Southwest Va. Year-in-Review: Regional cooperation nets manufacturing projects

Southwest Virginia is weathering the economic disruptions of the transition from coal and a pandemic-related shift to remote work by focusing on a collaborative approach to business attraction.

Teamwork is yielding results with a bump in manufacturing deals, punctuated by the November 2024 announcement that Wrap Technologies would invest $4.1 million to move its manufacturing and distribution from Arizona to Norton, bringing along 126 jobs.

Wrap makes products for law enforcement agencies, including artificial intelligence and virtual reality training platforms, body camera systems and drone technology. More than 40 Virginia agencies are partnered with the company.

With the announcement, Wrap becomes the second company to locate at Norton’s Project Intersection, a 200-acre industrial megasite on abandoned coal mine land that’s operated by the Lonesome Pine Regional Industrial Facilities Authority. The authority consists of Lee, Wise, Scott and Dickenson counties and the city of Norton. The localities jointly invest and receive revenue through the authority.

The Wrap deal is “a really great example of, when you work together, you can really get things done, and usually get things done a lot quicker,” says Duane Miller, executive director of the LENOWISCO Planning District Commission. “It seems that funders, both state and federal, really seem to be supportive of projects that are of a regional nature and have a lot of member localities working together to do this. Essentially, they’re getting more bang for their buck.”

The authority has already won about $25 million in grant funding for infrastructure and site development. Its first announcement came in 2021 from Atlanta-based internet service provider EarthLink, which invested $5.4 million to build a 28,000-square-foot call center expected to create 285 jobs. The company held a ribbon-cutting ceremony in September 2024.

Wrap will build a 20,000-square-foot manufacturing and distribution facility at the second pad at Project Intersection. The deal was leveraged through a $3.2 million loan from the Virginia Coalfield Economic Development Authority, a Gov. Glenn Youngkin-approved $425,000 grant from the Commonwealth’s Opportunity Fund and an $800,000 grant from the Virginia Tobacco Region Revitalization Commission. Additionally, Wise County will provide a transitional space for the company to begin to locate in the region before the structure at Project Intersection
is complete.

Regional connectivity

“One of the nice things about these economic development projects where they do it as a regional event is that we don’t have that much land to build on in Southwest Virginia, so when you get various counties to come together it helps,” says U.S. Rep. Morgan Griffith, who represents Virginia’s 9th Congressional District.

“People drive in Southwest Virginia,” he adds. “People in Dickenson County will drive wherever they need to go, whether it’s Russell County or Buchanan County. That’s why I find it such an appealing concept.”

Coalfield Strategies Managing Partner Will Payne, who has driven multiple economic development initiatives in Southwest Virginia, credits the involvement of Youngkin, Del. Terry Kilgore, state Sen. Todd Pillion and a litany of regional partners for securing the Wrap deal.

“In any other place, people would have given up,” Payne says. “But the perseverance on both sides — the company, the state, all the local folks — it’s such a good case study. Collaboration ultimately leads to this kind of success.”

The Wrap relocation was the region’s largest announcement in terms of job numbers.

“The largest deal by investment, and a close second in number of jobs, was an existing industry expansion by Simmons Equipment,” says Jonathan Belcher, VCEDA’s executive director.

The mining equipment manufacturer announced in July 2024 it would expand its operations from Tazewell County into Russell County, investing $8.5 million to build more manufacturing operations to meet growing global demand for its soft rock machinery.

As with Wrap, state and regional officials stacked together numerous incentives to close the deal. They include a $187,500 workforce development and training grant from VCEDA, a $500,000 loan from Russell County’s industrial development authority for infrastructure improvements, a $270,000 grant from the Commonwealth’s Opportunity Fund and the potential for tax credits for the creation of full-time jobs.

Both the Wrap and Simmons deals are examples of Southwest Virginia’s recent success with deals involving manufacturing jobs.

“What we have been seeing is a continuation of the same thing we’ve seen the last several years, in that the most activity is in manufacturing,” Belcher says. “That’s both expansion of existing manufacturing in Southwest as well as new manufacturing companies.”

Manufacturing successes

In September 2024, VFP, a maker of custom-designed enclosures for telecommunications, data centers and utility projects, announced it would spend $5 million to expand its Scott County facility with a focus on serving the fast-growing data center market. Virginia competed against Louisiana and Missouri for the project.

The same month, medical and industrial plastics maker Bird Dog Distributors received a half-million-dollar grant from Virginia Energy’s Abandoned Mine Land Economic Revitalization program to grow its Dickenson County facility.

The following month, Electro-Mechanical, which manufactures electrical equipment, announced it would invest $16.6 million to expand its operations by adding a 200,000-square-foot facility. Virginia beat out Tennessee for the project, aided partly by a $300,000 grant from the Commonwealth’s Opportunity Fund.

“Manufacturing tends to be the hottest area of activity, as well as small business startups,” Belcher says. “It’s been that way really since the pandemic. What’s changed since the pandemic was the level of activity in information technology or back-office projects. …
“Prior to the pandemic,” he explains, “those were always a pretty healthy share of our projects,” but demand has fallen as many workers remain remote.

While VCEDA still receives occasional queries about office space, it’s been more successful working with manufacturing operations, Belcher says. The regional cooperation continues. Two pad sites remain at Project Intersection, along with a third that’s still being developed.

Additionally, Payne and Will Clear, managing partner at Virginia Energy Strategies, are working to lay the groundwork to attract energy-related projects to build on a 65,000-acre site. The idea is to concentrate energy projects on former mine land with the goal of attracting data centers drawn by the availability of renewables in proximity to transmission lines.

“The holy grail here is to figure out how to supply a data center locally,” Payne says. “What we’re really talking about is data center sites, and we’ve got several of them, but [there’s] one main one we’re trying to work on right now with line of sight access to a gigawatt of potential generation. …
“There’s nowhere in the commonwealth where you can put all of this together on a contiguous piece of property,” he adds. “It doesn’t exist. We’re the only ones who can say that.”

Data centers have proven a difficult goal for Southwest Virginia, for a variety of reasons. With other, more populous parts of Virginia beginning to push back against the noisy-but-tax-revenue-generating developments, developers hope the region’s localities will be able to assemble the right combination of amenities and incentives.

Belcher, meanwhile, wants to continue to ride manufacturing momentum, as well as to attract technology projects such as data centers, and to seed startups that have the potential to grow into larger expansions.

LENOWISCO’s Miller agrees: “We’re probably seeing more activity than we’ve seen in a long time in economic recruitment.”