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D.C. sues bitcoin whale Michael Saylor for tax fraud

founder was sued in August by the city of , , which alleges that he defrauded the nation’s capital of more than $25 million in income . The argues that Saylor falsely claimed to reside in Virginia or Florida while instead living in a luxury Georgetown penthouse.

The civil suit, filed Aug. 22 by D.C. Attorney General Karl Racine in the District of Columbia Superior Court, also names as a defendant.

MicroStrategy’s executive chairman, Saylor stepped down as CEO following the Tysons-based tech company’s August earnings report, which tallied a $1.98 billion impairment loss on its holdings. Saylor is a major bitcoin influencer on Twitter, and MicroStrategy is the largest corporate holder of the . 

According to the lawsuit, since 2005, Saylor has lived in “Trigate,” his 7,000-square-foot waterfront D.C. penthouse. In 2012, he bought a house in Miami Beach, got a Florida driver’s license and registered to vote there.

Around 2013, the suit alleges, Saylor asked MicroStrategy to begin using his Florida address on tax forms while MicroStrategy provided him with a security detail and transportation in D.C. and was aware of his residency there.

About a year later, according to the lawsuit, MicroStrategy’s then-chief financial officer grew concerned after finding that Saylor spent the majority of each year in D.C. Saylor agreed to reduce his salary to $1, but his compensation remained high because of fringe benefits, the lawsuit says. 

MicroStrategy continued to report Saylor’s Florida address on his W-2s from 2014 through 2021, and failed to withhold D.C. income taxes, the lawsuit says, adding, “This was no mere clerical error.”

Saylor and MicroStrategy deny the allegations.

“Although MicroStrategy is based in Virginia, Florida is where I live, vote and have reported for jury duty, and it is at the center of my personal and family life,” Saylor said in a statement.

Accusing D.C. of “overreach,” MicroStrategy called the case a “personal tax matter” involving Saylor.

Under the city’s new False Claims Act, Saylor, who has a reported net worth of $1.6 billion, could be found personally liable for more than $75 million in unpaid taxes and penalties.

The act encourages whistleblowers to report instances of city residents evading tax laws by misrepresenting where they live. In this case, whistleblowers filed an April 2021 lawsuit against Saylor alleging tax fraud.

September 2022 Top Five

The most-read daily news stories on VirginiaBusiness.com from Aug. 15 to Sept. 14 included two items focusing on , the No. 1 bank in Roads by market share.

1  |   TowneBank to acquire Farmers Bank

Suffolk-based TowneBank agreed to acquire Windsor-headquartered Farmers Bankshares Inc., parent company of Farmers Bank, in a $56 million deal. (Aug. 18)

2  |   Va. Beach’s to add 655 jobs

The -based unmanned aerial vehicles firm announced a $27 million expansion that will include a drone center at Richard Bland College. (Aug. 24)

3  |   258 Va. companies make this year’s Inc. 5000

Richmond-based IT staffing firm Summit Human Capital was the top-ranked Virginia company on Inc.’s 2022 list of the nation’s 5,000 fastest-growing privately held companies. (Aug. 16)

4  |   Richmond picks Diamond District development team

The city selected a joint venture including Richmond-based Thalhimer Realty Partners to build a new baseball stadium as the centerpiece of a mixed-use neighborhood revitalization project. (Sept. 12)

5  |   TowneBank names new CEO

On Jan. 1, 2023, William “Billy” I. Foster III, the bank’s market president for Central Virginia and the Carolinas, will succeed J. Morgan Davis, who is retiring. (Aug. 26)

Fighting back

and problems have pushed up the price of citric acid by 200%. That’s a problem for Crystal Wellman because citric acid is a primary ingredient in bath products she sells at Sugar + Spruce, her bath, body and skin care products shop in downtown Fredericksburg.

Wellman could try just raising prices, but she and other owners are instead seeking creative ways to push back against the fastest pace of inflation since November 1981. The consumer price index rose 9.1% year-over-year in June, before dipping in July to 8.5% due to falling gasoline prices.

Other ingredients used to manufacture Sugar + Spruce’s bath products have seen only slight price increases, says Wellman. But one of the shop’s top-selling products — bath bombs — cannot be made without citric acid to fuel its fizzing effect.

At the same time, “the in-store purchase amount is dropping. People are maybe holding on to their dollars a little more than normally. They’re not where they used to be,” says Wellman, who has been in business for 10 years.

“There are so many angles we’re getting hit at. We pay a lot of shipping. It feels like every time we order it’s a little different,” she says. “The margins are still very good but they’re not where they used to be. … The profit margins are from 75% to 85%.”

“People are not spending as much. It’s not tremendous, but for us as a small business, every cent counts,” says Tawann Scott of Marie’s Hair & Nail Supply in Richmond.photo by Shandell Taylor

So far, Sugar + Spruce has made small price adjustments. Before the pandemic, customers purchasing products in bulk received a discount. That incentives gone now, and prices of individual items remain the same.

Wellman has bigger ideas “to get people to put more in their basket” again. She wants to bring back the fun of in-person shopping.

“We’re having more workshops on how to make candles. People are testing out products in the store, which they couldn’t do during COVID,” she says. “I feel like people are craving the experiences. Fredericksburg has a great historic downtown. People can meet friends, go to lunch, make candles, have a perfect afternoon.”

Tawann Scott, owner of Marie’s Hair & Nail Supply, a beauty supply store in Richmond, also is feeling the pinch of inflation and mapping out ways to counter the loss of business.

“I feel people are not spending as much. It’s not tremendous, but for us as a small business, every cent counts. I don’t know if big-box stores feel it as much. We depend on our community,” she says.

As wholesale prices have gone up, “we have to increase prices, pass it on to customers,” says Scott, who opened the store with family members in October 2021.

“We’re doing a few extra things, like running a few sales to attract more people, sending out coupons. We’re on social media constantly. That’s gone pretty well,” she says, adding that her shop recently was listed on BLK RVA, a Richmond Region Tourism website dedicated to Black businesses, culture and community.

Scott’s big idea is to confront the decrease in customer spending directly. She believes many women are not coming into the shop to buy products as often because they are having their hair braided — partly because it’s easy to maintain and partly as a money-saving measure. Getting your hair braided means you don’t have to pay to get it done again for two to three months, she explains.

“There are braiding products I probably could bring into the store. I could get additional types of braided hair,” says
Scott, who’s thinking about hiring a braider to work in the shop to attract more customers.

Like Scott, 5.4 million entrepreneurs filed applications to start new businesses in 2021, 53% more than in 2019, according to U.S. Census data.

Many of those new small businesses are in the service sector, according to Steve Cooper, a volunteer in Charlottesville with SCORE (Service Corps of Retired ), an organization partly funded by the U.S. Small Business Administration.

The nature of service-industry businesses can make inflation a little less onerous.

“They don’t buy a lot of stuff. It’s not like a company,” Cooper says. Often one-person operations, these businesses don’t have to pay wages, and many are home-based, so they don’t have to deal with office overhead expenses.

The bigger problem for fledgling startups, according to Donald Jennings, a SCORE volunteer in Orange, is that “people starting businesses have a Pollyanna view of funding. Banks are not going to lend for an idea. You have to have a proven product or service. Funding is self-funding and [from] family. It’s bootstrapping.”

Jennings urges small business owners fighting inflation to “eliminate any unnecessary expenses, especially reoccurring expenses. Use the infrastructure you have to the maximum extent.”

Due to rising costs for goods and wages, the cost of soft-serve ice cream cones at “Hawaii” Lin’s Aqua S shop have risen from $4.75 to $5.75. photo by Mark Rhodes

Resilient industries

Coby Loessberg, president of Legendary Custom Signs & Graphics in Manassas, says his business is coping relatively well.

“The sign industry is pretty resilient to economic cycles,” he says. Although it saw some setbacks early in the pandemic when there was so much uncertainty, the industry picked up again quickly, with demand increasing for COVID-related signs and acrylic sneeze guards.

Loessberg’s sign company has raised prices in response to inflation, he says. “I tried to cover for a while, but our prices are driven by the supply chain, which is not predictable now. In some cases, materials have gone up. In some cases, they’ve gone up and come back down. Transportation costs for fuel were starting to come down, but now they’re going back up.”

Loessberg expected supply chain problems during the pandemic’s peak, “but I’ve been seeing more [problems] in the last six to nine months. Rigid material aluminum composite is harder to come by. It’s back-ordered,” he says. Before the pandemic, Legendary Custom Signs & Graphics kept a low inventory on hand, because it was easy to get supplies the next day. “Now we’re ordering three or four extra rolls of vinyl.”

The market for clear acrylic “got hit hard” because the product is used to make shields to protect cashiers and counter clerks against COVID. Manufacturers have since caught up with the demand but are now limiting production of acrylic to a smaller number of colors, according to Loessberg. “There’s not as broad an array. They’ve focused their manufacturing on the high-demand product. … It’s not like they’re going to build a new plant. They do more of one thing and do less of another.”

Madhu Garlanka, CEO of Allwyn Corp., a Herndon-based information technology services and consulting company with 200 workers, doesn’t have to worry about rising costs or shortage of raw materials. But, she points out, inflation has a significant “indirect effect” on businesses like hers.

“There’s the rising cost of people who are looking to increase their income. To retain people, you have to pay more,” Garlanka says. “As we look to source people for projects, it’s become a challenge.”

One way to meet the challenge, she notes, is to negotiate higher prices when customer contracts come up for renewal.

Another method is to take advantage of a wider hiring pool made available through remote work.

“In the past, we used to look for people local to where the client is located,” says Garlanka. “Now we’re able to hire people from lower cost-of-living areas. The workforce wants to work remotely.”

Ice cream and beer

The food and beverage industry has been especially hard hit by the rising costs of supplies and shortages of all types.

Ice cream shop owner Xiawei “Hawaii” Lin finds that “inflation is definitely causing the problem. Raw materials are costing more money. I believe it’s going to go up higher.”

Lin opened an Aqua S soft-serve ice cream franchise in Virginia Beach in December 2019. Since then, her cost for goods has gone up 20% to 30% and shipping costs have rocketed upward of 40%. Additionally, Virginia’s mandated minimum hourly wage went up to $11 in January and will rise to $12 at the beginning of 2023. Lin’s shop has about 10 employees.

Plus, she says, Aqua S faces supply problems. “We use ice cream powder from Italy. Ingredients are imported from Italy to corporate to us. There’s a limited quantity we can get.” Even products obtained locally, such as juice, are sometimes in short supply.

Mustang Sally Brewing Co. in Chantilly has seen “a pretty significant rise in costs,” says Sean Hunt, the brewery’s managing member and founder. Photo by Will Schermerhorn

Combined, those factors mean that the cost of a soft-serve cone has risen from $4.75 to $5.75. “Our profit margin was usually around 40% when we opened. Right now, I can’t tell you. Now it’s maybe 10% to 20%,” Lin says. She’s received business assistance grants, but sometimes, she says, “we don’t know how we are going to keep the door open.”

Having more products that the shop can sell during the winter would help, Lin says, but being a franchise also means restrictions.

She’s making a big push to expand beyond the storefront. “We’re doing catering, weddings, birthday parties, business staff-appreciation events. We’re selling to restaurants. We’re partnering with nonprofits to have events.”

Sean Hunt, managing member and founder of Mustang Sally Brewing Co. in Chantilly, also has experienced “a pretty significant rise in costs. Things are going up across the board generally and, in a more exasperating way, with particular products.”

His brewery’s big cost items are grain, hops and fruit. The cost of grain has been slowly creeping up over the course of the past year, while the cost of hops “hasn’t increased as much,” he says. “Fruit is very variable. It seems to be going up and down. We’re trying to figure it out long term.”

Costs of canning supplies have gone up too, he says, bringing down the profit margin on Mustang Sally’s sale of canned beer products to grocery stores.

He estimates that prices of raw goods have gone up at least 10%, and that escalates to 15% when you factor in new surcharges that shippers have instituted to make up for rising fuel prices.

For now, Hunt says, “we’re absorbing the costs to some degree. We’ve increased prices slightly. The question is, how much do we pass along? We’ll assess that more probably next year.”

In the meantime, the brewery is reassessing the types of fruit it uses. “We do a lot of fruit beers. We’re using more of the fruit that’s available,” he says. For example, “there was a product we had been making that was blackberry-based. We were going to run that for another two months, but blackberry costs shot up, so we made a tangerine fruit beer.”

The best approach to the situation, Hunt believes, is to focus on something “that’s less affected by inflation” — the customer experience.

“Our theory here is that we’re not a restaurant, not a bar. Breweries are different. We’re 100% experience. People come here for something that’s really interesting,” he says. “The end game is that somebody has a lot of experiences to choose from, but at a reasonable cost.”

To create that experience, Mustang Sally hosts lots of events and offers plenty of craft beers that customers can’t find anywhere else, Hunt says.

“We want to make sure we are producing an interesting lineup. We try to make it fascinating. You can really do anything with sour beer. We’ve had a mango coconut raspberry tart beer. It’s fun. About every four months, we have a sour fest. We’ve had a Swedish Fish marshmallow sour.” 

Virginia 500 Spotlight: Mark C. Lowham

BEST ADVICE FOR OTHERS: You never learn anything when you are talking.

FIRST JOB: Analyst for Kidder, Peabody & Co. in New York

WHAT I WAS LIKE IN HIGH SCHOOL: Mr. Clean and a bit of a nerd, but I still managed to be elected student body president

PERSON I ADMIRE: My father. He was the classic American gentleman, Marlboro man and CEO wrapped in one.

WHAT A COMPETITOR WOULD SAY ABOUT ME: He is an honorable man.

WHAT MAKES ME PASSIONATE ABOUT MY  WORK: I love being a mentor to young people who are building their careers.

ONE THING I’D CHANGE ABOUT VIRGINIA: Ensure equity is pervasive across the state.

FAVORITE APP: Homesnap

FAVORITE VACATION SPOT: Jackson Hole, Wyoming

DID YOU KNOW? Lowham’s office handled the then-record-breaking $43 million sale of AOL co-founder Steve Case’s McLean estate in 2018, as well as the current state-record sale of the $48 million River View estate in Fairfax County to Commanders owners Daniel and Tanya Snyder in November 2021.

Under construction

Roads Bridge-Tunnel

Hampton and

is underway along 10 miles of the Interstate 64 corridor from Hampton to Norfolk on the $3.9 billion expansion project. In June, crews on
the South Island began reassembling Mary, the 430-foot, $70 million tunnel boring machine (TBM) that was delivered to the last November. As of late summer, crews were completing work on the TBM’s launch pit on the island, and Virginia Department of Transportation officials anticipate boring to begin in spring 2023, excavating about 50 feet a day and taking approximately a year to cross the harbor. In mid-July, workers poured 14.5 million pounds of concrete in a 24-hour period, one of the largest continuous concrete pours in VDOT’s history. Meanwhile, of the tunnel segments is underway in Cape Charles, where roughly 500 rings (or 4,500 tunnel segments) of the 2,388 rings were completed as of August. Nearly half of the 1,200 piles for the new bridge trestles across have been placed above and below water in the Norfolk Harbor.

Rendering courtesy Pembroke Realty Group

Pembroke Square

Virginia Beach’s 1966-era Pembroke Mall is rebranding as Pembroke Square, as Pembroke Square Associates and its partners (including Landmark Hotel Group LLC and Castle Development Partners) conduct a $200 million redevelopment of the 54-acre property. The 14-story, 209-room Tempo/Homewood Suites by Hilton hotel is set to open in summer 2025, and groundbreaking is set in October for the 153-unit Aviva Pembroke Senior Living Community, a partnership with Beth Sholom Village. In early 2023, work is set to start on a 324-unit, five-story apartment building, with opening scheduled in fall 2025.

 

 

Photo courtesy Amazon.com Inc.

Amazon.com Inc. fulfillment center

Chesapeake

In August, Amazon.com Inc. opened its inbound cross-dock fulfillment center in Chesapeake on Boulevard, the first center of its kind in Virginia for the e-commerce giant. The 640,000-square-foot processing center created 1,000 full- and part-time jobs, and it expands Amazon’s operations and logistics network in the state. A similar facility is set to be completed later this year in Stafford County. Amazon’s presence in has mushroomed, with its $230 million, 3.8 million-square-foot robotics fulfillment center in Suffolk expected to open in September and a 60,000-square-foot delivery station nearby that opened in February. Norfolk and Hampton also have delivery facilities, and Amazon has a career center in Chesapeake.

 

 

Photo by Mark Rhodes

Fairwinds Landing

Norfolk

The $100 million Fairwinds Landing project is underway, as an entity connected to The Miller Group signed a 30-year lease in August for the 122-acre Lambert’s Point Docks property owned by Norfolk Southern Corp. It has 20 miles of rail infrastructure, high-volume transload facilities and 1.1 million square feet of industrial warehouse space, and the plan is to turn the property into a maritime operations and logistics center to support offshore wind, defense and transportation industries. Construction is expected to begin later this year, and the center is expected to produce more than 500 jobs. Multiple phases of the project will be completed over the next five years.

 

Photo courtesy The Breeden Co.

Avant at Huntington Pointe

In May, The Breeden Co. broke ground on the $33 million Avant at Huntington Pointe apartment project in Newport News, which is set to include 176 units between 672 and 1,517 square feet each. Breeden Construction is serving as general contractor, and the company’s property management arm will manage the apartments. The first units are slated to be completed by late summer 2023, with full completion by next fall or winter.

 

 

Siemens Gamesa offshore wind blade factory

Portsmouth

Announced in October 2021, Siemens Gamesa Renewable Energy S.A. expects to start infrastructure work in 2023 on the nation’s first offshore wind turbine blade facility on leased property at the Portsmouth Marine Terminal, with production scheduled to start in 2025. The Spanish company, which is partnering with Dominion Energy Inc. on the $9.8 billion Coastal Virginia Offshore Wind (CVOW) farm, will produce blades for 176 turbines that will be erected 27 miles off the coast of Virginia Beach. Siemens intends to spend $80 million for new buildings on 80 acres that are part of the Port of Virginia, part of an overall $200 million investment. Construction on CVOW is expected to start in 2024, with completion set for 2026.

Executive insights

Virginia Business asked five leaders to discuss how regional cooperation could directly impact their industries, how they’re coping with staffing shortages and what their hopes are for the region’s future.

XAVIER BEALE

XAVIER BEALE

Vice president of human resources and trades, , Newport News

Most Roads leaders say they’d like to see more regional cooperation. What specific project or sector of the local do you think would benefit
most from this?

Education and workforce training. Newport News Shipbuilding is the largest industrial employer in Virginia, with more than 25,000 people, so we draw employees from throughout the region. Arbitrary lines that designate localities, school districts or community college territories have no effect on our hiring. Regional collaboration among training providers would create more effective outcomes for trainees and employers. There’s been positive progress, but more work is needed to meet the needs of the region’s current and future employers and workforce.

Which jobs are hardest for you to fill, and what is being done to improve that?

The biggest challenges right now are welders and shipfitters, as well as attracting and retaining experienced professionals with portable skills, such as engineers, business management and human resources [professionals]. Newport News Shipbuilding is taking aggressive action to recruit and retain talent — however, this is not a short-term problem. We need to hire around 21,000 people over the next 10 years, so enhancing regional pipeline programs is key. Our goal working with our community partners is to ensure we have enough skilled talent to support NNS, but also our suppliers and other businesses across our region.

 

 

ANNA BONET

ANNA BONET

CEO, ,

What specific project or sector of the local economy do you think would benefit most from regional cooperation?

All companies can relate to the and staffing challenges right now. Together we could work to create a robust, empowered workforce.

Sustainability is another opportunity for a collective approach. Coming from Spain, I continue to be amazed by the amount of waste that is generated [here] and the lack of recycling programs. In the region, more electrical vehicles and alternate power resources such as wind and solar are needed. Together, we can become greener.

Your company finances, operates and maintains the Elizabeth River Tunnels connecting and Portsmouth. How is toll technology changing, and can it help improve congestion?

We need to provide mobility solutions for drivers, and that means making their trips more convenient. Technology is moving faster to provide solutions, some of which we are seeing already with free-flow tolling. 

Free-flow tolling [using an electronic system instead of toll booths] reduces travel times for everyone, reduces crashes and creates a more reliable, predictable travel experience. Additionally, it reduces carbon emissions and improves fuel usage for drives, which is critical for the high gas prices everyone is experiencing today.

Additional technology we’re seeing more of is in-vehicle telematics, a technology built directly into the vehicle [using GPS]. In the past, telematics was only available in higher-end vehicles, but more and more manufacturers are building it into new vehicles. In-vehicle telematics communicate vehicle and travel information to improve safety and vehicle operation. In-vehicle telematics are already being used in Virginia’s new Mileage Choice Program that launched on July 1.

 

 

MARCIA CONSTON

MARCIA CONSTON

President, Tidewater Community College, Norfolk

What specific project or sector of the local economy do you think would benefit most from regional cooperation?

Supporting the development of offshore wind in Hampton Roads will require regional cooperation to recruit, train and upskill an emerging workforce. Today and in the coming years, the need for skilled laborers to support the various areas required to build, install and maintain offshore wind turbines will continue to increase. This growing industry will provide generations with opportunities for employment as the region comes together to support this innovative technology.

Community colleges are a critical provider of workforce training in Virginia. How does that impact TCC’s goals and offerings?

As one of the largest providers of higher education and workforce services in Hampton Roads, TCC’s vision is “to be our community’s first choice for education, opportunity, partnership and innovation.”

To achieve this vision, the college remains focused on providing our industry partners with a skilled workforce to help support their goals. We continue to expand our workforce and career and technical offerings to meet the increasing demands of the region in health care, skilled trades, manufacturing and, eventually, wind technology. This growth is a common thread in our strategic plan, Innovate 2026, which aligns the college’s goals with current and future endeavors for our region.

As we continue to transform training throughout the region, it is important that TCC is serving not only adult learners looking to change careers or expand their industry knowledge, but also the next generation of skilled technicians through our dual-enrollment program. This program offers high school students an opportunity to earn college credit before graduation in areas that will propel Hampton Roads’ workforce forward.

 

 

STEPHEN EDWARDS

STEPHEN EDWARDS

CEO and executive director, Virginia Port Authority, Norfolk

Siemens Gamesa Renewable Energy S.A. is renting part of the Portsmouth Marine Terminal to build its first North American factory to manufacture turbine blades for offshore-wind farms. Is the port open to leasing more land to other companies?

We are always open to the possibilities of private investment inside of our terminals. While Siemens Gamesa is a good example, it is not the first company to lease space on Virginia Port Authority property.

At Richmond Marine Terminal, Scoular Co., a large international grain exporter, has operations, and at Norfolk International Terminals, another larger grain and feed exporter, Fornazor International Inc., has operations. We are also talking with a company about the possibilities of developing an export operation inside the terminal at Virginia Inland Port. The goal is to find the best fit and a long-term commitment with a growing company that needs to reach markets across the globe.

How is the port handling hiring and retaining employees, particularly in the current labor market?

To remain competitive with current workforce challenges, our recruitment efforts have shifted to focus on tapping into local talent partners for support and networking with skill-specific partners. We have also enhanced our partnerships with local associations and institutions to create a talent pipeline for both current and future hiring needs. Internally, we are elevating our workforce by being more intentional in our leadership and development programs [and] benefit and compensation offerings, as well as other engagement initiatives.

 

 

DENNIS MATHEIS

DENNIS MATHEIS

President and CEO, , Norfolk

Sentara is collaborating with Old Dominion and Norfolk State universities and Eastern Virginia Medical School to establish a collaborative academic health center and school of public health. How do you expect this to improve the region’s health care and workforce training efforts?

Working with our regional health care and educational partners to create an integrated, state university-based medical school is something I am very passionate about. 

 All four organizations — ODU, NSU, EVMS and Sentara — are committed to tackling health care access, health equity and other pressing public health issues in our region. The ONE School of Public Health will help us closely align efforts that have traditionally been fragmented, to address these issues more efficiently and effectively. It also will strengthen our region’s educational research capabilities, help attract and develop the talent we need in the future and secure more robust funding through federal, state and private resources.

How is Sentara working to attract and retain employees, especially in-demand health care professionals?

Over the years, we’ve implemented numerous creative strategies to help us address staffing challenges and hard-to-fill positions, including the development of an internal staffing pool that allows us to deploy our own highly qualified clinical professionals throughout the system when and where they are needed.

Nonetheless, long-term solutions must be implemented alongside shorter-term changes. Prior to the pandemic, a national clinician shortage was predicted to slowly extend through 2030. The pandemic exacerbated the confluence of factors contributing to the labor shortage, accelerating and amplifying it. Sentara is expending considerable effort, education and resources toward workforce pipeline development, especially around school-age children and young adults. This work is vital to the long-term sustainability of our collective health and well-being.

 

 

 

Workforce development resources

The Apprentice School

Founded in 1919, The Apprentice School in has trained 11,000 shipyard workers over its long history. The school at Huntington Ingalls Industries’ division offers four-, five- and eight-year paid apprenticeships in 19 shipbuilding disciplines and eight advanced programs of study, including management and marine engineering. Apprentices complete 1,000 hours of coursework and a minimum of 7,000 hours of on-the-job training. as.edu

Goodwill of Central and Coastal Virginia

Goodwill’s Employment Center provides assistance to and opportunities for job seekers facing challenges to work to apply for open Goodwill positions in retail, support, janitorial, logistics and more. Goodwill’s Begin@Home model is focused on delivering workforce development opportunities while individuals earn a paycheck. Begin@Home is composed of programs that support on-the-job paid training, skills building and career plan development with the assistance of a dedicated career adviser. goodwillvirginia.edu

Workforce Council

The Hampton Roads Workforce Development Board oversees federally funded workforce development programs for all localities in the Hampton Roads region. The job board offers hiring opportunities, and the council offers general workforce services in varying locations like financial coaching, matching job seekers with employers and hosting workshops covering résumés, job interviews, salaries and other topics. The board operates the Hampton Roads Veterans Employment Center and offers programs for people ages 14 to 24, called NextGen Pathways. theworkforcecouncil.org

Paul D. Camp Community College

The community college’s division of workforce development offers options for employers and workers in western Hampton Roads. The college offers courses to gain industry credentials, professional certifications and licenses in various professions, including commercial driving, , logistics, IT security and welding. For businesses, the college offers customized workforce training, either on-site or at one of its four training facilities. pdc.edu/workforce-development

Employers can book customized training on-site, on campus or online, and TCC can provide classroom space, mechatronic and welding labs, trucks or motorcycles. The college offers a job-skills training program as well as a variety of short-term workforce training courses in advanced , business, , health care, hospitality and others. Maritime and transportation programs include training to earn a commercial driver’s license and the U.S. Coast Guard’s operator of uninspected passenger vehicles license, which is required for anyone operating a vessel carrying up to six passengers for hire. Business courses include paralegal, OSHA and license trainings. workforce.tcc.edu

Virginia Peninsula Community College

Formerly Thomas Nelson Community College, Virginia Peninsula’s workforce development program provides customized workforce-training options for employers and short-term career training for workers on the Peninsula. The college offers training programs for companies on-site, online or at its locations in Hampton and Williamsburg. Courses and programs include manufacturing and trade skills, culinary arts, business and entrepreneurship, technology and health care. VPCC now also offers Ed2Go, online short courses and certification programs. VPCC is an American Welding Society-accredited testing facility with a certified welding inspector who can conduct the certification.
vpcc.edu/workforce

Full speed ahead

No other region of Virginia moves the entire commonwealth forward like Roads. Sure, Dee Cee is about technology, government contracting and national politics. And Richmond is about politics that are generally more local.

, on the other hand, is about the and commerce. The ports, the railways, interstates, tunnels, trucks and air cargo move millions of shipping containers from across the globe to distribution centers all across Virginia and ultimately to many destinations across the nation.

The past year has been another period of growth for the region. Container volumes are up. Port profitability is up. Projects to widen and deepen shipping channels are nearing completion. Wind power is ramping up, and the $3.9 billion expansion is striving to open in November 2025 as expected. These are all major projects and important investments in the of the commonwealth.

Meanwhile, tourism in is on the upswing. Hotel projects that were launched pre-pandemic have been completed. Occupancy rates for leisure travel were strong this summer, and state and regional hospitality experts have high hopes for business travel rebounding this fall after difficulties during the pandemic’s height. New investments are being made in cultural venues to sustain a thriving arts and music scene across the entire region.

If you aren’t already doing business in Hampton Roads, maybe you should be. The talent pool being produced by local colleges and universities is outstanding. Virginia’s largest manufacturer, -based Huntington Ingalls Industries, offers extensive training to support a variety of highly skilled positions at its subsidiary, the state’s largest industrial employer. There is an ongoing supply of well-trained individuals who are completing military service and looking forward to entering the civilian workforce. In these pages, the new commander of Navy Region Mid-Atlantic, Virginia Beach native Rear Adm. Christopher “Scotty” Gray, discusses how he plans to continue the Navy’s partnership with local developers.

We hope that you will enjoy reading the 2022 issue of Hampton Roads Business as much as we’ve enjoyed reporting on the stories in these pages. Our goal is to help everyone better understand the area’s economy and connect with the businesses that drive its success. Hampton Roads is a team player not only for all of Virginia, but also for points across the nation and the globe.

Full speed ahead!

— Bernie Niemeier,

President & Publisher

A welcome respite

While the spring was red-hot for the market, conditions are expected to cool off in the fall.

“The market is definitely stabilizing,” says Liz Moore, board president of Information Network Inc., the multiple listing service (MLS) for the Roads region. “We had such a frenzied market during the pandemic.”

She cautions, though, that it’s hard to predict what will happen next because the market has been so crazy.

Earlier this year, housing inventory was so low, nearly every listing had multiple offers on it, creating an ultra-competitive market for buyers.

A steadier market, which is a good possibility for this fall, is good and bad for buyers. Rising interest rates are pulling some buyers out, and would-be first-time homebuyers could be affected more than other potential buyers. But that means a more balanced supply-and-demand equation.

“It was so competitive for the last two years that buyers didn’t have much of a chance in a multiple-offer situation,” Moore says. “Now that there’s not quite such an intense frenzy of competition, buyers don’t have to pay such wild prices.”

In July 2021, the median sales price for a home in the region was $300,000 — and a year later, the median cost rose about 7.5% to $322,500, according to REIN data. And that’s up from the median price of $275,000 from July 2020. Still, Moore is seeing some cooling on the higher end of the market, where homes listed for $750,000 or more are staying on the market longer than they had in recent years.

“I think there is good news on the horizon,” Moore says. “As the inventory inches up, that will be a welcome respite for these buyers.”



For The Record: October 2022

CENTRAL VIRGINIA

Fortune 500 used car online retailer Carvana Co. is more than halfway to its 400-employee hiring goal for its $25 million, 191,000-square-foot Chesterfield County inspection center, General Manager Robert Sheets said in August at the center’s ribbon cutting. Carvana has hired 240 employees and expects to reach 400 workers when it begins full production later this year. The company started training employees in late June. The project, announced in December 2019, was paused during the pandemic, and Carvana announced it would move forward in April 2021. (VirginiaBusiness.com)

Nonprofit drugmaker Civica Rx is investing $27.8 million to establish a new 55,000-square-foot laboratory in Chesterfield County‘s Meadowville Technology Park, Gov. Glenn Youngkin announced in September. The expansion will add 51 jobs, and the company will also host a scale-up facility run by Virginia Commonwealth University’s Medicines for All Institute, which will add more jobs. The generic drugmaker is currently building a 140,000-square-foot, $124.5 million manufacturing facility in Petersburg that will become the Utah-based company’s North American headquarters when it opens in 2024. The Chesterfield lab will support that factory through testing and development of new products. (VirginiaBusiness.com)

After a two-year investigation, ongoing federal scrutiny and numerous lawsuits alleging it marketed vaping products to underage users, , D.C.-based Juul Labs Inc. tentatively settled with Virginia, 32 other states and Puerto Rico for $438.5 million in September. Virginia will receive $16.61 million over the next six to 10 years, but the larger impact may be on Henrico County-based Altria Group Inc., which has a 35% ownership stake in Juul. In 2018, Altria invested $12.8 billion in the e-cigarette company, but its investment was valued at $450 million as of June 30. A U.S. District Court judge in Virginia declined to approve a proposed $117 million settlement in August between Altria and shareholders over its investment in Juul. (VirginiaBusiness.com)

A $300 million indoor vertical farm campus — billed as the world’s largest — is coming to Chesterfield County’s Meadowville Technology Park, Gov. Glenn Youngkin announced in September. San Francisco-based Plenty Unlimited Inc. is expected to produce 300 jobs over the next six years in a multiphase project. The first farm, expected to be completed in winter 2023-24, will grow Driscoll’s strawberries at scale. (VirginiaBusiness.com)

On Sept. 12, the city of Richmond announced it selected a joint venture including Richmond-based Thalhimer Realty Partners to build a new baseball stadium for the Richmond Flying Squirrels, as well as a mixed-use development surrounding the stadium, in a $2.44 billion effort to revitalize the area into a new neighborhood to be known as the Diamond District. Other partners in RVA Diamond Partners include Washington, D.C.-based Republic Properties Corp., Chicago-based Loop Capital Holdings LLC and San Diego venue developer JMI Sports. The group committed to purchase the first $20 million of bonds needed to finance the stadium, which is required to be completed and open for the 2025 Minor League Baseball season. (VirginiaBusiness.com)

PEOPLE

Whit Huffman
Photo courtesy Capital. Square

Glen Allen-based real estate company Capital Square has promoted Whitson Huffman to co-CEO, the developer and sponsor of tax-advantaged real estate investments announced in September. Huffman, 33, is the son-in-law of Louis Rogers, founder and CEO of Capital Square. The company specializes in Delaware Statutory Trust offerings as part of IRS Section 1031 property exchanges, and it has branched out into developing multifamily properties, largely in the Southeastern United States. (VirginiaBusiness.com)

EASTERN VIRGINIA 

Retail and restaurant vacancies in downtown reached 23% in 2020 — nearly four times higher than the national average for all retail space at the time, according to a market study commissioned by the Downtown Norfolk Council. There’s too much retail and restaurant space, and not enough residents to fill it, according to Mike Smith, real estate director for Streetsense, the consulting firm that conducted the study. Streetsense presented findings to the Norfolk Planning Commission Aug. 25. It recommended the city redevelop MacArthur Center mall, which has a vacancy rate of about 30%, and tweak its zoning code, which requires 65% of all ground floor space on most downtown streets to be retail.
(The Virginian-Pilot)

-based LLC is adding 655 jobs as part of a $27 million expansion that will include establishing a drone testing, training, and research and development center at Richard Bland College, Gov. Glenn Youngkin announced Aug. 24. DroneUp specializes in commercial drone delivery and flight services and software and will invest $20 million to establish the college center and $7 million to expand its Virginia Beach headquarters from about 15,000 square feet to about 80,000 square feet. The company will add 510 jobs at its headquarters, and it will create 145 jobs for drone operator trainers at the training center. It will also open three drone hubs at Walmart Inc. locations, likely in Chesterfield County and . (VirginiaBusiness.com)

Virginia Beach City Manager Patrick Duhaney, Deputy City Manager Taylor Adams and City Council members Aaron Rouse and Linwood Branch flew to New York in late August to meet with Virginia Beach native and pop music icon Pharrell Williams. While Branch declined to offer details about the meeting, Rouse said he requested it to “build a relationship” with Williams, who is co-developing the $350 million Atlantic Park mixed-use surf park development at the city’s Oceanfront. “We had a great conversation about moving our city forward,” Rouse said. Last fall, after Williams decided not to bring the Something in the Water Festival back to Virginia Beach, he wrote a scathing letter to city officials, citing the city’s “toxic energy.” (The Virginian-Pilot)

PEOPLE

Newport News-based Riverside Health System CEO Bill Downey will transition to executive vice chairman and special adviser to make way for his successor. He will be replaced by Riverside’s president and chief operating officer, Dr. Michael Dacey, who takes over as CEO on Jan. 1, 2023, the system announced Sept. 7. Downey has spent 40 years with Riverside, the past 12 years as CEO. Dacey will retain his title as president, and Downey will retire in 2024 after the yearlong transition. (VirginiaBusiness.com)

Virginia Beach-based Sentara Health Plans named Colin Drozdowski as the next president of Sentara Healthcare’s health insurance division, effective Sept. 1.
Drozdowski succeeds Dennis Matheis, who was named president and CEO of Norfolk-based Sentara Healthcare in June. Drozdowski served as senior vice president of comprehensive health solutions and was senior vice president of Sentara Health Plans since 2019. He helped bring Virginia Premier into Sentara Health Plans, the largest transaction in Sentara’s history. Drozdowski will also serve as executive vice president of Sentara Healthcare. (VirginiaBusiness.com)

Suffolk-based announced Aug. 26 that William “Billy” I. Foster III will become CEO, succeeding J. Morgan Davis. Davis will step down as CEO on Dec. 31 but will remain with the bank until March 31, 2023, to assist with the transition. He will also continue serving on TowneBank’s board of directors and as an executive consultant. Foster, the bank’s market president for Central Virginia and the Carolinas, joined TowneBank as a regional president in 2004. (VirginiaBusiness.com)

NORTHERN VIRGINIA 

The pandemic shrank some tax revenue streams that officials said would grow as Amazon.com Inc. builds its $2.5 billion HQ2 East Coast corporate headquarters in Arlington County. That has meant no cash grants paid out to Amazon. The county projected it would pay $22.7 million in total to the e-tailer in annual payments through 2035. The pay-as-you-go grants are based on Amazon’s commitment to occupy a certain amount of office space and on an expected increase in hotel stays. Arlington had been collecting nearly $25 million annually from its transient occupancy tax — on which the incentives are based — but collected only $15.1 million in revenue from July 2021 through June 2022, millions short of the increase necessary to trigger payments. (The Washington Post)

In September, Google LLC completed its acquisition of Reston-based cybersecurity company Mandiant Inc. in an all-cash transaction valued at $5.4 billion. Google is paying $23 per share for Mandiant, which is joining Google Cloud while retaining its branding. The companies announced the deal in March. Together, Google Cloud and Mandiant will offer customers more capable end-to-end security operations, Mandiant said in a news release. Mandiant was founded in 2004 by CEO Kevin Mandia. In a blog post about the sale, Mandia wrote that by combining Mandiant’s experiences with the scale and resources of Google, “we can make a far greater difference in preventing and countering cyberattacks, while pinpointing new ways to hold adversaries accountable.” (VirginiaBusiness.com)

On Aug. 24, the six-month anniversary of Russia’s war on Ukraine and Ukrainian Independence Day, Reston-based Fortune 500 defense contractor Leidos announced a partnership to support Washington, D.C.-based global health and humanitarian relief organization Project HOPE‘s medical relief efforts in Ukraine. Leidos had already funded medicine and medical supplies, mobile clinics and support for refugees since the conflict began. The new, ongoing partnership does not have a particular contribution, budget or time frame attached to it, CEO Roger Krone said. He estimated Leidos’ contributions “will be substantial.” (VirginiaBusiness.com)

Worrying that over-prescriptiveness and other hitches could stymie economic growth, businesses are displeased with Loudoun County‘s draft new zoning ordinance, weighty legislation that debuted before the planning commission in late August. Uncertainty about ramifications for properties with previously allowed uses, but which would find those uses disallowed under new zoning provisions, has many worried. The new ordinance could generate “hundreds if not thousands” of such instances, Bill Junda, president of engineering and land planning firm Gordon, speaking for the Commercial Real Estate Development Association’s chapter, told commissioners. (Washington Business Journal)

ManTech International Corp. stockholders approved the Herndon-based tech contractor’s sale to The Carlyle Group for approximately
$4.2 billion. Stockholders approved the sale during a Sept. 7 special meeting, subject to customary closing conditions. The transaction closed the week of Sept. 12. Under the terms of the transaction, ManTech stockholders received $96 per share in cash. ManTech and Carlyle announced the deal in May. More than 99% of the votes cast at the meeting were in favor of the merger, ManTech said in a news release. (VirginiaBusiness.com)

Maximus Inc. won a contract valued up to as much as $6.6 billion to continue contact center operations for the Centers for Medicare & Medicaid Services, the Tysons-based federal contractor announced Sept. 1. The contact center operations contract handles more than 35 million customer inquiries a year for CMS programs like 1-800 MEDICARE and the health insurance marketplace across a range of channels. The company operates 84 contact centers in 28 states and employs more than 20,000 contact center agents. This year, employees in Virginia, Louisiana and Mississippi have protested for higher wages. (VirginiaBusiness.com)

SOUTHERN VIRGINIA 

The world’s largest aeroponic smart farm opened in Cane Creek Centre industrial park. Local, state and company officials held a Sept. 12 ribbon-cutting ceremony for AeroFarms‘ 138,670-square-foot facility. The company plans to have 48 plant-growing towers, each four-and-half stories high, with the operation entailing the equivalent of a 1,000-acre farm. The vertical-farming facility began production in August and has hired about 80 employees from Danville and the surrounding area; all 158 workers will be hired by the end of the year. (Danville Register & Bee)

After approving two massive solar generation facilities — including the Randolph Solar Project, one of the largest solar farms in the U.S. — the Charlotte County Board Supervisors has hit the pause button on solar power applications in the coming year. Meeting on Aug. 8, Charlotte supervisors voted 4-2 to freeze action on any unapproved solar permit requests until the Charlotte County Planning Commission makes a recommendation on zoning for future solar development in the county, or through January 1, 2024, whichever occurs first. The majority of the board agreed to seek recommendations from the planning commission about solar-related zoning. Until those recommendations are received, the board would halt all solar zoning actions. (SoVaNow)

Danville officials are working with the owners of Danville Mall to find new uses for the commercial site. “We envision that the Danville Mall property can become a lifestyle destination, where community, commercial and residential meet in one location,” Danville Director Corrie Bobe said. Possible uses for the site include hospitality, residential, outdoor recreation, food and beverage, public gathering areas, and office space, Bobe said. The mall’s 87,000-square-foot footprint and about 17,000 square feet of outparcel development area could be redeveloped, she said. (Danville Register & Bee)

The Danville Regional Airport will receive $1.26 million in federal funding to rehabilitate its apron and taxiway. The money comes from more than $13 million in federal funding for infrastructure improvements at Virginia airports that were announced on Aug. 25 by U.S. Sens. Mark Warner and Tim Kaine. Funded projects include extending runways, rehabilitating aprons and improving taxiway lighting. “Our airports are essential to both our local economies and to helping Virginians get where they need to go,” the senators said. “We are pleased to see the Bipartisan Infrastructure Law continue to upgrade Virginia airports and help ensure they’ll be meet our communities’ needs well into the future.” (WSLS 10 News)

The third cohort of students graduated from the Institute for Advanced Learning and Research‘s Accelerated Training in Defense Manufacturing pilot program on Aug. 5. This 16-week curriculum develops skilled workers with industry recognized credentials for employment in the defense industry. It trains workers in key trades to fill skill gaps in welding, computer numerical control machining, quality control inspection and additive manufacturing. The program was developed as a public-private consortium between the institute and the U.S. Department of Defense, Danville Community College, Phillips Corp. and The Spectrum Group, in coordination with maritime defense industry partners and Navy stakeholders. (News release)

PEOPLE

The United Way of Danville-Pittsylvania County recently selected Telly Tucker, president of the Institute for Advanced Learning and Research, as its 2022 campaign chair. Tucker takes over for Danville Otterbots General Manager Austin Scher, who helped United Way navigate fundraising last year. The campaign chair lends visibility and energy to the campaign, providing presentations to employee and community groups, pitching in at events like the Sept. 27 kickoff and generating enthusiasm for the campaign throughout the community. (Danville Register & Bee)

SOUTHWESTERN VIRGINIA 

The Hard Rock Hotel & Casino Bristol‘s temporary casino documented guests from 49 states by its sixth week of operation, ending Aug. 19. Alaska is the only state the casino has
not seen guests from. During its first partial month of operation, the casino generated $11.71 million in adjusted gross revenues, with $10.21 million coming from its 870 slot machines and $1.48 million from its 21 table games. Total play created $2.1 million in , including over $703,000 that local governments in Southwest Virginia will divide. (Bristol Herald Courier)

Coronado Global Resources Inc., an Australian producer of metallurgical coal, will invest $169.1 million to expand coal mining operations at its Buchanan Mine Complex, located about 10 miles southeast of Grundy in Buchanan County. The expansion will see the mining operation add 181 jobs, bringing its total workers at the site to 781, Gov. Glenn Youngkin announced Aug. 23. Coronado will increase capacity at the mine to meet the growing demand for metallurgical coal, which is used in steel production. The company began production at the Buchanan Mine Complex in 1983 and started longwall mining operations on the site in 1987. (VirginiaBusiness.com)

After 15 years, the Damascus Trail Center opened its doors to trail hikers, bird watchers, nature enthusiasts and tourists on Aug. 26. Located at 209 W. Laurel Ave., the center will have a series of exhibits covering the history of the Appalachian Trail, dating back to 1921, and of seven other trails that cross through Damascus, including the Virginia Creeper Trail. The town of Damascus — Trail Town USA — and the Appalachian Trail Conservancy collaborated to open the center, and U.S. Sen. Tim Kaine attended the ceremony. (Bristol Herald Courier)

Girls Inc. of Bristol, Virginia, held a groundbreaking on Aug. 31 for a 7,566-square-foot recreation center that will include a gym, a full kitchen and partitions that will allow Girls Inc. to create up to six different classroom spaces. The nonprofit, which offers educational support programs for girls ages 5-18, has raised about $1.6 million for the center and needs to raise about $300,000 more. The future center will serve about 240 additional children for after-school and summer programming, and Girls Inc.’s eight outreach sites throughout the region will be able to use it. (Bristol Now)

Chesterfield County-based payment and invoice automation company Paymerang LLC will expand its operations to Southwest Virginia, creating 50 jobs in Wise County, the company announced Aug. 25. The move follows a previous expansion of its Chesterfield County headquarters. In Wise County, Paymerang employees will work in software development, cloud engineering and payment operations. Paymerang is the second company to join Project Fuse, an economic development initiative that aims to make Southwest Virginia the location of choice for remote work. Lonesome Pine Regional Industrial Facilities Authority and InvestSWVA launched the project in February. (VirginiaBusiness.com)

U.S. Sen. Mark Warner made stops in Marion and Wytheville on Aug. 23 as part of a three-day tour of Southwest and Southside Virginia to talk with community leaders. Virginia’s Democratic senior senator touted the recent passing of what he called a “once in a generation infrastructure law,” which includes $65 billion to improve broadband access. Local community colleges can offer pop-up training so Virginians can get jobs installing the needed fiber, he said. Warner also discussed the CHIPS Act, then a bill, and said he’d like to see semiconductor undergraduate programs at Virginia universities. (Smyth County News & Messenger)