Democratic state delegates excoriated Virginia Gov. Glenn Youngkin on Tuesday for taking Virginia out of the running for a $3.5 billion Ford Motor Co. battery manufacturing plant that would have created at least 2,500 jobs in Southern Virginia. The governor said last week that although Virginia was a finalist for the economic development project, he called a stop to the plant because of its ties to a Chinese company, saying that he didn’t want Ford to serve as “a front for China” in Virginia.
“We all thought we were trying to achieve the same bipartisan goals of bringing good-paying jobs and economic development to Virginia, but apparently, in his absence last year, the governor missed that part of the transition briefing,” Loudoun County Del. David Reid, a Democrat, said on the House of Delegates’ floor. Reid was referring to Youngkin’s extensive 2022 domestic travel schedule, which many political onlookers saw as Youngkin testing the waters for a 2024 presidential run. “At this point, the governor needs to go to Southside, hold a town hall and explain why it is OK for him to make tens of millions of dollars off of investments in China and Chinese investments in the United States when he was in Carlyle Group, but he decided to play politics when it came to the livelihood for an entire region.”
According to a Richmond Times-Dispatch report, Ford was considering building a plant for electric vehicle batteries at Pittsylvania County’s 3,528-acre Southern Virginia Mega Site at Berry Hill, which so far has no tenants, while the state and other investors have spent more than $200 million to prepare the site for industrial use. The plant would have been run by Chinese company Contemporary Amperex Technology Co. Ltd. (CATL), which builds lithium iron phosphate batteries.
Reid, who served as an intelligence officer in the Navy Reserves and worked as a defense contractor, said that “no one in the intel community has ever even remotely implied that Ford was a front company for the Chinese.”
However, Chinese influence in the U.S. has become an increasingly popular talking point among GOP political leaders, including Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, who are both considered potential candidates for the Republican presidential nomination. DeSantis has said in recent days that he will ask Florida lawmakers to bar Chinese investors from buying farmland and residences, and a Texas legislator has filed a bill that would prevent residents, governments and entities of China, Iran, North Korea and Russia from buying land in Texas.
Former President Donald Trump, the only announced GOP presidential candidate, criticized Youngkin in November 2022, claiming credit for his gubernatorial win and using an anti-Asian slur, saying that Youngkin’s name — spelled by Trump as “Young Kin” — “sounds Chinese.” The governor declined to criticize Trump, saying “I do not call people names.”
Youngkin, like Abbott, also barred all state employees from using state-issued phones or Wi-Fi networks to access Chinese-owned phone apps TikTok and WeChat in a December 2022 executive order, saying in a statement that “TikTok and WeChat data are a channel to the Chinese Communist Party, and their continued presence represents a threat to national security, the intelligence community and the personal privacy of every single American.” During his State of the Commonwealth speech last week, Youngkin called on the state legislature to ban selling Virginia farmland to Chinese investors.
“It is deeply disappointing that Gov. Youngkin would turn away business investment and jobs from Ford Motor Co. due to political considerations and a new obsession with China. It’s clear that the governor has put his personal politics above jobs for Virginia communities,” Democratic state Sen. Jennifer McClellan, who is running for the late Donald McEachin’s congressional seat, said Friday.
However, as Reid noted, when Youngkin was co-CEO of Carlyle Group Inc., a Washington, D.C.-based private equity fund, he benefited financially from the company’s investments in Chinese industries, including ByteDance, TikTok’s parent company. In 2021, when he was running for governor, Youngkin had an estimated net worth of about $400 million, making him the wealthiest governor in the state’s history.
Republican delegates defended Youngkin’s decision to pull Virginia from consideration for the Ford plant. “Bringing the right jobs to Danville … is critical,” said Del. Terry Kilgore, a Republican who serves on the state Tobacco Region Revitalization Commission, which assists localities in Southern and Southwest Virginia in boosting economic development projects with funds from tobacco civil lawsuits settled decades ago. “But Bloomberg reported in December that Ford Motor Co. was planning to run this proposed electric vehicle plant through a conglomerate that coordinates closely with the Chinese Communist Party.”
The Dec. 15, 2022, Bloomberg news article notes that former U.S. House of Representatives Speaker Nancy Pelosi’s trip to Taiwan last year strained relations between the U.S. and China, leading to CATL’s delay in building a new facility in North America, which would have been constructed in Virginia or Michigan, according to multiple news reports. Under Ford’s agreement with CATL, the American vehicle builder would own 100% of the plant while CATL would operate the plant and own the technology to build the batteries.
Meanwhile, Virginia Beach Republican Del. Tim Anderson cautioned against the use of cobalt in electric car batteries, arguing that “child slaves” are mining cobalt used in batteries and other tech devices. “If we’re going to bring new business to Virginia, I would like to bring something to Virginia that doesn’t have slave trade supply-chain issues.”
Siddharth Kara, a Harvard visiting professor, has written a book being published later this month about horrifying conditions at cobalt mines in the Democratic Republic of the Congo, including child labor, which has also been reported by The New Yorker and other media outlets. The mineral is used in the production of lithium-ion batteries. According to the 2021 New Yorker story, cobalt keeps the batteries from catching fire, and cobalt’s value has gone up significantly in recent years.
However, lithium iron phosphate batteries — the kind that would be produced by the Ford plant — do not use cobalt, and electric vehicle manufacturers, including Tesla, are increasingly moving toward cobalt-free batteries, according to news reports.
With inflation decreasing but still not at its 2% target, the Federal Reserve still needs “to stay on the case,” Federal Reserve Bank of Richmond President and CEO Tom Barkin said Thursday at a conference hosted in Richmond by the Virginia Bankers Association and the Virginia Chamber of Commerce.
Inflation continued to slow in December 2022, decreasing to 6.5%, down from 7.1% in November, according to a Bureau of Labor Statistics report released Thursday, as gas prices and airfares lowered. The Fed’s increases in interest rates last year were done “quickly … but what we were doing was taking our foot off the gas,” Barkin said. “Now, it makes sense to steer more deliberately. The last two months’ inflation prints have been a step in the right direction, but I would caution that while the average dropped, the median stayed high.”
Following his speech, Barkin said that his preferred rate of inflation would be between 1.5% and 2.5%. “I think you have to be careful about declaring victory too soon,” he said, “because I think Fed credibility does matter.”
Barkin also noted a heterogeneity in business practices — some companies have reached their peaks in pricing, while others are still raising prices to improve their profit margins, which keeps inflation rates higher. That’s a different attitude from the past 20 years, when businesses kept costs from reaching customers whenever possible, he observed.
As for the forecasted 2023 recession — “the most predicted potential recession in memory,” Barkin said — “the data we’ve seen on spending, investment and employment keep pushing the timeline out, unless you are in housing or sell into a low-income customer base, or are a deal maker, or are dependent on digital advertising.”
One factor that seems to be easing is the labor shortage, at least in some sectors, Barkin said after his speech. “As I talk to employers, the pressures that were so serious a year ago on the labor side are easing, at least for professionals, who are increasingly nervous about [a] recession or layoffs in tech. For frontline service workers, [companies] have found ways to automate [to] become more efficient. [But] it feels to me that there’s significant wage pressures in the skilled trades — nurses, plumbers, truck drivers, carpenters — the demand is still very high and the supply is just not there.”
Richmond-based Estes Express Lines, now entering its 92nd year, has promoted Webb Estes to president and chief operating officer, while his father, former president Rob Estes, will continue as board chairman and CEO of North America’s largest privately owned freight carrier.
Billy Hupp, another family member who previously was vice president and COO, has transitioned to vice president of the board and corporate executive vice president. In an interview with Virginia Business on Wednesday, Webb Estes noted that being part of the fourth generation in a family-owned business “is a rare thing in this society today. It took a lot of hard work. I feel like I’m standing on the shoulders of giants.”
A William & Mary alumnus, Webb Estes joined the business about 15 years ago, starting as a truck driver and gradually gaining experience throughout the company, including running its IT department, human resources and customer engagement divisions before his recent promotion to president and COO. In 2020 and 2021, Estes Express Lines increased its workforce, mainly due to the increase in shipments and deliveries during the pandemic, and the company now has about 22,000 employees. Estes said that the less-than-truckload (LTL) company, which carries loads averaging about 1,200 pounds, has focused on worker retention, and its driver turnover rate has ranged between 12% and 15%, down from the LTL industry average of 22.5% in 2021.
Unlike long-haul truckers, Estes’ drivers typically can get home each night after work, a priority for the company, Estes said. Another priority is using more sustainable transportation methods; this year, the company will receive 12 electric trucks, which were ordered before the pandemic and will be used primarily for testing, and has recently purchased 300 electric forklifts. Also, Estes has partnered with Amazon.com Inc. and startup Remora, which produces a carbon-capture system for freight vehicles that is expected to arrive at Estes in February or March.
As for self-driving trucks, Estes says, “I don’t have a crystal ball,” but he is “all for technology” that makes drivers’ lives easier, such as routing technology that provides up-to-date traffic information and other data.
A Richmond resident, Webb Estes is a father of three “as of last Thursday,” and enjoys coaching his daughter’s soccer team. He also serves on the National Motor Freight Traffic Association Inc.’s Digital LTL Council.
Pablo Di Si, the Herndon-based president and CEO of Volkswagen Group of America, has been elected chairman of Autos Drive America, a trade association that represents 12 international automakers with presences in the United States, Volkswagen announced Tuesday.
Previously executive chair of Volkswagen’s South America region, Di Si was named president and CEO of the German automaker’s Americas group in July 2022.
“International automakers are critical to the U.S. economy,” Di Si said in a statement. “Companies like ours are embracing the nation’s transition to electric vehicles by investing billions of dollars in strengthening domestic assembly and supply chains, and creating thousands of new jobs for American people. As chairman of Autos Drive America, I’ll be a vocal advocate for international automakers in the United States and make sure our voice is heard.”
Before joining VW in 2014 as president and CEO of its Argentinian arm, Di Si worked in finance and business development in the U.S. and Brazil with Fiat Chrysler Automobiles and Kimberly-Clark Corp. after getting his start managing special projects for The Monsanto Co. He has an MBA in international management from Arizona State University, an accounting degree from Northwestern University and a bachelor’s degree from Loyola University of Chicago. Di Si also received management training at Harvard Business School.
Dr. Arturo P. Saavedra will be the next dean of the Virginia Commonwealth University School of Medicine and executive vice president for medical affairs at VCU Health, the university announced Monday. His appointment is effective April 15.
Saavedra is currently chair of the University of Virginia’s dermatology department and interim CEO of the U.Va. Physicians Group, and before that, he was chief of population health and health policy, and chief of ambulatory strategy and operations for UVA Health. A Harvard and University of Pennsylvania alumnus, Saavedra specializes in HIV dermatology, drug reactions that cause dermatologic complications and care of cancer and post-transplant patients. He also is the senior editor of Fitzpatrick’s Color Atlas and Synopsis of Clinical Dermatology.
“I am very impressed by VCU’s unwavering commitment to its mission and by its citizenship,” Saavedra said in a statement. “I can’t wait to be part of this great university, to learn and grow with it, and to create strong partnerships in advancing all goals of the School of Medicine.”
Saavedra, who was hired after a national search, replaces Dr. David Chelmow, who stepped in as interim dean Jan. 3, 2022, after Dr. Peter F. Buckley resigned to become the University of Tennessee Health Science Center’s chancellor.
“I am pleased to welcome Dr. Saavedra to VCU and our School of Medicine,” VCU and VCU Health President Michael Rao said. “Dr. Saavedra shares our commitment to put the needs of students and patients first. His work at U.Va. demonstrates a deep understanding of medical care and of health policy at every level, experiences that will be invaluable as he leads our work to educate the next generations of physicians and research scientists.”
Atlantic Union Bankshares Corp., the Richmond-based holding company for Atlantic Union Bank, announced Friday it is transferring the listing of its common stock and depositary shares from the Nasdaq to the New York Stock Exchange. The bank’s first day of trading on the NYSE is Jan. 18.
“We are excited to join the NYSE alongside many of the world’s most prestigious and well-regarded companies,” said John Asbury, president and CEO of Atlantic Union. “We believe that the NYSE is the right partner for Atlantic Union as we continue to build long-term value for our customers and shareholders.”
The common stock and depositary shares will be under the ticker symbols of “AUB” and “AUBAP,” respectively, and each is a 1/400 interest in a share of its 6.875% perpetual noncumulative preferred stock, Series A.
As of 11 a.m. Friday, Atlantic Union stock was trading at $36.41 per share, a 2.68% increase from the start of trading at 9 a.m. Atlantic Union has 114 branches in Virginia, Maryland and North Carolina, and as of the third quarter in 2022, the bank had $19.95 billion in assets, $16.546 billion in deposits and was the largest bank headquartered in Virginia. Its fourth quarter and full year 2022 earnings report is scheduled Jan. 24.
Telus International Inc.’s $1.225 billion purchase of Charlottesville-based software company WillowTree Inc. has been completed, the Canadian tech company said Wednesday. The acquisition was announced in October 2022.
The purchase included $210 million of assumed debt, of which $125 million was to be settled in Telus subordinate voting shares. Approximately $160 million will be reinvested by certain eligible management team members and settled subject to certain performance-based criteria, and the remainder was to be paid in cash upon closing.
Majority stakeholder Insignia Capital Group also sold its stake in WillowTree, after having invested in the company in 2018.
According to Wednesday’s announcement, WillowTree will add front-end design-and-build capabilities to Telus’ offerings. Founded in 2008, WillowTree is a software company with roots in mobile app design and development. It has 13 global studios in the U.S., Brazil, Canada, Portugal, Spain, Poland and Romania and more than 1,000 digital strategists, designers, engineers and project managers. WillowTree ranked No. 8 in Adweek’s 2022 list of the fastest-growing agencies in the Southeast United States, and 60th on the national list.
“Our company’s thoughtful approach to maximizing our established market presence post-acquisition includes carefully preserving WillowTree’s strong brand equity while clearly communicating to the market our combined entity’s larger scale and broader suite of complementary capacities that are now enabled for existing and prospective clients,” Telus International President and CEO Jeff Puritt said in a statement.
WillowTree works with brands including Fox, CBC, PepsiCo, Anheuser-Busch InBev, Marriott and others. Its 2021 revenue total was $140 million.
Telus is a communications technology company with $17 billion in annual revenue and operates in 28 countries.
In a letter on WillowTree’s website, President Tobias Dengel wrote, “Above all, we wanted to join a company that, like us, treats its employees and clients with respect and cares about the communities in which we work. While TI and WillowTree offer complementary services, at the end of the day, we are in the same business — finding the best team members and giving them the autonomy and opportunities to delight clients.”
Barclays and Rothschild & Co. served as financial advisers on the deal, Shearman & Sterling LLP served as legal counsel, and Scotiabank provided committed financing to Telus International for this transaction.
Although many political observers doubt there will be much legislation of major significance passed by the split legislature this year, Sen. Joe Morrissey, D-Petersburg, is gambling on a productive 2023.
As one of a slight Democratic majority in the Virginia Senate, the only state body currently under the party’s control, Morrissey is in an enviable position to get some bills passed — as long as he is willing to play ball with Republicans. That could mean bringing a casino to Petersburg.
Morrissey, who was elected in 2019, is closing out his freshman term in the Senate, but his reputation precedes him — to say the least.
At the end of Gov. Ralph Northam’s term in January 2022, Morrissey was granted a pardon for a 2014 misdemeanor conviction of contributing to the delinquency of a minor — his now-wife, Myrna, who was his 17-year-old receptionist at the time, and with whom Morrissey, 65, has since had four children. In January 2015, Morrissey was serving in the House of Delegates and commuted to the session from the Henrico County jail, wearing an electronic monitoring device and followed by unflattering headlines.
Disbarred twice, he also carries the nickname “Fightin’ Joe,” which dates back to a 1991 fistfight in which Morrissey, then the Richmond commonwealth’s attorney,punched defense attorney David Baugh during a circuit court trial. He also was found guilty in 1999 of misdemeanor assault and battery of his former handyman, and in 2001, Morrissey was prohibited from practicing law in federal court, followed by the Virginia State Bar’s revocation of Morrissey’s license in 2003. After a few years teaching law in Ireland and Australia, Morrissey returned to Virginia and was elected to the House of Delegates in 2007.
But the pugnacious senator considers his checkered history a badge of honor: His live WJFN-FM radio show is called “The Fighting Joe Morrissey Show,” and his district office features a glass display cabinet full of red boxing gloves.
Morrissey hosts a talk show, “The Fighting Joe Morrissey Show,” on WJFN-FM, a conservative talk radio station in Goochland County. Photo by Matthew R.O. Brown
Neither his temper nor his legal entanglements have apparently cooled with time. The president of Petersburg’s NAACP chapter, a casino critic, claimed in February 2022 that Morrissey said, “I’ll rip your heart out of your chest” during an argument — words the senator has acknowledged saying — which led to a Capitol Police investigation. And in May 2022, two WJFN employees filed preliminary restraining orders against Morrissey after a heated argument about abortion restrictions, but a judge dismissed the orders. (Raised Catholic, Morrissey has said he supports some limits on abortion, although not a full ban.)
But even with all his personal baggage, Morrissey is viewed as a savvy politician and strong advocate for his region. Petersburg has suffered financial woes for decades but has seen an uptick in developer interest and the attention of the new governor, particularly in support of the city’s burgeoning pharmaceutical manufacturing hub.
One of Morrissey’s top priorities this session is bringing a casino to Petersburg — and removing the possibility ofa competing casino in Richmond, where voters rejected a casino referendum in November 2021. Some Richmond leaders want a second chance to bring a referendum to the city’s ballots this year, but Morrissey says that if there were two casinos — one in Richmond and one in Petersburg — they would both suffer financially. “We’d have a Rosie’s [Gaming Emporium] on steroids, and that’s not good for either location.”
Instead, Morrissey has filed a bill that would bring a local referendum to Petersburg this fall to allow The Cordish Cos. to build a casino as part of a $1.4 billion mixed-use development, a deal the Baltimore developer says won’t happen if it has to compete with a casino in Richmond. Even though his party is in the minority in the House and Gov. Glenn Youngkin is a Republican, Morrissey said in November 2022, “I think it’s very likely it’s going to happen. I think the House is going to be behind it.”
Morrissey’s 2023 legislative agenda also includes sponsoring a bill to ban assault-style weapons, following two high-profile mass shootings late last year in Chesapeake and Charlottesville.
In late December, Morrissey was defeated by Sen. Jennifer McClellan for the Democratic nomination for the late U.S. Rep. Donald McEachin’s congressional seat, gaining only 13.56% of the primary vote to McClellan’s 84.81%. She will go on to run in a special election in February.
Virginia Business: You weren’t elected yet as a state senator in 2018 when negotiations began to legalize casinos in Virginia. Why do you think Richmond — and not Petersburg — was included in the bill with other economically challenged cities like Bristol, Danville, Norfolk and Portsmouth?
Morrissey: Petersburg was much more of a natural fit. The casino legislation was to help struggling cities in the commonwealth, not counties or cities that were going gangbusters. You had to work to construct language that allowed Richmond to fit into one of the five host cities.
The answer is simple. Should I be my usual candid self? The legislators representing Petersburg [in 2018], both of them were asleep at the wheel. To allow Richmond to get a casino when Petersburg was struggling and had just escaped bankruptcy three years [or] four years before, to allow that to happen was disgraceful. When God saw fit to allow Richmonders to vote against a referendum, it was an easy pivot to Petersburg. I’ll say this — had I been the state senator at the time, I would’ve fought tooth and nail to give Petersburg that initial casino.
VB: If a casino is built in Petersburg, are there any guarantees that Cordish will be creating well-paying jobs?
Morrissey: Absolutely. I think [the Joint Legislative Audit & Review Commission] was conservative in their estimate of 1,300 jobs. Most people think there’ll be between 1,500 and 1,800 permanent jobs. That’s not just Petersburg, but it’s Surry, Sussex, Prince George, Dinwiddie [counties] and Hopewell. This casino will benefit all of Central Virginia.
VB: How do you feel about Cordish being the casino developer tapped by Petersburg officials earlier this year? Did you have much to do with that?
Morrissey: I spoke with all the different casino developers, and I thought that Cordish is probably one of the preeminent casino operators in the country. When Richmond endeavored to put a casino in Richmond, it was down to [finalists] Cordish and [Urban] One. If you talk to other developers, they would say far [and] away, the best proposal [came from] Cordish. Now part of that is a factor of experience. [Editor’s Note: Cordish operates Seminole Hard Rock Hotel & Casinos in Hollywood and Tampa, Florida, and developed and operates Live! Casino & Hotel resorts in Maryland and Pennsylvania.]
What’s coming now to Petersburg is a destination resort — a 300-room hotel, retail shops, pools, music venues and gaming — but Cordish develops the contiguous area, that’s their brand. They will improve the infrastructure and all 90 contiguous acres, not just the 20 that the casino sits on.
VB:Gov. Youngkin has brought a lot of recent focus to Petersburg, notably launching a $14.5 million, 42-point state aid initiative, the Partnership for Petersburg, which he described as a pilot program for assisting underserved localities. Have you made any agreements with Youngkin’s administration or other Virginia lawmakers for support of the Petersburg casino or anything else regarding economic development in Petersburg?
Morrissey: There are absolutely zero deals, zero conversations, nothing whatsoever. The only thing that I’ve spoken to the governor about [in] the Petersburg initiative is the Petersburg initiative. It’s not fluff; it’s substantive programs that will improve Petersburg. They’re going to bring in prosecutors to help the local commonwealth’s attorney’s office. They are focused on improving water infrastructure, sewage infrastructure, rehabbing schools, perhaps a lab school. They are focused on natural resources, including that river that flows behind the old city and perhaps [building a] marina.
Let me just say this, and I said it before: I think that [Democratic governors like] Gov. Northam, Gov. [Terry] McAuliffe [and] Gov. [Doug] Wilder did some very good things for Central Virginia. [But] let’s be clear, no governor has focused as much and has put as much emphasis and money and resources into Petersburg than Gov. Youngkin.
To my Democratic colleagues that want to pooh-pooh that and say it’s ridiculous, if Northam was still governor and he did what Youngkin is doing, they would be building a statue to him right now in Old Towne Petersburg. It is, in every sense of the word, substantive, and that’s why the African American sheriff, chief of police, mayor, majority of city council, school board chairman [and] school board are all fully invested in this.
VB: Why do you think the governor’s so focused on Petersburg?
Morrissey: I think he sees an opportunity to improve a city very close to Richmond, an African American [majority] city, with initiatives and policies and programs. I think if he does exceedingly well [there], it bolsters any presidential aspirations that he has. Anybody that criticizes him and says, ‘Well, he’s doing it for his own motives,’ well, don’t we all in some way do things if we think it’s going to help us down the road?
VB: Why is it important that the state invests in economic development in Petersburg?
Morrissey: Before I came to Richmond 30 years ago, [there was] a very heavy cigarette industry in Petersburg that unfortunately left, and that decimated Petersburg. It struggled to recover and is still struggling, but now we’re on the cusp of something great. That pharmaceutical ingredient park [in Petersburg] will be the pharmaceutical capital of the East Coast.
With [Republican Del.] Kim Taylor, we got $30 million for sewage and regular water infrastructure improvements [at Petersburg’s Poor Creek Pump Station]. There is a commitment with the new director of economic development, Brian Moore, to plow tens of millions of dollars into this city, and the Petersburg initiative is going to help make that happen. Listen, I see great things ahead. I’ve told people, “You want to make money, invest in Petersburg.”
VB: What’s it like working in a split General Assembly? How easy is it to get bills to come up for a vote, let alone pass both chambers?
Morrissey: For me? Easy. Here’s why — when I’m working [on] a bill, I start a couple of months [early], visiting my colleagues in their home districts, telling them what we need to do and why this will be helpful. Take the Senate: I reach across the aisle to the Richard Stuarts, Siobhan Dunnavants, Bill Stanleys, Todd Pillions, and say, ‘Guys, listen. This is what I want to do. This is what you believe in. Let’s make it happen.’ It works.
I’m going to be very candid. I have had greater success working with some of my Republican, business-oriented, business-focused, empirical-data-driven legislators than some of the folks on my own side. That’s the way it is. Similarly, I think I have some great colleagues on the Democratic side, but when I look across the aisle there, there is a cadre of folks that are really worker bees and committed.
VB: Do you think there will be any adjustments to the minimum wage this session?
Morrissey: No. We already went flying past the $11 to $12 mark because of inflation and COVID. I thought it would take five years to get up to $15 an hour with incremental steps. We’re there, so no, there’s going to be no movement to increase it above what we’ve already done. The free market is already dictating prices, and that’s the way it should be.
VB: Do you expect more tax cuts in 2023? Is that something Democrats can get behind?
Morrissey: We have a tendency to do it piecemeal. For example, we gave $40,000 in income tax relief to military veterans — $10,000 a year for four consecutive years. I think that was good, because we want Virginia to be the [most] military-friendly state in the union, not North Carolina. I spend money when I make votes like it’s my money. I’m very, very prudent. I want Virginia to be prudent in its tax policies and let [those policies] be dictated by market forces.
VB: Cannabis sales regulation was not passed in 2022. Do you think the General Assembly will do it this session?
Morrissey: I hope so. I think so. We dropped the ball by not doing it. We have a fiduciary duty, since we have legalized marijuana, to finish the job. An expression that my kids have heard a thousand times and they can’t stand [is], “Finish the job. … You’re halfway there. You’re three-quarters [of] the way there.”
VB: This year every state legislator will be running in newly redrawn districts, including you. How do you see the November elections impacting the General Assembly and the commonwealth?
Morrissey: The best thing in the world happened. Now 61 legislators are running against each other. You got one seat where three or four Democrats are running together. Great. If we had gerrymandering in there, they would’ve all been protected. OK? Now you got [Republican Sens.] Steve Newman and Mark Peake running against each other. [Republican Sens.] Tommy Norment and [Ryan T.] McDougle. Morrissey and [Democratic primary candidate] Lashrecse Aird. Fine. Wonderful. We have no right to have a district that just protects us. Let the chips fall where they may.
There’s always going to be strong red districts in Southwest Virginia, and there’s going to be strong blue districts in Northern Virginia and some of our cities. We’re going to create more bubble districts. That’s a good thing for politics. It’s a good thing for the economy. It’s a good thing for business because it forces them to use that ‘c’ word: compromise.
VB: Do you think Democrats can hold on to power in the state Senate this year?
Morrissey: Yes. It’ll be a narrow margin once again, but I do think in 2023, they will maintain control of the Senate. It’s going to be a brand-new Senate. We’re going to see a Senate and some degree of House that we haven’t seen before with this redistricting. There’ll be 10, 15 senators [who] aren’t back.
Like the quote from a possibly apocryphal Harvard Law professor, Virginia legislators can look to their left and then to their right, and one of their peers probably won’t be seated there next year, thanks to a supercharged primary field created by a late 2021 redistricting.
And now, 61 of Virginia’s 140 incumbent state senators and delegates find themselves competing for the same district with other incumbents. Some will face each other in June primaries and others in November general elections, while a few may decide not to run. The outcome is likely to create a major reshuffle in legislative leadership, if not party representation.
State Sen. Joe Morrissey, who faces former Del. Lashrecse Aird in a Democratic primary for the Petersburg Senate seat, welcomes the competition, saying, “We have no right to have a district that just protects us. Let the chips fall where they may.”
Here are just a few of the contested state Senate districts in the 2023 election year featuring familiar names: Democratic state Sens. Louise Lucas and Lionell Spruill Sr. in Hampton Roads; Republican Sens. Ryan McDougle and Minority Leader Tommy Norment in the Peninsula; and in the Roanoke Valley, Democratic Sen. John Edwards vs. Republican Sen. David Suetterlein. Three other sitting senators — Democrat Creigh Deeds and Republicans Emmett Hanger and Mark Obenshain — were in the same Shenandoah Valley district. However,Deeds said he’s moving to Senate District 11, where many of his Charlottesville-area constituents reside, and where he’ll challenge Del. Sally Hudson for the Democratic nomination.
Delegates, too, are facing primary and general election battles, among them Republicans Israel O’Quinn and Will Wampler in Southwest Virginia, Democrats Eileen Filler-Corn and Kathy Tran in Fairfax County, and Luke Torian and Elizabeth Guzman, Democrats representing parts of Prince William County.
In Floyd and Patrick counties, the heat has already risen on the primary contest between Republican Dels. Marie March and Wren Williams. Not only are they seeking the same seat, but March pressed charges against Williams, claiming he slammed her shoulder as the two passed each other at a GOP fundraiser in Wytheville in September 2022. Williams has said he apologized and didn’t realize he had bumped into March, while she claimed it was intentional. On Jan. 4, a Wytheville General District Court judge found Williams not guilty.
“Those Southwest Virginia people, they get pretty fired up,” jokes Del. Hyland “Buddy” Fowler, R-Hanover, suggesting that GOP Del. Thomas Wright, who sits near March and Williams in the House, “will be the referee. We do have to maintain some level of decorum.”
‘Insane’ number of primaries
Tempers aside, an election year often generates more posturing than real legislative action — but some of that depends on the ideological makeup of candidates’ districts.
“I think the conventional wisdom is that it’s a year to do nothing,” says Greg Habeeb, a former Republican delegate and now head of Gentry Locke Attorneys’ Richmond-based government and regulatory affairs team. “It’s a campaign year. There’s an insane number of primaries. There’s going to be huge turnover amongst Senate leadership from the highest levels of the Senate.”
Indeed, Sen. Janet Howell, the Fairfax County Democrat who co-chairs the powerful Senate Finance and Appropriations Committee, has been rumored to be considering retirement, having served in the Senate since 1992. Her new district includes Democratic incumbent state Sen. Jennifer Boysko.
Delegates Marie March and Wren Williams will face each other in a Republican primary for the same seat in Floyd and Patrick counties. March photo by AP Photo/Steve Helber; Williams photo by Allison Lee Isley/The Washington Post via Getty Images
Senate Majority Leader Dick Saslaw, who has served in the Senate since 1980 and turns 82 in February, may also retire. Democratic Sen. Dave Marsden is now in the same Fairfax County district.
University of Mary Washington Professor Stephen Farnsworth says that the newly drawn districts — determined in December 2021 by two Virginia Supreme Court-appointed special masters who did not take incumbents’ residences into consideration — favor Democrats because of population dispersal. Younger, more Democratic-leaning voters live in urban and suburban areas, while more conservative rural regions are losing population and seats, he notes.
“The [Republican] House majority is already at risk because of the lines that have been redrawn,” Farnsworth says. “The reality for a lot of Republicans is that the election that really matters is the primary.”
The state Senate, which Democrats have held in a razor-thin 21-19 majority since Republicans won back the House and the governorship in 2021, is a bit trickier to predict, although Morrissey says he believes Senate Democrats will hang on to power in 2023.
In January, though, voters in U.S. Rep. Jen Kiggans’ former state Senate district will vote for her replacement as the Republican takes office in Washington, D.C. State law requires the Jan. 11 special election to take place in the 2010-drawn 7th District including parts of Virginia Beach and Norfolk, which has gone back and forth between Democratic and Republican control. If Democrat Aaron Rouse, a Virginia Beach councilman, beats Republican candidate Kevin Adams, the Democratic-Republican divide will widen to 22 to 18 this session.
While the change of one Senate seat could make a difference in the fate of some bills in committee, the Senate has been a reliably steady institution, often checking the bolder impulses of the House of Delegates.
“The Senate, no matter who has been in charge, has been the same institution for a long time,” Habeeb says. “The majority-minority changes, but the leadership doesn’t change.”
However, that may not hold true much longer, he adds: “A lot of that’s about to change. A lot of folks are saying that [2023’s] the time to go.”
‘Get out of Richmond’
A major question for candidates, especially Republicans, is how far to push hot-button culture war topics. Common wisdom has it that some Republicans nationwide lost midterm elections by focusing on the premise of a stolen 2020 presidential election, a falsehood promoted by former President Donald Trump.
However, notes David Ramadan, a former Republican delegate who represented parts of Loudoun and Prince William counties, issues like abortion and transgender students’ rights go beyond simple rhetoric for some Republican officeholders and their constituents. “They believe very strongly in what they’re doing. They represent very, very red districts. They don’t go by the national atmosphere, especially in an election year,” says Ramadan, a professor at George Mason University’s Schar School of Policy and Government.
Even controversial bills that are likely to fail or be tabled — such as Republican Sen. Amanda Chase’s measure to prohibit all gender transition treatment for children under age 18 — can serve a role in differentiating candidates from competitors, Ramadan says. “They’re going to go with the far-right issue bills that will help them nail the nomination.”
But this legislative gamesmanship can have real-world effects. Even as Virginians are reeling from two mass shooting events in Charlottesville and Chesapeake late last year, it’s doubtful that a split legislature will pass any gun control legislation, based at least partly on campaign calculations, observers say. “Voting to restrict guns puts your primary renomination at risk if you’re a Republican,” Farnsworth says. “In the history of election-year sessions, [the rule is] do the minimum as fast as possible and get out of Richmond.”
Morrissey says decisions on what bills to file usually come down to a candidate’s priorities, as well as whether they hope to pass legislation via compromise in a divided legislature — although he planned to file a bill that would ban assault-style weapons, which is unlikely to pass.
“When it comes to some of these social issues, it’s fine to have your beliefs on that,” he says. “You don’t ever have to abandon your values, but remember you’re legislating for your entire district or the commonwealth of Virginia. That’s what goes through my head all the time.”
Election years are not the time to make waves in Virginia’s legislature, says Greg Habeeb, a former Roanoke delegate who now advises clients pursuing legislation in the General Assembly.
Big changes — the kind the state saw during the Democrats’ two years of full legislative control in 2020 and 2021 — are expected to be extremely unlikely amid the split, election-year legislature of 2023. “It’ll cause some people to be excessively bold,” but that’s not the natural state of things, says Habeeb, who leads Gentry Locke Attorneys’ government and regulatory affairs team in Richmond. “It’s hard to legislate on the off-off year.”
Odd-year sessions are automatically shorter than even-year sessions, when the state must pass budgets. The Virginia Constitution requires a session of 30 days, traditionally extended to 45 days in odd years, so there’s less opportunity to pass as many bills as with the 60-day session required in even years.Also, this fall, all 140 seats in the House of Delegates and the Virginia State Senate are up for election, and redrawn districts mean 61 incumbents suddenly found themselves sharing districts with other incumbents, setting up a crowded primary field for this spring. (See related story.)
Undoubtedly, lawmakers in Richmond this session will pass some legislation — likely in the areas of renewable energy, education, public safety, workforce development and industrial site development. But “you [can] take the social issues off the table,” including gun control and abortion, Habeeb says. “There’s little to no room for compromise on those.”
That said, Virginia Gov. Glenn Youngkin’s administration is supporting a bill to seek out public school library books with graphic sexual content so that parents can prohibit their children from having access to those materials. Other social-issue legislation being introduced in the House this session includes a measure to make vaccinations optional for public school students. And though it’s almost certain to not make it to the state Senate floor, House Bill 1395 from Del. Marie March seeks to ban all abortions in the wake of last year’s U.S. Supreme Court’s ruling repealing Roe v. Wade.
At least some bills this session are likely to gain traction and some bipartisan support, however.
For instance, there may be some movement toward filling two vacancies in the Virginia State Corporation Commission, the three-judge panel that governs utilities, state-chartered financial institutions, securities, insurance, retail franchising and the Virginia Health Benefit Exchange. In recent years, confirmations have been tied up in partisan strife, and with Judge Judith Williams Jagdmann’s resignation at the end of 2022, only Judge Jehmal T. Hudson remains on the bench.
“With two seats [open], there’s an obvious compromise,” Habeeb says. “The House fills one; the Senate fills one,” although there’s no guarantee that legislators will do that, he adds.
Other areas ripe for compromise include some Youngkin initiatives, such as measures to increase affordable, workforce-priced housing as well as a new agency focused on creating a “one-stop shop” for workforce development efforts.
A perennial subject
Extra money for site development will depend on the budget surplus, says Del. Luke Torian, D-Prince William. Courtesy photo
The Youngkin administration has proposed creating a state Department of Workforce Development and Advancement to take over 13 programs from eight state agencies, representing most of Virginia’s $485 million workforce efforts. His reorganization plan would move some responsibilities away from the Virginia Employment Commission and the Virginia Community College System.
According to the governor, the state’s workforce development initiatives are spread across 12 agencies, 20 other organizations and 800 programs. Meanwhile, Youngkin says, there are about 300,000 jobs unfilled statewide, and the state’s labor force participation rate was at 63.6% in October 2022, down from 66.4% before the COVID-19 pandemic.
During a December 2022 panel discussion sponsored by the Virginia Chamber of Commerce, Virginia Labor Secretary Bryan Slater called the current state of workforce development in the commonwealth “fragmented [and] siloed.” Virginia needs a “centralized hub … to drive policy, programs data and grants,” he added, and also a stronger focus on how many jobs are being filled through programs and how long people stay in those jobs.
It’s hardly a new idea. James W. “Jim” Dyke Jr., senior advisor for McGuireWoods Consulting LLC and former state secretary of education under Gov. L. Douglas Wilder, recalls that when he was tasked with consolidating the state’s workforce training functions in the early 1990s, “I had a full head of hair and Barry DuVal was the young mayor of Newport News.”
Del. Chris Head, R-Roanoke, is particularly excited about the proposed department. “We’ve spent an awful lot of money on workforce development,” he says, but Virginians often are not aware of training programs, due to a lack of marketing and poor interagency communication. Del. Terry Kilgore, the House majority leader, says Virginia’s workforce infrastructure is “duct-taped together,” compared with other states’ more cohesive approaches.
Also, notes University of Mary Washington political science professor Stephen Farnsworth, “one of the areas in which Virginia has not done well is unemployment assistance.” Kilgore says that if the VEC doesn’t have to worry about workforce training, it will be able to focus on more efficiently handling unemployment claims.
In April 2022, the VEC settled a federal lawsuit filed by three legal aid groups that represented Virginia residents who had struggled to obtain benefits during the height of the pandemic shutdown. The Joint Legislative Audit and Review Commission reported in November 2021 that the VEC had made more than $1.2 billion in incorrect payments during the pandemic.
Dyke hopes the new department could be created “in one fell swoop,” adding that he’s spoken to legislators on both sides of the aisle who support the new department. But Farnsworth says that turf battles could trip up the plan — especially if the community college system loses some authority and resources from the proposal.
While Head says there’s “still a significant amount of discord between Democrats and Republicans in the House of Delegates,” he’s hopeful they will find common ground on the workforce proposal.
Not safe bets
It’s less clear whether Youngkin will find support for some of his other proposals, such as increasing the state’s current budget allocation for helping localities prep industrial sites for megaprojects from $150 million to $500 million, or adding $1 billion in personal and business tax cuts.
“I think every single legislator will agree we need to focus on developing megasites,” Habeeb says, but the governor’s proposed spending increase for site development may face some pushback.
“I’m not sure it’s going to be possible this year,” says Democratic Del. Luke Torian, a member and former chair of the powerful House Appropriations committee, adding it will depend on the amount of budget surplus.
Also, notes Farnsworth, “One of the tensions in Richmond is the governor spending a lot of time on the road. There is always a fear in the legislature that the governor from the other party will be able to launch a national campaign on the backs of [statewide] successes.”
In short, Democrats have political motivation to prevent too many compromises that would make Youngkin appealing to a national audience. In 2022, the governor campaigned for GOP gubernatorial candidates across the nation — trips he said were in exchange for the Republican Governors Association’s support during his campaign. Many political observers, however, say that Youngkin is testing the waters for a potential 2024 presidential campaign.
“Glenn Youngkin’s aggressive national outreach has made compromise less likely in Richmond,” Farnsworth says. “He hasn’t done all that much to encourage compromise.”
Del. Terry Kilgore, R-Scott County, supports building a small nuclear modular reactor in Southwest Virginia. Photo by Earl Neikirk
Youngkin also has also proposed a $10 million investment to create the Virginia Power Innovation Fund, including $5 million to develop a small modular nuclear reactor (SMR) in Southwest Virginia. (See related story.)
Nuclear energy is one way to help the state fulfill the Virginia Clean Economy Act (VCEA), which calls for all energy in the state to be generated from carbon-free sources by 2050. The VCEA was passed in 2020 by the Democratic-controlled legislature.
Although Democrats intended for this goal to be met primarily through innovations in solar and wind energy, including battery storage, Habeeb says other kinds of energy production — including nuclear — are currently needed to meet the 2050 deadline.
Kilgore is bullish about building a reactor in coal country, where it could easily find a home at an abandoned mine site. “A lot of European countries are relying on nuclear energy,” Kilgore says. “I’m all for clean energy — solar and wind — but we’re going to have to invest in gas, coal and SMRs.”
However, some environmental groups and Democratic Del. Richard C. “Rip” Sullivan Jr., the House’s chief patron of the VCEA, have voiced doubt about the viability of a small reactor in Southwest Virginia, which would take at least 10 years to be productive, the governor has acknowledged.
In an op-ed in the Richmond Times-Dispatch last year, Sullivan wrote: “It is ironic that [Youngkin] would call renewables risky and expensive while trumpeting small modular nuclear reactors (SMRs). Solar and wind projects abound, while commercialized SMRs don’t exist anywhere in the world, because we don’t know how to build or operate them in cost-effective, safe and reliable ways.” [Editor’s note: While there are no SMRs in the United States, a Russian floating nuclear power plant uses two SMRs, and a land-based SMR is under construction in China.]
Casinos and cannabis
Meanwhile, state politicos say it’s a safe bet that Democratic Sen. Joe Morrissey will be doing everything in his power to gain approval this session for bringing a casino to Petersburg.
In October 2022, Petersburg City Council voted in favor of Maryland-based The Cordish Cos. developing a casino there if the General Assembly would allow it. In December 2022, Cordish Cos. officials said the project would include $1.4 billion in total commercial development.
Three years ago, the Assembly passed legislation allowing casinos to be built in five economically challenged Virginia cities — Bristol, Chesapeake, Danville, Norfolk and Richmond. Voters in the first four localities have approved casinos, which are under development, but Richmond voters narrowly defeated a referendum in November 2021, blocking a proposed $565 million casino resort. The next day, Morrissey, whose district includes Petersburg, began working on getting Petersburg a shot at a casino instead of Richmond. His 2022 bill failed, but he’s refiled it for the 2023 session.
Morrissey, who was elected to the state Senate in 2019, says in an interview with Virginia Business (see related January 2023 Q&A with Morrissey) that the region’s previous state legislators were “asleep at the wheel” when negotiations were held in 2018 to determine which Virginia cities could hold casino referendums — and that he would have fought “tooth and nail” for Petersburg.
The casino bid may receive some bipartisan support because Republican Del. Kim Taylor, who represents Petersburg and part of Chesterfield County, is carrying the House version of Morrissey’s casino bill.
Richmond casino proponents are still actively pursuing a second referendum, even if Petersburg also wins the right to build a casino. But two casinos in the region would mean fewer jobs and less revenue for each locality than just one casino, according to the findings of a JLARC report released late last year. And Cordish Cos. officials have said they are not interested in pursuing a Petersburg casino if one is approved in Richmond.
Another adult recreational issue that may come up during this session is regulating commercial sales of cannabis. Following the legislature’s 2020 decriminalization of marijuana, plans for creating a legal retail market are still up in the air, and loopholes for products like delta-8 gummies may also be addressed this year.
Head doesn’t expect an overall resolution on retail marijuana sales this session, although there could be some new medical marijuana legislation. Some Republicans, himself included, consider it “crazy” that marijuana possession was legalized in the first place, Head says, and are not likely to approve further legislation. Morrissey, however, is hopeful for some regulatory measures, calling them “a fiduciary duty,” while Kilgore expects the state Cannabis Control Authority to make recommendations for the 2024 session.
The list of bills that probably won’t be passed this year is long. Limits on abortion and LGBTQ rights — including restrictions on K-12 transgender students participating in school sports — are bound to hit Senate Democrats’ brick wall.
A bill as seemingly anodyne as adjusting state dentist licensing lost its prospective chief co-sponsor’s support “because it’s an election year,” says Republican Del. Phil Scott.
And even in the wake of high-profile mass shootings in recent months at the University of Virginia and a Chesapeake Walmart store, gun-control measures like Morrissey’s proposed ban on assault weapons are unlikely to pass through the GOP-controlled House.
Dyke says that higher education leaders in Virginia may seek more leverage in barring firearms from their campuses, but Habeeb says even that powerful constituency is unlikely to budge Republicans.
U.Va. and Virginia Tech — two schools strongly impacted by gun violence this century — are “so intertwined with their communities, and you can’t put a fence around the universities,” Habeeb says, adding that even if guns are banned from campuses, students and employees could store weapons off-grounds.
Nevertheless, there is a chance, he adds, that the legislature will find common ground this year “in investing in more law enforcement or more funding for mental health.” Both ideas have the support of Youngkin, who has proposed $230 million to expand the state’s behavioral health system.
Redrawn districts become incumbent battlegrounds BY KATE ANDREWS
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