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byline: Paula C. Squires

Virginia Beach reduces tax rate for data center equipment

The city of Virginia Beach has reduced the tax rate for data-center equipment, joining Henrico County in a bid to attract data centers with tax incentives.

The beach city’s new rate drops the tax on computers and peripherals used in data centers from $4 to 40 cents per $100 of assessed value, a reduction of more than 88 percent.
In April, Henrico dropped its business property tax rate on computers and related equipment for data centers from $3.50 to 40 cents per $100 of assessed value.

The lower tax rate in Virginia Beach is one of several new initiatives the city is taking to welcome data centers.

“This tax rate is highly desirable and puts us in a very strong competitive field to attract data centers,” Virginia Beach Economic Development Director Warren D. Harris, said in a statement.  “We want data center operators to know we have the resources in place to support their global customer base.”

Currently, the city doesn’t have any data centers. But it’s about to get new undersea cables, the first in the mid-Atlantic region. MAREA, the transatlantic cable by Facebook, Microsoft and Telxius — a subsidiary of Telefónica — has arrived and will be live in the first quarter of 2018 with the first ultra-high-speed data cable from Bilbao, Spain.

BRUSA, also owned by Telxius, will bring the second cable from Fortaleza and Rio, Brazil, to Virginia Beach in the third quarter of 2018. Each cable has a designed bandwidth of 160 terabits per second, which the city describes as the fastest cables in the world.

Additionally, Corporate Landing Business Park has been certified as a data-center site by Dominion Energy. Corporate Landing is a 325-acre, Class A, mixed-use park with ultra-high-speed commercial and residential network infrastructure in place, fiber access hubs, a cable landing station and several planned data centers.

The location has been approved for a streamlined permitting process that offers stable business costs, competitive power rates and flexible business assistance programs. Dominion Energy currently has eight other certified data-center sites, and Virginia Beach is the first and only location in southeastern Virginia. Corporate Landing also has been designated as a Technology Zone with additional incentives established by the Virginia General Assembly.

Other tax incentives offered by Virginia Beach include: no inventory tax, no tax on business equipment for manufacturers, and no tax on machinery and tools equipment.

Northwood Ravin to build its first project in Northern Virginia


Northwood Ravin, a Charlotte, N.C.-based real estate development company, is moving into the Washington, D.C., area with its first apartment project in Fairfax County.

The company announced that it would begin construction soon on its first multifamily building, along with 10,000 square feet of retail space, at the Preserve at Westfields in Chantilly.  Located at the entrance to Westfields Corporate Center and near the area's newest Wegmans, the Preserve will offer 312 luxury apartment homes consisting of studio, one-, two-, and three-bedroom floor plans.

The development, which also includes 155 townhomes being built by Elm Street, will include community spaces, such as an amphitheater, pavilion and nature trail surrounding a central lake.

“The Preserve at Westfields was the perfect opportunity for us to enter into the D.C. metro area,” Michael Gribble, vice president of Northwood Ravin, said in a statement. “With a large employment base, Westfields was already an active place during business hours.  The addition of the apartments, townhomes, the nearby Wegmans and our retail will help Westfields become an even more vibrant place in the evenings and on weekends too.”

The community will include a resident fitness room and gym. Northwood also plans a first-floor lounge with game room, a resident café and co-working space and a top -floor lounge overlooking am adjacent wooded area and creek.

Northwood Ravin is a joint venture between Northwood Investors and Ravin Partners LLC. The private apartment development, construction and property management firm serves the mid-Atlantic and Southeastern United States and says it has constructed more than 46 luxury apartment communities with a capitalization of over $2 billion.

Besides Charlotte, Northwood Ravin has offices in Raleigh, N.C., and Tampa, Fla.

Distribution property in Stafford County sells for $8.4 million

 

300 Centreport Parkway LLC has purchased a 64,656-square-foot FedEx Ground distribution property in Stafford County from Patricia H. Jaeger-Fredericksburg LLC for $8.4 million.

According Cushman & Wakefield | Thalhimer,  which brokered the sale, FedEx will continue its operations on the 12-acre property at 300 Centreport Parkway.

Thalhimer’s Virgil G. Nelson handled the sale negotiations on behalf of the seller.

Stonebridge Investments acquires Cooper Spring apartments for $54.2 million

StoneBridge Investments of Washington, D.C.  has acquired Copper Spring, a 366-unit apartment community in Henrico County, for $54.2 million. The seller, represented by Eastdil Secured,
was an affiliate of Clarion Partners.

Built in 1989 and renovated in 2006, Copper Spring is located at 3301 Copper Mill Trace, just outside the Richmond city limits.

The property includes 23 two- and three-story garden-style apartment buildings in a 30-acre, wooded suburban setting. An unused 1.25-acre parcel on the site could be developed with additional apartments or amenities.

Copper Spring represents StoneBridge’s first acquisition in the Richmond area. The company said it plans to upgrade the clubhouse and other amenities, as well as some of the residences.

“We were initially attracted to Copper Springs due to its proximity to large employment centers, strong historical operating performance and legacy of high-quality institutional ownership,” William Bateman, director, StoneBridge Investments, said in a statement. 

“We are very bullish on Richmond’s fundamentals, and think its long-term prospects are strong,” Kees Bruggen, managing director, StoneBridge Investments, said in a statement.   “Led by a strong white-collar employment base, in combination with reasonable living costs, short commuting times, and extensive cultural amenities, Richmond continues to be an attractive live-work-play destination. We intend to remain active in the Richmond market for the foreseeable future.”

ZRS Management, an affiliate of StoneBridge, will manage Copper Springs.

Since 1980, StoneBridge and its affiliates have acquired and developed more than $1.7 billion in real estate, primarily in the multifamily sector, for foreign and domestic investors. The company’s target markets include the Washington-Baltimore area, the Carolinas, Georgia, Florida, and Texas.  It has offices in Washington, D.C., and Amsterdam.

Two-story office property sells for $1.5 million in Virginia Beach

A two-story, 11,450-square-foot office building at 1439 North Great Neck Road in Virginia Beach has sold for  $1.57 million.

According to Divaris Real Estate Inc. (DRE), which brokered the sale, the seller was SLM Investments LLC and the buyer was 1439 Associates LLC.

The buyer’s firm, EDC Homes – one of the fastest growing homebuilders in the Hampton Roads area – will occupy the building’s second floor.

DRE also completed a 6,104-square-foot lease with Axis Global Enterprises Inc. to occupy the remainder of the building.  Vivian Turok and Jason Oliver of Divaris represented the landlord while George Fox, also with DRE, represented the tenant.  Axis Global provides construction and security technology solutions to a variety of clients.

Tim Kaine says a larger naval fleet presents an ‘enormous’ opportunity for Virginia

U. S. Sen. Tim Kaine, D-Va., told a group of legislative and business leaders Monday that there will be a great business opportunity for Virginia as the country gradually ramps up the number of Naval aircraft carriers and ships to 355 during the next 15 years.

  “We’re in the high 270s now,” he said, describing the size of the Naval fleet. “So much of that work will be done in Virginia.  The commitment was in the defense bill that we just got done and that the president signed. But building up isn’t going to be easy or immediate,” Kaine added during a keynote speech for the annual meeting of the Virginia Foundation for Research and Economic Education (VAFREE), held at the Jefferson Hotel in Richmond.

Nearly 350 people turned out for the meeting and luncheon. Kaine was referring to President Donald Trump’s action on Dec. 12, when he signed a $700 billion defense budget into law, known as the National Defense Authorization Act. It requires special legislative action to fund new priorities, including $26.2 billion for 14 new ships, $5.9 billion for Virginia-class submarines and $4.4 billion for aircraft carriers.

Huntington Ingalls Industries, based in Newport News, is the country’s largest military shipbuilding company. While HII’s Newport News Shipbuilding subsidiary — which builds both Virginia-class submarines and nuclear aircraft carriers — obviously would benefit from more work, Kaine noted that many contractors and other companies also would gain from a 355-ship Navy.  “All the reactors that are built that go into the nuclear carriers and subs are built in Lynchburg.  Building these ships will be an enormous opportunity,” he said, especially if the state and localities work together with higher education institutions to provide a skilled workforce for the expansion.

Kaine, a member of the Health, Education, Labor and Pensions Committee, said that it will be tasked with rewriting the Higher Education Act in 2018. “As we go forth this year, I’d love to pick the brain of VAFREE and other organizations grappling with workforce issues. As the unemployment rate comes down, it’s tougher to find the help you need. “

In an interview with Virginia Business, Kaine said he supports expanding Pell grants to cover not only college costs but costs associated with accredited career training programs in the trades as an incentive for students to seek such training.

With Congress expected to vote this week on a tax reform package, Kaine weighed in on that issue calling it “a missed opportunity.” Unlike President Ronald Reagan’s tax reform bill of 1986, which Kaine said unfolded after 10 months of hearings in both houses, President Trump’s package was “rushed, secretive and partisan,” he said.

The Democrats didn’t get the handwritten bill until late in the day last week, he said, and they had to vote on it that night

Kaine says there’s a “90 percent chance” the package will pass in the form that it was reported out, following a House-Senate conference committee meeting on Friday. “While the bill has some features that are positive, the absence of meaningful dialogue with the Democratic Party means it will be a missed opportunity.  The bill does sadly, in my view, weight the benefits at the top end and doesn’t do much for the middle class. It jacks up the deficit, and, with limitations on historic tax credit programs, Virginia gets socked a little more than other states,” he said.

Many businesses, though, are looking forward to the proposed reduction in the U. S. corporate tax rate from 35 to 21 percent.  That cut will raise the country’s deficit by $1.5 trillion dollars, said Kaine.

Nancy Agee, the CEO of Carilion Clinic in Roanoke and chair of the Virginia Business Council, also addressed the VAFREE gathering, congratulating the group on its 30th anniversary.

She expressed concern about a political environment that’s increasingly polarizing. “Our civil discourse is disintegrating at the federal level,” Agee said. “That’s the only way forward. When it devolves into a refusal to engage, it’s gets us nowhere, and it’s bad for business.”

Agee also commented on Virginia’s rise this year in a national business ranking by Forbes magazine to No. 5, after being No. 6 in 2016. The state’s Achilles’ heel, she said, may two things: “The cost of doing business — labor, energy and taxes cost more in Virginia than in 20 other states. And secondly, we rank No. 1 in per-capita federal spending. That’s a two-edge sword. It accounts for one third of our state economic activity, which makes us vulnerable to federal spending events like sequestration That’s why efforts to diversify our economy are so important.’’

HITT Contracting names next generation of leadership

HITT Contracting Inc., the largest general contractor in Virginia and one of the top 100 largest general contractors in the U.S., announced a new generation of leaders Thursday.

Co-Presidents Jim Millar and Brett Hitt will become co-chairmen of a newly formed board, and Russell Hitt will become chairman emeritus. Executive Vice President Kim Roy has been named CEO, becoming the first woman CEO of a Top 100 U. S. construction company, as defined by ENR (Engineering News Record), an industry trade magazine.

Executive Vice Presidents Jeremy Bardin and Drew Mucci will be co-presidents.

Millar and Brett Hitt remain sole owners of the firm. They will continue to be engaged in the company’s strategic direction, focusing on research and development, leadership development, and other areas of impact

“We have been carefully planning for our future for a number of years. Kim, Jeremy and Drew are exceptional leaders with proven records of success and a passion for our company and the construction industry. They have been intentionally developed as the next generation of leaders for our company,” Brett Hitt said in a statement.

His grandparents, Warren and Myrtle Hitt, founded the Falls Church company 80 years ago. Today, Hitt Contracting has expanded to nine offices across the U. S., with more than 1,000 employees and revenues of more than $1.5 billion in 2017.

Roy joined HITT Contracting in 1999. She will be responsible for all corporate operations, defining key initiatives, identifying emerging markets, and executing the board’s strategic vision.

Bardin, a 30-year construction industry veteran, will provide executive oversight of the firm’s portfolio, as well as drive national growth in current and new geographies.

Mucci, who rejoined HITT in 2017 after heading the mid-Atlantic operations of a national competitor, will provide increased leadership for 10 key market sectors and regional offices.

Additional leaders were named alongside the new principals. Josh Foreso was promoted to senior vice president to lead the base building and multifamily sectors. Evan Antonides was promoted to senior vice president to lead the mission critical sector, and Sara Collins was named senior vice president to lead the healthcare sector.

Matt Vester was promoted to vice president to lead the law firms sector and Senior Vice President Peter Thaler assumes leadership of the Richmond regional office.

Rosslyn’s Wilson Boulevard is most expensive street to lease space in Northern Virginia

Just how much will companies pay to occupy one of America’s most desired office addresses? According to JLL’s 2017 Most Expensive Streets study, those high-profile strips command an average asking rent of $48.65 per square foot, or a 46.9 percent premium compared to the rest of the country.

Across the metropolitan Washington, D.C. region, similar premiums exist despite market stagnancy. In fact, the one-mile stretch of Pennsylvania Avenue that runs from the White House to the U.S. Capitol Building in Washington, D.C., commands the highest office rents in the mid-Atlantic region with an average of $80 per square foot.

Occupied primarily by top-tier law firms, lobbying groups and government affairs’ offices of Fortune 500 companies, JLL says these tenants are willing to pay a premium for this address, which offers expansive views of the Capitol Building and the monuments as well as proximity to lawmakers in Congress.

Across the river, Rosslyn’s Wilson Boulevard is the most expensive street in the Northern Virginia market. Here rents average between $56 and $65 per square foot. With new trophy office buildings recently completed or scheduled to open in the next several months, the JLL report says rates are trending from the mid-$50s per square foot to the low-$60s per square foot for buildings with full-service amenities.  “The new trophy buildings not only deliver high-end modern office space, but will help transform Rosslyn from a sleepy 9-to-5 business district into a vibrant live-work-play neighborhood,” Michael Hartnett, senior research manager in JLL’s Northern Virginia office, said in a statement.

By comparison, rents are much lower in a smaller market such as Richmond. According to Cushman & Wakefield |Thalhimer’s third-quarter report, the greater Richmond office market had an overall vacancy of 7.5 percent and an overall average asking rent of $18.85 for all office property classes. In the more expensive Class A office properties, the average asking rent was $21.06 per square foot.

Smartmouth Brewing Co. to open second brewery in Virginia Beach

Smartmouth Brewing Co, based in Norfolk, will open its second brewery in Virginia Beach on Dec. 16. Mayor Will Sessoms will lead a ribbon-cutting ceremony at noon for Pilot House a 9,457-square-foot facility located at 313 32nd St.

Pilot House will offer the same flagship beers — Alter Ego Saison, Murphy's Law Amber Ale and Rule G IPA as well as new limited release beers — to the resort district. The company leased the former U.S. Post Office building and renovated it to include a small-batch, 10-barrel brewery system, private event space and an 8,000-square-foot tasting room with a back deck.

Smartmouth worked with several Hampton Roads companies during the construction phase, including WPA Architects, Spacemakers and Benevolent Design.

“Smartmouth Brewing Company has transformed the 1958-era post office into a new and very distinct brewery in the resort district,” Virginia Beach Economic Development Director Warren D. Harris said in a statement.  “Not only will they bring their award-winning beers to our city, they have added 14 new employees in Virginia Beach.”

Porter Hardy, president of SmartMouth Brewing, described Pilot House “as a tribute to the local waterfront and aviation community as well as the location’s core function of producing experimental and creative beers. A pilot batch is the term used to describe the trial brew of a new beer in the brew house.”

The first two beers brewed on-site, First! IPA and Crooked Cane Candy Cane Stout, will be available on opening day in addition to a new barrel-aged cherry stout known as Rubidus Nox.

Smartmouth Brewing currently produces 4,400 barrels of craft beer each year in its Norfolk location. Smartmouth expects to brew an additional 600 to 800 barrels a year at the new site. The Virginia Beach Development Authority previously awarded an Economic Development Investment Program grant in the amount of $20,000 based on the capital investment in the city.

“The Virginia Beach craft beer community is growing significantly,” said Michelle Chapleau, the city's business development coordinator. “It is a collaborative community, and it not only attracts visitors to the city but also is a strong point of pride for locals.”

Interstate Batteries and Advance Auto Parts announce partnership

Advance Auto Parts Inc. and Interstate Batteries announced a strategic partnership Tuesday. Starting in the spring, Dallas-based Interstate Batteries, the replacement battery brand with the largest independent battery distribution system in North America, will become the exclusive automotive and specialty battery brand for Advance Auto Part stores and customers.

Roanoke-based Advance Auto Parts, which serves both professional installers and do-it-yourself customers, said it will debut a battery program with Interstate products at its more than 4,900 U.S. and international locations. The program will offer free battery testing and installation in stores.

Interstate products will be available initially at Advance’s company-owned stores and at independently owned Carquest stores. In the future, Advance Auto Parts subsidiaries Worldpac, Autopart International and Carquest Canada also will offer Interstate products.

“We are thrilled that Advance Auto Parts will be the only national auto parts retailer offering our customers the market-leading battery brand,” Tom Greco, president and CEO of Advance Auto Parts, said in a statement.  “….Together with Interstate we are positioned to increase market share in batteries and achieve growth. Long-term strategic partnerships with our suppliers are important, and this is a great example.”

“This alliance places us where our professional and retail customers are making purchasing decisions, allowing Advance Auto Parts and independent Carquest stores to serve as convenient, one-stop shops to meet our customers’ needs,” Scott Miller, president and CEO of Interstate Batteries, said in a statement.

Together, the companies said they plan to recycle more than 30 million batteries per year.