Kentucky-based Addiction Recovery Care is expanding its addiction recovery services into Virginia. Opening in Dickenson County in early to mid-2024, Wildwood Recovery Center, ARC’s first recovery center in the state, will provide treatment for substance use disorders in a residential program allowing individuals to stay for up to one year.
ARC’s mission goes beyond recovery, also providing job training, educational opportunities and post-treatment employment options.
“We have developed a very nimble training and education division inside the organization, and so we can meet with an employer who has labor needs and we can tailor training programs to meet those needs, and we can supply employees to them,” ARC President Matt Brown says.
ARC plans to offer skilled trades and vocational training such as welding, carpentry and culinary arts at the center.
Dickenson County Economic Development Director Dana Cronkhite says the site of the recovery center was intentional, located across the road from the Red Onion Industrial Park, which is set to be completed around the same time. The Dickenson County IDA hopes to leverage ARC’s workforce training programs when marketing the industrial site.
“The Dickenson County leadership and Board of Supervisors and Industrial Development Authority recognize the correlation between substance use disorder and the deficits in our workforce, and this is our way to try to work towards correcting that issue,” Cronkhite says.
The center has 112 beds for men, and ARC has announced plans to add a women’s center in the county later. The men’s center will create 50 jobs in the county, including nurses, clinicians and peer support specialists, as well as daily support staff such as certified maintenance workers and kitchen staff.
Peer support specialists use their firsthand recovery experience to help others who are in and seeking recovery from substance use disorders. In Kentucky and Virginia, individuals who have been in recovery for a year and meet requirements can become certified peer support specialists and are then eligible for employment with ARC.
Dickenson County is using $250,000 from the Virginia Opioid Abatement Authority to purchase furniture, fixtures and equipment for the center. Contractors were on track to finish construction at the facility by the end of 2023. Occupancy certifications and licensing and credentialing must be obtained before ARC can begin accepting clients at the center. That process, Brown says, will begin once construction is complete.
When Del. Don L. Scott Jr., D-Portsmouth, was sworn in on Jan. 10 as the first Black speaker of the house in the Virginia legislature’s 405-year history, he also was likely the first leader of that illustrious body to have served time in federal prison.
Reminiscent of the literary trials of Jean Valjean, Scott’s is a story of the redemptive powers of hard work and second chances. More than that, however, it offers instructive lessons in the power of mercy and the value of putting aside political divisiveness.
Scott had served in the Navy and was nearing graduation as a law student when he was arrested in May 1994 while studying at Louisiana State University’s law library. Prosecutors alleged he headed a plot to sell more than a pound of crack cocaine. But Scott and his attorney maintained that Scott, who didn’t use drugs, was nothing more than a “mule” who knowingly agreed to pick up $26,000 in drug money because he was broke and needed money.
Del. Don Scott, D-Portsmouth, was sworn in as the speaker of the House of Delegates on Jan. 10. Scott is the first Black speaker in the legislative body’s 405-year history. Photo by Associated Press/Steve Helber
“I wish 53-year-old Don could slap the hell out of 28-year-old Don,” Scott told The Virginian-Pilot in a 2018 interview.
Though he’d graduated law school and passed the bar exam, Scott took a plea deal and ended up serving almost eight years in a federal prison in Texas, where he helped other inmates with legal briefs and taught some to read.
After Scott was released from prison, his uncle helped him find a construction job and a position doing the books for a friend’s used auto dealership. Within eight months, Scott was hired by national workforce development consultancy KRA and worked his way up over a decade to become the company’s third-ranking executive.
His former boss, KRA Chief Strategy Officer Patrick Boxall, told The Virginian-Pilot that it’s “ingrained in [KRA’s] culture to judge people based on their possible future contributions, not on where they have been.”
By 2014, Scott passed the Virginia Bar Exam but still had to appeal to the Board of Bar Examiners’ Character & Fitness Committee, which in 2015 approved his admission to the state bar at age 50.
Five years later, in 2019, Scott had already served as chair of the Portsmouth Economic Development Authority and was elected to represent Portsmouth in the House of Delegates with 66% of the vote. He’s now a partner at the law firm of Breit Biniazan and a three-term delegate who served as House minority leader before his caucus unanimously nominated him for speaker.
During a recess amid his emotional first day as speaker, Scott’s well-wishers included former Gov. Bob McDonnell, whom Scott embraced warmly. McDonnell, whose own federal conviction on corruption charges was overturned by the U.S. Supreme Court in 2016, had restored Scott’s right to vote and run for office, paving the way for the historic moment.
“Thank you, thank you, thank you,” The Washington Post quoted Scott saying to the former governor.
During a time when the nation is deeply politically divided, with the prospect of a bitter presidential rematch ahead, it says a lot that the person who seconded Scott’s formal nomination as speaker was Republican Del. Terry L. Austin of Botetourt County, a friend who called it “an honor.”
While it’s debatable if the fabled “Virginia Way” ideal of legislative bipartisanship and civility in favor of governing for the public good ever really existed — or actually did good — the optics of Republicans and Democrats coming together after years of gridlock lends hope that the parties may find greater consensus this session on at least some of the commonwealth’s important issues — notably the state budget, mental health, education, data centers and industrial site development, if not tougher ones like abortion, gun control or automatic restoration of felons’ rights.
As Del. Luke Torian, D-Prince William County, said, summing the day up during his formal nomination of Scott as speaker: “Del. Scott understands the redemptive power of God.”
As the third wealthiest community in the U.S., McLean is known for its luxurious mansions and classic suburban feel. That’s starting to change.
In June 2021, Fairfax County supervisors adopted a plan, known as the McLean Community Business Center, to redevelop the town’s 230-acre downtown, bounded by Old Dominion Drive and Chain Bridge Road, to include zoned density and increased height requirements closer to the town’s core to transform it to a walkable village, a shift away from its car-centric strip malls.
The largest-yet phases of that transformation were approved by supervisors in October 2023. They include the Astoria, a seven-story, 130-apartment mixed-use building that will include 3,000 square feet of office and retail. Cost and a construction timeline have yet to be finalized, according to Michelle Rosati, who represents Astoria’s developer, JAG Partners.
Next door, candy and pet food manufacturer Mars, the largest privately held company in Virginia, is expected to begin an expansion of its headquarters, from 53,000 square feet to 125,000 square feet, during the summer, according to Pete Rowan, Mars’ vice president of U.S. public affairs. Mars declined to provide the anticipated cost of the project.
The Astoria is across the street from McLean’s first-ever mixed-use development, the Signet, a 123-unit luxury condominium with 5,475 square feet of retail space that has yet to be leased. The Signet was built in 2018.
“The major motivation was people moving to the area and feeling like we lacked a sense of community because we didn’t have a place where the community could gather,” Dranesville District Supervisor John Foust says, adding that the areas outside the business center’s boundaries will retain the suburban feel of old McLean to avoid becoming as urban as neighboring Tysons.
While McLean may not be aiming to copy Tysons, its transformation includes other projects that could achieve that village feel, including a 90,000-square-foot, 122-unit Sunrise Assisted Living facility that opened in spring 2023, and a nine-story, 44-unit condo building that began construction in March 2023. In April 2023, the owner of McLean Professional Park submitted plans to redevelop six townhouse-style office buildings into a 104-unit residential building.
“I think people are starting to feel like maybe change is actually possible and this is a catalyst that will lead to a revitalization of downtown McLean,” Rosati says.
Northwest Harrisonburg used to be a place to buy a tire. Beyond the 116-year-old City Produce Exchange building, which was converted into lofts in 2006, and the Local Chop & Grill House, which opened in the same building in 2009, there wasn’t much else to draw people to that corner of the city.
That’s changing, though. The resurgence of downtown Harrisonburg has spread from its core, bringing attention to what’s informally known as the “Bird District,” due in part to a partnership between local entrepreneur Kirsten Moore and real estate developer Bismarck, and several businesses with bird-themed names.
In 2017, Bismarck’s president, John Sallah, purchased a former tire store and garage along with an adjacent lot and a 21,000-square-foot warehouse along North Liberty and West Gay streets for a little more than $1 million. He approached Moore, who operated The Hub, a coworking space, with the idea of expanding her operation into the former tire store.
“I walked into the building and knew it could be so much more than a coworking space,” recalls Moore. In August 2020, she opened the Magpie Diner and the Bakery at Magpie in the space, and also moved her coworking hub, rebranded as The Perch, there too. The building is also home to Chestnut Ridge Coffee Roasters. Across the street, Sage Bird Ciderworks opened in 2020 in the garage Sallah renovated.
In October 2023, after a $2.5 renovation, Moore opened the Liberty Street Mercantile, a collection of shops and an event space, in the warehouse, the former home of the Harrisonburg Grocery, which closed in the 1970s. In December, the city’s first wine bar, Rootstock, opened in the mercantile.
More than $150 million was invested in the city’s downtown between 2004 and the end of 2022, says Andrea Dono, executive director of Harrisonburg Downtown Renaissance, or HDR. (A breakdown for Harrisonburg’s northwest corner was not available.)
HDR and the city are funding a public art installation in the northwest end of town to welcome people into the district. A bike lane along Liberty Street, funded by a $14.3 million federal grant, is also planned to open by 2029.
While the Bird District may not be an official spot on maps yet, Dono says, it’s an extension of local entrepreneurship happening across downtown Harrisonburg. “It’s authentic to us, [and] that’s what tourists like, too. It’s really the best of all worlds.”
Virginia’s first Black governor says it’s past time for the state’s historically Black colleges and universities to receive their fair share of the pie.
Former Gov. L. Douglas Wilder, a Virginia Union University alumnus, jokes that he has been advocating for increased state funding for Virginia HBCUs “for about a hundred years.”
The Biden administration gave a push in that direction last September in letters to 16 Southern governors — including Virginia Republican Gov. Glenn Youngkin — calling on them to correct what it calls decadeslong underfunding of 16 land-grant HBCUs in their states. According to the White House, states underfunded these schools by $13 billion from 1987 to 2020.
The commonwealth has two land-grant schools — Virginia Tech in Blacksburg and Virginia State University in Ettrick, an HBCU founded in 1882. Federal officials estimate that VSU is owed more than $277 million in state funding.
Land-grant schools were established by the 1862 Morrill Act, under which the federal government provided money to create 57 public colleges for agriculture and engineering. States generally provide required dollar-to-dollar matches for these institutions. During the days of racial segregation in the South, Black students were unable to attend colleges established by the 1862 act, so a separate Morrill Act system was set up in 1890.
Youngkin’s administration has denied that the commonwealth has underfunded VSU compared with Virginia Tech, and expressed skepticism over how federal officials came up with the numbers.
Wilder, a Democrat, says he’s written to Youngkin on the subject. “The underfunding has been documented at the federal level. I say to the governor, ‘Start putting money in the budget for HCBUs — all of them.’ This has been ignored too long by too many.”
William R. Harvey, who retired in 2022 after 44 years as president of Hampton University, suggests that HBCUs seek state funding for specific projects, like HU’s Proton Therapy Institute, which treats cancer patients. Photo by Mark Rhodes
The 93-year-old Wilder, the nation’s first Black governor since the Reconstruction era and later Richmond’s first popularly elected mayor, is now a distinguished professor at the Virginia Commonwealth University’s Wilder School of Government and Public Affairs named for him. Last September, the school’s annual Wilder Symposium addressed the topic of HBCU funding head-on under the title, “HBCUs and the Absence of Support.”
Under Youngkin’s proposed 2024-26 state budget, released in December 2023, VSU’s operating funding would go up about 9.2% — from $232 million for fiscal 2024 to $250 million proposed in 2025. The Democratic-controlled state legislature will get a crack at the budget to make amendments (likely in a special session this spring) before submitting it to the governor to sign.
There are multiple ways of advocating for more funding, Wilder says. In 2006, a group of alumni and supporters of Maryland’s HBCUs filed a federal lawsuit accusing the state government of providing inequitable resources to its four historically Black schools. In 2021, Maryland reached a $577 million settlement to end the lawsuit.
Wilder says he’s not advocating that Virginia HBCU supporters follow Maryland’s example, but he notes that both chambers of the General Assembly have significant Black leadership, including the state’s first Black speaker of the House of Delegates, Del. Don Scott.
“I don’t think a lawsuit is necessary,” Wilder says. But if HBCUs are not better funded, “we’ll say that your projects likewise will not be funded. There will be no pie for you if there’s no pie for me. … Power concedes nothing without demand. Now that we people of color can do something, we need to do it.”
Economic drivers
Virginia State University President Makola Abdullah, who serves on President Joe Biden’s HBCUs advisory board and is board chair of the Association of Public and Land-grant Universities, expresses hope that the General Assembly recognizes the value of investing in HBCUs and will be “receptive” to funding increases. “It’s exciting that we’ve reached the point where this conversation is happening” in Virginia, he says.
VSU ranks No. 26 in U.S. News and World Report’s list of Best Overall HBCUs for 2023, and its enrollment grew by 8% for fall 2022 and another 11% in fall 2023, surpassing 5,000 students. In 2021, Virginia State got a major boost in the form of a record-setting $30 million gift from philanthropist MacKenzie Scott, ex-wife of Amazon.com founder Jeff Bezos. She also donated $40 million to Norfolk State University, part of a series of donations to HBCUs and other traditionally underfunded institutions.
Major donations are important, but consistent public funding would translate into more scholarships, increased financial aid and updated technology and equipment, VSU’s president says. More than that, increased resources would mean that “the entire community would be uplifted,” Abdullah says. “VSU is a premier economic driver in Petersburg.”
Land-grant schools such as VSU “invest so much back into rural America,” says U.S. Rep. Abigail Spanberger, a Democrat who serves on the House Agriculture Committee and in December 2023 launched her bid for the Democratic gubernatorial nomination.
Speaking at the 1890 Land Grant Universities Recognition event co-hosted last September in Washington, D.C., by the nonprofit 1890 Universities Foundation, she told the audience that “back home in Virginia, I have heard from our farmers and our institutions of higher education about the critical nexus between research and the success of Virginia’s No. 1 private industry — agriculture.”
In the past three decades, “more than $275 million should have been available for Virginia State University, had it received state funding per student equal to that of Virginia Tech,” according to Spanberger. “This is unacceptable; those investments could have supported more infrastructure, more student services, and the ability to compete for research grants to better serve Virginia’s students. We need to do better.”
Acknowledging disparity
Although the Biden administration’s letter was specifically aimed at land-grant schools, “it comes at a time when we’re trying to get Virginia to do more for all Black schools,” says James W. Dyke Jr., senior advisor for McGuireWoods Consulting in Tysons.
“This has been going on a long time. Black schools have always received less funding. It’s built up over the years. I think everybody acknowledges the disparity,” says Howard University alumnus Dyke, who was Virginia’s education secretary under Wilder and has worked in recent years on increased funding for HBCUs.
Now is an especially important time to allocate more money to HBCUs, Dyke says. While many institutions around the country are struggling to attract students, enrollment at HBCUs is on the rise, increasing 57% by 2022, according to a National Center for Education Statistics report last spring.
And after the U.S. Supreme Court overturned affirmative action at most colleges and universities last June, Dyke says, “I think there will be more demand.”
He’s far from alone in that assessment. According to a July 2023 report by Inside Higher Ed, HBCU leaders are expecting more applications. While more interest is generally welcome, administrators at HBCUs nationwide expressed concern that they don’t have the resources and infrastructure to accept more students.
Currently, predominantly Black universities produce 20% of Black college graduates in the country but face significant underfunding compared with predominately white institutions, according to the Wilder Symposium, which billed it as “a crisis that impacts financial support for students, technology resources, and building infrastructure.”
It’s in the best interest of businesses and communities to better support all HBCUs, Wilder says. “Businesses are looking for leadership to come from all of their schools in Virginia. They need a [workforce] pipeline. We produce the doctors, the lawyers, the engineers.”
Like other higher ed institutions, HBCUs are not a monolith. Some, like NSU and VSU, are public universities that receive federal, state and private funding, while others are private universities that rely on tuition, donations and endowments. In Virginia, Hampton University, Virginia Union University and Virginia University of Lynchburg are the state’s private HBCUs.
In 2022, Virginia Attorney Gen. Jason Miyares, a Republican who is rumored to be eyeing a 2025 gubernatorial run, wrote that the state’s laws and constitution allow some public funding of private HBCUs — through the Tuition Assistance Grant program for individual students and with loans to universities through the Virginia College Building Authority.
“This is a significant moment in time for HBCUs,” Virginia Union University President Hakim J. Lucas said when Miyares made that determination.
William R. Harvey, who retired in 2022 after 44 years as president of Hampton University, knows about the effort it takes to attract donations and has advice for other private HBCUs.
When Harvey became HU’s president almost half a century ago, the university’s “finances were in bad shape. They had not balanced the budget. Physical buildings had decayed.” The school’s endowment was $29 million.
Harvey and his team went to work, and “people responded.” At his retirement, Hampton’s endowment contained more than $400 million, a 1,279% increase. MacKenzie Scott also made a $30 million donation to the school in 2020, its largest donation. But that endowment increase also reflects support from nonbillionaire donors.
People responded, Harvey says, because “we asked them to fund specific projects. We didn’t ask for $50 million, we asked for the proton center.” That’s the $225 million Hampton University Proton Therapy Institute (HUPTI), which employs proton treatments on a variety of cancers. The facility opened in 2010, funded by private donors and regional lenders, as well as some public support from the state and federal governments.
Harvey views the institute as a “classic example” of how Hampton and other HBCUs are helping their communities. “We are curing cancer. Cancer is the No. 1 killer in Virginia. We are easing human misery and saving lives.”
Virginia HBCUs at a glance
Virginia has five historically Black colleges and universities, spread across Hampton Roads and Central Virginia. Some of the oldest in the nation, these institutions are a mix of public and privately run schools.
Hampton University
Located in Hampton, the private, not-for-profit university is on 314 acres and has 3,649 students, 3,255 of them undergraduates.1 It was founded in 1868 as Hampton Normal and Agricultural Institute. In July 2022, Hampton welcomed its new president, retired U.S. Army Lt. Gen. Darrell K. Williams; he succeeds William R. Harvey, who had served as the university’s president since 1978.
Norfolk State University
The four-year public school near downtown Norfolk was founded in 1935. It has a 134-acre campus and has 6,045 students. NSU’s December 2021 commencement speech was delivered by music superstar and Virginia Beach native Pharrell Williams, who also hosted his Elephant in the Room business forum at NSU that year. NSU unveiled its 6,000-square-foot Micron-NSU Nanofabrication Cleanroom in October 2021.
Virginia State University
Virginia State University was founded in 1882 as one of Virginia’s two public land-grant institutions (the other is Virginia Tech). Located in Chesterfield County’s Ettrick area near Petersburg, its 231-acre campus overlooks the Appomattox River. VSU has 5,190 students, 4,829 of them undergraduates.
Virginia Union University
The private university was founded in 1865. Hartshorn Memorial College, a women’s college established in Richmond in 1883, became part of VUU in 1932. Storer College, a Black Baptist college in West Virginia that closed in 1955, merged its endowment with VUU. The university has 1,704 students, 1,227 of them undergraduates.1
Virginia University of Lynchburg
Virginia University of Lynchburg traces its origins to the 1886 founding of the Lynchburg Baptist Seminary. Renamed over the years, VUL was incorporated as Virginia University of Lynchburg in 1996. The private not-for-profit school has 837 students, 479 of them undergraduates.2
The City of Richmond continues to evaluate four proposals to demolish the shuttered Richmond Coliseum and redevelop the surrounding downtown area — 9.4 acres comprising the City Center Innovation District.
In May 2023, the Richmond Economic Development Authority and the Greater Richmond Convention Center Authority released renderings from four developer groups — Capstone Development, City Center Gateway Partners, Lincoln Property and Richmond Community Development Partners. Proposal requirements included a 500-room hotel anchor to support the convention center, adaptive reuse plans for the historic Blues Armory plus office, retail and housing.
The city has been mum on when it will announce its choice.
City Center Gateway Partners, led by Capital Square and including Shamin Hotels and Gold Key | PHR, proposed a 30-story, 350- to 375-foot-tall hotel, while Richmond Community Development Partners, led by Machete Group and Bank Street Advisors, put forth a 40-story, 450-foot hotel as an option. The other developers did not respond to interview requests.
A key component of City Center Gateway Partners’ proposal is a roughly 1-acre public park, as well as 700 to 1,000 residential units, of which about 120 would be affordable housing. City Center Gateway Partners estimates its proposal would generate more than $900 million in downtown investments.
“The reason we called ourselves the City Center Gateway Partners is because once redeveloped, we do actually think this area could be a gateway to downtown, just with how you come off the interstate to come into the city and then, of course, Broad Street coming east if you’re in town,” says Natalie Mason, Capital Square’s executive vice president of development.
Richmond Community Development Partners’ proposal includes a large, open bridge connecting a new hotel to the convention center. The team, which previously submitted a proposal for the Diamond District project, proposed adding more than 1,100 rental units and potentially several life sciences buildings.
“We’re already generally familiar with the market, based on the work that we did on the Diamond District, so we’re a fan of Richmond,” says David Carlock, principal of Houston-based Machete Group. The Coliseum area “is a part of town that will certainly benefit from investment, and we think it has the right attributes and adjacencies to be successful.”
City Council voted down a previous redevelopment attempt for the downtown Coliseum area, the $235 million Navy Hill project that would have included a 17,500-seat arena, in February 2020.
The top five most-read daily news stories on VirginiaBusiness.com from Dec. 15, 2023, to Jan. 15 were led by the announcement that Fortune 500 IT company DXC Technology replaced its top executive.
Interim DXC CEO Raul Fernandez. photo courtesy DXC Technology
Petty, Livingston, Dawson & Richards in Lynchburg and Southern Virginia Legal (SoVa Legal) in Danville merged to become PLDR Law, beginning Jan. 1. (Dec. 27, 2023)
Chesterfield County-based Virginia Credit Union and Roanoke-based Member One Federal Credit Union announced plans to merge and create the state’s third largest credit union. (Jan. 11)
The HeadWaters Resort & Casino’s developer has submitted new plans to the City of Norfolk, aiming to start construction in spring 2024. (Dec. 19, 2023)
HeadWaters Resort & Casino, which is planned for Norfolk, has to meet a deadline of November 2025 to open. Rendering courtesy HeadWaters Resort & Casino;
Despite boasting a world-class port, a highly skilled workforce and easily accessible transportation infrastructures, Hampton Roads perennially comes away empty-handed in attracting large-scale industrial developments.
Chalk it up to the region’s lack of shovel-ready sites, a situation that state and local economic development and political leaders are fervently working to change. Last year, the Virginia Economic Development Partnership’s Virginia Business Ready Sites Program awarded $90 million in matching grants to 21 sites statewide with at least 100 contiguous, developable acres (or at least 50 acres in western Virginia). Three Hampton Roads sites made the list: Chesapeake’s Coastal Virginia Commerce Park, Fairwinds Landing in Norfolk and Hazelwood Farms in James City County.
VEDP President and CEO Jason El Koubi acknowledges that the state has only recently begun to significantly invest in site development, in contrast with other Southeastern states that have sunk billions into producing shovel-ready sites. In its 2022-24 budget, the state allocated $159 million to the Ready Sites Program, up from $5.5 million in 2021 — itself a bump up from about $1 million previously allocated annually by the state. In 2023, the General Assembly added an additional $200 million to the biennial state budget for the program, and in the 2024-26 budget, Gov. Glenn Youngkin has proposed $150 million in fiscal 2025 and $50 million in 2026.
With so little funding allocated for industrial site development in previous years, Virginia lost out on more than 55,000 direct jobs, 110,000-plus estimated indirect jobs and more than $124 billion in capital investment since 2016, El Koubi says. There are fewer than 10 sites larger than 250 acres ready for development across the state — and Virginia has won only one industrial megaproject in recent years: the $1 billion Lego Group toy factory, currently under construction in Chesterfield County.
Several Hampton Roads localities have teamed up to form the Eastern Virginia Regional Industrial Facility Authority, pooling resources into regional site development projects. It’s overseen by the Hampton Roads Alliance, led by President and CEO Doug Smith. Photo by Mark Rhodes
Despite more site preparation funding under Youngkin’s administration, Hampton Roads still has challenges, with fewer available land tracts for development compared with other regions. But, with some tweaks, El Koubi believes, the region can become a competitor in the industrial sweepstakes.
“There are multiple exciting site development opportunities in Hampton Roads. It’s a place where you find virtually every strength a location needs,” he says. “But because Hampton Roads has a very diverse economy with a long history and a lot of development already, most sites that are easy to be developed have already been developed, so we want to make sure we’ve very strategic about where we invest. It’s important that the region work together to invest and strategize to maximize opportunities in a way that everybody wins.”
Pooling resources
Building a successful industrial strategy is where the Eastern Virginia Regional Industrial Facility Authority (EVRIFA) comes into play. As the only entity of its type in the eastern part of the state and one of 11 in Virginia, the authority is a mechanism for multiple localities to pool regional resources into site development opportunities that benefit all of Hampton Roads.
Currently, the counties of Gloucester, James City, York and Isle of Wight and the cities of Hampton, Newport News, Poquoson, Williamsburg, Franklin and Chesapeake are members of EVRIFA, with Virginia Beach City Council voting in November 2023 to join the group in January.
Member localities invest in project sites, sharing costs and tax revenues. Municipalities with populations of less than 50,000 pay $2,000 per year for EVRIFA membership, while those with more than 50,000 residents join for $4,000 annually. Each locality has two primary and two alternate members represented on the authority’s board.
“Some communities are land-rich and cash-poor,” notes Doug Smith, president and CEO of the Hampton Roads Alliance. The region’s economic development arm, the alliance has managed EVRIFA since fall 2022. “Some have revenues but don’t have developable land. They can now team up.”
Localities are not obligated to fund site projects, with members deciding to join or pass on each proposed venture, Smith adds. “Each project is a distinct opportunity, and participation in revenues is based on the share of investment each community puts in.”
City and county officials on the Peninsula proposed establishing the authority back in 2018, with the idea that Southern Virginia localities could join later. “We’ve had conversations to get all of them in the authority,” Smith says. “We’re hopeful that all of them will by June 2024.”
Hampton, Newport News, Poquoson, Williamsburg and York and Isle of Wight counties are backing EVRIFA’s first project, Kings Creek Commerce Center in York County. The authority acquired the 432-acre parcel in 2022 from the state for $1.35 million, ultimately leasing it to Dominion Energy for a solar energy farm and is marketing the remaining 109 acres for light industrial development. “We’re showing the site to prospects and expect to see some results in the next year,” says Hampton Roads Alliance Chief Operating Officer Steve Harrison. “It’s been very well-received.”
Along with shovel-ready properties, developers want a skilled workforce, good transportation infrastructure, adequate energy supply and access to the port. “Ultimately, decisions are made on how quickly they can get a facility up and running,” Harrison adds. “That’s a driving factor. If they can’t get a site up and running quickly, they will go to a community where they can.”
Typically, sites in the region can become shovel-ready in six to 12 months. From there, the facility would open within 18 to 24 months of the contract being signed. Those time spans are significantly shorter than they were a decade ago, yet another consequence of the pandemic. “COVID impacted supply chains,” notes Smith. “You see a lot of reshoring, and folks need to move quickly to get businesses open and products moving.”
New and emerging industries such as battery storage, chip manufacturing and electric vehicle projects have bypassed Hampton Roads and Virginia for more competitive areas. “Without preparing sites and developing EVRIFA into a robust organization, we’re not going to be able to land those projects — period,” Smith says. “Everything is a cost of getting into the game.”
Hampton Roads leaders are eager for the region to become a player in the industrial site sweepstakes. Smith says whenever a large economic development project is announced in another state, he can expect a telephone call from a local political or business leader asking why Hampton Roads didn’t get the project. And “the answer,” he says, “is always that we didn’t have 1,500 or 500 acres prepared to meet their development criteria.”
Smith anticipates fewer of those calls in the future as the region and the state invest more funding into developing large sites. “Now, they’ll be calling wanting to come to the ribbon cutting.”
Moving forward
A ribbon cutting could soon take place at Hampton Roads’ lone industrial megasite, the Coastal Virginia Commerce Park in Chesapeake. Situated near the North Carolina border, the park has been touted as a good fit for computer and electrical products manufacturing, semiconductor microchip manufacturing or general advanced manufacturing. The City of Chesapeake and VEDP have received multiple applications, and Deputy City Manager Brian Solis anticipates a contract could be signed by mid-2024, although he declined to give further details. Industries interested in the park include companies involved in advanced manufacturing, sustainable energy and emerging sectors such as energy storage and battery manufacturing. Tracts will be a minimum of 250 acres.
“We’re preparing the site to get it to shovel-ready with all utilities in place,” Solis says. “It has substantial large tracts ready to be built on. The entire site was farmed with a sophisticated drainage infrastructure. It’s ready to go from a development standpoint.”
The city received a $750,000 grant in 2023 from the Virginia Business Ready Sites Program for surveying and environmental assessment work on the 1,420-acre site, which was rezoned from farmland to industrial in 2022. The Chesapeake Economic Development Authority entered a contract in 2022 to purchase the land for $37 million from Virginia Beach farmer Frank T. Williams and has an option to buy 2,600 adjacent acres for $54 million. The sale will be finalized once site studies are completed.
According to Solis, market analyses of comparable megasites along the East Coast give the Coastal Virginia Commerce Park high marks for its proximity to the Port of Virginia and the region’s skilled workforce, as well as the convergence of four interstates in Chesapeake, allowing for multiple shipping and transportation options. “Chesapeake is unique in Hampton Roads because it is in the central part of the region from a transportation standpoint and is a direct 15-minute drive to the port.”
Although Chesapeake has struggled with the tension between preserving rural, agricultural land and developing industrial centers, Solis says, the megasite has been relatively well-received as a future employment center. “We’re very conscious of industry’s proximity to residential areas and put it in the furthest proximity to our population as possible,” he says. “It’s a positive difference-maker in that you always look for opportunities to provide more employment opportunities to our Hampton Roads residents.”
Industrial tenants also alleviate the tax burden on residents, Solis adds. “We want to have a healthy balance of nonresidential and residential tax base. For every tax dollar the business pays, that helps contribute to the quality of life for our residents.”
Neighboring Suffolk, the state’s largest city in land area, is promoting 6 million square feet of industrial development on more than 500 acres at the Port 460 Logistics Center. Maryland developer Matan is working with Rockefeller Group to construct the 10-building warehouse project which is zoned for heavy industrial, logistics, advanced manufacturing, life sciences and warehouse uses. The initial phase encompassing five buildings with about 2.4 million square feet is expected to be under construction in the summer of 2024.
“Things are going full steam ahead,” says Suffolk Economic Development Director Nic Langford. “With any development, we’re open to all possibilities as long as it makes sense for our investments. This will be a very big addition and nice new industrial development for the city.”
Langford says Port 460 would be a good fit for a large manufacturer such as Mercedes-Benz or Volvo. “We would love to get big manufacturers here,” he adds. “We chase those projects all the time. It seems they don’t land in Hampton Roads.”
Along with available land, Langford believes a lack of housing curbs large manufacturers’ interest in the region. “To attract large manufacturers, you need all range of housing. Suffolk is one of the few municipalities that’s building new housing.”
The city is revisiting its 2045 comprehensive development plan as it determines how to meet demand for all types of growth. “Suffolk has quite a bit of land,” Langford notes. “We’re next on the agenda in Hampton Roads for development, but we have to strike a balance between the pressures of the private market and smart growth. We have an obligation to our taxpayers to ensure we don’t expand too rapidly.”
Suffolk has not joined EVRIFA, but Langford says city officials have been talking to authority leaders to determine future participation. “There’s some value in municipal and economic development authorities purchasing land. When they do that, the ultimate decision-maker is the city or the economic development authority, and they can be more picky about who comes in and what happens.”
Smith says the authority is “in conversations” with the cities of Norfolk and Portsmouth and other localities, and he is hopeful all Hampton Roads municipalities will become members in 2024.
Benefits of cooperation
Joining the regional authority positions Virginia Beach to be a leader in regionalism, long cited by Hampton Roads business leaders as a necessity for economic advancement, says Chuck Rigney, the city’s interim director of economic development. “EVRIFA allows the region to make a better case to land large, significant projects and moves the needle to position Hampton Roads as a leading metro area.”
Virginia Beach’s lack of large tracts suitable for industrial development strengthens its rationale for joining EVRIFA, Rigney adds. “Virginia Beach has matured to the point of looking at strategic redevelopment and realignment of existing assets to be sure they are for the highest and best use. By supporting this partnership, we hope to grow the wealth of Hampton Roads.”
However, lack of suitable acreage will continue to prevent the region from securing large-scale industrial investments, says commercial real estate broker Lang Williams, an executive vice president with Colliers International Virginia. “So much of our land has been developed for other uses or is wetlands and not suitable for development.”
However, Williams notes that companies are investing in Hampton Roads, just not on as grand a scale compared to areas like Savannah, Georgia. He points to logistics service provider Katoen Natie’s November 2023 announcement that it will invest $59.9 million to expand its Norfolk facility with a 450,000-square-foot warehouse and rail yard, adding an expected 76 jobs. “We have a diverse set of smaller projects in the tens of millions of dollars as opposed to billions of dollars, but they are a strong indication of companies tracking to the region.”
Hampton Roads also can expect to benefit from Lego’s impending Chesterfield County facility, which is expected to open for production in 2025, adding 1,760 jobs over a decade. “Suppliers will look down here for warehousing in other space,” Williams says. “Lego was a huge win for Virginia.”
It’s a win that VEDP’s El Koubi believes can be replicated. “Virginia is steadily closing the gap with other states in site development,” he says. “We’ll see the impact accelerate over the next couple of years and see Virginia have one of the top site development programs in the nation.”
Hampton Roads at a glance
Virginia’s second most populous region, Hampton Roads is comprised of 17 localities, including the cities of Virginia Beach, Norfolk, Chesapeake, Newport News, Hampton, Portsmouth, Suffolk, Williamsburg, Franklin and Poquoson, and the counties of Gloucester, James City, Isle of Wight, Mathews, Southampton and York.
Chrysler Museum of Art Photo courtesy Chrysler Museum of Art
Bordering the Atlantic Ocean and the Chesapeake Bay, Hampton Roads is home to the Port of Virginia and the largest naval complex in the world, Naval Station Norfolk, as well as Naval Air Station Oceana. Colleges and universities in the region include William &
Mary, Hampton University, Old Dominion University, Norfolk State University, Virginia Wesleyan University and Regent University.
Population
1.79 million (2020)
Top employers
Huntington Ingalls Industries (Newport News)
Smithfield Foods (Isle of Wight)
Bon Secours Maryview Medical Center (Portsmouth)
Science Applications International Corp. (Suffolk)
Children’s Hospital of The King’s Daughters (Norfolk)
Major attractions
Hampton Roads offers an abundance of natural, historic and cultural attractions, including the Virginia Beach Oceanfront, Colonial Williamsburg, Historic Jamestowne, the Virginia Aquarium & Marine Science Center, Chrysler Museum of Art, Busch Gardens, Ocean Breeze Waterpark, the Virginia Air & Space Center and Nauticus.
A sampling of hotels
The Cavalier Resort (including Embassy Suites by Hilton, The Historic Cavalier Hotel and Marriott Resort Virginia Beach Oceanfront)
547 guest rooms,
70,875 square feet
of event space
Hilton Norfolk The Main
300 guest rooms,
71,500 square feet
of event space
Embassy Suites by Hilton Hampton Convention Center
295 guest rooms,
161,974 square feet
of event space (including
connected convention center)
1. Arlington County Board Chair Christian Dorsey (L) received the Metropolitan Washington Council of Governments’ Elizabeth and David Scull Metropolitan Public Service Award on Dec. 13, 2023, presented by D.C. Council member Robert C. White Jr. and COG Executive Director Clark Mercer (R). Photo courtesy COG.2. Dr. Joseph Moskal, Carilion Clinic’s chair of orthopaedic surgery and a senior vice president, spoke at the Jan. 10 opening of four additional operating rooms at Carilion Roanoke Community Hospital. Photo courtesy Carilion Clinic.3. Federal Reserve Bank of Richmond President and CEO Tom Barkin addressed attendees of the 2024 Financial Forecast event co-hosted in Richmond on Jan. 11 by the Virginia Bankers Association and Virginia Chamber of Commerce. Photo by Caroline Martin Bookbinder, courtesy VBA.4. L to R: Hampton Roads Workforce Council President and CEO Shawn Avery, Newport News Mayor Phillip Jones, Gold Key|PHR CEO Bruce Thompson, Gov. Glenn Youngkin, Jo-Kell owner and CEO Suzy Kelly, then-state Sen. Tommy Norment and Hampton Roads Chamber President and CEO Bryan K. Stephens attended the Nov. 29, 2023, Bravo! A Celebration of Leadership event, where Avery, Jones, Thompson, Kelly and Norment received regional leadership awards. Photo courtesy HR Chamber.5. L to R: Ashley Chittum, a business relationship specialist with Farm Credit of the Virginias; Sharon Ratzsch with Verona Community Food Pantry; VCFP President Cecil Wright; VCFP Executive Director Ike Moore; Valerie Moore, a FCV loan officer; and Susanne Mahmoodian, FCV business service specialist, hold a check representing FCV’s $830 donation to the food pantry on Dec. 11, 2023. Photo courtesy FCV.
Working as a mortgage lender in Roanoke for the past 18 years, Jason Bialek experienced everything from the financial crash of 2008 to the historic spike in home sales during the COVID-19 pandemic.
Following that bonanza in 2020, though, Bialek and others in the residentialreal estate industry will probably look back at this period as one of the most challenging times in their careers. Mortgage rates zoomed 5 percentage points over the past three years, and that’s combined with historic low housing inventory in Virginia, which has hurt real estate agents, lenders and current and prospective homeowners.
Bialek survived two significant rounds of layoffs in August 2023 at his company, Guaranteed Rate, the sixth-largest nonbank mortgage lender in the nation. Although he kept his job as a branch manager and vice president of mortgage lending, which he’s held since 2017, thousands of other employees were terminated. (The company declined to disclose an exact figure.)
The layoffs came after an influx of hiring at Guaranteed Rate during 2020 and 2021, right as the housing market peaked with the most home sales since 2006. In response, the company “probably” overstaffed, John Palmiotto, who resigned as the company’s chief of retail production, told the Chicago Tribune last summer. Palmiotto estimated the company’s layoffs were in the thousands nationally.
In Virginia, the lending industry lost about 12% of its loan officers in 2023, according to the Mortgage Bankers Association, and anecdotally, real estate professionals say they’re seeing many colleagues leave the industry following the Federal Reserve’s multiple interest rate hikes to address inflation, which significantly impacted mortgage rates. The central bank is expected to cut rates several times in 2024, from 5.25% to 5.5% to a possible low of 3.75% to 4%.
That will help borrowers, but rates are just part of the picture. Real estate agents and homebuilders are also preparing for major shifts in their industries’ landscapes, as the number of Realtors is already shrinking in Virginia, a reversal of the field’s growth in 2020 and 2021.
‘Eat what you kill’
A December 2023 report from Virginia Realtors observed a 9.5% year-over-year decrease in home sales across the state in November 2023 — the smallest year-over-year decline in statewide sales activity in about two years. “Some markets could finally be approaching the bottom of what has been a slow 2023,” the report stated, noting that active house listings also appeared to have reached a bottom.
Virginia Realtors President Tom Campbell said he expected to see some improvement in the tightness of the market. At 7.79% in October 2023, the average 30-year fixed mortgage rate was the highest it’s been since 2000, after hitting its lowest point ever — 2.65% — in January 2021.
With fewer people putting their homes on the market during this period of high rates and expensive house prices, real estate agents are leaving the industry after swarming to it starting in 2020.
From 2019 to 2021, 2,626 new Realtors in Virginia registered with Realtor associations, marking a nearly 6% increase across three years, according to the National Association of Realtors. During the past two years, however, more than 1,600 Realtors have left the association, bringing down the total number of registered Virginia Realtors from a peak of 36,445 in 2021 to 34,822 in October 2023.
“I think most Realtor associations across the state are budgeting for a modest loss in membership,” says Laura Lafayette, CEO of the Richmond Association of Realtors.
One of the primary reasons, she says, are the “golden handcuffs” keeping homeowners from selling because they purchased their house with a much lower mortgage rate than the current one. More than 60% of homeowners with a mortgage have a rate that’s lower than 4%, and 82% have a rate under 5%, according to Redfin data.
Increased rates heavily impact buying power, with every percentage point increase adding about $35,000 to the cost of a house, says Ryan McLaughlin, CEO of the Northern Virginia Association of Realtors. For those trying to sell homes and mortgages, that’s a major disincentive for their customers.
“It pushes so many people out of the market when the rates are 7.5% versus 5.5%,” Bialek says. “I mean, you’re talking millions of people that are pushed out of qualifying when the rates change like that.”
At the end of 2023, the national 30-year fixed mortgage rate was 7.45%, a slight decline from last autumn, but still high for many buyers — especially prospective first-time homeowners.
Home sales in Virginia had fallen 12% year-over-year as of October 2023. While lenders are facing a 75% decline in mortgage activity compared with 2021, according to Fannie Mae, Realtors rely on sales commissions for their income, so dropping home sales could reflect a significant drop in revenue.
Lafayette says about a quarter of those who left the Realtor profession at the end of 2022 had fewer than five years of experience, according to data her association has collected.
“I think our larger firms are designed to weather these storms,” she says, adding that she wouldn’t be surprised to see those firms shrink their footprints in response to the downturn. “It tends to be an ‘eat what you kill’ profession, so you’ve got to have some cash reserves.”
Although it hasn’t manifested yet as a major factor in Virginia, a $1.8 billion federal jury verdict in October 2023 against the National Association of Realtors and several large brokerages — holding that they artificially inflated commissions to real estate agents — could alter the national residential real estate landscape, some experts have noted. In addition to the damages awarded, which could rise as high as $5 billion, home sellers would no longer need to pay their buyers’ real estate agents. Although the NAR plans to appeal the verdict, there are similar lawsuits currently wending through other courts, and investment banking firm Keefe, Bruyette & Woods estimated in a November 2023 New York Times report that commissions could decline as much as 30% annually.
For Brad Thomas, a Realtor at Vinton-based Mountain View Real Estate who’s been in the business since 2008, the changing headwinds of the market have meant leaning more on commercial sales and his house-flipping business to make up for the downturn in residential sales.
“It definitely is hurting certain people in the short term, but that’s the natural progression of the real estate market,” says Thomas. “Everything goes in cycles.”
To Thomas, these cycles are necessary to keep a healthy market, which he believes was not the case in 2020 and 2021 when consumers were buying houses well over asking prices and sometimes without an inspection.
Now, a house that was getting 10 or 11 offers two years ago is getting just one or two, he says. Yet despite less competition, home prices are still rising.
Inventory battle
Richmond-area builders are facing a tight inventory of buildable lots, says Danna Markland, CEO of the Home Building Association of Richmond. Photo by Matthew R.O. Brown
In addition to rate hikes affecting the national residential real estate market, Virginians particularly have been impacted by low housing stock, which is adding pressure to housing affordability and the amount of supply real estate professionals have to work with.
Nationwide, unsold inventory was at a 3.6-month supply in October, reflecting the estimated number of months it would take for the current homes on the market to sell. Virginia had a 2.2-month supply during the same period.
A six-month supply is associated with moderate home price increases, and anything below that is expected to push prices up rapidly, according to the NAR. In Richmond and Northern Virginia, two of the state’s tightest markets, inventory supply is as low as 1.5 months and 1.05 months respectively, according to reports from those regions’ Realtors associations.
NAR said in December 2023 that the Washington, D.C., region, including Arlington County and Alexandria, ranked No. 10 in its list of markets with the most pent-up housing demand.
And in Richmond, “we’ve had an inventory shortage for a very long time. You’ve got real estate professionals who have less pie on the table to share,” says Lafayette. “It’s created a very challenging environment to work in and a challenging environment for some people to make the income that they would have made just two years ago.”
Low inventory is one of the reasons home prices are still ticking up in Virginia despite decreasing demand, and professionals like Bialek and Lafayette say they’re not optimistic about prices going down.
“A lot of people think they should wait for home prices to come down [before buying],” Bialek says. “That’s not going to happen.”
The effort to replenish housing inventory is under threat as builders have “blown through” their supply of buildable land since 2020, when they were addressing the spike in demand during the early pandemic, says Danna Markland, CEO of the Home Building Association of Richmond.
Lot inventories in Virginia have declined from a 36-month supply in 2012 to a 12-month supply in 2022, according to the Virginia Housing Commission.
“If we don’t address our land inventory, all these builders will not have the land product to be able to deliver a home to the market,” Markland says. “We could see a very different Richmond-region builder dynamic in the next five years.”
Although there’s been a “flurry” of new homebuilding, that spike will likely not be sustained and is really just making up for lost time, Markland says. The rate of housing stock growth in Virginia has been under 2% since the 1960s, according to the VHC, and was less than 1% from 2010 to 2020.
Limited buildable land for new home construction is also compounded with increased in-migration to areas like Richmond, Markland says. In total, the Richmond region added 27,640 people between April 2020 and July 2022, with close to 13,000 new residents moving from Northern Virginia to Richmond in 2021 alone.
At certain points over the past three years, Richmond-area builders reported up to 50% of their sales went to buyers from outside the metropolitan area, Markland says, as white-collar employees working from home had more geographic flexibility.
“There should be a heavy emphasis on increasing housing supply,” says McLaughlin, adding this can be facilitated by easing zoning regulations for developers.
2024 outlook
Virginia Realtors Chief Economist Ryan Price wrote in the organization’s November 2023 report that active listings were down by 0.7% from the previous year, although new listings rose by 0.3%. The median home price statewide was $385,000, up 5.5% from November 2022 — but in Northern Virginia, the median price was $656,500 in November 2023, up 5.72% from the same month in 2022.
Price wrote that the small decline in active inventory — the lowest decrease in the past eight months — as well as increases in listed homes in Central Virginia and parts of Hampton Roads indicate that the inventory levels “could be stabilizing.”
But Markland isn’t as optimistic about the Richmond region. She says land supply constraints could impact the price of new home construction, since buying and prepping land makes up a significant portion of construction costs.
“Even though we see fading strength in sales performance, there’s no way for those average prices to come down when markets are at a premium,” Markland says. “Construction of the home only makes up about 60% to 70% of the cost of the property. That land factor can swing significantly in the price.”
While rate hikes and sales decreases have eased, real estate professionals in Virginia continue to face evolving challenges. In part because of the limited land supply in areas like Richmond, the state’s inventory problem is likely to get worse before it gets better.
“The industry is waving this distress signal. We have a crisis on our hands, and we’ve got to address it,” says Markland. “But it can’t just be industry coming to the table, because lots are approved by local government.”
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