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Virginia Beach Holiday Inn sells for $16.25M

A 307-room Holiday Inn in Virginia Beach sold for $16.25 million in mid-December 2023, according to city property records.

The six-story Holiday Inn Virginia Beach – Norfolk, located at 5655 Greenwich Road, was built in 1981, property records show. It opened in 1982, according to a news release from commercial real estate firm CBRE, and the 6.6-acre property has 421 parking spaces. The hotel has more than 22,000 square feet of event space and an on-site restaurant and cocktail lounge, as well as a fitness center, convenience store, business center and heated outdoor pool.

Blenheim Hotels sold the hotel to Harmony Investments. Doug Henkel with CBRE Hotels represented Blenheim Hotels.

Harmony Hospitality plans to perform a $6 million renovation as part of a 20-year licensing agreement with IHG Hotels & Resorts. Since 2010, Blenheim Hotels has spent about $13.4 million on renovations.

Fed’s Fifth District economy sees mild expansion

Economic activity in the Federal Reserve’s Fifth District (a multistate region including Virginia, North Carolina, South Carolina, West Virginia and Maryland) expanded mildly in recent weeks, according to the latest edition of the Federal Reserve’s Beige Book, released Wednesday.

Published eight times per year, the Beige Book is based on anecdotal information about economic conditions gathered from the nation’s 12 Federal Reserve Banks. It is compiled from reports by bank and branch directors, as well as information gathered from business contacts, economists, market experts and other sources. Wednesday’s release is an update from the Fed’s Nov. 29, 2023 report.

Here’s what the most recent Beige Book edition revealed about the direction the economy is taking:

Employment in the Fifth District grew moderately in the past few weeks, although the tight labor market continued to put upward pressure on wages. Some respondents reported operational changes as a result, like a specialized software company that expects to cut investment plans this year because salaries increased by 15% of the firm’s total revenue and the company needs to continue hiring workers to meet customer demand.

Price growth continued to slow slightly, according to the Fed, but year-over-year inflation remained “somewhat elevated.” Service providers saw a 3.8% increase in prices received, down half a percentage point from the previous reporting period. Manufacturers reported a 2.8% increase in prices received, up slightly from the previous report.

Manufacturing activity in the region slowed in recent weeks. While contacts in some industries tied to consumers’ discretionary spending reported declines, like a wine producer who reported a 30% drop in sales, some contacts saw unexpected increases in demand. An automobile fabric manufacturer reported an uptick in new orders, notable because its customers historically have pulled back on spending each December.

Fifth District ports’ trade volumes were down in recent weeks. Imports were lower year-over-year as wholesalers continued to work on reducing high inventory levels. Loaded exports, though, were up. Spot shipping rates to the East Coast increased because carriers had issues at the Panama Canal and the Red Sea. Container dwell times fluctuated.

Freight volumes for trucking firms were slightly lower than in the prior report, and firms did not see a seasonal uptick. In the full truckload segment, food, medical, automotive and retail shipments provided the greatest demand. Trucking companies did not experience significant backlogs on new equipment orders but occasionally had issues receiving some parts.

Retailers in the Fifth District reported steady to slightly increasing demand and revenues. Travel and tourism respondents reported steady to increasing sales, hotel occupancy rates and passenger air travel.

Residential real estate activity declined modestly due to an expected seasonal slowdown. Home prices increased moderately, while days on the market increased slightly but remained below historic averages. Construction costs had moderated, builders reported, but shortages of some building materials and specialty subcontractor labor continued.

Commercial real estate market activity was flat in the previous few weeks. The retail segment remained strong, particularly among fast casual restaurant chains. Class A office space tightened as firms upgraded their space and moved away from central business districts. Construction projects were largely limited to the industrial and multifamily sectors.

In the financial sector, loan demand continued to soften modestly. The biggest slowdown in demand was in residential mortgage lending. Deposit balances remained flat, and institutions continued to see competition for available funds.

Overall revenues and demand for services for nonfinancial service providers in the Fifth District remained stable. Competition put pressure on pricing and maintaining current clients. Firms reported wages and workforce availability were continuing challenges.

Developers put Fort Monroe marina redevelopment on indefinite hold

The redevelopment of Old Point Comfort Marina at Fort Monroe has been put on hold due to rising costs, with no timeline specified for when it could occur.

Instead of negotiating a long-term development agreement, the Fort Monroe Authority (FMA) and Smithfield-based hospitality management company Pack Brothers Hospitality (PBH) are now discussing a revised management agreement, the authority announced this week. PBH had been planning to invest $45 million to build a marina, renovate two existing historic buildings into conference space and a restaurant and hotel over the water, akin to its Smithfield Station development, in a development called 37 North at Fort Monroe.

The FMA’s long-term goal is to redevelop the marina, but rising construction costs and high-interest rates “have impacted the financial feasibility for PBH” to lead the renovation and reconstruction of the marina and portions of new construction for the restaurant, according to a news release. The marina can currently accommodate more than 300 boats that are up to 50 feet in length.

“The FMA does not have a timeline for the redevelopment of the marina,” FMA Executive Director Glenn Oder said in a statement to Virginia Business. “Our goal is to ensure the marina remains operational and the tenants as well as the public experience no change in the operating status of the marina.”

The original redevelopment plan was to start construction in fall 2024, with the marina and restaurant opening in fall 2025. The proposed hotel and conference center were planned to be completed 12 to 18 months later.

PBH is currently managing the marina under the terms of a revised letter agreement effective Dec. 29, 2023. The two parties have begun working on the terms of a longer-term marina management agreement that they aim to complete by Feb. 29, which would be “an annual arrangement that allows the management of the marina to continue while also still being nimble for future opportunities,” according to Oder.

“PBH looks forward to continuing its relationship with the Fort Monroe Authority and welcomes the opportunity to advance the initiatives of the FMA through this marina management agreement,” Randy Pack, PBH president and managing partner, said in a statement.

Leaseholders of the marina, including the Deadrise restaurant, are unaffected by the announcement, according to a news release.

The FMA oversees Fort Monroe, a national historic landmark in Hampton. The authority has more than $100 million in projected investment in the next two to five years, including public and private investment in preservation, renovation and utility projects.

Va. Tech Innovation Campus building opening delayed

The opening of the first academic building on Virginia Tech’s Innovation Campus has been delayed to spring 2025, the university announced Thursday.

Virginia Tech started construction on the first academic building of the $1 billion campus in Alexandria in September 2021 and had planned to open the $302 million building this August. The delay on the 300,000-square-foot, 11-story building is due to construction supply chain issues, according to a university news release. Bethesda, Maryland-based JBG Smith Properties is the building developer.

Virginia Tech opened the Innovation Campus headquarters on the ground floor of 3000 Potomac Ave. in 2021, adjacent to the site of the future 3.5-acre campus. It houses executive offices and a café-style area.

Graduate students will continue to attend Innovation Campus classes at Virginia Tech’s Northern Virginia Center in Falls Church. Classes in the center started in fall 2020. Currently, the university has 376 computer science and computer engineering master’s degree students based in the Washington, D.C. area.

The Innovation Campus is part of Virginia’s Tech Talent Investment Program, which aims to produce 31,000 in-demand computer science and related graduates in the next two decades. At its full buildout, the Innovation Campus will produce about 500 master’s program graduates and 50 doctoral candidates annually.

“Our vision remains unchanged. We are building a community perfectly positioned to connect talented students with Northern Virginia’s growing tech ecosystem,” Lance Collins, vice president and executive director of the Innovation Campus, said in a statement.

The Innovation Campus is part of a developing area. Anchored by the campus, the Potomac Yard-VT station opened in May 2023. In December 2023, Gov. Glenn Youngkin announced that the Washington Capitals and Washington Wizards are planning to move to Alexandria in a $2 billion deal that would create a 9 million-square-foot entertainment complex in Alexandria. In nearby Arlington County, Amazon.com’s $2.5 billion HQ2 began a phased opening in June 2023.

McLean-based ARG announces new president, CEO

McLean-based IT consulting firm ARG has made several changes to its executive leadership, as its president and CEO retire and move to board memberships.

ARG co-owner and former CEO Greg Praske is now chairman of the 2024-25 board of directors, and Steve Praske, ARG co-owner and former president, is vice chairman of the board, according to the company’s Tuesday announcement.

Mike Shonholz, previously ARG’s chief revenue officer, has been promoted to CEO, while former Chief Operating Officer James Larsen has been promoted to president.

“As pioneers of the agent channel, Greg and Steve have played a significant role in shaping and influencing our industry,” Shonholz said in a statement. “Our executive team is strong and focused on the experience for our team, our partners and their customers and the results we can achieve together.”

Before becoming chief revenue officer in January 2019, Shonholz was a principal at ARG, according to his LinkedIn profile. Prior to joining ARG, he served as director of aggregation, infrastructure and managed services at IT company CDW. Before that, he was general manager at iTEMize Technologies. Shonholz holds a bachelor’s degree from Kent State University.

Larsen was CEO of telecom expense management firm Cost Management Group before joining ARG. Prior to that, he co-founded iTEMize Technologies and served as its president until CMG bought the company in 2012. In 2001, Larsen co-founded NetGain Communications and served as its COO until ARG bought the company in 2009. Larsen has a bachelor’s degree in computer information systems and management from James Madison University.

“I’m incredibly proud of what we built as a team at ARG and the results we’ve achieved for our strategic partners,” Greg Praske said in a statement. “Mike Shonholz is the most talented leader I’ve met in my career. … Working alongside James Larsen, who has successfully built and exited multiple businesses in our industry as a founder and CEO, and backed by a seasoned executive team, ARG is poised to become an even more powerful force in the industry under Mike’s leadership.”

ARG stands for Association Resource Group. Founded in 1991, the company was one of Virginia Business’ Best Places to Work in 2017.

Va. casino revenues total $58.5M in December 2023

Virginia’s three casinos generated $58.5 million in December 2023 gaming revenues, according to data released Friday by the Virginia Lottery.

Virginia’s first casino, the Bristol Casino: Future Home of Hard Rock temporary facility, opened July 2022. The Virginia Lottery Board approved HR Bristol’s casino license in April 2022. In December 2023, the Hard Rock Bristol casino generated about $12.2 million from its 911 slots and about $2.7 million from its 29 table games.

Rivers Casino Portsmouth, Virginia’s first permanent casino, opened in January 2023, after the lottery board approved its license in November 2022. Rivers Casino Portsmouth reported a total of approximately $23.85 million in gaming revenues, of which about $16.3 million came from its 1,466 slots, with the remainder coming from its 81 table games.

The temporary Caesars Virginia casino in Danville opened in May 2023, after receiving its casino license in April 2023. The Caesars Virginia casino reported roughly $14.27 million in revenue from its 808 slots and about $5.46 million from its 33 table games.

Last month’s casino gaming revenues were a 14.3% increase from the $51.2 million reported in November 2023.

Virginia law assesses a graduated tax on a casino’s adjusted gaming revenue (wagers minus winnings). For the month of December 2023, taxes from casino AGRs totaled $11.7 million.

The host city of Portsmouth received 7% of the Rivers Casino Portsmouth’s AGR, almost $1.7 million. Danville received 6% of its casino’s AGRs, receiving roughly $1.18 million. For the Bristol casino, 6% of its adjusted gaming revenue — roughly $725,000 last month — goes to the Regional Improvement Commission, which the General Assembly established to distribute Bristol casino tax funds throughout Southwest Virginia.

The Problem Gambling Treatment and Support Fund receives 0.8% of total taxes, about $93,800 last month. The Family and Children’s Trust Fund receives 0.2% of the monthly total, roughly $23,000 in December 2023.

One more casino has received voter approval and is currently underway in Virginia: the $500 million HeadWaters Resort & Casino in Norfolk. The developers — a partnership between the King William-based Pamunkey Indian Tribe and Tennessee billionaire Jon Yarbrough — submitted new plans to the city, aiming to start continuous, rather than phased, construction in spring 2024.

The Norfolk Architectural Review Board is the first body to review plans in the approval process, which ends with the Norfolk City Council. The board was set to review the new plans in its Jan. 8 meeting, but developers continued the review until Jan. 22.

Following Richmond voters’ rejection of a proposed $562 million casino for the second time, Petersburg lawmakers are seeking to hold a casino referendum in the city, which would require the General Assembly to allow a casino in a city with a population below 200,000. State Senate Bill 268, with state Sens. Lashrecse Aird and Louise Lucas as patrons, would amend requirements for a host city to ones favorable for Petersburg, The Progress-Index reported.

Editor’s note: This story has been updated to correct the tax rates allocated to host localities and the RIC.

Roanoke fintech startup KlariVis closes $11M funding round

KlariVis closed an $11 million Series B funding round, the Roanoke-based banking data analytics startup announced Thursday.

KlariVis provides data analytics solutions for community banks and credit unions. The fintech company has doubled its revenue and customer count year-over-year and has 100 clients, according to a news release. The $11 million will be used for advancing KlariVis’ engineering, product development, customer success, and sales and marketing.

“As we expand our market share, our primary focus is empowering an increasing number of community banks and credit unions with a revolutionary approach to data-driven insights,” KlariVis founder and CEO Kim Snyder said in a statement. “This is an opportune time for us to double down on what’s working.”

La Jolla, California-based technology-focused equity firm Blueprint Equity led the funding round.

“KlariVis has been a great success thus far, and we believe that we can help the business maximize its potential with our capital and internal platform team,” Bobby Ocampo, co-founder and managing partner of Blueprint Equity, said in a statement. “We’ve been in dialogue with Kim for years, and it’s been exciting to witness their growth.”

Snyder, who was the chief financial officer of Valley Bank before BNC Bancorp acquired it in 2015, founded KlariVis in February 2019. The company launched in January 2020.

Economy healthy but more work is needed, Barkin says

The U.S. economy is showing signs of health, but bringing down inflation remains necessary, Federal Reserve Bank of Richmond President and CEO Tom Barkin said Thursday during the 2024 Financial Forecast event co-hosted in Richmond by the Virginia Bankers Association and the Virginia Chamber of Commerce.

Economic conditions have improved but haven’t quite settled back to baseline levels, Barkin said, using a mathematical analogy: The economy’s health is nearing the bottom of a parabola but hasn’t quite finished its path back to pre-pandemic levels.

The U.S. unemployment rate was 3.7% in December 2023, according to the Bureau of Labor Statistics. That’s historically low, Barkin said. The inflation rate was 2.6% in November, as measured by the Personal Consumption Expenditures price index, a measure of consumer spending on goods and services among households. The Fed’s target rate is 2%.

“Contrary to most predictions, the economy remains healthy … and that’s despite a number of shocks,” Barkin said.

He sees potential for a soft landing in which inflation is controlled but the economy remains healthy. There are still several “flight risks,” however, in the path down.

The first Barkin sees is that the U.S. economy could “run out of legroom.” Although credit and interest have tightened, they haven’t made the economy soft, and the risk that people and companies could pull back on borrowing remains.

Also, economists can’t predict external shocks to the economic system, like a cyber shutdown, and where those shocks would hit and how hard. Some unforeseen events could bring down inflation but have greater costs to the system

Inflation could also level off above the Federal Reserve’s 2% target. Most drops in inflation have resulted from a reversal of pandemic-era price increases, and a goods deflationary cycle could end, Barkin said, while shelter and service prices remain high.

Additionally, a landing could be delayed, he said. Consumer spending is currently high, but strong demand isn’t a solution to inflation.

As measured by the Labor Department’s consumer-price index, inflation rose in December 2023, with the cost of living up 3.4% from the previous year.

“Overall, we’re still seeing, on a year-term basis, a long-term basis, a moderation in the overall levels of inflation, but there’s still this disconnect between goods and services and shelter,” Barkin told reporters, adding a caveat that “you can’t take too much [meaning] out of any one month.”

During its December 2023 meeting, the Fed’s policy-making Federal Open Market Committee reaffirmed its commitment to raising interest rates if necessary but held its benchmark rate in a 5.25% to 5.5% range.

The FOMC will meet Jan. 30-31 and March 19-20. Barkin is a member of the FOMC for 2024.

As to whether he’d support an interest rate cut in March, Barkin said, “Let’s see where the data comes in. … I don’t prejudge meetings. I definitely don’t prejudge the meeting after the next meeting.”

The U.S. isn’t yet in the clear. Fiscal conditions are ever-evolving, and “you gotta respond to conditions, so buckle up,” Barkin said in his address. “As you know, that’s the proper safety protocol, even if you’re on a plane expecting a soft landing.”

Va. Tech receives two $1M endowment commitments

The Public Service Education Institute has endowed two $1 million funds at Virginia Tech to support internships, the university announced Tuesday.

The endowments, each created with a $1 million commitment, will support students who have secured internships with federal, state or local government agencies, including the Virginia Cooperative Extension.

One endowment will support students in the College of Agriculture and Life Sciences, while the Public Service Education Institute Virginia Tech Internship Endowment will support students across a range of programs. The university is still working to establish the funds’ award criteria for students. 

“We are grateful for the support of the Public Service Education Institute for this tremendous gift that will impact the lives of Virginia Tech and College of Agriculture and Life Sciences students for years to come,” Alan Grant, dean of the College of Agriculture and Life Sciences, said in a statement. “Internships and the valuable skills they impart set students up for success in their future careers.”

The Public Service Education Institute was originally the U.S. Department of Agriculture Graduate School program. Established in 1921, the program expanded to provide more than 200 continuing education courses to government employees. In 2009, the program became an independent nonprofit, Graduate School USA. In 2021, Charles Town, West Virginia-based American Public Education bought the organization and renamed it the Public Service Education Institute.

Merle Pierson, the president and chairman of the institute’s board, was a professor of food microbiology and safety at Virginia Tech from 1970 to 2005 and headed its Department of Food Science and Technology from 1985 to 1994.

“Our goal is to help provide students with an experience in the government and to also provide the government with highly qualified individuals. … Hands on experience beyond the classroom provides much added value to education,” he said in a statement.

Ridge View Bank hires new SVP for New River Valley

Ridge View Bank has hired Todd Murray as senior vice president of commercial banking in the New River Valley, the Roanoke-based bank announced Wednesday.

Murray will lead an expansion of bank’s commercial banking services in the New River Valley and will be responsible for loan and deposit production, collaborating with the bank’s treasury, private banking and wealth partners.

For the past 27 years, Murray was market president of New River Valley for Danville-based American National Bank and Trust, which Atlantic Union Bank announced last July it would be acquiring.

“I grew up in the New River Valley and am excited to introduce Ridge View Bank to the area,” Ridge View Bank President Carrie McConnell said in a statement. “Moving into a new market, our goal is to find the best banker to build around. I am confident we have that person in Todd Murray.”

Murray holds an undergraduate degree from Virginia Tech and an MBA from James Madison University. He resides in Blacksburg.

Murray is a member of the Rotary Club of Blacksburg, Onward New River Valley’s investor relations and development committee and Montgomery County Chamber of Commerce’s legislative committee.

Ridge View Bank is a subsidiary of Pennsylvania-based CNB Financial that operates in Roanoke and Franklin counties.