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byline: Kate Andrews

Big deals

These are some of the state’s biggest economic development announcements in 2021 and 2022, expected to create at least 100 jobs each.

CENTRAL VIRGINIA

Chesterfield County: Lego Group, the manufacturer of the iconic brightly colored interlocking plastic toy bricks, announced in June it will build a $1 billion plant in Chesterfield County’s Meadowville Technology Park, a deal expected to create more than 1,760 jobs within 10 years. The Danish company’s plans include a 1.7 million-square-foot facility on the 340-acre site. Beginning in 2024, it expects to begin operations from a temporary building, initially hiring 500 workers.

Richmond: CoStar Group Inc. is expanding its footprint in Richmond with a $460 million campus on the James River, a project expected to create 2,000 jobs. The Washington, D.C.-
based commercial real estate data and analytics company also has purchased the former SunTrust office on the southern side
of the James for $20 million, where about
400 employees will be located.

EASTERN VIRGINIA

Accomack County: Rocket Lab USA Inc. selected Wallops Island for a launch site and manufacturing and assembly complex for its Neutron rocket, the company announced in February. The project, which will involve building of a 250,000-square-foot complex on 28 acres next to the NASA Wallops Flight Facility, is expected to create up to 250 jobs. The Neutron rocket is set to be operational in late 2024.

Norfolk: The 111-acre Lambert’s Point Docks is set to become a maritime operations and logistics center for the offshore wind, transportation and defense industries, creating more than 500 jobs and bringing in more than $100 million in capital investment. Norfolk Southern Railway Co. owns the land, which has been leased for the next 30 years by Virginia Beach-based Fairwinds Landing LLC, a special purpose company established in 2021.

Portsmouth: Siemens Gamesa Renewable Energy S.A., the Spanish wind energy company involved in Dominion Energy Inc.’s $9.8 billion offshore wind project in Virginia Beach, announced plans in October 2021 to build the first U.S. offshore wind blade factory at Portsmouth Marine Terminal. Siemens is investing $200 million to build the factory, which is expected to be completed in early 2023, creating 310 jobs.

NORTHERN VIRGINIA

Fairfax County: Qualtrics, a data analytics and experience management software company based in Seattle and Provo, Utah, is expanding its presence in Northern Virginia with a new location near the Reston Metro station, part of a development boom in the western part of Fairfax County. The company expects to create 400 jobs in Reston, it announced in December 2021, as Qualtrics closed its $1.13 billion purchase of Reston-based software company Clarabridge Inc.

Loudoun County: Hanley Energy, an Irish energy management company with its U.S. headquarters based in Loudoun, plans to expand its electrical division in Ashburn, creating an expected 343 jobs. Hanley announced the $8 million investment in June, about a year after it said it would base its U.S. headquarters in Virginia, bringing 170 jobs to the commonwealth.

Stafford County: Amazon.com Inc. continued its march across Virginia, with an announcement in November 2021 that it would build a cross-dock fulfillment center in Stafford County that would create an expected 500 jobs. The 630,000-square-foot plant is the first link of a supply chain where products from third-party vendors are sorted, repacked and sent to other Amazon distribution centers.

SHENANDOAH VALLEY

Augusta County: In February, Amazon announced another big fulfillment center project, this time in Fishersville. The 1 million-square-foot center is expected to create 500 jobs and open in spring 2023. Workers there will pick, pack and ship bulky or larger items like patio furniture, outdoor equipment and rugs, according to the governor’s office. Amazon employs about 27,000 people in Virginia and has more than 30 fulfillment centers and delivery stations in the state.

SOUTHERN VIRGINIA

Henry County: Schock GmbH, a German quartz composite sink manufacturer, announced in September 2021 it would invest $85 million into a new manufacturing facility that is expected to produce 355 jobs. Construction at the Patriot Centre Industrial Park is set to start in the first quarter of 2023.

Pittsylvania County: Tyson Foods Inc. broke ground in fall 2021 for its $300 million manufacturing facility in Pittsylvania County’s Cane Creek Centre just outside Danville. With completion scheduled in early 2023, the plant is expected to produce 376 full-time jobs. Tyson has long had a footprint in Virginia’s Eastern Shore and Henrico County.

SOUTHWEST VIRGINIA

Wythe County: Blue Star NBR LLC, a rubber and nitrile glove manufacturer, is investing $714 million to build a manufacturing facility in Wythe’s Progress Park. The company is expected to create 2,500 jobs by 2028 and establish six glove manufacturing plants total, with the first opening by March 2023. When it’s operating at full capacity, Blue Star expects to produce 20 billion gloves a year.

AeroFarms to add 66 jobs in Pittsylvania

New Jersey-based leafy greens producer AeroFarms plans to add 66 more jobs as it increases production at its vertical farm in Pittsylvania County, the governor’s office announced this week.

This is in addition to the 92 jobs promised in its operations at Cane Creek Centre, a $42 million investment in what is promoted as the world’s largest indoor vertical farm. The company, a certified B Corporation that is one of the leading producers of salad greens, said it is expanding to meet increased customer demand. Greens grown there will primarily go to grocery stores in the mid-Atlantic and Southeast markets, within a day’s drive of Pittsylvania.

“Virginia continues to be the premier location for companies using technology and innovation to become leaders in their industry by generating massive benefits to consumers and investors,” Gov. Glenn Youngkin said in a statement. “I want to thank AeroFarms for their continued commitment to the commonwealth and commend Danville-Pittsylvania County for their cooperative and highly effective approach to economic development that will create new jobs and economic opportunities for Virginians.”

Virginia competed with other states for the project, Youngkin’s office said. To attract the project, the Virginia Department of Agriculture and Consumer Services worked with the Virginia Economic Development Partnership and Pittsylvania County. Youngkin additionally approved a $33,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund, which the county will match with local funds. AeroFarms also is eligible to receive state benefits from the Virginia Enterprise Zone Job Creation Grant program.

First National Bank to expand in NoVa, Richmond

FNB Corp., parent company of First National Bank, announced Wednesday it will expand its presence in Virginia, particularly in the Northern Virginia area.

According to a news release, FNB expects to add four branches in Reston and Arlington by 2024, in addition to seven currently operating in the greater Washington, D.C., area. Also, FNB plans to expand its commercial banking operations with a new loan origination center in Richmond, as well as hiring more bankers to expand its lending services in Richmond, Charlottesville, Norfolk, Virginia Beach and Newport News. The bank has a long history in Richmond; a former First National Bank skyscraper in downtown Richmond, built in 1912, was converted into luxury apartments in 2013 and is known as First National Apartments.

John Wesley “Wes” York has been hired as senior vice president of commercial banking to lead growth in Richmond, FNB also announced. He previously was a senior vice president and commercial banking team leader at SouthState Bank, and is a graduate of Randolph-Macon College and the Kogod School of Business, with an MBA and a bachelor’s degree in business and economics.

Headquartered in Pittsburgh, FNB operates in seven states and Washington, D.C., and it has total assets of $42 billion and more than 340 branches across Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia.

HeadWaters temporary casino changes course in Norfolk

HeadWaters Resort & Casino, the Pamunkey Indian Tribe’s $500 million gaming project planned for Norfolk, announced Wednesday it is abandoning its temporary casino plans at Harbor Park, instead locating the facility on the same property as the permanent casino.

“Issues were recently raised about the address of the proposed initial gaming facility,” the tribe said in an announcement Wednesday, noting an error in paperwork that led Norfolk officials to table a vote on the casino this week. “While the tribe does not believe the ballpark address to be an issue since it was approved by the city, any delay due to a potential challenge is unacceptable.” The tribe also added, “Contrary to media reports, the address of the stadium was never changed.”

The Virginian-Pilot reported that the city changed the baseball stadium’s address last month to match the casino’s permanent address of 200 Park Avenue, “in an apparent attempt to circumvent language in the casino referendum that Norfolk voters approved in 2020.” In May, the Norfolk Planning Commission approved a conditional use permit to open a temporary casino.

Instead of the baseball field, the tribe says it is submitting a site plan for city approval east of Harbor Park Stadium on the location designated for the permanent casino, and it could be as open as soon as March 2023. Plans for the temporary facility will be provided to the city in a few weeks, the tribe said.

Richmond’s Maymont wins $8M tourism grant

Updated July 20, 2022

Maymont Foundation, which maintains and runs Richmond’s Maymont park, was awarded an $8 million federal grant Tuesday to promote regional tourism, the U.S. Department of Commerce’s Economic Development Administration announced.

With an additional $2 million in matching funds from the foundation, the EDA grant will be used for infrastructure improvements to expand visitors’ access to certain areas, including rescued wildlife habitats, and restore the roof and upgrade airflow and safety systems at the historic Maymont Mansion, according to the foundation. The federal funding comes from the American Rescue Plan’s $240 million competitive travel, tourism and outdoor recreation program, and Maymont was among many organizations competing for funds. The federal EDA plans to award $3 billion total for all of its American Rescue Plan grants on a rolling basis through Sept. 30.

“For years, Maymont has been a premier tourist destination in Richmond,” Virginia Gov. Glenn Youngkin said in a statement. “This grant will be used to expand the amazing opportunities tourists have when they visit Virginia’s historic capital, making the commonwealth a more sought-after destination in the U.S.”

In 2020, Maymont received a grant from the state to create immersive audio tours and open a new welcome center and classroom, work that is being completed by this fall.

“Maymont is grateful for the strong support that our application received from so many local, state and regional officials,” said Parke Richeson, the foundation’s executive director. “It’s a testament to the enduring love for Maymont held by our local community and the many hundreds of thousands of tourists to Maymont each year. Particularly during the pandemic, many people turned to Maymont as an outdoor refuge to connect with nature and animals of the Virginia ecosystem and to learn about the lives of the people who lived and worked at this historic estate over a century ago.”

Maymont is a 100-acre estate situated on the James River that was once the Victorian- and Edwardian-era residence of James and Sallie Dooley, who lived there from 1893 to 1925, and is now home to wild animals, an arboretum, formal gardens, the Robins Nature Center and the Maymont Mansion, formerly the Dooleys’ home. The nonprofit Maymont Foundation has operated and maintained the park since 1975, and more than 800,000 guests visit annually.

“Virginia’s culture, history and natural treasures support our tourism industry, creating jobs and strengthening local economies throughout the commonwealth,” said U.S. Sen. Mark Warner. “This $8 million Economic Development Administration investment will support the Maymont Foundation’s efforts to ensure that more people have the opportunity to see what Virginia has to offer.”

Hardywood taps new president, CFO and brewmaster

Hardywood Park Craft Brewery, the state’s largest craft beer brewer, announced Thursday it has promoted Kate Lee as president. She previously served as vice president of operations and quality, and joined the Richmond-based brewery in 2014.

Also promoted: Brian Nelson, vice president of production and head brewer, is now Hardywood’s brewmaster, and Doug Sulanke, formerly vice president of finance, is now chief finance officer. The brewery’s co-founders, Eric McKay and Patrick Murtaugh, will serve as CEO and chief operating officer, respectively.

Hardywood opened its Richmond location in 2011 at the start of a groundswell of Virginia craft beer breweries, which now number more than 200, according to the Virginia Tourism Corp. The brewery also has a second location in Goochland County’s West Creek business park.

Lee, who joined Hardywood in 2014 after working for 12 years at Anheuser-Busch InBev, is a North Carolina State alum and received her MBA from Virginia Commonwealth University last year.

“Kate has excelled at the highest levels within the brewing industry. She possesses an unrivaled depth of knowledge in the science of making world-class beer, and through her dynamic leadership skills, she’s propelled Hardywood’s evolution into one of the largest independent breweries on the East Coast,” McKay said in a statement.

Sulanke joined Hardywood in 2018 and is a certified public accountant with an MBA from the University of Richmond. Hired in 2011 as Hardywood’s first employee, Nelson is a graduate of Virginia Tech and previously worked as an engineer for Honda.

Virginia ranks 3rd in CNBC’s Top States for Business

After two consecutive years at the top, Virginia slipped to third place in CNBC’s 2022 America’s Top States for Business rankings, the business news channel announced Wednesday morning. North Carolina achieved the coveted No. 1 ranking this year. 

“A great education system is building a smart workforce,” CNBC said about Virginia this year. “But migration has slowed to a state where living costs are high.”

In 2021, Virginia took the top spot in the annual rankings of business-friendly states for a second, consecutive time. Virginia also won in 2019, 2011, 2009 and 2007. CNBC did not rank the states in 2020 due to the COVID-19 pandemic.

In announcing North Carolina’s win this year, CNBC praised North Carolina, saying, “Political leaders in the Tar Heel State keep managing to put partisanship aside to build the nation’s strongest economy.” North Carolina, which ranked second last year, also had some major economic development wins this year, including the $2 billion VinFast electric vehicle factory announcement in March. Apple announced last year that it will locate its East Coast hub in North Carolina’s Research Triangle region.

Speaking on CNBC’s “Squawk Box” Wednesday, North Carolina Gov. Roy Cooper said, “We’ve pulled together in a bipartisan way to make sure that businesses know that we’ve got the most talented, educated workforce in the country.”

Washington state ranked second in this year’s Top State rankings, with Colorado coming in fourth and Texas fifth.

During his run for office last year, Republican Virginia Gov. Glenn Youngkin downplayed the state’s two-year top ranking under his Democratic predecessor, Gov. Ralph Northam, telling Virginia Business, “I am thrilled to death that Virginia gets accolades. I am a proud, proud Virginian, and I want Virginia to get accolades. Unfortunately, Virginia isn’t performing like the No. 1 state to do business in. It’s not. In fact, some of the underpinnings to that ranking actually shine a bright light on the challenge as why we’re not performing. The cost of living in Virginia — gosh, we’re ranked 32nd, and the cost of doing business, where we’re ranked 26th, and the quality of our infrastructure, where we’re ranked 24th.”

In a statement Wednesday, a Youngkin spokesperson said, “Like the governor said last year, being acknowledged as a top state to do business is great for the commonwealth, but accolades and rankings haven’t always translated into growth in Virginia.” The statement also said that he is committed to lowering the cost of living and making Virginia more competitive.

One of Youngkin’s main priorities as governor is to get more large plots of industrial-zoned land “shovel-ready” to be able to better compete with other states for large projects, a need cited by economic developers statewide. “I recommended that we include up to $200 million out of the American Rescue Plan money to be put forth to site readiness across Virginia so that companies can move here,” he said last year before the election.

He also pointed Wednesday to some positives since he took office in January, including major economic development announcements and the expected addition of 80,000 more jobs promised by companies expanding and coming to Virginia.

The state has seen some big development news this year, with aerospace and defense contractors Raytheon Technologies Corp. and The Boeing Co. moving their global headquarters to Arlington. Additionally, the Lego Group said in June that it will be bringing a $1 billion toy manufacturing plant to Chesterfield County. But economic development wins are just one component of an array of considerations that go into the Top States list.

Virginia might not be No. 1 in CNBC rankings but can still be competitive, Virginia Chamber of Commerce President and CEO Barry DuVal said in a statement: “The state remains a favored location for business and has made great strides over the past few years to restore our competitive position. … Unfortunately, the cost of doing business continues to rise in the commonwealth, making it harder to compete against other states which have aggressively cut taxes and streamlined regulations.”

CNBC based this year’s rankings on 88 metrics — up from 85 last year — across 10 categories: workforce; infrastructure; cost of doing business; economy; life, health and inclusion; technology and innovation; business friendliness; education; access to capital; and cost of living. Workforce is the most heavily weighted category and considers a state’s concentration of science, technology, engineering and math (STEM) workers, the percentage of workers with college degrees, and new this year, workers with associate degrees and industry-recognized certificates.

Virginia ranked No. 11 in workforce this year, down from No. 3 last year, but retained its No. 2 rank in education, which considers the number of colleges and universities in each state, including historically Black colleges and universities (HBCUs).

Youngkin has been critical of the running of the Virginia Community College System, which is viewed as the state’s biggest pipeline for future specialized workers in tech, manufacturing, wind energy and other industries. Enrollment, already falling at many community colleges, declined significantly during the pandemic — a harbinger of skilled jobs continuing to go unfilled.  

The governor, saying he wants the 23-college system to do better, has used his bully pulpit to influence the hiring of the next chancellor. At the end of June, longtime VCCS Chancellor Glenn DuBois retired, and a previously hired candidate withdrew amid the controversy surrounding the job. 

In June, the VCCS board, which hires the chancellor, agreed to allow a member of Youngkin’s administration to be a nonvoting member of its search committee. 

Virginia jumped up in the infrastructure category ranking, from 24th last year to ninth this year. For this category, CNBC measures the value and volumes of goods shipped by air, waterways, roads and rail. In April, Stephen Edwards, CEO and executive director of the Virginia Port Authority, said that the port had grown about 25% in container volume it had moved in calendar year 2021 vs. 2020 and had about $1.3 billion in investments. Other metrics include the condition of highways and bridges, commute time, broadband access, utility infrastructure and available office, industrial and vacant space.

Virginia performed its worst in the cost of living category, which is weighted the lowest. The commonwealth rose from 32nd last year to No. 30 this year.

North Carolina received 1,580 out of 2,500 points. Virginia received 1,553 points.

Corsicana Mattress Co. closing Chesterfield plant in Aug.

Chesterfield County’s former Symbol mattress production plant will close in August, laying off 54 employees, owner Corsicana Mattress Co. announced Thursday. Production will be absorbed into the company’s plants in Connecticut and North Carolina.

“It appears that this location is a victim of both a competitive realignment and lower product demand,” Garrett Hart, director of Chesterfield’s economic development department, said Friday. “We will be working with the affected employees to assist them getting reemployed with other businesses in Chesterfield. We will also be working with the building owner on getting the building back in use by another company. Based on the current very high demand for both workers and buildings in the region, I am very optimistic that both the employees and the building will be back at work very quickly.”

Dallas-based Corsicana purchased rival Symbol — a business founded in Richmond in 1961 as Eastern Sleep Products Co. — in April 2021. Terms of the deal were not disclosed, but officials estimated $540 million in combined sales for 2021, as well as 16 manufacturing facilities and 1,400 employees.

Chesterfield’s 75,000-square-foot Symbol plant at 2001 Bellwood Road was among the properties included in the deal, but Corsicana has been streamlining its holdings. It announced last month the closing of its Laporte, Indiana, facility.

Corsicana produces a “mattress-in-a-box” line that is easier to ship than traditional mattresses.

“This consolidation is necessary to continue streamlining our manufacturing footprint, to drive efficiencies and effectiveness. Our Newington and Greensboro plants have the expertise and capacity to effectively service our customers in the mid-Atlantic region,” Corsicana CEO Eric Rhea said in a statement. “We are grateful to the local community and employees for their support and expect a smooth transition.”

Barkin: Inflation high, but Fed has tools to contain it

Tom Barkin agrees — inflation is too high. But he also says the Fed has the authority to get it back on the right track.

That’s what the president and CEO of the Federal Reserve Bank of Richmond told the Richmond chapter of the Risk Management Association on Tuesday at Triple Crossing Beer, a brewery in eastern Henrico County. “The Fed has the tools to contain inflation over the medium term, and we are committed to returning inflation to our target,” he said. ” We are meeting the test we face and have made clear we will do what it takes.”

Barkin’s talk came in the wake of the Federal Reserve Board of Governors’ June 15 decision to raise the target interest rate by three quarters of a percentage point — the highest increase since 1994.

Barkin said that the move was necessary due to higher rates of inflation than previously anticipated.

Americans need to wait for the market to settle down from shocks caused by the pandemic, the Russian invasion of Ukraine and supply and labor shortages, he said. The current economic moment — with record-breaking inflation, gas prices over $5 a gallon and rising rents and home prices — feels particularly unstable because of the relative stability of the economy prior to COVID, Barkin acknowledged in a Q&A session following his speech.

“I think with 20/20 hindsight, [the decade before COVID was] an unbelievably stable time for inflation, for GDP, for job growth, for an economy in general,” he said. “And we’re now two years into a quite unstable time. I think things need time to pivot back and forth to get back to stability. Continued volatility around some of these economic indicators [is] a more likely scenario. I do think that means we’re going to have some months or maybe even some quarters [when] our inflation points are actually well below where they were before COVID. But then you’ll have months where they’re high.”

Although Barkin was not willing to say a recession is definitely coming, as far as many Americans are concerned, it seems pretty likely. Citing the University of Michigan’s most recent consumer sentiment survey, Barkin noted that consumer sentiment fell to its lowest level on record and the percentage of small business owners surveyed  expect better conditions over the next six months was at its lowest level in the history of the survey.

Speaking specifically about Virginia, Barkin said that heavy government and military spending would help Northern Virginia and Hampton Roads avoid the worst impacts if the U.S. economy hit a recession. “I think the rest of the economy is relatively diverse, and it’s going to be affected a lot like the rest of the country. The question is going to be, ‘How deep does it go?'”

Many recall the 2008 Great Recession, a “very significant financial crisis,” he noted, “which, fingers crossed, doesn’t seem to be in the cards today.” He compared today’s economy to those that preceded the shorter recessions of 2001 and 1994, which affected certain sectors but were not as broadly destructive.

In his speech, Barkin also noted that fiscal support from the pandemic is waning and now it’s moving the Fed to raise interest rates, which slows the economy by making it more costly to borrow. “Historically, eight of the last 11 Fed tightening cycles have been followed by some sort of a recession,” he said. That markets are skittish is understandable, he said, because the Fed hasn’t moved this quickly to adjust rates in more than 20 years. Couple that with supply-chain challenges, pandemic-era shortages, the war in Ukraine and lockdowns in China, and even more unknown factors swirl.

But, he points out, consumer spending — responsible for two-thirds of the economy — is “quite healthy” and supported by strong personal balance sheets, excess savings accrued during the pandemic and the ability to do things like book trips again. He added that unemployment is historically low at 3.6%, and interest rates have not reached levels that constrain the economy.

“Barring an unanticipated event, I see rising rates stabilizing any drift in inflation expectations and in so doing, increasing real interest rates and quieting demand,” Barkin said. “Companies will slow down their hiring. Revenge spending will settle. Savings will be held a little tighter. At the same time, supply chains will ease; you have to believe [computer] chips will get back into cars at some point. That means inflation should come down over time — but it will take time.”

Barkin noted that the economy is out of balance today because stimulus-supported excess demand overwhelmed supply chains that are already constrained, but going back to normal means putting more products back on shelves, seeing restaurants and stores fully staffed, and cars back on auto lots.

“Most importantly, moderating demand has a higher purpose squarely in our mandate: containing inflation,” Barkin said. “The Fed is on a path to return inflation back to normal levels. We have the credibility with households, businesses and markets required to deliver that outcome. We may or may not get help from global events and supply chains. There is of course recession risk along the way, but there’s also the prospect of the economy returning closer to normal.”

Metro bringing back first group of 7000-series trains

The Washington Metropolitan Area Transit Authority announced Wednesday that it will return eight 7000-series trains to service on Thursday, months after all 748 railcars were taken off track due to a wheel malfunction that caused a derailment near Arlington National Cemetery.

The return of eight trains — with eight railcars each — to service comes after an intense training period on safety processes for inspectors over the past month, according to WMATA, which runs the Metrorail and Metrobus services. In October 2021, the wheel problem caused a derailment and led to the removal of the 7000-level trains, which make up about 60% of all of Metro’s fleet. Its older 6000-series cars were returned to service to prevent further delays, and as of early March, Metro had 330 railcars in service.

The eight 7000-series trains will initially run on the Yellow Line, which runs from Alexandria up to Fort Totten in Maryland, and the Green Line, which runs from Prince George’s County, Maryland through Greenbelt, Maryland.

According to Metro’s announcement, it is working on second and third phases to return more 7000-series trains to service this summer, which will allow faster service on the Blue, Orange and Silver lines by July. The later phases, which include using the Automated Wayside Inspection System (AWIS) equipment as part of Metro’s inspection process, will require approval from the Washington Metrorail Safety Commission.

Safety incidents have been a source of difficulty for the transit authority over the past few months, with WMSC citing concerns about driver fatigue, and Metro had to remove 72 train operators in May who were out of compliance with safety certifications.

In May, Paul J. Wiedefeld, WMATA’s general manager and CEO, resigned early after announcing his retirement would take place June 30. Randy Clarke, head of Austin, Texas’s transportation system, is set to become Metro’s next general manager.