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byline: Joan Tupponce

State grant helped keep brewery in Alexandria

Founder and CEO Bill Butcher credits Port City Brewing Co.’s expansion in Alexandria to “a lot of things coming together at the same time.” The lack of industrial-use properties in the area initially forced the company to look throughout the region for a suitable warehouse.

Things started to fall in place, however, when Butcher learned about the Governor’s Agriculture and Forestry Industries Development (AFID) grants from Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership. Around the same time, he found a warehouse in Alexandria that would accommodate his needs.

Funding from an AFID grant “isn’t used that often in the D.C. area because there aren’t many businesses here that support agriculture and forestry,” says Landrum. She was aware that Port City gets 75 percent of its agricultural ingredients from Virginia producers. For example, its best-selling Belgium-style wheat beer, Optimal Wit, is made from Virginia-grown wheat. 

The brewery received a $250,000 AFID grant, which the city will match with local funds. “We talked to Bill about in-kind investments that would help the business, and we are going to be installing a Capital Bikeshare station in front of the brewery,” Landrum says. (Capital Bikeshare provides 3,500 bicycles for rent at 400 stations in the Washington area. The first 30 minutes of each trip are free.)

Port City is spending $2.68 million on its expansion, which is expected to create 26 new jobs. The project will include a new cold storage facility and shipping hub to handle two functions now being done at the brewery’s location where the beer is bottled and kegged. The warehouse will be down the street from that building.

“By moving the cold storage offsite, it opens up more space for upgrades to the bottling line to make it faster and more efficient. We are also bringing in additional fermentation tanks for more brewing capacity,” Butcher says, adding that a second tasting room that can accommodate private parties and events will be added as well.

Port City has averaged 40 percent sales growth each year since it opened in 2011. “This year is on track to be another year of 40 percent sales growth as well,” says Butcher.

In 2015, Port City was named Small Brewing Company and Small Brewing Company Brewer of the Year at the prestigious Great American Beer Festival.

“There were 1,500 breweries that competed, and we won more medals than any brewing company in the country,” Butcher says.

Localities increas­ingly throughout the country are eager to attract breweries, wineries and distilleries, says Landrum. “It was important to keep Port City in Alexandria because it’s a place for corporate activities, for recreation, and it’s an attraction for visitors.”

The Hilb Group grows to 48 offices in 18 states

The Hilb Group’s growth is rooted in its acquisition strategy.
During the past six years the Richmond-based middle-market insurance broker has acquired more than 20 agencies and expanded its presence in 18 states.

The company, now at $100 million in revenue, has 48 offices that stretch from Vermont to Florida. Its next target:  the Midwest. “We are very active right now in deals, and there is a westward push. We have a signed letter of intent in the Midwest and one deal in Texas,” says Robert Hilb, the company’s CEO and founder, adding that he also wants to develop the company’s business in Virginia.

He focuses on quality and loyalty in making acquisitions. “We want good folks that will stay with the firm after the acquisition for as long as possible; that’s a big piece of our strategy,” he says.

Hilb also looks for companies that want to partner with his firm and “take 15 to 20 percent of their deal in our stock,” he says.

Privately held, The Hilb Group is backed by ABRY Partners, a Boston-based private equity firm. “They help us balance the scales of equity in buying the right businesses the right way,” Hilb says. “A big year for us is doing 14 to 16 deals. This year we have done nine to 10 deals and will probably close another three or four.”

Through its acquisitions the company has zeroed in on a variety of specialty practices, such as marine and construction insurance. This year, for example, it bought a business in New Jersey that specializes in medical malpractice insurance.

“We use technology that allows us to expand on that specialty. If one of our agencies in Virginia has an opportunity to write a policy for a group of doctors, they can access our folks in New Jersey, and they will help them write the business,” Hilb says.

The company is very committed to the areas it serves, he says. “We believe in being good stewards of the communities where we are,” Hilb says.

Plans for new ODU art museum are taking shape

Even though it’s still in the planning stages, a new art museum being built at Old Dominion University is creating quite a buzz in Hampton Roads.

The 24,000-square-foot museum, which has not been named, will include art donations from benefactors Richard and Carolyn Barry. The Barrys also will provide operating support through pledged annual gifts and a permanent endowment from their estates.

Richard Barry is a former Landmark Media Enterprises executive. Carolyn Barry serves on the Chrysler Museum of Art board of trustees.

The Barrys’ gift is valued at more than $35 million. It is the largest in the university’s history.

“This is an exciting opportunity for the university,” says Robert Wojtowicz, dean of the ODU graduate school. “We couldn’t be more pleased that the Barrys selected us. We are thrilled to have the collection.”

Two Barry art collections will be showcased at the museum: early modern American paintings (1900 to 1960) and Studio Art Glass works.

“There are nearly 60 paintings in the early modern American collection,” says Wojtowicz. The collection includes works by Arthur Carles, George Luks and Wolf Kahn.

The glass art collection contains work from top artists in the Studio Art Glass movement, which started in the 1960s. “The works range from mixed-media sculptures that are 13 feet high to small-table glass works,” says Wojtowicz. “The glass movement evolved on the Pacific Coast and has become a national phenomenon.”

The Barrys’ glass collection includes about 100 works from internationally renowned artists such as Dale Chihuly, Harvey Littleton and Lino Tagliapietra. ODU also will select some works from its existing collection to fill out the museum, Wojtowicz says.

The new museum will have at least four major galleries. “We are still refining the design of the building,” Wojtowicz says.

It will be constructed on the southeast corner of Hampton Boulevard and 43rd Street, across from the Ted Constant Convocation Center. Saunders + Crouse Architects is creating the initial concepts, which show a two-story building with room for expansion. The cost is still being determined.

One of the museum designs includes exterior cladding with a curving wall of glass. “It looks like a curtain of translucent glass,” says Wojtowicz. “They will be using a relatively new material that will allow diffused light into the interior. From the outside you can look in and discern shapes and the movement of people. It creates a visual metaphor for the collection inside.”

The museum will be near the university’s arts district, which includes art studios, a black box theater, an outer performance shell and an existing art gallery.

Golf course bonds leave Buena Vista in the rough

Buena Vista and New York-based ACA Financial Guaranty Corp. are locked in a legal battle over $9.2 million in bonds issued 11 years ago to build a municipal golf course.

The course, Vista Links, was envisioned as an economic stimulus for the city of about 6,600 people, but it hasn’t lived up to expectations. The city stopped making payments on the bonds in January 2015.

ACA, which insured the bonds, filed suit in Buena Vista Circuit Court June 13, threatening to take over city hall, the police department and the golf course, all of which are listed as collateral on the bonds. The city has asked for the suit to be dismissed.

Under a forbearance agreement negotiated in 2011, ACA reduced the city’s payments by 50 percent through Jan. 1, 2016, with the deferred amount to be paid back interest free over five years after the bonds’ original maturity date.

“Everybody knew going in that these bonds were subject to annual appropriations every year,” says city attorney Brian Kearney. “The payments are $660,000 a year, and that is a lot for real estate development that didn’t work.”

Kearney says the city is willing to talk with ACA at any time to try to resolve the issue. “The city has done everything it can to negotiate in good faith, but ACA refuses to negotiate. If the only negotiation is to make all of your payments in full, that’s not a negotiation.”

ACA argues that the city unilaterally broke the 2011 agreement by failing to make payments. The company says it is willing to resume negotiations with the city but it would “require guarantees from the city that would prevent it from breaking whatever agreement might be reached going forward,” says ACA director James M. Capruso. “However, if the city continues to fail to meet its financial obligations and properly serve its taxpayers, ACA looks forward to responding to the city through additional court filings.”     

Buena Vista, he says, “is trying to have it both ways and is taking great risk by failing to fulfill its financial commitments. The city claimed at the time bonds were issued that it had the authority to present a mortgage. Now the city is conveniently claiming that it doesn’t have to pay its bonds because it didn’t really have the legal authority to grant a mortgage to secure the bonds. This is not the appropriate way to conduct business or represent taxpayers.”

In a news release issued when the company filed suit, it said Buena Vista offered last year to settle its bond obligations by paying the value of city hall, the golf course and the police department building. Together, those assets represent “a value prohibitively less than” what the city owes on the bonds, the company said.

Nissan uses VIR as a testing ground for its autos

Virginia International Raceway’s automotive partner, Nissan North America, is very involved in its events. The company became a sponsor last year.

“Nissan has a motorsports division, and they understand racing,” says Kerrigan Smith, VIR’s chief operating officer. “It’s not like somebody buying a billboard here to show off their brand. Nissan gets what we do.”

Many automobile manufacturers race their cars to help with their research and development. Results on the racetrack can lead to new features on cars sold to the public.

“VIR is an exceptional track to test Nissan technology and performance,” says Rick Kulach, senior planner of motorsports marketing communications for Nissan North America. “It is a beautiful, demanding, exhilarating road course unlike anywhere else, especially in the mid-Atlantic. We’re proud to officially partner with VIR and look forward to a long, mutually beneficial relationship celebrating racing and innovation.”

Built in 1957 in  Halifax County, VIR shut down in 1973 and remained dormant until being reopened in 2000 by investors Connie Nyholm and Harvey Siegel.  Today, Nyholm is the owner and CEO of the 1,370-acre motorsport resort, which includes a hotel, spa and restaurant in addition to the racetrack.
Nearby is the VIRginia Motorsport Technology Park, home to Virginia Tech’s Global Center for Automotive Performance Simulation.

The racetrack’s reputation has continued to grow. “Car & Driver rates us as one of the top six road courses continually each year,” Smith says.
VIR hosts 12 spectator events that include three televised races — MotoAmerica, the Biscuitville 125 and the IMSA Weather­Tech SportsCar Championship.

“We feature open-concept racing. You buy a ticket, and you have free range to roam around,” says Smith. “Before the race, we open Pit Lane, and everybody can walk out to the Fan Walk. That’s where you can feel the heartbeat of the race. It’s the kind of thing that television can’t capture: racing warriors going out to do battle.”

The track draws a diverse group of drivers, including actor Patrick Dempsey, a longtime star on the television series “Grey’s Anatomy.”
“We get lots of NASCAR drivers and a lot of the top European drivers,” Smith says.

Hotel to capitalize on St. Paul’s outdoor attractions

The new Western Front Hotel being developed in St. Paul is a symbol of the transformation taking place in the Southwest Virginia town.

Creative Boutique Hotels, MB Contractors and Cornerstone Hospitality broke ground on the $7.3 million, 33-room hotel in June.

“We will be designing the hotel to accommodate eco and environmental tourists, those who enjoy the outdoors,” says Kimberly Christner, president and CEO of Cornerstone Hospitality and a partner in Creative Boutique Hotels, the development group for Western Front. “The town and its citizens are focused and driven in making St. Paul a destination in Southwest Virginia, and it’s happening.” 

Many visitors travel to the area to take advantage of  Spearhead Trails, an extensive system of all-terrain vehicle (ATV) trails. They also visit the Clinch River, second only to the Amazon among the most bio-diverse rivers in the world. 

“With our ATV-friendly trails we feel that we are now a destination for people to come, stay and play,” says Bob Harrison, chairman of the St. Paul Industrial Development Authority. “We don’t have enough places for these people coming in to town and wanting to stay multiple days.”

In addition to tourists looking for outdoor adventures, the nearby Virginia City Hybrid Energy Center, a  Dominion power plant, draws workers to St. Paul when it undergoes maintenance each spring and fall. “We have about 200 people come in,” Harrison says.

The Western Front, which incorporates two historic St. Paul buildings, will have a restaurant and music venue, rooftop dining room and bar, and outdoor entertainment spaces.

To finance the project, Creative Boutique Hotels is using federal historic tax credits as well as federal grants. The company also has received a $250,000 grant from the Virginia Tourism Growth Fund and several low-interest loans.

The hotel follows the development of the Mountain View Lodge, Copperhead Road Rentals, Saint Paul Suites and Cottages, Fat Boy’s BBQ and Sugar Hill Brewing Co.  All have opened in St. Paul in the   last year.

The Western Front project was a group effort, says Harrison. “There were several people involved.”

One of them is Lou Wallace, co-founder of the nonprofit St. Paul Tomorrow. She had read about the Craddock Terry Hotel in Lynchburg, a former shoe factory that was converted by Cornerstone Hospitality.

“I said. ‘This is what we want to do.’ If you want to be seen as a visionary, you have to dream big,” she says. “We choose to be different and think differently. We want to be a model to other communities.”

Neustar to split its operations into two companies

If all goes as planned, Sterling-based Neustar will divide itself into two companies next year.

“We did some analyses and determined that segregating the services into two separate groups and spinning one off would unlock shareholder value,” says Lisa Hook the company’s president and CEO.

One company, which has not yet been named, will include the majority of Neustar’s information services business, which provides marketing, security and data services. Revenue from these businesses totaled $470 million last year, with a compounded annual growth rate of 25 percent during the past four years.

The other company, which will keep the Neustar name, will provide order management and numbering services to wireline, wireless and cable communications providers as well as to social media and messaging platforms. Revenues from these services were $580 million in 2015, with a four-year growth rate of 8 percent. 

Revenues, however, could be affected by the loss of a U.S. number portability contract that Neustar has held since 1997.

The New York Times reported in July that the FCC has decided in a closed-door session to award the contract to Telcordia, a subsidiary of Sweden-based Ericsson. Neustar has been fighting to keep the contract since an advisory group recommended the switch to Telcordia in 2014.

The contract involves the Number Portability Administration Center (NPAC), which allows U.S. consumers to keep their phone numbers if they switch providers.

Neustar will continue to provide number portability services for the Canadian telecommunications industry. The company announced in early August that it has signed a deal with the Canadian LNP Consortium Inc. that lasts until the end of 2018.

Hook says one reason for splitting Neustar is that the two business groups tend to develop and grow differently. “The service industry is a different industry with different skill types. The separation will enable management of each company to have a better focus and move more quickly than today.”

Hook will become president and CEO of the information services company. Paul Lalljie, Neustar’s current senior vice president and CFO, will be president and CEO of the numbering services company.

In late July, Neustar reported  second-quarter revenues of $297.6 million, up 16 percent from the same quarter last year. Adjusted net income rose 12 percent to $69.4 million.

New president named at 70-year-old Southern Air

Lynchburg-based Southern Air this year is marking its 70th anniversary with the appointment of a new president, Paul Denham.

Denham, who previously served as executive vice president, has more than 25 years of experience in the industry. He succeeds Ronnie Kidd, who is the company’s CEO.

“It’s been a very smooth transition,” says Ben Wilkinson, vice president of business development. “Paul is a professional engineer. He worked his way up through the company. He started as a project manager.”

Engineer George Costan founded Southern Air in 1946. Over the years it has grown from a residential heating company to a full-service design/build mechanical and electrical contractor.

The company employs 750 to 800 people, depending on the time of year, and averages $115 million in sales volume annually. “We focus on slow, controlled growth,” Wilkinson says.

He credits that growth to Southern Air’s attention to detail and focus on customer service.  “We take care of our customers. We service what we sell, and we make sure it’s right. We have a lot of repeat customers. Our service retention rate is over 90 percent.”

Southern Air has a 60,000-square-foot fabrication facility in Lynchburg and construction offices in Roanoke, Mechanics­ville, Charlottesville and Bluefield, W.Va.

The company also has service locations in Winchester, Newport News, Fredericksburg, Harrisonburg and Greensboro, N.C.

Most of the company’s business comes from commercial and industrial customers, but it also handles residential replacement work in Lynchburg and Charlottesville.

Wilkinson says Southern Air was the first Lynchburg-area  contractor to start a four-year, state-approved apprenticeship program.

“One of the problems facing the industry today is finding qualified individuals that want to get into the construction industry,” he says. “Our apprenticeship program is trade specific. All of the instructors are certified by the state. People in the program work during the day and go to class at night. Up to 80 employees go through the program every year.”

University status results from 6 years of change

After years of planning, Mary Baldwin College will officially become Mary Baldwin University on Aug. 31.

“To me the significance is not about the name change per se, but that Mary Baldwin University will accurately reflect the ongoing character of this institution,” says the university’s president, Pamela Fox. “We have been advancing the institution with a series of initiatives for the past six years, and this brings us to the point that we truly are a distinctive, small university.”

Mary Baldwin, which will mark its 175th anniversary next year, was founded as Augusta Female Seminary in 1842. It became Mary Baldwin College in 1923 when baccalaureate degrees were first awarded.

Long known as a college for women, Mary Baldwin now has an enrollment of 1,700 students, including men and women. Its residential program remains all female, but men and women participate in its online, adult and graduate programs.

“As we become Mary Baldwin University, we are serving the broadest spectrum of individuals, from certificates to doctoral programs, in class and online. We have a diverse group of students,” Fox says.

Mary Baldwin has campuses in Staunton and Fishersville as well as 11 regional locations throughout the state. As a university, it is shifting to an organizational structure that includes several colleges — the College of Education, College of Arts and Sciences, College of Business and Professional Studies, and the Murphy Deming College of Health Sciences. Mary Baldwin also has the Virginia Women’s Institute for Leadership, the nation’s only all-female corps of cadets.

Mary Baldwin added doctoral programs in 2014. The first two  — programs in physical therapy and occupational therapy — are offered by the Murphy Deming College of Health Sciences. “We will hand out our first doctoral degree in May 2017,” says Crista Cabe, Mary Baldwin’s vice president for communication, marketing and public affairs.

After the name change, Mary Baldwin plans to announce new program initiatives, some of which will help streamline a student’s path from a bachelor’s to a master’s degree. Education students, for example, will be able to earn bachelor’s and a master’s degrees in four years. “We will also have a year-round track for earning bachelor degrees in biology, psychology and health sciences in three years,” Fox says.

Distillery shows owner’s whiskey making legacy

James Gordon, the owner of Springfield Distillery, comes by his interest in whiskey naturally.

“I grew up with memories of my father moonshining,” says Gordon, who is opening his Halifax County distillery in August. “My father is one of the first two private individuals in South Africa to get his license for distilling liquor. I get to tap into 25 years of distillery experience.”

In 2012, Gordon and his wife, Kelly, bought Springfield Farm in Halifax, which includes a home built around 1842. They moved to Southern Virginia from Fairfax County.

“There are rumors that there is an old still on this property,” Gordon says. “This area became known for making corn whiskey prior to Prohibition, and it continues to be a good place to distill whiskey.”

The couple wanted to develop a business that would be a good fit for the local economy and also be “a tourist opportunity that would highlight everything we like about Halifax,” Gordon says.

Springfield Distillery is expected to create five jobs and get all of its corn and barley from Virginia farmers. “Our neighbor across the road is growing our corn,” Gordon says. “I can throw a coin from the distillery and hit the corn we are using.”

In opening the distillery, Gordon’s company invested $160,000 in site improvements and equipment while also creating a tasting room and remote-licensed ABC store. Springfield Distillery will purchase almost 150,000 pounds of Virginia corn and barley during the next three years.

“It takes a considerable amount of investment to get into the distilling business,” Gordon says. “There is a lot of regulation and compliance before you can move ahead to producing product.”

Visitors to Springfield Distillery will be able to view the whiskey-making process and then sample the resulting product in a tasting room fashioned from a cabin. The cabin, built in the 1800s, previously was located on a tobacco farm. The DIY Network television show “Barnwood Builders” took the cabin apart and reassembled it at its new location.

Gordon plans to rent out two other cabins at the farm to vacationers. “We will ultimately have four cabins on the property,” he says. “We are near the popular wedding venue Berry Hill Resort. We are looking to collaborate with them to host functions at the distillery.”

Gordon hopes to distribute his whiskey not only in the U.S. but also overseas. “We have some international distributors as far away as New Zealand that are interested in looking at the product,” he says.