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Crying wolf?
It’s “the most predicted potential recession in memory,” Federal Reserve Bank of Richmond President and CEO Tom Barkin quipped in January, but it hasn’t happened yet. Maybe.
During the first half of 2022, surveys of consumers and CEOs showed they were worried about a recession coming on the heels of a 40-year peak in inflation and ongoing labor shortages. Many expected it to come in the second half of the year. In June 2022, consumer sentiment fell to a record low. Rising inflation, record gas prices and worries about personal finances contributed to a feeling of dread last matched during 2008’s Great Recession, according to data from the University of Michigan.
And then there was confusion over whether we actually were in a recession.
Tech giants Amazon, Meta, Google and Microsoft began announcing thousands of layoffs in late 2022, and the trend continued into early 2023 as other tech companies and employers followed suit. Surely that meant we were in a recession.
And yet, the United States was not actually in a recession. After the Fed raised interest rates several times, inflation decreased in December 2022 to 6.5%, down from 7.1% in November. Although Barkin said his preferred rate of inflation would be about 2%, he acknowledged the improvement in prices. Plus, the nation’s gross domestic product increased by 2.9% in the fourth quarter of 2022, following a 3.2% rise in the third quarter.
Economists and business leaders say there could still be a recession in the offing this year. Manufacturing and the housing market are already in recession, according to experts, and labor participation remains low in certain skilled-job sectors, including health care, public safety and cybersecurity. In January, Moody’s Analytics dubbed its 2023 outlook a “slowcession” — short of a real recession, but an economy in which growth comes to a near halt.
Meanwhile, mass layoffs — or even the threat of them — are changing the balance of power between employers and workers, many of whom received higher salaries and work-from-home allowances over the past two years during the U.S. labor shortage. Many labor experts agree that employee-friendly honeymoon is over, and in August 2022, a survey for Bloomberg News reported that 58% of respondents believed companies now have more leverage in the job market, a 5% increase from January 2022.
Another impact of layoffs is on workforce diversity, as more women and people of color have been laid off for a combination of reasons, including “last in, first out” policies that undo more recently made diverse hires, and remote work, which can leave employees with fewer allies among executives. Some advertisers also are backing away from more expensive buys due to economic concerns.
Virginia, in general, is in better economic shape than the nation as a whole because of reliable government contracting work. The commonwealth’s unemployment rate in December 2022 was 3%, a half-point down from the national rate, and Virginia gained 103,500 jobs between December 2021 and December 2022.
Old Dominion University economists said in January that they don’t predict a recession in Hampton Roads because of an increase in defense spending. Instead, they expect the region’s economy to grow by a modest 1.7% this year. However, the state’s fiscal 2023 economic forecast from the Department of Planning and Budget expected a 4.6% unemployment rate in fiscal 2024, which begins July 1, after a slowdown in hiring in the second half of fiscal 2023.
Familiar territory
When it came time to select a new home for its corporate headquarters and distribution center, Würth Revcar Fasteners Inc., a company with Star City roots dating back to 1969, stuck with the Roanoke Valley.
Owned by the Würth Group, an industrial distributor headquartered in Germany, and consisting of more than 400 companies across more than 80 countries, Würth Revcar Fasteners is investing $11 million to renovate the 387,558-square-foot former Home Shopping Network distribution center it’s leasing in Roanoke County into its new headquarters and primary East Coast distribution center.
The company supplies fasteners, like screws and rivets, to corporate customers and the U.S. Navy. “We work with our suppliers, domestic and abroad, to secure quality parts that meet the quality specifications,” explains Betsy Troyer, marketing manager of Würth Revcar Fasteners.
Additionally, the company develops custom inventory management solutions for its customers “so they don’t run out,” Troyer says. “They have the parts they need when they need them.”
Würth Revcar Fasteners needs to move to a bigger space, says CEO Chapman Revercomb, because the company has sustained “pretty extreme growth” over the past several years.
Part of that growth stems from the Würth Group consolidating complementary business units from different Würth Group companies over several years, Troyer says. Industrial customers that had previously obtained their fasteners from other Würth Group companies were absorbed by Würth Revcar Fasteners. “It was a moving of the chips,” she says.
Since the pandemic, Würth Revcar Fasteners has also won new clients and seen increased orders from established customers. That’s in part because Würth Revcar Fasteners hasn’t struggled as much with post-pandemic supply chain and labor issues, Revercomb says. Being owned by a large international company with deep pockets helped protect Würth Revcar Fasteners from those difficulties, he believes.
“We certainly didn’t have a crystal ball,” Revercomb says. “But as the lead times kind of developed and disruptions continued to mount, we were able to quickly invest in enough inventory to cover those disruptions.”
Since 1999, Würth Revcar Fasteners has worked out of a 42,000-square-foot building on Thirlane Road in Roanoke. For the past several years, the company also has occupied a 50,000-square-foot warehouse located off U.S. 460 in Roanoke County. Both sites are at 100% capacity and have been for a while, according to Revercomb. Those buildings will be leased to other companies when Würth Revcar Fasteners moves into its new digs.
When he learned in early 2022 that the expansive former Home Shopping Network building on Avery Row was available, Revercomb quickly got on the phone with Würth Group executives about what had the potential to be Würth’s largest facility in North America. “We ended up going for it,” he says.
The goal, Revercomb says, is to have the space to support two decades of “accelerated growth” for the company.
Initially, executives at Würth made a rough estimate that office renovations
and warehouse infrastructure would cost $5 million. But after working with a general contractor and architects, the cost grew to $11 million, according to Troyer.
The new Würth Revcar Fasteners operation on Avery Row will look quite different from the 7,000-square-foot Southeast Roanoke building where Jim Revercomb Sr.,
Chapman Revercomb’s grandfather, first launched the business that would become Würth Revcar Fasteners.
As of December 2022, Würth Revcar Fasteners had about 100 employees in Roanoke. Employees will move into the new facility in phases, with a goal of everyone being moved into the new facility by July, she says.
As part of the expansion, Würth Revcar plans to hire 50 new employees by this summer, Troyer says. The openings will include office and warehouse jobs.
Between late 2023 and 2025, Würth Revcar Fasteners plans to invest an additional $6 million in warehouse automation, according to Troyer. “We’re doing it for the long haul,” Revercomb says. “We’re going to be there for at least 20 years and hopefully more.”
Building blocks
If you ask economic development officials in Central Virginia about 2022, they might respond with a familiar slogan: “Everything is awesome.”
With almost 5,000 announced jobs and $1.6 billion in capital investment, the Richmond region had one of its best years
in the last two decades.
By October 2022, the region recovered 100% of jobs lost during the pandemic, says Greater Richmond Partnership President and CEO Jennifer Wakefield, but the recovery was lopsided. The IT, finance and insurance sectors continue to lag, she explains, “but we’re looking to attract more companies in these areas since they include high-paying wages.”
Heading into 2023, the region may look to build on megadeals such as the June 2022 announcement that Danish toy maker Lego Group had picked Chesterfield County for a $1 billion manufacturing plant. (See related story, Page 15.) In September, San Francisco-based Plenty Unlimited Inc. announced plans to invest $300 million to build the world’s largest indoor vertical farm in the county, bringing 300 jobs to Meadowville Technology Park.
“We’ve never seen this volume of megaprojects before,” says Henrico Economic Development Authority Executive Director Anthony Romanello.
Richmond
In November 2022, Washington, D.C.-based commercial real estate data and analytics provider CoStar Group Inc. broke ground on an expanded research and technology campus on the downtown riverfront. The $460 million expansion will bring nearly 2,000 employees to the city. The project, announced in December 2021, is expected to be complete in early 2026. The company also purchased a 117,500-square-foot, $20 million office building across the river in the city’s Manchester area in May 2022.
“Having a new corporate campus shows that companies are still investing in office projects and creating jobs in Richmond,” says Richmond Director of Economic Development Leonard Sledge.
Between July 1, 2021, and June 30, 2022, the city landed $552 million in capital investment, creating an expected 2,237 jobs. Those projects include an expansion by Massachusetts-based Thermo Fisher Scientific Inc., which in March 2022 announced it would invest $97 million to expand its clinical research operations by nearly 150,000 square feet while adding 500 employees in the Richmond area during the next three years. The project is a joint one with Henrico County, and while much of the investment will be there, including two labs, Thermo Fisher will add significant space to its operations in the city at the
VA Bio+Tech Park.
Also in March 2022, Pennsylvania-based warehousing and logistics company A. Duie Pyle Inc. announced it would invest $20 million and add 75 jobs to establish three cross-dock service centers in Manassas, Roanoke and Richmond, where 25 of those jobs will be located.
Meanwhile, Richmond’s city government has been sparking some of the region’s largest projects ahead. In September 2022, Richmond selected the RVA Diamond Partners LLC development team, led by Thalhimer Realty Partners, to develop the Diamond District, a $2.44 billion neighborhood redevelopment project. Being built on 67 acres along the Interstate 95 corridor, the mixed-use project will include 2,800 residential units and a new baseball stadium for the Richmond Flying Squirrels, expected to open for the 2025 Minor League Baseball season.
Additionally, in December, the Richmond Economic Development Authority and the Greater Richmond Convention Center Authority received five development proposals for the City Center Innovation District, a 9.4-acre mixed-use downtown redevelopment project that will include demolishing the closed Richmond Coliseum and adding a hotel.
Henrico County
Henrico had not landed a $1 billion economic development project since Facebook announced a data center there in 2017. That changed in 2022 when the county saw a record six $1 billion-plus projects, says Romanello. Henrico saw total economic development investments of $264.2 million, adding 1,271 jobs, in fiscal year 2022, which ended June 30, 2022.
“What made 2022 unique was the number of advanced manufacturing and data center megaprojects that came to us,” Romanello says, “and we continue to work dozens of projects, from the megaprojects to small businesses and everything in between.”
Last year marked a year of expansions in the county as well.
Boston-based SimpliSafe, a producer of DIY home security systems, announced in July 2021 it was investing more than $3 million to expand its Henrico operations, adding 250 jobs. The company opened its first customer service call center in Willow Lawn in 2020; it opened a second location in Innsbrook last year. “They liked us so well, they doubled down and made a second investment,” says Romanello.
On the sweeter side, snack food maker Mondelez International Inc. opened a new distribution site in Henrico in November 2022, part of a $122.5 million investment and expansion in the county, creating about 80 jobs. The company produces brands such as Oreo, Ritz, Wheat Thins and Chips Ahoy!
Additionally, EAB, an education research, technology and marketing company, announced in June that it would invest $6 million and add more than 200 jobs in Henrico during the next five years, relocating and consolidating from two area locations into a 70,000-square-foot space on West Broad Street.
via Associated Press
Chesterfield County
Aside from its massive, headline-generating Lego factory announcement, Chesterfield County scored big wins in agriculture and pharmaceuticals in 2022, tallying a record $1.47 billion in investments and 2,658 jobs during fiscal 2022.
Announcements from agriculture company Plenty Unlimited Inc. and nonprofit drugmaker Civica Rx in September 2022 added to the county’s gains. Plenty is slated to open the first phase of its 120-acre $300 million indoor vertical farming campus, billed as the world’s largest such facility, late this year or in early 2024. Civica is investing $27.8 million to construct a 55,000-square-foot laboratory testing facility in Chesterfield to support its Petersburg pharmaceutical manufacturing operation. The project expects to create 51 jobs.
Also in the works is a $108 million, 179,000-square-foot renovation and expansion of Bon Secours St. Francis Medical Center, near Midlothian.
Hanover County
Hanover Director of Economic Development E. Linwood Thomas IV says the county has seen “significant demand in manufacturing and logistics space, and we are seeing emerging growth taking place in the bio and life sciences segments of our local and regional economy as well.”
For the 12-month period ending June 30, 2022, the county added more than 1,960 jobs across all industry sectors and announced more than $243 million in new projects.
In February 2022, Walgreens Co. announced an investment of $34.2 million to establish a pharmaceutical micro-fulfillment center at Atlee Station Logistics Center. The project will create 249 jobs and is scheduled to be completed in the first quarter of this year. That was followed by a July 2022 announcement from Toronto-based Unilock, which manufactures concrete paving stones and segmental wall products. The company plans to invest $55.6 million to establish a manufacturing campus in Doswell, adding 50 jobs. Construction is expected to begin this year. Finally, Pennsylvania-based Lutron Electronics announced in September 2022 that it will invest $28.3 million to build a 145,000-square-foot manufacturing facility, adding about 200 jobs.
Lynchburg and Charlottesville
Lynchburg continued to capitalize on its LYH Loves You branding campaign, which launched in summer 2021. The campaign, part of the city’s five-year strategic plan, aims to attract business investment and talent, says Anna Bentson, the city’s assistant director of economic development and tourism. In 2022, Lynchburg’s economic development authority directly supported expansions by Flowers Baking Co. and Bausch & Lomb, resulting in $65 million in investment and 94 new jobs.
Meanwhile, Charlottesville continues to see growth as an innovation hub for technology and life sciences, says Chris Engel, who directs the city’s Office of Economic Development.
In January, the University of Virginia announced it will build a $300 million biotechnology institute funded in part by a $100 million donation from Charlottesville investor Paul Manning and his wife, Diane. Expected to open around 2027 at U.Va.’s Fontaine Research Park, the Paul and Diane Manning Institute of Biotechnology will focus on translational medical research to produce new treatments — such as cellular and gene therapies, nanotechnology and immunotherapy — that are expected to treat many different diseases. UVA Health is recruiting researchers who will work for now in the system’s existing facilities.
Filling the steel gap
Metallurgical coal may be an unknown to the general population, but it’s very important to the manufacturing of steel and also valuable in the current economy.
In August 2022, Australia-based Coronado Global Resources Inc., which produces metallurgical coal, announced a $169.1 million expansion of its Buchanan Mine Complex in Buchanan and Tazewell counties, expected to create 181 jobs.
Metallurgical coal is used to generate coke, a fuel used in blast furnaces to make steel. “That’s what we’re focused on,” says Bob Cline, Coronado’s vice president of business development and engineering.
Thermal coal, by contrast, is used to generate power — and also has generated an image problem due to its contribution to climate change.
“I would make the argument that Coronado is not an energy company; rather, it is more aptly defined by its role in the manufacturing, infrastructure and construction sectors,” says Will Payne, managing partner of consulting firm Coalfield Strategies LLC and head of business development for InvestSWVA, a public-private business attraction and marketing campaign for Southwest Virginia.
Prices for metallurgical coal hit historic highs in the last part of 2021 and the first part of 2022, according to Ben Beakes, president of the Metallurgical Coal Producers Association.
Halfway into 2022, the metallurgical coal market began to “settle,” according to Beakes. “However, the market is still fairly strong.”
Expanding the Buchanan Mine Complex in Buchanan and Tazewell counties is necessary for Coronado to remain “competitive in the international coal markets for many years,” Cline explains. The company also has active mines in Queensland, Australia, and West Virginia.
Over the next 20 years, extracting coal from the Buchanan mine will require digging out more rock than previously required. “The expansion will allow Buchanan to not only maintain current production levels but also increase the saleable tonnage produced annually,” Cline says.
As of early December, workers had begun construction at the Buchanan Mine Complex on a second set of skips, which carry raw coal from underground to the surface. “We are well on our way to getting started,” says Brett Holbrook, vice president of U.S. operations for Coronado.
The expansion will also include storage space for 60,000 to 70,000 tons of raw coal, as well as a new coal preparation plant. “The preparation plant separates the coal from the rock, thus generating a saleable clean coal product,” Cline says. Additionally, the expansion will increase the size of the coal storage stockpile facility. This will mean fewer trucks hauling coal offsite for storage and later hauling it back for shipping, he adds.
Several factors contributed to the current demand for metallurgical coal. Coming out of the pandemic, construction projects that had been put on hold suddenly received green lights, which led to a clamoring for steel. Then Russia invaded Ukraine, and Europeans looking to wean themselves from Russian coal, including metallurgical coal, began shopping for it elsewhere.
Another factor impacting demand: China’s relations with Australia began deteriorating a few years ago. That caused China also to shop around for its metallurgical coal needs. “The United States benefited quite a bit from that shift,” says Michael Quillen, founder of Abingdon-based coal producer Alpha Natural Resources and chair of the Energy DELTA Lab and the Southwest Virginia Energy Research and Development Authority.
As part of its plan to satiate some of that demand, Coronado had hired about 40 of the promised new workers as of December 2022, bringing the total number of employees at the Buchanan complex up to 615, according to Cline. The company plans to fill an
additional 141 positions over four years.
The expansion plan for the mine complex came together quickly over the summer of 2022, according to Payne, who collaborated closely with Coronado executives and state and local officials on the expansion. “Zooms and phone calls every … day for 10 weeks,” Payne recalls.
Gov. Glenn Youngkin approved a $3.5 million grant from the Commonwealth’s Opportunity Fund to Buchanan and Tazewell counties for the expansion. The money will be used primarily to relocate less than a mile of Route 632 to make room for expansion, according to Cline.
Payne describes Youngkin and Virginia Secretary of Commerce and Trade Caren Merrick as being “incredibly hands-on” during negotiations. “They closed the deal.”
Virginia hold ’em
The slot machines are already ringing out in Bristol and Portsmouth, where Virginia’s first commercial casinos opened during the past year.
The state’s first permanent casino, Rivers Casino Portsmouth, opened its doors on Jan. 23. Operated by Chicago-based Rush Street Gaming, the resort has 1,148 slot machines, 57 table games and 24 poker tables, as well as a sportsbook, a Topgolf “swing suite” and multiple restaurants. The casino is expected to generate $16.3 million in annual tax revenue to the city.
However, the Hard Rock Hotel & Casino Bristol was first out of the gate in the race, opening a temporary facility in July 2022. Hard Rock International Inc. broke ground in December 2022 on its $400 million permanent Southwest Virginia casino, expected to open in July 2024.
During its first six weeks, Virginians and guests from 48 other states visited the temporary Hard Rock casino, a 30,000-square-foot space with 900 gaming slots and 20 tables at the former Bristol Mall. The project generated about 600 jobs, and when the permanent casino opens with a 3,200-seat theater and a 20,000-seat outdoor entertainment venue next year, the resort is expected to create 1,500 direct jobs and bring in $21 million in annual tax revenue for Bristol.
Meanwhile, the state’s two other casinos are in the works in Norfolk and Danville.
As of early February, construction had not started on the planned temporary or permanent HeadWaters Resort & Casino on the Elizabeth River. The Pamunkey Indian Tribe-led project hit some roadblocks last year after the city halted plans for a temporary casino inside Harbor Park, the Norfolk Tides’ home stadium. The tribe then announced it would build the temporary casino in the same space in the stadium’s parking lot as the $500 million permanent casino, after the city of Norfolk sold the land to the developer.
According to Jay Smith, spokesman for the casino, construction of the permanent casino and hotel will take 18 months to two years, and both facilities are expected to generate $30 million in annual gaming and sales taxes for Norfolk.
Smith said in February that the tribe hopes to reach agreement on the land sale “in the next few weeks. We look forward to breaking ground as soon as possible.”
In Danville, plans for a temporary Caesars Virginia resort at the former Dan River Inc. mill site are moving forward, with a possible midyear opening, although Caesars Entertainment Inc. officials are keeping their cards close to the vest when it comes to details. Table game dealers were set to start training in late February in preparation for the permanent resort’s opening in late 2024.
Caesars announced a partnership with the Eastern Band of Cherokee Indians (EBCI) in August 2022, with an accompanying increased investment from $400 million to $600 million. The cash influx will mean a larger hotel, growing from 300 to 500 rooms. The project will also have a 2,500-person entertainment venue and 40,000 square feet of meeting and convention space.
“Following COVID-19 pandemic closures, we found that regional gaming markets across the country recovered more quickly than anticipated,” explains Cory Blankenship, EBCI’s treasury secretary. “We are confident that market conditions — regional population, consumer demographics, proximity to other gaming markets and other variables — are favorable to support an expanded scope to the Danville project.”
The fate of a fifth potential casino — either in Richmond or Petersburg — was still undecided as of this issue’s mid-February deadline. Richmond voters rejected a proposed Urban One Inc.-backed casino in late 2021, but city officials were pursuing a second referendum vote this fall, while Petersburg leaders were trying to bring a referendum to their ballots.
State lawmakers pulled from consideration two bills that would have opened the possibility for a casino in Northern Virginia, but the legislation could return for consideration during the 2024 General Assembly session.
Building momentum
From olive oil to space rockets, 2022 saw a variety of companies seeking to invest — or reinvest — in the Hampton Roads region and Eastern Virginia.
That kind of diversity of industries augurs well for the region’s economy, says Vinod Agarwal, professor of economics at Old Dominion University’s Strome College of Business. “In the past, when I looked at many of the announcements, they’re all related to defense, directly or indirectly,” says Agarwal. “This year, we find lots of variation. Defense is an asset, but we can’t just lean on it alone.”
If there was a theme to 2022, says Suffolk Deputy City Manager Kevin Hughes, it was “industrial development with, like, 30 exclamation marks behind it.”
Norfolk saw steady economic growth in 2022, much of it built on state-level relationships, says the city’s interim director of economic development, Sean Washington. And Chesapeake worked to secure more sites for future business investment, according to Chesapeake Director of Economic Development Steven Wright.
Last year was a year for building momentum, says Hampton Roads Alliance President and CEO Doug Smith. Investments leaned into the region’s target industries, including food and beverage, manufacturing and logistics. But at its core, Hampton Roads is a maritime economy, Smith says, which makes the potential exciting for adjacent and emerging industries like offshore wind.
Chesapeake
Celadon Development Corp., a joint venture from Kamine Development Corp. and Nicollet Industries LLC, aims to bring green technology and 210 jobs to a 100-acre site on the west side of the Elizabeth River, but it could be up to two years before ground is broken on the proposed $267 million, 335,000-square-foot facility, Wright says. Celadon will recycle mixed paper and old corrugated cardboard into a reusable and exportable fiber sheet to supply middle-market paper manufacturers in China.
Perdue Agribusiness’ $59 million renovation and expansion in South Norfolk represents a significant equipment investment, Wright says. Modernized facilities will increase production of high protein soybean meal, soybean oil and hulls, providing a greater market for local soybean farmers and strengthening Virginia agribusiness.
Meanwhile, construction is expected to be finished this year on Wisconsin-based defense contractor Fairbanks Morse Defense’s 45,000-square-foot Chesapeake facility. Specializing in naval power and propulsion systems, the company is relocating its Norfolk operations. The $13 million investment, adding 50 jobs, will build a campus that expands its service capabilities and training opportunities.
And Tokyo-based Nakano Warehouse & Transportation Corp. is expected to open its $14 million East Coast logistics center at Greenbrier North Commerce Park in the third quarter of this year, bringing 25 jobs.
Canadian seafood processing company High Liner Foods USA announced in June 2022 it will spend more than $30 million over the next four years modernizing facilities and adding 30 positions to its existing 230 jobs there.
Oakland Industrial Park will see new activity with announcements from Italian olive oil manufacturer Certified Origins USA Inc. investing $25 million and creating 30 jobs; Canadian home goods manufacturer and wholesaler Mercana Furniture and Décor investing $8.5 million and creating 26 jobs; and tech company Mühlbauer Inc. investing $9 million and creating 34 jobs.
Norfolk
During his 2022 State of the City address, Norfolk Mayor Kenny Alexander announced that Fairfax-based defense contractor WR Systems Ltd., which replaces and repairs naval navigation systems, plans an expansion that includes a light assembly lab and adding several hundred positions to its existing 320 jobs in Norfolk.
A $100 million project aiming to turn the Norfolk Southern Corp.-owned site at Lambert’s Point into Fairwinds Landing, a maritime operations and logistics center to support the local offshore wind, defense and transportation industries, got a boost in August 2022 when The Miller Group signed a lease for the 122-acre property.
And the clock on the Pamunkey Indian Tribe’s forthcoming $500 million HeadWaters Resort & Casino reset after regulatory issues resulted in developers shifting their plans for a 45,000-square-foot temporary casino. Instead of opening inside Norfolk’s Harbor Park baseball stadium as originally planned, the temporary casino will be located in the stadium parking lot, on a portion of the site where the permanent casino will be built. The temporary facility could be up and running this year, Washington says. The permanent resort casino is expected to open in 2024, with plans to generate 2,500 permanent jobs.
Also last year in Norfolk, Embody Inc., a medical device company developing novel collagen-based technology for soft tissue injury and repair, announced a $5 million, 10,000-square-foot expansion of its headquarters, along with 92 new hires.
Speaking of casinos, the $340 million, 250,000-square-foot Rivers Casino Portsmouth opened Jan. 23, with thousands of patrons coming by to get a glimpse of the first permanent casino to open in Virginia.
The casino, which expects to generate $16.3 million in tax revenue annually, had hired more than 1,100 of its planned 1,300 permanent workers as of December 2022. Rivers Casino Portsmouth’s estimated annual payroll will be $62 million.
With casinos being exempt from Virginia’s indoor smoking laws, some patrons initially complained about cigarette smoke, prompting Rivers Casino Portsmouth to adjust its smoking policy and designate half of its 90,000-square-foot main gaming floor as nonsmoking.
The casino’s offerings include restaurants, 1,446 slot machines, 57 game tables and a sportsbook with a 12-foot-by-62-foot-wide viewing wall that can simultaneously display dozens of televised sports events. The casino also has a 25,000-square-foot multipurpose event space.
Suffolk
Home improvement retailer Lowe’s Cos. Inc. expects to open a $75 million coastal distribution center at the 932-acre Virginia Port Logistics Park by the end of this year, creating 100 jobs. The Mooresville, North Carolina-based Fortune 500 company’s facility will receive imported goods through the Port of Virginia to supply regional distribution facilities and help supply the 69 Lowe’s locations across the state.
Last June, Italian coffee company Massimo Zanetti Beverage USA announced it would invest $29.1 million and create 79 jobs as it consolidates and expands operations at its Wilroy Industrial Park roasting facility. The company is relocating its current roasting operations from New Jersey to Suffolk in an expected two-year transition.
Birdsong Peanuts, a more than century- old peanut processing company, is modernizing its existing shelling facility to the tune of $25 million. Updates include refurbishing and automating production lines. The facility is expected to be fully operational by this spring.
And California-based flooring, counter-top, wall tile and hardscaping products supplier M S International Inc. (MSI) plans to invest $61.6 million establishing its East Coast distribution facility, creating 80 jobs. The 548,000-square-foot facility will be at Westport Commerce Park, a 247-acre master-planned industrial park located on Route 58.
Virginia Beach
In August 2022, Virginia Beach-based DroneUp LLC held a news conference in Richmond with Gov. Glenn Youngkin, announcing that the aerial drone company is adding 655 jobs as part of a $27 million expansion. (See related story.)
And a few months later, German chainsaw and outdoor power equipment manufacturer Stihl Inc. announced a $49 million expansion, adding 26,000 square feet to its 60,000-square-foot facility. Stihl, which established its U.S. headquarters in Virginia Beach in 1974, plans to increase its capacity to manufacture chainsaw guide bars by a third, creating 15 jobs.
Eastern Shore
Virginia could be inching closer to having its own Florida-like space coast on the Eastern Shore, according to David Bowles, executive director of the Virginia Institute for Spaceflight & Autonomy at Old Dominion University.
In January, California-based Rocket Lab USA Inc. made its first launch from U.S. soil at Virginia Space’s Mid-Atlantic Regional Spaceport, successfully deploying three satellites into low Earth orbit for Herndon-based satellite analytics company HawkEye 360. The mission is the first of three planned with HawkEye 360 through 2024.
Rocket Lab broke ground in April 2022 on a launch pad and 250,000-square-foot manufacturing facility for Rocket Lab’s Neutron reusable rocket, which will be built adjacent to the NASA Wallops Flight Facility in Accomack County. Rocket Lab is expected to ultimately create 250 jobs at the facility.
Compound growth
As U.S. stocks hit bear market territory last year, Virginia’s largest publicly traded companies weathered rising interest rates, inflation and continued supply chain and labor challenges.
Rising home mortgage rates drove a slowdown in new business at McLean-based Freddie Mac. Plunging prices for used cars caused Goochland County-based CarMax to focus on controlling costs.
As inflation hit American households hard in 2022, Chesapeake-based Dollar Tree Inc. and other discount retailers saw an increase in business, especially from shoppers moving their food purchases away from grocery stores to lower their bills.
Amid these changing fortunes, Virginia’s profile as a home state for corporate headquarters was buoyed by the relocation of two large Fortune 500 firms — Boeing and Raytheon Technologies — to Arlington County.
As a result of these moves, four of the world’s top five defense contractors are now based in the Old Dominion, with the largest contractor, Lockheed Martin Corp., headquartered in nearby Bethesda, Maryland.
Jerry McGinn, executive director of the Center for Government Contracting at George Mason University‘s School of Business, says the concentration of government contractors not only in the suburbs of Washington, D.C., but specifically on the Virginia side of the Potomac, speaks well of the commonwealth’s reputation.
“It reflects well on the business environment here that they would come here as opposed to the District or Maryland,” he says. “Virginia has been a very attractive state for business, and I think this is another reason the companies ended up here.”
At a time when consumer-focused businesses are extremely volatile, defense contractors have a level of stability that doesn’t exist in many other parts of the economy, he says. One indicator is the federal defense budget. Passed at the end of 2022, it was $45 billion larger than the Biden administration’s original request.
“It’s a dangerous world. That was made very clear last February when Russia invaded Ukraine, and those events have put a brighter light on Asia and the rise of China,” McGinn said. “The margins are not as high in the aerospace and defense world, but the stability and cash flow is much more predictable.”
Here’s a look at how Virginia’s 10 most profitable publicly traded companies fared during the past year:
Federal Home Loan Mortgage Corp. (“Freddie Mac”) McLean
2021 revenue: $68.7 billion
Employees: 7,300
As mortgage rates climbed during much of 2022, Freddie Mac saw new business slow in both its single-family and multifamily divisions, according to company earnings reports.
The government-sponsored enterprise’s own research shows that in the fourth quarter of 2022, confidence in the nation’s housing market fell significantly, with only 34% of respondents reporting optimism that the housing market will remain strong in 2023. The report also found that 57% of consumers — renters and owners — were concerned about making housing payments, reflecting nationwide concerns about affordability and equity in housing.
Freddie Mac in June 2022 released its first-ever Equitable Housing Finance Plan. The plan was created in response to a 2021 request by the Federal Housing Finance Agency. It calls for expanding access to capital for diverse multifamily housing developers, investigating the use of the Special Purpose Credit Program framework to deliver mortgage funding to underserved communities and fixing disparities in credit scoring, underwriting and appraisals, among other initiatives. Freddie Mac plans to implement the plan during the next two years.
Raytheon Technologies Corp. Arlington County
2021 revenue: $64.4 billion
Employees: 182,000+
In July 2022, Raytheon Technologies moved its corporate headquarters from Massachusetts to Arlington County’s Rosslyn neighborhood, making it the last of the Big Five defense contractors to locate in a suburb of Washington, D.C. The aerospace and defense company formed in 2020, when Raytheon Co. merged with aerospace business United Technologies Corp. The company is made up of four subsidiaries — Collins Aerospace; Pratt & Whitney; Raytheon Intelligence & Space; and Raytheon Missiles & Defense.
In December 2022, Pratt & Whitney received $75 million in the federal appropriations bill toward its modernization of the engine that powers the F-35 Lightning II fighter jets. In January, Raytheon Intelligence & Space was named prime contractor on the development of a missile tracking system for the U.S. Space Force. In September 2022, Raytheon Missiles and Defense received the go-ahead from the Air Force to move beyond the prototype phase and continue development of a new hypersonic cruise missile weapon under a nearly $1 billion contract.
Boeing Co. Arlington County
2021 revenue: $62.3 billion
Employees: 140,000+
Boeing’s announcement in May 2022 that it would move its global headquarters from Chicago to Arlington added the world’s third largest defense contractor to Virginia’s growing stable of aerospace and defense companies.
While the move did not come with significant job relocations, Boeing plans to develop a research and technology hub in the region that will focus on cybersecurity, autonomous operations, quantum sciences, and software and systems engineering.
Boeing also is partnering with the University of Virginia and Virginia Tech on developing hypersonic jet engines through U.Va.’s Aerospace Research Laboratory.
Along with Airbus, Boeing is one of the two largest commercial plane manufacturers in the world, and its 2022 commercial jet business continued to show a slow recovery from the pandemic’s impact on airlines and the grounding of its 737 MAX jets from March 2019 to November 2020 following two deadly crashes.
Boeing delivered 480 jets in 2022, notably including the last of its iconic 747 jumbo jets. In January, Boeing’s 747 No. 1,574 left the factory in Everett, Washington, drawing a close to the company’s 55-year history of manufacturing the wide-body airliners.
The last few months have seen Boeing ink some major deals, including a December 2022 order from United Airlines for 100 787 Dreamliner jets that’s expected to be worth $25 billion. Additionally, in February, Air India reached a $45.9 billion deal to purchase jets from Boeing — the company’s third biggest sale ever.
Boeing also made big changes to its Defense, Space and Security business last year when Ted Colbert was named president and CEO of the defense unit. Colbert had previously served as CEO of Boeing Global Services and was succeeded in that position by Stephanie Pope. Under Colbert’s leadership, the defense unit in November 2022 announced a major reorganization in response to recent delays in key programs, and significant quarterly losses — including a loss of $1.1 billion on a deal Boeing made with the Trump administration to modify two 747s to serve as Air Force One.
General Dynamics Corp. Reston
2021 revenue: $38.5 billion
Employees: 100,000+
The Pentagon awarded the Reston-based defense contractor a $5.1 billion contract modification for the Columbia-class ballistic-missile submarine program in December 2022. Work on this contract will be performed in Connecticut, Newport News and Rhode Island and is expected to be completed by June 2028.
As a visible sign of progress on the Columbia-class submarine program, in June 2022 General Dynamics’ Electric Boat subsidiary joined with the U.S. Navy to celebrate the ceremonial keel-laying for the USS District of Columbia — the lead boat in this class, intended to play a major role in the U.S. military’s nuclear deterrence efforts.
Meanwhile, subsidiary General Dynamics Information Technology Inc. (GDIT) landed a $65 million contract last year to support an integrated data repository for Centers for Medicare and Medicaid Services’ Enterprise Architecture Data Group. GDIT also was awarded an $84 million contract from the Defense Health Agency to continue helping staff at the Traumatic Brain Injury Center of Excellence with congressionally mandated projects, including the Warfighter Brain Health Program and a 15-year study of brain injuries sustained in the Afghanistan and Iraq wars. GDIT has been involved in the study since 2014.
Northrop Grumman Corp. Falls Church
2021 revenue: $35.7 billion
Employees: 90,000+
NASA’s November 2022 launch of its Artemis I unmanned moon orbit mission was powered in part by two five-segment solid rocket boosters manufactured by the Falls Church-based Fortune 500 aerospace and defense contractor. Northrop Grumman is supporting several stages of NASA’s Artemis program, which is focused on deep space exploration and establishing a sustainable human presence on the moon.
Also supporting the Artemis I launch were two of Northrop’s RQ-4 RangeHawk unmanned aircraft, which were positioned to help track the Artemis I rocket as it exited the Earth’s atmosphere during a window when it was not visible to NASA ground stations.
In December 2022, Northrup Grumman and the U.S. Air Force also unveiled the
B-21 Raider, a stealth bomber expected to take a premier spot in the U.S. fleet. “The B-21 Raider defines a new era in technology and strengthens America’s role of delivering peace through deterrence,” Northrop Grumman Chair, CEO and President Kathy Warden said at the unveiling ceremony.
Capital One Financial Corp. McLean
2021 revenue: $32 billion
Employees: 51,000+
The sixth largest bank in the U.S. based on consumer deposits, Capital One officially reopened its corporate offices in September 2022, following many delays due to the pandemic. Its McLean headquarters is running on what the company calls an “initial hybrid” model that makes Mondays and Fridays virtual workdays and Tuesdays through Thursdays in-office days. CEO Richard Fairbank noted that Capital One will monitor how the approach works, adjusting as needed.
The bank continues to see strength in its credit card business, and Fairbanks noted in reporting third-quarter earnings that the bank’s long-term focus on luring heavy spenders to its cards — notably the Venture X premium card — is paying off.
“Our decadelong quest to build our heavy spender franchise has brought with it significantly increased levels of marketing, but the sustained revenue, credit, resilience and capital benefits of this enduring franchise are compelling, and they’re growing,” Fairbank said on the call.
In January, Capital One renamed the startup incubator it runs in downtown Richmond in honor of the late Michael Wassmer, a longtime Capital One executive and Richmond resident who served most recently as the bank’s Central Virginia market president. Wassmer died unexpectedly in June 2022 at age 52.
Performance Food Group Co. Goochland County
2021 revenue: $30.4 billion
Employees: 30,000+
A Goochland-based food services and distribution company, Performance Food Group delivers to more than 300,000 locations, including restaurants, businesses, schools, health care facilities, vending distributors, retailers, theaters and convenience stores. Building on its 2021 acquisition of convenience store supplier Core-Mark Holding Co. Inc., Performance Food announced in September that its entire convenience business would operate under the Core-Mark brand.
“We believe that combining our convenience companies under the powerful Core-Mark brand positions PFG for future success,” President and Chief Operating Officer Craig Hoskins said in announcing the change.
The Core-Mark acquisition proved fruitful for the company, as Holm acknowledged it was a major driver of the 42% increase in net sales reported in its quarterly earnings in November 2022. Inflation also drove its net sales numbers higher.
In August 2022, PFG tapped former Core-Mark President and CEO Scott McPherson to serve as executive vice president and CEO of its convenience division.
Jim Hope, PFG’s executive vice president and chief financial officer, retired at the end of 2022, succeeded by Patrick Hatcher, who had served as chief operating officer and president of Vistar, the company’s vending division.
Less than a month after Russia invaded Ukraine, Performance Food Group announced a $50,000 donation to Washington, D.C.-based nonprofit World Central Kitchen to provide meals to Ukrainian refugees.
Dollar Tree Inc. Chesapeake
2021 revenue: $26.3 billion
Employees: 200,000+
Based in Chesapeake, discount retailer Dollar Tree, which operates more than 16,200 stores under the Dollar Tree and Family Dollar brands, has gone through some big executive changes in the past year, culminating in the Jan. 29 replacement of its CEO.
Rick Dreiling, former chairman and CEO of Dollar Tree rival Dollar General, replaced Mike Witynski, who had been president and CEO since 2020, overseeing a controversial move to raise prices to $1.25 for most items in the Fortune 500 retailer’s dollar stores.
Dollar Tree’s third quarter 2022 sales grew 8.1% year over year to $6.93 billion, but Dollar General’s sales rose 11% to $9.5 billion during the same period.
Dreiling was named Dollar Tree’s executive chairman in March 2022, as part of a settlement with activist investor group Mantle Ridge LP that also saw six other new directors named to the retailer’s board.
Leadership shakeups at the company continued through 2022, with Dollar Tree replacing five C-suite executives and adding more. As part of this transformation, Michael Creedon Jr. was tapped as chief operating officer; Pedro Voyer as chief development officer; Jeffrey Davis as chief financial officer; and Bobby Aflatooni as chief information officer.
Altria Group Inc. Henrico County
2021 revenue: $26.01 billion
Employees: 6,000+
As the U.S. market for traditional cigarettes shrinks, Altria continues to try to build a foothold in smokeless tobacco.
A major step in these efforts came in September 2022, when Altria announced it had exercised its option to be released from a noncompete deal with Juul Labs Inc. The move came four years after Altria bought a 35% stake — then valued at $12.8 billion— in the e-cigarette maker. But Juul’s value plummeted as it became the target
of lawsuits claiming it marketed to teens. By July 2022, Altria valued its stake in Juul at $450 million. Juul agreed to a $1.7 billion legal settlement in late 2022 and, as of January, the company was reportedly seeking to sell the business or establish new partnerships.
In October 2022, Altria announced a $150 million joint venture that will see subsidiary Philip Morris USA and Japan Tobacco Group sell heated tobacco products in the U.S. and worldwide. This could move Altria beyond the roadblocks presented by both the Juul stumble and 2021 action by the International Trade Commission that pulled Marlboro Heat Sticks and IQOS heated tobacco products from U.S. markets due to infringement on patents held by R.J. Reynolds Tobacco Co.
CarMax Inc. Goochland County
2021 revenue: $31.9 billion
Employees: 30,000+
The used car market was battered over the past year by rising interest rates, inflation and supply constraints. This had a major impact on CarMax, the country’s largest used car retailer, leading it to report year-over-year declines in net revenues and sales in its third-quarter 2022 earnings report.
“In the near term, we are prioritizing initiatives that unlock operational efficiencies and create better experiences for our associates and our customers,” President and CEO Bill Nash said. “While we continue to selectively invest in initiatives that have the potential to activate new capabilities, we have slowed the pace of those investments.”
CarMax continues to focus on making it easier to buy a car digitally — including the financing process. In January, it enhanced its financing capabilities by launching a tool that allows customers to be instantly prequalified for financing and learn their financing terms from the beginning of their search for an automobile from CarMax’s nationwide inventory.
In April 2022, CarMax was recognized for the 18th consecutive year as one of Fortune magazine’s 100 Best Companies to Work For.
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Here to stay
Composite decking and railing manufacturer Trex Company Inc. has called the Winchester community home for more than 25 years, so when it came time for the company to construct a new global headquarters, Winchester was top of mind.
“Trex was already based in the area, so they were familiar with the city and approached us when they began considering sites for their new headquarters,” says Winchester City Manager Dan Hoffman. “From there, it was important to start building a relationship and listening.”
Last spring, the publicly traded company broke ground on its 64,000-square-foot, $7 million global headquarters on eight acres along Crossover Boulevard near Interstate 81. The company’s corporate offices, approximately 40,000 square feet, are currently located on Exeter Drive in Frederick County.
About 200 people will work in the new headquarters, which is set to open midyear. In 2020, Trex was one of the nation’s 100 fastest-growing companies, according to Fortune magazine, and it brought in more than $1.2 billion in fiscal 2022.
“Trex has experienced tremendous growth in recent years. As the company rose to meet the demands of our customers, it quickly became clear that our current headquarters location could no longer support the growth of our team,” says Bryan Fairbanks, its president and CEO. “We began to look for an opportunity that would afford us the space we needed but also the modern work environment and technologies that our team members desired.”
Early in the process, the company had considered other locations in Winchester and Frederick County but was drawn to the I-81 corridor.
There are limited sites along I-81 that are already prime for development and also have access “to the amenities that Winchester has to offer, such as an excellent school system, an extensive network of parks and trails, and a historic downtown,” Hoffman says.
The location along Crossover Boulevard also offered space for future expansion as well as easy access to transportation routes and visibility along I-81. The new headquarters will feature eco-friendly elements such as electric vehicle charging stations and rooftop solar panels.
As with any modern workspace, the new corporate headquarters “will provide opportunities for greater collaboration and recruitment of top talent,” Fairbanks says. “Additionally, the location is closer to our Winchester manufacturing campus, which will support synergies across our work streams and sustain growth moving forward.”
Between the new corporate headquarters and a 200,000-square-foot expansion for decking production added to its Frederick County manufacturing campus on Shawnee Drive in 2021, Trex expects to create about 350 jobs in the Winchester and Frederick area, including 150 manufacturing jobs, many of which the company says already have been filled.
One of the components of the headquarters deal was the promise of incentives. “The incentive itself was fairly straightforward, so it just needed to go through the proper approval processes. Our economic development authority and city council both had to approve it,” Hoffman says.
Under the agreement, Trex will pay all assessed property taxes on the new building, but for the first seven years, the Winchester Economic Development Authority will refund any portion of Trex’s tax payment that exceeds the amount currently being generated by the site.
The deal went smoothly, Hoffman says. “We were very upfront about what was possible, and the executive team at Trex was great to work with. My hope is that this sends a message to other companies looking for a new home,” he continues. “We have other sites in the city that would be ideal landing spots for a large or midsized company.”
“We are honored the city of Winchester is the destination for Trex corporate headquarters,” says Rick Cobert, executive director of the Winchester EDA, adding that having “one of IndustryWeek’s 50 best U.S. manufacturers exemplifies our focus on target industry attraction.”
Trex has a long, rich “history in the Winchester and Frederick County area and is proud to be part of such a strong and supportive community,” Fairbanks said in a statement. “This is our home, and we are pleased to be able to contribute to the health and prosperity of the area through jobs creation, community involvement and national recognition from our industry-leading products and brand.”
The big freeze
Given pandemic-caused interruptions, college students have been through a lot so far this decade, but one silver lining at many Virginia schools has been frozen tuition. Virginia Gov. Glenn Youngkin made it a priority to keep costs flat this academic year, and he succeeded in getting all 15 of the state’s public colleges and universities on board with that plan.
Speaking at William & Mary’s February 2022 convocation, Youngkin said, “I strongly urge our college and university boards to show restraint in tuition increases, just as you have been doing during the pandemic. … And the reason this is important is, if we are not careful, we will price first-generation students and those that come from low-income homes out of the market.”
Most schools and the Virginia Community College System agreed to freeze tuition levels for in-state students soon after the governor’s message, and the University of Virginia’s board of visitors voted in September 2022 to give its students a one-time credit to refund its recent tuition hike, amounting to $690 per student. George Mason University followed suit later that month, awarding a $285 credit to its full-time undergraduates.
Meanwhile, many Americans with heavy student loan debts felt a mixture of excitement and relief after President Joe Biden announced loan forgiveness of up to $20,000 for eligible applicants. The plan was blocked, however, when a group of states and two student-loan borrowers filed suit against the government; the cases were set to be taken up by the U.S. Supreme Court in late February, with a ruling expected later in the year.
Whether or not federal loan forgiveness happens, Virginia’s schools and government officials are working to increase the ways students can afford college. One such effort is the state’s G3 program, which offers community college students below a certain income threshold the opportunity to earn a free degree in certain high-demand employment fields. Additionally, many universities — public and private — have come up with ways for students to fund their educations without incurring crippling debt, while some are promoting faster paths to earning degrees or career certifications.
However, the other side of the tuition freeze issue is the cost burden for colleges and universities. Virginia Commonwealth University, for instance, reported it would have an $11 million budget shortfall and would have to eliminate 62 jobs through attrition due to flat tuition in the 2022-23 school year. Virginia Tech and other schools raised tuition on paper but gave a one-year scholarship to in-state undergraduates to cover the increase. This means that schools will likely raise costs for tuition, room and board this fall.
In other higher ed news over the past year, there were some significant departures, including a president with one of the nation’s longest tenures, Hampton University’s William R. Harvey, who retired in June 2022 after heading the university for nearly 44 years. He was succeeded by a 1983 alumnus, retired Army Lt. Gen. Darrell Williams, who served nearly 40 years in the military and led the Department of Defense’s Defense Logistics Agency.
The 21-year chancellor of the state’s community college system, Glenn DuBois, also retired in June 2022. One candidate withdrew after being hired last year, and now David Doré of Tucson, Arizona’s Pima Community College is set to succeed DuBois in April. The search for DuBois’ replacement was complicated and politically fraught, as Youngkin pushed to be more involved with the hiring of VCCS’ chancellor. Seeing as the 23-college system is the linchpin of the state’s plans to prepare students of all ages to fill approximately 300,000 health care, tech and other high-demand skilled jobs, expectations for the system’s leader have risen in recent years.
“The race for talent is on,” Youngkin said in a statement announcing Doré’s hiring in January.
