Continuing a trend of the past several years, mergers and growth continue to be in fashion among law firms.
McGuireWoods, the largest firm headquartered in Virginia, has its eye out for new partners, firm Chairman Jon Harmon said in 2023. “I believe the legal industry is consolidating, and that, over time, there’s going to be haves and have nots,” he noted.
McGuireWoods is looking to add attorneys in New York, Chicago, Atlanta and other strategic locations across the country, but smaller firms also are looking to boost their numbers closer to home.
In January, Lynchburg’s Petty, Livingston, Dawson & Richards and Southern Virginia Legal in Danville tied the knot, combining to serve clients across Central and Southern Virginia as PLDR Law. The merged firm has 16 attorneys, retaining offices in Lynchburg and Danville.
That deal followed 2022’s Woods Rogers/Vandeventer Black merger and 2020’s Troutman Sanders combination with Pepper Hamilton, creating Troutman Pepper. And in August 2023, Richmond-based KVCF was absorbed into Williams Mullen, which added 10 attorneys from that deal. The third largest law firm headquartered in Virginia, Williams Mullen also added six lawyers from Pierce McCoy, which rebranded as Pierce Jewett, last year. Williams Mullen has about 250 attorneys across Virginia and the Carolinas.
Nationwide, 48 law firm mergers closed during 2023, remaining constant from 2022, which saw 46 closed deals, according to Fairfax Associates, a legal consulting firm.
Law firms are still competing to hire attorneys, especially those with desirable specialties, which makes mergers more attractive — and it appears this trend will power through 2024 and onward, experts say.
For attorneys, the hiring market is still on their side for the most part, although specialties make a difference. Cybersecurity and technology, mergers and acquisitions, and environmental, social and corporate governance are all hot practice areas. Six-figure signing bonuses are mostly past, but associate attorneys’ compensation was still rising as of late 2023, according to a survey by consultancy Withum Smith+Brown. And anecdotally, work-life balance is still key, especially as younger attorneys enter the profession with different priorities from their elders.
“The practice of law has changed a lot for guys like me and Jon [Harmon] who’ve been at it for decades,” says Mike Herring, McGuireWoods’ Richmond managing partner. “I think we are continuing to be really attentive to the preferences and needs of our younger lawyers.”
While money matters — especially as law school debt averages $160,000, according to the American Bar Association — many attorneys also want to pursue pro bono work and have schedules that don’t interfere with their personal lives.
Briana Stevens, a partner at Harrisonburg-based Wharton Aldhizer & Weaver, says her family law practice is personally meaningful because it’s a “client-centered practice area. I consider it a privilege to guide my clients through an emotional, stressful time in their life.”
Meanwhile, Virginia’s accounting firms are in a similar position, with large numbers of accountants having reached retirement age and not enough young accountants joining the industry. Unlike lawyers, entry-level accountants are finding salaries too low. According to the CPA Accounting Institute for Success, the average salary for CPAs nationwide is $62,410, despite student loan debt and long work hours. Many firms are responding with bonuses, higher salaries and shorter workweeks for new CPAs, who sometimes work up to 100 hours per week during high-volume periods.
Also, firms are prioritizing communication with prospective accountants. “We have to show that accounting is a dynamic profession, not just sitting behind your desk doing grunt work,” says Stephanie Peters, CEO and president of the Virginia Society of CPAs.
For decades, the area bordering Richmond around the Willow Lawn neighborhood has been home to mostly defunct commercial projects and old homes. But a $450 million project announced in December 2023 to renovate an old Elevance Health (formerly Anthem) campus promises to bring a “transformation” to the area by way of more housing, retail, hospitality and office space, says Anthony Romanello, executive director of the HenricoEconomic Development Authority.
The Henrico County Board of Supervisors greenlit Kinsale Center, a massive redevelopment project in the Willow Lawn area from insurance company Kinsale Capital Group and Richmond-based Marchetti Development. The mixed-use development is expected to bring nearly 700 residences, an eight-story “high-end” hotel with about 150 rooms, 32,300 square feet of retail and 345,000 square feet of new office space to the 29-acre area at the northeast intersection of West Broad Street and Staples Mill Road.
“The Kinsale Center is part of the renaissance of the Willow Lawn/ Westwood area of Henrico, which is seeing hundreds of millions of dollars in new investment with the redevelopment of [the] Willow Lawn, Libbie Mill, Westwood and Broad Street corridor,” Dan Schmitt, Henrico County supervisor for the Brookland District, said in a statement.
During the past few years, Libbie Mill, a newer retail and residential development in near western Henrico, has come to life, and the surrounding Willow Lawn and Westwood areas have also seen an uptick in multiuse development.
“They can’t build enough housing units fast enough” in Libbie Mill, Romanello says. “I think we’re going to see exactly the same thing with what Kinsale is doing.”
The area at the intersection of Staples Mill and Broad is positioned on the Henrico County-Richmond border.
“Our perception is the project will be the gateway to the county,” says Joe Marchetti Jr., co-founder of Marchetti Development. “We think the key advantage to it is its location, which is centrally located with great access to Interstate 64.”
Kinsale Capital will own the project, with Marchetti as developer, Baskervill as design architect and Kimley-Horn performing civil engineering.
The Kinsale Center project will be completed in phases, with the first including construction of 261 apartments, followed by office, hotel and retail space, Marchetti says. Two office buildings are already on the site, and the older of the two will be completely renovated with a glass facade and new interior. Zoning regulations will allow Kinsale to construct up to 350,000 square feet of new office space that could come in the form of one to three buildings of various sizes, Marchetti says.
The second phase would include a residential building with 258 units at the intersection of Maywill and Thalbro streets. The residential buildings would be five to seven stories each. The retail space, intended for upscale boutiques, would be incorporated into the office, multifamily and hotel buildings.
Phase 3 would include two new six-story office buildings and a parking garage with nearly 1,400 spaces along Thalbro Street and at its intersection with Staples Mill. Phase 4 would include another new office building at the intersection of Staples Mill and West Broad and a mixed-use building for office, hospitality and retail with 173 units along Staples Mill. This phase would be five to seven years from now, so it’s “too early to predict exactly what the uses might be in this phase,” Marchetti says.
The project “will really offer an exciting opportunity for business and residential right in the heart of the Richmond region,” Romanello says.
Construction started Jan. 9, Marchetti says. The priority will be getting Kinsale into the building first and then to start marketing other sites moving forward. The building that will include Kinsale’s new headquarters is about 254,000 square feet, and the insurance company will take about 215,000 square feet of it. Elevance will occupy the 35,000-square-foot basement. It should be ready by fall 2025, with the rest of the projects scheduled to reach completion starting in 2026.
“The full redevelopment, I’m sure it’s going to take several years,” Romanello says. “But [Marchetti Development is] locked and loaded” to start on the project.
As available land for data centers in Loudoun County — home to Data Center Alley, the world’s largest concentration of data centers — has become scarcer and more expensive, the industry has expanded into other Northern Virginia localities and beyond.
In Virginia, Prince William County has become the other heat map for the industry — casting warmth for some businesspeople and elected officials but stoking an angry fire in other residents and politicians. In December 2023, the county Board of Supervisors approved plans for the Prince William Digital Gateway, a 2,100-acre, 23 million-square-foot campus from developers Compass Datacenters and QTS Data Centers that would be the world’s largest data center facility. It’s expected to eventually generate about $500 million in local annual tax revenue. The board’s vote followed a 27-hour meeting filled with voluminous and vehement public comments both for and against the project.
Brentsville District Supervisor Tom Gordy previously served on the county planning commission and voted to reject the complex.
“I don’t think it’s a good project, especially for where it is,” he says. “I’m not convinced that we’re going to get the revenues from it, and I believe that the amount of infrastructure and parks and trails and everything that was supposed to go along with this development is going to end up costing us more money than we’re going to get.”
Gordy has lots of residents on his side, but the other side has powerful financial arguments. As economic development projects, data centers bring significant tax revenue with minimal population growth. It’s why Loudoun, Prince William and other Northern Virginia counties have pursued data centers, and why other regions of the state are looking to follow suit.
Buddy Rizer, executive director of Loudoun County’s economic development department, notes that his county collects close to $1 billion dollars in tax revenue from the industry annually, amounting to a third of the local government’s overall budget.
While the data center industry remains most prominent in Northern Virginia, it is picking up steam in many other parts of the state.
“There is growing interest from the data center community to look at places outside of Northern Virginia,” says Christina Winn, immediate past president of Virginia Economic Developers Association and executive director of Prince William County Department of Economic Development and Tourism. “When I talk to my counterparts in other communities, they’re actively working with potential data centers. That investment is starting to spread across the commonwealth.”
Building a global hub
The Richmond region and Hampton Roads are marketing themselves as the next big places for data centers to locate, with more available land than Northern Virginia, and connections to three major subsea cables originating in Europe and South America that come ashore in Virginia Beach and connect to the East Coast at QTS Data Centers’ network access point (NAP) in Henrico County. As of 2022, 18% of the East Coast’s internet traffic came through Henrico or Virginia Beach. That’s not at Loudoun’s level of ferrying 70% of the entire world’s internet traffic, but it’s significant nonetheless.
In September 2023, RVA757 Connects, a nonprofit organization that builds ties between the two regions, released a 10-point strategic plan for building the “megaregion” into a new global internet hub, aiming to attract more data centers and other digital infrastructure between Richmond and Virginia Beach, says John Martin, president and CEO of RVA757 Connects.
In addition to QTS’ NAP, rural eastern Henrico County is home to a major data center for Facebook parent company Meta, which is expanding its operation in White Oak Technology Park, as well as a 320-acre site north of White Oak where developer Hourigan is proposing to build a $1 billion tech park that could house more data centers and advanced manufacturing. The project’s viability depends on permission for Dominion Energy to build a new 230-kilovolt transmission line, Hourigan officials have noted.
Although Henrico County hasn’t seen the same level of community concern and opposition to the spread of data centers as Prince William, Anthony Romanello, executive director of Henrico’s economic development authority, says “good community planning” is key to the industry’s growth in the area. “Our [data centers] are in industrial areas and are very well screened and buffered. … We have a conservation action network that’s been formed by some concerned citizens, and they’re watching what we do very carefully.”
‘I’m a believer’
In Prince William, in addition to the Digital Gateway, county supervisors rezoned 269 acres near Bristow to allow the construction of Devlin Technology Park, which is expected to include as many as nine data centers totaling 4.2 million square feet. In addition to the county’s existing 27 million square feet of data centers, Devlin and the Digital Gateway will push Prince William’s data center footprint far past Loudoun’s 30 million square feet.
While Winn and industry proponents proclaim the economic benefits to the county, residents have voiced environmental and quality-of-life concerns over the projects. In the lead-up to the project’s December 2023 approval, several large civic associations published a document making recommendations for design and construction standards, including protections for property value, historic preservation and environmental use.
Local state legislators also have voiced concerns, with the General Assembly considering bills this year that would place more state oversight on data center projects, with an eye toward limiting placement in rural, historic lands.
County residents have also filed still-pending lawsuits in an attempt to prevent the Devlin and Digital Gateway projects.
“Of course, the industry is necessary, but they’re going to have to find a way to implement their facilities in a way that does not cause major disruption or animosity,” says Kathy Kulick, vice chair of the board of directors of HOA Roundtable of Northern Virginia, one of the civic organizations that created the data center recommendations document.
In 2022, Prince William supervisors established the Data Center Ordinance Advisory Group to review the county’s noise ordinances and recommend changes for data centers. Staff members also recommended creating a working group comprised of residents who are affected by data center noise, industry representatives, and other stakeholders.
The group started meeting in February 2023, but Kulick, a member, says this was “late in the game,” considering that the Digital Gateway was approved 10 months later, and the group’s recommendations won’t be ready until 2025.
“When you look at all the projections on the growth of data, the slope is almost vertical, we are moving so fast,” says John Martin, president and CEO of RVA757 Connects. Photo by Caroline Martin Bookbinder
Rizer, known locally and in economic development circles as the “godfather of Data Center Alley,” also sees citizen engagement and the resulting demand for industry accountability as a positive development for everyone involved.
“I’m a believer in the industry,” he says, “but I think it’s important for all of us as government officials to look at development and make sure that we’re doing it in a way that’s consistent with the values and plans of our communities.”
Spreading out
In December 2023, the Joint Legislative Audit and Review Commission (JLARC), the state’s watchdog agency, authorized a study to be conducted this year on the data center industry, just five years after its last such study. That appears to be critical to state legislators who are considering 17 bills regarding data center development.
In January and February, bills that included allowing some 500 kV power lines to be installed underground and move costs to high-volume power users were continued to the 2025 session, and other measures also were tabled until the 2025 session, after lawmakers receive JLARC’s report, which is scheduled to be released at the end of 2024.
But even without statewide guidance, localities took steps to welcome and, in some cases, regulate the data center industry in 2023 and 2024. For the most part, Virginia localities are making moves to position themselves to attract data center business while keeping the peace with residents.
In January, the Hanover County Planning Commission voted to recommend rezoning for a 1,200-acre data center campus that would include 46 buildings, a project proposed by Denver-based data center park developer Tract. It will next go to the county’s board of supervisors for approval.
In April 2023, Surry County announced plans for the construction of 30 data centers on a 641-acre plot adjacent to the Surry Nuclear Power Station, along with the possibility of eventually building a hydrogen- and nuclear-powered energy production facility nearby. And in the fall and winter, King George, Caroline and Culpeper counties approved measures allowing data centers to be built.
In King George, supervisors approved the rezoning of 869 acres of farmland for industrial use, making way for Amazon Web Services to build a 19-building, 7.24 million-square-foot campus, and Culpeper officials OK’d a 1.4-million-square-foot data center project, rezoning 121 acres from rural to light industrial in December.
In October 2023, Caroline County adopted a new zoning designation to allow data centers, and Stafford County amended its ordinances to restrict where data centers can be located while setting new development standards.
Spotsylvania County in June paved the way for Amazon.com to build four data center campuses totaling 10 million square feet, although the e-tailer says it’s part of an exploratory process, and in July, supervisors amended the county’s comprehensive plan to encourage data center development, crucially by expanding access to public water and sewer. In October, Spotsylvania approved rezoning to allow a 127-acre office park that would include two data centers totaling 900,000 square feet.
Farther reaches
The industry is even making headway in rural far Southwest Virginia, where leaders hope to attract data centers with the offer of lower tax rates and abandoned coal mines that hold 10 billion gallons of cool water, a hidden resource that would cool off the data centers naturally, keeping down HVAC costs. In Wise County, elected officials, including Gov. Glenn Youngkin, have announced plans to develop 65,000 acres of former coal mining land for a data center campus and alternative energy projects, including solar, wind and hydrogen. (See related story.)
Dallas-based Fortune 100 energy company Energy Transfer, Wise County and Energy DELTA Lab, a nonprofit set up to develop the project, announced in November 2023 the plan, which could attract $8.25 billion in potential private investment, backers say.
Wise County’s data center portion of the project, known as Data Center Ridge, would be located on a 4,000-acre industrial site at a formerly mined property. When developed, officials expect the project to produce 1 gigawatt of energy.
A few years ago, Wise and surrounding counties implemented the state’s lowest regional property tax rate on data center equipment — 24 cents per $100 of assessed value — in addition to other incentives and tax breaks to encourage data center development in the region’s opportunity and enterprise zones.
“We will always be a complement to Northern Virginia, but in order for the industry to stay in Virginia, it needs to expand,” says Will Payne, managing partner of Coalfield Strategies, an advisory firm that assists with regional economic development. “And we are making the case for why the industry can grow in Virginia and not in Maryland or elsewhere.”
Such promotion of the state’s rural reaches for data center development demonstrates the industry’s booming growth in the commonwealth. Between 2017 and 2021, data centers contributed $54.2 billion to the state’s gross domestic product, according to a 2023 PricewaterhouseCoopers study. Amazon alone invested $52 billion in building data centers in Virginia from 2011 and 2021, and announced last year that it intends to spend $35 billion more by 2040.
The data center industry also translates into broad-based economic gains in other industries, notably including construction, but also HVAC companies and technology equipment suppliers. One example is North Carolina-based SteelFab, a steel fabricator with a division and fabrication plant in Emporia, which has worked on more than 50 data centers in Virginia. The company’s activities have spread the wealth to Virginia manufacturers, such as Gerdau Petersburg steel mill in Dinwiddie County, which has supplied SteelFab with 75,000 tons of structural steel for data center construction in the past several years, and New Millennium Building Systems, which produced 12,000 tons of metal decking for SteelFab at its Salem plant.
“So much of the economic power of data centers is in the ecosystem development that they help to establish and create,” says Josh Levi, president of the Data Center Coalition, a Loudoun-based national trade association. “Every job inside a data center creates six other jobs in the broader economy.”
Irish company Hanley Energy established its Hanley Energy Electrical division in Loudoun County, offering installation and service of energy management equipment for data centers, and in 2023 invested $8 million to establish a new 36,000-square-foot corporate headquarters in Ashburn.
“It’s a tremendous amount of economic drive,” Levi says. “It’s the geographic diversity you’re starting to see now. And it’s the lift in ecosystem development around Virginia. You’re seeing the supply chain really start to fill in, and that’s very exciting.”
Power hungry
As the amount of data produced around the world continues to grow — and begins to grow exponentially with the rise of artificial intelligence — data center operators in Virginia must quickly adapt to changing needs.
“When you look at all the projections on the growth of data, the slope is almost vertical, we are moving so fast,” says Martin of RVA757 Connects. “The demand on our infrastructure will do nothing but continue to grow, so we’ve got to keep up.”
Notably, the amount of electrical power required to run data centers is already enormous and is only expected to increase at a rapid clip in coming years. Dominion Energy estimates that Virginia data centers’ demand for electricity will jump from 2.8 gigawatts in 2023 to 13 gigawatts by 2038.
With these growing demands, Virginia residents are increasingly concerned about the environmental impact of the industry. Data center operators, in response, are seeking new solutions.
“Energy is the biggest challenge facing the data center industry right now,” says Rizer. “Renewables are important, and the data center industry has taken the lead on that.”
Levi reports that a number of Data Center Coalition members have “fairly significant and aggressive goals” to achieve 100% carbon-free power generation. And four of the nation’s largest renewable-energy buyers are coalition members.
Others are not so sanguine about the industry’s green credentials. In December 2023, a group of environmental and land use organizations formed the Virginia Data Center Reform Coalition to call for a closer examination of the impacts of data centers on human health and the environment, as well as more regulation of the industry.
State lawmakers have introduced a raft of bills to oversee data centers’ use of power and water, and their noise emissions. One bill in particular sponsored by Fairfax County Democratic Del. Richard C. “Rip” Sullivan requires data center operators to meet certain energy efficiency standards to be eligible for sales and use tax exemptions.
That bill has been continued to 2025’s General Assembly session, where lawmakers will take it up after receiving JLARC’s upcoming report on data centers.
Kulick notes that this and related bills “have broader support this year than they did last year,” perhaps reflecting the public’s growing awareness and concern over the impacts of data centers.
Prince William County Supervisor Tom Gordy sees such efforts as a necessary part of the data center industry’s growth in the state.
“At the end of the day, it’s a double-edged sword as an industry,” he says. “[Data centers] do have an industrial impact, and I think people need to go into them eyes wide open, fully understanding what those impacts are and seeking to mitigate those impacts for the good of their community.”
When Roanoke Countyeconomic development officials pitched Wells Fargo on expanding its customer support center operation in the county, they emphasized how well they’d taken care of the nation’s fourth-largest bank previously and how they would continue to do so.
The pitch worked. Now the bank’s $87 million expansion will be the largest commercial office investment in the county’s history, making the San Francisco-based banking company the county’s largest employer, surpassing the local public school system, which has around 2,500 employees.
“One of the things that I emphasized was, ‘We really took good care of you before you said you wanted to grow, and we will continue to take great care of you as you expand, and here’s how we can demonstrate that,’” says Roanoke County Administrator Richard Caywood, citing past efforts such as transportation improvements to serve the company and neighboring businesses.
The expansion will modernize the bank’s 436,685-square-foot customer support center on Plantation Road, allowing room for about 1,100 jobs to be added to the bank’s local workforce of more than 1,650 current employees over the next four years. (As of early February, Wells Fargo had not released information about when hiring would begin.) Construction will commence in March and will be conducted in three phases, to be completed by the end of 2025.
John Hull, executive director of the Roanoke Regional Partnership, says the regional economic development organi-
zation worked collaboratively with Roanoke County and the Virginia Economic Development Partnership to land the project.
Roanoke was identified through a site consultant and stands as the largest office capital investment project and the most substantial single project in Virginia for 2023, Hull says, tied only with Amazon.com’s project in Virginia Beach.(See related story, Page 23).
“It’s encouraging to see an office project of this size, this number of jobs [and] its level of investment,” he adds, “particularly in the post-pandemic environment, where there’s a lot of question about the future course of office tenancy.”
Caywood says the Wells Fargo announcement was crucial for Roanoke County because the banking customer support center on Plantation Road was already the largest site where county residents went to work every day. The site was originally operated by Dominion Bankshares, which was acquired in 1993 by First Union, which in turn was later bought by Wachovia and Wells Fargo.
“There’s a lot of changes in the national banking industry with a lot of consolidation, so it was critical for us to keep that [center], and the only way to do that was through that expansion and reinvestment occurring,” he says.
Brian Corde of Atlas Insight, the site selection consultant for the project, predicts in a blog post on the Roanoke Regional Partnership’s website that the Roanoke market will continue to be appealing for talent attraction. He says the region will continue to see growth, adding that it has “great outdoor activity, great weather and a stable political environment, a reasonable one … [and] a good tax structure. Most importantly, you have places where people can actually live for reasonable amounts of money.”
Based on an economic impact analysis, Hull projects the Wells Fargo expansion will have a $322 million annual economic impact once the project is fully operational in 2025, with positive effects on housing demand and the health care and restaurant industries. The infusion of jobs will have a ripple effect throughout the local economy, he adds.
“When you think of what a household spends and how they spend their money, every one of those consumer sectors will be impacted in a positive way,” Hull says.
The expansion also helps the region not just by adding 1,100 jobs but by retaining Wells Fargo’s 1,650 existing staff members, Caywood says. “It’s a big deal for us,” he says. “There’s nothing but universal excitement about this project in the community.”
A local connection helped bring an impactful business project to Southwest Virginia. Daniel Kennedy, who was born and spent his early days in St. Paul, was instrumental in bringing home one of the largest manufacturing deals in years.
Data center storage rack manufacturer Tate struck a deal in early November 2023 to occupy a long-vacant, 280,000-square- foot facility in St. Paul, along the Russell and Wise counties border. Tate began moving into the facility in December 2023, with plans to add 170 jobs over the next four years, according to Jonathan Belcher, executive director of the Virginia Coalfield Economic Development Authority (VCEDA). The project includes a $14.9 million capital investment, he adds, mostly to cover equipment.
“This is big,” Belcher says. “It’s the most major manufacturing jobs announcement in the area in a long time.”
The deal gives an economic boost to St. Paul, which has mostly relied on outdoor tourism because of its access to the Spearhead Trails and proximity to the Clinch River State Park.
Tate’s access floors division, which focuses on the research, development and manufacturing of raised-access floors, airflow management and infrastructure solutions for commercial and data center applications, opened the plant on schedule in January.
Kennedy, a George Mason University graduate, is president of the Americas for Tate, a subsidiary of the Ireland-based Kingspan Group, where he’s worked for the past 14 years.
Kennedy moved away from St. Paul at an early age but visits family there regularly, especially during summers, he says.
“I know the area’s work culture and the history of the city,” says Kennedy, who now lives in Lovettsville. “They put together an attractive package for us, we did our labor studies, and the area really meets our needs.”
Belcher says, “Having people from our area giving back to the community through business projects is a method that has worked well for us.”
U.S. Rep. Morgan Griffith, R-9th District, who represents much of Southwest Virginia, says, “We love to bring anything data center-related to our area. We have the power and the water and the space to do it. [And] we know that if you are from Southwest Virginia, even if you move away, your heart is always with us here.”
Hiring is underway, but Tate’s facility won’t be fully staffed from the start, Belcher says. The company, which held a job fair on Jan. 4, will be hiring several dozen workers at a time.
“There aren’t many buildings of that size in this part of the state, and this is needed because of the data center business we have,” Belcher says. “The location means that the building’s data center function will not only serve Virginia but can extend as far as the Midwest.”
The Russell County Industrial Development Authority has owned the building for about 2 ½ years.
Ernie McFaddin, executive director of the Russell County IDA, says, “This is really huge for our area. These are high-paying jobs with an average starting salary of $58,000, with full benefits.”
The project “will pull from locals and others in our area, including eastern Tennessee, and spur more much-needed housing and other entrepreneurial business endeavors.”
Dickenson County
Dickenson County is partnering with Kentucky-based developer Southwest Properties and Kentucky-based Addiction Recovery Care (ARC) to build a 112-bed rehabilitation center for substance use disorders that’s expected to open in the first half of 2024, according to Dana Cronkhite, the county’s economic development director. She estimates the Clintwood facility, Wildwood Recovery Center, will create 50 jobs.
Those who graduate from the ARC program become eligible to be hired as peer support specialists through the center’s “Crisis to Career” program. Other vocational programs will be offered for individuals with other interests and/or skills, Cronkhite says.
Dickenson has a population of about 14,000 and ranks nationally as having one of the highest percentages of residents with a substance use disorder, Cronkhite says. Local household median income is approximately $40,000, according to the U.S. Census Bureau.
The project will be one of the first in the state to develop a substance use disorder treatment program as a form of economic development. Wildwood Recovery Center will be Virginia Medicaid-credentialed.
“There’s a need in the county for this rehabilitation,” Cronkhite says. “There can’t be a better ‘win’ for Dickenson County and our region. By treating individuals with substance use disorder, we are working to rebuild our workforce and our community.”
By building the center through modular construction — building off-site and assembling the structure on the property — rather than stick-built construction, the project reduced its costs from $12 million to $4.5 million, Cronkhite says.
In December 2023, the county announced plans for a similar women’s facility from ARC, which will be located in the former Ervinton Elementary School in Nora.
The Ervinton property was conveyed to the county from the Dickenson County School Board as surplus property and was subsequently conveyed to the IDA for development. Cronkhite anticipates it will house more than 50 beds. Renovations are expected to begin in 2024 and be completed by the end of 2025.
Tazewell County
Pennsylvania-based CNX Resources, a natural gas producer, is expanding its footprint in Southwest Virginia, adding eight executive office jobs, each paying at least $100,000. The office will be in Richlands in Tazewell County.
Meanwhile, Belcher says, it’s important to note that CNX Resources will be retaining its 67 current jobs there.
“We were worried we might lose this deal to West Virginia,” Belcher says, because CNX had previously stationed its regional headquarters in West Virginia and was considering returning it to the neighboring state.
“The incentives we were able to offer and a personal visit from Gov. Youngkin with the company helped tip the regional headquarters project in Virginia’s favor,” he says.
Pennsylvania-based business process outsourcing firm AnswerNet could bring as many as 30 remote jobs to the area, Belcher says. VCEDA has worked with the company to advertise remote teleworking jobs in the region ranging from call center agent to marketing and network administration jobs.
“This was due to some outreach by our agency to AnswerNet and similar firms to attract IT jobs to the region — a strategy we have been doing for 25 years,” Belcher says. “In the case of AnswerNet, they had 30 remote work-from-home positions they were having difficulty being able to fill [nationally], and they were willing to work with us and the [Southwest Virginia Workforce Development Board and the Virginia Employment Commission] to try and fill them in our region.”
R&R Automation announced in November 2023 that it would bring 27 jobs to Tazewell County in a $2 million expansion of its existing facility. R&R performs machine shop and fabrication work and supplies hardware to the natural gas industry.
Additionally, wealth management firm Ronald Blue Trust announced in October 2023 that it would bring 22 jobs to Wise. It is locating in an existing office building that is owned by the county and financed by VCEDA.
What’s that we hear? Is the economy growing healthier?
It’s getting stronger for sure, Federal Reserve Bank of Richmond President and CEO Tom Barkin said in January during the 2024 Financial Forecast event co-hosted in Richmond by the Virginia Bankers Association and the Virginia Chamber of Commerce.
Inflation was 3.4% in December 2023, inching closer to the central bank’s goal of 2%. As always, the Fed‘s leaders are cautious in their wording, but in February, Chair Jerome Powell said the Federal Reserve expects to cut interest rates three times in 2024, starting in May.
Barkin, who serves this year on the powerful Federal Open Market Committee, which sets interest rates and monetary policy, noted in January, “Contrary to most predictions, the economy remains healthy.”
That represents a shift from the previous two years, when Fortune 500 companies’ executives took cover and prepared for a widely predicted recession that didn’t materialize — launching massive layoffs in many cases.
That’s not to say that businesses haven’t encountered several challenges in the past year — including high interest rates, high inflation, continuing supply chain challenges and wars in Gaza and Ukraine. In Virginia, home prices and demand continued to rise amid a tight market, making it difficult for Virginia millennials and Gen Zers to buy or rent. And that, in turn, has kept some businesses from finding employees, Barkin and the state commerce and trade secretary, Caren Merrick, noted during the November 2023 Virginia Governor’s Housing Conference in Hampton.
“We all know housing availability is limiting communities,” Barkin said, urging communities, employers and universities to work together to create more affordable housing.
Meanwhile, in a state where defense funding is crucial to financial outlooks for ports, the military and federal contracting, Congress neared the brink of a federal shutdown twice last year, something that hasn’t happened since 2018. In January, the U.S. House and Senate passed a third stopgap resolution to keep the government operating through March.
If a shutdown does occur, the impact would be harsh on Virginia, where more than 144,000 federal employees work, second only to California. In 2022, the Department of Defense spent $62.7 billion in Virginia — and based on the 2018-19 shutdown, it can take months for contractors to get paid.
Bob McNab, an Old Dominion University economist, notes that $4 out of every $10 generated in Hampton Roads comes from the federal government. If a shutdown occurs, “it is this perfect storm that would really undermine economic activity in Hampton Roads if it continued for a long period of time,” he says.
That said, right now, Virginia looks strong. Employment regionally has grown moderately, and the tight market has raised wages, according to the Federal Reserve’s Beige Book report released in late January.
In fiscal 2023, 2,520 people lost jobs in layoffs and closures reported by the Virginia Employment Commission, up slightly from the previous year, when 2,182 people were laid off, but a big improvement from fiscal 2021, when 12,281 people lost their jobs.
Factors like inflation, gas prices, job shortages in some fields and overall cost of living expenses have affected consumer sentiment negatively, however. According to McNab and fellow ODU economist Vinod Agarwal, recent consumer sentiment has been at the lowest point since the Great Recession of 2008, but they are hopeful that Virginians’ perceptions will align closer to the data. In February, the ODU economists’ 2024 state economic forecast predicted a third consecutive year of growth.
And with interest rates expected to decrease, it’s hoped moods will brighten in the commonwealth.
Data centers continued to dominate, define and, in some cases, shape the arc of Northern Virginia‘s 2023 economic story.
Amazon Web Services cleared its hurdle in Stafford County, and although Prince William County’s controversial Digital Gateway project faced major public backlash, supervisors ultimately voted to approve the 1,200-acre project’s rezoning applications in December 2023. (See related story.)
Often touted as once-in-a-generation development projects, data centers tend to bring with them the promise of an economic sea change and local tax windfalls, although critics point out that they also come with few jobs and very high electrical power usage.
However, data centers were hardly the only projects of note in the region last year. In December 2023 came Gov. Glenn Youngkin’s unexpected announcement of plans to move the Washington Wizards and Washington Capitals teams to a proposed $2 billion entertainment complex and arena in Alexandria. If successful, the arena would be owned by a state-run authority, requiring General Assembly approval. In mid-February, that bill ran into a Senate roadblock, although the House version passed. For Youngkin to seal the deal, he’ll need to make concessions to Democrats, politicos say.
Alexandria
Backed by Youngkin and majority team owner Ted Leonsis, the plan to move the Wizards and Capitals from Washington, D.C., to Alexandria’s Potomac Yard would be the economic development equivalent of Stanley Cup and NBA Finals wins for the commonwealth, supporters say. The governor has said the project could potentially create $12 billion in local economic impact and 30,000 jobs over the next several decades.
As part of the deal, the teams’ corporate owner, Monumental Sports & Entertainment, would move its headquarters from Washington to Alexandria, bringing more than 600 jobs. Run by Leonsis, with partners including Fortune 500 CEOs Richard Fairbank of Capital One Financial and Raul Fernandez of DXC Technology, Monumental also owns the WNBA’s Washington Mystics. The company would invest $403 million in the $2 billion project in addition to contributions from the state, Alexandria and JBG Smith Properties, developer of Amazon.com’s HQ2, located a short distance away from Potomac Yard.
The proposal is nonbinding, and for the plan to take place, the General Assembly must establish a sports authority that would own the property and buildings. Sen. Scott Surovell sponsored a bill in the 2024 session that would establish the Virginia Sports and Entertainment Authority and financing fund.
It was a year of ribbon-cuttings for Fairfax as the county welcomed almost a dozen headquarters openings, relocations or expansions in 2023.
V2X, the aerospace and defense contractor formed by the 2022 merger of Vertex and Vectrus, moved its headquarters from Colorado to Tysons in April 2023, and satellite cybersecurity firm SpiderOak relocated its headquarters from Colorado to Reston.
Fairfax County Economic Development Authority President and CEO Victor Hoskins attributes the county’s appeal to its large talent base and its proximity to transportation and government agencies, as well the regional data center boom, which has also benefited Fairfax.
“We ended up with about 417,000 square feet in data centers last [fiscal] year, which for us is good,” says Hoskins. “That is above what we set as our benchmark.”
Overall, in fiscal 2023, the county EDA announced the additions of 9,300 jobs and more than 1.5 million square feet of office space.
Buddy Rizer, Loudoun’s economic development executive director, says that although data centers are still important to the county’s economy, they aren’t the whole story. “We had significant wins from sports to retail to health IT to manufacturing and logistics. We added $10 billion of new commercial investment last year.”
Rizer views Rivana at Innovation Station’s approval last spring as the county’s biggest deal of the year. Loudoun supervisors voted in May 2023 to approve the 103-acre multiuse project, which is expected to include 2.4 million square feet of residential, office and hotel space in its first phase. Groundbreaking is expected in March, Rizer said in January. Also, developers of Arcola Center, a 34-acre business park, broke ground last year on more than 3 million square feet of flex industrial space.
Nevertheless, Rizer expects about 2 million square feet of data center space to be added this year in Loudoun.
Stafford County
An Amazon Data Services deal stood out as Stafford’s biggest economic development story over the past year, when county supervisors approved a data center performance agreement with the Amazon.com subsidiary on Jan. 2, following months of discussion.
Due to nondisclosure agreements and closed sessions, some details are not public, but the performance agreement includes two data centers planned on 50 acres off Old Potomac Church Road, as well as any future campuses. The project represents a $2 billion investment and the potential for more than $100 million in tax revenue annually for the county.
“Getting a data center is kind of like landing an auto manufacturer was in the 1900s,” said Kyle F. Allwine, who was Stafford County’s economic development director before departing in December 2023. “It can be life-changing for a county.
“Now it’s a matter of ironing out the incentive deals and everything else,” Allwine added. Another data center proposal —Stafford Technology Campus, a 5.8 million-square-foot project on 523 acres — is set to be submitted for rezoning by June, officials say.
Stafford’s other economic news from the past year included the October 2023 opening of Japanese convenience store food products manufacturer Warabeya Nichiyo Holdings Co.’s East Coast production plant, which resulted in the creation of more than 300 jobs, an increase from the 268 originally projected. Warabeya Nichiyo’s primary client is the 7-Eleven chain.
Prince William County
Billed as the future largest data center complex in the world, the controversial Prince William Digital Gateway received its final approval on Dec. 13, 2023, after more than 24 hours of public comments both for and against. The lame-duck Board of Supervisors passed three rezoning applications, allowing the project to go forward, in 4-3 votes with one abstention. Upon completion, the project is expected to include 23 million square feet of data centers on 2,100 acres.
As of November 2023, Prince William County had 42 data center buildings, totaling 7.78 million square feet, with an additional 4.5 million square feet under development.
“This is definitely a sweet spot for Prince William County,” says Christina Winn, executive director of the county’s Department of Economic Development and Tourism.
Overall, Prince William recorded $1.9 billion in capital investment, and 1,420 new and retained jobs in 2023.
Meanwhile in the county’s seat, the city of Manassas, Giant Food opened its 82,000-square-foot e-commerce distribution facility in May 2023, creating 200 jobs and investing about $30 million.
February brought an early Valentine’s Day gift to Arlington, with the news that CoStar Group was investing $20 million to relocate its global corporate headquarters from downtown Washington, D.C., to Rosslyn. Known for its Apartments.com brand, the real estate analytics and data company purchased the region’s tallest office building, the 560,000-square-foot Central Place Tower, for $339 million from Bethesda, Maryland-based JBG Smith Properties and PGIM Real Estate. CoStar plans to move into 150,000 square feet of the building in late 2024. About 500 employees will be relocated, and CoStar also plans to add 150 jobs.
Meanwhile, retention and expansion were the name of the economic game for Arlington in 2023, although in June, Amazon held the grand opening for Metropolitan Park, the first phase of HQ2, the e-commerce giant’s $2.5 billion-plus East Coast headquarters, a high point for the year. While Amazon had hired 8,000 HQ2 workers by June, it announced in March 2023 that it would be pausing construction of HQ2’s second phase, PenPlace, including the proposed showcase spiral Helix building. Amazon began moving employees into the first of Metropolitan Park’s 22-story twin towers in May.
In October 2023, Kalahari Resorts & Conventions broke ground on its $900 million, 1.38 million-square-foot destination water park resort in Spotsylvania. (See related story.) Meanwhile, the U.S. Department of Veterans Affairs made significant progress on its new regional outpatient clinic at U.S. 1 and Hood Drive in the county’s Four Mile Fork area, expected to be among the largest VA outpatient clinics in the nation. Initially scheduled for delivery in late 2023, the clinic is now slated to open in 2025.
Virginia Secretary of Transportation Shep Miller and friend were thumbs-up at the Jan. 30 groundbreaking for the Buc-ee’s travel center in Rockingham County. Courtesy Virginia Office of the Governor;
The top five most-read daily news stories on VirginiaBusiness.com from Jan. 16 to Feb. 13 were led by news that Buc-ee’s broke ground on its Rockingham County travel center.
Texas-based convenience store chain Buc-ee’s started construction on its first travel center in Virginia with a Jan. 30 ceremonial groundbreaking. (Jan. 30)
The University of Virginia’s McIntire School of Commerce and the University of Richmond’s and William & Mary’s business schools placed in the top 50 of 91 undergraduate business schools in the online publication’s 2024 rankings. (Jan. 22)
The General Assembly unanimously elected two attorneys — Kelsey Bagot and Sam Towell — to fill vacancies on the State Corporation Commission. (Jan. 24)
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Sign In
Free Newsletter
