Back in 2016, Virginia Coastal Zone Management program planners began talking about ways to protect the Lower Chickahominy River watershed.
“We’re like, ‘Well, let’s get ahead of this,’” says Jefferson Flood, an appropriately named coastal planner for the CZM, a network of individuals from Virginia agencies and local governments who work to protect coastal resources. “Let’s look at ways to promote ecotourism, promote zoning — empowering the localities to understand that they can make a lot of money off of ecotourism and that sort of thing, versus zoning for another shopping center.”
To get it done, Flood worked closely with a diverse group of stakeholders, including administrators in several counties, small business owners and leaders from the Chickahominy and the Pamunkey Indian tribes.
“The training helped me personally, but it also helped to grow the program,” Flood says of the CZM.
Flood’s efforts paid off. During the latter half of 2021, the CZM’s stakeholders signed a memorandum of understanding agreeing to collaborate on efforts to increase sustainable ecological and economic activity in the watershed.
Such a cooperative effort was a new approach for this type of environmental effort, according to Flood. “That had not been done before that we’re aware of anywhere in this region,” he says.
Safeguarding coastal resources
The National Estuarine Research Reserve System is a network of 30 coastal areas established through the 1972 Coastal Zone Management Act. Each reserve system employs staff charged with protecting and studying estuaries — bodies of water where rivers and streams meet the ocean.
Every reserve system offers a coastal training program to support coastal decision-makers such as local government and state agency officials, nonprofit administrators, and owners and employees of businesses involved with aquaculture operations, recreation outfitters and construction.
Virginia’s program, which launched in 2001, offers training on a wide variety of topics, from habitat restoration to tribal engagement for localities. It also works to provide technical assistance, helping with tasks like collaborative research and designing surveys.
“This program has historically been known for more … in-person, kind of hands-on field experiences,” says Cirse Gonzalez, coastal training program coordinator for the Chesapeake Bay National Estuarine Research Reserve. “I’ve scaled back on the courses and the training a lot just to focus on these other elements of the program, which involve a lot of community engagement.”
Last year, Gonzalez, who earned a master’s degree in marine affairs from the University of Washington, began offering office hours, allowing coastal decision-makers to schedule time to discuss everything from planning an effective coastal project to the latest science on sea-level rise.
Gonzalez’s openness to collaboration has been a professional boon for Taryn Sudol, coordinator for the Chesapeake Bay Sentinel Site Cooperative, which works to improve planning and management decisions regarding sea level rise.
“If I reach out to Cirse with a question,” Sudol says, “she’s often able to point me in the right direction or say, ‘Did you know about this research going on here or there?’”
Like a lot of offices, the Chesapeake Bay research reserve went virtual went the pandemic hit. “It’s all moved online … for better or worse,” Gonzalez says.
Even with the coastal trainings held remotely, Jessica Steelman appreciates how the courses give her an opportunity to collaborate with other folks in the field.
“You get a broad range of planners and project managers in a room talking about [topics like] equitable negotiation, and you’ve got ideas that you never would have thought of on your own,” says Steelman, a coastal planner with the Accomack-Northampton Planning District Commission.
As CTP coordinator from 2006 until her retirement in 2018, Sandra Erdle had the pre-pandemic luxury of offering trainings in the field. One of her most popular offerings was a course on wetland delineation, referring to determining the location and size of any wetlands on a property.Heads of environmental consulting firms would call Erdle to book seats in the class months in advance, she recalls.
As of March, the 2022 slate of courses — including a wetland delineation course, which hasn’t been offered since before the pandemic — was still in planning stages.
“I’m really looking forward to seeing people again and getting out in the field myself,” Gonzalez says.
Tournaments at the Virginia Beach Sports Center. Events at the Virginia Beach Convention Center. A busy Oceanfront boardwalk.
That was the scene in Virginia Beach during just one weekend in mid-March.
And it was the perfect “prelude” to the summer travel season, says John Zirkle, general manager of the DoubleTree by Hilton Virginia Beach. “The Oceanfront was hopping; the whole resort area was hopping,” he says. “This year it’s safe to say that we are very optimistic on the [summer tourism] season.”
Zirkle’s viewpoint resonates with hoteliers and tourism industry experts across Virginia. Tourism suffered a devastating blow two years ago when the COVID-19 pandemic began, bringing shutdowns and drastically reducing business and leisure travel. Since then, the industry has been slowly reviving, but there have been stops and starts along the way.
In some parts of the commonwealth, this could be the best year for leisure travel spending and activity since 2019. Many signs point to a springtime resurgence of travel activity, including Carnival Cruise Line’s decision to restart its cruises to the Bahamas, Bermuda and the Caribbean from Norfolk, starting in mid-May.
Still, some tourism experts believe that full recovery will not happen until 2023.
In Virginia, that’s largely because business travel has yet to return to pre-pandemic levels, dragging down hotel occupancy and travel spending in the state, says Dan Roberts, director of research and market intelligence for the Virginia Tourism Corp.
Due to the lingering pandemic and its side effects, ranging from labor shortages to remote work and videoconferencing, many businesses still are not yet back to traveling or planning conventions and large meetings.
That’s had a big impact on Northern Virginia, which has half of the state’s total hotel supply and relies heavily on business travel, Roberts says: “That whole economy is built around serving that midweek business traveler.”
As a result, compared with 2019, Virginia’s hotel room revenues were down about 18% in 2021 and occupancy rates were down 11.5%, according to the Dragas Center for Economic Analysis and Policy at Old Dominion University. The center produces reports using data from STR Inc., a division of CoStar Group Inc. that provides global hospitality market data.
Even so, Christopher Nassetta, president and CEO of Tysons-based Hilton Worldwide Holdings Inc., has said that he believes business travel will return. Presenting Hilton’s fourth quarter earnings results in February, he reflected on an improving future for the industry.
“We were pleased to see continued recovery throughout 2021, with our fourth quarter showing strong results versus 2019,” he said in a statement. “Although new variants of the virus have had some short-term impact, we are optimistic about the acceleration of recovery across all segments during 2022. We remain confident in the future of our business.”
Whether business travel will surpass pre-pandemic levels is in question, says Vinod Agarwal, professor of economics at ODU and deputy director of the Dragas Center.
Even as people restart business travel, they may opt to travel less often for individual or smaller meetings because they’ve now become accustomed to digital conferencing and other virtual communications platforms.
“They may want to meet clients in person, and in between they could do Zoom meetings,” Agarwal says. “It’s saving travel time and convenience. Face-to-face is required and needed, but not very often.”
‘This too shall pass’
Tourist attractions like Busch Gardens Williamsburg will be fully open for business this summer after two previous seasons of pandemic shutdowns and restrictions. Busch Gardens photo courtesy Virginia Tourism Corp.
Aside from corporate travel, leisure tourism is rebounding across the state.
That’s evident in Williamsburg, where revenue per available room in February was the highest it’s been since 1987, says Ron Kirkland, executive director of the Williamsburg Hotel & Motel Association.
Strong revenue in January and February typically bodes well for a successful spring season for the Williamsburg area and that leads to a good summer, he says. Despite summer 2020 shutdowns and 2021 labor shortages and capacity limits, popular area attractions such as Colonial Williamsburg and Busch Gardens will be fully open for business this summer.
And while business travel from conventions and other corporate functions has not yet returned at many Williamsburg lodging properties, Kirkland says, vacation travel spending has been providing a boost.
“Leisure tourism has been so strong, particularly over the last nine months, we’ve been able to offset any losses we would have from the group market,” he says.
Leading the rebound statewide is Hampton Roads, with the strongest market in the state for leisure travel.
In Virginia Beach, hotel occupancy in 2021 was down only 3.7% compared with 2019, according to the Dragas Center.
Despite the rise of the delta variant of COVID-19, last summer was a surprisingly good time for travel at Virginia Beach, says Zirkle, who also serves as president of the Virginia Beach Hotel Association.
Virginia Beach-based hospitality company Gold Key | PHR plans to open its new Embassy Suites by Hilton hotel, featuring 157 luxury suites, in early 2023. Embassy Suites by Hilton rendering courtesy Gold Key | PHR
He expects even more travel demand this summer, especially as pandemic restrictions have lifted and restless consumers are ready to go places. “The people who were hesitant to travel last summer are traveling this summer,” he says.
Optimism in the Virginia Beach market is one reason that plans have continued for a new Embassy Suites by Hilton, an Oceanfront hotel under construction on Atlantic Avenue as an addition to Virginia Beach hospitality company Gold Key | PHR’s Cavalier Resort. Gold Key aims to open the new Embassy Suites, featuring 157 luxury suites, in early 2023.
“The ownership group believed that this too shall pass,” says Glenn Tuckman, Gold Key’s chief operating officer, alluding to the effects of the pandemic on the industry. “We have weathered a lot of economic challenges, and they just really believed in the product and the advantages of the [Embassy Suites] going up now rather than delaying it or canceling it.”
Staffing woes persist
While hoteliers expect a strong summer, they’re still encountering staffing challenges that have plagued lodging and hospitality businesses throughout the pandemic. For instance, Zirkle’s DoubleTree opens its restaurant only for breakfast and dinner, not lunch, because of low staffing levels.
Furthermore, like many other hotels now, the DoubleTree does not clean guest rooms every day unless a customer requests it. Staffing levels are not yet high enough for daily room cleanings, plus customer demand for the service has changed.
“We have found a surprising number of people prefer you not to go into their room,” Zirkle says. “They just get some fresh towels, and we empty trash. That’s a huge saver for us.”
The hospitality industry in Virginia lost 88,000 jobs at the start of the pandemic and 51,000 of those jobs remain unfilled, says Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association. Due to lack of staff, he says, “we still have a lot of restaurants that used to be open seven days a week and are now open five days a week.”
This summer, however, hoteliers and restaurant owners across the nation expect to see some staffing relief thanks to an international work exchange program. The J-1 visa program, which brings international college students to the United States to work in hotels and restaurants for the summer, is back up and running after the Trump administration suspended several types of foreign worker visas in June 2020.
The Biden administration lifted the pandemic-related ban on foreign workers in March, but, by then, some visa applications were stalled and not approved in time for the summer season.
Typically, 30 to 40 college students work at the DoubleTree as housekeeping, restaurant and front desk staff on J-1 visas during the summers. Last year, only two J-1 students made the deadline and worked at the DoubleTree, Zirkle says.
Participants under the J-1 visa program dropped by 98% in Virginia and 95% across the United States in 2021, according to the Alliance for International Exchange. In Virginia, there were 116 summer work exchange students in 2020, compared with 4,621 in 2019.
“The J-1 students are a game changer,” Zirkle says. “Having them this year will be a huge benefit.”
Tourism challenges
One factor that could negatively impact tourism in the commonwealth is ongoing crime and violence in Hampton Roads, a problem that seemed to be worsening in the early months of 2022. An April shooting at Norfolk’s MacArthur Center shopping mall killed one person and injured two others. And in March, a Virginian-Pilot newspaper reporter was one of two people killed in a shooting outside a restaurant and bar in downtown Norfolk. Last year, in March 2021, a spate of shootings one night at Virginia Beach’s Oceanfront tourist area left eight people wounded and two dead, including one of superstar musician Pharrell Williams’ cousins, Donovon Lynch, who was killed by police.
Kurt Krause, president and CEO of VisitNorfolk, has been talking with city officials about how to create a safer environment in his city. He’s worried that increases in crime could deter tourists. “The savvy traveler will look at it,” Krause says. “We need to make sure that we are addressing all of those needs. We have to create the environment that people feel safe to walk the streets at night.”
Rising gas prices could pose another challenge for hospitality businesses this summer, potentially impacting consumers’ travel plans. Nationally, the price of a gallon of gasoline hit a record high of $4.33 on March 11, just after Russia’s invasion of Ukraine, according to AAA. In Virginia, the average per-gallon price for regular gasoline was $3.94 on April 14.
Agarwal says the surge in gas prices likely will impact air travel more than vehicle travel this year, because airline ticket costs are increasing. Also, travel by vehicle is a small portion of a family’s travel budget, he says.
Still, consumers may make different travel choices. For example, due to higher fuel costs, vacationers from New England may drive a shorter distance and decide to stop in Virginia Beach rather than venturing farther south to Myrtle Beach or Florida, Agarwal says.
Landon Howard, president of Visit Virginia’s Blue Ridge in Roanoke, says he expects these kinds of travel adjustments to benefit Southwest Virginia.
“People have the money to travel; they want to travel,” he says. “Many of our feeder markets are within a 3- to 4-hour drive from us. A lot of people will look at us as an alternative, rather than those longer travel trips.”
‘Reasons for optimism’
Restrictions on tour sizes have been lifted at Thomas Jefferson’s Monticello estate in Charlottesville, which is starting to see school groups booking trips from as far away as the West Coast again. Photo courtesy Virginia Tourism Corp.
Tourist attractions and cultural organizations like the Thomas Jefferson Foundation, the nonprofit that owns and operates Monticello, Jefferson’s historic home in Charlottesville, are closely watching gas price increases and already seeing strong visit trends.
Linnea Grim, the foundation’s vice president of guest experiences, estimates that visits to Monticello now are at about 70% to 75% of 2019 visitation numbers. “We have seen a really steady rebound over the course of last year and into this year,” she says. “People didn’t get out as much as they wanted with the omicron surge. We are expecting some local and regional travel” to Monticello.
Meanwhile, tours at Monticello are back to full capacity and school groups, some as far away as the West Coast and Texas, are beginning to book trips there again.
“We see a lot of reasons for optimism,” Grim says.
Similarly, the American Shakespeare Center, a Staunton performing arts theater that features a re-creation of Shakespeare’s indoor theater, is back with a full season of live shows. It suffered COVID-related interruptions in 2020, and its 2021 fall season was canceled due to internal staff conflicts and allegations of a toxic work environment that led to the resignation in February of Artistic Director Ethan McSweeny. He was replaced by Heathsville native Brandon Carter, ASC’s first Black artistic director.
Now fully reopened, the theater requires audience members to wear masks and present proof of vaccination or a negative COVID test. It also offers a certain number of performances with socially distanced seating.
“The audiences are coming back, compared to this time last year and this time two years ago,” says Jo Manley, spokeswoman for the center. “We are performing live on stage, which is a blessing, and no plans to curtail.”
Back on Virginia’s waterways, now that both Norwegian and Carnival cruise lines have restarted cruises from Norfolk, it could be smooth sailing for the city’s tourism market.
Nauticus, a maritime discovery center whose Norfolk campus houses Virginia’s only cruise terminal, says it expects to welcome about 150,000 passengers and 62,000 crew members in 2022 from all cruise lines, its highest yearly total ever, says Rehn West, Nauticus development director.
This year marks Norwegian’s first return to the port in two years, and it plans to make 25 stops in Norfolk this year.
“It’s surreal to go from a relatively empty pier throughout 2020 and 2021 to our busiest season ever in 2022,” says Stephen Kirkland, executive director of Nauticus, in a news release.
As the largest highway construction project in state history, the $3.8 billion Hampton RoadsBridge-Tunnel expansion is without question the most notable road project currently underway in Virginia.
Construction began in October 2020, and workers made a lot of progress last year, remaining on track to reach the Virginia Department of Transportation‘s goal of a November 2025 finish date. Upon completion, the bridge and tunnel system will have six lanes and four two-lane tunnels on the 9.9-mile Interstate 64 corridor between Norfolk and Hampton. The expansion is designed to reduce congestion, improve access to the Port of Virginia and create more emergency evacuation routes.
Additionally, one mile of I-64 in Hampton and four miles in Norfolk will be widened to include an express lane and a drivable shoulder in each direction that will be variably priced tolled lanes.
Crews will use a $70 million, custom-built tunnel boring machine (TBM) to carve out an underwater path for the tunnels, which will be about 50 feet deeper than the current tunnels. HRBT is the fourth U.S. roadway project to use a TBM. The machine’s front end has a 46-foot-diameter cutterhead that will create an approximately 45-foot-wide opening. The machine, named “Mary” after Mary Winston Jackson, the late NASA mathematician and aerospace engineer depicted in the 2016 film “Hidden Figures,” was being assembled this spring, with excavation scheduled to start this summer.
Crews nearly doubled the size of North Island and have begun work to build the receiving pit for the TBM. On the South Island, crews are working to excavate down more than 70 feet.
Crews are also working on replacing or rebuilding more than two dozen bridges and have installed hundreds of piles that will form the foundation of new marine trestle bridges.
The project’s design-build contractor is Hampton Roads Connector Partners — a joint venture led by New York-based Dragados USA Inc. and including Vinci Construction, Flatiron Construction Corp. and Vinci subsidiary Dodin Campenon Bernard.
Other major ongoing transportation projects around the commonwealth include:
NORTHERN VIRGINIA Improve 95, Transform 66 projects
As part of its Improve 95 plan to relieve congestion, the state government entered into a $1 billion public-private partnership with Transurban, an Australian toll-road operations company with its U.S. headquarters in Alexandria. The Fredericksburg Extension (Fred Ex) project will extend Interstate 95 express lanes about 10 miles south to Exit 133 in Stafford County, and Transurban will operate and maintain the lanes and charge variable usage tolls in a contract that extends until 2087. Construction on the $565 million project started in spring 2019.
As of March, the project is running behind its scheduled opening date this year, and the completion date for contracted construction is now set for 2023. Developers say the extension will provide 66% more capacity during peak periods.
Further north, the Virginia Department of Transportation, the state Department of Rail and Public Transportation and I-66 Express Mobility Partners are working on the $3.7 billion Transform 66 Outside the Beltway project, which will build 22.5 miles of new express lanes alongside Interstates 66 and 495. The lanes are scheduled to open in December. The project also includes improved bus service and transit routes, expanded park and ride lots, interchange improvements and 11 miles of new bike and pedestrian trails.
The $2.2 billion Interstate 81 Corridor Improvement Program consists of 64 planned improvements to the 325-mile corridor from Bristol to Winchester. Focused on safety and reliability, the project includes bridge replacements, ramp extensions, highway widening, curb improvements and additional auxiliary lanes. The program has a 2031 completion date, and improvements are in varying stages. One recently completed project is the replacement of nearly 60-year-old bridges over Reed Creek in Wythe County, which concluded in September 2021.
The Coalfields Expressway (CFX) — U.S. Route 121 — is a proposed 115-mile highway to improve transportation connectivity between Southwest Virginia, West Virginia, Tennessee and Kentucky, boosting commerce and tourism. A 2021 report by Richmond-based Chmura Economics & Analytics estimated the CFX’s cumulative economic impact during a 50-year span would be $12.8 billion in 2021 dollars, based largely on largely on construction spending and new service businesses expected to locate along the route. Seven miles of the expressway overlap U.S. Route 460 and are the only miles of Virginia’s roughly 50-mile portion of the CFX funded so far.
In January, VDOT announced a $207 million agreement to construct a two-mile section of U.S. 460 that will extend from near state Route 604 to the existing Route 460 in Grundy. Construction is expected to begin in late 2022 or early 2023. As for the rest of the expressway, supporters say they need more federal funding. In March, the U.S. House included $1.99 million in its fiscal 2022 federal spending bill, now law, for planning, budgeting and design work on expanding the CFX from Grundy to West Virginia.
This article has been corrected since publication.
Leaders from Virginia’s maritime and logistics industries share their thoughts about where their sectors stand amid labor shortages, growing cargo volumes and the pandemic’s lingering impacts.
VB:How is your company hiring and retaining staff?
Anders: We have intensified through omnichannel recruitment, including social media, local television, testimonials, referrals and sign-on bonuses. These, along with a commitment to a positive culture, leadership training, increased compensation, a new health clinic and other initiatives, have helped retain and add to our team. We are continuing to implement automation and other ways to optimize handling in a shrinking labor market.
VB:How is the supply chain strain affecting your business and clients?
Anders: The last two years have caused a higher demand for space due to e-commerce and removing pre-pandemic just-in-time inventory models. However, the utilization of this space remains a challenge.
Customers cannot procure all the necessary ingredients and packaging to manufacture to meet demand. Products are turning faster, but inventories are not rising. This appears to be far from over as supply chains are still very strained due to raw material shortages and geopolitical concerns. I believe continued inflation and increasing interest rates will soon dampen demand, and that will produce other opportunities.
VB: What do you hope to see happen in terms of federal or state policy that will help the logistics industry?
Anders: All participants in the supply chain will benefit from modifications of commercial driver’s license requirements, thereby increasing the candidate pool. A significant constraint in the supply chain comes from the pre-pandemic truck driver shortage that has been further exacerbated [since then]. Additionally, legislation and regulations surrounding demurrage and detention of ocean containers is sorely needed.
VB: What will be the biggest factor impacting the maritime industry in the next five years?
Grden: The biggest factor — and opportunity — for the industry is innovation! A recent report, “A Pathway for Maritime Innovation in Hampton Roads,” by TEConomy Partners, noted the unique mix of major economic drivers … related to maritime. The study names four cross-cutting areas of innovation — autonomous systems, digital transformation, cybersecurity and advanced manufacturing — that present immediate opportunity for Hampton Roads and the commonwealth. The report also recommended four specific pathways, which are in various stages of planning and implementation.
VB:How will the collaborative play a role in that?
Grden: HRMC is an umbrella organization and was formed to recognize and coordinate the array of assets and initiatives Hampton Roads has in its broad maritime and water ecosystem. HRMC identified innovation as a major area of focus for the future, and through Reinvent Hampton Roads and Old Dominion University, sponsored the TEConomy report mentioned above. In addition, HRMC was an early and strong supporter for Old Dominion University to play a leadership role in the region’s maritime economy; build and expand its existing related academic programs and research centers; and be globally recognized as an institution focused on maritime. ODU President Brian O. Hemphill announced the ODU Maritime Initiative last November, and there is an active national search underway now for the leader.
VB: What is your biggest challenge in hiring and retaining employees?
Boykin:To do the work that we do, we need to hire and retain a highly trained workforce with a wealth of knowledge and experience.
An important component to retaining this key talent is listening to our people and acting on the valuable feedback we receive. Based on these conversations, we’re taking action to enable our workforce by providing development opportunities and fostering a work environment that inspires our shipbuilders to be their best. The labor pool is smaller and the competition for talent is greater than it has been in years past, and we’re seeing the same recruitment challenges as employers across the country. Yet, despite these challenges, I am confident we will continue to hire and retain future generations of shipbuilders.
VB: Are there any supply chain issues affecting your current backlog of projects?
Boykin:The shipbuilding supply base faces many of the same challenges that we experience at Newport News Shipbuilding. After two years of pandemic impacts, many of our suppliers are now challenged with securing, developing and retaining a proficient workforce in a tight labor market. These factors can impact production schedules and also the price of materials. NNS actively partners with our suppliers to mitigate risks and minimize the pressure on ship construction efforts.
Our Navy partner also plays a critical role in managing supply base risk. Specifically, some of our contracts include funding for investment in supplier development and risk mitigation strategies. This provides an opportunity for suppliers to prepare their facilities, processes and workforces to meet the no-fail mission of delivering quality ships to the Navy.
VB: What’s the biggest challenge facing Virginia’s maritime industry?
Waters: The biggest challenge is development of a pipeline for an educated and skilled workforce sufficient to satisfy and promote steady growth in the maritime and extended supply chain. In the past five years, Virginia invested over a billion dollars to upgrade its state-owned port facilities to some of the most advanced and efficient in the world; invested hundreds of millions of dollars to support Virginia economic development and growth in a variety of ways that are making a difference; and nurtured and developed cohesive relationships in the industry in Virginia and around the globe to create a network of cooperation to further the economic interests of the commonwealth and its citizens. The resulting past and anticipated commercial success have showcased the urgent need for targeted avenues of education and training in the field.
Due to market forces exacerbated by the COVID-19 pandemic, which caused an unprecedented demand for goods, the flow of the global supply chain — of which the maritime industry is a significant part — has been crushed and clogged as businesses and their workforces strained to maintain business continuity. Yet, new and established businesses using modern technology opened in all parts of the commonwealth, creating high demand for an educated and skilled workforce at all levels.
Virginia must rise to the challenge of supplementing its existing workforce by providing avenues such as STEM programs, apprenticeships [and] technical training and management education, such as ODU’s Maritime and Supply Chain Management program. The need to support education of our workforce is urgent but will pay long-term dividends in the form of quality jobs for families who live in the region and beyond.
VB: What will be the biggest factor affecting the maritime industry in the next five years?
White: The overall amount of work and change, which will occur on multiple fronts, and having the people to meet those demands. Cargo volumes, shipbuilding and ship repair workloads, offshore wind development, and maritime and transportation infrastructure projects are all positioned for growth. Concurrently, we expect to see deployment of innovative technologies, many designed to meet increasing pressures to improve supply chains, mitigate cybersecurity threats and meet decarbonization goals and requirements. It is important to also consider the effects of higher costs and that Russia’s war on Ukraine is a sudden wild card, with particular implications for cyberthreats, trade relations, and energy policy.
VB: What do you hope to see happen in terms of federal or state policy that will help the maritime industry?
White: The VMA continues to inform lawmakers and executive branch leadership about the challenges and opportunities in front of our industry and encourage them to make needed investments. We must complete the dredging to make our shipping channels the widest and deepest on the East Coast, increase the cargo handling capacity of our marine terminals and freight corridors, increase our inventory of shovel-ready sites for industrial development, and seize on the opportunity to become a hub for offshore wind.
Beginning in K-12, we must modernize and expand our education and training programs, so they better prepare more people who are interested [in] and prepared for the opportunities our employers offer. The bipartisan Infrastructure Investment and Jobs Act presents a once-in-a-lifetime opportunity, but there will be fierce competition between states for these dollars. Winning requires coordination and collaboration between industry, Gov. Glenn Youngkin’s administration, the General Assembly and Virginia’s congressional delegation.
Tommy White
Tommy White
Vice president, California Cartage Co.; Director, Virginia Maritime Association
Suffolk
VB: What will be the biggest factor impacting the maritime industry in the next five years?
White: There are several areas that will play a big role in the next five years, from labor to port congestion, which have had a negative effect on the supply chain. I would expect after the next five years, we will see more manufacturing return stateside if we can solve the labor issue. Our warehouses and distribution system will become more automated over the next few years due to the increase in competition for — and lack of — labor.
VB: How is the supply chain strain affecting your business and clients?
White:Over the last two years we [have seen] record volume levels, but [have been] working with fewer resources … from personnel to equipment due to pandemic. My staff has worked from the office the entire time to make sure that, as an essential business, our customers and end users received
high-quality service.
VB: What do you hope to see happen in terms of federal or state policy that will help the maritime industry?
White:On a federal level, I’d like to see some reforms on how much steamship lines are allowed to charge beneficial cargo owners and trucking companies for goods that remain at the ports due to lack of ability to move them, and investment from the state recognizing the importance of the maritime industry.
The top trending major business stories on VirginiaBusiness.com from March 15 to April 14 were led by news of the death of Fairfax Countydeveloper John “Til” Hazel Jr.
The gift to the Virginia Museum of Fine Arts from Bristol-area philanthropists James W. and Frances Gibson McGlothlin included 15 paintings, featuring works by Norman Rockwell, John Singer Sargent and Andrew Wyeth. (March 15)
Civica Rx, a nonprofit generic drug-maker with a pharmaceutical manufacturing plant under construction in Petersburg, plans to produce three forms of insulin priced at $30 per vial beginning in early 2024, a project that dovetails with a bill in Congress that would cap consumers’ out-of-pocket insulin costs.
Civica’s 140,000-square-foot, $124.5 million Petersburg production facility will become the Utah-based manufacturer’s North American headquarters when it opens in early 2024. Built to produce medicines for the treatment of COVID-19, the plant also will include space for insulin manufacturing, company representatives said during an April tour. Civica plans to hire up to 250 people for the factory, up from its original plan to hire 186 workers.
“We’ve had a bunch of large donors who are very concerned about diabetes and the cost of insulin come to us and ask us to [manufacture] insulin,” says Civica President and CEO Martin VanTrieste. The $30 insulin vials will cost “about 90% [less] than today’s list price,” he says. “And,” he adds, “as you know, the list price is a price no one pays unless you have no insurance.”
In April, the U.S. House of Representatives passed a bill to cap insulin prices at $35 a month or 25% of an insurance plan’s negotiated price, whichever is lower. According to the Health Care Cost Institute, insulin prices doubled between 2012 and 2016.
In Petersburg, Civica is partnering with Richmond-based Phlow Corp. and Rancho Cordova, California-based AMPAC Fine Chemicals to produce COVID drugs as part of a federal initiative to create a domestic supply chain for critical pharmaceuticals and ingredients. U.S. Sen. Tim Kaine visited the Civica plant, which is halfway completed, in April, participating in a roundtable discussion about drug costs and workforce training initiatives at the region’s universities and colleges.
Kaine supports the $35 out-of-pocket cap on insulin costs and hopes to revive a previous bill he introduced to allow students to use Pell Grant funds to pay for short-term certificate programs in pharmaceutical manufacturing and other vocational studies.
Aside from lowering consumer costs, Kaine says, producing medications domestically will help lighten the nation’s dependence on Chinese drug manufacturers.
“I think most of us feel better about the quality when it’s made here at home,” he says. “You don’t have to assume that China’s a bad actor, [but] in the next pandemic, they are naturally going to prioritize producing pharmaceuticals for their own population.”
On March 20, 1922, the U.S. Navy commissioned its first aircraft carrier: the USS Langley.
A century later, the Navy is hosting centennial events around the country, including in Norfolk, where the USS Langley was converted into the Navy’s first carrier from the USS Jupiter, the Navy’s first electrically propelled ship. The Jupiter was decommissioned in Hampton Roads in 1920, and workers at the Norfolk Navy Yard worked on it for two years, leading to its recommissioning as the Langley.
Today, the aircraft carrier business is a much bigger deal in Hampton Roads, where Huntington Ingalls Industries‘ Newport News Shipbuilding (NNS) division, which began building carriers in 1934, is the country’s only nuclear-powered aircraft carrier builder and the state’s largest industrial employer.
“The business environment, the industrial base and the workforce are all absolutely vital to our ability to operate and continue to maintain our ships,” says Rear Adm. John F. Meier, commander of Naval Air Force Atlantic. “We literally could not do it without the Hampton Roads area.”
Aircraft carriers “revolutionized combat at sea,” playing a major role in World War II, says retired Rear Adm. Craig Quigley, executive director of the Hampton Roads Military and Federal Facilities Alliance.
Today, NNS is working on the next generation of carriers. The nuclear-powered Gerald R. Ford-class includes four flattops planned for delivery to the Navy by 2023.
The Ford-class is a dramatic advance from the aging 10-ship Nimitz-class, the first of which was commissioned in 1975. Among the 23 new technologies on the Ford-class carriers are Electromagnetic Aircraft Launch Systems (EMALS) — replacing steam-driven systems — and electric elevators, which require less maintenance than the hydraulic ones they’re superseding. EMALs allow for better control and put less stress on aircraft, says Brian Fields, NNS’ vice president of aircraft carrier construction. Upgraded electromagnetic weapons elevators are expected to move ordnance through the ship more efficiently, helping it achieve its mission of launching and recovering aircraft faster.
Ford-class carriers are designed to dock for maintenance less frequently, Fields says, and will require about 600 fewer sailors than the Nimitz-class carriers. Over a Ford-class carrier‘s 50-year lifespan, the Navy estimates it will spend $4 billion less per ship than on a Nimitz-class carrier, thanks to reduced maintenance and crew member requirements.
The first ship in this class, the USS Gerald R. Ford, has been delivered to the Navy, with its maiden deployment expected this fall. The Navy originally estimated the Ford would cost about $10.49 billion, but the ship’s cost escalated to $13.3 billion, making it the most expensive Navy ship built to date.
The Ford’s keel-laying ceremony —similar to a construction site’s ground-breaking — took place in 2009, when NNS was Northrop Grumman Shipbuilding. NNS delivered the Ford to the Navy in 2017, two years later than targeted, and then-President Donald Trump commissioned it in July 2017, although it still required more work before deployment.
Each new major technology system on the Ford came with its own challenges, says Meier, who was the Ford’s first commanding officer. “If there’s a lesson learned here,” he says, “it’s probably you don’t want to put that much new technology on a ship at a single time.”
In March, NNS announced it had finished a six-month maintenance period on the Ford. “We’re really proud of her and what she’s going to be able to do for the Navy,” Fields says.
Meanwhile, the next Ford-class carrier, the USS John F. Kennedy, has about two years’ more work to go before its delivery, Fields says. The ship is in the process of being turned over to the Navy.
Along with the Kennedy, two Nimitz-class carriers are at NNS: the USS George Washington and the USS John C. Stennis are at the shipyard for their midlife refueling and complex overhaul. NNS is the only shipyard that performs that work, a process that costs billions of dollars and takes several years to complete.
The Navy completed a double-ship buy for the third and fourth Ford-class carriers — the USS Enterprise and the USS Doris Miller — which allows for quicker and less expensive builds. NNS is working with the Navy and the ship’s sponsors — U.S. Olympians Simone Biles and Katie Ledecky — to find a date this year for the Enterprise’s keel-laying ceremony. (Traditionally women, ship’s sponsors perform ceremonial duties for a ship, including smashing a bottle on its bow during the ship’s christening.)
The USS Doris Miller, named for the first Black American awarded the Navy Cross after he was killed in action during World War II, is in the initial stages of construction but, thanks to the block purchase, her design and parts procurement has advanced, Fields says. Currently, NNS is building structural pieces for the craft.
More than 31,000 people in Virginia work on aircraft carriers or in indirect jobs related to the industry, and 403 businesses in the state supply carrier parts, according to the Aircraft Carrier Industrial Base Coalition. NNS employs about 25,000 people total, and approximately 8,000 hourly workers are assigned to new carrier construction and Nimitz-class overhauls.
“It’s kind of a part of our DNA, of who we are as a region,” Quigley says. “We’re very proud of our wide and deep association with the Navy in Hampton Roads, and to be the only producer in the nation of nuclear-powered aircraft carriers is something the region is very proud of.”
One of the oldest launch sites in the world, the NASA Wallops Flight Facility launched its first rocket on July 4, 1945. Given its history, it seems fitting that Wallops’ rocket business got a big payload boost in late February when California-based Rocket Lab USA announced plans to build a 250,000-square-foot facility on Accomack’s Wallops Island for manufacturing Rocket Lab’s reusable Neutron rockets. The company also plans to construct a new launch pad.
“Neutron is huge for the Eastern Shore,” says Ted Mercer, CEO and executive director of the Virginia Commercial Space Flight Authority, known as Virginia Space, which owns and operates the Mid-Atlantic Regional Spaceport at Wallops.
“They’re going to bring 250 jobs,” Mercer says of Rocket Lab, adding that while most if not all of the positions are expected to be in Accomack, exact details aren’t yet known.
The state’s aerospace and unmanned systems industry workforce is projected to grow by 8.5% during the next decade, according to state Secretary of Commerce and Trade Caren Merrick.
“The growth potential is huge in the future,” Mercer says, adding that as of 2018, the “Wallops Cluster” made up of NASA, the National Oceanic and Atmospheric Administration, Northrop Grumman Corp., the Navy and Virginia Space, among
others, had an annual economic impact of $1.37 billion on the Eastern Shore.
Accomack County Administrator Mike Mason estimates that the Neutron program at buildout will generate roughly $2 million in direct annual property tax revenue to the county, which would increase the county’s total property tax revenues by roughly 6%.
“We’re a rural county,” says Supervisor Ron Wolff, who represents the district where the project will unfold. For Accomack, 250 jobs is “staggering; we’re scrambling to find places to put them all,” he says, adding it would be about a year before new workers start arriving.
Accomack’s planning commission has already recommended building a 140-unit townhouse development roughly 20 minutes from Wallops, Wolff says.
Rocket Lab broke ground on Neutron’s production facility in April, but a spokesperson declined to provide details on the construction’s timeline or the rocket’s launch. Virginia committed to an incentive package valued at about $57 million,
and Rocket Lab expects to spend about $103 million supporting Neutron’s development in the state over the next eight years.
Accomack has a strong relationship with NASA and Virginia Space, Mason says: “When they succeed, we succeed.”
Developers are expected to break ground this month on the first of three mixed-use projects near the West Falls Church Metro station with a total investment of about $1.2 billion.
Each piece comes together to complete a puzzle that will transform about 40 acres of vacant land, parking lots and Virginia Tech‘s Northern Virginia Center into a live-work-play destination comprising more than 3.2 million square feet that officials say will ease traffic, increase pedestrian safety and boost the economies of Falls Church and Fairfax County.
A 2020 presentation estimated the projects could generate $17.5 million in annual state taxes while creating 3,600 jobs.
Falls Church’s George Mason High School was demolished and replaced by the nearby Meridian High School to make way for the first development, which is scheduled to break ground in mid-May. Bordered by State Route 7 and Haycock Road, the 10-acre, 1.4 million-square-foot project is being developed by Washington, D.C.-based Hoffman & Associates and Bethesda, Maryland-based EYA LLC. It will include 326,100 square feet of office space, a 146-room hotel, 215 senior housing units and as many as 647 condos and apartments. It also will feature more than 140,00 square feet of retail, including a grocery store.
The second project aims to transform 24 acres owned by the Washington Metropolitan Area Transit Authority abutting Route 66 at its West Falls Church station into 900 housing units, along with 110,000 square feet of office space and 10,000 square feet of retail, comprising more than 1 million square feet. Hoffman and EYA are developing it with Falls Church-based Rushmark Properties LLC. If it receives expected county approval, construction could begin in 18 to 24 months.
“This was a station losing money, didn’t have enough people using it, and now it will have an identity,” says James Snyder, Falls Church’s director of community planning and economic development services.
The final project received the green light in April when Virginia Tech announced it would convey its Northern Virginia Center, home to administrative offices and several academic programs, to Falls Church’s city government for redevelopment. While details remained undetermined as of press time, it will include a new corporate headquarters for Falls Church-based national construction firm Hitt Contracting Inc. and a Virginia Tech innovation lab for testing smart city technologies. The project is being developed by Rushmark.
A previously proposed redevelopment plan for the site included 275,000 square feet of office space, 450,000 square feet of residential and 100,000 square feet of academic space.
In the coming months, the rubble of a demolished furniture factory on a roughly 70-acre property in Chilhowie will be hauled away to make room for an industrial park.
Smyth County is teaming up with Bland and Washington counties, forming the Pathway Regional Industrial Facilities Authority to create Pathway Park, which will feature rail service and access to Interstate 81.
“Successful economic development and job creation is not confined by borders,” Bland County Administrator Eric Workman says of the tri-county collaboration. “The effects have resounding positive impacts on all surrounding communities in terms of job creation and synergy of economic resurgence.”
Smyth County has owned the park property for several years. It received grants to help demolish the derelict American Furniture factory and plan for new development. The caveat: Grants available to single localities were drying up.
“At the same time, we are winding down a similar regional partnership with Washington County [the Smyth-Washington IFA to develop Highlands Business Park] and felt it was a successful venture,” says Smyth County Administrator Shawn M. Utt. “Add in Bland County’s willingness to partner in these types of projects [and] we felt we had the makings of a great partnership.”
Pathway RIFA has been awarded two $600,000 grants from GO Virginia and the Virginia Tobacco Region Revitalization Commission to help replace the utility infrastructure.
“These two grants would not have been possible if it weren’t for the regional partnership,” Utt says. “These funds will be used to build new water lines, replace a collapsed sewer line that crosses the Middle Fork of the Holston River and help fund a new entrance from Route 11.”
Costs and revenue share from the park are still being worked out by the counties but, Utt says, “realistically, our three jurisdictions will share equally in the costs and equally in the future revenues.”
Once the RIFA is registered with the State Corporation Commission, design work for the sewer and water lines will begin.
“We also have to get with the Virginia Department of Transportation for the entrance road,” Utt says. “As far as breaking ground on the utility work, we hope to have the design work and bidding complete by late summer, with construction beginning later [in] 2022.”
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