seven-month nationwide site selection search.

During their first in-person visit, the client company’s executives didn’t speak to anyone, Hart says, because “they didn’t want us to hear their accents.”

Finally, during one of the last virtual meetings, each member of the mystery client’s team changed their screen background, one by one. A Lego figure was behind each executive.

“And then, someone had the Lego emblem behind them,” Hart says. “That’s when we knew who they were. It took a few minutes for us to speak again. To have one of the most beloved toy manufacturers making toys in Chesterfield was beyond my comprehension.”

The deal would go on to be announced by Gov. Glenn Youngkin in June 2022: The Billund, Denmark-based Lego Group plans to invest $1 billion over a 10-year period to build a 1.7 million-square-foot, carbon-neutral manufacturing facility on a 340-acre site at the county’s Meadowville Technology Park, creating more than 1,760 jobs. 

“This is not just the unicorn; it’s the golden unicorn of economic development,” Hart says.

The Chesterfield factory, which will include molding, processing and packing operations plus a high bay warehouse, will be Lego’s seventh manufacturing factory worldwide, and the only one in the United States. Lego produces as many as 36 billion of its brightly colored plastic toy bricks annually. 

“They are currently designing the building and working with a lot of groups to figure out how they can best design the building for the future,” says Hart. “They are considering building designs such as mass timber construction, rainwater collection, and an onsite solar farm to lessen their carbon footprint.” (That extends to planting replacements for the 4,500 trees that were cleared from the factory site.)

The county plans to finish work on the site’s pad in March, and Lego “would like to be in production at the end of 2025,” Hart says.

The toy company has also leased a building in the Interchange Walthall Industrial Park, housing its temporary offices.

As of February, Lego had hired 15 salaried positions for the Chesterfield facility, and planned to make 60 production hires by June. Lego will send the first group of workers to train at its Mexico production facility in July, according to Karra McCormick, Lego’s head of talent operations in the Americas. And the toymaker plans to hire 500 workers at Chesterfield within a year.

Until its new campus is complete, Lego will assemble toy kits in its temporary facility, using bricks manufactured at other facilities. “They will be available to purchase at Christmas,” Hart says.

The area’s community colleges and the Virginia Talent Accelerator Program, a workforce initiative created by the Virginia Economic Development Partnership in partnership with the Virginia Community College System and other higher education partners, helped put Chesterfield over the top to secure the Lego megaproject.

Lego also loved the site and its central East Coast location.

“We would not have been in the competition if we didn’t have Meadowville and a site that was project-ready,” Hart says. “Having ready sites is important.”

Lego is already planning a visitor center for its new site and aims to be part of the local community. “They want to be very visible to everyone,” Hart adds.

Discussing their goals for the new factory, Lego executives said that “they wanted their employees and the company to be successful,” McLaren says. “They wanted to understand what our community was about, what issues our community faced, and if they could be of help. This company and their facility will be a wonderful highlight of our community and region.” ν

Assistant Editor Katherine Schulte contributed to this story.

Lynchburg area needs more industrial sites

Megan Lucas knows all too well that no product means no project in economic development, especially when it comes to pad-ready sites and move-in-ready buildings.

The lack of pad-ready sites and industrial spec buildings in the Lynchburg region is the major reason the area has missed 65 economic development opportunities that could have brought as many as 12,000 jobs and $5.5 billion in investments during the past six years, says Lucas, CEO and chief economic development officer for the Lynchburg Regional Business Alliance.

“If you don’t have what they need, they move on,” Lucas says. “This issue isn’t only a Lynchburg regional issue; it’s a statewide issue.”

The alliance represents a region including Amherst, Bedford and Campbell counties that has 13 publicly owned industrial parks of various sizes and readiness and four pad-ready sites. At least two of those sites could support a 100,000-square-foot building, but nothing larger, Lucas says. When businesses approach the region, they’re typically seeking buildings between 100,000 and 150,000 square feet or pad-ready sites of 27 acres or more, she adds. The region has no pad-ready sites of that size. The lack of ready-to-go space is also noted in a five-year economic development strategy released in June 2022 by the Alliance.

Companies interested in the area “can’t wait for us to grade a 50-acre site and get it pad-ready and even get a spec building up,” Lucas says, but “they don’t have that kind of time.”

To rectify the problem, the organization is convening regional business, industry and community leaders during the first quarter of this year “to explore and discuss initiatives and opportunities to get us over the hurdle of pad-ready sites and existing buildings,” Lucas says. Those conversations are expected to examine local development incentives as well as ideas for spec building construction, including public-private partnership possibilities. An outside firm also will be hired to conduct market research.

“Local economic developers have been working diligently to prepare sites in their municipal industrial parks,” Lucas says, adding that grants from GO Virginia Region 2 have helped with due diligence, planning and site development.

The Lynchburg region already has a diversified manufacturing base but, Lucas says, “we need to grow it.” 

Associate Editor Courtney Mabeus-Brown contributed to this story.