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byline: Robyn Sidersky

Arko buys chain of 135 convenience stores

Arko Corp., a Fortune 500 holding company for Henrico County-based convenience store chain GPM Investments LLC, has closed the acquisition of South Carolina-based Transit Energy Group, which is valued at $370 million plus the value of inventory.

The transaction, announced Thursday. includes 135 convenience stores, supply fuel to approximately 190 dealers and a transportation business with 58 trucks and 78 tanker trailers supporting retail and wholesale businesses in the Southeast United States.

The acquisition of TEG is Arko’s 23rd since 2013. Arko previously announced plans to acquire TEG in September 2022.

“We believe we can add value to these stores and well-known regional brands with an enhanced offering as we reset these stores,” Arko Chairman, President and CEO Arie Kotler said in a statement. “We welcome TEG’s employees to our family of community brands and look forward to working together to grow the business and provide value for customers.”

The deal is valued at $370 million, plus the cost of inventory, $50 million of which is deferred and payable in two annual payments of $25 million on the first and second anniversaries of the closing. Arko financed $90 million of the non-deferred consideration including the value of the inventory and other closing adjustments. The remaining $258 million was funded by funds managed by Oak Street, a division of Blue Owl Capital, as part of the existing $1.15 billion agreement. Arko leases the real estate assets from Oak Street.

TEG’s 135 stores include retail convenience stores including Corner Mart, Dixie Mart, Flash Market, Market Express and Rose Mart, which are located throughout Alabama, Arkansas, Louisiana, Mississippi, Missouri, North Carolina, South Carolina and Tennessee. The acquisition introduces Arko to Alabama and Mississippi.

Arko reported operating income for the fourth quarter of 2022 at $33.7 million, compared to $28.4 million in the fourth quarter of 2021. For the year, Arko’s operating income was $167 million, up from $142.1 million in 2021. Arko reported a net income of $72 million for the year, compared to $59.4 the prior year.

Virginia hold ’em

The slot machines are already ringing out in Bristol and Portsmouth, where Virginia’s first commercial casinos opened during the past year.

The state’s first permanent casino, Rivers Casino Portsmouth, opened its doors on Jan. 23. Operated by Chicago-based Rush Street Gaming, the resort has 1,148 slot machines, 57 table games and 24 poker tables, as well as a sportsbook, a Topgolf “swing suite” and multiple restaurants. The casino is expected to generate $16.3 million in annual tax revenue to the city.

However, the Hard Rock Hotel & Casino Bristol was first out of the gate in the race, opening a temporary facility in July 2022. Hard Rock International Inc. broke ground in December 2022 on its $400 million permanent Southwest Virginia casino, expected to open in July 2024.

During its first six weeks, Virginians and guests from 48 other states visited the temporary Hard Rock casino, a 30,000-square-foot space with 900 gaming slots and 20 tables at the former Bristol Mall. The project generated about 600 jobs, and when the permanent casino opens with a 3,200-seat theater and a 20,000-seat outdoor entertainment venue next year, the resort is expected to create 1,500 direct jobs and bring in $21 million in annual tax revenue for Bristol.

Meanwhile, the state’s two other casinos are in the works in Norfolk and Danville.

As of early February, construction had not started on the planned temporary or permanent HeadWaters Resort & Casino on the Elizabeth River. The Pamunkey Indian Tribe-led project hit some roadblocks last year after the city halted plans for a temporary casino inside Harbor Park, the Norfolk Tides’ home stadium. The tribe then announced it would build the temporary casino in the same space in the stadium’s parking lot as the $500 million permanent casino, after the city of Norfolk sold the land to the developer.

According to Jay Smith, spokesman for the casino, construction of the permanent casino and hotel will take 18 months to two years, and both facilities are expected to generate $30 million in annual gaming and sales taxes for Norfolk.

Smith said in February that the tribe hopes to reach agreement on the land sale “in the next few weeks. We look forward to breaking ground as soon as possible.”

In Danville, plans for a temporary Caesars Virginia resort at the former Dan River Inc. mill site are moving forward, with a possible midyear opening, although Caesars Entertainment Inc. officials are keeping their cards close to the vest when it comes to details. Table game dealers were set to start training in late February in preparation for the permanent resort’s opening in late 2024.

Caesars announced a partnership with the Eastern Band of Cherokee Indians (EBCI) in August 2022, with an accompanying increased investment from $400 million to $600 million. The cash influx will mean a larger hotel, growing from 300 to 500 rooms. The project will also have a 2,500-person entertainment venue and 40,000 square feet of meeting and convention space.

“Following COVID-19 pandemic closures, we found that regional gaming markets across the country recovered more quickly than anticipated,” explains Cory Blankenship, EBCI’s treasury secretary. “We are confident that market conditions — regional population, consumer demographics, proximity to other gaming markets and other variables — are favorable to support an expanded scope to the Danville project.” 

The fate of a fifth potential casino — either in Richmond or Petersburg — was still undecided as of this issue’s mid-February deadline. Richmond voters rejected a proposed Urban One Inc.-backed casino in late 2021, but city officials were pursuing a second referendum vote this fall, while Petersburg leaders were trying to bring a referendum to their ballots.

State lawmakers pulled from consideration two bills that would have opened the possibility for a casino in Northern Virginia, but the legislation could return for consideration during the 2024 General Assembly session. 

Ups and downs

Compared with the previous two years, 2022 was less of a roller coaster for the housing market in Virginia, but it still presented challenges for many would-be first-time homebuyers.

As inflation rates grew, peaking at a 40-year high of 9.1% in June 2022, the Federal Reserve increased interest rates rapidly. Inflation fell to 6.5% in December 2022, but the higher rates put the brakes on the housing market in Virginia with an abrupt screech.

Over the course of 2022, 123,000 homes sold statewide, about 20% less than in 2021 but closer to pre-pandemic activity, according to Virginia Realtors. The sharpest declines were seen in Northern and Central Virginia. Bidding wars were less common last year than during the height of the pandemic, but it still wasn’t a great market for buyers, as the state’s median sales price jumped about $25,000 to $375,000 in December 2022, compared with December 2021.

However, in February, mortgage rates started to decline, prompting renewed demand. According to a Wall Street Journal report, the average 30-year home loan rate has come down by nearly a full percentage point from a 20-year high above 7% in November 2022 — although that’s still double the 3% rates from November 2021. 

On the commercial side, many large-scale projects are now in the works across the state. In Richmond, the ball is rolling on the $2.44 billion Diamond District mixed-use development centered around a new baseball stadium for the Richmond Flying Squirrels, set to be completed in time for the 2025 baseball season.

At the end of 2022, the Richmond Economic Development Authority and the Greater Richmond Convention Center Authority received five proposals from developers to redevelop the City Center Innovation District, a 9.4-acre downtown area that includes the closed Richmond Coliseum, which the city wants demolished. A 10-person evaluation panel is scheduled to narrow the group of five during the first quarter of this year.

In Hampton Roads, two of famed entertainer and Virginia Beach native Pharrell Williams’ larger projects made progress in 2022: the $1.1 billion redevelopment of Military Circle Mall in Norfolk and the $350 million Atlantic Park project in Virginia Beach.

Negotiations started last year, but as of late January, Williams’ Wellness Circle team had not yet officially signed documents to redevelop Military Circle Mall, which would include 1,100 residential units, a 200-room hotel and a 16,000-seat arena. In November 2022, the music superstar prodded Norfolk leaders to move forward with the project, saying “The ball’s in their court.”

Meanwhile, the Oceanfront-based Atlantic Park, Williams’ surf park project with Virginia Beach-based Venture Realty Group, secured pending financing in January and is getting closer to groundbreaking, with completion set for summer 2024. The first phase includes 120,000 square feet of retail, 310,000 square feet of residential and 15,000 square feet of office space.

Northern Virginia is seeing massive development along the Silver Line’s Loudoun County extension, which opened in November 2022 after an eight-year delay. Reston Town Center, which has 5.1 million square feet of office space, is set to add 700,000 to 800,000 square feet more in the next few years, part of a $3 billion investment by Boston Properties Inc., and developer Comstock Inc. is busy building 7 million square feet of offices and residential space at Reston Station. The company has plans for 2.5 million square feet of multiuse space at Loudoun Station in Ashburn.

In Danville, the long-awaited White Mill project broke ground in early 2023. The $100 million public-private redevelopment of the 550,000-square-foot former textile mill, now known as Dan River Falls, is a joint venture between the city’s industrial development authority and The Alexander Co. It will have 147,000 square feet of commercial space and 150 apartments geared toward employees of the forthcoming Caesars Virginia casino.  

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2023 housing market off to slow start

Virginia home sales were off to a slow start in 2023, with a 30% decline in January from a year ago, or 2,454 fewer sales, according to data released in February by Virginia Realtors. 

Across the state, 5,609 homes were sold, marking the slowest January that Virginia has seen in eight years. Fewer sales have also resulted in fewer sales volume. Compared to a year ago, there has been $1 billion less, or a 28.5% decline for a total of $2.4 billion. 

The slowdown is being felt most in the state’s largest housing markets — Northern Virginia, Hampton Roads and Richmond, said Ryan Price, chief economist with Virginia Realtors. Price added that the slowdown is still “pretty uniform” around the state, compared to what it was a year ago. 

The sharpest drops were in the Shenandoah Valley market, parts of Central Virginia, the Lynchburg region and the Williamsburg area, according to the report.

It’s still a seller’s market, he noted, but not as intense as it was a few months ago, and the market is shifting to favor buyers. 

Sales levels are down, with fewer contracts overall in January and homes are staying on the market longer, according to Virginia Realtors. 

The statewide median sales price was $350,000, up 3.7% from a year ago, and an increase of $12,500. Last month, 45.6% of the homes sold were priced between $200,001 to $400,000, down from 45.9% last year. One out of every five homes were in the higher price points of $400,001 to $600,000, and about 15% sold for less than $200,000. Nearly 8% of homes sold in January were more than $800,000. 

Homes are staying on the market longer, an average of 39 days, which is about a week longer than in January 2022. Pending sales are also down. But inventory is up about 22% from a year ago and has been increasing for four straight months. It’s still low compared to historical averages, though.

Price said inventory is constrained, but improving, and there are more listings, not necessarily new ones. Homes are taking longer to sell, allowing inventory to build up. Buyers frustrated by the lack of inventory will start to see more options. 

However, he noted that it’s still challenging for first-time buyers because of the lack of inventory and pricing trends.

It’s not all bad news, though. 

“We are gearing up for the spring season, which typically is one of the busier times of the year for the housing market,” Price said.

Angela and Carl Reddix donate $1.1M to JMU

James Madison University alumni Angela and Carl Reddix have made a $1.1 million commitment to their alma mater to support first-generation college students, JMU announced Friday.

Founder, president and CEO of Norfolk-based ARDX, a health care management and IT consulting firm, Angela Reddix studied marketing at JMU and graduated in 1990. Her husband, Carl, studied management and graduated in 1988. Their gift establishes the Reddix Center for First Generation Students and the Reddix Centennial Scholarship Endowment.

“This gift is an incredible investment in JMU and will benefit countless students for years to come,” JMU President Jonathan R. Alger said in a statement. “We are honored that JMU is the recipient of this form of generosity from inspiring and innovative alumni. We have been very intentional to cultivate a supportive and inclusive community for first-generation students throughout their educational journey at JMU, and this gift is perfectly aligned with that initiative.”

Reddix
Photo by Mark Rhodes

Angela Reddix also founded the nonprofit Envision Lead Grow, which helps girls, especially girls of color, overcome long odds to become successful entrepreneurs. She founded ARDX in 2006 and the company has won more than $200 million in government contracts and last year announced a $2.4 million facility expansion in Norfolk. Reddix is a member of Old Dominion University’s Strome Entrepreneurial Center Hall of Fame.

“We are delighted to leave a powerful mark on a university that has left such a powerful mark on our lives,” the couple said in a statement. “May this center be a representation that, regardless of where you start, we can all reach impossible dreams.”

In an interview with Virginia Business, Angela Reddix talked what it means to them to be able to make the gift. She said her mother was a first-generation college student and her husband was, as well.

“The foundation of who we are and what we were able to do, personally and professionally, came from here,” she said. It’s a full circle moment for her, she added.

“I feel that it’s absolutely my responsibility to to give and be an example,” she said.

At JMU, the applicant pool of first-generation students has grown 29% since last year, according to a news release. First-generation students make up about 38% of JMU’s class of 2021. About 67% of first-generation students were already working full time at graduation and another 23% continued their education.

Farmer Focus to create 300 jobs with $17.8M expansion

Harrisonburg-based Farmer Focus is planning a $17.8 million expansion that will create 300 jobs and double its processing capacity, the organic poultry producer announced this week. 

Part of that expansion will be paid for with a $3.6 million grant from the United States Department of Agriculture’s Meat and Poultry Processing Expansion Program (MPPEP). U.S. Secretary of Agriculture Tom Vilsack announced the grant at a visit to Farmer Focus’ headquarters on Tuesday. 

The expansion will “enable Farmer Focus to welcome more family farmers into its farming family” and create 300 jobs over the next two years, according to a news release. Farmer Focus plans to expand its organic chicken processing facility in Harrisonburg. Operating since 2014, the plant processes 335,000 chickens per week, but demand has grown and the expansion will allow the company to process 630,000 chickens per week.  

The creation of the new jobs will coincide with the completion of the expansion project and will be a mix of production, maintenance and supervisory roles, according to Liz Fuchs, Farmer Focus’ chief people officer. A completion date for the expansion has not been set, and the expansion won’t physically change the size of the facility.

“The programs and money the Biden-Harris administration is committing can make a huge difference in providing opportunities to independent processors like Farmer Focus so we can build a more competitive meat industry and strong generational family farms while providing our consumers with the highest quality organic and humane certified chicken,” Farmer Focus Founding Farmer and CEO Corwin Heatwole said in a statement.

 “Just a little over a year ago, I was invited to a White House Round Table where I had the unique opportunity to share my thoughts directly with President [Joe] Biden and Secretary Vilsack on ways to increase competition within the meat industry,” Heatwole added. “The MPPEP proves that our leaders in Washington are listening closely to the farming community, and are following through on their commitment to improve the lives and livelihood of America’s farmers and the resiliency of our food system.”

The program provides grants to help eligible processors expand their capacity, according to the USDA. 

In a statement, Vilsack said, “The Biden-Harris Administration and USDA are taking action to advance a sustainable vision of agriculture that prioritizes the needs of our resilient producers and small businesses, strengthens our food supply chain and brings value back to rural people and places.”

With this second round of MPPEP grants, the USDA doled out $59 million to five U.S. companies, including Farmer Focus, the only Virginia-based grant recipient. Farmer Focus will make improvements to alleviate bottlenecks in processing and offset costs associated with equipment purchases, new conveyor lines, building and site modifications and a new wastewater treatment system, according to the USDA. 

Farmer Focus has recently undergone multiple leadership changes. In December 2022, Farmer Focus tapped Stephen J. Shepard as its new president and chief operating officer, a promotion from his role as executive vice president of operations.

Founded in 2014 and formerly known as Shenandoah Valley Organic, Farmer Focus sells organic poultry raised as free-ranging on humane-certified farms. In February 2022, Farmer Focus opened a 78,000-square-foot packaging facility in Harrisonburg,  increasing production capacity and expanding Farmer Focus’ workforce.

Farmer Focus’ products are now distributed in more than 4,000 stores, including the East Coast and the Midwest, in retail grocery chains such as Publix Super Markets Inc., Harris Teeter and Safeway Inc.

ManTech names new CFO

Herndon-based government contractor ManTech International Corp. has named Michael D. Ruppert as its new vice president and chief financial officer, following the retirement of Judy Bjornaas.

The appointment was effective Tuesday. Bjornaas spent a dozen years at ManTech, which was acquired by The Carlyle Group Inc. last year, and contributed to its growth toward becoming a nearly $3 billion government services contractor with nearly 10,000 employees worldwide.

Ruppert will report to ManTech President and CEO Matt Tait. He will be responsible for the company’s financial, treasury and corporate development functions.

Most recently, Ruppert was executive vice president, CFO and treasurer for aerospace defense contractor Mercury Systems Inc.

“I am very excited to take on the CFO role at ManTech, a company that is a tech leader in the government space with its sophisticated technology solutions that transform the success of customers in the defense, intelligence and federal civilian sectors,” Rupert said in a statement.

Before he was at Mercury Systems, Ruppert was co-founder and managing partner of RSPartners LLC, a mergers and acquisitions firm focused on aerospace and defense. He was also a managing director at UBS Securities, leading the company’s defense and government IT efforts. He has also worked at Lehman Brothers and Lazard Freres. He has a bachelor’s degree in finance and an MBA from the University of Virginia.

ManTech provides technology solutions for U.S. defense, intelligence and federal civilian agencies.

Health care venture to establish manufacturing facility in Norfolk

Princo LLC, a joint venture comprised of health care companies Premier Inc., Vario Labs LLC and Caretrust LLC, will invest up to $23.8 million to establish a health care products manufacturing facility in Norfolk, creating an expected 284 jobs, Gov. Glenn Youngkin announced Tuesday.

Princo will initially invest $18.1 million with the potential to invest another $5.7 million. The 80,000-square-foot facility, located in the Norfolk Industrial Park, will manufacture incontinence pads, which are used by more than 4,400 hospitals and other health care providers around the country. The project brings the production of the pads from Southeast Asia to the United States.

“This tremendous new venture represents the onshoring of a necessary health care product, a boost for the industry supply chain, and high-quality manufacturing jobs all happening in the commonwealth of Virginia,” Youngkin said in a statement. “Princo LLC’s new manufacturing facility in the city of Norfolk will benefit from the region’s outstanding logistical advantages, skilled workforce and diverse ecosystem of suppliers, innovators and customers. This venture is a blueprint for future investment in Virginia, and we look forward to the company’s future success.”

Vario Labs, a wholly owned subsidiary of PremiumEstore LLC, also known as Premium-PPE, is based in Virginia Beach. Premium-PPE is a domestic manufacturer of personal protective equipment, including disposable masks. It has supplied more than 100 million FDA-cleared masks to the federal government since early 2020.

Charlotte, North Carolina-based Premier Inc. does group purchasing, technology, consulting and provides other services to the health care industry. Caretrust specializes in international materials, global product sourcing, logistics, supply chain management and manufacturing operations.

“A strong workforce, expanding port infrastructure and access to domestic and global markets make the commonwealth of Virginia an ideal location for the production of incontinence pads — a vital product for our nation’s healthcare providers,” Michael J. Alkire, president and CEO of Premier, said in a statement. “We thank the governor, the Virginia Economic Development Partnership, and the city of Norfolk officials for their work with us on this project. This investment and their support will help drive greater domestic production of the supplies providers need to care for patients — and strengthen resiliency in the U.S. health care supply chain.”

Princo will begin opening and hiring for the facility in March and a grand opening is scheduled for April, Brent Dillie, CEO of Princo USA, told Virginia Business. He said the pads are expected to be available for health care providers to purchase later in the spring/summer.

“With this investment, we are building market competition and bringing production to the United States to support health care providers and patients nationwide,” he said.

VEDP worked with Norfolk to secure the project for Virginia. Youngkin approved a $50,000 grant from the Commonwealth’s Opportunity Fund to assist the city with the project. Princo is eligible to receive benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development, as well as from the Port of Virginia Economic and Infrastructure Development Zone Grant Program. Funding and services to support employee training activities will be provided through the Virginia Jobs Investment Program.

Roanoke shopping center sells for $4.8M

A shopping center in Roanoke has changed hands.

Salem-based Omma Management LLC purchased the 49,881-square-foot Oak Grove Plaza in Roanoke for $4.8 million, Cushman & Wakefield | Thalhimer announced.

Built in 1964, Oak Grove Plaza is located at 2061 Electric Road. CXL Inc. sold the property, which is on about four acres. Cushman & Wakefield | Thalhimer will continue to provide leasing and management services for the plaza.

Tenants in the shopping center include McDonald’s Corp., T-Mobile USA Inc., pizza and barbecue restaurants, an ice cream shop, a custard shop, a nail salon, a rug store and others.

William D. Poe, of Cushman & Wakefield | Thalhimer, handled the sale negotiations on behalf of the seller.

Soli Organic hires former Tesla exec

Rockingham County-based Soli Organic Inc. has hired former Tesla executive Jeff Jackson as its chief infrastructure officer, the indoor farming company announced Friday.

Jackson was the director of infrastructure for Tesla, which manufactures electric vehicles. At Soli Organic, he will support the strategic development of the company’s new facilities and infrastructure. He will lead building, geographic expansion, clean and low-carbon energy sourcing, scaled design and facility innovation, according to a news release.

Soli Organic recently closed a $125 million Series D funding round. In 2021, it broke ground on a 100,000-square-foot facility in South Carolina and in February 2022 announced plans to build a 130,000-square-foot, soil-based, controlled environment agriculture farm in Washington state.

“We are committed to flipping the paradigm that organic must be more expensive. Our indoor farms provide sure supply of fresh, nearby, sustainably grown produce and our technology allows us to provide the quality organic produce consumers want at prices they can afford. Demand in key markets is high and we are gaining leadership as we rise to meet it with expanded facilities in strategic locations,” CEO Matt Ryan said in a statement. “Jeff will further accelerate our efforts in this next phase of growth, drawing on decades of experience with global brands well-known for fast growth and world-changing technology to drive the evolution of industries.”

Jackson has more than 20 years of experience in operations, engineering and construction. He spent more than seven years at Tesla and has held leadership roles in operations and facilities at Samsung Austin Semiconductor. He will be based on the West Coast, but plans to regularly travel to Soli Organic’s Virginia headquarters.

Soli sells a variety of lettuces, herbs, purées and potted herbs at 20,000 retail stores nationwide and operates several facilities around the country.