Please ensure Javascript is enabled for purposes of website accessibility

States join forces to battle Beltway bridge bottleneck

When the governors of Virginia and Maryland announced plans in November to replace the aging American Legion Bridge, it may have sounded like a chorus of angels to woebegone commuters who make their way across the Potomac River each weekday.

“A new bridge means commuters will get to work and back home faster,” said Gov. Ralph Northam. “Our teams have identified a way to fix one of the worst traffic hotspots in the country.”

The bridge has been operating beyond its capacity for nearly four decades, according to the Virginia Department of Transportation. About 235,000 vehicles travel on it daily, a nearly 400% increase in traffic since the bridge opened in 1962. And with the region’s population expected to grow by another 1.2 million by 2040, traffic is bound to get heavier. Planners estimate that the project will cut commuting times in half for many travelers.

The $1 billion project, set to start in 2022 and finish within five or six years, is too late for Cheryl Marks of McLean, who just retired from the National Institutes of Health in Bethesda.

Over the years, Marks and her carpool colleagues learned their way around the backroads to avoid traffic. Once they even hopped on White’s Ferry to cross the Potomac.

“For 46 years I drove back and forth on that bridge,” she says. “When I first started, I didn’t work with anybody who worked in Virginia. By the time I left, a third of the people were coming from Loudoun.”

The “Capital Beltway Accord” will add two express lanes and replace existing lanes each way between the George Washington Memorial Parkway and River Road in Maryland. Utilizing public-private partnerships for funding, Virginia will pay 21% and Maryland will pay 79% of the expected costs.

Victor Hoskins, president and CEO of the Fairfax County Economic Development Authority, sees the plan as yet another sign of regional cooperation, like the Maryland-Virginia-Washington D.C. joint funding of the Metro system. “Now with the governors of Maryland and Virginia, along with many state and local lawmakers, supporting the widening of this critical bridge, we have made another leap forward in growing the region’s interrelated economy,” he says.

Marks, however, isn’t optimistic about the chances of relieving the bottleneck at the bridge. “There have been so many projects on the Beltway, but they’ve never been synchronized. There’s just too damn much traffic.”

Growth spurt

As the economy has been on the rise, so have hotels in many parts of Virginia.

During the past 12 months, Virginia’s hotel industry has seen more than a billion dollars invested in hotel construction and renovation — everywhere from Richmond to Bristol.

“The bulk of that is new construction,” says Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association. But it also includes renovations of aging properties that required sprucing up to attract a new generation of travelers.

As Virginia’s economy has gotten stronger, developers have engaged in a hotel building spree, says Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association. Photo by Matthew R.O. Brown

Much of the industry’s growth is “due to [the] fact that we were pretty stagnant,” Terry says. “When I got back to Virginia in 2014, there was almost no new construction. The pace has accelerated as the market has gotten stronger.”

In this improved economy, he says, REITs (real estate investment trusts) “are very active” in hotel construction, “and so is more traditional financing.”

Distributing dividends on a quarterly basis, REITs are uncorrelated to stocks and bonds, and help investors diversify their portfolios. About 87 million Americans invest in REITs, according to the National Association of Real Estate Investment Trusts.

But “quite a bit of capital is available [from] traditional real estate financing” as well, Terry says. “Even smaller banks are doing some of that, especially in Virginia Beach.”

The down side

Virginia Beach hotel developer Bruce Thompson, CEO of Gold Key|PHR, is happy about the abundance of capital.

But the economic benefits are “devoured by escalating construction costs,” he says, and modest increases in occupancy and room rates aren’t offsetting those higher expenses.

“I don’t foresee any decrease on construction pricing or additional room demand anytime in the near future. So my company is taking a ‘wait and see’ approach and looking for opportunities to acquire existing hospitality assets to reposition them at values less than replacement costs,” Thompson says.

Steven Parrish, senior vice president of Aikens Group, based in Winchester, has another worry.

The Aikens Group owns two hotels in Front Royal and two in Winchester, including the Hampton Inn & Conference Center. Photo courtesy The Aikens Group

“Financing is easier today than it has been in the past 10 years. The economy is doing well. Banks tend to lend. Now people are able to go out and get money,” Parrish acknowledges. His concern is that the building boom is leading to oversupply. And what goes up must come down. “It goes in cycles.”

Nonetheless, hotels are popping up across the state, including in areas that traditionally have been underserved. Here are some of the latest projects.

Richmond

Family-owned Shamin Hotels, the largest hotel ownership group in Virginia, has seen a robust demand for hotel space recently, especially in its own backyard south of Richmond.

The Chester-based company, which owns, operates and develops hotels in six states, is building a 200room, full-service hotel and a 10,000-square-foot conference center with retail and restaurants at Stonebridge in Chesterfield County.

The county has long had a need for meeting space that can accommodate events for the growing number of tourists visiting the county, says Shamin CEO Neil Amin. “That’s why we are excited to work with them on it.”

The company also plans to develop a Hampton Inn and Home 2 Suites by Hilton in Chester. “It’s two hotels in one location,” Amin says. “That way it’s able to have a larger fitness center, and it improves services for guests.”

In downtown Richmond, Shamin has acquired an old office building that it plans to convert into a Moxy hotel, Marriott’s boutique brand. “It’s more of a lifestyle brand,” says Amin. “We’re talking to a brewery to come to the hotel.”

Chesterfield County-based Shamin Hotels is converting the Hampton Marina Hotel into a Tapestry Collection hotel, an upscale Hilton brand. Rendering courtesy Shamin Hotels

The commonwealth “is a very stable market” for hotels, “which we like,” Amin adds. “We are long-term holders. We’re looking at the next 10 to 20 years. With 60 hotels, we’re renovating about 10 a year, improving the technology as well as the décor.”

Also in the region, Richmond-based Apple Hospitality REIT Inc., which has 235 hotels in 34 states, announced in October that it had purchased the 31-year-old Berkeley Hotel in the city’s Shockoe Slip area for approximately $7 million. The publicly traded REIT plans to turn the building into a 55-room boutique hotel. The hotel is about four blocks from Apple Hospitality’s headquarters.

The company also is making a multimillion-dollar investment in the Richmond Marriott hotel in downtown Richmond, its first major renovation since 2009.

Consistent reinvestment “has always been an important part of our ownership strategy,” says Justin G. Knight, president and CEO of Apple Hospitality. “We are generally able to fund our projects through operations, using our strong balance sheet to manage cash flow throughout the year.”

Richmond has been considering the redevelopment of a 10-block area of city-owned land known as Navy Hill around the site of the now-shuttered Richmond Coliseum. A 527-room Hyatt Regency hotel has been included in the proposal, but Connie Brewer, market director of sales, marketing and revenue management for Richmond Marriott Downtown, isn’t worried about the potential competition.

“The city needs more rooms because there are not enough hotel rooms for the number of people the convention center can accommodate,” she says. “As a city, we are losing opportunities for those larger pieces of business,” without an adequate number of hotel rooms.

Hampton Roads

Management hospitality group Gold Key|PHR currently has more than $200 million in lodging under active development and construction. More than half of that is attributable to the $125 million Marriott Virginia Beach Oceanfront, the second phase of a project that has included renovation of the city’s historic Cavalier Hotel and Beach Club.

“However, we’ve also had to put three projects we initiated at the first of the year on hold until either construction pricing becomes more competitive or the market either grows in occupancy or average daily room rates to accommodate these increased costs,” Gold Key’s Thompson says.

Shamin also has projects in the area. It’s renovating the Renaissance Hotel on the Portsmouth waterfront and converting the Hampton Marina Hotel into a Tapestry Collection hotel, an upscale Hilton brand.

In Norfolk, Clancy & Theys Construction Co. Inc., based in Raleigh, North Carolina, is turning the historic Royster building into a 117-room boutique hotel for its owner, Suburban Capital.

Northern Virginia

While the state’s hospitality market generally has been exploding, Northern Virginia has seen a decline in hotel construction in recent years after the Base Realignment and Closure Act reduced the Department of Defense’s presence in the region. But Amazon’s  planned second headquarters in Arlington’s Crystal City neighborhood is sparking talk of hotel construction and redevelopment, Terry says.

Lodgeworks Partners LP is developing a 178-room Archer Hotel near the Silver Line’s McLean Metro station. Rendering courtesy Cityline Partners

Already Park Hotels & Resorts is considering redevelopment of its DoubleTree by Hilton in Crystal City.

“There’s been less [hotel building] in Northern Virginia, but that’s probably going to turn around,” Terry adds.

In the ever-growing Tysons area, Lodgeworks Partners LP, owner, operator and developer of the Archer Hotel collection, is planning a 178-room hotel near the Silver Line’s McLean station. Farther down the Silver Line, next to the Wiehle-Reston East station, a 250-room hotel is being developed by Marriott International and Comstock Partners.

Shenandoah Valley

Four hotels also are being built by various companies in the Shenandoah Valley, according to Parrish of Aikins Group. The company currently owns two hotels in Winchester and two in Front Royal.

Parrish has seen rapid growth in the area before. Between 2006 and 2008, just before the recession, four or five hotels opened in the area, he says. “It was oversupplied. Nothing was built between then and now. It took that long for the market to absorb it.”

Now, though, “the numbers are pretty good,” and it makes sense to build, he says. But he’s concerned that it’s too much of a growth spurt for the valley region. “They should have added a hotel — one or two, but not four. The times are good right now, but four is probably a couple too many.”

Elsewhere in the state

Opening this March in Bristol, the boutique Sessions Hotel pays homage to the city’s heritage as the birthplace of country music. Photo by Earl Neikirk

Developers are finding creative ways to build hotels in smaller communities, too. Places such as Farmville and St. Paul “are really being helped with tax credits and grants available through the state,” Terry says.

South Boston has received nearly $1 million in historic tax credits to renovate the John Randolph Hotel.

These historic tax credits “have been in existence for quite a while, but they weren’t quite as viable,” Terry says. “You can’t do a whole project on tax credits. You’ve got to have traditional financing as well. The time is right for that.”

South Boston worked with Creative Boutique Hotels, a Virginia-based partnership between Williamsburg’s Cornerstone Hospitality and Henrico County-based developer Hal Craddock, focused on the developing boutique hotels in small markets and on the repurposing of historic buildings.

Creative Boutique Hotels also had a hand in turning three historic buildings in Bristol into the brick-and-beam boutique Sessions Hotel, expected to open in late January or February. To emphasize the city’s heritage as country music’s birthplace, Americana singer and songwriter Jim Lauderdale is working with the developers to program concerts at the hotel’s indoor and outdoor stages and host his radio show on-site, says Kimberly Christner, president and CEO of Cornerstone Hospitality.

“It is the place for music,” she says. “We’re just going to continue to perpetuate that with our music program.”

Inova takes steps to create personalized health ‘ecosystem’

Editor’s note: This story has been updated.

On the former Exxon Mobil campus in Fairfax County, Inova Health System plans to create an “innovation district” with treatments tailored to patients’ genetic makeups, environments and lifestyles.

In September, the county Board of Supervisors approved updates to Inova’s expansion plans for the site. The county’s newly approved Comprehensive Plan envisions another 3.8 million square feet in possible development for the 117-acre campus, now called the Center for Personalized Health.

The long-range goal, according to Inova officials, is to create “an ecosystem for academic, commercial, research, technology and other partners to flourish and collaborate with one another and our clinicians.”

Inova expects the first phase of development to be completed during the next 25 years.

However, in late November, the health system made a shift in the campus’ focus, deciding to shut down Inova Strategic Investments, its venture capital program, and the Inova Personalized Health Accelerator, a hub for health care startup businesses, at the end of the year.

“We have a relentless focus on patient care, and although these are valuable activities, they do not align with our new strategic focus,” Inova President and CEO Dr. Stephen Jones said in a prepared statement.

Decisions about what will replace the departing programs on the campus are still under discussion, Siciliano says, and the seven startups in the accelerator are currently being assessed by Inova’s finance division, which will decide which companies the health system will continue to invest in. In essence, she says, the idea of building an ecosystem for health care innovations is still in place — but now it will be entirely centered around patient care.

“Thanks to recent land use approvals from Fairfax County, Inova is now poised to create an innovation district on the Inova Center for Personalized Health campus, working with a variety of partners to ultimately advance patient care,” Siciliano says.

Other parts of the campus, including the Global Genomics and Bioinformatics Research Institute, a collaboration between Inova and the University of Virginia’s School of Medicine, will still move forward.

Alexander Prevost, a spokesperson for the U.Va. Health System, says most new research “will be centered around the Global Genomics and Bioinformatics Research Institute [GGBRI] and the potential treatments that arise from the research conducted.” GGBRI’s focus is on projects related to genetics, genomics, bioengineering, systems biology, developmental biology and computational biology.

The GGBRI building is still being retrofitted for a research buildout, officials say, although the health system is in discussions now with U.Va. about a possible change in scope and name.

In addition to more academic and research space at its campus, plans for housing, retail and hotels also remain in place. Inova is a leading health-care provider in Northern Virginia — and the largest nonprofit employer in Fairfax County, and it already has entered into a comprehensive research and medical educational partnership with George Mason University and the University of Virginia.

Victor Hoskins, president and CEO of the Fairfax County Economic Development Authority, calls the Center for Personalized Health “a huge magnet for talented medical professionals and scientists who want to change and improve health care.” He predicts that “the whole area of personalized medicine will open up. This is going to be a long-term opportunity. It’s a competitive process and we’re going to continue to do it until we win.”

By 2035, Inova estimates that activity related to the campus will generate $1.18 billion in economic impact, including $68 million in local and state tax revenue.

Inova takes steps to create personalized health ‘ecosystem’

On the former Exxon Mobil campus in Fairfax County, Inova Health System has plans for an “ecosystem” to develop health care startups and build a research hub for treatments tailored to patients’ genetic makeups, environments and lifestyles.

In September, the county Board of Supervisors approved updates to Inova’s expansion plans for the site. The county’s newly approved Comprehensive Plan envisions another 3.8 million square feet in possible development plans for the       117-acre campus, now called the Center  for Personalized Health.

The long-range goal, according to Inova officials, is to create “an ecosystem for academic, commercial, research, technology and other partners to flourish and collaborate with one another and our clinicians.”

Inova expects the first phase of development to be completed during the next 25 years.

In addition to more academic and research space at its campus, there are plans for housing, retail and hotels. Inova is a leading health-care provider in Northern Virginia — and the largest nonprofit employer in Fairfax County. The health system already has entered into a comprehensive research and medical educational partnership with George Mason University and the University of Virginia.

Alexander Prevost, a spokesperson for the U.Va. Health System, says most of the new research “will be centered around the Global Genomics and Bioinformatics Research Institute [GGBRI] and the potential treatments that arise from the research conducted.” GGBRI’s focus is on projects related to genetics, genomics, bioengineering, systems biology, developmental biology and computational biology. An Inova building is being retrofitted to house the institute, with construction expected to be completed by the fourth quarter of 2020.

Victor Hoskins, president and CEO of the Fairfax County Economic Development Authority, calls the Center for Personalized Health “a huge magnet for talented medical professionals and scientists who want to change and improve health care.” He predicts that “the whole area of personalized medicine will open up. This is going to be a long-term opportunity. It’s a competitive process and we’re going to continue to do it until we win.”

By 2035, Inova estimates that activity related to the campus will generate $1.18 billion in economic impact, including $68 million in local and state tax revenue.  

Stormy weather ahead?

Inverted yield curve. Unemployment. Consumer confidence. Interest rates. Inflation. Wealth managers are watching to see which way the economic indicator dominoes fall.

Michael Joyce, president of Richmond-based financial planning firm Agili, sees troubling signs of a slowing economy. “If business investment further declines, that could lead to unemployment. That could put a dent in consumer confidence.” And he’s especially concerned about the economic effects of the Trump administration’s ongoing trade war with China: “Tariffs are a very blunt instrument.”

During the past few years, though, Joyce says, “people have been investing based on a reading of tea leaves on what’s going on in Washington.” Election results and impeachment hearings can have a short-term effect on markets, but “things that go on in Washington have less impact than people think.”

Some economic indicators — such as a tame inflation rate  and low unemployment  — may lull people into not preparing for another recession, says Roberta Keller, CEO/founder of Alexis Advisors in Richmond.

Two in five Americans (40%) said they wouldn’t be ready for an economic downturn if it were to occur within the next six to 12 months, according to Bankrate’s October Financial Security Poll. Nearly a quarter of respondents (24%) to the consumer financial services company’s survey said they’re not very prepared, while 16% are not prepared at all.

“Consumers often don’t think about recession until they are in it,” Keller says. “Consumers aren’t yet feeling the effects. But as a money manager, I am definitely seeing signs of recession.”

The money managers for hundreds of the world’s wealthiest families agreed with that sentiment in a September survey by investment bank and financial services company UBS. Fifty-five percent of 360 firms surveyed said they see a recession beginning by the start of 2020. Forty-five percent said they were adjusting their portfolios, including shifting to bonds and real estate, while 42% said they were increasing cash reserves.

Going through the rapids

“No recession has ever not been followed by recovery,” notes Christopher Krell of Cassaday & Co. Photo by Stephen Gosling

When another recession comes, “grip onto the sides of the kayak and go through the rapids,” advises Christopher Krell, a principal with Cassaday & Co. in McLean. “No recession has ever not been followed by recovery.”

The key is not allowing fear and anxiety to drive financial decisions, Krell says, because there are “all kinds of things you can do instead of sitting around and feeling sorry for yourself.” Make sure your personal finances are in order and that you have emergency funds in case you lose your job. Consider getting a side job. Look for opportunities such as taking advantage of low interest rates to refinance debts. Keep as diversified a portfolio as possible.

As Cal Brown, a financial adviser with Savant Capital in McLean, puts it: “Panic is not an investment strategy.” He cautions against market timing, a strategy of making your buying or selling decisions based on attempts to predict future market price movements.

“Once we are in a bear market, it is too late to sell stocks. You don’t want to sell when prices are already down. Everyone should assess their asset allocation now and be positioned to get through the recession OK,” says Brown, the author of “When Life Strikes: Weathering Financial Storms.”

Joyce also warns against trying to time the market; focus instead on long-term goals and objectives. “We’re in a pretty mature cycle now. This is a good time to be less aggressive than you might have been two, three, four, five years ago. Prune some positions that are pretty fully valued now; look for higher quality investments.”

People are taking some steps to prepare themselves for the next economic downturn, according to the Bankrate survey. Forty-four percent of respondents said they were spending less money; 33% were saving more for emergencies; and 31% were paying down credit card debt.

“Saving more for emergencies and paying down credit card debt are especially important steps to be taking, as fewer than one in five households has sufficient emergency savings, and the average credit card rate is over 17%,” Greg McBride, Bankrate’s chief financial analyst, said in a statement.

Gold, real estate, bitcoins, oh my!

Investing savings can be complicated, however.

Financial advisers used to talk just about investing in stocks and bonds, notes Daniel B. Ludwin, president and founding partner of Salomon & Ludwin in Richmond. “Now the most important allocation is what you have in stocks and what you don’t have in stocks. Now more than ever you need to distinguish between risk assets and non-risk assets.”

To counter the risks associated with stocks, many wealth managers recommend investing in alternative investments such as real estate and commodities, as well as bonds. “They don’t move in the same direction as stocks. You’re diversified — if something drops over here, something goes up there,” Brown says.

Ludwin, on the other hand, says “real estate and commodities are risk assets to us.” He recommends “ultra-short-term bonds right now. They’re not exciting, but you need patience. Some people are trying to find extra yield, but that’s a mistake.”

But Brown says he has found Real Estate Investment Trusts, or REITs, an alternative to owning real estate directly, to be “the best performer in our portfolio. People like them because they are liquid. They’re a great diversifier away from stocks.”

Gold is an old investment standby. “I would not go whole hog into gold,” Brown warns. “But it is in the commodities category. I would have commodities. You could buy a fund — precious metals, energy, agriculture. These are noncorrelated with the stock market, which is a good thing. They don’t move in lockstep with stocks.”

What about investing in cryptocurrencies such as Bitcoin? “Most of what I’ve seen going on hasn’t had anything to do with fundamentals; it has to do with speculation,” Joyce says. One of Agili’s clients put money into Bitcoin against the firm’s advice, and “she lost all of it in a pretty quick period of time. We do not recommend it.”

The key question is how much you put into these different categories, Brown says, noting that Savant Capital relies on “a scientific way to optimize based on Modern Portfolio Theory,” which uses a mathematical framework for assembling a portfolio.

This balancing “is not just for the coming recession. It should be a port you can live in and be comfortable with for the rest of your life,” Brown adds. “You have to take into account emotional factors. Some people can say, ‘I’ll just wait it out and be fine.’ Others will lose sleep at night.”

Like the Great Recession?

Joyce doesn’t expect the next recession to look like the financial crisis 10 years ago. “When we have the next bear market,” he says, “I believe it will be more the traditional type” than the sharp global economic downturn of 2008-09.

“Diversification matters. You need to re-balance or prune your portfolio as risks come along,” says Joseph W. Montgomery of The Optimal Service Group of Wells Fargo Advisors. Photo by Stephen Gosling

But the Great Recession provides good lessons for getting through the next downturn, according to Joseph W. Montgomery, managing director — investments for The Optimal Service Group of Wells Fargo Advisors in Williamsburg.

You need to have patience, but with a little perspective, most of us can weather it,” Montgomery says. “In the 1987 tech bubble, in 2008 and 2009, in most cases, if people were reasonably well-diversified, they were in pretty good shape within 18-24 months. … Diversification matters. You need to re-balance or prune your portfolio as risks come along.”

Keller stresses the need for consumers to be educated about how to invest all through the economic cycle — expansion, peak, contraction and trough.

“I can help families be a tortoise rather than a hare.”

Innovation engine

When Eric Lofgren finishes his work as an Emergent Ventures fellow at the Mercatus Center at George Mason University, he hopes to provide a “socially useful” analysis of U.S. weapon systems acquisition.

Emergent Ventures Fellow Shruti Rajagopalan plans to help develop better property rights laws in India.

Both are members of a new incubator fellowship and grant program launched with a $1 million grant from the Thiel Foundation, the private foundation created and funded by billionaire PayPal co-founder Peter Thiel.

The program’s stated goal is to allow entrepreneurs “to jump-start high-risk, high-reward ideas that advance prosperity, opportunity and well-being. The fellowship provides participants with the short-term resources and support to quickly develop and test their ideas.”

Emergent Ventures is a step toward making “moonshots a reality,” Tyler Cowen, faculty director of the Mercatus Center, said when the program was announced in July 2018. “By finding and taking chances on risk-taking, talented people with bold ideas, I believe we can reinvent the capacity for an intellectually oriented philanthropy to improve the world.”

Rajagopalan, who received her Ph.D. in economics from George Mason in 2013, says the fellowship allows her to pursue “ideas off the usual path. My big goals are for a more free, prosperous India.” She’s currently studying government use of eminent domain to seize private property for public use. “There’s a tension that has existed. How can we design a system that will actually help govern people better,” she asks, balancing public interest and individual rights?

Lofgren, who worked as a consultant at the Pentagon, studied dissenting voices on weapon systems procurement from the mid-20th century. Finding “a gaping hole in the literature,” he’s at work on a book, a podcast and a blog on the subject and plans to return to the defense industry when his fellowship is finished. “I think I have a socially useful book here about the budget process. Usually we talk about contracting reform, but we’re not really addressing the crux of the problem: the flow of funds [and] how do you justify those funds.”

Those are just two examples of the scholarship that the program cultivates. At a recent meeting of fellows, Lofgren says he found “there are lots of interesting people doing different things. Some are doing neuroscience, chemistry, social activity, small satellite development. It’s a heterogenous group. There are a lot of under-21-year-olds.”

Emergent Ventures builds on more than 35 years of student fellowships awarded by the Mercatus Center to graduate students at Mason and other universities throughout the world. The not-for-profit research organization does not receive any financial support from the university or state.

‘Thinkers, doers and problem-solvers’
The Emergent Ventures program’s goals support Mason’s overarching strategic goal of meeting “the demands of the commonwealth, the region and the world for dynamic, creative, collaborative thinkers, doers and problem-solvers.” Mason, the largest public university in Virginia, states that it is committed to contributing “to the economic and civic vitality of the region by driving entrepreneurship and innovation and by creating learning partnerships with private and public organizations.”

One prominent partnership is with Amazon.com Inc., which announced plans last November to locate its second headquarters in Northern Virginia. Mason now projects it will enroll more than 10,000 undergraduates and 5,000 graduate students in computing-related degree programs by 2024. The university has launched a new School of Computing to meet the growing demand.

Mason pledged to invest more than $250 million over the next five years to grow programs, hire faculty and expand its Arlington campus. That includes the creation of the multidisciplinary Institute for Digital InnovAtion (IDIA), a university think tank and incubator for the digital economy. IDIA’s new, 400,000-square-foot building will house graduate programs and research as well as entrepreneurs, technologists and business leaders.

Bringing together students, faculty, researchers, entrepreneurs, technologists and business leaders creates conditions conducive to “innovation ferment,” says Deborah Crawford, Mason’s vice president for research, innovation and economic impact.

“If you have a certain density of talent, it will attract more companies who are tapping into that talent. Then you’ll be able to create new companies,” Crawford says. “My job is to enable and support that type of ecosystem, to provide the wraparound support that new businesses need to succeed.”

“An ecosystem requires many species to make it healthy,” she adds, and Mason is committed to working with the other universities in Northern Virginia. “We contribute different assets and benefit from each other. We have natural day-to-day interaction and work closely together.”

All this research, innovation and cooperation is happening in the context of the global economy, Crawford notes. Mason has established a branch campus in Songdo, South Korea, and a “global [perspective] is highly integrated into everything we do. We think about preparing our graduates to work in multinational companies. They need to be culturally sensitive about how tech is used around the world.”

George Mason has been in the process of searching for a new president, with former Virginia Secretary of Education Anne Holton acting as interim president. “The presidential transition has not changed our priorities at all. Our highest priority is tech talent, tech talent, tech talent,” Crawford says. “We need to provide successful graduates for the tech talent pipeline. This is about graduating more students and attracting talent to the region.”

Diverse stakeholders
Mason’s commitment to tech talent is not limited to faculty and traditional university students but embraces entrepreneurs of all types, adult learners and even youngsters, according to Crawford.

The Mason Enterprise Center offers programs, services and resources for entrepreneurs of all experience levels — aspiring, start-up and established. The center is particularly focused on small-business services, she notes.

The university works with young students, preparing them to enter the talent pipeline. Its Early Identification Program focuses on middle school and high school students who would be the first in their families to go to college. They participate in weekend and summer programs designed to help them to have a more productive college experience. 

Mason has established a partnership program with Northern Virginia Community College called ADVANCE that lets community college students “declare as Mason students and get access at NOVA and at Mason.

They do the majority of their first two years at NOVA, and the credits transfer,” Crawford says. “It’s an important option for students who are worried about the cost of a four-year degree. It can almost cut the cost in half by taking courses at NOVA first.”

The university also has programs tailored to adults who want to complete their education or change career paths.

“Someone might have an associate degree and be interested in entering the tech workforce. We provide them with an academic pathway. We allow individuals who want to upskill in particular market sectors to improve their business positions,” she says. Mason offers a variety of approaches, such as online courses and certificate programs, “because people make their way differently.”

George Mason University has been growing “by leaps and bounds,” Crawford says. “Mason reflects the region overall — growing, multicultural, diverse, with respect for the great value diverse communities bring.”

Alexandria searches for solution to Potomac Yard Metro station access

Alexandria officials continue to search for a way to satisfy future Potomac Yard Metro station riders from both sides of the tracks without breaking the budget. Although the state announced an additional $50 million in funding for improved access, a solution has yet to be found.

The station — which would provide transportation access near Amazon’s HQ2 and the Virginia Tech Innovation Campus — was originally designed to have two entrances on the west side of the tracks and another entrance, farther south, on the east side of the tracks.

When initial construction bids in 2017 exceeded the project’s then-$320 million budget, “the only practical way to keep the station financially viable was to reconfigure the entrances,” Craig Fifer, director of the city of Alexandria’s office of communications and public information, said in late September. Some residents on the east side of the track protested the changes.

Even after the state announced the additional funding last November, city officials said that amount might not be enough. “We are revisiting that proposal and working to identify a design that further enhances access from that … location. Several updated designs have been proposed to date; however, they have come in far above the $50 million mark,” Fifer says. “Our latest design is undergoing cost analysis by the contractor,” he adds, and the city expects to present the results to the Potomac Yard Metrorail Implementation Work Group by the end of November.

Part of the station will be built on wetlands, which requires two permits. The State Water Control Board has approved the project and city officials said in early October that the U.S. Army Corps of Engineers was expected to complete its review within a few weeks.

The station is being built on Metro’s Blue and Yellow lines, between the Braddock Road and Reagan National Airport stations. The location is already used by Metro, so construction has to be completed alongside active tracks. Officials say the station is set for a spring 2022 opening, but the project has been in the city’s plans for more than two decades.

Game changer

Some companies play games with employee wellness.

Chesapeake-based energy services company Damuth Trane, for example, makes wellness a competition.

Damuth Trane organizes “a variety of challenges. We like to mix them up,” says Elise Tillie, human resources team leader. The company sponsors contests to see who can walk the most steps or lose the most weight. Before the end-of-the-year holidays, it holds a “maintain, don’t gain” competition. The contests are voluntary and on the honor system, with raffle drawings to spur competition.

There’s a cash reward for employees who quit smoking, and “if they do an annual wellness checkup, they receive a gift card,” Tillie adds. “The goal is to make sure they have a relationship with their doctor.”

In addition, Damuth Trane offers free flu vaccinations, has a gym at its headquarters, an employee assistance program — via a third-party company providing confidential assessments, short-term counseling and referrals —  as well as bringing in a mobile mammogram clinic. It’s also looking into instituting a quiet room where employees can de-stress. About 85 of the company’s more than 200 employees work at locations other than its headquarters, so the company partners with local Y’s and fitness clubs to provide exercise opportunities for those workers. 

Damuth Trane is concerned about employees’ emotional and financial wellness as well as their physical wellness, Tillie says. For instance, the company pays for an educational program that gives employees step-by-step guidance to eliminate debt, save for emergencies and plan for retirement.

In its 2018 Employee Benefit Report, the Society for Human Resource Management found that 75% of employers offer wellness information and/or a general wellness program. But others, like Damuth Trane, go above and beyond the basics to offer substantial benefits that help employees prevent illnesses and lower their health-care costs.

Challenges and coaching
Bon Secours Mercy Health, which operates hospitals in the Richmond and Hampton Roads regions, also sponsors challenges for employees and offers individualized coaching.

“We have resources to help you meet your goals. We can connect you with a work/care manager or a coach who can help establish a training plan,” says Ashley Moody, well-being and recognition operations partner. “Taking care of our employees directly impacts our patient care. In health care, we’re often not the best at taking care of ourselves; we’re too busy taking care of others.”

To help remedy that, the company offers virtual medical visits to employees and their dependents. “It’s programming that can be accessed anywhere. We have so many clinical resources, it allows us to tap into the expertise at our fingertips,” Moody says. “We try to tie it all together — social, emotional, financial. A whole person has lots of things going on in their lives; you can’t silo. We want to help with anything that causes stress in their life.

“We’ve had excellent executive buy-in. Our team works hard to make sure our leaders are aware so they can communicate and be shining examples,” she adds. “We have wellness committees from across the system from different departments and teams. They are seen as subject-matter experts on all things well-being.”

Bon Secours Health System and Mercy Health merged last year and are taking steps to combine their wellness programs. “We’re taking the best of both worlds,” she says. “Mercy has a robust, outcome-based program. Bon Secours’ program is participation-based.” The new program will roll out in 2020.

In Newport News, Huntington Ingalls Industries offers a physical health clinic for employees and dependents of its shipbuilding division. The company also has a clinic at its facilities in Mississippi.

For a $15 charge, “you can get anything done you get done at your doctor’s office,” says Karen Velkey, corporate vice president for benefits and compensation. “If you have a cold, you can get treated. You can get lab work, X-rays. There’s a pharmacy, a vision center, dental care. There’s nutrition counseling, diabetes counseling.” Physicals are free.

The company’s health costs are below industry average, according to Velkey. “We’re working to make people understand that you shouldn’t go to the ER. The fewer ER visits, the greater the cost savings on ER. We’ve had a lot of avoided cost.”

However, employees often worry that participating in a wellness program will provide confidential medical information to their employer. To protect workers’ privacy, Huntington Ingalls’ clinic is run by a third party, QuadMed, and the company does not know the results of individual health screenings, Velkey says.

“That’s one of the biggest challenges. We just have to be really up front,” she says. “The signage says ‘operated by QuadMed.’ We get the name out there a lot. We try to make the division really clear.”

Because the company operates in three shifts, it can be challenging to provide wellness activities such as exercise classes for workers on the late shift.

“We have an employee on third shift who is diabetic and needs to eat small meals,” Velkey says. “The QuadMed educator really understood that and helped her plan snacks she could pack.”

Employees working from remote locations are a growing part of Huntington Ingalls’ business, so the company must make sure they also have comparable access to wellness programs. “My team is always asking: What is as valuable to those employees as the health clinic is?” Velkey says. “We use CVS clinics. We try to make sure they have what they need.”

An app for that
TowneBank offers a rich array of wellness benefits to its 2,500 employees in Virginia, North Carolina and Maryland. The Portsmouth-based financial institution provides flu shots, sponsors fitness challenges and has an employee assistance program that handles mental and financial problems as well as physical ones. The corporate office has a fitness center with equipment and classes; the company has a gym-membership reimbursement plan for employees working at other locations.

But it’s TowneBank’s wellness app that really sets it apart.

The company partners with Virginia Beach-based EdLogics LLC to offer employees an optional health literacy app. “It’s a cool tool that we can use to promote awareness and education,” says Christy Rudisill, the bank’s health and wellness officer.

Before choosing EdLogics in 2016, “we reviewed a lot of apps. I was skeptical at first. I’m a nurse by profession, and I wanted to be sure we had sound medical information,” Rudisill says. Employees — and their family members — can play games, participate in scavenger hunts, complete learning modules and take health quizzes. Each day, the app offers a “health scratch” question. Correct answers earn points. An incorrect answer provides a way to click and learn more about a particular health topic.

At the end of each month there’s a lottery drawing: “We give away $100 to three employees each month. The more people participate, the better their chance to win,” Rudisill says.

Many employees find the app appealing, she says. “We’re not a younger workforce — a lot of people are in their 40 or 50s  — but about 50% are actively engaging” with the app.

Since EdLogics collects data on app usage, employees’ individual privacy is protected, Rudisill says. And aggregated data allows TowneBank to see what topics employees are most interested in, helping the bank create new learning modules to meet its workers’ needs.

Figuring out what drives employees to participate in a company’s wellness program is critical to success, says Moody with Bon Secours Mercy Health. Confidential surveys, assessments and feedback all play important roles.

“You need to really know your population and figure out what opportunities there are,” Moody says. “If you try to develop a program before you know what the needs are, you might fall on your face. We might have what we think is an excellent idea but if it doesn’t serve the employees, what’s it [good] for?”

Even in digital hub Loudoun County, internet service lags

Ashburn is known as the center of the internet, and eastern Loudoun County is an international hub for data centers. But, “west of Leesburg, you roll back to the Eisenhower administration,” says the chairman of the county’s communications commission, Timothy Dennis.

Despite the eastern part of the county having “more fiber per square inch than anywhere in the universe,” slow and unreliable internet service plagues western Loudoun, says Dennis, who represents the Catoctin District on the commission and is president of wireless tower builder Invisible Towers. But that situation may soon change.

To increase broadband and cellular access in western Loudoun, the board of supervisors’ finance committee in July recommended a partnership with a company to install fiber-optic cable at county facilities. The plan would connect 60 facilities in western Loudoun, at a cost of about $16.1 million over 10 years. It would then be up to internet service providers to decide whether they want to connect customers from that fiber.

The recommendation was based on a study by consultant Columbia Telecommunications Corp. (CTC) after county supervisors approved a broadband strategic plan last year.

The cable project is a small step in what Dennis describes as the commission’s eight-year-long journey to remedy the problem, although some say that the plan won’t do enough to provide broadband access to the west. However, options are limited because internet providers profit more where their customer base is concentrated, not in rural areas.

The ideal, Dennis says, would be a “fiber/wireless hybrid solution. The [consultant’s] report validated that strategy. But the bottom line is it doesn’t work. It’s a losing proposition,” he says. CTC estimates it would cost about $130 million to run fiber all the way to individual residential properties on the more sparsely populated side of the county, nearly 10 times the cost of the current plan.

“The focus for me is education,” Dennis says. “My son’s friends were showing up to do their homework because they had no broadband at home.”

And while the county wants to preserve rural areas, “there’s got to be the ability to work remotely, for home-based businesses to upload and download,” he says.

“Wineries and breweries are the energy drivers for the rural west. But when you go to a winery, you’re struggling to use your credit card,” Dennis adds, because of the poor internet service.

Hitting a wall

While national news about immigration focuses on raids to deport people who are in the United States illegally, Virginia immigration attorneys warn that the biggest immigration problems businesses face are visa application delays and denials.

“What we see are obstacles to legal immigration [that are] inconsistent and arbitrary,” says Jennifer A. Minear, a director in Richmond-based law firm McCandlish Holton’s immigration practice group.

Hiring workers from other countries is more difficult than it used to be, according to Minear, who is president-elect of the American Immigration Lawyers Association. “The processing time is increased for all types of visas, and the outcomes are less certain than they’ve ever been.”

There’s particular concern about the H-1B visa program, which allows companies to employ foreign workers temporarily in occupations requiring highly specialized knowledge and at least a bachelor’s degree, or its equivalent, in a certain specialty.

The H-1B is the country’s largest temporary employment visa program, according to the Pew Research Group. A worker can stay in the United States initially for up to three years on an H-1B visa. That initial visa can then be extended once for up to a total of six years.

‘A frustrating game’
The denial rate for H-1B visas has jumped significantly, notes Lakshmi Challa of Challa Law Group in Henrico County. Denial rates for H-1B petitions for initial employment rose from 6% in fiscal year 2015 to 32% in the first quarter of FY 2019, according to the National Foundation for American Policy.

Last year, the top 100 Virginia employers filing applications to sponsor H-1B workers were seeking to hire nearly 7,850 people at an average salary of $82,643, according to employment website Myvisajobs.com. Top employers sponsoring foreign workers in the commonwealth last year included Capital One, which was hiring developers and software engineers, and the University of Virginia, which was seeking assistant professors.

Challa says that U.S. Citizenship and Immigration Services (USCIS) has changed how it determines whether a position qualifies as a specialty occupation. 

“Instead of the formal process of rewriting policy, they’re just doing it through their decisions,” she says. “To make matters worse,” she adds, USCIS has rescinded a longstanding policy memorandum that directed adjudicators to give deference to a prior approval of an H-1B petition when considering an extension involving the same employer and the same worker.

With extension petitions now receiving as much scrutiny as initial petitions, “this puts the H-1B community in very uncomfortable circumstances,” Challa says, because many workers hope for long-term employment.

The immigration policy changes are also creating a “substantial increase” in businesses seeking her legal assistance, Challa says.

“Highly skilled talent is a critical resource, and any issues impacting their immigration status causes business disruption,” she adds. Increased denials of H1-B petitions impact a company’s bottom line, Challa says, and creates “a feeling of uncertainty throughout the organization and beyond, hindering their ability to retain and recruit international talent.”

Michael McVicker, an immigration attorney in Reston, reports that the process of applying for an H-1B visa has become more costly for businesses because much more paperwork is often required.

Requests for Evidence (RFE), a request issued by USCIS to petitioners for residency, citizenship, family visas and employment visas, “have gone up dramatically,” McVicker says.

“Before, you could have a two-paragraph job description and an employer support letter was maybe three pages in length. Now it needs to be much longer,” he says.

Businesses continue to wade through the process because there is a shortage of skilled U.S. workers, especially in the IT sector, McVicker says. After spending time and money searching for domestic employees, “employers … don’t look forward to the extra expense” of visa applications, he adds.

Minear calls the situation “a frustrating game right now. You have to be prepared for how to play that game. It’s totally unpredictable.” But a company can go to court, and, in the long run, she says, “when a business sues, usually the government will just reverse the denial.”

Labor headaches
In addition to seeking H-1B visas for skilled foreign workers, businesses rely on other types of employment visas to fill jobs that attract few U.S. applicants, says Dustin W. Dyer with Henrico-based Dyer Immigration Law Group.

The H-2A program allows U.S. employers to bring foreign nationals to the country to fill temporary agricultural jobs. In the Old Dominion, Dyer says, that might mean harvesting apples in Winchester or working in tobacco fields in Southern Virginia.

H-2B visas permit employers to hire foreign workers to come to the United States and perform nonagricultural services on a one-time, seasonal or intermittent basis. These employees, for example, might work during the high season at a ski resort or at an amusement park. 

Congress has set the H-2B cap at 66,000 workers per fiscal year. In May it was announced that 30,000 additional visas would be allowed through the end of the current federal fiscal year, ending Sept. 30. That ceiling was reached in June.

“Businesses are not able to bring in the workers they need to [hire] for seasonal jobs that are a lot of hard labor for low pay,” Dyer says. The choices, he says, usually are to increase wages in an effort to attract more American workers or face a downturn in business.

Large companies have more flexibility to avoid the impact of labor shortages, according to Dyer, but “smaller businesses suffer; it’s too much of a headache.”

These visa headaches hurt the Virginia economy in a number of ways, says Challa, noting that the commonwealth is home to the eighth-largest foreign-born population in the United States.

The economy has benefited from foreign workers on H-1B visas who are generally highly paid, dependable consumers, she says. Now, “these folks are concerned about making an investment like buying a house” because of uncertainties about their immigration status.

Also, approximately 168,000 Virginians are employed by immigrant-owned companies, Challa says, and “many of these companies are looking to expand to the U.S. because they are supporting a tech company in the U.S. … They look [and] see how easy is it going to be if they are investing? Can they bring in their senior executives? That is the most critical issue given the current trends.” With visa denial rates going up, “that’s a major consideration that they have. It’s one of the first questions they ask,” she says.

“The startup community is led by the international community,” she adds. “We need to make sure we have smart immigration policies that are fostering economic growth and continue to make the U.S. the hub for disruptive technology.”

Minear urged Virginia businesses to be more vocal about the problems they are encountering and “encourage congressional oversight” of USCIS’ processing delays. “They are overstepping. American companies need to make it plain the impact this is having on the American economy.”