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byline: M.J. McAteer

Old and new mix in Alexandria

Alexandria is a patchwork quilt of a city, with the distinctive fabric of each of its neighborhoods central to the planning of commercial and residential development.

Old Town, with its many blocks of handsome historic architecture, can be likened to fragile old velvet that needs to be sensitively handled and preserved to maintain its beauty, while funky Del Ray is more like well-worn denim — informal, comfortable, low key.

Potomac Yard is the equivalent of one of those new-age materials that are all about convenience and practicality. Yet tough times along the Interstate 395 corridor have left its no-nonsense fabric quite frayed.

Alexandria counts 18 such neighborhoods. “We divide the city into small areas and do comprehensive plans for each,” says Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership.

Old Town is perhaps the site of the city’s most ambitious agenda. The area always has been a steady performer, and in the second quarter of this year it had one of the lowest commercial vacancy rates in the Washington metropolitan  market — 14.5 percent for Class A space, according to CoStar, a commercial real estate data company. The average rate for the region was 16.4 percent. 

“Old Town doesn’t have pendulum swings,” says Eric Berlin, senior director of investor services for Cushman & Wakefield. One stabilizer has been the presence of many nonprofits and associations, which are suited to its inventory of generally smaller buildings.

Melissa O. Webb, executive director of brokerage for Rappaport, says Old Town’s main drag, King Street, also is a magnet for retail. National sellers such as Lululemon, an athletic and yoga apparel retailer, mix with local boutique businesses, such as Sonoma Cellars, a recently opened wine tasting room.
Riverfront development

Old Town, however, never has made optimal use of its prime location on the Potomac River, although the potential is clear. On a recent steamy afternoon, for example, the attractive dock area at the foot of King Street was swarming with people browsing the gift shop at the Torpedo Factory art center, lining up for tickets for the ferry that runs to Mount Vernon, Washington, D.C., and National Harbor in Maryland, and lunching at the newest trend spot, the Blackwall Hitch. The sidewalks were packed, and parking was impossible.

Yet a few blocks away in either direction along the river, almost no one was around. That’s because two former industrial sites cut off all access to the water. The Robinson Terminals, North and South, where paper once was offloaded for presses of The Washington Post, bookend the Old Town waterfront, and both have been empty for years. They are enclosed by chain-link fences plastered with unfriendly warnings to keep out.

This lack of access will soon change. Robinson South will be the site of a project that will include town houses, condos, restaurants and limited retail. Construction should begin this fall with an opening projected for late 2017. Adjacent to that development, a 5-story, 110-room Hotel Indigo is expected to open the same year. 

Robinson North will become a second mixed-use development. It will include a hotel with about 100 rooms, Landrum says. Construction should begin next year with the project expected to open in 2017. “Old Town has long been regarded as a tourist destination, even though plenty of people live there, too,” notes Webb. 

The city is investing its own money in the riverfront upgrade by doing extensive flood mitigation work to be followed by a new park with a centerpiece fountain and a 1.5-mile river walk.  A revamped, much more aesthetic and accessible riverfront should help Alexandria increase the already satisfying stream of day visitors who ferry across the Potomac from National Harbor, a massive mixed-use project on the Maryland shoreline. When the MGM Casino opens at the complex next year, that tourist flow is expected to become even heavier.

Another area, about a block off the river close to the Braddock Metro and within walking distance of Old Town amenities, is an object of special attention from the city as well. Alexandria has crafted a new development plan for Old Town North with the aim of finding a better balance between commercial and residential uses. Landrum says the 2015 “small-area” plan for the neighborhood includes mostly in-fill development, such as hotels and mixed-use projects.

Until just recently, Old Town North residents were underserved, Webb says. However, eateries such as Mason Social, Bastille, the Lost Dog Café, and doughnut purveyor the Sugar Shack have arrived in the past couple of years. A Harris Teeter supermarket opened there in 2014, joining new high-end town houses and apartments.

A luxury condo building called the Oronoco, which opened last year, was built from the foundations of the former home of the Sheet Metal Workers International Association. Rusting railroad tracks leading to the derelict Robinson North terminal still run through the park in front of it.

On the other side of Old Town in Carlyle, Alexandria looks forward to the 2017 arrival of about 2,100 employees of the National Science Foundation. They will occupy a 660,000-square-foot, LEED-certified building across from the Eisenhower Metro. Mixed-use development should follow. “It won’t have huge coattails,” Berlin predicts, “but there will be some.”
Last month, the city learned that another major federal agency, the Transportation Security Administration, also is relocating its headquarters to Alexandria. The TSA is going to the Victory Center Building in 2018, a move that will bring 3,400 employees.

Away from the river in down-home Del Ray, lots of growth is not really the goal. Instead, Alexandria is focusing on a “pattern book,” which offers owners, architects and builders nonbinding guidance for making alterations and additions to historic buildings.

Potomac Yard
Just a few blocks from quiet Del Ray, yet a world apart, is the booming Potomac Yard, where hundreds of units of new housing are going up. “Certainly, a lot is going on residentially everywhere,” Berlin says, but Potomac Yard is “huge.”

The city expects 5.8 million square feet of residential development in that neighborhood in the next 25 years. The projected arrival of Metrorail in 2018 is anticipated to bring another 5.6 million square feet of commercial development.

The station’s tax revenues are expected to generate more than $1.5 billion over 30 years for the city. The project will be funded with $69 million from the Northern Virginia Transportation Authority, a $50 million Virginia Transportation Infrastructure Bank loan and a $143 million general obligation bond. The debt will be paid by a contribution of up to $72 million from a developer and revenue from two special tax districts around the station.  

One commercial tenant that will be moving in is the Institute for Defense Analysis. That is good-news/bad-news for Alexandria, because the institute is now located at the Mark Center on the city’s struggling Interstate 395 corridor, where the commercial vacancy rate in the first quarter of this year reached  24.3 percent. Another Mark Center tenant, the American Diabetes Association, also is decamping for a location in Crystal City in Arlington with the access to Metro that the Mark Center lacks.

“The traffic scared people away,” Berlin says. “The 395 corridor’s future as an office market is questionable.”

The downturn in that part of Alexandria is partly the fault of the recession, of course, but also of changing attitudes. More and more, people want to live and work in areas that are diverse and that have access to public transportation, such as Old Town or Potomac Yard.  Alexandria’s best and most promising neighborhoods may be a patchwork, but Metro provides the stitching that holds their future together.

The “senior” guy

“Many times, when you bring in a senior guy, it can be risky.” Those were the thoughts of John Germano, executive managing director of the mid-Atlantic region for CBRE, a commercial real estate services giant, before he hired Lou Christopher. 

Seasoned hires sometimes put their personal advancement ahead of “the brand,” he says, but not Christopher, who was named Virginia Leasing Agent of the Year in 2014 by the Commercial Real Estate Brokerage Association of Greater Washington (CREBA). A multifaceted headquarters deal that

Christopher negotiated for CBRE in 2014 further earned the association’s vote as the region’s best leasing transaction that year.

Christopher came to CBRE in 2012 from Cushman & Wakefield Inc. with 25-plus years of experience and a reputation as a top producer.  “From the day he walked in, Lou had a strategic perspective,” Germano says. “He has been transformational.”   

Christopher, now a CBRE vice chairman, demonstrated his worth when he became the point man in finding a new corporate headquarters for the Corporate Executive Board (CEB), a best-practices consulting firm. CEB had been leasing offices in two locations in Rosslyn and wanted to consolidate under one roof. It was considering moving out of state, which would have meant a loss of 1,300 jobs to the NoVA economy,” says Christopher.

Under his guidance, CBRE did labor studies, worked with economic development groups and helped secure almost $10 million in incentives from Virginia, which persuaded CEB to stay in Arlington County and invest $150 million for a new headquarters operation.

The broker also worked with JBG on customizing space for his client in an office tower JBG is constructing in Rosslyn. When that 31-story, 525,000-square-foot building delivers in 2018, CEB will occupy 350,000 square feet or 15 floors of it. The building will be called the CEB Tower.

“It was as complicated as a deal can get,” Germano says.  Christopher is “the ultimate professional,” says Paul Adkins, who represented JBG in the negotiations. “He is one of the few brokers who could manage such a complex transaction.”

Being able to customize space to fit CEB’s needs before the lease was signed was critical to the deal, says Christopher. For instance, younger workers, now in the majority at CEB, prefer a collaborative environment. The need for small meeting rooms has grown, notes Christopher, while the need for assigned offices has shrunk.

Work tools also have become so portable that only 50 to 60 percent of employees are in the office on any given day. When they are on site, strategies such as “free address” (unassigned work areas) have reduced the footage each worker needs from about 230 square feet 15 years ago to about 165 square feet today, he adds.

Technology also has transformed Christopher’s ability to manage multimarket clients, but at the price of making his job an almost 24-7 proposition.

“I’m always working — from getting up, to going to bed,” he admits.  Yet, he’s still able to spend time boating and skiing with his wife and three children. “I just take a break from my outings to help a client,” he says.  

While such dedication has been essential to his success, just as important has been that he is “good to work with,” says his boss.  “You can’t have a thin skin around him,” Germano explains. “But he is very self-aware of his shortcomings, and people gravitate toward him.”

Time for a changeover

Northern Virginia is in the middle of a metamorphosis.

“The region is moving from being a company town to becoming a global business center,” says Stephen S. Fuller, director of George Mason University’s Center for Regional Analysis. The move, he says, is not really an optional change. If Northern Virginia hopes to maintain its enviable perch at the top of almost every measure of local success, the metamorphosis is a must.

Sequestration was a brutal lesson for NoVa about the dangers of depending too heavily on the federal government as a driver of the local economy. In the past five years, cuts in federal spending have meant the loss of 9,000 federal jobs in the region — jobs that no one seriously expects to get back.  Gone, too, with sequestration, is $9 billion in federal contracts, with the predicable effect of many government contractors having to downsize or go out of business. The collateral damage has been office vacancies stuck at all-time high rates and a stagnant employment market.

Office vacancy rates in the Washington area rose from 14.6 percent in the last quarter of 2014 to 15 percent in the first quarter this year, according to Costar, the commercial real estate research firm. Southeast Fairfax County had the worst vacancy rate in the region, a whopping 37.5 percent. These rates, in part, reflect a new reality in the commercial real estate market: Many businesses are reducing their footprint by using space-reduction measures such as bench seating and hoteling and allowing their employees to work remotely.

A Bureau of Labor Statistics study in 2013-14 shows the depth of the employment problem. It found that the Washington region as a whole ranked 14th out of the nation’s 15 largest metropolitan areas for job growth during that period — worse even than Detroit.  And, Fuller says, the jobs that NoVa has been adding, which have kept its unemployment numbers in the 4 percent range, are mostly in food services, hospitality and retail, and they pay far less than the jobs that have vanished.

Obviously, the past few years haven’t been the best of times for a region used to years of ever-increasing prosperity, but business leaders believe that their recent pain can be turned into eventual gain. Northern Virginia has the necessary positives in place to allow it to transform itself into an international business center: top-notch schools, a highly educated and enviably wealthy populace, and a sophisticated and expanding transportation network, including Metro’s Silver line. Redirecting those resources will just take patience and planning.

“This kind of change doesn’t happen overnight,” Fuller says. “It takes a while to reposition.”

The economist’s best guess on when Northern Virginia once again will outpace the national economy? 2018. But the overall picture already is brightening, if slowly.

A better year than 2014
In Alexandria, Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership, predicts this year will be better than last year. Applications to build have increased along with the volume of leasing, she says, and the office vacancy rate has dropped at least a little, from 17.3 percent last year to 16.2 percent in the first quarter of 2015.
The city’s three major markets, Old Town, Carlyle and Potomac Yard, are all logging promising activity.

In Old Town, where the office vacancy rate is only 10 percent, three waterfront projects are underway. The Hotel Indigo should open in the summer of 2016; work on the mostly residential development at Robinson South is expected to begin this fall; and the residential and retail Robinson North project is slated to get underway next year with delivery the following year.
In Carlyle, the 2,100 employees of the National Science Foundation should arrive in 2017 and occupy a 660,000-square-foot LEED-certified build­­­­ing across from the Eisenhower Metro stop, with mixed-use development expected to follow. (LEED stands for Leadership in Energy & Environmental Design.)

Residential development around all four of Alexandria’s Metro stations is strong, Landrum says, but especially at Potomac Yard, which is slated to get a Metro station in 2018. The station on the Blue and Yellow lines will be funded with $50 million from the Northern Virginia Transportation Authority and $50 million from a developer. The remaining $140 million will be generated by a special tax district surrounding the station.  Alexandria projects that — once it is built out with a mix of residential, commercial and retail space — the area will produce $98 million in annual revenue for the city.

Millennial mecca
Arlington, too, is “definitely better off than last year,” says Christina Winn, the county’s director of business investment.  “We are moving into a new world of technology companies, entrepreneurs and millennials.”

Unfortunately, that new world includes about 4 million square feet of empty office space, much of it in Crystal City, where the vacancy rate remains at an uncomfortable 21 percent for Class A space, according to Costar. Still, Winn is bullish about the transformation of the high-rise neighborhood into an innovative technology hub, and activity does seem to be picking up there.

In April, the D.C.-based business incubator 1776 announced it was acquiring Disruption Corp., an asset management and financial services firm, and expanding into Crystal City. It joins Eastern Foundry, an incubator for small government contractors; LiftOff Health, which focuses on identifying and fostering ideas for innovation in health care; TechShop, which helps entrepreneurs with 3-D printing; and the Crystal Tech Fund, a co-working space for startups. 

Another co-working space company, WeWork, is partnering with the biggest landlord in Crystal City, Vornado Realty Trust, to turn an empty office building into micro apartments and retail space. The WeLive concept will target millennials by creating two-floor “neighborhoods” with shared common space and amenities.

“We have the highest concentration of millennials in the region,” Winn says.

Lidl, a Germany-based discount supermarket chain, announced in June plans to spend $77 million in creating a U.S. headquarters in Arlington where it will employ 500 people. The company also will create a $125 million regional headquarters and distribution center in Spotsylvania County, employing 200.

In Arlington’s Rosslyn area, the business advisory company CEB will help anchor a new 31-story office building expected to open in 2018. CEB will add 800 employees to the 1,200 it already has in Arlington. A TargetExpress store will open in the same neighborhood this fall.

Still, Costar reports that the office vacancy rate in the Rossyln-Ballston corridor is little better than in Crystal City — about 20 percent in the first quarter of 2015 for Class A space. One reason is 1812 N. Moore St., a 530,000-square-foot, 35-story office tower. It is still vacant more than a year after completion. Developer Monday Properties built on spec and has yet to find a marquee tenant; it recently refinanced a $140 million construction loan.

Overall, the county’s economy is “gaining traction and momentum with every success,” Winn says. “The high vacancy rate remains our biggest challenge.”

Sequestration’s toll
Of all the NoVa jurisdictions, Fairfax probably was hurt the most by the federal budget cutbacks.

“We lost 10 percent of government contracting dollars from the sequestration,” says Gerald L. Gordon, president and chief executive officer of the Fairfax County Economic Development Authority.

Costar reports that the county continues to have a painfully high office vacancy rate as a result — 18.9 percent in the first quarter of the year. Gordon doesn’t expect any great changes for 2015. “This year will be pretty flat, maybe creeping up a little,” he says.

The county does look forward to a one-time boost of $60 million to $80 million from being the primary host of the World Police and Fire Games, which began on June 23 and will end on July 5. Otherwise, any rise in the county’s fortunes probably will come from the burgeoning businesses of cybersecurity and translational medicine and the ongoing emergence of Tysons Corner as a business center.

Especially good news for Fairfax was the recent decision by Inova Health System to buy for $180 million the former Exxon Mobil Corp. campus across the street from its Inova Fairfax hospital. Once Exxon has fully vacated the premises in about a year, Inova will begin renovations to accommodate centers for genomics, cancer research and personalized medicine. In May, Dwight C. Schar, chairman of the home building company NVR, announced that he and his wife, Martha, will donate $50 million to the launch of the cancer research institute there.

Eventually, the Merrifield campus may accommodate 3,200 employees. The site has 1.2 million square feet of office and conference space, and two pads there are zoned for another 465,000 square feet of office space, Gordon says. He scoffs at the notion that George Mason University’s plan to dive into personalized medicine at its Prince William campus will represent competition for Inova. He sees “crossovers,” instead. Both institutions also hope to open medical schools eventually.

Tysons, of course, is the county’s biggest story. The opening of Metro’s Silver line a year ago is spurring a frenzy of residential and office building there, despite an office vacancy rate of about 15 percent. (See related story, Page 66.)

New hospital in Loudoun
Loudoun County, being farther from Washington, was not hit as hard by the cutbacks as closer-in jurisdictions. “We are in better shape than a year ago, and we are diversifying rapidly,” says Matt Letourneau, a Republican supervisor representing the Dulles District and chair of the board’s economic development committee.

The hottest part of Loudoun is the Route 50 corridor, where hundreds of bulldozers can be seen working on housing and retail projects. In a nod to that exploding demographic, HCA will open its 124-bed StoneSprings Hospital Center along Route 50 in December. It will join a medical cluster in that part of the county, which includes a hospice, a rehab hospital and Waltonwood, a memory-care center that will open next year. The county also plans to build a senior center at South Riding in the next couple of years.

Along the Route 7 corridor, the office vacancy rate was a better-than-average 12.8 percent for Class A space in the first quarter of this year, Costar reports. One Loudoun, a mixed-use development in Ashburn, continues to expand, adding restaurants and retail, even though plans for a minor-league baseball stadium at the site appear dead in the water. And, despite a flurry of press about Gov. Terry McAuliffe wanting to have a Redskins stadium in NoVa, the county’s business leaders say nothing concrete has emerged about any location in Loudoun.

As is true throughout NoVa, office space leasing has been slow, and that caused a rethink by the Peterson Cos., developer of the 205-acre Commonwealth Center office development park near Route 7. By this date, a 65,000-square-foot TopGolf entertainment complex should have opened at the site, and Peterson wants to build an indoor skydiving facility at the center next. A few miles away, high-end rental apartments, restaurants and entertainment facilities are going up around  what will be the last stop of  the second phase of Metro’s Silver line at Route 772.

All this building activity is taking place almost exclusively east of Route 15. West of that unofficial dividing line, Loudoun’s rural economy is thriving.  In 1998, for example, the county had five wineries. It now has 40, and in a nod to Virginia’s up-and-coming reputation as a producer of fine wines, the county will host the national Wine Tourism Conference next year, the first time that gathering has ever been held outside of Napa Valley.

Breweries “are multiplying like rabbits,” as well, say Tony Howard, president of the Loudoun County Chamber of Commerce.  Eight are now operating, with more on the way, including Victory Brewing of Philadelphia, which will open a brewpub at the courthouse square project in downtown Leesburg next year. Maryland-based Flying Dog Brewery, however, canceled plans to open Farmworks Brewery in the northern part of the county on the site of a new $1 million hops-processing operation. That facility, called Lucketts Mill & Hopworks, expects to begin operations in October. 

Washington Dulles International Airport continues to be “a concern” for Loudoun, Letourneau admits. Air traffic there is down 2 percent, but international travel is growing, he says, and the bargain carrier Frontier Air has expanded its domestic flights from the airport and is doing well. The Metropolitan Washington Airport Authority’s decision to shift money from Reagan National to Dulles is another “positive sign.”

All in all, “it’s hard to complain” about the state of the economy in Loudoun,” Howard says. His statement is accompanied by a caveat, though.  In September, he points out, the federal budget will expire without timely action in Washington. That means it could be déjà vu all over again for Northern Virginia with still another sequestration possible.

Northern Virginia at a glance

Source: Virginia Employment Commission, Virginia Economic Development Partnership

Unemployment rate (April) 3.8 percent
Population (2013) 2.86 million
Increase since 2010 6.7 percent
Average weekly wage $1,270
Percentage of adults (25+) with bachelor’s degree or higher 52.5 percent
Median family income $116,615

 

The Silver bullet

Phase I of Metro’s Silver Line marks its first anniversary in July, and that is a cause for celebration in Northern Virginia. Since rail arrived, the fortunes of Tysons Corner and Reston have been building — literally — and the silhouette most common to their skylines has become the construction crane.

Even in western Fairfax and eastern Loudoun counties, where Phase II of the Silver Line probably won’t open until 2020, growth is on a fast track. Developers and planners see how the first phase of the line is altering the neighboring landscape, and they are all aboard for the change that is coming.

This spring, Metro had to share some less than great news about the Silver Line: Design modifications would be adding $76 million to the cost of Phase I, bringing the final price tag to $2.98 billion, and the opening of the $2.7 billion Phase II, originally to be in 2019, would be delayed 13 months because of weather problems, design modifications and new stormwater management requirements. Despite these setbacks, Phase I of the system is performing better than expected, and it is acting as a catalyst for a surge in growth.

Shyam Kannan, managing director of planning for the Washington Metropolitan Area Transit Authority, says Phase I — which consists of the McLean, Tysons Corner, Greensboro, Spring Hill and Wiehle-Reston East stations — is outperforming ridership projections.

Wiehle, the station at the end of the line, is the busiest of the five stations, logging more than 8,000 daily entries. Greensboro, the quietest stop, has been averaging 943 entries.

Commuter traffic is flowing in both directions on the railway, with a reverse commuting market that Kannan terms “pretty significant.” Almost two-thirds of Silver Line riders cross the Potomac, and 17 percent travel to and from Maryland. About 1,500 rides a day are confined solely to the new railway.

Weekend use of the Silver Line has been even stronger than weekday use. On “Black Friday,” the traditionally heavy shopping day after Thanksgiving, for example, the Tysons Corner stop “was through the roof,” Kannan says, with 11,000 entries. In general, that station, which serves the Tysons Corner Center and Tysons Galleria shopping malls, posts weekend ridership numbers second only to the Woodley Park stop in the District, which provides access to the National Zoo.

Unlike two other recent transportation additions to the Washington area, the Intercounty Connector in Maryland and the hot lanes on the Beltway, the Silver Line has not had to be sold to an unconvinced public, Kannan says. The demand was there. And with 20 million square feet of construction taking place at Tysons, the Metro planner says that usage surely will grow.

Michael Caplin, president of the Tysons Partnership, a coalition of business, government and community leaders, concurs.  “It’s go, go, go at Tysons,” he says. “Ridership is exceeding expectations, construction is proceeding with gusto, and retail sales are strong.”

Fairfax County’s master plan permits unlimited density within a quarter mile of the new Metro stops, with the result that during this spring alone, more than 400 units of luxury housing have opened near the Spring Hill station and more than 800 units close to the Tysons Corner stop. Hundreds more units are planned.

Capital One Financial Corp. is putting up a 34-story office tower near the Mclean station, which, after the Pentagon, will be the second-largest building in the region.

Tech companies are moving in at Tysons, as well.  One recent arrival is Cvent, a software company that does logistical support for major events. Last year, Cvent relocated from a site about a mile away to be adjacent to the Greensboro station, saying specifically that it wanted its 400-plus employees to have access to Metro. 

In April, the 300-room Hyatt Regency became the first new hotel to open at Tysons in 20 years, and it pointedly touts its location just 200 yards from the Tysons Corner station. In May, Whole Foods announced it will open a 70,000-square-foot store at a planned 3.7-million-square-foot mixed-use development called The Boro near the Greensboro station. With that amount of development in the works nearby, the Greensboro station is unlikely to remain the quietest on the line for long.

In Reston, a 1.5-million-square-foot, mixed-use public-private development called Reston Station is going up around the Wiehle station, which has become a regional transit hub. With 2,300 parking spaces, Wiehle is the only station on Phase I that has designated parking. It also has a 10-bay bus terminal that serves Fairfax and Loudoun as well as Washington Dulles International Airport.

Mark Ingrao, president and CEO of the Greater Reston Chamber of Commerce, says the coming of Phase II of the Silver Line to Reston Town Center in five years has increased the number of applications for construction permits there. Several luxury apartment buildings within walking distance of the planned railway stop already have opened. “There’s a lot of interest in residential units,” Ingrao says.

Reston Town Center will be the first of six stations on Phase II of the Silver Line. The other stops heading west will be Herndon and the Innovation Center, also in Fairfax County, and Dulles Airport, Route 606 and Route 772 in Loudoun. The Herndon station, Route 606 and Route 772 all will have designated parking.

In Loudoun, “lots of folks are getting prepared for Metro,” says Tony Howard, president of the county’s Chamber of Commerce. “This is a once in a lifetime opportunity, an opportunity to shape our future.”

Loudoun has the advantage of still having plenty of green space that can be developed, Howard says, which makes it attractive to commercial developers. Its challenge will be to provide the cultural amenities to leverage that investment and foster a sense of place.

“The market is going toward an urban, workable environment,” Howard  notes,  which precisely describes the Loudoun Station complex that is coming out of the ground near the Route 772 Metro stop. Loudoun Station advertises itself as a “downtown community,” featuring offices, residences, restaurants, retail and entertainment options. An 11-screen movie theater opened there this spring.

Herndon, too, envisions a citylike environment around its Metro station — as much as 3.2 million square feet of commercial space and 2,400 housing units by 2035.

All of this current and future development will transform a landscape that was decidedly rural just 30 years ago into a network of suburban cities, all connected by rail. As Caplin points out, “Access to Metro will be the differentiator.”

The new leisure travelers

Patrick Starfish has trust issues. It’s obvious from the wary look in his  eyes. But at Salamander Resort & Spa in Middleburg, guests can learn to communicate with horses, even skittish ones like Patrick.

Under the tutelage of equestrian director Sheryl Jordan, a recent participant in the resort’s Equi-Spective course transformed the suspicious animal into a trusting follower who shadowed her every movement around a pen and quietly came to her when she stopped.

Jordan’s course is meant to be a lesson in nonverbal leadership that can be applied to team building in the workplace. Yet plenty of Salamander guests take it solely for their own enrichment, she says. Bringing about change in an equine partner is a Horse Whisperer moment and exactly the kind of special experience that today’s leisure travelers crave.

While high-end leisure travelers represent only about 10 or 15 percent of visitors to the commonwealth, Eric Terry, president of the Virginia Hospitality and Travel Association, says he looks to their demands and expectations to lift the hospitality market as a whole. That already seems to be happening in a modest way as Virginia boasts of more top-rated resorts in 2015 than ever before.

For example, three Virginia resorts earned Forbes’ highest, five-star imprimatur, up from two last year. Patrick O’Connell’s Inn at Little Washington, Richmond’s The Jefferson Hotel, and Keswick Hall and Golf Club in Charlottesville all got top marks on Forbes’ 800 separate standards of hospitality.

O’Connell’s restaurant also merited five stars, for the 25th consecutive year — best showing of any restaurant in the country. The number of facilities in the commonwealth that Forbes ranked with four stars also grew from seven in 2014 to eight this year.

“People expect great amenities” at these resorts, says Terry. Like the participants in Equi-Spective, “They are looking for an experience.” Millennials in particular, he says, are “savvy and focused” about what they expect.

At the Inn at Little Washington, the experience being sought is a meal that is famously not to be duplicated elsewhere, complemented by a world-class wine cellar.

At The Jefferson, it’s immersion in the ambience of the hotel’s grand public rooms, soon to be matched by its guest rooms. Managing director Joseph Longo says that by the end of 2016, each room at The Jefferson will be at least 500 square feet and will feature a foyer, a changing room, a five-fixture bathroom, and even a doorbell.

The new 18-hole Pete Dye-designed Full Cry golf course undoubtedly was a factor in Keswick earning its first five-star rating this year. Just as important, says Janet Kurtz, the resort’s director of sales and management, is the option for guests to unplug from their high-tech lives and have offbeat outings such as hot-air ballooning, touring local wineries on horseback or walking the foxhounds with the huntsman for the Keswick Hunt.

“Luxury is changing its meaning,” says Esra Calvert, director of research for Virginia Tourism Corp. The creation of a memory, she notes, is as important as a lush environment. A sampling of top Virginia resorts shows just how on the mark she is.

At the four-star Salamander, for example, guests are treated to a taste of hunt country Virginia, not only through Jordan’s course, but through riding lessons, trail rides and the chance to attend polo matches, steeplechase races and horse shows.

At the Tides Inn on the Chesapeake Bay in Irvington, the focus is on the culture of the Northern Neck. General Manager Gordon Slatford says the inn, which made Travel+Leisure’s best hotel list, “creates events to individualize the property,” such as this spring’s oyster roast and craft-beer festival. Guests can go hands-on, too, by helping a local waterman harvest oysters or by going crabbing. 

The venerable, 2,000-acre Omni Homestead resort in Hot Springs, which has updated its pool and lobby, has long been known for its exotic activities, which include falconry lessons, Segway tours and skeet shooting.  On TripAdvisor, the most common compliments from amateur critics concern such adventures. The Homestead earned a four-diamond rating from AAA this year, which is awarded to only 5.4 percent of  the 28,000 hotels the association rates.

Another wilderness resort, the 12,000-acre Lodge and Cottages at Primland at Meadows of Dan, sets itself apart with a panoply of unusual activities, including stargazing at its own observatory, geocaching, off-roading and wing shooting. Such offerings helped propel it onto U.S. News and World Report’s list of the world’s top 50 resorts — it ranked No. 25 — and garnered four stars from Forbes, says Steve Helms, vice president. For a unique sleepover, he recommends one of the resort’s three luxurious tree houses that look down on the Dan River gorge 2,700 feet below.

Experiences such as stargazing, crabbing or communing with Patrick Starfish are popular not solely because they are so unusual. They also represent another shift in the profile of the high-end leisure market. Yes, these travelers want high-thread-count sheets, HD TVs and lightning-fast Internet, but, as Calvert puts it, “Legacy has become the new luxury. Consumers feel guilty, and they want to do the right thing.”

The right thing these days means staying at a resort that is environmentally sensitive, like Primland, which has a LEED (Leadership in Energy & Environmental Design)-certified lodge, or Salamander, which put 250 of its acres in a conservation easement. If a resort is philanthropic, giving back to its community like The Jefferson does through support of the Virginia Museum of Fine Arts, so much the better.

The right thing also means a focus on eating conscientiously — both for one’s own health and that of the planet. The Inn at Little Washington’s longtime emphasis on organic and sustainable foods was in the vanguard of a farm-to-table movement that has become ubiquitous. Almost without exception, the commonwealth’s top resorts strive to serve regionally sourced cuisine, and Virginia wines and craft beers.  “The foodies are here to stay,” Calvert says.

This emphasis on healthier, greener eating is part of a general interest in health and wellness as is witnessed by the rise of the spa.  No top resort is without a spa now, though, naturally, each comes with its own twist on pampering — whether it is lotions made from grape seeds from nearby vineyards or massages tailored to horseback riders or golfers. 

Who would have foreseen this flight from conformity toward the individualized resort experience when Anne Tyler wrote “The Accidental Tourist” in 1985? The hero of that prize-winning novel, Macon Leary, made a living writing travel guides for people who wanted everything to be as much like home as possible wherever they went. Now, 30 years later, in the leisure world of 2015, Macon Leary would need to find another line of work.

Meet, greet, connect

Please turn off all electronic devices. That was the norm in the not-so-distant past for attendees at a meeting or conference.

These days, people are encouraged to keep their tablets and smart phones fired up, the better to interact with the information being imparted and interested parties outside the room. Before they even arrive at meetings, some participants have downloaded an app to plan and personalize their schedule, and every nuance of their experience is often live-streamed to the folks back at the home office.

“Digital space is changing the platform,” says Carol Torricelli, director of domestic sales for the Virginia Tourism Corp. Translation: Today, meeting planners are almost as concerned about cyberspace as physical space.   “Everyone wants to be interacting,” says Torricelli. “Everyone is engaged.”

“If you aren’t there [on the forefront of technology], you aren’t in the game,” says Sherrif Karamat, chief operating officer for the Professional Convention Management Association. “With the average conventioneer using two devices, the challenge is to keep up the speed. We’re living on a live stage and learning as we go along. We are seeing the digitalization of our economy.”

Meeting venues in Virginia have been scrambling to keep abreast of this burgeoning digital demand. “Everything is wired, everything [is] built-in now,” says Vicki Bendure, spokesperson for the National Conference Center in Leesburg, the largest meeting space in Northern Virginia. The center, which has 900 rooms and a 16,000-square-foot ballroom, recently has been refurbished and updated by new management and offers free Wi-Fi throughout.

At the Hotel Roanoke & Conference Center in Roanoke, which can accommodate groups as large as 1,600, public relations director Michael Quonce says the online, all-the-time agenda of groups puts his AV/technology team to the test. “We’ve increased bandwidth and have a separate pipeline for large groups so they can do their work,” he says. “This really has been a change for us.”

It’s a change worth making. Eric Terry, president of the Virginia Hospitality & Travel Association, says that the meetings and convention industry has been on the uptick nationwide for several years now. The trade organization Meetings & Conventions projects a 0.3 percent increase in the number of meetings held in North America in 2015, and a 0.2 percent increase in the number of attendees.

Virginia’s outlook also is trending positive, although not as strongly as in some parts of the country, Terry says, because it is still recovering from the loss of so much government business. Northern Virginia and the Hampton Roads area were hit hard repeatedly, first by the government hunkering down after 9/11, then by the Great Recession in 2008 and 2009. Then came “Muffin Gate.” Even though the story about how Department of Justice meeting-goers were feasting on $16 baked goodies at the taxpayers’ expense proved to be not quite as sensational as first reported in September 2011, in its aftermath government conferences became about as common as bipartisanship on Capitol Hill. The government shutdown in 2013 was the final insult. Dean Miller, national sales manager for Visit Fairfax, says the National Conference Center in next-door Loudoun saw $2 million in bookings vanish that fall, and many other venues took a big hit, too.

It was a lesson learned the hard way about putting all the eggs in one basket. Today, the meeting and convention industry in Virginia is embracing diversity, and its new favorite buzz word is “SMERF.” This acronym stands for “social, military, educational, religious, fraternal,” meaning if Uncle Sam won’t be gathering at your hotel anymore, maybe the Elks, or the romance writers or retired members of the Fifth Marine Division will.

The Washington Post recently reported that the Westfields Marriott in Chantilly keeps its 1,100-person capacity ballroom busy not just with business meetings, but by hosting lavish Indian weddings — 118 of them in the past three years, which generated $3.3 million in revenue.

Reggie Cooper, general manager at Salamander Resort & Spa, says his high-end Middleburg facility already has booked 50 weddings for 2015, along with an increasing number of meetings for nonprofit groups, lawyers and insurance executives. As the baby boomers age, medical conferences have become another growth area for the meetings industry.

Terry says that the commonwealth is expanding its capacity to meet these modest but steady increases in demand.

In Richmond, a downtown Hilton Garden Inn is being converted to a regular Hilton and will expand its meeting space from about 6,000 square feet to 15,000 square feet.

In downtown Norfolk, a 300-room Hilton will open at the end of the year. The complex, called The Main, will include a $42.5 million, 50,000-square-foot conference center, which will be built with public funds. Anthony DiFilippo, CEO of the Norfolk Convention and Visitors Bureau, says his city needs this expanded capacity.

In NoVa, Miller says that the opening of the first stage of Metro’s Silver Line has been hugely beneficial in getting groups to hold events in Fairfax County. Easy access is a critical concern for event planners, and now meeting attendees can use the Metro to go lobby on the Hill or take in a Nationals’ game. “We’re not stuck out in the middle of nowhere anymore,” he says. To help serve this expanding market, a 300-room Hyatt Regency with 15,000 square feet of meeting space should be on line by this month. The New York-based company Convene also opened 15,000 square feet of meeting space at Tysons at the end of 2014.

Those in the industry point to several other positive developments for their business. Esra Calvert, Virginia tourism’s director of research, says that in 2014, 15 percent of the 40 million visitor trips to the commonwealth were business-related. One in four of those business travelers extended his or her stay by one or more days for leisure purposes. She called this phenomenon “bleasure travel.”

Indeed, the line between business and pleasure is blurring. Blame it on the rise of the more demanding millennials, but meeting-goers expect to be able to customize their experience in much the same way leisure travelers do. “They are doing what they want to do, not what we tell them to do anymore,” Karamat says.

And what they want is to be in a greener, more socially responsible environment where they can eat local food, sample craft beers and artisan wines, and generally immerse themselves in the ambience of the particular region.

At the National Conference Center, for example, meeting-goers can indulge in a locally sourced chef’s dinner or visit a local winery. At Salamander, they can team-build by riding horses or sliding down zip lines. The Hotel Roanoke promises more vegetarian, gluten-free dining options, while Norfolk emphasizes its unique history with the U.S. Navy and its “no-chain zone” downtown. “We’re a foodie city,” DiFilippo says.

This move toward self-curated business travel, however, still has to be balanced against the need for stricter accountability — no more junkets — and not just for government gatherings, but for corporate meetings, as well.

“It must be mission critical for it to happen now,” Karamat says. Yet he doesn’t foresee meetings being replaced by video conferencing, despite how plugged-in everyone at a physical meeting site must be these days.

“Face-to-face meetings,” he says, “are here to stay.”

Treating employees like clients

Sometimes in business transactions, speed has become an end unto itself: Close the deal quickly and move on. Not at Accounting Principals-Richmond.

The business model for this professional recruiting firm is all about long-term relationships, not only in dealing with clients, but with employees as well. The ethos of its customer service — a commitment  to integrity, mutual respect and support services — also applies to its staff, and that is no common thing in the field of competitive sales.

In 2013, Accounting Principals employees’ positive ratings of their workplace propelled the firm to the No. 1 ranking among large companies on the list of Best Places to Work in Virginia. This year, the firm is a repeat winner.

Administrative assistant Dorothy Brooks is a good example of the loyalty that Accounting Principals fosters. She started as a temp at the agency 19 years ago and never left.  Back then, she was a single mother with a young son, but she says she was given the flexibility to be there when her child needed her, and, later, was given the same leeway to care for her mother.

Nearly two decades later, that humanistic approach remains at the core of Accounting Principals’ culture. The company’s latest hire, executive recruiter Shannon Patel, was seven months pregnant when she started work last August, which means she had to go on maternity leave after a bare two months on the job. Her newborn son then had serious health problems, which necessitated more time away from the office.

“The support I received was amazing,” she says.

“If someone has a health or family concern, it’s never, ‘What’s our policy’?” says Jennifer Dodge, the managing director at Accounting Principals. “Instead, we figure out a way to make it happen.”

The company extends that generous spirit to its community relations, doing three or four team volunteer events every year. Dodge says such endeavors are especially important to millennial staff members, who believe that work should be more than just a job. The enthusiasm of these young colleagues, in turn, gives their boomer and Generation X co-workers a boost, she says. The company also recently added a paid personal volunteerism day so that employees can give time to their pet causes. “We do a lot of community services, and I enjoy that,” Brooks says.

The company also supports its employees in developing their careers. Brooks was given the time to pursue her bachelor’s degree in business administration, and Natalee Rinaca, the firm’s senior business development manager, was able to change jobs within the company five times in  eight years until she felt she had found the perfect fit.  “There are a lot of opportunities to move around. Lots of potential for internal growth,” Rinaca says.

Accounting Principals is wise enough to understand the payback of longtime employees such as Brooks and Rinaca: The expertise they develop in their areas is a huge factor in retaining clients.

In 2001, for instance, Mark Koschmeder came to Accounting Principals in search of a job. He was relocating from Northern Virginia to the Richmond area and had talked to a number of head hunters. “But,” he says, “Jen and her team seemed more interested in placing me in something right, career-wise.”

Although Koschmeder ended up finding a position on his own, he did not forget Accounting Principals and called on the firm when he was in a position to hire at Capital One. “Accounting Principals always brought the best person to the table,” he says.

Last year, the best person they brought to the table just happened to be Koschmeder himself after the company found him a new position as controller of Fas Mart/GPM Investments.

Matt A. Schumacher, vice president and controller of The Brink’s Co., has worked with Accounting Principals for more than a dozen years, too, mostly with the same person. “They know the different flavors of accountant,” he explains. “They don’t waste our time by sending over people who don’t fit.”

“Our clients know we will do the right thing by them,” says Dodge. “At the end of the day there is the trust factor.”

That trust factor, obviously, also has been key to Accounting Principals’ track record in keeping employees, but the firm offers material rewards, too, such as competitive salaries and benefits. Superior performance is singled out.

For all these reasons, both intangible and concrete, Accounting Principals topped the list of best large companies at which to work this year, but Brooks perhaps sums up its attraction best in terms most people understand: “I don’t have to moan and groan when getting out of bed in the morning to go to work,” she says.

 

Best Places to Work 2015 list of large employers

 

 

 

 

Hotspots

Development these days is all about mixed use. Planners mingle offices, retail, restaurants and residential projects in a single area, usually in an attempt to create a village or mini-city where people can live, work and play.

This mixed-use philosophy shines at four of some of the hottest development spots in Virginia.

At Scott’s Addition in Richmond, the waterfront in Alexandria, and The Bridges in Roanoke, walkability, connectivity and green space all figure large in the discussion. At Harbour View in Suffolk, mixed use also is the buzz, but within the parameters of traditional suburban development where the car is still king.

Of the four spots, Harbour View also is the only area that is not a part of another development trend: the repurposing of buildings that have outlived their original use. At Scott’s Addition, the Alexandria waterfront, and The Bridges, mostly blue-collar commercial buildings are being reborn as everything from white-collar offices to apartments and coffee shops, and their conversion is a cornerstone of the character of the developments.

Scott’s Addition, Richmond
“Most people didn’t even know it existed,” says Roger Bouchard, president of the Scott’s Addition Business Association (SABA).  “The area was zoned industrial, and I never saw people walk north of Broad.”

No more. Scott’s Addition is emerging as a more affordable downtown neighborhood than Shockoe Slip or the Fan District, and its industrial character is being transformed by a huge influx of residents and the amenities that are beginning to follow them. 

In 2005, Scott’s Addition — bordered by railroad tracks on the north, Broad Street on the south, North Boulevard on the east, and I-95 on the west — was placed on the National Register of Historic Places. That attracted developers who could apply for tax credits on rehab projects. A slew of apartment projects are now in the pipeline:  Some of the larger ones include:

Main Street Realty’s recently completed projects, one on Norfolk Street and the other on Summit Avenue and Norfolk, for a total of 132 units.

Jerry Peters’ 94 apartments that are going into the Seaboard Bag Co. factory at Moore and Belleville streets. 

Spy Rock Development’s 70 apartments housed in a 73,000-square-foot former Coca-Cola bottling plant on Roseneath Road. Historic tax credits “were a significant factor” in undertaking the $27 million project, says developer Andrew Basham. The units in the old bottling plant are scheduled to be available this month while 124 more units in a new 126,000-square-foot building on the same site should deliver in the second quarter.

“Richmond was lacking a midtown area between Broad and I-64/I-95, Basham says. “People are coming back to the city, and Scott’s Addition was primed for redevelopment.”

Restaurants and retailers have been trickling in to serve the burgeoning population, which ranges in age from the mid-20s to the mid-40s. Lamplighters Coffee Roasting Co. recently relocated to larger quarters, and a couple of breweries have opened.

“They [the new residents] want cool, convenient and kitschy,” says Charlie Diradour, president of Lion’s Paw Development, which converted a defunct pornographic bookstore on North Boulevard into a funky restaurant, En Su Boca. Diradour also demolished a gas station next door. A drive-through Starbucks should open in its place this month, with the coffee shop sharing the building with Growlers to Go, a craft beer store.

North Boulevard is technically not a part of the neighborhood, but that is going to change. Bouchard says Scott’s Addition will nearly double in size when it is expands its boundaries to include the Boulevard. The acronym of his organization, the SABA, won’t change, but the letters will stand for Scott’s Addition Boulevard (instead of Business) Association.

The Alexandria waterfront
“It’s such a unique aspect to have a waterfront,” says Stephanie Landrum, executive vice president and chief operating officer of the Alexandria Economic Development partnership. “But ours has been underutilized for the past century.”
Just like at Scott’s Addition, that lack of use is going to fade into history. When the Dominion Boat Club agreed to accept $5 million for its half-acre site at the foot of King Street last year, that removed a major and long-standing impediment to the city’s goal of “continuous public access” for the Old Town waterfront.

In addition to the cash settlement, the deal allows for the relocation of the boat club on city-owned property just a block away, at the foot of Prince Street. Its old Beachcomber building will be razed to make way for a three-story clubhouse, 45 parking spaces, a dock, piers and slips.

That clears the way for the city’s plan for $120 million in mostly open-space improvements along the waterfront, Landrum says. The old boat club site will become Fitzgerald Square, a park that will feature interactive water elements and a skating rink in the winter. An art walk with themes based on history will run the length of the waterfront. “It will be almost like a curated walk,” Landrum says.

Two other parcels crucial to the city’s vision became available in 2013, when The Washington Post sold the Robinson Terminals, which bookend the waterfront.  The city made approval for development at the sites contingent on public access.

At Robinson Terminal North, developers CityInterests and Rooney Properties plan a series of buildings: a four-story residential and commercial building, a six-story building with two residential towers and a hotel sandwiched in-between and a two-story glass building facing the river.

Robinson North will offer views of neighboring parks and will have new green space fronting a pier. Construction is expected to be done by 2016.

At the other end of the Old Town waterfront, at Robinson Terminal South, developer EYA is teaming with JGB Cos. to put up eight new buildings totaling 280,000 square feet. “There are not that many waterfront development opportunities in Alexandria,” says A.J. Jackson, EYA’s senior vice president of land acquisition.

The Robinson South project, under study now by the city’s architectural review panel, will feature condos, townhouses, retail and restaurants on 3.2 acres. Most of the existing buildings, Jackson says, are corrugated metal and not worth saving. EYA will repurpose a two-story brick warehouse as a commercial space. Like CityInterests, it promises a new pier will be part of its $120 million investment. Plans are to break ground this summer with the first occupants of the residential units moving in by the second half of 2017.

Finally, Carr City Centers is building a five-story, 121-room boutique hotel at the site of a former warehouse on South Union Street. The project, which will include an 80-seat restaurant, is expected to cost less than $50 million and should open late this year or early next year.

The Bridges in Roanoke
As in Alexandria, WVS Cos., the Richmond-based developer of The Bridges, is trying to transform a neglected riverfront into a dynamic mix of uses. It plans apartments, restaurants, retail and green space, including a river walk.  Already under its belt is a similar project WVS did near downtown Richmond on the James River called Rocketts Landing.

The name for the 22-acre site in Roanoke, which stretches along South Jefferson Street adjacent to the downtown, derives not only from the two distinctive bridges that bisect the property but also from the developer’s hope of being a bridge to downtown. The location of the Virginia Tech Carilion Research Institute directly across the street should be a catalyst for that connection.

Although The Bridges site is on the National Register of Historic Places, it had been considered a brownfield because of the residue from heavy industrial use, which included ironworks, lumberyards, a mill and a scrapyard. Now, the area will be part of the new 47-acre Roanoke River & Railroad Historic District, which will give developers access to federal and state historic tax credits.

Marc Nelson, special projects coordinator for Roanoke’s Department of Economic Development, says The Bridges will be developed in five phases. The first phase is a 157-unit apartment building, which should be fully opened this spring. A Starbucks and two restaurants will be housed in a converted stable. The investment will be about $15 million.

The $4.8 million Phase II, also in progress, focuses on the conversion of a trolley barn into offices for the technology company JDSU. The developer anticipates that JDSU will be able to move in next month. So far the city has provided a $2 million grant toward public infrastructure, which could rise to as much as $10 million over the arc of development.

“Full build out of the site is projected to take 20 years with the total investment estimated at approximately $100 million,” Nelson says.

Harbour View, Suffolk
Up until a decade ago, this northern Suffolk area was largely residential. But after the housing crash in 2008, which it weathered better than most because it didn’t have a lot of inventory, the area’s relatively modest prices and convenient location have fueled what F. Greshman Wall III, vice president of sales and leasing for CBRE, calls “an explosion” in residential growth. That growth, in turn, is spurring commercial and retail development.

Hampton Roads Crossing, for example, is a mixed-use development at the edge of Harbour View. Developer John Peterson III says it covers 150 acres and includes retail and office space and 1,000 units of both rental and owner housing that should be built out by 2017.

A 123,000-square-foot Kroger Marketplace, the centerpiece of the retail quotient of the project, opened last December. Fenton Childers with Kroger Real Estate said the chain was attracted by the area’s dense population and a strong daytime workforce of military and government workers.

The area’s workforce had looked to face tough times in 2011 when the U.S. Joint Forces Command was disestablished. But in 2012, the Navy Cyber Command (soon to be called the Information Dominance Command) moved into the 200,000 square feet of vacated space. Its 1,500 employees are big contributors to the Harbour View economy, says Kevin Hughes, director of the Suffolk Department of Economic Development.

The presence of Bon Secours Health Center at Harbour View — an outpatient facility — also “has created a lot of medical tenant and government contracting interest,” Wall says. For example, a 25,000-square-foot medical office building across from the hospital will deliver this summer.

Other projects in the pipeline include the development of 55 acres into an office park near Interstate 664. Plus, the Tidewater Community College Real Estate Foundation plans another mixed-use development for 400 acres on the James River near the Monitor-Merrimac tunnel. 
“It’s all about location,” Hughes says. To drive home that idea, his organization has come up with a new slogan for the community: “Destination Harbour View, the center of it all.”

Happy trails

Tourism, once mostly grounded by the recession, is taking off again in Virginia and across the country.

With new hotels in the pipeline and the state’s rising profile as a destination for culinary experiences that include visits to wineries and breweries, Virginia is positioning itself for a strong 2015.

“Culinary tourism has become huge,” says Caroline Logan, director of corporate communications for the Virginia Tourism Corp.

With food usually comes lodging, and that’s trending in a positive direction as well.  “Viewed from the 50,000-foot level, the lodging industry is in a really good place,” says Bobby Bowers, senior vice president of operations for Smith Travel Research, which tracks hotel room supply and demand around the world.

As of the end of October, the revenue per available room, a combined measurement of occupancy and room prices, was up 8.4 percent nationwide to $70.70 a night compared with 2013, representing what is projected to be the fifth consecutive year of growth.  “Most people expect 2015 to be a smidgen lower, but I am not convinced that it will be lower at all,” Bowers says.

In Virginia, the news has been good, too, though more earthbound. The lingering effect of sequestration on Northern Virginia and Hampton Roads has suppressed government and corporate travel, which only now are in recovery.  The result, as of October, has been an increase in revenue per available room of 6.4 percent to $58.72 compared with 2013 — numbers that were good enough to make tourism one of the few expansion areas in the commonwealth’s economy.

While figures for 2014 aren’t in yet, the state saw $21.5 billion in revenue from tourists in 2013, a 14 percent increase from 2012.

Even though demand for lodging was on the increase last year, only modest numbers of new rooms came on line during 2014. As of mid-November, Virginia had expanded its hotel room numbers by just 0.1 percent in 2014, while the national rate was 0.8 percent. Slow growth is expected to continue in 2015, Bowers says, with about 2,170 new rooms in the pipeline for the commonwealth for a growth rate of about 1.5 percent (see story on Page 57).

Most of the visitors who occupy those rooms — 58 percent in 2013, the last year for which figures were available — come to the commonwealth by car to visit family and friends, according to the research firm TNS Travels. These visitors will continue to be the mainstay of the Virginia tourism and hospitality business. Yet two major sporting events (see story on Page 57) and several travel trends, including culinary tourism, should help the state’s tourism industry gain altitude in 2015.

One factor in Virginia’s favor is a surging millennial market. Logan says many younger tourists are attracted not only by the state’s varied opportunities for outdoor recreation, but by the chance to have authentic local experiences at reasonable rates. That quest dovetails nicely with another trend: the exponential expansion of wineries, breweries and locally sourced restaurants.

Virginia now has more than 250 wineries and counting, and so many craft breweries (more than 60) that the state tourism website offers itineraries for beer tours. Stone Brewing Co., the 10th largest craft brewery in the country, is getting into the act, promising to invest $74 million in a brewery that will open in Richmond next year.

Restaurants are paralleling that development by drawing diners with their locavore credentials. In a coup for the state, Esquire magazine recently announced that Virginia was not just about ham anymore in naming it the Food Region of 2014.

Increasingly, hotels and bed-and-breakfasts are partnering with chefs for cross-over events and promotions, says Logan, using last November’s Wine & Brine festivities along the Eastern Shore as an example. Under development in that region now is an oyster trail that will celebrate the waterman culture of the Chesapeake Bay. Logan says the self-guided route should be ready in the next 12 to 18 months.

The southwestern section of Virginia likewise is trending.  The popular Crooked Road, a 300-mile route through the region’s folk and country music heritage, now is supplemented by the Birthplace of Country Music Museum, which opened in August in Bristol. The nonprofit museum’s executive director, Leah Ross, expects it to average 90,000 visitors a year with revenues projected at $2.5 million by the museum’s second year of operations.

The three-day Bristol Rhythm & Roots Reunion festival has become another big draw for Bristol. In its first year, the three-day festival drew 7,500 people; last year, on its 15th anniversary, 60,000 people showed up to hear  more than 1,000 artists.

New outdoor attractions in the region are sprouting up too, most notably the Spearhead Trails project, an ambitious network of 500 miles of ATV and equestrian trails near Saint Paul. The 70-mile Mountain View trail there already is open, and completion of the rest of the trails is promised by next year. Near Pocahontas in Tazewell County, Spearhead will add 20 miles of ATV trails this year to augment the 30-mile Pocahontas trail already in operation.

Another significant development for tourism in the region includes the return of the Virginia Museum of Transportation’s Norfolk and Western Class J 611 steam engine to Roanoke. The engine, built in that city, has been undergoing a $3.5 million restoration in North Carolina, but it will return home under its own steam in April, says the museum’s executive director, Beverly T. Fitzpatrick Jr. The engine, pulling eight to 15 cars, then will make four weekend excursions a year on Norfolk Southern tracks, west toward Radford and east to Lynchburg at dates yet to be determined. Once in operation, Fitzpatrick says, the Class J 611 will offer the only steam engine excursion in the commonwealth.

“It’s an exciting time for the state,” says Eric Terry, president of the Virginia Hospitality and Travel Association, of the prospects for tourism in Virginia this year and into the foreseeable future. “We really have turned the corner.”

Winning combination

Virginia is hosting two major athletic events this year, both expected to give the state economy a substantial boost. The World Police and Fire Games will be held in Northern Virginia June 26-July 5, and the UCI Road World Championships will dominate downtown Richmond Sept. 19-27.

Barry Biggar, president and CEO of Visit Fairfax, anticipates that 12,000 active and retired first responders will participate in the police and fire games. They will compete in 61 different sports at venues scattered throughout NoVa, but primarily in Fairfax County. All the events — which range from shooting and soccer, to darts and Dragon boats, to ultimate firefighter and SWAT team competitions  — will be open to the public at no cost. Because many of the athletes will bring family and friends, about 30,000 people are expected. The games are budgeted at $20 million in public- and private-sector money and are forecast to generate $60 million to $80 million in revenue. 

Meanwhile in Richmond, Tim Miller, executive director of Richmond 2015, which is managing the UCI Road World Championships, calls the race “the superbowl of cycling.”  The 12 races, which will be held across nine days, are expected to attract 1,500 top-tier athletes and 400,000 spectators. The projected budget of $21 million potentially will produce an $86 million economic impact on the capital city and a $135 million impact statewide.

The start and finish line for many of the races will be at Fifth and Broad streets in downtown Richmond. Grandstands will line that area while fan zones with jumbo screens to follow the action will be sited around the courses. The plan is for lots of vendors, many based in the convention center, and live entertainment. Satellite parking and shuttles will supposedly keep the downtown from gridlock.
“This is going to be much more than a bike race,” Miller says.